Q1 2024 Ferrari NV Earnings Call

Okay.

Operator: Good day, and thank you for standing by. Welcome to the Ferrari 2024 Q1 Results Conference Call. At this time, all participants are in a listen-only mode.

Speaker Change: Good day and thank you for standing by welcome to the February 'twenty 'twenty four Q1 results conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star, 1, 1 on your telephone. You will then hear an automated message advising that your hand is raised.

Speaker Change: Asked a question during the session you will need to press star one one on your telephone you will then hear an auto let your message is watching your hundreds right.

Operator: To withdraw your question, please press star, 1, and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nicoletta Russo, Head of Investor Relations. Please go ahead.

Speaker Change: Rest of your question. Please press star one on one again, please be advised that today's conference is being recorded I would now like to hand, the conference or at your speaker today Nicoletta Russo head of Investor Relations. Please go ahead.

Nicoletta Russo: Thank you, Sandra, and welcome to everyone who is joining us today. Today, we plan to cover the Group's Q1 2024 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 the 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.

Speaker Change: Okay.

Nicoletta Russo: Thank you Sandra and welcome to everyone Who's joining us today, we plan to cover the group's Q1 capital before 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. Benedict Divina and group CFO and he said I'm starting to pick up at all.

Speaker Change: Lucky that's available in the investors section of the periodic corporate website and at the end of the presentation.

Speaker Change: For your question.

Nicoletta Russo: 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 Harbour Statement, included on page 2 of today's presentation, and the call will be governed by that language. With that said, I'd like to turn the call over to Benedetto.

Benedetto Vigna: <unk>, we begin let me remind you that any forward looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the Safe Harbor statement included on page two of today's presentation and the call will be governed by this language with upset a lot I'd like to turn the call over to Ben.

Benedetto Vigna: Thank you, Nicoletta, and thank you everyone for joining us today. I just came back from Miami, where I spent one week together with our clients, the fans, the sponsors, including HP, our new title sponsor, and all brand enthusiasts. You should have been there with me and all my Ferrari colleagues. You would have experienced the brand power of the Prancing Horse.

Ben: Good afternoon.

Ben: Thank you everyone for joining us today.

Ben: Just came back from Miami, where I spent a week together with our clients to define the sponsor, including HP, our new title sponsor and all brand enthusiasm you should have been there we meet and also adequately yet you would have.

Ben: <unk> been experiencing that brings the power of the pricing or indeed for the first time in our history.

Benedetto Vigna: Indeed, for the first time in our history, Prancing Horse Racing, Sport Cars, and Lifestyles have been working in unison together to provide all the people in Miami with a truly unique experience. But before sharing with you more detail about this fantastic event, I would like to thank our Ferrari colleagues for their outstanding work and dedication, our clients for their loyalty to our brand, and all our partners, suppliers, dealers, and sponsors. Without their tireless effort and dedication, the strong result we present today would not have been possible.

Ben: So he saw our company racing sports golf and lifestyle, they've been working in unison together to provide all the people in Miami, a truly unique experience, but before sharing with you more detail about these fantastic event I would like to thank our colleagues for their outstanding work and dedication.

Ben: <unk>, our clients for their loyalty to our brand and all our partners suppliers dealers and sponsors without their tireless effort and dedication. The strong results. We present today would not have been possible. So let's start with the financial results of the first quarter.

Benedetto Vigna: So let's start with the financial results of the first quarter. We can say that it was a strong start to the year, with double-digit growth on key metrics, thanks to an even more robust product mix and a strong trend in personalization. Three key highlights are: One, total revenues reached approximately 1.6 billion euros with flat deliveries.

Ben: You can see that is a strong start to the year with double digit growth on key metrics. Thanks to an even more robust product mix and the stronger trends in personalization.

Ben: Three out of the key highlights.

Ben: Total revenues reached approximately $1 6 billion with a flat deliveries. This once again face Testament to our strategy of value over volume.

Benedetto Vigna: This, once again, pays testament to our strategy of value over volume. Two, we enjoy strong profitability, with EBDA at 6.05 million euros. And three, industrial free cash flow generation reached more than 320 million euros in the quarter.

Ben: We enjoyed a strong profitability with EBITDA at $6 5 million Euro and three industrial free cash flow generation reached more than 320 million euro in the quarter.

Benedetto Vigna: The order book on our current models continues to be very strong, with a normalization in line with our expectations, and almost all models are substantially sold out. And in the last week, we opened the order book for the Dodici Cilindri, Coupe, and Spyder. For the first time among our range models, we unveiled the Coupe and the Spyder together because we want to leave the freedom of selection to our clients. The first feedback from our two new models has been extremely positive. Several clients have said that it's not a matter of either or. We love both of them.

Ben: The order book on our current model continues to be very strong we have a normalization in line with our expectation with almost all model substantially sold out and in the last week. We opened the order book for the Nordic to Chilean re coupe inspired us for the first time four hour range models, we have.

Ben: Unveiled the coupe and despite their together because we want to leave the freedom of selection to our clients.

Ben: First feedback from our two new models has been extremely positive.

Ben: Several clients as said it is.

Ben: Is not a matter of either ours, we love both I totally with clients from all over the world from China from Korea from U S from Europe. They were all astonished by both models, our new <unk>, Chile in Gray are amazingly beautiful Andi performance.

Benedetto Vigna: I talked with clients from all over the world, from China, from Korea, the US, and Europe. They were all astonished by both models. Our new 12-cylinders are amazingly beautiful and high-performance. They are the perfect blend of tradition and innovation, elegant and sporty.

Ben: The perfect blend of tradition and innovation.

Ben: As partners.

Benedetto Vigna: Our clients' opinions are obviously paramount, but I am also proud to say that the Roma Spyder has been recognized with a red dot award, the best of the best in the product design category. And the Ferrari SF90 XX Stradale and one-off KC23 have also been awarded red dot awards. All these are truly innovative vehicles enabled by our R&D innovation, and in fact, in 2023, just in Italy, we submitted 181 patent applications, one every two days.

Ben: Our current opinion are obviously, paramount, but I am also proud to say that they're almost by this has been recognized we were Red Dot Award best of the best in the product design category and the Ferrari FF 90 X extra Dallas and the one off cases 23 have also been awarded breath.

Ben: The awards.

Ben: All these are truly innovative vehicles enabled by our R&D innovation and in fact in 2023, just in Italy, We submitted 181 patent application one.

Ben: Two days.

Benedetto Vigna: And always on the subject of innovation, last month, we inaugurated the E-Cell Lab in collaboration with the University of Bologna and NXP Semiconductor. This lab will make a significant contribution to research in electrochemistry, and the project reflects the importance of collaboration between the academic and the business world.

Ben: And also on the subject of innovation last month, we innovated the ESL a lab in collaboration with University of Bologna, and NXP semiconductors. These laboratory will make a significant contribution to research and electrochemistry and the projects reflects the importance of collaboration between the academic and business worlds.

Benedetto Vigna: But there is much more to it. This lab will foster innovation in our local area and help us to build the skills of the future. Talking of technology collaboration, we have renewed our partnership with Eskeon, a leader in the field of high-performance cell manufacturing with whom we have collaborated for many years, and we will continue to innovate further. As you can see, we are fighting on all cylinders in the execution of our business plan and product development.

Ben: It's much more in it this lab will foster innovation in our local area and they'll pass to build the skill the skills of the future.

Ben: Talking of technology collaborations we have renewed our partnership with risky on the leader in the field of high performance cell manufacturing with whom we have a collaboration for many years and we will continue to innovate cover.

Ben: As you can see we are firing on all cylinders in the execution of our business plan and product development, but perhaps I should say we are charging ahead because in 2024, we will set another significant milestone in our electrification journey.

Benedetto Vigna: But perhaps, I should instead say, we are charging ahead because, in 2024, we will set another significant milestone in our electrification journey. In fact, on the 21st of June, exactly two years since our last Capital Market Day, and as we promised you during all our previous calls and meetings, we will inaugurate our new building. This state-of-the-art and highly flexible plan will assure us of flexibility and technical capacity in excess of our needs for years to come.

Ben: In fact on the 20 <unk> of June exactly two years since our last capital market day, and as we promised with you during all our previous calls and meetings, we will inaugurate our new rebuilding these are state of the App and the highly flexible plant will assure us of the flexibility.

Ben: Technical capacity in excess of our needs for years to come.

Benedetto Vigna: Here, we will handcraft the dedicated electric axles and batteries that will power future Ferraris, exactly like we promised you two years ago. A special thank goes to all the colleagues that have been able to maintain the building schedule despite all the difficulties we have experienced in these turbulent times. It has not been easy, believe me, but they made it happen. Grazie.

Ben: Yes, we will end the craft the dedicated electric axles and batteries that will power future Ferraris exactly like we promised you three years ago.

Ben: Frank because all the colleagues that have been able to maintain the rebuilding scheduled despite all the difficulties we experienced it in these turbulent times. It has not been easy believe me, but they may be turpin gotcha move.

Benedetto Vigna: Moving to the next page, the pictures clearly show the essence of one Ferrari ethos, and believe me, there is no better way to exemplify it than our recent activities in the United States. As I told you at the beginning, last week, Ferrari hosted an unforgettable series of brand experiences in Miami, which immersed international clients, sponsors, Tifosi, dealers, and brand enthusiasts into the Ferrari universe. It began with Cavalcade International, one of our most prestigious driving events, which attracted about 70 Ferraris and their owners from all over the world as they drove together through the scenic landscape of Nashville, Tennessee, first and later in Florida.

Ben: Moving to the next page the picture should clearly the essence of one Ferrari ethos and believe me there is no better way to simplify it than our recent activities in United States.

Benedetto Vigna: The journey culminated in Miami with the world premieres of the Ferrari 12-cylinder and the Ferrari 12-cylinder Spiders, our new two-seater Berlinettas powered by a front-mid naturally aspirated V12. These models are the perfect embodiment of the Prancing Horse DNA, offering incomparable performance and handling with sophisticated design. You should have seen the emotions of all our clients. My words would never be capable of transmitting those emotions to you.

Ben: I told you at the beginning last week Ferrari Allstate and forget about series of brand experiences in Miami, which immersive international clients sponsor before see dealers and the brand into assist into the Ferrari universe. It the big game, we've cavalcade International one of our most prestigious dry.

Benedetto Vigna: These events were accompanied by a privileged view of the latest fashion capsule collection, inspired by the history of racing on American tracks and the vibrant energy of Miami. The capsule collection received a warm reception. It was nice to see most of our clients wearing many pieces of our lifestyle collections during the long weekend. And last but not least, a fortunate few clients had the opportunity to enjoy the Miami Grand Prix to its fullest with the exclusive and elegant hospitality of Casa Ferrari, right at the heart of the race.

Benedetto Vigna: I am also proud to say that the Miami Grand Prix was the start of a new partnership. HP has become our title sponsor for a multi-year collaboration that encompasses a shared commitment to innovation, trust, and excellence, as well as a commitment to sustainable futures, from carbon neutrality to the education of the next generation.

Ben: Events, which attracted about 70 ferraris and their owners from all over the world.

Ben: <unk> brought together through the cynic landscape of Nashville.

Ben: Let's see first and later in Florida.

Ben: The journey culminated in Miami with the World premiere of the Ferrari <unk> entry into February, though the Chilean spiders, our new two seater building. It is powered by fraud prone to meet naturally aspirated.

Ben: These models are the perfect embodiment of the planting of DNA.

Ben: Bringing comparable performance and then dealing with sophisticated design.

Speaker Change: You should have seen the emotion of all our clients my words will never be capable to transmit to you those emotions. This.

Ben: Events were accompanied by a privilege of view of the latest fashion capsule collection in spite of the babies study of racing on American tracks and survival of the NFC of Miami the capsule collection.

