Q3 2021 Ferrari NV Earnings Call
Good day, and thank you hi, Jim by welcome to the Sei right. So in Pizza and two on Q3 results conference call. At this time all participants are in any sense.
Really bad.
After the speaker's presentation, there will be a question and answer session.
Ask a question or an assassin you wouldn't need to press star one on your telephone please be.
Advised that today's conference is being recorded.
If you require any further assistance. Please press star Zero I would now like turn the conference over to your speaker today because it was so please go ahead.
Thank you Sarah and welcome to everyone who is joining us.
Today, we plan to call that our group's Q3 2021 operating results in light of this the duration of the call is expected to be around the 60 minutes today's call would be offset by the group C. O M. Instead of Benedict Divina and group CFO, Mr. I'm, telling you pick up it's gone well.
I live onto my theory, that's out available in the investors section of the fed already corporate website and at the end of the presentation, we will be available to answer your questions.
Before we begin let me remind you that any forward looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the Safe Harbor statement included on page two of today's presentation and the call will be governed by this language with that said I'd like to turn the call over to me instead of three.
Yeah.
Thank you so much and thank you everyone for joining us today.
First of all I would like to say that is a great honor for me to be here today for the first time, it's fair that as CEO.
And even a greater Illinois to take you through the latest result, or this wonderful company.
Before joining this team.
You've always said the huge admiration for Ferrari for its people its achievement and of course, what is incredible cash erasing expertise.
But lets together and the agenda any brand that is known and respected all around the world.
Now that I am in the privileged position of being on this side.
Leaving this unique company my intimidation is so much greater.
But before we talk about the last quarters, either like appreciate we view a little bit of my experience here in February during the first weeks since I arrived in mirandola.
First and foremost I'd been getting to know our highly motivated ischial entertainment.
And they've been very much impressed by the dedication to every retailer.
By their knowledge and my Dear skill.
But most of all by the openness to learning and improving everything we do.
Every step of the way.
They all are they all wanted to take Ferrari two new even greater levels.
They haven't made me feel very much at home from day, one so I'd like to take this opportunity to thank everyone in the company for their warm welcome.
We have no doubt.
We have many exciting and rewarding times ahead of us.
In which our opportunities ever never been greater.
And what convinces me of this more than ever.
The following three key factors that they've seen so clearly expressed said that my micro leak in my first weeks.
I had a fair to passion.
I refer to excellence and they refer to innovation.
First of all passions.
You May you have these ward mainly times.
Since it is often very used but I believe here in February it's fine it's true meaning.
Everyone.
With any connection with Ferrari, whether they be called League partners before and of course, our customers Orla Express a sense of belonging a belief and a love for our brand which is quite unlike anything I've ever known.
Second excellence.
In February we craft timeless icons that are not only beautiful to look at but also delivers a unique experience.
Most of all they are known for being a fun to drive and this is something I can testify to myself.
And third innovation and by innovation I don't just mean, the ability to exploit technology to the maximum.
But also the way we express the visibility through the special collaboration between our teams in the constant drive to perfect. What we do and the creative inspiration we bring to our craft the ASF and 90% of Dallas is a testament to this is that also <unk> nine despite this.
And the 286 GCB.
Solid steps ahead in the implementation of our electrification plants that are part of our path towards new technology in the distinctive favorite alleyway.
Of course.
His relentless dedication to our craft for our customers is also dedicated to our investors who place their trust in us and to you to all of you who follow us.
Now.
Having shared the magnesia experienced in February.
Focus on the results of these last quarters.
I would like to highlight the following three things.
These are all first revenues.
Cash flow and order intake revenue first.
Is the first time in our history that in Q3, we crossed the 1 billion euro revenue threshold.
Now cash flow, we have delivered the strongest Q3 in our history in terms of industrial free cash flow generation.
And last but not least order intake.
This is the highest ever quarter of order intake across all models and regions with mainland, China and U S being particularly strong.
But how did we achieve all of this I was it's possible.
Well I'd like to point to the following three factors first of all.
We have capitalized through focused and disciplined on our strong economic climate.
Davidson said also by the solid performance of our pre OLED business.
Second.
