Q3 2023 Ferrari NV Earnings Call

November 2, 2023

Okay.

Operator: Good day, thank you for standing by. Welcome to the Ferrari Q3 2023 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 need to press star one one on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Nicoletta Russo, Head of Investor Relations. Please go ahead.

Good day and thank you for standing by welcome to the so Rami said quote that 'twenty two 'twenty three 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 this session going need to press star one bond on the telephone keypad, you well I can't I'm not going to be made at message advising you had it right.

Your question. Please press Star one again, please be advised that today's conference is being recorded.

I would now like to hand the conference.

Our speaker today Nicoletta Russo head of Investor Relations. Please go ahead.

Nicoletta Russo: Thank you, Nadia, and welcome to everyone who is joining us. Today we plan to cover the group's Q3 2023 operating results, and the duration of the call is expected to be around 60 minutes. Today's call will be hosted by the Group CEO, Mr. Benedetto Vigna, and Group CFO, Mr. Antonio Picca Piccon. All relevant materials are available in the investor section of the Ferrari 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 2 of today's presentation. The call will be covered by this language. With that said, I'd like to turn the call over to Benedetto.

Thank you and idea and walk them through I would Wanna is joining us today with plans to call by the group's Q3, 2023 operating results and the duration of the call is expected to be around 60 minutes today's call would be offset by the group CEO. Mr. Benedict Avino groups here for me that I'm, telling you pickup is gone all relevant.

About theaters that are available in the investors section of the periodic cost, but its website and at the end of the presentation, we will be available to answer your question.

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 statements included on page two of today's presentation and the call will be carbon by these language, there's upside electrical Nicola that's too bad at it though.

Benedetto Vigna: Grazie, Nicoletta, and thank you everyone for joining us today. Before we begin, I would like to thank all the women and men of Ferrari for their outstanding work, all our clients for their continuous trust in our brand, and all our partners, suppliers, dealers, and sponsors with whom we have continued to strengthen our relations. In the current macroeconomic context, we are continuing to execute our business plan in line with the trajectory outlined last year during our Capital Markets Day, and Q3 was once again a quarter full of achievements. Three are the key messages we want you to focus on. One, record Q3 financial results, sustaining our greater confidence towards year-end guidance. Two, product and infrastructure development are well on track, in particular on the electrification side with the full electric Ferrari in prototype phase and the e-building proceeding as planned.

We're actually gonna ethane. Thank you everyone for joining yesterday.

Before we begin I would like to thank all the women and men of Ferrari for their outstanding work.

All our clients for their continued strength in our brand.

Our partner supplier theater sponsors with whom we have continued to strengthen our relations.

In the current macroeconomic context, you are continuing to execute.

Business plan in line with the trajectory outlined in the last year during our capital market day in.

In Q3 Q3 was once again a full.

Full of achievements.

Three out of the key messages, we want you to focus on.

One a record Q3 financial results sustaining our greater confidence towards year end guidance.

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Product and infrastructure level of pain and are well on track in particular on the electrification side with a fully electric Ferrari in prototype phase ended the email link are proceeding as planned.

Benedetto Vigna: Three, continued strong brand momentum, further fueled by two new model launches, the 296 Challenge and the 499P Modificata, and outstanding event attendance in Italy and in the United States. Let's start with financial results and the business performance of our company. Q3 was a record quarter with all key metrics showing a double-digit growth versus the previous year. For the first time, the revenues were above EUR 1.5 billion, 24% up versus the prior year, with shipments 9% up. All geographic regions grew in the first nine months. EBITDA, about EUR 600 million, and EBIT, over EUR 420 million, were both up about 40%, driven by product mix and personalization. Last but not least, the industrial free cash flow generation was more than EUR 300 million.

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Continued strong brand momentum further.

By two new model launches, the 296 challenge and therefore be more difficult than and outstanding event attendance in Italy and in the United States.

So let's start with financial results and the business performance of our company Q3 was a record quarters, we've all key metrics showing a double digit growth versus the previous years.

For the first time, the revenues were about $1 5 billion Euro.

24% up versus the prior yes, we have a shipment 9% up olah all geographic regions grew in the first nine months.

EBITDA about 600 million Europe and EBIT.

Over 420 million Euro were both up about 40% driven by product mix and personalization.

And last one at least the industrial free cash flow generation was more than 300 million euro.

Benedetto Vigna: These results are further proof of the strength of our business, and the increase in the visibility towards the end of the years led us to revise upward the full year outlook. The vitality of our business is also confirmed by the current order book, which remains at highest levels across all geographies and models, covering the entire 2025. Before you ask, I can already tell you that in the next few months we do not expect the order book to continue to grow since all models are substantially sold out, but one, the Roma Spider. Last week, at the dealer annual meeting, I spent one full day with dealers from all over the world, and I received very positive comments on the market sentiment. By this, I mean throughout, from products to client interest, and to brand experiences.

These results are.

Further proof of the strength of our business and increases the visibility towards the end of the Es led us to revise it upward the full year outlook.

The vitality of our business is also confirmed by the current order book, which remains at the I guess, the levers across all geographies and modest covering the entire 2025.

And before you ask I can already tell you that in the next few months, we do not expect the order book to continue to grow since all models at substantially sold out but one the roadmap spiders.

Last week at.

At the <unk> annual meeting I spend one full day with dealers from all over the world and they received a very positive comments on the market sentiment and by this I mean throughout.

Some products to client interest and two brand experiences.

Benedetto Vigna: Again, anticipating one of your questions, I would like to underline that during the dealer annual meeting of last week, I specifically spent time with our dealers in mainland China, which confirm that the traction of the brand continues to be very strong. We are also making progress on the future product pipeline. All projects are on track as planned, and in particular, I'm excited about the fully electric Ferrari, now a prototype in testing mode. I had the pleasure to see and try it, and unfortunately, I cannot tell you more. You have to be patient, and as you know, this is part of the desirability of our brand. I am also very proud of how the e-building is progressing towards the inauguration expected in June next year, exactly two years later after our Capital Markets Day.

Again, anticipating one of your question I would like to underline that the beauty the dealer annual meeting of last week.

Pacific and spent time with our peers in mainland, China, which confirmed that the traction of the brand continues to be very strong.

We are also making progress on the future product pipeline.

All projects are on track as planned.

And in particular I'm excited about the full electric Ferrari now prototyping testing mode.

It is a pleasure to see and try it and unfortunately I cannot tell you more.

You have to be patient and as you know this is part of the desirability of our brands.

I'm also very proud of how the building is progressing towards the inauguration expected in June of next year exactly two years later update our capital market day.

Benedetto Vigna: After finishing the walls, we started already to install the equipment to produce the selected strategic component, and by Q1 2024, we will finalize the assembly line of the electric engine and e-axles. Talking about our product offering, last week we unveiled 2 new stunning models, both inspired by our racing DNA. In fact, the recent Finali Mondiali at our Mugello racetrack provided the ideal stage for the unveiling of the latest 2 additions to our portfolio. The first one is the 296 Challenge. It is an ICE car that makes full use of the experience and expertise gained by the company in the field of international GT racing. The result is a car in several respects, very close to the 296 GT3, which debuted in January 2023. The second is the 499P Modificata.

After finishing the walls, we started already to install the equipment to produce the selected the strategic components and by Q1 of 2024th we will finalize the assembly line of the electric engine and E axles.

Talking about our product offering last week, we unveiled two new standing models look inspired by all of our leasing in DNA.

In fact, the recent finale Mon Valley.

Our modelo racetrack provided the ideal stage for the unveiling of the latest the two additions to our portfolio.

The first one is the 286 challenge it is an IC cost that it makes full use of experience and expertise gained at the by the company in the field of International GT racing.

That is a cat in several respect very close to the 2006, <unk> III, which debuted in January 2023, and the second is the 49 90 people more difficult there.

Benedetto Vigna: It is a strictly limited-series track car and the most high-performance closed-wheel car ever offered for gentleman driver use and already fully allocated. We are the only brand offering each client the possibility to drive the newest racing car only six months after the debut on the racetrack in Sebring, inaugurating the new Sport Prototipi Clienti program, which joins the F1 Clienti program. Once again, the Finali Mondiali, the unique reunion of the Ferrari community to celebrate the final events of our client experience on track, saw the participation of almost 30,000 motorsport enthusiasts among clients, Tifosi, and employees. In talking about our community, I'm also proud to mention that the Ferrari Gala, which took place in New York in mid-October, this event was an opportunity to highlight our brand's influence on sports cars, on racing, lifestyle, and beyond.

It is strictly limited to serious track gas and the most high performance closely will.

Ever offered four gentlemen driver to us and already fully allocated.

We are the only brand offering clients the possibility to drive the newest praising God only six months. After the debut on the racetrack in Sebring inaugurating, the new spot prototypical Emt program, which joins the F. One client program.

Once again, we see that even on the IV the unique reunion over the Ferrari community to celebrate the final events of our client experience on track. So the participation of almost totally 30000 motor sports enthusiasts among clients <unk> and employees.

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And talking about our community I'm also proud to mention that the Ferrari Gala, which took place in New York in mid October. This event was an opportunity to highlight our brands influence on spot cash on racing lifestyle and beyond celebrating also the unique bonds and.

Benedetto Vigna: Celebrating also the unique bond and shared values between Ferrari and the US, which goes back to the earliest days of our histories in the fifties and holds strong today. This event was an opportunity to share a series of unique experiences with such a passionate community. During this three-day exhibition, we got opportunity to get 130,000 visitors at New York City's Hudson Yards complex, the one that you are seeing now in your chart. An exclusive charity auction during the Ferrari Gala gala dinner, which raised more than $7 million. The funds will be devoted to projects supporting education in the community because we believe that giving back is a moral obligation.

<unk> shared the values between Ferrari and the U S, which goes back to the earliest days of our studies in the fifties and those strong today.

This event was an opportunity to share a serious sort of a unique experiences we have such a passionate community.

During the visit three day exhibition.

<unk> got opportunity to get 130000 visitors at New York City's Hudson yards complex. The one that you are seeing now and you're just.

And an exclusive charity auction during the Ferrari together.

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And defense will be devoted to projects supporting education in the community because we believe that giving back east and moral obligation.

Benedetto Vigna: This quarter, we also had the many client experiences on road, among which the Ferrari Cavalcade Classiche and the first Ferrari Legacy Tours dedicated to the beautiful F40, which saw the participation of 40 owners of F40 from all over the world. Moving to the racing world. In the World Endurance Championship, after the victory at the 24 Hours of Le Mans, the Ferrari 499P confirmed to be competitive with a podium in Italy, a fourth and fifth place in Japan, and we are looking forward to our return to action for the grand finale of the season with the 8 Hours of Bahrain this coming weekend. In Formula One, the recent podiums and improvements provide us the boost to prepare ourselves for the next season.

This quarter. We also added many client experiences toll road, among which the theoretical velcade the classic and the first Ferrari legacy tools dedicated to the beautiful F 40, which is so the participation of 40 owners of effort from all over.

The world.