Ben: Reception it was nice to see most of our clients wearing many pieces of our lifestyle collections during the long weekend.

Ben: And last but not least a fortunate few clients Ed opportunity to leave the Miami Grand Prix to its fullest, we've exclusive and delegates hospitality of Casa Berardi right at the heart of the race.

Ben: I'm also proud to say that to the Miami Grand Prix was the start of a new partnership HP has become our title sponsors with a multiyear collaborations that encompasses a shared commitment to innovation and.

Ben: <unk> excellence as well as commitment to sustainable future from carbon neutrality to the location of the next generation.

Benedetto Vigna: In HP, we have found the same values which make it an ideal partner. I have known them for more than 20 years, and for both our companies, people are at the center of whatever we do, because it is only people, it is only people who are able to blend together tradition and innovation. Not all of our clients, Tifosi and Bread Enthusiasts, were able to attend the event in person.

Ben: In HBV, we have found that the same values, which make it an ideal partners I know them since more than 20 years and for both our companies people out of the center of whatever we do because it is only people. It is only people who are able to blend together the tradition and innovation.

Ben: All of our clients before CN brand enthusiasm, we're able to attend the event in person. Thus we have each of them through social media channels. So not just their sense of belonging.

Nicoletta Russo: Thus, we reached them through social media channels to nurture their sense of belonging. Lastly, before moving on, I would like to thank you, our shareholders, for your continuing trust, and among you, I'm delighted to welcome around 4,700 new shareholders among our dear colleagues. Indeed, around 98% of our employees have taken advantage of the broad-based share ownership plan launched by Ferrari that I described to you a few calls ago. This initiative demonstrates our desire to foster the sense of belonging that makes us unique and underlines once more how we continuously strive for excellence. And on this note, I hand over to Antonio to review the Q1 2024 financial results. Please, Antonio.

Ben: Lastly, before moving on I would like to thank you our shareholders for your continued trust and demand you I'm delighted to welcome around 4700, new shareholders among our dear colleagues, indeed around 98% of our employees have taken.

Ben: Advantage of the broad based the share ownership plan launched by Ferrari that I described with you a few calls ago.

Ben: This initiative demonstrates our desire to foster a sense of belonging that makes us unique.

Ben: And underlines once more how we continuously strive for excellence and on this note I'll hand over to Antonio to review the Q1 2024 financial results. Please Antonio.

Antonio Piccon: Thank you, Benedetto, and good morning or afternoon to everyone joining us today. Starting on page 5, we present the highlights of this year's first quarter results. As you can see from this page, the first quarter saw shipments equal to the last of the prior year, while revenues and profitability grew double digits. As Benedetto mentioned earlier, the robust mix was the main driver.

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

Antonio: Starting on page five we present the highlights of the first quarter results of this year.

Antonio: As you can keep it on this page the first quarter, so shipments flat with the prior year, while revenues and profitability grew double digits.

Antonio: As Ben mentioned earlier, the robust mix was the main driver.

Antonio Piccon: Let me briefly go through the main highlights. Revenues of €1,585,000,000, up 11% adjusted EBIT of €442 million, up 15%, with a 27.9% margin, 100 basis points higher than last year, net profit of 352 million euros, leading to an adjusted diluted earnings per share of 1.95, up 20% adjusted DA of 605 million euros, up roughly 13% with a solid margin at 38.2%. And finally, strong industrial free cash flow generation of 321 million euros. Moving to page 6, we can now add more color to the shipment numbers for the first quarter. As usual, the geographic breakdown reflected our choices of both volume and product allocations in the different markets.

Antonio: Let me briefly go through the main highlights.

Antonio: Revenues of 1.595 billion up 11%.

Antonio: Adjusted EBIT of 442 million Europe up 15% with 27, 9% margin 100 basis points higher than last year.

Antonio: Net profit of 352 million euro leading to an adjusted diluted earnings per share of one year and 95 up 20%.

Antonio: Adjusted EBITDA of 605 million Europe.

Antonio: Roughly 13% with a solid margin at 38, 2%.

Antonio: And finally strong industrial free cash flow generation of 321 million euros.

Antonio Piccon: As a result, deliveries increased in EMEA by 39 units, in America by 35 units, the rest of APAC was almost flat, and allocations to mainland China, Hong Kong, and Taiwan decreased by 79 units. Moving to the product portfolio overview, during the first quarter, the Roma Spider continued its ramp-up phase, while the Puro Sangue reached global distribution. Deliveries of the 296 family continued, sustaining the 46% ivory share.

Antonio: Moving to page six we can now add more color to the shipments number of the first quarter.

Antonio: As usual the geographic breakdown reflected our choices of both volume and product allocations in the different markets.

Antonio Piccon: The allocations of the Daytona SP3 increased in the quarter in line with our plans and above the average for the rest of the year. Lastly, some models were approaching the end of their life cycles, namely the SF90 Stradale and the A12 GTS. DSF90XX Stradale, DSF90XX Spyder, and obviously the newly launched 12-cylinder Coupe will start contributing at their respective paces this year, while the 12-cylinder Spyder will start contributing in 2025. On page 7, you can see the net revenues bridge, which shows a 13% growth versus the prior year at constant currency.

Antonio: As a result deliveries increase in EMEA by 39 units in America by 35 units rest of Africa was almost flat and allocations to mainland China, Hong Kong and Taiwan decreased by 17 nine units.

Antonio: Moving to the product portfolio overview during the first quarter, they're almost by their continued its ramp up phase, while they put us and where its global distribution.

Antonio: Deliveries of the $200 and finally continued sustaining the 46% I would share.

Antonio: The allocation of that I don't I see three increase in the quarter in line with our plans and above the average for the rest of the year.

Antonio: Lastly, some modest we're approaching the end of their lifecycle, namely DSS, 19th Strobila NDA towards the GTS.

Antonio: Yes.

Antonio: Yes, S 90 X X Spider and obviously, the newly launched digitally and recoup with assai contributing at their respective pace. This year, while the 12 cylinder aspire Spider was planned from 2025.

Antonio: On page seven you can see the net revenues bridge, which shows a 13% growth versus prior year at constant currency.

Antonio Piccon: The increasing number of cars and spare parts was the most relevant contributor, driven by the richer product mix and country mix, as well as higher personalization. In the first quarter, personalizations came in strong and in line with our expectations of approximately 19% in proportion to driving on cars and spare parts. The main contributors were the Purosangue and the total carbon finish for the Daytona SP3.

Antonio: The increase in cars and spare parts was the most relevant contributor driven by the richer product mix and country mix.

Antonio: Whereas higher personalization.

Antonio: In the first quarter personalization came in strong and in line with our expectations of approximately 19% in proportion to having on cars and spare parts.

Antonio: The main contributors were the pool of bandwidth and the total category finished for the data on <unk> III.

Antonio Piccon: Sponsorship Commercial and Brand increased thanks to the higher sponsorships for our racing activities, partially offset by the lower Formula One rankings achieved in 2023 compared to 2022. With regard to sponsorship, the additional contribution is provided both from new sponsors and different phase-in of sponsors signed last year. Other revenues were flat, with the improved contribution of financial services offset by the decrease in the sales of engines to Maserati, whose supply contract expired at the end of 2023.

Antonio: Sponsorship commercial and brand increase thanks to the higher sponsorships for our hedging activities, partially offset by the lower formula one ranking.

Antonio: In 2023 compared to 2022.

Antonio: With regards to sponsorship and the additional contribution is provided both from new sponsor and different phasing of sponsors signed last year.

Antonio: Other revenues were flat with improved contribution of financial services offset by the decrease of the sales of engines to Maserati.

Antonio: <unk> contract expires at the end of 2023.

Antonio Piccon: As previously flagged, within the other revenues, we have now reclassified any residual sales of engines to third parties, whether for sport cars or race cars. Currency has a negative net impact of approximately 25 million euros, mainly due to the adverse dynamics of the Chinese yuan, Japanese yen, and US dollar versus the euro. Moving to page 8, the change in adjusted EBIT is explained by the following variances: Volume slightly negative, mainly reflecting lower range model deliveries.

Antonio Piccon: As previously flagged within the other revenue we have now reclassified any residual sales of engines with third parties whether for sparkle for racing.

Antonio Piccon: Currency had a negative net impact of approximately 25 million, mainly due to the adverse dynamics of the Chinese Yuan Japanese yen and U S dollar versus the euro.

Antonio Piccon: Moving to page eight the change in adjusted EBIT is explained by the following variances.

Antonio: Volume slightly negative, mainly reflecting lower range models deliveries.

Antonio Piccon: Mixed in price positive for 123 million euros thanks to the robust product mix sustained by the Daytona SP3. As a reminder, we show in this bar the whole contribution from the Daycona pillar, including the volume variance, the increased contribution from personalization, and a positive country mix mainly driven by America. Industrial and R&D expenses grew 29 million euros, led by innovation expenses mainly for our sports car development as well as higher depreciation and amortization. LVNA's turnover increased by 12 million euros and mainly reflected the ongoing development of our digital infrastructure and organization.

Mix and price positively for 123 million Europe, thanks to the robust product mix sustained by data on SB three.

Antonio: As a reminder, we are showing this by the whole contribution from the corner pillar, including the volume by.

Antonio Piccon: The increased contribution from personalization and a positive country mix, mainly driven by America.

Antonio Piccon: Industrial and R&D expenses grew 29 million Europe led by innovation expenses, mainly for our forecast development as well as higher depreciation and amortization.

Antonio Piccon: SG&A increased 12 million and mainly reflected the ongoing development of our digital infrastructure and organization.

Antonio Piccon: Other positively contributed 6 million euros. The increased contribution from sponsorship and the release of private car environmental provisions in the USA, the latter worth approximately 10 million US dollars, were partially offset by the lower Formula One ranking achieved in 2023 compared to 2022. Lastly, the total net impact of currency was negative for 23 million euros.

Antonio Piccon: Other positively contributed four 6 million euro the increased contribution for a strong from a sponsorship and release of prior year car environmental provisions in the USA. The latter worth approximately 10 million U S dollars were partially offset by the lower formula one ranking achievement in 2023 compared to 2000.

Antonio Piccon: 'twenty two.

Antonio Piccon: Lastly, the total net impact of currency was a negative 423 million Europe.

Antonio Piccon: Okay.

Antonio Piccon: Turning to page 9, in the first quarter, our industrial free cash flow generation was strong and reached €321 million. It reflected an increase in profitability, partially offset by CapEx for €195 million, €45 million higher than last year, and in line with the pace of development of our products and infrastructure. Capital expenditure during 2024 will develop more linearly compared to our usual cadence, particularly as we start spending for the new Spain shop.

Antonio Piccon: Turning to page nine in the first quarter, our industrial free cash flow generation was strong and reached 321.

Antonio Piccon: It reflected the increase in profitability, partially offset by Capex for $195 million 40.

Antonio Piccon: 45 million higher than last year and in line with the pace of development of our products and infrastructure.

Antonio Piccon: Capital expenditures during 2024 will develop more linearly compared to our usual guidance, particularly as we start spending for the new paint shop.

Antonio Piccon: And second, a moderate increase in net working capital, mainly led by trade receivables. At the end of March, the company was in a net industrial cash position of €38 million, notwithstanding €136 million of share purchases that occurred in the quarter and residual impacts from currency and IFRS 16. Following the Annual General Meeting approval in April, the dividend distribution of approximately 440 million euros was paid on the 3rd of May, thus impacting the balance sheet of the second quarter.

Antonio Piccon: And second a moderate increase in working capital mainly led by trade receivables.

Antonio Piccon: At the end of March the company was in a net industrial cash position for 38 million Europe, Notwithstanding 136 million euro share repurchases occurred in the quarter and residual impacts from currency and <unk> 16.