We have the most beautiful most innovative a widest product range in our history that 296, GCB. We've it's hybrid <unk>, which we launched in June has been received with the we've huge enthusiasm we've orders flowing in even before customer and had the opportunity to drive.
Yes.
And of course last but not least we have to thank our incredible customers both existing and new.
And speaking of our customers. It has been a reality, but I think to be able to start the arranging events with them again in September easily I was delighted to attend the 10th anniversary of the cavalcade a truly memorable event in every sense.
In fact for the first time over 120 historic and contemporary Ferraris John It is single parade.
You had to be enabled.
Joining me in Cecity, you would have been surrounded by selection of truly beautiful Cups Ferrari.
Financed.
From a demand there.
Two the portofino from the hybrid power all of Ferrari and <unk> 19 per diluted to the historic they start Asa and they're 50.
But more than anything this location truly emphasizes the that owning a ferrari is so much more than just owning a cash EPS the experience of being a member of the unique February family.
And so I'm really proud to announce today to all our loyal furry family members that unusual price is coming soon with unveiling in the middle of this month of our second Aikona model.
It will be an address very special location just be patient for a few more days.
Now.
After the Q3 highlights, let's say a quick look together in the future.
My first two months the perinatal confirmed to me that we are very strongly positioned to capitalize on the many opportunities we have in our hands today and once that lie ahead of us.
I believe a Ferrari.
As it has always done.
Will distinguish itself yet again through its creativity and the ability to apply and interpret the vast array of future technologies and always with our and compromising and distinctive style.
This will happen, while always remaining disciplined in our approach to investment.
To achieve this result, our people out of the key.
They really out of the key.
Through our special close collaboration working with commitment and dedication for a common goal, we will deliver enduring success together.
This has been the source of our unique success in the past and it will also power our future both within the company and outside the company working with all of our partners present and future.
This is exactly the kind of innovative and open approach you can expect under my leadership here.
As demonstrated also by the recent exciting collaboration we announced that we've lapped from.
We are also making excellent progress with our brand diversification strategy to further enhance the vibrancy and vitality of our brands.
We haven't <unk> the first fashion collection.
We have renovated our flagship stores in Maranello Milano in Los Angeles.
And we reopened the iconic evolving restaurant Es next to our own.
We are making important progress also in our motor racing activities. Indeed <unk>.
Just a few weeks ago.
Our four to $8 eight GT table, one ethylene man.
The ZIP code, we will return to in 'twenty three to compete it I guess level, we've our hypercard.
In Formula one in the most recent surveys we have seen some positive sign of progress as well.
Competition comps.
Competition on the track has been a deep in Ferrari DNA through our history.
So it is today so it will be in the future.
There are many many project under development in our company, but there are three areas I would like to highlight today.
Our brands.
Our product and carbon neutrality.
Our brand first.
Relentlessly, we will continue to nurture and evolve our brand by announcing in already engaging immersive and authentic experience for all our customers current and new ones.
Whenever and wherever they get in touch with us when they drive at a cost.
At the end of third event oriented our stores in the real world or in the digital dimension. We are fully committed to make these extraordinary emotional experience.
We are fully aware of these enormous responsibility, especially in a world rapidly changing like today.
Now after a brand the product.
We will continue the discipline and the extension of our product range through the launch of the put us and with which we will unveil next years.
We will work to capture all the possibilities of further by technologies in a unique distinctive way.
Always preserving our exclusivity and luxury positioning as we have done throughout our history.
And finally carbon neutrality.
We will continue our folks at the journey towards carbon neutrality by 2030, a key priority for my tenures and for our business.
And to be clear in addition to our electrification journey, we are committed to addressing both direct and indirect emissions.
We're focused on energy and materials.
Our next capital market day, we will provide you with plenty of detail and color about our future plans and the path to delivery.
And we look forward towards the new <unk> on June 16.
Let me conclude these opening words begin thinking all my theoretical leak for their warm welcome and for all of their amazing work.
<unk> honored to be leading them into the next phase of our extraordinary journey.
And of course, my Thanks goes to our board and to our chairman for their support and confidence and also to you.
To all of you for your precise and dedicated interest in everything we do.
