Q4 2021 Ferrari NV Earnings Call
Good day and thank you for standing by welcome to February 2021 full year results conference call. At this time all participants are in listen only mode. After the speaker's presentation. There will be the question and answer session to ask a question. During the session you will need to press star one on your telephone keypad. Please be advised that todays call.
France is being recorded if you require and if for the assistance over the phone. Please press star zero.
I'd now like to hand, the conference over to us so to speak of today Nicoletta Russo. Please go ahead.
Thank you and idea and welcome to I would one who is joining US today, we plan to cover the group's full year 2021 operating results and 2022 guidance.
Of these the duration of the call is expected to be around 60 minutes today's call will be all set by the group CEO and he said I've been at it Davina and group CFO , Mr. Antonio pickup it gone already live onto my theaters are available in the investors section of the fed already corporate website and at the end of the presentation 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 Bennett It though.
Thank you Nicolas Thanks, Thank you everyone for joining us today.
Three months of passive it seems the last time, we met digitally altogether.
Many things have happened in our company.
Today I will be delighted to take you through the 2021 result, and that would provide a little taste about what's happening in our company.
Our performance in 2021 was very robust.
From a both a quantitative and qualitative point of view.
Numbers first.
We closed the years setting a new record in terms of the south across all metrics posting a double digit growth.
Above pre pandemic level.
The results were I guess than the targets, we had already upgraded when we share our third quarter results.
Five.
Five excellent result to remember.
First $4 3 billion euro revenues materially exceeding for the first time in our history.
Ratio level of 4 billion Euro.
Over 11000 car shippers, we have a significant growth in all regions in China, our deliveries doubled es of areas.
35, 9% exceptionally strong EBITDA margin reached a record level.
Impressive 640 million Euro industrial free cash flow generation, mainly thanks to the advances collected on the specious special series and thanks to the discipline and timing of Capex spend and all of this we have no impact on our.
Our product plan.
The last point.
We have the strongest ever order book in our history.
Up double digits versus the prior year and covering well into 2023, we've all region all regions showing significant growth.
How did we achieve these excellent. These five excellent result fell.
Firstly.
We have to thank our incredible customers, both existing and new.
And all the women and all the men a ferrari for their outstanding work.
Secondly.
It was possible thanks to the strong margin contribution of the Monza <unk> and DSP too.
Thirdly. This was further boosted by our decision to cease commercial opportunities on certain models in line with our order intake evolution.
We also benefited from the deliveries of the <unk> hundred 90 steadily being moved to 'twenty one from previous year 2020.
And last but not least we have capitalized on our strong economic climate.
Evidenced also by the solid performance of our pre owned business and on the enthusiasm of our customers with the.
The light and sharing their Ferrari passion, we've asked has been so evident at our event.
After these five excellent result, the five key priorities we focuses on on all the year 2021.
Product excellence.
Customer experience.
Total racing brand diversification and carbon neutrality.
Let's start with product.
Last year, we unveiled four new models, demonstrating our leadership in technology in design and driving experience.
<unk> received an enthusiastic response from the market and worldwide acclaim.
In may.
We unveiled the <unk> 12, a competitor you're on it and that eight to 12 competitor unit, Alberta, our latest spacious Sirius with its revolutionary aerodynamics.
And they were all sold out prior to the official launch is it.
Testament to the vigorous demand for our <unk> 12 models.
Just a month later in June we launched the.
The accelerating 296 dtb, featuring our latest hybrid power train combining a V six durable and electric motors.
It exceeded previous models order intake over the same relative period and now a solid pipeline of experiences for our customers is already planned for the current year further fueling our ambition for this model.
I drove this cara.
Several times in the Gold Cup feeling the fund to drive experience you can have a really unique believe me.
A few weeks ago in november's, new Aikona. The most powerful with 12 ever made was unveiling the pleasure of attending in Florence.
Price to our most loyal <unk> Im talking about the Ferrari Daytona Speedway.
Masterpiece.
The craftsmanship performance and design already awarded internationally and limited to 599 units, which have all been allocated in advance of its premiers and we've untapped demand way way exceeding the limited serious plan.
So we entered this year 22, we have considerable momentum thanks to two factors one the strongest ever order book into a broad portfolio of models.
The order book first it has never been so strong.
The positive trend characterized the war years and continued in Q4, when we experiences impressive order intake. Despite our decision to close the order collection on certain models.
The new product portfolio.