Moving into the racing world in the World The Endurance championship. After the victory at the 24 hour suddenly man. The February 49, non peak configured to be competitive with a podium in Italy, a fourth or fifth place in Japan, and we are looking forward to our return to <unk>.

For the grant in Ireland over the season with the eight hour so better in this coming weekend.

The Formula one the recent volumes and improvements provide us the boost to prepare ourselves for the next season.

Benedetto Vigna: Clearly, we need to keep improving and recover our technical gap, and thus, on one side, we are strengthening the team under Fred, and on other side, we are enlarging our racing manufacturing infrastructure, which will grant us highest development speed and quality. I saw this facility this morning. We are also pleased with the renewal of the multi-year partnership with PUMA, who becomes our Formula One premium partner starting from next year. We also strengthened the licensing agreement with PUMA for Ferrari branded product, and they became the suppliers of our racing teams and all other racing activities. Continuing on lifestyle. On top of this partnership I just mentioned with PUMA, Ferrari showcased its latest spring, summer 2024 looks during the Milan Fashion Week, a powerful collection perceived from many editors as their absolute favorite so far.

We need to keep improving and recall that our technical debt and thus on one side, we are strengthening the team and the Fred and another side, we are enlarging our racing manufacturing infrastructure, which will grant us I guess development speed and quality. So this facility.

This morning.

We're also pleased with.

The renewal of the multi year partnership with Puma will become our Formula one premium partners starting from next year.

We also strengthened the licensing agreement with Puma for Ferrari branded product and they became with the suppliers of our racing teams and all others.

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Continue with lifestyle on top of this partnership.

Just to mention that we implement.

So that is showcasing its latest spring to summer 2024 looks during the Milan fashion week, a powerful collection perceived from many editors as their absolute fabric so fast.

Benedetto Vigna: We also continue to strengthen our presence with successful activation in Pebble Beach and in New York brand event by creating our own pop-up for our clients to increase collection, awareness, and visibility. We registered a record level of visitors in our museum, reaching over 650,000 visitors since the beginning of January, confirming the strength of the brand and the passion of our community. For your reference, in the whole 2022, we had about 620,000 visitors, so we still have a couple of months to go till the year end. Before leaving the stage to Antonio, one comment on our important sustainability journey.

We also continued to strengthen our presence we have successful activation.

In Pebble Beach, and in New York brand event by creating our own pop up before our clients to increase collection awareness and visibility.

And we registered a record level of visitors in our museum, reaching over 650000 visitors since the beginning of January confirming the strength of the brand and the passion of our community for your reference in the world.

'twenty two we added about 620000 visitors. So we still have a couple of months ago till year end.

Before leaving the stage two Antonio one comment on our important sustainability journey.

Benedetto Vigna: While many activities continue to run at factory level to address Scope 1 and Scope 2 emissions, and we are looking carefully at energy efficiency and recycled material use, we are engaging our suppliers, our dealers to address Scope 3 emissions. Indeed, last week, during our dealer annual meeting, for the first time, we also awarded the most active dealers in reducing their CO2 emissions with the Green Award. We will keep this Green Award also for the years to come, to keep high the attention on this topic that is so important for our company. Now, I leave the stage to Antonio to enter into the earnings details.

While many activities continued to run at factory level to address the scope, one and scope two emissions and we are looking carefully at the energy efficiency and recycled material use we are engaging our suppliers.

Yes.

Scope three emissions.

Indeed last week during our annual meeting for the first time, we also awarded most active dealers in reducing this year to emission.

Green Award and.

And we will keep these green awards also for the years to come to keep by the attention on this topic that is so important.

For our company and then now I leave the stage count on you to enter into the earnings details.

Antonio Picca Piccon: Thank you, Benedetto, and good morning or afternoon to everyone joining us today. Starting on page 4, we present the highlights of the Q3 results. A quarter which confirms the positive dynamics shown in the first part of the year and represents a further improvement compared to the expectations we had. Our strong business performance was sustained by a rich product and country mix, and high personalizations, leading to a remarkable double-digit growth in revenues, profitability, and industrial free cash flow generation. With shipments single digit higher than last year, revenues were up roughly 24%. Adjusted EBITDA increased 37% with a 38.6% margin. Adjusted EBIT was up 42% with a 27.4% margin, supporting a strong industrial free cash flow generation of EUR 300 million. On page 5, you can see the details of the Q3 shipments.

Thank you Vanessa and good morning, or afternoon to everyone joining us today.

Starting on page four we present the highlights of the third quarter results.

Artur, which confirms the positive dynamics saw in the first part of the year and represents a further improvement compared to the expectations we had.

Our strong business performance was sustained by our rich product and country mix and high personalization, leading to a remarkable double digit growth in our revenues profitability and industrial free cash flow generation.

With shipments of single digit higher than last year revenues were up roughly 24%.

Adjusted EBITDA increased 37% with 38, 6% margin.

Adjusted EBIT was up 42% with a 27 point for margin.

Supporting our strong industrial free cash flow generation of 300 million Euro.

On page five you can see the details of the Q3 shipments.

Antonio Picca Piccon: In the quarter, we continued to serve the highest order book that Benedetto commented, and we are all very proud of. Backed by the above, shipments in the quarter reflected our volume and product allocation strategy for the year and by geography. Thus, EMEA and Americas were up versus the prior year. Deliveries in Mainland China, Hong Kong, and Taiwan decreased by a few tenths, and rest of APAC was substantially flat year over year. All regions are up in the first nine months, with Americas benefiting from a larger share of allocations year over year and visibly supporting our margins. The increase in shipments was driven by the 296 and the SF90 family, together with the 812 Competizione Aperta and the Purosangue, which were in their ramp-up phase.

In the quarter, we continued to serve the highest order book that Benedicto commented and we are all very proud of.

Backed by the above shipments in the quarter reflected our volume and product allocation strategy for the year and by geography.

Thus EMEA and Americas were up versus the prior year deliveries in mainland China, Hong Kong and Taiwan decreased by a few times and rest of Outback was substantially flat year over year.

All the regions are up in the FERC nine months with America benefiting from a larger share of our locations year over year and visibly supporting our margins.

The increase in shipments was driven by the 206 and yes.

Okay.

Together with the April competitor on our Panther and the profound way, which we're in the ramp up phase.

Antonio Picca Piccon: In the quarter, the SF90 Spider was approaching the end of its life cycle, and the allocations of the Daytona SP3 continued in line with planning. Lastly, in the quarter, the hybrid weight on total deliveries further improved, reaching 51% and surpassing that of ICE for the first time as a result of the SF90 and the 296 families' contribution. On page six, you can see the net revenues bridge posting a strong 26% growth at constant currency. The increase in cars and spare parts was driven by higher volumes, a richer product and country mix, as well as stronger personalizations and pricing. Personalizations further increased in absolute value in the quarter and reached approximately 19% in proportion to revenues from cars and spare parts, mainly driven by paint, liveries, and the use of carbon.

In the quarter DFS Spider was approaching the end of its life cycle and the allocations of Daytona SB three continued in line with planning.

Lastly in the quarter the hybrid way from total deliveries further improved reaching 51% and surpassing that of IC for the first time as a result of the 90 296 families contribution.

On page six you can see the net revenues bridge posting a strong 26% growth at constant currency.

The increase in cars and spare part was driven by higher volumes.

Rachel product and country mix as well as stronger personalization and pricing.

Both organizations fiber increase in absolute value in the quarter and reached approximately 19% in proportion to revenues from cars and spare parts.

Mainly driven by <unk> leverage and the use of carbon.

Antonio Picca Piccon: Sponsorship, Commercial, and Brand reflected higher sponsorships, including Formula One and World Endurance Championship racing activities, and higher commercial revenues as a result of the better prior year Formula One ranking. Engines revenue declined in line with the reduction of supplies to Maserati. Please note that from Q1 2024, we'll stop reporting such item in the bridge analysis as a result of the supply agreement coming to its natural end. Currency had a negative net impact, this time mainly reflected the Chinese yuan and the Japanese yen, and secondarily, the US dollar dynamic. Moving to page 7, the change in adjusted EBIT is explained by the following variances: volume, positive and reflecting the increase in shipments.

Sponsorship commercial and brand that reflected higher sponsorships, including Formula One and we're endurance championship racing activities.

And higher commercial revenues as a result of the beggar priority our formula one ranking.

Engines revenue declined in line with the reduction of supplies to Maserati and please note that from Q1 2024 with a stop reporting such item in the bridge analysis as a result of the supply agreement coming to its natural end.

Currency is a negative net impact this time, mainly reflected the Chinese yuan and the Japanese yen and secondarily the U S dollar dynamics.

Okay.

Moving to page seven the change in adjusted EBIT is explained by the following variances.

Volume positive and reflecting the increasing shipments.

Antonio Picca Piccon: Mix and price, strongly positive for EUR +170 million, thanks to this very favorable mix, both product mix sustained by the Daytona SP3, the 812 Competizione, and the SF90 families, and country mix driven by Americas. Obviously, to the increased contribution from personalizations and pricings. Industrial and R&D expenses grew EUR 63 million, mainly due to higher depreciation and amortization and raw materials and components cost inflation. SG&A was slightly negative for EUR -10 million, mainly reflecting the company's organizational development and digital infrastructure. Other was positive for EUR +17 million, mainly reflecting higher commercial revenues from the better prior Formula One ranking and new sponsorships. The total net impact of currencies was negative for EUR -23 million. With the positive net support of these variances, we reached remarkable EBITDA and EBIT margins that we mentioned.

Mix and price strongly positive for 170 million. Thanks.

Thanks to the very favorable mix, both product mix sustained by Raytheon SB 312, competency on NDS of 90 families and country mix driven by Americas.

And obviously to the increased contribution from personalization and pricing.

Industrial and R&D expenses grew 63 million Europe, mainly due to higher depreciation and amortization and raw material and component cost inflation.

SG&A were slightly negative for 10 million euros, mainly reflecting the company's professional development and digital infrastructure.

Other was positive $4 17 million, mainly reflecting higher commercial revenues from the better prior year Formula one ranking and new sponsorships.

Therefore, our net impact of currencies was negative 423 million Europe.

With a positive net support of desire as is where is the remarkable EBITDA and EBIT margins that we mentioned.

Antonio Picca Piccon: Turning to page eight, our industrial free cash flow generation for the quarter was strong at EUR 301 million, reflecting the increased profitability, partially offset by capital expenditure for EUR 205 million, in line with our product and infrastructure development and consistent with the full-year target of approximately EUR 850 million. An increase in net working capital, which reflects a seasonal decrease of trade payables during the past summer as a result of our decision to carry higher inventories and accelerate our capital expenditure in the previous months. To be noted that the net contribution from advances collected on our future deliveries, including the start of range models in certain countries, was positive but very limited in the quarter.

Turning to page eight our industrial free cash flow generation for the quarter was strong at 301 million euro reflecting the increased profitability.

Actually offset by capital expenditure for 205 million Europe in line with our cloud and infrastructure development and consistent with our full year target of approximately 850 million Euro.

An increase in net working capital, which reflects a seasonal decrease of trade payables. During the summer as a result of our decision to carry higher inventories and accelerate our capital expenditure in the previous months.