Antonio Piccon: Following the annual General meeting approval in April the dividend distribution of approximately 440 million Euro was paid on the third of Mei, thus impacting the balance sheets of the second quarter.

Nicoletta Russo: Finally, let's move to page 10, which confirms the guidance for 2024. We are really pleased by the solid Q1 performance, the continuing strength of the order book, and the positive business trends, also highlighted by the enthusiastic reception of the Dodici Cilindri and the great partnership started with HP. On this basis, we can look with great confidence at the next steps in the execution of our plan for the current year and beyond. I thank you for your attention, and I now turn the call over to Nicoletta. Thank you, Antonio. We are now ready to open the Q&A session. Please, Sandra, go ahead.

Antonio Piccon: Okay.

Antonio Piccon: Finally, let's move to page 10, which confirms the guidance for 2024.

Nicoletta Russo: We are really pleased by the solid Q1 performance. The continued strength of the order book and the positive business trends also emphasized by the enthusiastic reception of the various actual injury and the great partnership started with HP.

Nicoletta Russo: On this basis, we do look with great confidence at the next steps in the execution of our plan for the current year and beyond.

Nicoletta Russo: I. Thank you for your attention and I'll now turn the call over to Nicoletta.

Nicoletta Russo: Thank you Antonio we are now.

Nicoletta Russo: To open the Q&A session Snee Sandra go ahead.

Sandra: Thank you Sir.

Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star, 1 and 1 again. We will now take the first question. Coming from the line of George Galliers from Goldman Sachs, please go ahead.

Nicoletta Russo: A reminder to ask a question. Please press star one on your telephone and wait for your name to be announced the wisdom. Your question. Please press star one on one again.

George Galliers: We will now take the first question.

George Galliers: Coming from the line of George <unk> from Goldman Sachs. Please go ahead.

George Galliers: Good afternoon and thank you for taking my questions. The first question I wanted to ask was just to help provide some clarification about the order book. You talked about some normalization, but you also, in the opening remarks, referenced the order book being very strong. Could you just help us understand what normalization means?

George Galliers: Good afternoon, and thank you for taking my questions. The first question I wanted to ask was just to help.

George Galliers: Some clarification about the order book.

George Galliers: You talked about some normalization, but you're also in the opening remarks reference the order book being very strong.

George Galliers: Could you just help us understand what normalization means is this just the fact that you have more slots available now going into 2026 and with two IDT Chilean Trey.

Benedetto Vigna: Is this just the fact you have more slots available now going into 2026? [inaudible] The second question I had was around innovation, and Benedetto, obviously, you referenced the large number of patents that you continue to file. Just with respect to patents and innovation, is there any one area where you are particularly active today, such as aero, or chassis dynamics, software, or electric powertrain? Or is the innovation really across the board, and all of the different technologies obviously in play at Ferrari? Thank you. Thank you, George. Thank you for your question. I will start with the first one. Stabilization is a process of normalization.

Benedetto Vigna: Or is there another element to it and could you just confirm you havent seen any pickup or abnormal behavior with respect to cancellations.

Benedetto Vigna: Second question I had was around innovation and <unk>, obviously, you referenced the large number of patients that you continue to file.

Benedetto Vigna: Just with respect to the patients and the innovation is there any one area, where you are particularly active today, such as arrow or chassis dynamics software or electric powertrain or is the innovation really across the board and all of the different technologies, obviously in play.

Speaker Change: Ferrari Thank you.

Speaker Change: Thank you John Thank you for your question I want to start with the first line study.

Speaker Change: Normalization what does it mean.

Benedetto Vigna: What does it mean? And so, let me say in this way, it's simple math, okay? Because we are in a situation where a lot of our models are sold out, and we have the two new models that were announced last week. And thanks for the effort to pronounce it well in Italian.

Speaker Change: And so let me say in this way is it simple.

Benedetto Vigna: Is it simple math, okay, because we are in a situation where a lot of our more than half sold out and we have the.

Benedetto Vigna: Two new models that were announced at the last week.

Benedetto Vigna: Thanks for the efforts to pronounce dwell in Italian. Thank you noted your Chilean rate, whereas this the author of this took out are not yet in our portfolio. So normalization for us meant that as we said also at the beginning of the year in February we were expecting the product portfolio.

Benedetto Vigna: Thank you. The Dodici Cilindri, well, the order of these two cars is not yet in our portfolio. So normalization for us meant that, as we said also at the beginning of the year in February, we were expecting the product portfolio to go down a little bit because there was not too much for the client to order. On that question, I would like to take this opportunity to clarify something important. The order book that we have goes well into 2026.

Benedetto Vigna: Talk a little bit down because there was not too much for the client to orders.

Benedetto Vigna: And this question I would like to take this opportunity to clarify something important the order book that we have goes well into 2026.

Benedetto Vigna: This is very important. I want to clarify this, because we have models that are, let me say, for which we have a longer waiting list. No abnormality of cancellation. We saw less orders coming from China, that's true, but we don't see an abnormality of cancellation. We don't see any pattern either in terms of country or in terms of models.

Benedetto Vigna: This is really important I want to clarify this because we have <unk>.

Benedetto Vigna: Models.

Benedetto Vigna: Let me say for which we have a longer a longer waiting at least the second point.

Benedetto Vigna: No abnormality of cancellations, we saw less.

Benedetto Vigna: Or they're coming from China, that's true, but we don't see a abnormality or cancellation, we don't see any pattern either in terms of country or in terms of the model we see some.

Benedetto Vigna: We see some clients that want to have some more models; they have to wait longer because there is a long wait time, like for example, the Burosangue. The other point was about the IP. The IP is the innovation, let me say, that we are running and we are patenting goes across the board. There are some areas that are, let me say, more, a little bit more present, as related to the driving trails.

Benedetto Vigna: Clients that want to have some are more moderate they have to wait long gas because there is a long wait wait time like for example, the Bureau sandwich.

Benedetto Vigna: The other point was about the IP.

Benedetto Vigna: IP is.

Benedetto Vigna: Innovation, let me say that we are running and we are patenting. It grows across the board there are some areas there.

Benedetto Vigna: Let me say more of the.

Benedetto Vigna: A little bit more presence.

Benedetto Vigna: What is that related to the driving trends.

Benedetto Vigna: So if you come, let me say, in our patent portfolio, we'll not find many patents about things that are not strategic for us, like autonomous driving. But when it comes to anything related to the driving trails or plowing and disinteracting with the car, well, over there, that one is an area of attention and focus for our patenting activities. Great, thank you very much.

Benedetto Vigna: So if you can let me say in our patent portfolio will not find many patents about things that are not strategic for us like autonomous driving.

Benedetto Vigna: When it comes to.

Benedetto Vigna: Anything related to the driving trips.

Benedetto Vigna: Hello, Adrienne this into vaccine, we look at well over there is that one is an area of attention and focus for our patenting activity.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you.

Speaker Change: We will now take the next question.

Operator: Thank you. We will now take the next question. From the line of John Murphy from Bank of America, please go ahead. Hello everybody.

Benedetto Vigna: From the line of John Murphy from Bank of America. Please go ahead.

John Babcock: I just had two questions. The quarter was a very Ferrari-like quarter with volumes flat, very significant revenue growth from price and mix, and personalization. So it really proved out the model. But I think if we look at the two walks, I was just wondering if you could give us some information or color on the EBIT change versus the revenue change. Because it was a very clean quarter with volumes almost flat year over year, but EBIT up $123 million versus revenue up $166 million, which would give you a 74% contribution margin, which I think is not being appreciated necessarily in the stock at the moment.

John Babcock: Hello, everybody.

John Babcock: Two questions.

John Babcock: <unk> was a very Ferrari light quarter with volumes flat very significant.

John Babcock: Revenue growth from price and mix and personalization. So it was really proved out the model, but I think if we look at the two walks I was just wondering if you could give us some information on or color on the EBIT change versus the revenue change because it was a very clean quarter with volumes almost almost flat year.

John Babcock: Over year, but EBIT up $123 million versus revenue up $166 million, which would give you a 74% contribution margin.

John Babcock: Which I think is not being appreciated necessarily in the stock.

Antonio Piccon: So I don't know if you can talk about that on a relative basis, but if you could give us some sort of color on how we should think about contribution margin X volume, because it was very strong in the quarter, about 74% as far as I can tell. It's a nice question. I would like Antonio to... There are three main elements that contribute to the increasing contribution margin. The first one is the product mix, whereby it's important to emphasize the role of the Icona.

John Babcock: At the moment.

John Babcock: I don't know if you can talk about that on a relative basis, but if you could give us sort of color. How we should think about contribution margin X volume because it was very strong in the quarter about 74% as far as I can tell you. The next question I would like to have three.

Antonio Piccon: Three main elements that contribute to the to the increase in contribution margin.

Antonio Piccon: The first one is the is the product mix.

Antonio Piccon: Whereby its important to flag the role of da Kona.

Antonio Piccon: Actually, I think I said in my comment on the bridge that the Daytona contributed more than they would over the course of the rest of the year in the first quarter. Secondly, personalization. Personalization is very strong. So it's above the 19% that we had for the rest of the year, slightly above. The third is country mix.

Antonio Piccon: Actually I think I said in my comments on the on the bridge debt.

Antonio Piccon: Data on a contributed higher than they would do over the course of the rest of the year.

Benedetto Vigna: Obviously, with China down, that helps in terms of even marginality. I don't know whether it is a sufficient color, there are a couple of other elements that also contribute to the 499P, and also add a couple of... models sold in the quarter, but that's what explains the strength of this contribution of mix and price. Okay, maybe just one follow-up to that. I mean, basically, what you're saying is this 74% contribution margin x volume is the kind of number we should think about in the future. And then just one follow-up on Parasangua.

Antonio Piccon: In the first quarter secondly, personalization.

Benedetto Vigna: The amortization is very strong.

Benedetto Vigna: So it's above the 19% that we had for the rest of the year is slightly above the third is country mix.

Benedetto Vigna: Lee with China down.

Benedetto Vigna: And in terms of even of the marginality.

Speaker Change: I don't know whether.

Speaker Change: It is a sufficient color.

Benedetto Vigna: There are a couple of other elements is also contribute 49 90 also add a couple of them.

Benedetto Vigna: Models sold in the quarter, but this was.

Benedetto Vigna: To explain the strength of this contribution of mix and price. Okay. Maybe just one follow up to that I mean, basically what youre seeing is the 74% contribution margin X volume is the kind of number we should think about in the future and then just one follow up on personal and work. There is one element to take into consideration the Daytona is higher this quarter.

Benedetto Vigna: There is one element you should take into consideration. The Daytona is higher in this quarter than the rest of the year. Okay, and then just on the Pura Sangua success. I mean, that form factor is obviously somewhat unique. But Benedetto, you're having incredible success there.

Benedetto Vigna: And then the rest of the year.

Benedetto Vigna: Okay, and then just on the personal loans.

Benedetto Vigna: I mean that form factor obviously.

Benedetto Vigna: Could we see a successor to that in the next couple of years? And what would that mean for the business? Look, also another interesting question. I can tell you that yes, ProSangu is getting a lot of traction, and the order book is very strong, it's going well ahead, but I don't want to comment on... I cannot, I would like to, but I cannot because secrecy is a way to feed the secrecy of what we do.

Benedetto Vigna: Somewhat unique.

Speaker Change: But then a dental youre, having incredible success there could we see a successor to that in the next couple of years and what would that mean for the business.

Benedetto Vigna: Look at Ulster. Another interesting question I can tell you that yes, <unk>, having a lot of traction in that.

Benedetto Vigna: The order book is very strong goes well.

Benedetto Vigna: But I don't want to comment of I cannot I would like but they cannot because secrecy is a way to fit with our ability to what we do.