Not only do we have the broadest most innovative and most beautiful range of cars ever offered to our customers.
We also plan to further enrich these.
To save launches this year, completing the 15 launches promos at the capital market day in 2018.
In Dcs in 'twenty, two we will unveil the much anticipated that put us on where which I'm confident we'll exceed our customer expectations either or it several times in the heels around about an ela that day and night for the test and I can testify that the driving experience is really.
Astonishing, but they do not want to see mode to avoid to spoil such a surprise.
Now after product customers experience.
In the course of 2021 .
It has been really liberating to be able to start arranging events with them again to mention a few of them we market.
<unk> 10th anniversary, we are a very special event in Sicily for classic and modern it drivers and we restarted our reboot incorrectly into activities, culminating in the finale, Mongolia to mood yellow, where I met so many of our customers and fans all passionate about February .
Now our motor racing activities 2021 was our best ever season in GT racing with Ferrari, winning the drivers and manufacturers world titles in FIA World Endurance Championship and with victory at the 24 hour service.
Months with our $48 eight GT April the.
Formula One 2021 season also showed encouraging signs towards it and we've turned the place in the Constructors Championship.
2022 is the first year with a complete new set of technical rules and our new card will be presented in a few days on February 17th.
We're also redefining our strategic partner along three directions, one we welcome back Banco Santander.
With tap current segments with new partners, such as CEVA logistics in the transportation space.
Three we strengthened our relationship with leading edge technological partners, such as Amazon Web services and wireless to be at the forefront of digital technologies and web 3.0.
Such stronger partner portfolio.
Firms one once again the continued <unk> of the most successful team in F. One is three scooter year February .
And what about the brand diversification.
Well last year, we made excellent progress in extending our brand into exciting new territories in June we launched the first David Farrar efficient collection in July we reopened it diaconicon leaner restaurant in the heart of Maranello.
And in the second half of last year, we renovated our stores in Italy and USA.
In 2022, we plan to move forward in the first important milestone will be the upcoming a fashion show in Milan later this month.
Last but not least <unk>.
Capital neutrality by 2030.
In a further step towards our goal in Q4, we received ISO 14 zero 64 certification for our calculation of the group's carbon footprint.
<unk> certification has been really an important step forward. In addition to our electrification journey. We are also committed to addressing both direct and indirect emissions with a focus on energy and material across all our entity.
In tide value chain.
As always our focus who was not only.
External stakeholders, we continued to invest in our employees through to our founders believe that Ferrari is made above all by people.
We invested in training for our employees caring for their wellbeing and nurturing the diversity of talent in our company.
Our efforts were rewarded in 2021 by equal salary certification for the second consecutive year in Italy and for the first time in the United States.
<unk> has been really outstanding thanks to the passion the dedication of Ferrari people into reward their achievement in line with the company's strong performance indicators I am really pleased to announce the company the yearly competitive award up to <unk>.
Slightly over 12000 in Europe for our employees.
And now <unk>.
After the 2021 highlight let's have a look at the futures at our futures is small taste before providing the full picture on June 16, when we meet yes.
We are targeting 2022 to be a solid year on the trajectory to reach the 2023 Abd a target of 182 billion Euro has announced that in 2018.
How do we want to do this we want to achieve this goal well there are three clear direction, we identified number one.
We will carefully manage a vibrant order intake in line with our strategy to pursue.
Control would grow 2% of our brand exclusivity.
Two we will manage the months as phase out wireless Daytona deliveries will start in 2023.
Three is I already explained it in the last call innovation requires partners and it is what we start to do love from Amazon and <unk> just to mention a few of them and some others. Some other important technology partnership will follow up in the near future.
2022 is a very important year for us it's not only the 75th anniversary of our company.
It also sets the foundation for a new business plan, which will be presented at our capital market day on June 16, Es in Maranello.
This will also be location to meet in person some members of our new organization.
Recently announced it and achieved through both the promotion of homegrown talent in a number of key strategic externalize.
The new organization is decided to further foster innovation.
Optimizing processes and.
Agility and increased collaborations.
People at the South of our company and I'm confident we will seize the opportunities ahead of us in this fast evolving environment.
I will now hand over to Antonio who will review the 2021 result in 2022 guidance.
Thank you, Tom and good morning, or afternoon to everyone joining us today.
Let me start on page seven.
Where you can see the highlights of the 2021 earnings.
Very strong here, which shows a high double digit growth on all metrics compared to 2020.
And more meaningfully a remarkable increase versus pre pandemic levels.