I would now like to hand over to Antonio to present in detail. The Q3 'twenty one earnings.
Good afternoon, Victor and good morning, or afternoon to everyone, who is joining us today.
The walnuts welcome to you Benedetto.
Also by me and the whole team here and the promise of our tireless commitment to drive a ferrari towards even brighter achievements.
We will be at your side.
Now, let's come to our quarter.
Starting on page four you can see the highlights of the Q3 2021 earnings.
A very solid set of results across all metrics and exceptionally strong on industrial free cash flow generation.
Our shipments were 2000, and 750 units up 18, 9% versus the prior year and up 11, 2% versus the third quarter of 2019.
Group net revenues were $1 billion, and 53 million increased by 18, 6% versus prior year and up 15, 1% versus 2019, driven mainly by volume and stronger product mix.
EBITDA came in at 371 million Euro.
12, 4% versus the third quarter of 2020, and up 19, 6% versus Q3 2019.
As already mentioned in previous earnings call. The EBITDA margin decreased compared to H 121 level of 37, 3% as entry level models, we're ramping up as expected and Opex grew in line with our programs.
Compared to Q3 2020, the EBITDA margin was also down C&C in such quarter of last year. The estimates of the F. One sponsorship and commercial revenues were revised upward.
The impact of cost containment measures undertaken to react to the pandemic became fully visible.
EBIT was $270 million up 21, 8% versus Q3, 2020 and up to 19, 2% versus Q3 2019.
Net profit was 207 million.
Up 28% versus the third.
Third quarter of 2020, and up 22, 4% versus Q3 2019, resulting in diluted EPS of one euro and 11% up 27% versus prior year.
Industrial free cash flow for the quarter was exceptionally strong at 242 million euros supported mainly by the collection of the advances for the a 12 competency on it.
Yeah.
Turning to page five you can see the details of the shipments of the third quarter 2021 up 18, 9% versus the third quarter of 2020.
Sales of eight cylinder were up 39, 4%, while 12 cylinders were down 35, 1%, mainly due to the reduced volumes of da 12 Superfast.
There are not yet sales for da Vinci X range represented by the $2 96 <unk>.
The shipments of Q3 were driven by the range models in the portfolio with the first deliveries of DSS, 19th Teradata, beginning in the quarter and the Ferrari Portofino am entering the ramp up phase.
Shipments of the Ferrari Monza SB, one and SB two continued in line with planning.
All geographies contributed positively as.
As a result, EMEA was up one 6% compared to our third quarter of 2020, when the region grew by 12, 7%.
Americas increased 41% after losing 34, 7% in Q3 'twenty.
Mainland, China, Hong Kong, and Taiwan doubled thanks to the arrival of new models in particular, the Ferrari Roma idiots over 93 data.
Last year the region at the last 25, 2%.
Finally rest of APAC was up 21, 1% from being almost flat in Q3 'twenty.
Moving to page six.
You can see here displayed the work of our group net revenues for the third quarter up 27% at constant currency.
The increase in revenues from cars and spare parts up 23, 5% at constant currency was supported by higher volumes and positive product mix along with personalization.
Personalization is were up versus the prior year in absolute terms sustained by volumes while in line with the historical average in proportion to revenues from cars and spare parts at around 17%.
Yes.
Engines revenues were up 24, 8%.
The improvement is related to higher shipments to Maserati and to a lesser extent to the rental of engines to other formula one racing teams.
The increase in sponsorship commercial and brand was attributable mainly to brand related activities.
As already mentioned in Q3 2020, our revenue accrual for F. One sponsorship and commercial was based on full year estimates updated in such quarter and improved compared to first half of 2020.
Currency, including translation and transaction impact as well as foreign currency hedges had a negative contribution of 15 million euro mostly mostly related to hedges.
Moving to page seven.
Let me review the change in our EBIT bridge.
Explained by the following variances.
Volume was positive for 39 million euro, reflecting the shipment increase.
Mix price variance was also positive for 41 million. Thanks to the strong contribution of DSO of 90 family and the Ferrari Monza SD Wan NSP too along with personalization, partially offset by the Ferrari Roma ramp up and the reduced contribute.
<unk> of the eight well Super fast.