John Babcock: Clearly, clearly, there is... we are learning a lot from this model, and usually, let's put it this way, we like to use what we learn, but I don't want to say if there will be success or whatever. That's very helpful. Thank you very much. Sorry about this, John. No, I understand, but thank you very much. That's a good color.

Benedetto Vigna: Clearly clearly there is.

John Babcock: We are learning a lot from this model unusually let's put it this way we like to use what we learn but I don't want to say, if there will be a success or whatever.

John Babcock: That's very helpful. Thank you very much guys sorry about this Jonathan understand but thank you very much that's good color. Thank you.

John Babcock: Yeah.

Speaker Change: Thank you.

Operator: Thank you. Thank you. We will now take the next question from the land of Toin Narayan from RBC Capital Market. Please go ahead. Oh, yeah, thanks for taking the question. The first one I have is on China. You mentioned it was, you know, down a little. Just curious, maybe if there's something driving that.

Speaker Change: We will now take the next question.

Gautam Narayan: From the line of time Narayen from RBC capital markets. Please go ahead.

Gautam Narayan: I know that there are some just inherent reasons to not be as aggressive there with CO2 restrictions there and tariffs and such. I would love to hear maybe a little more on what's happening in China. If there's anything, any commentary there. Thank you, Tom.

Gautam Narayan: Hi, Thanks for taking the question. The first one I have is on China. You mentioned it was down a little just curious maybe if theres something driving that I know that there are some just inherent.

Gautam Narayan: Reasons to not be as aggressive there with.

Gautam Narayan: Two restrictions there.

Gautam Narayan: Tariffs and such just would love to hear maybe a little more on what's happening in China.

Gautam Narayan: Anything any commentary there.

Gautam Narayan: Thanks.

Benedetto Vigna: That is pretty interesting. So we did some analysis. It's funny to see that if you go to China and compare what was happening one year ago and this year, basically, there are two numbers that are swapped in terms of the cars that we ship to Mainland China. Okay, we're talking about Mainland China.

Speaker Change: Thank you Tom I would like to should we view some color about that.

Benedetto Vigna: China that is pretty interesting so.

Benedetto Vigna: We did do some analysis as funding to see that the if you will in China.

Benedetto Vigna: And if you compare Europe.

Benedetto Vigna: What was happening one year ago and this year basically there are two numbers that are swapped in denim. So.

Benedetto Vigna: Clearly, if I compare it versus one year ago, there is a stronger traction for the hybrid model. One year ago, we were shipping more ICE than hybrids. This year, we are shipping more hybrids than ICE.

Benedetto Vigna: Clara that we shipped to mainland China. Okay, you were thinking about mainland China clearly if AC.

Benedetto Vigna: Versus one year ago, there is a strongest traction of hybrid model one year ago, we were shipping more.

Benedetto Vigna: E.

Benedetto Vigna: And this brings also, since the hybrid models are basically sold out, because a little bit is left to be sold, this has an impact and also, let me say, gives you more color about the meaning of normalization in that country. So I wanted to share a little bit more color because this China has a different meaning for us versus the other luxury brands acting in that region. It has a different meaning because for us, since the beginning, since the capital market day, as Antonio said, we want to mainland, sorry, Greater China.

Benedetto Vigna: I believe that this year, we are shipping more hybrid.

Benedetto Vigna: <unk>.

Benedetto Vigna: Then I see and this brings also.

Benedetto Vigna: Since it seems that the hybrid model that are basically sold out.

Benedetto Vigna: A little bit is left to be sold.

Benedetto Vigna: These are an impact and is also let me say it gives you more color about the meaning of normalization in that kind of in the company. So I wanted to appreciate a little bit more color because of this.

Benedetto Vigna: China is a different meaning for us versus the other brand of luxury brands acting in that region has a different meaning because for us since the beginning since the capital market day as Antonio said earlier, we want to keep the mainland and greater.

Benedetto Vigna: Greater China.

Benedetto Vigna: So ABC, Mainland China, Taiwan, Hong Kong, below 10, because we want this market to get more acquainted with our brand. To be in the family of Ferrari, you need some time. And you need to give time for the client in a country to understand what it means to be our client. So having said that, it's clear that, let me say, in China, we have this kind of normalization. That was also our, if you want, deliberate choice.

Benedetto Vigna: So ABC mainland, China, Taiwan, Hong Kong below 10%.

Benedetto Vigna: Because we want this market to get more acquainted with our brand.

Benedetto Vigna: To be in the family of Ferrari, you need some time and to and you needed to give it time to the client in a country to understand what does it mean to be our clients. So having said that it's clear that for lithium.

Speaker Change: Let me see.

Benedetto Vigna: In China, we added these kind of normalization that we source. Our if you want deliberate choice because the number of model, we can sell data domain.

Benedetto Vigna: Because the number of models we can sell there is not so many, and we wanted to keep it always below 10%. Thank you for that. And a quick follow-up on personalization. The guidance is to stay at that 19%; that was the same amount in 2023, so effectively flat. Pierre Sanguis coming in, I think you also said Daytona above that level. So I guess the question would be... Is there upside potential to that 19% to your guidance in 2024? Or maybe it's because, you know, the initial folks who are getting the pure sangui are more likely to personalize it because they are more VIP, etc.

Benedetto Vigna: And we wanted to keep always below below 10%.

Speaker Change: Thank you for that and a quick follow up on personalization and the.

Benedetto Vigna: Our guidance is to stay in that 19%.

Benedetto Vigna: That was the same amount in 2023, so effectively flat.

Benedetto Vigna: <unk> is coming and I think you would also say daytona above that level.

Benedetto Vigna: So I guess my question would be.

Benedetto Vigna: Is there upside potential to that 19% to your guidance in 2024 or maybe it's because the initial folks who are getting the <unk> are more likely to personalize because they are.

Benedetto Vigna: Maybe more VIP et cetera, So just love to hear more on your thoughts on I think let's say the trend.

Benedetto Vigna: I'd just love to hear more of your thoughts. The trend of personalization is not specific to a model. What I can tell you, let me say, another lesson learned. We like to record, to report, at least to ourselves, what are the lessons learned, and share with you. This year, we increased the price of personalization. You may remember from last call we said that we increased the price of the new model and we increased the price of personalization. Well, what we saw was that yes, there was an increase in the price of personalization, but there has not been So this is a lesson learned.

Benedetto Vigna: The trend of personalization is a specific of a modern what I can tell you is it let me say another lesson learned wed like to reduce that to report at least to US what are the lessons learned into should we view is that.

Benedetto Vigna: This year, we increased the price for personalization.

Benedetto Vigna: You May remember last call, we said that.

Benedetto Vigna: We increased the price of the new model and we increase the price of personalization, we are and what we saw that.

Benedetto Vigna: Yes, there was an increase on the price of the.

Benedetto Vigna: The price of personalization, but there has not been any impact on the ratio of personalization.

Benedetto Vigna: So this is a lesson learned we increase the price and the personalization, but if the client want to personalize it keeps personalized Inc.

Benedetto Vigna: We increase the price and the personalization, but if the client wants to personalize, they keep personalizing. And this is also the reason why, when the previous colleague asked the contribution year-over-year to the EBIT, Antonio said the contribution from personalization, product mix, and country maker. Also, if I may add, the higher the average price of the car, the lower the percentage.

Benedetto Vigna: This is also the reason why.

Benedetto Vigna: When the previous.

Benedetto Vigna: Co lead gasket.

Benedetto Vigna: The contribution year over year to the <unk>, Mr. Antonio was Sterling contribution from personalization product mix the country mix.

Benedetto Vigna: Okay.

Benedetto Vigna: Also if I may add.

Benedetto Vigna: <unk> average.

Benedetto Vigna: Price of car the lower the percentages just mathematical.

Benedetto Vigna: Formula.

Benedetto Vigna: It's just a mathematical formula. So the more we sell, the more we sell Daytona. Understand? Thank you. Welcome.

Benedetto Vigna: So the more on Saturday at all on that.

Benedetto Vigna: Yeah.

Benedetto Vigna: Yes.

Speaker Change: Understood. Thank you.

Benedetto Vigna: Welcome.

Speaker Change: Thank you.

Operator: Thank you. We will now take the next question. From the line of Monica Bosio from Intesa, Sao Paulo, please go ahead. Hello everyone, I hope you can hear me, and thanks for taking my questions. The first one is on the DDG Cylindri.

Speaker Change: We will now take the next question.

Monica Bosio: From the line of Monika posture from Intesa Sanpaolo. Please go ahead.

Monica Bosio: I was wondering if the 12-cylinder might carry a higher ratio of personalization, or if there are any particular features that might carry a higher personalization content, not only on the price side, but also on this side. And my second question is about the country mix, which was favorable in the first quarter. Should we expect a similar impact also in the coming quarters? Thank you very much. Thank you, Monica. I think the first one and the second one; I leave it to Antonio. Let's say two things about the Dodici Chilindri, okay? Coop and Spider.

Monica Bosio: And we will not be one that you hope you can hear me and thanks for taking my question.

Monica Bosio: First one is on the ceiling.

Monica Bosio: I was wondering if.

Antonio Piccon: It does.

Monica Bosio: Linda.

Monica Bosio: Mike Carey.

Monica Bosio: <unk> ratio post spin.

Monica Bosio: <unk> or <unk>.

Monica Bosio: Any particular future that Mike Kelly.

Speaker Change: This amortization Cohen.

Monica Bosio: Not only on the price side that Hey, Niccolo.

Monica Bosio: I appreciate the dumping side and my second question is Tony is on the capital, which was followed by a low single.

Monica Bosio: That first quarter should we expect the female era impact also in the coming quarters. Thank you very much.

Monica Bosio: Thank you Monica I think the first wanted to take on the lever to Antonio.

Antonio Piccon: Let's say two things for the <unk>, Chile, Murray, Okay coupon spiders actually three things one as I said that to the clients like Lambda sorry love both of them.

Benedetto Vigna: Actually, three things. One, as I said, that the clients like, love, sorry, love both of them. Two, I've been talking to maybe around 60, 70 clients, spending time with them in the two evenings we had in Miami.

Benedetto Vigna: Two I have been talking.

Benedetto Vigna: Maybe around the 60 70 clients spending time with them in the two evening, we had in Miami.

Benedetto Vigna: I saw a strong interest from clients for new colors, so Arctic White as well as Verde Toscana, so there was a strong demand, with many clients telling, I will take, I will order these colors. Some clients asked for two different colors on two different cars, the Coupe and Spyder. What I can tell you is that the last important point is that we agreed. We increased the price. As you have seen, the price is 3.95K for the coupe and 4.35K for the spiders.

Benedetto Vigna: So strong interest over the client for new callers, so Arctic white as well as vertical scanner. So there was a <unk>.

Benedetto Vigna: Stronger.

Benedetto Vigna: With the many client selling I will take I will note that this call us.

Benedetto Vigna: Some clients asking for two different color on two different gas the.

Benedetto Vigna: The coupons partners.

Benedetto Vigna: What I can tell you that the last important point is that we agreed to.

Benedetto Vigna: We increased the price as you have seen the prices of 395.

Benedetto Vigna: Okay for Europe for <unk>.

Benedetto Vigna: The coup and photo the fiber for the floor.

Benedetto Vigna: For the spiders.

Benedetto Vigna: The number of personalizations, let me say, will be the trend that we'll discover together. But I think there are enough personalization options for the client and, as I said, there is a lot of interest in the new colors. That's, let's say, let them fall in love even more.

Benedetto Vigna: The number of the personalization, let me say, what we will see what will be the trend will discover together.

Benedetto Vigna: But I think there are enough personalization option for the client.

Benedetto Vigna: And.

Benedetto Vigna: As I said there is a lot of interest for the for the new callers that are let's.

Benedetto Vigna: Let's say that.

Benedetto Vigna: Let them get them love even more.