Our shipments reached 11155 unit up 22% versus the prior year and 10% versus 2019.
Group net revenues were $4 billion, and 271 million euro increased 23% versus prior year, and 13% versus 2019, driven mainly by volume and stronger product mix.
EBITDA came in at 1 billion and 531 million.
Up 34% versus 2020, and close to 21% versus 2019.
The EBITDA margin reached a record level of 35, 9% boosted by the contribution from the Ferrari Monza and otherwise very rich product mix.
EBIT was $1 billion, and 75 million euro up 50% versus 2020, and 17% versus 2019.
The improvement of both operating margins compared to our latest guidance mainly reflects the upward revision of the commercial revenues from the F. One commercial REIT Alder recorded in Q4.
Adjusted net profit was $833 million up 56% versus 2020, and 19% versus 2019, resulting in an adjusted diluted EPS EPS of $4 five improved.
Improved by 56% versus prior year.
Industrial free cash flow for the year was exceptionally strong at 642 million Euro supported mainly by the collection of the advances 48 will have competency on them.
Turning to page eight.
You can see the details of the shipments of the full year 2021 up 22% versus 2020.
Sales of eight cylinder were up about 35%.
While 12 cylinders were down 16%, mainly due to the reduced volume volume of the eight well Super fast, which was phase out in the year.
Our deliveries were driven by the range models.
Family.
The Ferrari Roma IDF, Ninety-third Islands, which reached global distributions.
The portofino and <unk>, despite the ramp up phase.
Shipments of the Ferrari Monza SB, one and SB two were higher compared to the prior year in line with planning and are reaching the end of production.
All geographic regions posted double digit growth.
Moving to page nine you can see the walk of our group net revenues up 26% at constant currency.
The increase in revenues from cars and spare parts.
Almost 29% at constant currency.
Was supported by higher volumes and strong enrichment of the product mix along with personalization.
Revenues from personalization, we're higher than the prior year in absolute terms sustained by volumes.
They were in line with historical average at around 18% in proportion to revenues from cars and spare parts.
Engines revenues.
We are up about 26%.
<unk> is related to higher shipments of Maserati and to a lesser extent to the rental of engines to other formula one racing teams.
The increase in sponsorship commercial and brand up close to 13% at constant currency was attributable to the more favorable formula one calendar and brand related activities.
Sally offset by a lower priority ranking.
This increase reflect also the upward revisions of the commercial revenues from Formula one that I mentioned before.
Currency, including translation and transaction impact as well as foreign currency hedges at a negative contribution of $80 million Euro.
Mostly related to the U S dollar and the Japanese yen this quarter.
Yeah.
Moving to page 10.
Let me review the change in our EBIT Bridge explained by the following variances.
Yeah.
First volume was positive for 220 million Euro.
<unk> the shipments increase.
Second mix price variance was also positive for 212 million euro boosted by a richer product mix. Thanks to the <unk> family and the Ferrari Monza SD Wan NSP too along with personalization.
Partially offset by the ramp up of the Ferrari Roma and the Portofino am.
And the reduced contribution of the 12 superfast.
As already mentioned by <unk> the product mix in 2021 was further boosted by our decision to cease commercial opportunities on certain models in line with order intake evolution.
And also benefited from deliveries of the <unk> being moved to 2021 from 2020.
Third industrial and R&D expenses increased 65 million euro mainly due to higher DNA product innovation activities and Formula one expenses net of technology related government incentives as well as startup costs.
Fourth SG&A were negative by 14 million euro, mainly reflecting communication and marketing activities of model Unveilings and lifestyle events as well as the camera the company's organizational development.
Lastly, other increased eight 3 million euro, reflecting the more favorable formula one calendar and higher contribution from brand related and other supporting activities, partially offset by the impact of the lower formula one ranking of 2020.
Yes.
The net impact of currencies was negative $477 million.
As a result of what I, just mentioned EBIT reached $1 billion and 75 million Euro.
52% versus the prior year with an EBIT margin of 25, 2%.
Turning to page 11, industrial free cash flow generation for the year was remarkable.
And equal to 642 million euro sustained by the strong growth in EBITDA and the collection of advances on the competitive zone.
The working capital dynamics.
Including the above mentioned advances provisions and other receivables and payable was almost neutral also due to the cadence of our capital expenditure, which stood at 737 million Euro.
The capitalization ratio was approximately 39% for the year and in line with the prior year.