Industrial and R&D expenses increased 12 million, mainly due to product innovation and startup costs, including Formula one.
SG&A were negative by 4 million euro, mainly reflecting communication and marketing activities. Following the gradual restart of our events.
Other decreased mainly due to higher costs related to the assumption of better F. One in season ranking and nonrecurring charges impacting other supporting activities.
The net impact of currency was negative 414 million euro.
As a result of what I, just mentioned EBIT reached 270 million euros up 21% compared to the prior year and with an EBIT margin of 25, 7%.
Turning to page eight industrial free cash flow generation for the quarter was 242 million Euro.
This exceptional performance for the quarter led us to beat our full year guidance in nine months only.
Cash flow was mainly sustained by EBITDA and the collection of advances on da 12 competitive Fiona Ho.
Inflow was faster than initially anticipated.
The working capital dynamics, where also neutral for the quarter, which was unusual compared to our typical seasonality mainly due to timing of our expenditures.
These will be at least partly reabsorbed in Q4.
All of the above was partially offset by 199 million euro of investments that are progressing in line with plans.
The capitalization ratio was approximately 39% for the quarter decreased versus prior year essentially due to the increased weight of product innovation activities.
Net industrial debt as of the end of September was 368 million versus 552 as of the end of June decreased thanks to the robust industrial free cash flow generation of the quarter.
On page nine we revised upward our 2021 guidance across all metrics on the back of the strong trading performance recorded so far and the confidence on positive development for the core business in the last part of the year.
Coupled with improved targets for our operating expenditures.
The overall full year contribution of Formula one commercial revenues is still uncertain. However opportunities may arise. In addition to this improved outlook.
Industrial free cash flow generation is now projected to be greater than 550 million euro reflecting improved profitability.
Savings on Capex compared to our previous estimates now seen closer to 750 million Euro and.
And continuing support from net working capital Thanks to the collection of advances on our special series and capital expenditures being weighted over the last months of the year.
Our guidance still relies on the assumption that trading conditions remain unaffected by risk of preclude a sense of the COVID-19, pandemic and continuing scarcity of electronic components.
However, the dynamics of current market demand never survival before support our confidence for the year and well beyond.
With that said I'll turn the call over to Nicoletta.
Thank you and Danielle we're now ready to start the Q&A session over to you Sarah Thank you.
Thank you as a reminder, you will need to press star one.
Oh, yes.
To ask a question.
Ladies Western scheme.
Once again it is.
And one to ask a question.
We will now take our first question from the line of Thomas.
Please go ahead your line is now.
Open.
Thank you very much.
A couple of questions. Please.
Sorry.
We have some difficulty hearing you could you kindly be closer to the microphone. Please.
Yes.
Is it good enough.
Definitely thank you very much thank.
So it's almost like you're pushing.
Christian.
The first one being equal it's unusual but it's the first time, we can have a chance to speak with you.
Could you please tell us.
About your hiring process.
I believe has been the liquidity as you're bringing those have made you the one.
Selected to run this company.
Hi, Thomas Nice meeting you. Thanks for your question pretty interesting.
What I believe.
I can bring in.
Ferrari is three things.
I think I can bring.
The experience that they've been able to navigate in the previous company through times when in an environment that is pretty I mean changing pretty fast.
So I think this is one thing I can bring the second.
E <unk> been able and they've been exposed to the two pretty much international.
World. So I think this is also another contribution I can bring to the team.
And the last.
I think it is about the leadership style that helped me to drive the team in the previous company to achieve the results that I think you have seen from the other company a few days ago. So these are the three things international experience leadership style and the ability to manage.
The situation in a changing time.
Great. Thank you very much.
My second question.
Classic for an earnings group.
It will relate to the comments you made about you can make.
Capex for requirements for February for this year, and I think for the future you'd probably want to wait until June.
To give us more details.
You've talked to Capex being essentially.
The last months of the year.
Can we still expect to produce guidance to hold or are you going to be able to spend slightly less than planned for this year.
Yes.
On this year I just explained we are revising our estimates towards 750 million Euro and it is just better spending and skewed towards the end of the year with no delays with respect to the future years I think it's important that we wait for the call.