To be noted that the net contribution from advances collected on our future deliveries, including the stock of brands model in certain countries was positive, but very limited in the quarter.

Antonio Picca Piccon: Net industrial debt at the end of September decreased to EUR 233 million, reflecting the solid industrial free cash flow generation in the quarter, partially offset by EUR 194 million of share repurchases. To conclude on page nine, we upgrade the guidance for the full year on the back of another very positive quarter. Q3 earnings was supported by an extremely favorable product and country mix, enriched with personalizations. In addition, it benefited from timing on costs mainly related to racing and a more favorable US dollar dynamics compared to our previous expectations. We expect these positive contributions to be visible also in Q4, despite the planned lower volumes allocation, higher R&D linked to product life cycles, continuing inflationary pressure, as well as the significant seasonal increase in racing expenses.

Net industrial debt at the end of September decreased to 233 million euro, reflecting the solid industrial free cash flow generation in the quarter, partially offset by <unk> hundred 94 million of share repurchases.

To conclude on page nine we upgrade the guidance for the full year on the back of another very positive quarter.

Q3 earnings was supported by an extremely favorable product and country mix and rate with personalization. In addition, it's benefited from timing on costs, mainly related to rising and a more favorable U S dollar dynamics compared to our previous expectations.

We expect this positive contributions to be visible also in Q4, despite the planned lower volumes allocation.

And a linked to product life cycles, continuing inflationary pressure as well as the significant seasonal increase in raising expenses on one side or the development costs for the 2024 corner one car and on the other the logistics expenses for the laugh overseas races or court decision.

Antonio Picca Piccon: On one side, for the development costs for the 2024 Formula One car and on the other, the logistics expenses for the last overseas races for the season. All of the above augurs well for 2024, and we are confident and ready in front of its challenges. As we anticipated during our Capital Markets Day, next year, we expect a normalized revenues growth after the very strong start of the business plan, which will be explained front-loaded. That said, we are obviously conscious of the strength of our margins, which is there and in line with our plans. Many thanks for your attention, and let me now turn the call over to Nicoletta.

All of the above augurs, well for 2024, and we are confident in rating in front of <unk>.

As we anticipated during our capital market day next year, we expect our normalized revenue growth. After the very strong start of the business plan, which can be explained frontloaded.

That said, we're obviously conscious of the strength of our margins, which is there and in line with our plan.

Many thanks for your attention and let me now turn the call over to Nicole FX.

Nicoletta Russo: Thank you, Antonio. Nadia, we are now ready to start the Q&A session. Thank you.

Thank you Antonio No idea, we are now ready to start the Q&A session. Thank you.

Operator: Thank you, dear participants. As a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. Now we're going to take our first question. The first question comes from the line of Adam Jonas from Morgan Stanley. Your line is open. Please ask your question.

Participants as a reminder, each wish to ask a question. Please press star one on the telephone keypad.

And like for them to be analysis now.

Well go and take our first question.

Okay.

And the first question comes from the line of Adam Jonas from Morgan Stanley. Your line is open. Please ask your question.

Adam Jonas: Hi. There was a bit of cutting out there. It's Adam Jonas, can you hear me?

Hi, there was a bit of cutting out there Adam Jonas can you hear me.

Antonio Picca Piccon: Very well. Ciao, Adam.

Adam Jonas: Oh, ciao.

Antonio Picca Piccon: I'm good.

Oh sure.

Adam Jonas: The comment, first question on your order book, you said that you don't expect the order book to grow, because you're basically sold out. Does this mean that you're only gonna take new orders at a pace that replaces your deliveries? Or are you just not taking any new orders? I'm just curious if this is unprecedented or if you're aware, I know you're relatively new to Ferrari, but whether you're aware of this situation happening before.

So the first question on your order book, You said that you don't expect the order book to grow.

Because you are basically sold out so does this mean that youre only going to take new orders at a pace that replaces your deliveries or are you just not taking any new orders I'm. Just curious if this is unprecedented or if youre aware I know you're relatively new to Ferrari about whether youre aware of the situation happening before.

Antonio Picca Piccon: No, no, look, thanks for the question, Adam. So, last year, in last years, we had a strong increase of order book. We expect this order book not to grow at the same speed for a couple of reasons. Number one, we are allocating the final tail of Purosangue, so it's almost gone, let's say. We cannot take orders on the Roma Spiders. Clearly, we have the special version, but the special version, let's say, are all allocated, as well as the 499P Modificata. They are all allocated.

Thanks for the question Adam So.

Last year in last year as we had a strong increase of order book, we expect that this order book not to grow at the same speed for a couple of reasons number one we are allocating the final tail off.

Bhutto sanguine.

Its almost gone let's say.

We cannot take orders on.

Although most by this clearly we have a dispersion version, but this patient may have shown let's say all.

Allocated as well as the 490 <unk> model together, they I don't know located.

Benedetto Vigna: We remain confident about the traction of our cars. I was with many clients. There were 600 clients last weekend, and they all were literally in love with our track cars. Clearly the speed of growth of the order book will not be the same as in the past.

But.

Antonio Picca Piccon: We remain confident about the traction of our cars. I was with many clients. There were 600 clients last weekend, and they all were literally in love with our track cars. Clearly the speed of growth of the order book will not be the same as in the past.

So we remain confident about the traction of our of our cabs.

We've seen on the Monday added we have many clients. They were 600 client last weekend and they all were literally lab, where we have our cash.

And but clearly the speed that will grow.

We will not be the same as in the past.

Adam Jonas: Okay.

Benedetto Vigna: We have many things, let's say we have less models to offer to the clients because they eagerly took everything we offered them. It's a good challenge for us to keep, let me say, delighting them with unique cars.

Okay I appreciate.

We have many fee, meaning let's say, we have less model to offer.

The clients because the eagerly took everything we offer them. So it's a good challenge for us to keep.

To keep or let me say the lightning them with unique cash.

Adam Jonas: Thanks, Benedetto. Maybe as a follow-up, can you remind us how that works from for pricing, the mechanism from the time an order is placed, let's say at the far end of your order book, late 2025, tell us how what is the expectation that one of Ferrari customer would have for the price paid prior to configuring versus your ability to work with them, including potentially higher prices? Not just because you can, 'cause obviously you want the customer to promise a value. Just remind us during times when there's a very tight order book and it goes very long out, how. Confirm that you don't lock in pricing and kind of historically how that could move, if you follow the logic of my question.

Thanks Pat.

As a follow up.

Can you remind us.

How that works from a pricing mechanism from the time, an order is placed let's say at the far end of your order book late 2025.

Tell us how what is the expectation that one of Ferrari customer would have for the price paid prior to configuring versus your ability to work with them, including potentially <unk>.

Higher prices not just because you can because obviously you want to shrink the company you want you want the customer to us.

Thomas a value, but just remind us in during times. When there is a very very tight order book and it goes very very long out how confirm that you don't walk in pricing and kind of historically, how that could move if you follow the logic of my question.

Benedetto Vigna: No, I think I follow. What I want to tell you is that it's true, the order book is pretty long. I have to say that during last years, we gave a clear priority to all our dealers to engage the client also with, on one side, experiences, on the other side with the pre-owned cars. I have to say that, and that's what I also said to the dealer last week in Florence. I thanked them because they did what we were asking them to do. In terms of pricing flexibility, like you said, it's always you have to find the right balance in increasing the price of what is already contracted versus also not upsetting the client.

I think I follow what I want to tell you is that it's through the law that the order book is pretty long.

To say that during last year, we gave a clear priority at all of our leaders to engage the client also we have on one side experiences on the other side these with the pre owned.

We would appeal to the cash so I have to say that and that's what those are what I said to the beta last week in Florence.

I think of them because they lead than what we were committing what we're asking them to do.

<unk>.

In terms of our pricing flexibility like you said, it's always to find that right balance.

Increasing the price or what is already.

<unk> contracted <unk> source or not upsetting the client I think we have the bond.

Benedetto Vigna: I think we have, let me say, the link in understanding of the client is such that we can continue to manage it in the same way we did so far. I-

Let me say at the Linq and the understanding of the client is such that.

We can continue to manage it in the same way we did so fast.

Adam Jonas: Thank-

Benedetto Vigna: I do not expect, honestly, big travels over there, Adam.

So I do not expect honestly eh media travels over there.

Adam Jonas: Thanks, Benedetto.

Adam.

Benedetto Vigna: Thank you so much.

Thanks Pat.

Benedetto Vigna: Thank you so much.

Thank you so much thank.

Operator: Thank you. Now we're gonna take our next question. Just give us a moment. The next question comes from the line of Thomas Besson from Kepler Cheuvreux. Your line is open. Please ask the question.

Thank you.

Okay.

Now I would want to take over next question.

Just give us a moment.

And the next question comes from the line of Thomas Besson from Kepler Cheuvreux. Your line is open. Please ask your question.

Thomas Besson: Thank you very much. It's Thomas. I have a couple of questions, please. I'd like to start first with the level of your revised 2023 target when you compare it with 2026 targets you've shown at the Investor Day 18 months ago. Clearly you've done better than you were assuming for 2022. You're gonna do a lot better than you were assuming for 2023. The question is simply, is there a plan at one stage in February or maybe in June next year when we visit your EV plant to eventually raise the 2026 targets, or are you gonna leave us with these 2026 targets for longer? That's the first question.

Thank you very much I have a couple of questions.

I'd like to start first with.

So the level of your revised.

With your three year targets when you compare it with 2026 targets you've thrown at us.

Investor Day 18 months ago.

You've done better than the.

Usu meaningful 22, youre going to do a lot better when you asked your info switches rights. So the question is simply.

Is there a plan.

One stage in February you or maybe in June next year, when we visit yawn.

The blonde treatment should be raised to six targets or are you going to give us resist which is you can still get support loan growth.

Thomas Besson: You have a full, you're fully sold everything you're gonna make until the end of 2025. Can you talk about the impact this has on your residuals on existing vehicles on the road, and share with us the share of used vehicle sales in your car and spare parts revenues and explain to us whether this is going to increase, you plan to control a higher proportion of your used car business in the future or not? Thank you.

The first question.

The second.

You have <unk>.

Just hold everything youre going to make until the end of switches.

Can you talk about the impact on you.

Residuals.

On the existing vehicles on the road.

And share with us.

Shelves for used vehicle sales in your Calvin spare parts.

Revenues explain us with all of this is going to increase your plan to control the higher proportion of your used car business in the future. Thank you.

Benedetto Vigna: I think the first one, Thomas, thanks for the question. We confirm the plan we shared with you one year ago. You have to wait still, let me say a few quarters more than your visit, maybe next June, before we update our plan. We will not review this before 2025, okay, the year 2025. We keep. We want to do what we committed in front of our shareholder to do in 2022. The second, I will start, and then Antonio will add as he believes appropriate. It's true that we are sold out. As I said, this is helping a lot on the pre-owned market. I have to say that we see the pre-owned market pretty healthy.

So I think the first one for Matt. Thanks for the question. So we confirm the plan, we should we view one year ago.

You have to wait still.