Benedetto Vigna: There are many dimensions we can explore over there, Monica, but we wanted to start from a price that is higher than the predecessors of this car. The second one I would like to, Antonio, if you can elaborate. Thank you, Benedetto. Ciao Monica, I think as far as the country mix is concerned, over the course of the year, I would expect a modest positive impact. [inaudible] Sorry, the time is not good. Okay, okay, thank you very much. Can you hear me?

Benedetto Vigna: There is a lot of there aren't many dimension, we can explore their moniker.

Antonio Piccon: We wanted to start from.

Speaker Change: Pricing does either of them.

Antonio Piccon: The predecessor of discussion the second one I would like to Anthony.

Speaker Change: Thank you.

Benedetto Vigna: The.

Antonio Piccon: So Monika I think as far as the country mix is concerned over the course of the year.

Antonio Piccon: Back to a modest positive impact.

Speaker Change: Another man.

Benedetto Vigna: Antonio.

Benedetto Vigna: That's our model.

Speaker Change: Okay. Okay. Okay.

Speaker Change: Okay, Yeah welcome.

Antonio Piccon: Okay? Yes. Thank you. Thank you, Antonio.

Speaker Change: Got it. Thank you thank you Antonio.

Speaker Change: Thank you.

Operator: Thank you. We will now take the next question. From the line of Adam Jonas from Morgan Stanley, please go ahead. Ciao, everybody. A couple questions.

Speaker Change: We will now take the next question.

Operator: From the line of Adam Jonas from Morgan Stanley. Please go ahead.

Operator: Yeah.

Adam Jonas: Sure everybody a couple of questions first can you remind us.

Adam Jonas: First, can you remind us of your sales today by unit volume? What percentage of your volume is delivered to clients that already own a Ferrari, and how has that changed in recent quarters?

Adam Jonas: Of your sales today by unit volume.

Adam Jonas: What percentage of your volumes are delivered to clients that already own a ferrari and how has that changed.

Adam Jonas: In recent quarters neither followup.

Benedetto Vigna: Now the follow-up. We were waiting for only this question. I have a follow-up. I can ask it now or wait. Oh, no. We were taking notes on a piece of paper. So maybe you can go.

Speaker Change: We were waiting for this question.

Benedetto Vigna: I have a follow on if I can ask in our way.

Benedetto Vigna: We were taking notes on a piece of paper. So maybe you can go. So one is the percentage of repeated the second.

Adam Jonas: So one is the percentage of repeaters, and the second. Um, yeah, so again, the first question to be clear is what percentage of your volume is delivered to clients that already own a Ferrari or are existing owners replacing a Ferrari, if that makes sense. The second question, Benedetto, is you have been making efforts downstream with your dealers, franchise dealers, to try to capture more of the recurring revenue and establish a more intimate relationship, if I can say so, with your clients, including things like increasing your hit rate on repurchasing a secondhand vehicle. I know there's other efforts that you're doing.

Benedetto Vigna: Yeah. So.

Adam Jonas: So again the first question to be clear is what percentage of your volume or delivered to clients that already own a ferrari or where existing owners, replacing a ferrari if that makes sense.

Speaker Change: Very clear.

Adam Jonas: The second question is.

Adam Jonas: Yes.

Adam Jonas: You have been making efforts downstream.

Adam Jonas: With your dealers.

Adam Jonas: <unk> dealers on trying to capture more of the recurring revenue and establish a more intimate relationship if I can say, so with your clients, including things like increasing.

Adam Jonas: Your.

Adam Jonas: Your hit rate on repurchasing of secondhand vehicle I know theres other efforts that you're doing but if you could give us an update on how that's going.

Speaker Change: Since you've kind of reemphasize the efforts there that would be appreciated. Thank you.

Benedetto Vigna: But if you could give us an update on how that's going, since you kind of reemphasize the efforts there, that would be appreciated. Thank you. The first question is very, the first answer is very simple, Adam. They say the repeater, what we call the repeater, no?

Speaker Change: The first question is really the first answer is very simple.

Speaker Change: Adam Let's say the repeaters, what we call repeat it now.

Benedetto Vigna: The people that are already clients, it depends a little bit on the model. So you have models where the repeater is in the range of 10, let's say 30, sorry, 30, 35 percent to a situation where the repeater is going to around 80 percent, 85 percent. So, on average, in the year 2023, 74% of our new cars were sold to existing clients. Thank you. So this is the answer. The second part, the dealers.

Benedetto Vigna: The people that are really client it depends.

Benedetto Vigna: A little bit on the model. So you have a model where the repeat there is in the range of 10, let's.

Benedetto Vigna: Third is already 30, 35% with situation, where they repeat that are going to around the 80% 85%.

Benedetto Vigna: It is in average in average in the year in 2023, 74% 74%.

Benedetto Vigna: Our new cash were sold to existing clients.

Benedetto Vigna: Okay.

Benedetto Vigna: So this is the answers the second the dealers.

Benedetto Vigna: What we are doing together with the dealers is to push and put on, to make the relationship more intimate. As you said, we are working on two dimensions. Number one is personalization.

Benedetto Vigna: What we are doing together we ended the list is to push.

Benedetto Vigna: Uh huh.

Benedetto Vigna: To meet the relation more intimate as you said we are working on two dimensions number one is the personalization.

Benedetto Vigna: The personalization so that we can enrich the, we can personalize the cars more. And the second is the Ferrari Approved program these days. I mean, last week, actually, we launched the Ferrari Approved program in the USA. That is something that allows us to connect more and more. We want to nurture the pre-owned markets more and more.

Benedetto Vigna: The personalization so that we can reach we can personalize more of the cash and the second.

Benedetto Vigna: Is the.

Benedetto Vigna: February approved in.

Benedetto Vigna: In these days I mean last week actually we launched in USA. The Ferrari approved program that is.

Benedetto Vigna: Something that allows us we want to leave you more and more of the.

Benedetto Vigna: We want to nurture more and more of the pre owned.

Benedetto Vigna: Markets.

Benedetto Vigna: And to this end, we launched the Ferrari Approved Initiative that is intended to link, to bring more clients into the family, to avoid them going, let me say, to use grey body shops or grey dealers. And for this, we agreed with our dealers some activities so that there is an incentive for our clients to go back and stay in the family. So these are the two things we are doing. Thank you. We will now take the next question. On the line from Michele Binetti from Evercore ISI, please go ahead. Hey, thanks, guys.

Benedetto Vigna: And to this we launched the Friday approved initiative that is intended to.

Michael Binetti: To link to bring more in the family the client to avoid them going let me see if you use that gray works body shop or great dealers and toward these we agreed with our derisking activities. So that there is an incentive for our.

Michael Binetti: Our client to go back and to stay in the family. So these are the two things we are doing.

Benedetto Vigna: Adam.

Benedetto Vigna: Gotcha.

Benedetto Vigna: Fragrance.

Michael Binetti: Thank you.

Michael Binetti: We will now take the next question.

Michael Binetti: From the line of Nick.

Michael Binetti: The net <unk> from Evercore ISI. Please go ahead.

Operator: And Benedetto, first, I want to say congratulations to the 98% of the employees participating in the stock program. I know that's something that's been important to you since very early on in your time here. Thank you. I just, I guess, a question on the margin cadence through the year as we think about the puts and takes, particularly in the second quarter. I think, you know, I think you said there'll be fewer Daytona after the first quarter, but here we are in May. I think the SF90XX models start to ship in the second quarter with the Coupe and then the Spyder later in the fourth quarter. I know those are high-priced point cars, and it sounds like they're very heavily personalized.

Michael Binetti: Hey, Thanks, guys Pandeiro first I wanted to say congrats on the 98% of the employees participating in stock program I know, that's something that's been important to us and it's very early on in your time here. Thank you.

Operator: I.

Operator: Just I guess a question on the margin cadence through the year as we think about the puts and takes particularly in second quarter.

Operator: I think.

Operator: I think you said there'll be last Daytona after the first quarter, but I think here. We are in May I think 90 X X models start to ship in the second quarter with the coupon and the Spider later in the fourth quarter.

Operator: I know there is a high price point cars and it sounds like they are very heavily personalized is there.

Michael Binetti: Is there, you know, as we look at that mixed bridge, does that slow because there are fewer Daytonas through the rest of the year? And does the margin lift from Daytona slow through the year? Or does the XX pick it up, and that can be more linear through the year?

Operator: As we look at that mix bridge does that slow because theres less Daytona is through the rest of the year and does the margin lift from Daytona slow through the year or does the does see X X pick it up and that can be more linear through the year.

Speaker Change: And then I guess secondly.

Antonio Piccon: And then I guess, secondly, maybe just on some of the new items, how does the HP sponsorship flow into the P&L? Which lines and what is the timing around when you start to record that, if that's a new addition to 2024 guidance? And then I guess my last one is Benedetto, on the E building. I know that that's an important input to the EV that you've announced for next year. Will we see the output from that building start to show up in your commercial activities, but before the EV? And maybe what would that look like?

Michael Binetti: Maybe just on some of the new items, how does how does the HP.

Antonio Piccon: Bonser ship flow into the P&L, which lines and what is the timing around when you start to record that if that's a new addition to 2024 guidance and then I guess my last one is on the.

Antonio Piccon: E building I know that that's an.

Antonio Piccon: An important input to the EV that you've announced for next year is that where we see that the output from that building start to show up in your commercial activities, but before the EV and maybe what would that would look like.

Benedetto Vigna: So I think, thank you, Mike, I think the third one, and Antonio will elaborate on the first two. So the building, as I said, is the electric cars will be made in the E-Building, but in these buildings, because we always give priority to flexibility, we will also have other cars assembled over there, the hybrid. So, yes, we will have some hybrid cars that will get out, will be manufactured, assembled, let me say, in the E-Building, but the electric cars, the plan for electric cars stays as we committed two years ago, and the E-Building will be inaugurated on the 21st of June, as I said before. So don't expect, let me say, any electric cars to get delivered before what we told you. I mean, we should stick to our plan.

Benedetto Vigna: Well I think.

Speaker Change: Mike I think in the third one and then Tony will elaborate on the first two so the building as a as I said there is.

Benedetto Vigna: It will be let's say the extra cash will be done in the building, but in these buildings because we always give priority to flexibility. We've also we will also have other cara assembled the best the hybrid so yes, we will have some.

Benedetto Vigna: I believe the caps that will get out will be manufactured or assembled there can you say in this E building, but.

Benedetto Vigna: The electric as the plan for electric App stays as we committed two years ago and the building will be inaugurated the 20 <unk> of June.

Benedetto Vigna: I said before.

Benedetto Vigna: So don't expect the Metamucil and an extra cash to get delivered before what we told you we speak to our plan.

Antonio Piccon: We are in line with that. For the other two, the HP sponsorship flowing in the P&L and the margin cadence... Yeah, I go. Hi, Mike.

Antonio Piccon: We are in line with that for better food HP sponsorship, but flowing into the P&L and the margin cadence.

Antonio Piccon: The first one, in terms of the cadence, the margin cadence is partly dictated by that of the deliveries of the Daytona, which we expect to be higher in the first half compared to the second. Even if, in the second half, at some point, we get also the SF90XX Stradale for delivery. But we expect, anyway, the overall mixing price impact to remain above 10% compared to last year in terms of growth. And as far as HPE sponsorship flows into the P&L, it will start in the second quarter. Do not disregard the fact that this is just a portion of the year.

Antonio Piccon: Hi, Mike the first one in terms of the cabins.

Antonio Piccon: The currencies partly dictate.

Antonio Piccon: Biogen's guidance is patty dictated by that of the deliveries of Daytona, which we expect to be higher in the first half compared to the second even if in the second half at some point.

Antonio Piccon: So the <unk> stockpile level of delivery.

Antonio Piccon:

Antonio Piccon: And the but we expect anyway deal overall.