Net industrial debt as of the end of December 'twenty, one was 297 million compared to 500.
$4 3 million at the end of 2020.
It's worth mentioning that excluding the dividend distribution of 162 million Euro.
231 million of share repurchases, we would have been cash positive at year end.
Let's move on page 12.
We explained the main drivers of our guidance for 2022, which targets a solid growth and continues to demonstrate the EBITDA progress on the trajectory to reach our 2023 EBITDA target of one eight to 2 billion Euro as announced back in 2018.
While in 2022, our profitability will continue to expand in absolute terms carefully leveraging our record order book.
Percentage wise, the majority will be flattened by a product mix, which will be a richer, but not enough to offset the negative impact of the monza phasing out and of the Daytona deliveries starting in 2023.
More diversified by but lower revenues from sponsorship.
And a step up in DNA in line with the start of production of new models, which will start deliveries in 2023 or which contribute marginally in 2022.
On the industrial free cash flow side, the generation will be robust supported by the strong operating results and the collection of advances on the Daytona SP <unk> III.
This will be partially offset by capital expenditures of approximately 800 million Euro as we expect the lower capex seen in 2021 to re phase partly in 2022.
But also by much higher taxes commensurate to the very strong results posted in 2021.
Page 10 or 12 of them.
We show the progress that we aim to achieve based on our guidance since our starting point of 2018 and till the end of 2022.
In essence as of the end of this current year, we want to be very close to what we promised at the 2018 capital markets day for the accumulated EBITDA.
And fully on target in terms of cumulated industrial free cash flow generation over the plan period.
I'll buy it with a different time profile.
And we want to achieve such results. Despite the impact of this pandemic.
Subject to meeting our ambitions I believe this will prove once again, the resilience and strength of our business model based on brand exclusivity product excellence, leading edge technology and innovation.
Such awareness allow us to look at the future with great confidence.
With that said I'll turn the call over to Nicoletta.
Thank you.
Thank you Antonio Nadia. Please we are now ready to start our Q&A session.
Thank you.
We will now begin our question and answer session.
If you wish to ask a question. Please press star and one on your telephone keypad and Mike for your name to be announced.
Okay.
The first question comes through line of Michael Binetti from Credit Suisse. Please go ahead.
Hey, good morning, guys. Thanks for all the detail today and for taking our questions.
Yes, I'm trying to think about the structure of the guidance you laid out for 'twenty two relative to where we were at.
I know you guys have been focusing us on the on the 2018 analyst day in helping explain the differences and similarities as you put it at that.
One eight.
Going into next year, but this.
This year, you've got revenues in line at $4 eight with the low end of that original plan, but EBIT.
Below by maybe $100 million at the low end of the plan, maybe you could just help us understand.
Whats different on the same revenue base.
EBIT a little bit lower.
This year and if it.
You were originally said maybe a few units.
Start to ship in 2022 today or can you clarify that Adobe and 'twenty threes, maybe at the timing mismatch, but I wonder.
How much of it might be attributable to the profitability of growth relative to the overall fleet if that is that a car.
You view as accretive to corporate margins and to the rest of the fleet.
Antonio can you estimated reserve.
Thank you Michael if I got your question right I think the difference compared to the guidance that we gave back in 2018.
Is largely due to the different timing of introduction of the cars compared to what we modeled at the time.
Clearly we are seizing the commercial opportunities that we are having so significantly.
Significantly strong order books on VA to entry models, resulting in that respect.
While as we mentioned I think the gap that we have between the phase out of the of the Monza and introduction of the Daytona is is impacting the level of the margins both EBIT and EBITDA. In addition to that as far as EBIT is concerned we have this DNA impact which.
Due to the fact that we start producing new cars that are coming in in the next one I don't know whether this is enough for it.
In terms of color on <unk>.
Let me let me follow that for one second you have.
Daytona and peso and confirm to start shipping next year. After what you described as a headwind from mix this year largely monza, but if the guide is now $1 82 billion for next year. The low end of that guide assumes EBITDA growth will slow to about 6% in 2023 from a 11% in 2022.
How should we think about that.
At the top end versus the bottom end of the guidance in that range.
What scenario do you see that would explain a slowdown to the on EBITDA growth next year, maybe it's maybe there was some phasing of investments as you guys look out at the beginning.
Initiatives like electric and those kinds of things I'm. Just curious if you could help us think about that.
Yes, I think volumes will keep on growing anyway with better margins with mix will be stronger was supported by the new economy I mean.