Let me say a few quarters more than your visit to maybe next June before we have to date.

Our our plan. So this is.

We will not review this before 25, okay. The year 25, so we keep we want that we want to do what we committed in front of our shareholders to do in 2022.

The second I will say I will start and then Antonio will add as.

It believes are appropriate.

It's true that we are.

So doubt as I said this is helping a lot on the pre owned market and they have to say that we see the pre owned market pretty healthy.

Benedetto Vigna: In some sense, yes, it can help to sell, you know, spare parts, but I would say that the thing that we see is not happening as originally we planned at the beginning of the year. I mean, it's going better than we planned, it is the personalization. The spare parts, correct me, Antonio, but it's pretty in line with what we saw, no?

In some sense, yes, it can help too.

To sell spare.

Spare parts.

I would just say that.

The thing that we see.

Is not happening as that regionally we plan it to be at the beginning of the year and it is going better than we plan a is the personalization the spare part colectomy Antonia, but is pretty in line with what we saw now absolutely and maybe I can complement on this in terms of pre owned vehicles that we sell.

Adam Jonas: Absolutely. Maybe I can comment on this. In terms of pre-owned vehicles that we sell, it's really limited to the cars that we use for our events, for introducing the car per se. In terms of commercial strategy, in terms of volume, it is really limited to a small number of pieces every year. In terms of interest for controlling the market, this is not for us, it's obviously for our dealer, and we encourage our dealers to become more and more present in the pre-owned business. That's certainly an area of further potential development for them.

It's really limited to the <unk>.

With that we use for our events for introducing the car per say, but in terms of commercial strategy. So in terms of volume is really limited to a small number of pieces every year.

In terms of interest before controlling the market. This is not for US is obviously for our dealer and we encourage our dealers to.

<unk> become more and more present in the industry on business. That's certainly an area of further potential development for them.

Thomas Besson: Thank you very much. Can I maybe have just a quick follow-up? Would it make sense for you, given that you've already sold almost everything you're gonna make, to already start selling the BEV products you plan to show us in 2025 before showing it to customers, or do you want to show it first to customers?

Thank you very much can I, maybe just a quick follow up.

But we did make sense for you given that you probably saw that almost everything youre going to make it too.

We'll really start seeing the bebe products.

<unk> and 'twenty before offering it to customers or do you want to.

So it's both.

Christmas.

Benedetto Vigna: No, no, we will show the BEV in Q4 2025 as planned. Everyone will see, let me say, in that quarter. Apart from the people that are working here, obviously they seem to see it, to make it happen. It's Q4 2025, Thomas.

No no we will show we will show the BV in Q4 'twenty five as planned so everyone will see let me say in debt in the quarter.

Apart from the people that are working here at home.

Let's then proceed to make it happen.

So is Q4 thank you.

Thomas Besson: Thank you very much.

Benedetto Vigna: Thank you.

Thomas Besson: Thank you.

Thank you. Thank you.

Operator: Thank you. Now we're going to take our next question. Just a moment. The next question comes from the line of Stephen Reitman from Société Générale. Your line is open. Please ask a question.

Operator: Thank you. Now we're going to take our next question. Just a moment. The next question comes from the line of Your line is open. Please ask a question.

Thank you.

Now I'll go and take our next question.

Just a moment.

And the next question comes from the line of Stefan <unk> from Societe Generale. Your line is open. Please ask your question.

Stephen Reitman: Thank you very much. A question first of all, on the guidance for 2023. Just with simple maths, it seems to be that after a 28% margin, adjusted operating margin in the first nine months of the year, if we take the lower end or the 26.5%, at least 26.5% or more, that suggests that the margin could be as low as 22% in Q4, which seems very, very low compared to the momentum you've shown and the kind of maybe the sort of currency adjusted underlying margin of 29.4% that you showed in Q3 before FX impacts and hedges. If you could maybe talk about the headwinds that you're anticipating in Q4.

Thank you very much.

A question first of all on the guidance for 2023.

Just a bit of simple math, it seems to be that off for 28% margin adjusted operating margin in the first nine months of the year if.

If we take the lower end.

Of the 2026, 5% at least 26, 5% or more.

Message just the margin could be as low as 22% in the fourth quarter. We've seen some very very low compared to the momentum you've shown and the kind of maybe the currency adjusted underlying margin was 29%.

9.4% you showed in the third quarter for FX impacts and hedges. So if you could maybe talk about the headwinds that you're anticipating in the fourth quarter. Obviously, we know this is a very conservative guidance youre ways Keith.

Stephen Reitman: Obviously, we know there's a very conservative guidance you always give. My second question is about Formula One. Could you update us on the status of how you are with it. Have you fully now replaced all the sponsorship that you lost? Obviously Mission Winnow and Velas. Now, do you have a full roster, including your main sponsor? I saw you took on Virtual Gaming Worlds, but does that now mean that your car is fully liveried, and you have everything you need? Thank you.

My second question is about Formula one.

And could you update us on the status of how you always have you fully now.

Replaced all the sponsorship that you lost.

Obviously you win.

And the last night, you have a full roster, including your main sponsor I saw you took on virtual gaming world, but does that now mean youre fully <unk> is fully live or even you have everything you need. Thank you.

Benedetto Vigna: I'll take the second one, Stephen. Thanks for the question. Then I will ask Antonio to comment on the first one. Let me say in this way, in the last three years, Sponsorship-wise, we have been able to lower the dependence on, let me say, on a single sponsor, okay? If in the past, this single sponsor was accounting for more than 60% of revenues, now, if I take the biggest sponsor in our basket, is no more than 13, 14%. I would say that on the sponsorship-wise, we've been able to enlarge the sponsor base. By lowering also the dependence on a big one. This is the answer to the Formula One. Antonio.

I think in the second one is Stefan thanks for the question and then I will ask Antonio to comment on the first one so let me say it this way in the last three years, we have been able to lower the depend sponsorship wise, we have been able to lower the dependence on.

Let me say on a single sponsors okay. So if in the past. These single sponsor was accounting for more than 60% of revenues now if I think of the biggest sponsors in our basket is no more than 13, 14%. So.

So I would say the sponsorship wise, we have been able to enlarge the sponsor base. We will know by lowering also the dependence on a big a big one.

So this is the answer to the Formula one and.

And then.

Thomas Besson: Stephen, hi. I think the reasoning is the one I try and explain in words in my speech. If you look at Q4, what is different compared to the previous quarter is, in terms of volumes, lower allocations to Q4, already designed that way since the beginning of the year. Secondly, we have a specificity in terms of the overall seasonality of the spending, particularly, R&D expense to the P&L for racing. If we normalize for that, even at the EBIT margin level, we get much more in line with the rest of the year. In addition, if you go to the EBIT margin level, then you should take into consideration that D&A are gonna grow in Q4, and this is due to two elements.

Antonio Picca Piccon: Stephen, hi. I think the reasoning is the one I try and explain in words in my speech. If you look at Q4, what is different compared to the previous quarter is, in terms of volumes, lower allocations to Q4, already designed that way since the beginning of the year. Secondly, we have a specificity in terms of the overall seasonality of the spending, particularly, R&D expense to the P&L for racing. If we normalize for that, even at the EBIT margin level, we get much more in line with the rest of the year. In addition, if you go to the EBIT margin level, then you should take into consideration that D&A are gonna grow in Q4, and this is due to two elements.

Antonio and Steven Hi.

I think the reasoning as to why they try and explaining worth in my speech. If you look at Q4, what is different compared to the previous quarter is in terms of volumes lower allocations to the fourth floor already designed that way since the beginning of the year.

Secondly, we have a spare.

Sufficient in terms of the overall seasonality of the spending particularly.

R&D expense through the P&L for for racing.

If we normalize for that.

EBITDA margin level, we get much more in line with the rest of the year. In addition, if you go to the EBIT margin level. Then you should take into consideration that DNA are going to grow into Q4 and this is due to two elements. One is the start of production of a couple of new models in the second.

Thomas Besson: One is the start of production of a couple of new models, and the second one is some projects that we are gonna start depreciating, that are more related to our infrastructural development of these E-Labs.

Antonio Picca Piccon: One is the start of production of a couple of new models, and the second one is some projects that we are gonna start depreciating, that are more related to our infrastructural development of these E-Labs.

One is some project that we're gonna start depreciating.

Related to our infrastructural development of deserves.

Stephen Reitman: Thank you.

Thomas Besson: Thanks for compliments on being conservative.

Antonio Picca Piccon: Thanks for compliments on being conservative.

Thanks, Steve and thanks for your compliments are being considered conservative.

Hum.

Operator: Thank you. Now we're going to take our next question. Just give us a moment. The next question comes from the line of Giulio Pescatore from BNP Paribas. Your line is open. Please ask your question.

Thank you.

Yes.

Now I will go and take our next question.

Thank you Ms amendments and the next question comes from the line of Giulio Pescatore from BNP Paribas. Your line is open. Please ask your question.

Giulio Pescatore: Hi, thanks for taking my question. First one, I want to come back on a comment made by one of your competitors. I know you don't comment on competitors, but it was striking because they were calling out weakness in luxury car demand, especially North America. What they said, it's in very stark contrast with whatever you're saying today. I'm not asking you to comment on competition, but just what do you think is making the difference here? Why your demand is so much healthier and resilient than some of your peers? Second one, just a clarification. The track cars you launched, those don't count towards the 15 models expected to be launched by 2026 and the four models for this year.

Hi, Thanks for taking my question and first of all I want to come back on a comment made by one of your competitors I know you've done.

You don't comment on competitors, but.

It was striking because they were calling out weakness in luxury cars demand, especially North America and what they said it seemed very stark contrast, whatever youre, saying today, so no pause.

Asking you to comment on competition, but just what do you think it's making a difference yes, why why you demand so much healthier.

And resilient than then.

Some of your peers and then second one just a clarification the truck as you launch those don't count towards that 15 models are expected to be launched by 326, and therefore modest for this year.

Giulio Pescatore: Just a clarification on that. Then last, very last one, the 499P, I mean, can you give us an indication on volumes and price, and when do you expect deliveries to happen? Is there any reason to expect this car to be less profitable than the limited edition ones you have launched in the past? Thank you.

Just a clarification on that and then last very last one.

499.

I mean can you give us some indication of volumes and price and when do you expect deliveries to happen and is that I know is on piggybacking discussed to be less profitable than than the limited edition <unk> launched in the past. Thank you.

Benedetto Vigna: I start from these two cars, they count in the 15 models also because, despite the fact that they look like something else, I mean, we had to put a lot of, you know, resources, in engineering, in managing this product, so they count. You know, the 296 Challenge is only ICE, is not hybrid. Well, but there has been a lot of work done by our colleagues in engineering in the factory to make it happen. The 499P Modificata, it's a car that comes in few tens of it, and it is a car that, as I said, will offer our gentleman driver the possibility to try the same experience of our, let me say, pilot, that won, a few months ago in Le Mans.

So I'll start from so these two cash they count in the 15 models also because despite the fact that they look like something yes, I mean, we had to put a lot of.

Resources in engineering in.

In managing these products so they count.