As of the end of this year, we'll provide you with indication on 2022, and then of course, we will have the capital market day, and we'll outline the future there.
Thank you.
We will now take our next question from the line of Monika by CRT Intesa Sanpaolo. Please go ahead. Your line is open.
Good afternoon, everyone and thanks for taking my question and welcome.
They need that.
I have two questions first one if you can give us a flavor on the waiting list.
And if you add some.
Supply chain problem that.
Could have affected the way can leave and EPS.
The company is going to implement so much on our supervisor. The general are allowed the feed that we can release that if they are too long.
And the second.
The question is on the order intake I don't know if you can give us some color about that I would really appreciate some color from a country level.
Okay. Thank you very much.
Ciao Monica, thanks for that and welcome.
You put the two.
See you also in person maybe here.
So.
I will start from the supply chain.
<unk> I have to say that the team is the team and Ferrari.
We are also the support of suppliers have been able to manage appropriately. These situations that are many players that are facing all over the world. So you have to express really.
Kind of award for the team here and also for the supplier that had been supporting US. This is about the supply chain.
About the.
The net order intake as I said also in my past there is for sure there are some.
The new models like the 296 the GTP for example that is doing.
Is doing pretty well and that's what they said, but there is also a stronger a stronger positive trends across all the market and all of the segment. So this is very very very positive.
For the waiting list.
I don't know Antonio if you want to add something about.
Yeah, Hi, Monika.
As usual we are above one year coverage for all models and some of them are already sold out.
Yeah.
Okay. Thank you so no problems on their way to at least as far the supply chain that everything is under contract is it okay.
Yes. This is correct Monika.
Thank you very much thank you.
We will now take our next question is from the line of Giulio Pescatore ethics.
Your line is open.
Hi, Thanks for taking my question and then implement that.
The first one I would like to go back to a comment that was made by the fed.
So I mean, he said in the past.
So you didn't see it becoming completely electric in our in the foreseeable future.
I know you want to wait for next year for.
More color on that maybe you can you can you just expressed your thinking around the electrification issue.
So Julien I think of it.
In general on the technologies that are needed there to address our needs.
It needs of the customer to like do the lights them, what I would like to say is that the.
We as a company started the our electrification electrification path already a few years ago. It was the case all of February and then it is the case now with the S. F 90 start out it we will continue.
And as our chairman has said in the previous.
<unk> color, we will unveil.
The full electric car in 2025.
And I will be more delighted to show you the full plan when we meet here in.
16th of June.
Next year.
Okay Fair enough and just maybe one question on a comment you made you said that the company will continue to follow a disciplined approach to investments.
Maybe elaborate a bit on the statements you made.
Yeah I think this is important point that I E.
In all my careers.
Always.
Optimizing the use of the capital to reach some goals. So I believe that the beauty the beauty of our work is to make sure that.
We reached the call optimal.
Optimizing the use of the capital that's what they did in the previous company, that's what I intend to do here with the team capital discipline. It is it.
He is very very important otherwise so let me say it this way innovation would it be too easy if you don't have any boundary constraint.
Okay.
Maybe one last one.
On a more short term.
If we think about there then you might call how youre presenting in mid November.
The deposit will be mobile followed the same pattern.
Deposits for the months of volatile very strong inflows in maybe Q1 Q2 next year.
Hi, Giulio Antonio speaking, yes, we expect it to follow a similar path it will not impact 2021, though which started from 'twenty to 'twenty two.
Perfect. Thank you very much and good luck.
We will now take our next question is from the line of Susan <unk> UBS. Please go ahead.
Seven.
Hi, Thank you for taking my question and that was due to hear from you.
And so one question is to just go back to the waiting list I wanted to ask what's your view your personal view on retaining the exclusivity of the brand.
And at the same time, you have just order books that continues to expand and you will eventually reach a point where.
Consumers either have to wait too long or you'd be in a position to choose either to prioritize and the price. So maybe increase the price makes it a little bit more aggressively or having to increase the volume production.
So in a philosophical way like what's your view on this and understand value, which obviously is not a good place to be and that will be interesting to see how you approach. This.