And this is Andy.
As far as the.
Contribution of our core business and then we added the other businesses that we expect also to grow.
Brand is still very low in 2000 that you do expect it to be better.
In terms of our one there are some elements of it including the budget cut introduction, but thats of course in terms of the cost side.
Okay. Thanks.
That's on a great year guys I appreciate it.
Okay.
Thank you. The next question comes from the line of Adam Jonas from Morgan Stanley . Please ask your question.
Thanks very much.
Yeah.
Date until June 16.
Going to be really.
That's going to be some special so I'll look forward to meeting you all in person.
No.
When you you guys recently struck a deal with the Swift block.
Block chain company Vela network.
How should investors think about the potential for the Ferrari brand and the met averse.
Or in the NFC or digital space.
Thank you for the question John US and also looking forward to meet you in person at the 16 of June .
Yeah.
I think of that.
As we said it's important that we look.
And we see how the new technologies can help.
Our brand for sure.
The digital technologies in the web 3.0 technologies that they are using the blockchain and the NFC is an area that is it can be interesting for us either deserves some attention.
There are many as you know there are many there is a lot of movement on the market about this some companies even changing the name.
And I think this is an area that where we have to put our attention in this resolves Hawaii.
I put.
We have in place if you have seen in the organization.
Department that is called a digital in the rate in data.
Because.
It's an important dimension that we as Ferrari, we have we have to evaluate that to consider for the future.
Okay look forward to learning more about that.
My follow up is.
Do you believe electric vehicles.
Fans the addressable market for the Ferrari brand.
And if so how.
So do you think that to the electric vehicles will expand the brand.
Do you think that as Ferrari.
Brings forth.
All electric vehicles.
<unk> grows.
The.
Addressable market and revenue potential for the brand.
And if so how do you see that happening.
Why.
Okay.
I think the point is the following I mean electrification is one.
One technology like the.
Digitalization that we rely on is always in our unique Ferrari way.
As you know we already started to <unk> our model a few years ago, we have already three model on the road that pretty much successful essay for 90% of that is by the 296, GTP and I believe that.
The electrification is a way is a technology the way that can help our brands to keep the pace with the time, let's.
And that's really what they believe the Adam.
Okay. Thanks.
Thank you. The next question comes from the line of so think about it from UBS. Please ask your question.
Hi, Thank you for taking my question.
So my first one would be just to go back on Michael's question.
Thanks, guys.
So your revenue guide for 2022.
It is quite high.
And so.
So given that the mix is going to be.
That strong it kind of implies.
Step up in volume.
And so I was wondering if this is a correct assumption or if there is something else that we're contributing meaningfully to the top line. Because you mentioned that also in terms of partnership you have it's been lower.
It seems like.
Good increasing revenues should come mostly from the kind of volume growth. So I just wanted to check if that's.
Right way to think about it.
Sure.
Hi, Susie Antonio speaking.
Thats correct volume will be higher so we'll grow there and is it because also the order book is significantly higher than we are used to.
Covering well into 2023.
It's not true that it makes this week I mean actually the.
The product range mix is high it is simply not enough improving compared to the loss of the of the Monza and the introduction of some fees. Some months later of the Daytona.
Okay, but basically year over year volumes will be positive and mix, we expect to be slightly.
Slightly negative.
Overall.
Yes.
Okay got it.
And on pricing and so in 'twenty. One it was the first time that you pushed through our like for like price increase about 2%.
If I remember correctly, it was mostly due to inflation and inflation.
And given that inflation so at the moment.
Going away and should we expect something similar for 'twenty. Two like are you planning to potentially push through some price increase.
To offset inflation or was it a one off in 'twenty one.
Yes. This is an important point I mean, there is some pressure on the energy on the aluminum cost and we will we.
We will apply this price increase to consider for that but we will also leverage other important levers when it comes to the pricing of the new model.
And selected price increases of selected model and also the personalization. So this is an important factor we are factoring in switching.
Okay. Thank you.
Quick just a follow up on your free cash flow.
So in this slide and you should have you basically.
You're in line you achieve that.
I'm sorry.
Eight cumulated at cash flow as promised so Adam.
So basically the fact that.
Guidance previously at one one to $1 25 billion industrial cash free cash flow.
It's just a matter of phasing right.
It feels like.
That has been just due.
Due to that to the phasing of the models are.
Or was there some kind of advances for our future, maybe hypercard, which.
Changes in timing.
Got it right Susie.