The 296 challenges only ice's not hybrid well, but there has been a lot of work done by our colleagues in engineering in the factory to make it happen.

The 49, nine Piedmont DC catheter.

It's a cash that comes in few tens of it.

And it is a cast that as I said, we lost our the gentleman driver the possibility will try the same experience of our.

Let me say pilots that one a few months they go in lemon.

Benedetto Vigna: I would say that I want to share with you this comment that I have heard from gentlemen drivers last week. I heard in Mugello last week. Now, they were very, very happy to have the possibility to test themselves on a race track with a car that, by the way, does not have even the balance of performance. If let's say our drivers when they are racing in endurance World Endurance Championship, you know, there is a balance of performance. They cannot go faster than they would like. The gentleman drivers, since it is in its own, it can be even faster. You can enjoy even more the speed of this, of this car. Then the first question, why we believe we are resilient.

And I would say that.

I want to share we viewed this comment that I have for me.

Gentlemen, drivers lastly, I have been in Louisiana last week. They were very very happy to have the possibility to test themselves on a racetrack.

Net cash that the by the way does not have even the balance of performance. So if.

Lets say our rem.

Drivers when they're racing and endurance.

Northern Europe Championship, there is a balance of performance so they cannot.

Go faster.

And they would like the gentleman drivers since it is in its own.

It can be even faster. So you can enjoy even more of the speed of this of this cash.

And then the first question why.

We believe we are resilient.

Benedetto Vigna: I would like to answer the question, sorry, the answer in two parts. I think we are. When we talk about Ferrari car, we are talking about an ultra-luxury car that is also addressing maybe a demographic that is different from other brands. The second, I have been in these three years, two years, I have seen and I've met many people that are touching our brand, the prancing horse, and I have seen an attachment, a sense of bonding that is really unique. I mean, I was in Mugello last weekend. I was in Pebble Beach. I can tell you, Giulio, that right after the car was shown, it was fully allocated. I mean, the car. There was a client close to me.

I would like to answer the question the answer sorry in two parts I think we have when we were talking about Ferrari Cod, we are talking about the neutral actually cash.

That is also addressing maybe demographics that is different from for my dad.

Other brands.

But the second half.

You haven't been.

In these three years two years.

Have you ever seen and I've met many people that are attaching our brands the <unk> and <unk> seen that in attachment the sense of bonding.

Is really unique I mean I was in that in.

In Louisiana last weekend I was in Pebble Beach, and I can tell you Julien.

Right. After the cash was shown it was fully allocated.

There was a client close to me there was a kind of occurs to me that the started to cry.

Benedetto Vigna: There was a client close to me that started to cry, so, literally. It's you know the bond we have with our customer I think is something unique and for which I will always, let me say, thank them. Clearly, our people are doing their best, but our clients are giving, are trusting us, and I would always thank them for this kind of trust. This is the long answer to your question. We are talking about different kinds of people. We are talking about a kind of unique sense of belonging, sense of bonding of this client to our brand.

So literally.

So it's.

The the bond we have with our customer I think is something unique in retail Netherlands.

I will always let me say thank them.

Can you hear me our people are doing their best but our clients are giving.

Trusting us and they would always thank them for these kind of trust. So this is.

The longer answer to your question, we are talking about different kinds of people. We are talking about the kind of unique sense of belonging sense of bonding of these clients to our brand.

Giulio Pescatore: Very clear. I hope he didn't start crying because he saw the price tag. Yeah. Thank you. Grazie. Bye-bye.

Frankly, I hope you can start crying because they saw the price tag, but yes. Thank you. Thank you.

Benedetto Vigna: Oh. Ciao.

Right.

No.

Operator: Thank you. Now we're going to take our next question. The question comes to the line of Monica Bosio from Intesa Sanpaolo.

Yeah.

Thank you.

Now we're going to take over next question.

Yeah.

And our question comes from the line of Monika question from Sunpower.

Monica Bosio: Hello? Can you hear me? Hello?

Yes.

Hey, Noah.

Sure.

Operator: I think now we can hear.

Yeah.

Monica Bosio: Okay.

Operator: Can you hear me louder? That's better. Thank you.

Okay.

It's just a matter of fact.

Monica Bosio: Okay, thank you very much, and thanks for taking my questions. The first one is on the shipment allocation for the next year. I know that you cannot disclose it, but I just was wondering if you are seeking to keep a share towards China in the region of 10% or more. My second question is on the SF90 XX. Are you planning to get some advances in 2024 from the SF90 XX? The very last one is a housekeeping question on the financial charges. Can you, Antonio, explain me better the impact of the financial charges side in Q3 and an expectation for the full year, please?

Okay. Thank you very much.

And thanks for taking my questions. The first one is on the shipment allocation for the next yes, I know that you cannot disclose it.

I just was wondering each U a E.

Keen to keep share to China.

In the region of 10% of Nomura.

My second question is on the potential and is on the <unk>.

Exactly.

Are you planning to.

Get some advance he said 2024 from yes, that's right.

90, execs and the very last one is and housekeeping question on the financial charges.

Todd can you Antonio explain me better impact.

The financial charges tied that in the third quarter and an expectation.

Expectation for the full year please.

Benedetto Vigna: Okay.

Giulio Pescatore: Monica, SF90 XX, yes, we'll take advance payment in 2024. The rest is Antonio.

Good morning, guys. So <unk>.

<unk>, Yes, we would think of advanced payments for the rest of his Antonio yes, absolutely in China, I think we stick to what we said at the capital market day.

Benedetto Vigna: Yeah, absolutely. In China, I think we stick to what we said at the Capital Markets Day. I mean, for us, China is a market around 10% in terms of share of our annual deliveries. 2024 should not be an exception then.

Antonio Picca Piccon: Yeah, absolutely. In China, I think we stick to what we said at the Capital Markets Day. I mean, for us, China is a market around 10% in terms of share of our annual deliveries. 2024 should not be an exception then.

China is a market around 10% in terms of share of our annual deliveries at 175.

Monica Bosio: For the next year.

Benedetto Vigna: Yeah. In terms of the impact of the purchase of the bond, it created a gain on sale, which is simply due to the difference between the pricing of the bond at the time we booked it and

Antonio Picca Piccon: Yeah. In terms of the impact of the purchase of the bond, it created a gain on sale, which is simply due to the difference between the pricing of the bond at the time we booked it and

Yeah.

Yep.

In terms of the impact of the repurchase of the bonds. It created a gain on sale, which is simply due by the difference between the the pricing.

After bond at the time, we booked at the end of pricing at the time, we repurchased it saw as an 8 million euro.

Monica Bosio: Mm-hmm

Benedetto Vigna: ... the pricing at the time we repurchased it. It's an EUR 8 million financial income that we booked in Q3, and which is reducing the financial charges net for the first nine months. As a result for the rest of the year, we expect to be much lower compared to what we were used to in the previous years. About half-

Antonio Picca Piccon: ... the pricing at the time we repurchased it. It's an EUR 8 million financial income that we booked in Q3, and which is reducing the financial charges net for the first nine months. As a result for the rest of the year, we expect to be much lower compared to what we were used to in the previous years. About half-

Financial income that we booked in Q3, and which is reducing the financial charges net for the first nine months.

As a result for the rest of the year, we expect to be much lower compared to what we were used to in the previous in the previous year.

Monica Bosio: Okay.

Benedetto Vigna: ... the amount of the-

Antonio Picca Piccon: ... the amount of the-

So about <unk> the amount okay. It's Jeff.

Monica Bosio: Okay. It's just for the bond. Okay. Thank you.

Okay. Thanks.

Benedetto Vigna: Welcome.

Antonio Picca Piccon: Welcome.

Welcome.

Monica Bosio: Thank you very much.

Operator: Thank you. Now we're gonna take our next question. Just give us a moment. The next question comes from the line of Susy Tibaldi from UBS. Your line is open. Please ask your question.

Thank you very much thank you.

<unk>.

Now we're going to take our next question.

Thank you Ms amendments and the next question comes from the line of Jesse <unk> from UBS. Your line is open. Please ask your question.

Susy Tibaldi: Hello. Thanks for taking my question. My first one is about inflation, because you once again have been mentioning how inflation remains a headwind. It's been now, well, 11 months since your price increase earlier in the year. So I was wondering if it's something that you are contemplating for next year or if you prefer to adjust to the pricing of the new cars, so purely through the mix. Secondly, when we think about your medium-term guidance and what has changed since the Capital Markets Day, I guess on the positive side, we have seen a very resilient demand, better personalization trends, these price increases, while on the negative side it's been mostly the higher inflation.

Hello, Thanks for taking my question.

The first one is about inflation.

Because once again has been mentioning how inflation has been it remains a headwind and and.

It's been now well 11 months since your price increase earlier in the year.

So I was wondering if there's something that you're contemplating.

For next year, or if you prefer to adjust to the pricing of the Newcastle purely to the mix.

Secondly, when we think about your medium term guidance and what has changed since.

Since the capital markets day, I guess on the positive side, we have seen a very resilient demand better personalization trends with price increases and while on the negative side. Its been mostly the higher inflation is this the right way to think about.

Susy Tibaldi: Is this the right way to think about these moving parts, or is there something else we should take into account? Thirdly, a more technical question, but can you give us some color on why your gross margin was much weaker in this Q3 despite the very strong mix? Thank you.

Good morning.

Is there something else we should.

They can talk column.

And then thirdly more technical question, but can you give us some color on why your gross margin was much weaker in the third quarter. Despite the very strong mix. Thank you.

Benedetto Vigna: Antonio, you take the question?

So Antonio you taking the question.

Thomas Besson: Yeah, sure. Inflation assumption, we are thinking of price increase next year. I think we do not have just pricing for cars. I mean, our overall revenues are much wider in principle to the extent needed and subject to the conditions that Benedetto mentioned during his first answer today. I think we remain flexible and look at how costs are proceeding in order to move pricing and eventually take a decision on that going forward. Second, I think you really named which are the main different elements compared to what we had in mind at the Capital Markets Day last year. So far, I think the overall impact, particularly of personalization and pricing on new model, has more than offset the hit coming from cost inflation.

Antonio Picca Piccon: Yeah, sure. Inflation assumption, we are thinking of price increase next year. I think we do not have just pricing for cars. I mean, our overall revenues are much wider in principle to the extent needed and subject to the conditions that Benedetto mentioned during his first answer today. I think we remain flexible and look at how costs are proceeding in order to move pricing and eventually take a decision on that going forward. Second, I think you really named which are the main different elements compared to what we had in mind at the Capital Markets Day last year. So far, I think the overall impact, particularly of personalization and pricing on new model, has more than offset the hit coming from cost inflation.

Inflation assumption.

We are thinking of a price increase next year I think we do not have just the pricing for tires I mean, our overall revenues are much wider in principle is to the extent needed then subject to the conditions of that.

<unk> mentioned during his first answer today I think we remain flexible and look at our costs are proceeding in order to move pricing and eventually take.

Take a decision on that going forward.

Second I think you named you really named which are the main different elements compared to what we had in mind that the capital market day last year.