I still say clearly I mean, the waiting list as Antonio said there is in a good position and I think that's what also already what we started there is a way to manage it properly playing with the price and in fact, we already started to increase the price. So that we can manage it properly.
Situation.
We have also to say that are usually what we see and are is that the customer that wanted to Ferrari.
They also are willing to wait a little bit because when you drive a Ferrari you don't drive a car.
Several hundred cars and I think the unique experience you get over there.
At a memorable so on one side, we are increasing price on the other side, we believe that the.
Friday experience so that to the people that we are going to stay and willing to do it.
Understood.
And for US in terms of the full year guidance that you updated today.
What this implies for the fourth quarter in terms of EBITDA and <unk>.
Yes, low to mid single digit increase year over year and given all the strength that you're seeing in the order book and the great lineup that you have.
It does feel a little bit conservative and I wanted to check if there is any.
Any operational reason for it and or if it's your way of managing the business to growth.
Yeah.
And still Antonio answering hi, Susie.
I think I made a comment in my speech already in the previous two calls we have two elements that are impacting the end of the year. One is mix, which is a bit less strong compared to the first nine months in the previous off particularly the second one is opex.
They are growing.
And with unusually compared to the previous years and this is also in relation with a fun to the opposite we see opportunities.
Related to an uncertain element, which our revenues from the S. One commercial.
Right all of those.
That we do not put into the numbers. So the result is what we outlined now as a guidance.
Perfect. Thanks, a lot.
We will now take our next question from the line of Michael Binetti.
<unk> Suisse.
Go ahead your line is open hey.
Thanks, guys for taking our question Bennett that'll let me add my my welcome to you very very forward to working with you on a story here over the next few years.
I know theres a lot of questions on guidance and everything today, but just backing up very simply what do you think is the EV opportunity for our pinnacle luxury car company over the next five to 10 years and then.
On Formula one.
Businesses.
Is has a lot of overlap there they've been very clear in the direction of their future power units sustainable fuels and hybrid engines, they've talked about in the media quite a lot. How do you see the historical strategy for Ferrari of transferring Formula One technology into New road cars evolving over the next next five years to 10 years.
I mean, I, so I want to start with talking about your first question. How do you see the opportunity will determine that easy and all do you see the opportunity that the new technologies offers to us.
Because I believe and I don't want to repeat myself, but it's really a profound belief I believe that.
The technologies.
Really a way to make some unique distinctive product that will delight customers.
So now we're talking about the different propulsion scheme that are using our let's say electrical engine and this is something for sure. There is an opportunity for us and that's the reason why we have been sharing.
<unk>, we view, partially not in detail not yet in detail at our our electrification plan.
What I would like also to say is that a.
When under the same umbrella you have also the possibility to take technologies that that'll make that made the fundraising I think there is any unique opportunity in this sense and are you able to say that.
In these two months have you ever gone I spent some time with a colleague in the laboratories and they havent seen really something interesting really something interesting I am sorry, I cannot say too much about the 16 of June we will provide more color on this.
Well, thank you for that and I guess.
Let me ask you what would you say to those in the financial markets early on since we still have a ways to go until June that are that are concerned about.
A small companies' ability to pivot to technologies that are required a lot of investment in other areas like electric vehicle and other non petrol engine technologies and the levels of investment it might take for a small car company like this to capitalize on those opportunities.
I wouldn't say only one thing I would say that are.
The solution is to go through partnership we ever want it.
It is true we are small on the other side is also true that we have a stronger brand on in general in General and this is also what I did the in the other company I think it's important to leverage at the best the partnership. So it's important that you say leg to that is where we want to excel and on the other so you walk.
With partners. This is what I believe it.
Is important for financial market to keep in mind clearly if you want to do everything by yourself is going to be a challenge you have to select what you do by yourself and what you do with partners that sounds low to me.
Okay. Thank you very much look forward to seeing the new iconic and we'll talk soon.
Yeah.
We will now take our next question from the line of Philippe <unk> Jefferies. Please go ahead. Your line is open.
Okay.
Filippo we cannot hear you.
Maybe a new tender.
Haney do you hear me now.
Now we can thank you.
Apologies for that and welcome to you've been and that's what we look forward to hearing what you tell us in June I have two questions. Maybe one until you can help us there.