<unk> is an exact answer.
Okay, Okay perfect. Thanks, a lot.
Thank you. The next question comes from the line of John Murphy from Bank of America. Please ask your question.
Good afternoon, everybody and thanks for the time.
Wanted to follow up on that pricing discussion I mean, obviously there is cost inflation thats going on but you are talking about your order book being longer than it ever has been before so is there a greater opportunity to take price explaining to your customers is this cost inflation to you relatively sophisticated.
I'll start that and then also maybe.
Helps balance out the supply and demand in the business at a very high class problem, but it seems like there might be a greater pricing opportunity.
And then you've ever had before.
Thank you I think this is what you say, it's important and we are considering.
We are applying the price increase and we are monitoring carefully what's happening on these two dimension of energy in the aluminum and again as I said, we will introduce also new model and the normal we will apply in the right way the pricing. So this is.
An important dimension that we have we are careful about also because we all know what is the pressure that there is in the supply chain all over the world on the other side are you able to say that.
We are also.
On the supply chain.
We have some good partners and reliable partners, we can leverage on.
Okay, and then just a second question on the transition.
EV is.
Very interesting, where they told us of each wells naturally aspirated.
Engine.
It sounds great to me personally.
But obviously there is a push towards towards Evs, giving your close relationship with your customers and you kind of build design engineer and build what they want what are you hearing from your customers at this point on this transition I mean, many other companies are less slaves to getting at where EV penetration will go and what they are.
The powertrain investment.
Direct access and good discussion your relationships with your customers what are they telling you just on the Daytona It seems like they're saying Hey, we probably don't want this right now, but the reality is some people might go I mean, what are your customers telling you right now.
But I think we have.
We have different kind of a February see each one of its own.
Preferred.
It's a model and the propulsion. So we have heard recently that you've seen them in Florence win.
We launched the Daytona and they were extremely extremely happy and delighted to see such a beautiful.
You have seen also customer trying.
96, <unk> that is a kind of different.
Different <unk> with different feeling so I think that.
If you want to get my year.
Feedback from the customers that we have customers with different.
Feeling different needs different perception and.
Even the same customer for different moment can have.
Can prefer the V 12, thus be rated one or the V. Six hybrid so there is a mix of different.
Customer with different feeling and different needs different emotion.
But it's fair to say that Youre not guessing at this you had any discussions with your customers. So youre, what youre, introducing and Youre building is what they want.
Youre never going into a year, you would miss estimate EV penetration on on on.
The models right I mean, it is something thats well known by Bayou through that order book and your discussions with your customers is that a fair statement.
Seeing that there is a clear trend and we would work on for sure in electric vehicle and you will see this strategy lineup here in June 2016, what I want to say is that there are customers different customers that prefer a different kind of proportional schema. So we are aware of obviously of what's happening we have plan for that but we are also.
With all the different feelings and different emotional the customers want to get with different propulsion scheme.
Okay, great. Thank you very much.
Thank you.
Thank you. The next question comes from the line of Giulio Pescatore from BNP Paribas Zhang Please ask your question.
Hi, Thanks for taking my question I, just want to follow up on the previous point.
The answer did you mean.
As long as customers will one combustion engines, you will be willing to provide them. Even if we think about 10 or 20 years down the line.
I think of that.
The technology is useful as far as it addressed the customers.
We able to delight the customer we have to.
This is a.
This is important for us. So if we are moving based on or we are moving other things that's what we want to do.
Okay. Thank you and then the second question on the order book for the <unk>, which you said build faster than previous.
So that vehicle.
Does that mean that that could potentially do the same type of volume.
I think with that face off like they did in the us.
And maybe talk about the difference in demographics between that vehicle and four days.
Maybe you can go into that.
One provider.
Forecasting on volume lifecycle.
However, this has been a as I said before.
The reception has been very strong in terms of order compared to our previous internal benchmarks.
Other element, yes, I think you are addressing the fact that the our.
Our customer base for this Scott is slightly younger and this is true.
I mean really you need to drive it experience it.
Well after you to provide a driving experience that youll see <unk> be more than happy.
Right.
We with the carriers.
That's exactly I will give that maybe just one last one before.
That's helpful. Thank you and to.
It really started to reach guidance, which feels very very conservative.
At least I understand the step up in Capex.
They're gonna be higher taxes.
Can you maybe help us help us with.
The amount of deposits that you should expect.
From the Baikonur and how many deposits did you received last year for the competitive because it's really difficult to reach that number.