And so far I think the overall impact, particularly of personalization and then pricing on new model as more than offset the debt coming from the <unk>.

From cost inflation.

Thomas Besson: Gross margin weaker. It depends, really. You should not look at that on a quarterly basis. Overall, the product mix and the country mix during a single quarter make a difference, obviously, together with the level of personalization of the cars entailed. Take a look at that, but look at it on a wider period of time and you'll see a certainly an improvement nine months over nine months.

Antonio Picca Piccon: Gross margin weaker. It depends, really. You should not look at that on a quarterly basis. Overall, the product mix and the country mix during a single quarter make a difference, obviously, together with the level of personalization of the cars entailed. Take a look at that, but look at it on a wider period of time and you'll see a certainly an improvement nine months over nine months.

Gross margin weaker.

It depends really.

You should not look at that on a quarterly basis overall, the product mix and the country mix during a single quarter make make a difference obviously together with the level of personalization of the cars in <unk>. So.

Take a look at that but look at that on a why the period of time.

And you'll see us certainly an improvement in the nine months over nine months.

Susy Tibaldi: Okay, thanks.

Okay. Thanks.

Operator: Thank you. Now we're going to take our next question. The next question comes from the line of George Galliers from Goldman Sachs. Your line is open. Please ask a question.

Thank you.

Okay.

That will go and take our next question.

And the next question comes from the line of George <unk> from Goldman Sachs. Your line is open. Please ask your question.

George Galliers: Good afternoon, and thank you for taking my questions. The first question I had was just with respect to how to think about mix in 2024. Obviously, a lot of exciting products to come, and you're in the process of ramping the Competizione Aperta and the Purosangue. Is it safe to assume that mix next year should be positive relative to this year, given that product cadence? The second question I had, Benedetto, if I may, was with respect to the electric Ferrari that you mentioned earlier. Obviously, a very exciting product for Ferrari.

Good afternoon, and thank you for taking my question first question I had was just with respect to how to think about mix in 2024.

A lot of exciting product to come and you are in the process of ramping their competence.

I'm just curious <unk> is it safe to assume that mix next year it should be.

Relative to this year given that product cadence.

And the second question I had been at that sorry, if I may was with respect to the electric Ferrari that you mentioned earlier.

Really a very exciting product for Ferrari.

George Galliers: However, a few other luxury premium car makers have noted that at the very top end of their product ranges, the customers, particularly in China, have a strong preference for internal combustion engines, as, similar to a watch, they believe the mechanical elements have a higher level of craftsmanship and value compared to electric and digital offerings. To the extent you have discussed the Ferrari EV with certain customers as a project, have you received any similar feedback? Or do you believe that whatever car Ferrari produces will have similar level of desirability irrespective of the power plant that you put in it? Thank you.

A few other luxury premium carmakers have noticed that at the very top end of that product ranges.

Customers, particularly in China have a strong preference for internal combustion engines.

Similar to our watch they believe the mechanical element.

A higher level of craftsmanship and value compared to electric and tissue offerings.

To the extent you have discussed the Ferrari.

With customers at the project have you received any similar feedback or do you believe that whatever Ferrari produces will have similar level of desirability irrespective.

Thank you.

Thomas Besson: I take the second one. Let me make an introduction, George. I think that, you know, you have to look at the way you use the technology. The technology may be the same, but what is making the difference between one company and others is the way you use the technologies. Today, there are many objects, I don't mention which one, beyond the cars, that are all using the same technology, but at the end of the story, one is more successful than the others. It depends how close, how that product is addressing the real, in that case, needs of the final client. What I can tell you, and is one of the question also, you know, I am asking a client what is their feedback when they ask some other electric cars.

Benedetto Vigna: I take the second one. Let me make an introduction, George. I think that, you know, you have to look at the way you use the technology. The technology may be the same, but what is making the difference between one company and others is the way you use the technologies. Today, there are many objects, I don't mention which one, beyond the cars, that are all using the same technology, but at the end of the story, one is more successful than the others. It depends how close, how that product is addressing the real, in that case, needs of the final client. What I can tell you, and is one of the question also, you know, I am asking a client what is their feedback when they ask some other electric cars.

So I think in the second one so.

Let me make an introduction in Georgia.

I think that then.

Yeah.

You know you have to look at the way you use the technology. The technology may be the same but what is making the difference between the one company and another is the.

When you use the technologies. So there are many.

<unk> mentioned, which one beyond the caps that are all using the same technology, but at the end of the 31 is more successful than the others. It depends how close how.

That product is addressing the real in.

In that case and needs of the final client what I can't tell you, but I can tell you in that.

<unk> is one of the question also.

Sure.

I am asking clients what is their feedback when they ask some other electric cash.

Thomas Besson: Well, it's clear two things. One, we, in our company, did well in 2022 during the Capital Markets Day to tell that we will make the three kind of propulsion, the red ICE, the blue, the hybrid, and the green. Why? Because we want to leave this freedom to the client. Two, we have clients, and that's what they are telling me, some of them, they will not take the electric cars. Some other will take both. Okay? Some other will get into Ferrari world, Ferrari family, I would like to say, because of electric car. I have in mind three clients, okay, with whom I had a dinner. They were saying, "You know, I'm pushing a lot for sustainability.

Benedetto Vigna: Well, it's clear two things. One, we, in our company, did well in 2022 during the Capital Markets Day to tell that we will make the three kind of propulsion, the red ICE, the blue, the hybrid, and the green. Why? Because we want to leave this freedom to the client. Two, we have clients, and that's what they are telling me, some of them, they will not take the electric cars. Some other will take both. Okay? Some other will get into Ferrari world, Ferrari family, I would like to say, because of electric car. I have in mind three clients, okay, with whom I had a dinner. They were saying, "You know, I'm pushing a lot for sustainability.

It's clear.

Two things one we in our company did well in 2022 during the capital market day to tell that we will make the three kind of propulsion red I see the blue Diamond and the Greens why because we want to leave at this freedom to the client.

And two we have a client and thats, what they are telling me some of them.

We will they will not take that Africa. Some of that will take both okay. Some of it will get into February world Ferrari family and we'd like to say because of electric cars you have in mind three client okay with.

With whom it yet.

They were saying you know I'm pushing out for sustainability and we're pushing it out to my family Company I created a company in this direction for me the way to get in this beautiful fantastic family is through the electric Ferrari I cannot get in without electric Ferrari. So we will have a three.

Benedetto Vigna: I'm pushing a lot in my family. I have a company, I created a company in this direction. For me, the way to get in this beautiful, fantastic family is through the electric Ferrari. I cannot get in without electric Ferrari. We will have three kinds of people, and that's the reason why the recent development on technology landscape, I think, is giving a good confirmation of our strategy. I have to say that the experience I had in other business to manage the technology transition has been helping and it will help in this direction. The first one, the product mix.

Kind of.

People in this reason why the recent development.

On the technology landscape I think is giving us a good confirmation of our strategy and they have to say that if you want.

Okay.

Another business to manage the technology transition has been helping and it will help in these directions. The first one on the product mix, Yes, sure Hi, George I think it's maybe too early to speak about 2024 in such a detail since we haven't finalized the allocation, but if you. If you ask my gut feeling where we should be considering the product range that we have.

Thomas Besson: Yeah, sure. Hi, George. I think it's maybe too early to speak about 2024 in such a detail since we haven't finalized the allocation. If you ask me, gut feeling where we should be considering the product range that we have, and obviously assuming same level of personalization, I should bet at least on having the same, similar mix to this year. Not such a jump that we are witnessing in 2023 compared to 2022. We know that last year was mainly a volume year. The product mix this year is much richer. Next year will be, too, but not at the same distance as we witnessed from last year to this one. Great. Thank you very much.

Benedetto Vigna: Yeah, sure. Hi, George. I think it's maybe too early to speak about 2024 in such a detail since we haven't finalized the allocation. If you ask me, gut feeling where we should be considering the product range that we have, and obviously assuming same level of personalization, I should bet at least on having the same, similar mix to this year. Not such a jump that we are witnessing in 2023 compared to 2022. We know that last year was mainly a volume year. The product mix this year is much richer. Next year will be, too, but not at the same distance as we witnessed from last year to this one. Great. Thank you very much.

And obviously, assuming same level of personalization I should better at least on having the same.

A similar mix to this year, so not such a jump that we are witnessing in 2023 compared to 2022, we know that last year was mainly a volume here.

The mix. This year is much richer next year will be too, but not at the same distance as we witnessed from last year to today as well.

Great. Thank you very much.

Operator: Thank you. Now we're going to take our next question. Just a moment. The next question comes from the line of Martino De Ambroggi from Equita. Your line is open. Please ask your question.

Thank you.

Now I'm going to take over next question.

Jeff amendments and the next question comes from the line of Matt <unk> from <unk>. Your line is open. Please ask your question.

Speaker 16: Thank you very much. Good morning, good afternoon, everybody. I have one short-term and one long-term question. The first is on the full year guidance because you revised upwards by more or less EUR +100 million this year, your EBITDA guidance. Considering the drivers you commented, I don't know if I'm right, but I suppose Formula One, okay, was positive but small. Personalization is by far the most important contributor because, in my view, the mix was already predefined at the beginning of the year, so you know exactly more or less what to produce. Am I right in assuming that the personalization is the big difference between the starting guidance and the current one?

Martino De Ambroggi: Thank you very much. Good morning, good afternoon, everybody. I have one short-term and one long-term question. The first is on the full year guidance because you revised upwards by more or less EUR +100 million this year, your EBITDA guidance. Considering the drivers you commented, I don't know if I'm right, but I suppose Formula One, okay, was positive but small. Personalization is by far the most important contributor because, in my view, the mix was already predefined at the beginning of the year, so you know exactly more or less what to produce. Am I right in assuming that the personalization is the big difference between the starting guidance and the current one?

Thank you very much.

Hey, good morning, good afternoon, everybody.

I have one short term long term my question. The first is on the full year guidance.

Cause you revise up forced by a more more or less 100 million Euro this year your EBITDA guidance.

Considering the drivers you commented.

I don't know if I'm right I suppose of Formula one.

It was positive but small.

Personalization is by far the most important contributor because in my view the mix of what's already pre defined at the beginning of the year, So youll know et cetera, more or less what to produce so am I right in assuming that the personalization is the big difference between this therapy guidance and the current one.

Speaker 16: Still on the margins, the Purosangue now is in ramp-up phase, probably finalize the ramp up. Should we assume is accretive in terms of margins? If you have an update on the volumes that you expect. Last time you guided for less than 10% of total. I don't know if there is a more precise indication at this point of the year.

Martino De Ambroggi: Still on the margins, the Purosangue now is in ramp-up phase, probably finalize the ramp up. Should we assume is accretive in terms of margins? If you have an update on the volumes that you expect. Last time you guided for less than 10% of total. I don't know if there is a more precise indication at this point of the year.

And still on that.

On the margin is.

<unk> now is in ramp up phase, probably finalize the ramp up of <unk>.

Should we assume is accretive in terms of margins and if you have an update on the volumes that you expect.

Last time, you guided for less than 10% of total I don't know if there is a more precise indication.