A discussion around China, and this posterity politics, and every carmaker extensive cause a cheap car tells me no problem.
I know you had record deliveries in China again, but do you see on the ground any risk to your business plan in China.
No not selling cars, but maybe the upside you would expecting in China over the next few years to be reduced as a result of this shift in politics.
And the second question so you've been at old Navy is is on them.
Building a bit on what Thomas asked at the beginning.
And your selection process and what's your roadmap you will brief us from from G&A was down at Ferrari I look back on Ferrari, the ultimate compounding business and and your predecessors have always talked about being custodians of the brand.
And I'm just wondering in your discussion with John how much of your job is to be a custodian how much are they used to be a disruptor.
Within the limits of course, the fact you need to.
To keep building on the history, but I'm trying to kind of understand your road map and how much of a rupture or might expect from using suraj.
Okay I take it as one Philip Thank you and I think the last one and then for China Antonio will apply so I like to say the following.
[laughter].
My My leadership style has been always a I would say on the transformational side that we've a strong focus on the result.
Think of this being a custodian of the brands.
And.
Being let me say innovator on the product side, the Ara strictly be incurred if you want to as I said in my opening if you want to develop and if you want to have all but the concept of the brand itself over the time you have the tool to tool if you want to be a true guardians of the <unk>.
And then you have to follow to adapt to.
The product to keep it.
Could you go through innovation, so I think that the two dimensional go go hand in hand, and the gain to be custodian of the brand. The Guardian of the brand you have to read to interpret the technologies the author of the technology in a unique distinctive way like fatalities.
And Tony if you want to comment about the <unk>.
Hi, Felipe and on China for the time being the order intake is surprisingly strong.
Yes.
Looking to the future I think back in 2018, the capital market day, We stated we're not betting on a significant changing or significant development there.
So at least for the time being and comparing with our targets.
Whatever happens there.
It should not be a material drag.
All what could come from China compared to what we are used to should be a positive. If there is an upside.
Thank you very much.
We will now take your next question from the line of George Kelly at Goldman Sachs. Please go ahead.
Open.
Thank you for taking my question, but as I say welcome from me as well.
I just wanted to come back to the unveiling.
For this year and also as we complete that.
<unk> business plan.
At the beginning of the year you mentioned it would be three unveiling in 2021 and the Q.
Q2, you said you had three new models to the market during the quarter with the $2 96.
The eight one to compensate.
Eight once you called.
Our pets.
So I'm just trying to understand if it was always planned to unveil. The next generation of Iqos this year or whether that's been a pull forward.
And also with respect to the 15, new launches between 2019 and 2022 is that still very much.
Do you plan or could that be 23.
On the same tact you also back at the 2018 planning stage. It said that you expected your hybrid mix for next year to be around 60%.
Is that still your best estimate or are we looking at something lower than that given the product.
Is it really launched thank you.
Okay tell me do the first question is did you plan for this launch of the economy.
I think.
The answer is very simple we plan at the Reed.
We decided that during the years two loans with a corner.
In November mostly because we saw a strong willingness and need I would say the customer wherever.
So eager.
To get into a corner. So we felt that the responsibility in front of them to satisfy.
To accommodate their request. So that's the reason why we we push that we anticipated that I would say this fourth.
To launch.
This is about it.
Turning to the the percentage split by propulsion.
The tool to give any split how much is a hybrid that matches the ice.
I can tell you is that we are proceeding according to the plan while it for the future for the year to come we will.
I sent a very clear.
Path forward with all the color and the detail during our next capital market day.
Great. Thank you and I'm very much looking forward.
Yeah. Thank you. Thank you George.
Well you are now take our next question from the line of Mike Dean or their budget.
Please go ahead your line is open.
Thank you.
Good afternoon everybody.
Also from my side welcome Benedetto and the first question is for you. So what's your feeling for your opinion.
The maximum level of volumes.
In order to preserve these crews EBT of Ferrari.
In the second.
Because I heard a lot of opportunities around Oh, I agree, but without the main risks you perceive.
Apart from a capital spending capex spending which is for sure.
Issue going forward.
And the last question is on the down payment.