Antonio Piccon: Mix and price impact.

Antonio Piccon: To remain above 10% compared to last year in terms of growth.

Antonio Piccon: And as far as the HB sponsorship.

Antonio Piccon: Flowing into the P&L with a start from the second quarter.

Antonio Piccon: Do not disregard. The fact that this is just a portion of the year. So it's not a full year sponsorship is one and as these things will not happen overnight as you might imagine we encompass that already.

Michael Binetti: So it's not a full year sponsorship, this one. And as these things do not happen overnight, as you may imagine, we include that already largely in our guidance for the year. Okay, thank you very much. You're welcome.

Michael Binetti: Largely in our guidance for the year at the beginning.

Speaker Change: Okay. Thank you very much.

Michael Binetti: Welcome.

Speaker Change: Thank you.

Speaker Change: We will now take the next question.

Operator: Thank you. We will now take the next question. From the line of Stephen Reitman from Bernstein SG, please go ahead. Thank you very much. I have some questions about the Puro Sangue and about the 12-cylinder.

Michael Binetti: From the line of Steven <unk> from Bernstein SG. Please go ahead.

Operator: Okay.

Stephen Reitman: Thank you very much I have some questions about the <unk> at about.

Stephen Reitman: First of all, on the Puro Sangue, you say it has reached global distribution. Does that mean that it's also reached the production cadence that's equivalent to the 20% target you would normally have for the vehicle over the lifetime of the product? Secondly, on the 12-cylinder, could you comment, first of all, on your thought process and how you came up with the pricing on this vehicle, which is a 30% uplift on the A12 Superfast and, I believe, a 27% uplift on the A12 GTS. Obviously, big increases.

Operator: 12.

Stephen Reitman: First of all on the <unk> you say it has reached global distributions.

Stephen Reitman: That means that it's also reached the production cadence that's equivalent to the 20% target you would normally have.

Stephen Reitman: The vehicle over the lifetime of the product.

Stephen Reitman: Secondly on the 12 cylinder could you comment first of all on your thought process on how you came about.

Stephen Reitman: The pricing on this vehicle, obviously, which is a 30% uplift on the April Super fast I believe.

Stephen Reitman: 27% uplift on the <unk> GTS, obviously big increases.

Stephen Reitman: And secondly, also on the Omega 12 cylinder.

Benedetto Vigna: And secondly, also on the 12-cylinder, the fact that you're launching the two vehicles together, although, as you mentioned, there is a delay before the Spyder comes out, is a relief for customers. Does that indicate a higher degree of flexibility you now have within your production system that you can actually develop these vehicles in tandem and have them out in a very short space of time compared to in the past, when there was quite a long gap between these kinds of vehicles?

Stephen Reitman: The fact that you're launching the two vehicles together, although as you mentioned there was a delay before the split it comes out.

Benedetto Vigna: We released the customers does that indicate a high degree of flexibility you have within your production system that you can actually do both.

Benedetto Vigna: Of course in time that will have the Mount University was special mentioned in the past when there was a quite long time.

Speaker Change: These kind of vehicles. Thank you.

Benedetto Vigna: Thank you. Thank you, Stephen, for your question. So, coming to the first one, Purosangue, well, we can say that in Q1, the deliveries of Purosangue were below 16% of the volume we shipped. So we are not yet at 20%.

Speaker Change: Thank you Stephen for your question, so coming through the first one to put us and where we can see that in the Q1 that delivers for us and we were below 16% of the volume we ship. It. So we are not yet at the 20%.

Speaker Change: You can assume for the year that will be around 18% overall.

Benedetto Vigna: The coming back to the 12 cylinders or ability to Chile entering like we we like where the <unk> the price.

Benedetto Vigna: You can assume for the year that will be around 18% overall, coming back to the 12 cylinders or dodgy cylindering like we like, well, the dodgy cylindering the price. Let's say we... I agree, it has a higher price, a substantially higher price than the previous version, because we believe there is a lot of innovation, a lot of activities have been done by the company, by all the team, to put together traditional innovation and also, let me say, when you try it, because we tried it several times with Antonio and all other colleagues on the track and on the road, there is the right mix between driving thrills, elegance, and sportiness

Speaker Change: Let's say we are.

Benedetto Vigna: I agreed to <unk> and hydro price substantially higher price than the previous version because we believe there is a lot of innovation and lot of the act.

Benedetto Vigna: The activities have been done by the company by all the team to put together.

Benedetto Vigna: Gathers traditional innovation and also what we say.

Benedetto Vigna: When you try it because we tried to several times from Bon ton and all other colleague on the track and the on the road. There is the right mix between driving trips and against and the 14th.

Benedetto Vigna: So.

Benedetto Vigna: Let me say, I think this prize is what the cars deserve to have, also for... for all the work that has been done. I have to say that also during the two nights, let's say the world premieres.

Benedetto Vigna: Let me say I think that this price is what the cash.

Benedetto Vigna: The server class.

Benedetto Vigna: Also for the.

Benedetto Vigna: For the all the.

Benedetto Vigna: Work has been done.

Benedetto Vigna: Are you able to say that also during the.

Benedetto Vigna: Two nine this is the world premieres.

Benedetto Vigna: We have been talking about the features of the cars. OK, some clients were saying, I do not believe you have been able to reach such high performances in a car that was already high performance. And now we're talking about four steering wheels, that is really unique, and brake by wires. A lot of innovation has been done on these cars. Many, many.

Speaker Change: We have been talking about the feature of the cash okay.

Benedetto Vigna: Some clients are telling I do not believe you have been able to reach such a performance is in a cabinet was already I performance and how we're thinking about for sitting well that is really unique and break by wise a lot of innovation that's been done on discussed mainly.

Benedetto Vigna: On the aerodynamic side, on the power control, on the power unit. And so also on the interior side, the display, the central display. Yes, one thing that the client appreciated a lot is that we listened. We have the comment, we have a central display that is very high-end and very easy to use. You said well, I mean, the reason why we launched the two models together, the Coupe and the Spyder, the first time that we launched this for our range of cars, is because... We want to give more freedom to clients.

Benedetto Vigna: On the dynamic on the power control on the power on the power units.

Benedetto Vigna: Also on the interior side the display the central display, yes, one thing that to the client I appreciate the losses that we listen and we haven't commented we have a central display that is very high and very easy to be to be used.

Benedetto Vigna: You said well I mean, the reason why we launched the two model together the coup in spite US is the first time that we launched this four hour range cash is because.

Benedetto Vigna: It means that we have the flexibility enough. So we prepared ourselves to have this higher flexibility in-house because it's a... I mean, we met several times. We have to get to know our client better, and this is a way also to learn from our client how they react when they see the two models together. We are ready because we have a flexible manufacturing line.

Benedetto Vigna: We want to give more freedom to client it means that we are.

Benedetto Vigna: Flexibility in ops, so we prepared ourselves to have at least I get flexibility to announce.

Benedetto Vigna: It's a.

Benedetto Vigna: It's something that is also I mean, we met several times, we have a tool to learned to know more of our clients and this is a way also to learn from our clients.

Benedetto Vigna: When do you see the two models together.

Benedetto Vigna: We are ready because we have a flexible manufacturing line.

Benedetto Vigna: Okay.

Benedetto Vigna: Thank you. If I could go back again about the pricing on the Dodici Cilindri, I apologize for the timing.

Benedetto Vigna: Thank you David go back again about the pricing.

Benedetto Vigna: On the <unk>.

Benedetto Vigna: So did you celebrate.

Benedetto Vigna: Tony.

Stephen Reitman: The price increase, does that give us any idea of the future direction of when you will launch replacements for the next series of vehicles? We could be expecting this kind of degree of price uplift on these vehicles. Obviously, with the 296 GTB, there was about a 14% increase, and I think on the Roma Spyder versus the Porsche Portofino M, it was about 16%.

Benedetto Vigna: The price increase does not give us any idea of the future direction of when you launch also replacement schools in the next series of vehicles.

Stephen Reitman: We expecting just kind of degree of price uplift on these vehicles, obviously with the $2 six GTP. It was about a 14% increase but I think on the ROE Despite a versus the.

Stephen Reitman: The <unk> portfolio and it was about 16%.

Benedetto Vigna: These are other interesting questions. I think that it's clear that there are two things that we have to balance. One is the old innovation that we are offering to our clients, and number two, the willingness they have to pay a higher price. What I can tell you is that, yes, there is, as we said also in several meetings, there is an upward, a lift upward of our prices, as you have noticed as well, for the 296, for the Roma Spiders, and for the 12 cylinders.

Stephen Reitman: Is this rather interesting question I think that it's clear that.

Benedetto Vigna: There are two things that we have a tool.

Benedetto Vigna: To balance one is all the innovation that we're offering to our clients and number two the willingness to pay and they're going to price for that.

Benedetto Vigna: Can tell is that.

Benedetto Vigna: Yes, there is a as we said those in several meetings there is an upward.

Benedetto Vigna: At least upward of our prices as you have an opposite well for the 296 for the almost buyers and four of the largest anyway.

Benedetto Vigna: This is important.

Benedetto Vigna: I think this is important. We always said, you know, we want to grow; we want to give priority to value over volume. If you also look at the deliveries for this quarter, basically, they've been flat compared to Juan Yrigoyen.

Benedetto Vigna: I mean, we always said we want to grow we want to give priority to value over volume and if you see also the reversal this quarter basically they've been flat.

Benedetto Vigna: Versus one year ago.

Stephen Reitman: Very clear. Thank you very much. Thank you, Stephen.

Speaker Change: Alright, Thank you very much.

Speaker Change: Thank you Stephen Thank you.

Operator: Thank you. We will now take the next question. On the line from Anthony Dick from Odo BHF, please go ahead.

Anthony Dick: We will now take the next question.

Anthony Dick: From the line of Anthony <unk> from <unk> BHF. Please go ahead.

Anthony Dick: Yes, thank you. Just a follow-up question on the HT title sponsorship. I'm just wondering how that affects the profitability profile of the F1 business. Is this something that could actually improve the profitability of the business? Or is it just made largely to cover any cost increases that we might expect in the coming years, maybe especially in 2025, with some higher wage expenses?

Anthony Dick: Yes. Thank you just a follow up question on the HP title sponsorship.

Anthony Dick: So quite a significant partnership.

Anthony Dick: And so I was just wondering how that effects.

Anthony Dick: Stability profile.

Anthony Dick: <unk> F. One business. This is something that can actually improve the profitability of the business or is it just made largely.

Anthony Dick: Was there any cost increases that we might expect in the coming years, maybe especially in 2025.

Anthony Dick: We'd like to see some some higher wage expenses.

Benedetto Vigna: And then a second question on the paint shop. I'm just wondering if you could update us on the development of that. Okay, the first question. Yes, it improves.

Anthony Dick: And then the second question on the paint shop, just wondering if you could update us.

Benedetto Vigna: On the development of the paint shop, and what kind of investments and the ramp up could we expect that new.

Benedetto Vigna: Building. Thank you.

Benedetto Vigna: Okay.

Benedetto Vigna: First question, yes, it improves.

Speaker Change: Very simple answer.

Benedetto Vigna: [inaudible] The second, the paint shop, yes, we laid down the foundation in the last quarter, in Q1, and let's say the total investment is in the, is a part of the investment plan we declared to you two years ago. You remember we said 4.4 billion euros, the total, let's leave it at 2022-2026. Yes, over five years, out of which, let me say 1.1 billion euros were for infrastructures, and the paint shop, as the building is part of this 1.1 billion euros over the five-year cycle. So, nothing new, Anthony. We are moving according to the plan. The e-building will be announced next month, as planned.

Benedetto Vigna: The second the paint shop, yes, we lay down the foundation in the last quarter in Q1.

Benedetto Vigna: The let's say the total investment of the easing.