This point of the year.

Benedetto Vigna: Martino, I think the second one and the first, Antonio. First of all, we said 20% over the years. That's the limit of the Purosangue, no? Yes, we are in ramp-up phase, but we expect it that, the margin are in line with the rest of the family. Okay?

I think in the second one in the first Antonio so.

First of all we said that 20%.

Yes, the name itself can put us and whatnot, yes, we are in ramp up phase, but we expected that the margins are in line and we get asked all the same way.

Thomas Besson: On the first one, Martino. Yeah, I think you mentioned personalization is probably the main positive surprise that we had. It's also fair to acknowledge the fact that we had positive support also from FX rate compared to our initial expectations. That obviously helped.

Antonio Picca Piccon: On the first one, Martino. Yeah, I think you mentioned personalization is probably the main positive surprise that we had. It's also fair to acknowledge the fact that we had positive support also from FX rate compared to our initial expectations. That obviously helped.

Hey.

And on the first one Latino.

Yes, I think you mentioned personalization is probably the main positive surprise that we add.

It's also fair to in order to decide if we have that we have.

Positive support also.

As compared to our initial expectations that obviously helped.

Speaker 16: Okay. I was referring to the volumes for the current year for the Purosangue, because this year obviously is by far less than 20%. I remember-

Martino De Ambroggi: Okay. I was referring to the volumes for the current year for the Purosangue, because this year obviously is by far less than 20%. I remember-

Okay. So I was referring on the volumes for the current year for the pure sanguine because this year, obviously is by far less than 20%. So I remember that okay Dan.

Benedetto Vigna: Okay.

Speaker 16: Maybe I'm wrong.

Martino De Ambroggi: Maybe I'm wrong.

Benedetto Vigna: Okay. Thank you, Martino. I misunderstood because for the year to come, the limit is 20%. Yeah. This year will be lower because it's ramp up. Yes.

Thank you Matthew I misunderstood because for the year to gamma dynamic is 20% this year will be lower because he is ramp up yes.

Speaker 16: Okay. The long-term question is, I know you do not want to comment on your 2026 guidance, but consensus is already in the region of EUR 2.9 to 3 billion EBITDA. So what are your thoughts about this projection for consensus, both on Bloomberg and FactSet and I suppose all the providers?

Martino De Ambroggi: Okay. The long-term question is, I know you do not want to comment on your 2026 guidance, but consensus is already in the region of EUR 2.9 to 3 billion EBITDA. So what are your thoughts about this projection for consensus, both on Bloomberg and FactSet and I suppose all the providers?

Okay and the long term question is.

I know you do not want to comment on your 2026 guidance, but consensus is already in the region of $2 nine 3 billion EBITDA.

So what are your thoughts about.

These are projections for consensus.

Click on Bloomberg or both.

<unk> and <unk>.

Supposedly they providers.

Benedetto Vigna: Look, I think I have to reply in the same way I replied to your colleague. We will upgrade and review the messaging, let's say the plan in 25. I think that now we are fully, I like to say, Martino, that we are four wheels on the ground to make it happen, the plan that we shared with you. Let's keep going with four wheels on the ground.

Look I think that you're able to sort of play in the same way I would apply that to your colleague. So we will upgrade our reviewed.

Messaging, maintaining the plan in a 25.

I think that now we added a fully I'd like to say Martina debt, we added four wheels underground to.

To make it happen the plan that we shared with you.

Sure.

Let's keep going with.

Four wheels on the ground.

Speaker 16: Okay. Thank you, Benedetto.

Martino De Ambroggi: Okay. Thank you, Benedetto.

Okay. Thank you Brenda.

Benedetto Vigna: Thank you, Martino.

Thank you Jonathan.

Operator: Thank you. Now we're going to take our next question. The next question comes from the line of Henning Cosman from Barclays. Your line is open. Please ask your question.

Okay.

Now I'll go and take our next question.

Okay.

And the next question comes from the line of Adam question from Barclays. Your line is open. Please ask your question.

Speaker 17: Yeah. Hi, good afternoon. Thank you for taking my question. I think both have become follow-up questions by now, but I'm going to try and ask anyway. So the first one on the personalization again, I think last time we discussed that you have about three months of visibility, and it's great to see that you've now even drifted to the top end of the usual range of 17% to 19%. I believe you said 19% for the Q3. The question is, how do you see that trending into 2024? I think previously you were expecting this to perhaps even go to the bottom end or outside the bottom end of the range, but the dynamics seem to suggest this is going in the more positive direction, if anything.

Henning Cosman: Yeah. Hi, good afternoon. Thank you for taking my question. I think both have become follow-up questions by now, but I'm going to try and ask anyway. So the first one on the personalization again, I think last time we discussed that you have about three months of visibility, and it's great to see that you've now even drifted to the top end of the usual range of 17% to 19%. I believe you said 19% for the Q3. The question is, how do you see that trending into 2024? I think previously you were expecting this to perhaps even go to the bottom end or outside the bottom end of the range, but the dynamics seem to suggest this is going in the more positive direction, if anything.

Okay.

Yes, hi, good afternoon. Thank you for taking my question.

Both have become follow up questions by now, but I am going to try and ask anyway.

So the first one on the personalization again I think last time, we discussed that you have about three months of visibility and it's great to see that you've now even justice to the top end of the usual range of 17% to 19% I believe you said 19.

For the Q3.

The question is how do you see that trending into 2024.

Previously you were expecting just to perhaps even go to the bottom end or outside the bottom end of the range, but the dynamics seem to suggest this is going.

Speaker 17: If you could please comment on if you have changed your view as to how you see that develop going forward. The second question, I guess is again on the mix, maybe I can ask a bit more specifically because we're all, I think, scratching our head about the strength in 2024 when you have the Daytona volumes. Maybe we could start there. If you could say, is it going to be a lot more Daytonas or will you perhaps continue with the run rate of 30 or so per quarter in 2024 as well, and stretch it over a longer period?

The more positive direction, if anything so if you could please comment on if you have changed your views as to how you see that develop going forward and the second question.

Henning Cosman: If you could please comment on if you have changed your view as to how you see that develop going forward. The second question, I guess is again on the mix, maybe I can ask a bit more specifically because we're all, I think, scratching our head about the strength in 2024 when you have the Daytona volumes. Maybe we could start there. If you could say, is it going to be a lot more Daytonas or will you perhaps continue with the run rate of 30 or so per quarter in 2024 as well, and stretch it over a longer period?

I guess again on the mix, maybe I can ask you a bit more specifics because we're all I think.

Scratching our head about.

The strength in 2004, when you have.

The Daytona volumes, maybe we could start there if you could say.

Is it going to be a lot more daytona so William perhaps continue if the run rate of 30 or so per quarter in 'twenty, four as well and stretch it.

Speaker 17: Because now with the SF90 XXs and also the 499P Modificatas, the 296 Challenges, it seems there might be a pretty big jump actually, Antonio, if you allow me, relative to your earlier comment.

Henning Cosman: Because now with the SF90 XXs and also the 499P Modificatas, the 296 Challenges, it seems there might be a pretty big jump actually, Antonio, if you allow me, relative to your earlier comment.

Over a longer period, because now with the adds of 90 X axis and also the 299 months should cause us to nine six challenges. It seems it seems there might be a pretty big jump actually until new if you allow me.

Relative to your to your earlier comment.

Benedetto Vigna: Look, we have confirmed that for the Daytona will be around 30, 40 per quarter. It's exactly in line with what we saw, what we said before. When it comes instead to percentage of personalization, we expect that this 19% of Q3 to be more in the range of 18%.

Look we have reconfirmed that's for the Daytona will be around 34% per quarter.

So it is exactly in line with what we we saw what we said before.

When it comes to us that the percentage of personalization, we expect that these 19% in Q3 to be more in the range of 18%.

Thomas Besson: Maybe you recall, I mentioned at our Capital Markets Day that we were planning around 17%, which was the usual run rate. This is actually one of the reasons we have been positively surprised this year. We have seen a stronger penetration of personalization and of rich personalization on the current product range. It is difficult to bet as of now as the continuation of this trend for the following months given the reduced visibility that we have. That and the answer of Benedetto reflects this view.

Antonio Picca Piccon: Maybe you recall, I mentioned at our Capital Markets Day that we were planning around 17%, which was the usual run rate. This is actually one of the reasons we have been positively surprised this year. We have seen a stronger penetration of personalization and of rich personalization on the current product range. It is difficult to bet as of now as the continuation of this trend for the following months given the reduced visibility that we have. That and the answer of Benedetto reflects this view.

But maybe you recall.

Mentioned that our capital market day that we are planning around 17%, which was the usual run rate and it is actually one of the reason we have been positively surprised this year, we have seen a stronger penetration of personalization and of reach personalization in the current range is difficult to Beth as of now.

Continuation of this trend for the following months given the reduced visibility that we have.

So that can be answered Benedetto reflects that view yeah. We can also say that we are preparing that we want to and then there was a series of the client and we are planning for these.

Benedetto Vigna: Yeah. We can also say now that we are preparing, but we want at the end of the story is the client, and we are planning for this, let's say 18%.

Thomas Besson: Yeah.

Antonio Picca Piccon: Yeah.

Let's say, 18%.

Speaker 17: Thank you. Just to clarify, the 30 to 40 Daytonas, that's also your target run rate for 2024, correct?

Henning Cosman: Thank you. Just to clarify, the 30 to 40 Daytonas, that's also your target run rate for 2024, correct?

Thank you and just to clarify the 30 to 40 day told US. That's also your target run rate for 2024 correct.

Benedetto Vigna: Yeah, yeah. That was the answer. Yeah. 30, 40 per quarter also next year.

Yeah, Yeah that was the answer is yes, because before the per quarter also next year.

Speaker 17: Okay. Some allocation of the Modificata as well already next year, the 499?

Henning Cosman: Okay. Some allocation of the Modificata as well already next year, the 499?

Okay, and some some allocation of the modest Jakarta as well already next year.

Nine.

Benedetto Vigna: Let's say we will start, but I don't want to be too specific on the quarter. Sure, I mean, we will start also, let's say we will start also the 499P Modificata.

Let's say we were stopped about.

I don't want to be too much specific on the quarter, but sure I mean, we are we will start also.

We will start also the fortinet anti money together.

Speaker 17: Very helpful. Thank you.

Henning Cosman: Very helpful. Thank you.

Very helpful. Thank you.

Benedetto Vigna: Thank you.

Operator: Thank you. Now we're going to take our next question. Just give us a moment. The next question comes from the line of Anthony Dick from ODDO BHF. Your line is open. Please ask the question.

Thank you.

Now we will go and take our next question.

Jackie This amendment.

Okay.

And our next question comes from the line of Anthony <unk> from <unk> BHF. Your line is open. Please ask your question.