Just to know what's your assumption in the current free cash flow guidance for the current year.
Concerning the down payments for the 12, a competitive field and.
Could dumping and become a habit.
Sure.
More models of what you used to have in the past so wholesale fort Meade the range instead of just a super luxury cars.
So im Athena I will leave it a down payment or visa to Antonio that will comment later about the volume of sand opportunity risk.
Very quickly.
The downpayments on the eight wells completed Fiona.
Or close to what we expected for the year and as I said they come in faster than we anticipated.
Close to 80% of the.
Total working capital a positive change in in Q3 was due to the to the advances on the April competitor on it we remain with a bit for Q4.
As to whether this may become a usual for the future.
Still early days to say so far it has been for some special series and it was significant as you witness for 40 years and is now visible part D as well.
We are obviously from time to time reviewing our our policy in respect of our collections from our customers and dealers. So we'll get back to that in the future.
So coming back to your question the volume and the opportunities for the volumes I would like to underline again Martino that we outlined.
We havent been and we will be profit driven not volume driven.
Clearly I mean, we are we will.
Continue to make unique to develop unique and distinctive Ferrari in a way that we can.
We can't justify it and we can also have a clear path forward when it comes to opportunities. The risks, yes, I said that several times in the opening speech that they see a lot of opportunities opportunities that could depend on different technologies.
I really believe it.
Clearly when you have opportunities.
Did that also some risk, but I wouldn't say that this is the beauty when you're out on the on the leading edge to do something unique something new.
And this is also.
There is a way let me say to manage some risk because you can.
Lets say or through partnership as I said before also.
Being a tool to go a long multiple path. Okay. So the risk managing the risk when you have a different opportunities is a I would just say is an app that you learn adjusted by doing and I think here I cannot contribute to my personal experience and with the all the experience of the team has.
Okay. Thank you Vanessa.
We will now take our next question from the line of Stephen Wright.
Please go ahead your line is open.
Yes, Thank you and also it will competitors.
I have two questions I guess first of all sort of benefits.
Given your background what is your assessment of the type of competence of Ferrari in technology Electronics, Obviously, Youll break will Boston and my second question regards the issue, albeit for Super fast.
You mentioned that the.
The REIT will mix was down because of lower sales of data center costs.
Does that look like life cycle, I mean, obviously, you've launched the competency only version or is it also maybe switching with some customers too.
ZIP 90 family.
Thank you.
Thank you, Steve and I take the first part.
We would've liked to shave to reply to this question of sharing my experience here that is more of a [laughter].
I think it's much.
Giving you much more color than let's.
So you just sentences.
Clearly one of the first laboratory I've seen them.
The technical team has been the laboratory, where new innovation and to use the.
And are you able to say that.
Maybe the best objective I can use is to say that they have been impressive.
By the knowledge the team is on the <unk>.
Taken together side, but also also as I said before by the passion to make things happen.
And also by the excellence in the way they want to push ahead. The things I can tell you that as you can imagine.
Pretty deep network in this field.
And I remember some practical cases, where I was opening some channel.
Late in the evening and the day after in the morning. They were the team was already on top of it.
And was able to keep the discussion we have with these top leader I put them in touch with it very high level. So the companys assessment of that.
With this team is very high because of what they know, but also because of the passion and excellence.
They want to Porsche so it's a very positive Steven.
On your question in respect of D. A 12 superfast the year over your assumption is correct. We are approaching the end of lifecycle and not yet there but volumes are clearly going down in line with our plans for that model.
Yeah.
Yes.
Thank you Sir I think nowadays that ends our question Sir.
And now handle there to be any data for his final remarks. Thank you very much.
So thank you. Thank all of you for all your time for all your questions really appreciate and also for your warm welcome.
Let me just close by repeating it again at the words I used in my opening speech that his passion excellence and innovation.
Every day and in every thing we do.
This is February nothing less than that I believe that when you will can yes, you will really brief Ferrari and I look forward in future too many modification to talk with you and also to meet into shape, our progress to get to your question and for you to expect his experience in person.
What we are creating yes, good afternoon, everyone and thank you again.
Yes.
Today's conference call. Thank you for participating you may all day.
Okay.
Yeah.
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