Okay.
I cannot comment on the degree of conservatism of the estimate but basically.
Our cash flow is relatively simple I mean, we have <unk> EBITDA and you know what the guidance is.
What we said about Capex I think the old question is about the working capital where we include in the wider definition answer the impact of the advances on the limited series cars.
For the Daytona we are talking about more than 200 million more or less in terms of current estimate the other element you should not underestimate the impact of taxes because.
We are obviously paying taxes, both in terms of the balance and the advance on the basis of the results of 2021.
And it makes a big difference compared to what we paid in 2021 based on the results of 2020 that were impacted by by the pandemic.
This provides you.
And better understanding of the dividend.
Yes.
Benefiting from the patent box right.
The patent box is helping but not in terms of cash now at the level. It did at the very beginning because now the law provides for the benefit cash wise in three installing three year installment. So this has been already visible in 2021 and it will be obviously in 2022.
Okay. Thank you.
Welcome.
Thank you. The next question comes from the line of Martin the umbrella <unk> from <unk>. Please ask your question.
Thank you.
Good afternoon everybody.
My question is on Capex, which is.
Portion of the lower free cash flow for the current year. So 800 million, maybe consider a sort of peak for capex or should we expect they will go beyond 1 billion annually going forward.
And when you talk about partnerships.
Remember you also mentioned partnership in order to reduce Capex.
I clearly understand.
You cannot talk about something was not announced but just to elaborate a bit on this.
In order to understand what could be the magnitude of the reduction in capex if any thank.
Thank you. Thank you Michael you remember well the partnership very important way forward for us.
And as I said also before.
Would it be some partnership that.
Total partnership for Us and we will announce in the near future.
I think that.
And it's important that as always also what I said in my previous life to keep a strong disciplined about capex and to keep the momentum and to make sure to do something innovative.
It's important that we decide what we do internally and we decided and what we want to do with partners outside so the two world.
On a ship and discipline.
And as I said in the near future you will hear about an important partnership.
Something that is important.
For the for our call, but for which.
We believe the best way forward is.
His partnership.
And on the amount of Capex 800 million could be considered as a peak.
You can consider as more or less a good number to think about because we will use as I said the partnership tool to optimize and to be disciplined.
Okay. Thank you and talking about volumes based on what you commented before.
We would expect higher volume growth than the usual, let's say average of 6% we saw in the last few years.
Yes, it is a bit a result of the significant net.
Intake increase that we've seen this year. So we need to serve this one obviously will be very careful because the consents of casualty remains crucial to our business model.
And this is an element of significant attention will play or leverage is going to manage this one.
And for sure the broadest portfolio the broad portfolio. We have is helping to protect also the brand exclusivity because in this year, we have a lot of a lot of models that are in production.
Thank you.
Thank you. The next question comes from the line of Stephen Reitman from <unk>. Please ask your question.
Yes, Sir.
Thank you for this.
I understand what youre, saying about the mix in 2022, so just to dig a little more detail in that first of all.
Is it much lending that youll still be selling some bonuses in the first quarter of 2022.
Okay.
If we could see may be some impact.
And the second question is about the cadence of the degrees of the April .
Okay.
How many would you expect to be delivered in 2000.
Yes.
Is a lot of noise on the background, we're having clinical understand your question.
I don't know it seems there is someone mute alone.
Yeah.
I'll try again, sorry, okay, sorry about that yes.
Sorry no.
So first of all.
Understand that you will be selling some loans is in the first quarter of this year model will that have an impact expected in the first quarter of this year still and secondly could you talk about the cadence of deliveries of the <unk> competency Oni, obviously, a very high margin coffee in the course of 2022. Thank you.
Even I think in terms of the longer we'll complete the deliveries of the of the mongering in Q1.
However, the absolute number will not be as high as it has been during the last quarter of this year.
Yes, it was competitive and competition are better will be spread quite evenly.
Across the fourth quarter.
Thank you.
Welcome.
Thank you.
The next question comes from the line of George <unk> from Goldman Sachs. Please ask your question.
Thank you for taking my question.
First question I had was just on the volumes. Obviously you are now above 11000 units I think in the past.
Previous management mentioned that Max capacity was about 15000 units.
The existing industrial footprint.
Is that still roughly the right number.
Think about it.
And in order to get that presumably you'd have to add shifts.
Lead time from a trading perspective.
The incremental shifts.