Speaker 18: Yes. Hi. My first question is on the residual values and the pre-owned market, which you've already alluded to. We've seen a correction in the residual values in the past few months, still above pre-COVID levels, and you describe them as healthy, but still trending down a bit. I know this is an important indicator for you, so I'd be interested in having your view on this and how does it affect your volume strategy going into 2024. Obviously not a topic for the limited series or the Purosangue, but I was wondering if you could comment-

Anthony Dick: Yes. Hi. My first question is on the residual values and the pre-owned market, which you've already alluded to. We've seen a correction in the residual values in the past few months, still above pre-COVID levels, and you describe them as healthy, but still trending down a bit. I know this is an important indicator for you, so I'd be interested in having your view on this and how does it affect your volume strategy going into 2024. Obviously not a topic for the limited series or the Purosangue, but I was wondering if you could comment-

Yes, Hi, My first question is on the residual values on the pre owned market, which you've already alluded too. So we've seen a correction in the residual values in the past few months still above pre COVID-19 levels and you described them as healthy, but still trending down a bit on that.

This is an important indicator for you so I'd be interested in having your view.

On this and how does it affect your volume strategy going into 2024.

Obviously, not a topic for the limited series of the pure Sunday, but I was wondering if you could comment for example on the demand and order momentum for your more accessible models like the room is vital.

Benedetto Vigna: Sure.

Speaker 18: For example, on the demand and order momentum for your more accessible models like the Roma Spider. I have a second quick question on the decision to approve the use of cryptocurrency for the purchases of Ferrari cars. Could you maybe provide some color on the extent to which you think this can enlarge your customer base? Also as a follow-up, these cryptocurrency investors are not always perceived as the most stable customers. How do you intend on managing this? Do you think it could create more volatility in your residual values? Thank you.

Anthony Dick: For example, on the demand and order momentum for your more accessible models like the Roma Spider. I have a second quick question on the decision to approve the use of cryptocurrency for the purchases of Ferrari cars. Could you maybe provide some color on the extent to which you think this can enlarge your customer base? Also as a follow-up, these cryptocurrency investors are not always perceived as the most stable customers. How do you intend on managing this? Do you think it could create more volatility in your residual values? Thank you.

And then I have a second quick question on the decision to.

Prove the use of crypto currency sort of purchases.

Salary costs. So could you maybe provide some color on the extent to which you think this can enlarge your customer base.

And also as a follow up these crypto currency investors.

Not always perceived as the most stable customers. So how do you intend on managing this do you think it could create more volatility.

Residual values. Thank you.

Benedetto Vigna: Okay. For the cryptocurrency, we do not expect this to be to create any volatility because at the end of the story there will be a conversion 1 to 1 real time. What I can tell you, I was discussing with the responsible, the commercial and marketing of these areas, we already started to have some clients. I have to say, not only the people below 35 years old, or the 40, that are, let's say, they place an order with the cryptocurrency. It seems to

So the cryptocurrency, we do not expect.

Needs to be to create any volatility because and then those stores there will be a conversion of one to one real time.

What I can tell you and I was discussing with them as possible on the commercial and marketing.

Fios areas, we already started to have some clients and then to see not only the people below 35 years old.

Over 40.

Taking their own let's.

Let's say they place.

Place an order with the cryptocurrency so it seems to what I think that.

Benedetto Vigna: What I think is that, I mean, from the first signal it is very well appreciated, so I think it was a good move to allow people to be, let's say, to enter our family or to use, let me say, the cryptocurrency to pay for a Ferrari because we make easier the process. They also appreciate the fact that we use the cryptocurrency, that by using a stake, let's say, it's pretty much sustainable. Okay. The proof of stake instead of proof of work, it allows to be sustainable. When it comes instead to the pre-owned, well, what I can tell you is two things. One, we did in our history many models, 150 models, if I consider since the beginning.

I mean from the first the seasonality is very well appreciated.

So I think it was a good move to allow people to be to be Mister.

Mr to enter our failure to user visit the crypto currency to pay for a Ferrari because we make ECS the process and they also appreciate the fact that we use the cryptocurrency that by using it.

Yes.

A state.

It's pretty much sustainable okay.

Proof of snake instead of proof of work it allows us to be sustainable when it comes instead to the pre owned at the well what I can tell you is two things one we.

<unk>.

In our history. Many models 150 models if they consider it seems the beginning for us they are all important.

Benedetto Vigna: For us, they are all important, the new and the previous one. The Roma Spider, the new, the pre-owned are the previous one. Well, they are all important for us, and we need, and we will take more and more care of them. We want to increase the share of the pre-owned cars that go through our official dealers. We want to make sure that the cars that go through gray dealers are reducing more and more. What we are doing with the team here on commercial side is exactly meant to reach this goal.

New and the previous one we have to the Roma baidu as the new the pre owned at that out of the previous one well. They are all important for us and we need and we will take more and more scarce of them. We want to increase the share of the pre owned and the cash that go through our official dealers we want to make.

Sure that the cabinet to go through great dealers is been using more in March and what we are doing with them.

The team here on the commercial side is exactly meant to reach these goals.

Benedetto Vigna: I also have to say, and I want to share with you, that when I visited some dealers, dealerships in the last quarters, it's becoming more and more frequent that the dealers are having people whose MBO, whose yearly KPI are based on the number of pre-owned car that they keep purchasing. I think there is, you know, there is even more and more attention also from our dealers and clearly also from us. Because we will keep always the number of car limited. As I said, the new car we make, as well as the one that our colleague before us, they have the same dignity, and they must be cared in the same way, like being all children of the same family.

You also have to say and I want to share with you that when I visited some dealers dealerships in the last quarters.

Becoming more and more frequent debt.

Having people, whose mbo, whose yearly kpis.

Based on the number of on the pre owned the car that they keep purchasing so I think there is.

There is even more and more attention also from our dealers and clearly also from from US because we will keep all with the number of <unk> limited. So as I said, the new code, we make as well as the one that are.

Our colleague beforehand.

They have the same dignity and they must be Canada in the same way like it being all children of the same family.

Speaker 19: Thank you.

Anthony Dick: Thank you.

Thank you.

Operator: Thank you. Now we're gonna take our last question. Just a moment. The last question for today comes from the line of John Murphy from Bank of America. Your line is open. Please ask the question.

Thank you.

Now we're going to take our last question.

This amendment.

And then last question for today comes from the line of John Murphy from Bank of America. Your line is open. Please ask your question.

Speaker 20: Good afternoon, everybody. Benedetto, just on kind of follow-up to that and sort of the follow-up to your backlog being so strong, you think about price and mix. I mean, there's opportunity to manage that sort of on an interim basis. Over time, do you think you need sort of the quote-unquote entry level product like a Roma? I mean, it's a beautiful vehicle, but I mean, would that be the kind of product that might not make it into the product portfolio in the next, you know, three to five years? And then a second question. As you see the strength in the used market, is there a possibility to start doing personalization in the used market, maybe around wheels and interiors?

John Murphy: Good afternoon, everybody. Benedetto, just on kind of follow-up to that and sort of the follow-up to your backlog being so strong, you think about price and mix. I mean, there's opportunity to manage that sort of on an interim basis. Over time, do you think you need sort of the quote-unquote entry level product like a Roma? I mean, it's a beautiful vehicle, but I mean, would that be the kind of product that might not make it into the product portfolio in the next, you know, three to five years? And then a second question. As you see the strength in the used market, is there a possibility to start doing personalization in the used market, maybe around wheels and interiors?

All right good afternoon everybody.

Just kind of follow up to that.

And in sort of the follow up to your backlog being so strong.

Do you think about price and mix I mean is your opportunity to manage that.

On an interim basis, but over time do you think you need sort of the quote unquote entry level product like.

<unk> I mean, it's a beautiful vehicle, but I mean would that be the kind of product it might not make it into the <unk>.

Portfolio in the next three to five years and then the second question is you see the strength.

In the used market is there a possibility to start doing personalization in the used market maybe around wheels and interiors, obviously, you can't do paint there or maybe you could.

Speaker 20: Obviously, you can't do paint there, or maybe you could, that could actually augment revenue and support residuals further in the secondary market.

John Murphy: Obviously, you can't do paint there, or maybe you could, that could actually augment revenue and support residuals further in the secondary market.

They could actually augment revenue and support residuals further in the secondary market.

Benedetto Vigna: Thank you, John, for the question. Yes, I start from the second one. Used market, we see this trend also to do personalization of the pre-owned. They may change the rim, they may change something in interiors. But also some client, they want to add, for example, some protective layers on the paint. Last week, I was visiting the location where we apply this protecting layer, and one of this car was exactly a pre-owned car that was where we were applying a protective layer. The second, I believe that the Roma is a good entry model. I think that we don't need to go lower.

Thank you John for the question, Yes, I start from the second one uses the market. We see this trend also through personalization. The pre owned they may change the dream. They may change something in interiors, but also some client that they want to add that for example, some protective layers on the paint.

Last week I was visiting the location, where we apply this protecting.

Layer and that one of the scatter was exactly a pre owned and the cash that was where we were applying it for.

Affectively, yes.

The second.

I believe that their.

Roma is a good entry model.

And I think that we don't need it to go lower I think of that.

Benedetto Vigna: I think that the strategy for a company like us that is playing, I would say, in the ultra-luxury space, is such that we need to make our cars always more and more emotional, always more and more unique in terms of performance, in terms of, let me say, astonishing design, and always having in mind the sustainability. I think these are. There are, you know, three wheels that must work in the same way, at the same speed. The driving emotion, the driving thrills, the performance driven by engineering, and the beauty of the car driven by design. These are the three wheels that we'll keep considering. I think we already have an entry level that is Roma.

The strategy for a company like us that is playing I would say in the ultra luxury space is such that we needed to make our cash owners more and more emotional almost more and more unique in terms of performance in terms of and can you say.

Astonishing the sign.

And notwithstanding in mind the sustainability I think these out there are there are three wells that the math to work in the same way at the same speed driving emotion driving trails, the performance driven by engineering and the beauty of the cat driven in by design. These are the three wells that will keep considering.

And I think we already have an entry level. It is early.

Speaker 20: Okay, great. Thank you very much.

John Murphy: Okay, great. Thank you very much.

Okay, great. Thank you very much.

Benedetto Vigna: Thank you.

Thank you.

Operator: Thank you. The speakers have no further questions for today. I would now like to hand the conference over to Benedetto Vigna for any closing remarks.

Yeah.

Dear speakers there are no further questions for today I would now like to hand, the conference over to <unk> for any closing remarks.

Benedetto Vigna: Thank you all for your time today, and also for your very insightful questions. Thanks a lot. The strong Q3 result, and also the desirability of the brand that we've been debating during this one hour, are basically fueling our confidence for the development of the year and also looking forward. Thanks a lot again, and I wish you a good afternoon or morning. Thank you so much.

So thank you all for your time today and also for your very insightful question. Thanks, a lot. The strong Q3 result, and also the ability of the brand that we have been.

Debating during this one hour.

Basically fueling our confidence for the development of the year and also looking forward. So thanks, a lot again and I wish you a good afternoon or morning. Thank you so much.

Operator: That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.

That does conclude our conference for today. Thank you for participating you may now all disconnect have a nice day.

Okay.

[music].

Okay.

Yes.

[music].

Okay.

Uh huh.

Okay.

[music].

Yeah.

Yes.

[music].

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