Benedetto Vigna: Is a part of the investment plan will be created to you three years ago. You remember, we said the $4 4 billion Euro.

Benedetto Vigna: 2022 'twenty 'twenty six yes over five years also which let me say $1 1 billion was for infrastructures and the paint shop as the building out of part of this $1 1 billion euro over the five year cycle.

Benedetto Vigna: So nothing we're not being you Anthony is we are moving according to the plan. The plan. The building will be announced next month as per plan and the paint shop started in Q1 as per plan and all is part of it is a basket of a $1 1 billion euro.

Benedetto Vigna: And the paint shop started in Q1, as per plan. And the whole is part of this basket of 1.1 billion euros. Thank you. We will now take the next questions. From the line of Martino Leambrogi from Ecuador, please go ahead. Thank you. Good afternoon, everybody.

Benedetto Vigna: Okay.

Benedetto Vigna: Okay.

Benedetto Vigna: Okay.

Martino Leambrogi: Thank you.

Benedetto Vigna: Okay.

Martino Leambrogi: We will now take the next question.

Operator: Sorry to bother you on the profitability in Q1 and customizations, but you mentioned that customization was higher in Q1 than the 19% projected for the full year. Am I right in assuming 21% first? And second, you also mentioned the higher the price, the lower the customization. Martino, can I just stop you on this one just to avoid any misunderstandings? We guided the market to 19% for the full year, and I just said that in Q1 we're slightly above 19%. So that's it, but it's not significantly different. Okay?

Benedetto Vigna: Yeah.

Martino Leambrogi: From the line of Martino at Sam Brodsky from equities. Please go ahead.

Martino Leambrogi: Okay, okay. And the second part of this question is always: you mentioned that the higher the price, the lower the customization as a percentage of sales. But you also mentioned... It's a simple math fact.

Speaker Change: Thank you good afternoon everybody.

Martino Leambrogi: Sorry to bother you on the profitability in Q1 and customization, but.

Martino Leambrogi: You mentioned that customization was higher in Q1 then.

Martino Leambrogi: 19% projected for the full year am I right in assuming 21% at first.

Martino Leambrogi: And second you also mentioned the higher is the price the lower is the customization Martino can I just stop you on this one just to avoid any of US understand we guided the market to 19% for the full year and I just had in Q1, we're slightly above that but it's not significantly different okay. Okay. Okay.

Martino Leambrogi: And the second part the always on this question is you mentioned that the higher is the price the lower is the customization as a percentage of sales.

Speaker Change: But you also mentioned that I think.

Speaker Change: It's the simple math fact, yeah, yeah yeah.

Antonio Piccon: Yeah, yeah. But you also mentioned that Purosangue is ramping up, and Daytona had a higher contribution in Q1 than the rest of the year. I remember you mentioned in the previous call that Daytona was expected to deliver 60 units in this quarter, so maybe..., was a hire, so the two things together show that probably it is not in this quarter that the relationship the higher the price is the customization for the overall picture, so I don't know if, And Benedetto, maybe I can answer. Yeah, you take it.

Martino Leambrogi: But you also mentioned that the put US language is ramping up and the Daytona had a higher contribution in Q1 than the rest of the year I remember you mentioned in the previous caller Daytona was expected to deliver 60 units in this quarter. So maybe.

Benedetto Vigna: Was it higher.

Benedetto Vigna: And the two things together.

Antonio Piccon: <unk>.

Benedetto Vigna: Show that probably it is not in this quarter that the relationship with the higher is the prices the customization for the overall picture. So I don't know if.

Benedetto Vigna: And there may be.

Antonio Piccon: Okay.

Antonio Piccon: You were right. You're right in the sense that in the first quarter, we had higher deliveries of the Daytona, and the Puro Sangue is ramping up in our global distribution, but it's not yet at 20%. Well, when we said at the beginning that we are guiding to a 19% average, obviously, we take into account that we do not have full visibility of personalization over the rest of the year because the decision on personalization is taken by the client toward the end of its waiting time, a few months before delivery.

Benedetto Vigna: You are right in the sense that the first quarter, we had higher deliveries of the Daytona.

Antonio Piccon: The porcine way is ramping.

Antonio Piccon: Our global distribution, but it's not yet at 20%.

Antonio Piccon: So it's actually an assumption. We are not in a position to project on a precise map for the following quarter, particularly as we go towards the end of the year. I think 19% on average is the first.

Antonio Piccon: Well, what we said at the beginning we are guiding to a 19% average obviously take into account that we do not have full visibility of personalization.

Antonio Piccon: The rest of the year.

Antonio Piccon: Because the decision on personalization is taken by the clients towards the end of this waiting time.

Antonio Piccon: A few months before delivery. So it's actually an assumption that one we are not in a position to have to project on a.

Antonio Piccon: The precise math for the for the following quarters, particularly as we go towards the end of the year I think 19% and average is a fair assumption.

Martino Leambrogi: Okay, thank you. And the second question is about costs. Referring to the previous question on HP sponsorship, am I right in assuming it is offsetting the Hamilton contract? And just to have an idea of the Formula One contribution going forward, regardless of the ranking you will have this year, which is probably higher than last year. As we said before, Martino, it improved. These were the same questions that we got, no? No, but the Hamilton contract, in the middle, I know you do not disclose the precise figures and so on, but I suppose it helps to cover the Hamilton contract that will come next year.

Speaker Change: Okay. Thank you.

Speaker Change: The second question is on costs.

Martino Leambrogi: Probably referring to the previous question on HP sponsorship.

Martino Leambrogi: Am I right in assuming it is offsetting the Hamilton contract.

Martino Leambrogi: Just to have an idea of the formula one contribution going ahead, regardless of the ranking you will have this year, which is probably higher than that of last year.

Martino Leambrogi: We said before it improves.

Martino Leambrogi: This one was the same question that we got to know so no, but the Hamilton contract intermediate I know you do not disclose the.

Martino Leambrogi: The precise figures and so on but.

Martino Leambrogi: I suppose these.

Martino Leambrogi: Helps to cover do you have some contracts that will come up next year.

Benedetto Vigna: No, no, but your answer, your question is very clear, and our answer is yes, it improves. We don't discuss the A or B, the plus and the minus, or the equal, but it improves. Okay, thank you. Thank you, Martina.

Speaker Change: None of it your answer your question is very clear.

Benedetto Vigna: The answer is yes, it it improves.

Benedetto Vigna: We don't disclose the daily or be the plus and the minus or the equal.

Benedetto Vigna: But it improves.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you Martina.

Speaker Change: Thank you.

Operator: Thank you. We will now take the next question. On the line from Gianluca Bertuzzo from Intermontazim, please go ahead.

Speaker Change: We will now take the next question.

Operator: Yeah.

Gianluca Bertuzzo: From the line of John Luca So from intermodal <unk>. Please go ahead.

Gianluca Bertuzzo: Hi everybody, and thank you for taking my question. I'm sorry to bother you about the partnership with HP. Are we talking about triple-digit sponsorship here, such as the previous long-standing title sponsor? And second and third question are about volumes. Can we expect an acceleration of volume deliveries throughout the year? Can we assume a stable evolution?

Gianluca Bertuzzo: Hi, everybody and thank you for taking my question I'm, sorry to bother you on the partnership with HP.

Gianluca Bertuzzo: Are we talking about triple digit sponsorships such as the previews longstanding title sponsor.

Gianluca Bertuzzo: And second question about.

Gianluca Bertuzzo: Volumes.

Gianluca Bertuzzo: Can we expect.

Gianluca Bertuzzo: Our acceleration.

Gianluca Bertuzzo: Volumes deliveries throughout the year.

Benedetto Vigna: And on cost inflation, did you change your expectations, or was the development in line with your thinking at the beginning of the year? I think the first two and the cost is Antonio will help us to get through. So HP, we never disclose the numbers. Also, because in the contract, if you see the contract we signed with all our sponsors, we cannot, we cannot't. This information is confidential, so we cannot disclose the number. If it is one, two, three, four, five digits, whatever, whatever measurement unit you are thinking about.

Gianluca Bertuzzo: Can we assume a stable evolution and on cost inflation with or.

Benedetto Vigna: Did you change your expectation of our did.

Benedetto Vigna: The development is line with it.

Benedetto Vigna: With your thinking at the beginning of the thank you.

Benedetto Vigna: I think the first two on the cost saves Antonio will then pass to go through so HP, we never disclose the numbers also because in the contract if youll see the contract we signed with all our sponsored we cannot we cannot this information confidential. So we cannot needless to say the number is it is 1234.

Benedetto Vigna: Five digits, whatever whatever the measurement unit, you're seeing into the second is the volume we said that.

Benedetto Vigna: The second is the volume; since we value value over volume, we give priority to value over volume, so let me say you know how many cars we have done in the last years. We also said that the growing volume would be very limited. You see that in Q1, basically, we did, to be precise, 7 units less than last year. So let's say we do not expect at all any acceleration of volume. This is not, I mean, what a brand like us should do.

Benedetto Vigna: Since ever that we value.

Benedetto Vigna: We give a priority value.

Benedetto Vigna: Yes.

Benedetto Vigna: So.

Benedetto Vigna: Let me say you know how many carried with it the last years. We also said that after the growing volume we'd be very limited do you see that Q1, basically we need to be precise of seven units less than last year. So let's say, we do not expect at all any acceleration of volume. This is not the.

Benedetto Vigna: I mean, what.

Benedetto Vigna: The branch light cash should do and that's also the reason why if you remember the previous question.

Antonio Piccon: And that's also the reason why, if you remember the previous question from Stephen, no? Stephen was saying, why you have been, what the... international behind this strong price increase, because we want to give priority to value over volume. For the cost of inflation, Antonio, can you... Yes, it's very simple.

Antonio Piccon: Steve announced even were saying.

Antonio Piccon: Why you have been a what is the.

Antonio Piccon: The rationale behind that is around the price increase because we want to give always priority to value over volume for the cost inflation Antonio can yes. It is very simple we haven't changed our assumptions for the rest of the year.

Antonio Piccon: We haven't changed our assumptions for the rest of the year, actually. Okay, thank you very much. Welcome. Thank you. We will now take the next question. On the line from Thomas Besson from Kepler Chevrolet, please go ahead.

Antonio Piccon: Actually.

Thomas Besson: Okay. Thank you very much.

Antonio Piccon: Welcome.

Thomas Besson: Thank you.

Thomas Besson: We will now take the next question.

Antonio Piccon: Frontline of Thomas Besson from Kepler. Please go ahead.

Antonio Piccon: Okay.

Operator: Thank you very much. I'd like to come back to the seasonality of earnings and talk as well about the seasonality of CapEx and Free Cash Flow, just to make sure I understood correctly. What I understood is that earnings would likely follow the shape of your deliveries for ICONA. So you likely have a better first half than the second half.

Thomas Besson: Thank you very much.

Thomas Besson: To come back to the seasonality of earnings.

Operator: Took available soon just capex and free cash flow just to make sure I understood correctly.

Operator: What I understood is up earnings.

Operator: Likely flu.

Operator: Vishay books Youll deliveries for the economy.

Operator: So we lately.

Speaker Change: For the second half, but I just want to confirm that.

Thomas Besson: I just want to confirm that, and I think you said as well that CapEx would be more linear this year than in previous years, where it was more linear and was more back-end loaded. Is that correct? Maybe just clarify on the first one. I commented on the development of the gross margin, the contribution margin, if you wish, which is dictated by the decadence of the Daytona. When you look at the entire P&L, obviously, there are other seasonalities that cross over the top part of the profit and loss.

Thomas Besson: You said that Capex would be more linear this year.

Thomas Besson: In previous years.

Thomas Besson: They've been more backend loaded is.

Thomas Besson: Is that correct.

Thomas Besson: Maybe just clarify on the first one I commented the development of the gross margin the contribution margin if you wish which is dictated.