The second question I had was with respect to carbon neutrality by 2030 do you still expect <unk> to play a prominent role.
In reaching that target.
And then finally, obviously, we had significant management changes and some exciting promotions and external hires during the quarter.
Perhaps you could give some insights into the skills that you were looking to promote.
Half of those management changes thank you.
Start from the last one the management change in the carbon neutrality and the first one.
We'll take it so let's start from the management change, yes, we did a big change at the beginning end of last year beginning of this change beginning of this year.
<unk>.
We did along with two direction, if you've seen on one side that we promoted our internal talents.
I had the pleasure to see because I talked to a lot of people in the company and also we externalize I think.
What.
The common threat.
We wanted.
Wanted to pursue these new organization.
For the fourth following ones number one.
The strong willingness to cooperate.
Number two is about the attention to innovation and number three is the focus to bring these things, especially.
Especially in a transition area to make the right choices right decision, the right timing and to move forward.
Number four.
He is.
It is very important, especially nowadays this is becoming very important for all the companies in this continuous learning approach.
Because we have to be opened.
To listen to the other point of view other People's point of view and also the supply point of view the partnering point of view. So these out of.
The features that they want to booster with.
The new organization again organize the wave of the homegrown talent and also external hires.
This keeps for granted domestic competencies that.
All these people are bringing in in the game.
Coming to the second question the carbon neutrality.
Said the carbon neutrality.
We will show you a clear plan.
We meet here in mrna load the target is to become carbon neutral by 2030.
We want to do it looking at all the carbon emission.
Generate directly as well as the carbon emission that get generated along.
The value chain.
We want to doing a scientifically scientifically and so there's a reason why we are also proud if you want of these ISO certification we got in Q4, because it's 55 that we are.
Substantiating these numbers with scientific approach I think.
But if you want to tackle this properly we needed to be to do it.
Scientifically and Thats, what we will do and Thats, what we will show you in June .
Now the first question Antonio you can theatrical.
The first one yes 15000 units is the level of capacity that we have there has been no change in that respect.
And the second one we are working on two shifts and we predict to be there and even for 2022.
Obviously sounds great. Thank you, yes very helpful. Thank you very much and looking forward to the CMT.
Likewise.
Thank you. The next question comes from the line of Monika posture from intense aside Pablo Please ask your question.
Good afternoon, everyone I Hope you can hear me.
My first question is not.
The volume growth in 2022 on the back of a stronger order book.
Ramp up of the new and northern seen 1022 volume volume impact would be significant over the current year I was wondering if this could bring to some phase out of some more than CAD.
And that's what the price mix.
I was wondering if you can elaborate.
And what do you expect in term of personalization for 2022.
My second question.
Hi.
Our keeping questions.
And we'll get that.
Someday Daytona should we get.
And the impact mostly in the first part of the year is it correct.
And part of that.
Vaccine.
Sure.
Would it be higher or the.
Cash impact two.
2022.
Some highlights of the P&L.
Thank you very much.
I think the part over the phase out of the model as I said the.
In Q4, we stop at the we did not take a order anymore on some some model.
And this is Dan on for the sake of brand exclusivity.
The personalization.
Give us a good contribution to our to our topline.
And for the Daytona the taxes, maybe anthem.
And then you can take that sure.
Daytona is significantly contributing in terms of cash flow with the advances in Q1, maybe you remember what happened back in 2019 with the with demand.
And in terms of taxes, yes, we are currently projecting something like <unk>.
<unk> recognized 100 million additional cash out for taxes during the course of 2022.
Thank you so much.
Welcome. Thank you.
Thank you very much their participants. Thank you very much for all your questions and now I would like to hand, the conference over to our speaker today, Mr. Benedetto Vigna.
Thank you so Mike go ahead.
Thank you. Thank you so much and thanks all for your time this afternoon and also for all your questions.
Let me close by underscoring it three things.
One.
Our excellent 2021 financial result, we have an exceptional EBITDA margin.
Two.
Our record order book covering well into 2023.
And three our broad innovative beautiful product range with two new launches to come in this year in 2022.
Today I realize that we I mean, we provided a little taste of whats happening in our company.
Realize that you want to hear malls and we are.
Zika is avid to seize these opportunities ahead of us into shape with.
We won't give you the full picture on June 16 in Maranello at capital market day.
So good afternoon, everyone. Thanks again for your attention until Q in the next quarter. Thank you.
That does conclude our conference for today. Thank you for participating you may all disconnect have a nice day.
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