Thomas Besson: By the cadence of the of the Daytona.

Thomas Besson: When you look at the entire P&L, obviously, there are other seasonality.

Thomas Besson: All there.

Thomas Besson: The top part of the of the profit and loss.

Antonio Piccon: Overall, I would not expect significant differences over time, but for probably Q3, that could be, but it normally happens a bit lower. With respect to CapEx, you're right. I said we usually experience an exponential growth of capital expenditure over the course of the year. In 2024, we expect the growth to be more linear because several projects are already quite advanced.

Thomas Besson: Overall I would not expect.

Antonio Piccon: Significant differences over time.

Antonio Piccon: But for probably Q3 could be.

Antonio Piccon: Normally happens a bit.

Antonio Piccon: Lower.

Antonio Piccon: With respect to Capex you are right I said, usually we experience an exponential growth of capital expenditure over the course of the year.

Antonio Piccon: In 2024, we expect the growth to be more linear.

Antonio Piccon: Because several projects already.

Antonio Piccon: Ben.

Thomas Besson: We are basically finishing up on the development of the e-building, and we have the ramp-up of the expenditure on the new paint shop. Thank you. My second question: I know you want to keep some surprises. I look forward to visiting it.

Antonio Piccon: We are basically finishing up on the development of the building and we have the ramp up of the <unk>.

Thomas Besson: Of the expenditure on the new paint shop.

Speaker Change: Thank you. Thank you my second question.

Speaker Change: I know you want to keep some some surprises I look forward to visiting H E B.

Benedetto Vigna: This e-building, when we come there, are you already making something in it? Are we going to see something, or is it just going to be to present your projects in more detail when it comes to both the one-to-many component you're going to make there and cars? Or are you already manufacturing something in the building?

Speaker Change: Building when we come down are you really making something in it or are we going to see something or is it just going to be forced.

Benedetto Vigna: <unk> presents us your projects in more details when it comes to Bruce.

Benedetto Vigna: Want to every component youre going to make in the Gulf or are you already manufacturing something in the building.

Benedetto Vigna: We told you, maybe we were not clear in the past, in September we started to get the first equipment, and in December we started already to assemble some components for our cars. So now we'll see how to manage it the best we can, but it's not an empty shell. We don't do this inauguration with empty shells, Thomas.

Speaker Change: We told you maybe we were not clear in the past in September and we start to get sufficient keep men in December we started already to assembled some component for our for our cash. So now we'll see how to manage it the best of the visit but is not an empty shell.

Benedetto Vigna: We don't do this integration with empty Shen of Thomas.

Antonio Piccon: I mean, there are people working over there. And there are components already made there. I would have been prepared to come for a religious visit as well, Benedetto. Last question, on Forex, please. The headwind was a bit larger than I thought in Q1. Can you give us an indication of what we should expect for the full year? Well, we expect the dollar to stay in the area of $1.10. Then, we'll see what happens. It's rather unpredictable. For example, the impact of the Chinese Yuan and the Japanese Yen both last year and this current year is negative and larger than we would have bet on.

Benedetto Vigna: I mean, there is there are people working over there, but as a component of the major radio for the best.

Antonio Piccon: We have been prepared to confirm religious so because it is one of those.

Speaker Change: Last question.

Antonio Piccon: On <unk>.

Antonio Piccon: Headwind was a bit larger.

Antonio Piccon: In Q1 can you give us some indication of what we should expect a political year.

Antonio Piccon: Well, we have said we expect the dollar to stay in the area of 110.

Antonio Piccon: And then let's see what happens is rather unpredictable for example, the impact of Chinese won and Japanese yen, both last year and the current year is negative and larger than we would ever back on as you know we added to our currency exposure on a 12 month rolling basis.

Thomas Besson: As you know, we edge our currency exposure on a 12-month rolling basis. So, this is moving the impact a bit. But overall, I would expect this to be negative for the rest of the year.

Thomas Besson: This is more than the the impact, but overall I would expect this to be negative for the rest of the year.

Antonio Piccon: Okay, thank you very much. Welcome. Thank you, everyone.

Speaker Change: Okay. Thank you very much.

Speaker Change: Welcome. Thank you. Thank you.

Operator: Thank you. We will now take the next question from the line of Gabriele Gambarova from Banca Acros. Please go ahead. Yes, thanks for taking my questions. There are just a couple left for me.

Speaker Change: We will now take the next question.

Gabriele Gambarova: From the line of Gabriela Gandara from Vanguard Cross. Please go ahead.

Gabriele Gambarova: Yes, Thanks for taking my questions just a couple left for me.

Gabriele Gambarova: Is it possible to know the precise number of SP3 Daytonas delivered in Q1? Yeah, approximately 80.

Gabriele Gambarova: Possible to know the precise number over three Daytona delivers.

Gabriele Gambarova: In Q1.

Gabriele Gambarova: Yes.

Gabriele Gambarova: Some of the 18th.

Gabriele Gambarova: Oh, yes.

Antonio Piccon: And another question, again on price and mix, very strong in Q1. The balance between this 80 and 123, am I right assuming that it is made of bigger deliveries of Puro Sangue? Can you please repeat the question? Yeah, I agree. I was just wondering if Purosangue had an important role in the improvement of price.

Gabriele Gambarova: And another question again on the <unk>.

Antonio Piccon: Price and mix are very strong.

Antonio Piccon: Q1, the balance between.

Antonio Piccon: Between this 80.

Speaker Change: I'm honored to decrease.

Antonio Piccon: Right assuming that these are made of a lets say bigger deliveries of Rahsaan glue.

Antonio Piccon: Okay.

Speaker Change: Can you please repeat the question.

Antonio Piccon: Yes.

Antonio Piccon: Just wondering I was wondering if the crude hungry.

Antonio Piccon: Let's see an important role in the improvement of our price.

Antonio Piccon: In meat so in Q1.

Speaker Change: Okay, sorry, yes Petrie.

Gabriele Gambarova: Okay, sorry. Okay, we do not give the details of the overall product mix impact. I told you that the overall product mix impact is positive, and this is because of Daytona. The other significant contributor remains personalization, and the third one is country mix.

Antonio Piccon: Okay.

Antonio Piccon: Ill give the details of the overall product mix impact.

Gabriele Gambarova: I told you that all of that all the product mix impact is positive and this is because of all the Daytona. The other significant contributor remains better personalization and the third one is country mix.

Speaker Change: Okay. Okay. Okay. Thank you very much very last question just to check.

Antonio Piccon: Ok, thank you very much. Very last question, just to check if I understood you well. Just for the sake of clarity, Puro Sangue, in terms of contribution, is average compared to the rest of the range, percentage wise.

Antonio Piccon: Tony.

Speaker Change: If I understood well.

Antonio Piccon: For the sake of clarity.

Antonio Piccon: For the same way in terms of contribution is average compared to the rest of the range percentage wise.

Gabriele Gambarova: Very last question. If I understand correctly, you said you expected price and mix to give a higher than 10% contribution across the rest of the year. I said that the increase in price and mix, as you can measure it, as the ratio of the average selling price compared to last year, is expected to be above 10% on a full year basis. Okay, that's it.

Speaker Change: Our last question I understood right, you said that you expect price and mix them together.

Gabriele Gambarova: Higher than 10% contribution across with the rest of the year.

Gabriele Gambarova: I said that the contribute the increase of price and mix as you can measure it as a ratio of the average selling price.

Gabriele Gambarova: Compared to last year is expected to be above 10% on a full year basis.

Speaker Change: Okay perfect. Thank you very much.

Antonio Piccon: Thank you very much. Welcome. Thank you. We will now take the next question, from the line of Henning Cosman from Barclays, please go ahead. Yeah, thank you so much for squeezing me.

Gabriele Gambarova: Welcome.

Speaker Change: Thank you.

Henning Cosman: We will now take the next question.

Antonio Piccon: From the line of Henning Cosman from Barclays. Please go ahead.

Henning Cosman: And I have also one more clarification, I'm afraid, but I'm still trying to reconcile your comments with respect to the high number of Daytonas. I think a very strong personalization mix on the first ProSanguis to be delivered, perhaps only a modest geographical mix effect in the course of the year, perhaps a little bit less in Q1. So I would have thought these comments all sort of add to thinking that the Q1 margin is more towards the top end of the range that we can perhaps expect across the quarters for 2024.

Henning Cosman: Yes. Thank you so much for squeezing me in.

Speaker Change: Also one more clarification on the site but.

Henning Cosman: Im still trying to reconcile your comments with respect to <unk>. They told US I think very strong personalization mix on the first person language to be deliver perhaps only a modest geographical mix effect in the course of the year, perhaps a little bit less in Q1. So I would have thought these comments all sort of at your thinking there.

Henning Cosman: The Q1 margin was more towards the top end of the range that we can perhaps expect across the quarters.

Henning Cosman: For 2024, but then again.

Henning Cosman: But then again, you know, similar to the previous point that the colleague made, if the revenue per unit stays at above 10% or the price mix stays above 10%, I'm struggling to reconcile that, and how that would be consistent with a full year margin of below 28%.

Henning Cosman: Similar to the.

Henning Cosman: Previous point that the colleagues made yes.

Henning Cosman: <unk>.

Henning Cosman: The revenue per unit space at above 10% off price mix stays above 10%.

Antonio Piccon: I mean, perhaps you can help us one more time to reconcile that. And then, on another topic that hasn't come up, the second question is residual values. If I'm not mistaken, you had made comments around the degree of residual value normalization in the context of better availability of new cars. I don't know if you wanted to share anything there.

Henning Cosman: Willing to reconcile that how that would be consistent.

Antonio Piccon: Full year margin of below 28% I mean, perhaps you can help us one more time to reconcile that and then on another topic that hasn't come up in the second question is residual values, if im not mistaken.

Antonio Piccon: You had made comments around the degree of residual value mobilization and the contract.

Antonio Piccon: Our inability of new cost I don't know if you wanted to share anything there.

Henning Cosman: I just wanted to give you an opportunity if you wanted to share something on residual values. Thank you very much. I think the first one, maybe Antonio can add some more color, and then we'll comment on the second.

Henning Cosman: Just wanted to give you an opportunity if we wanted to share summer one residual values. Thank you very much.

Henning Cosman: Well I think the first one and maybe Antonio can add some more color and I will comment about the second.

Benedetto Vigna: So I start from the second part of the business of discussion. The residual value. There are, let me say, the residual value keeps pretty well. There is, there has been one country that has been suffering a little bit for one specific model, but the situation is coming, basically, is recovering.

Antonio Piccon: It's up from a second dose of a reasonable discussion to residual value there are.

Benedetto Vigna: Let me say the residual value keep it pretty well there is a there has been a.

Benedetto Vigna: One country that is suffering a little bit for us Brazil for one specific model, but the situation is.

Benedetto Vigna: He's coming in basically two is recovering so we don't see any any strange patterns. Nonetheless.

Benedetto Vigna: So we don't see any, any strange pattern over there. Coming to the first question, Antonio will elaborate more, but what I would like to underline is that we are not changing the guidance. Absolutely. Absolutely. I mean, we are asked about color for the development of price and mix over the rest of the year. And I'm trying to simplify what I said before. I mean, price and mix have been particularly strong in Q1.

Antonio Piccon: Coming to the first question.

Antonio Piccon: It's more about what that looks.

Benedetto Vigna: On the line is that we are not changing the guy that obsolete absolutes.

Benedetto Vigna: We are asked about color for development.

Benedetto Vigna: It was all price and mix over the rest of the and I try and simplify what I said before I mean price and mix has been particularly strong in Q1 does that mean supported by the number of deliveries of the Daytona, which is higher compared to the average for the rest of the year.

Antonio Piccon: These have been supported by the number of deliveries of the Daytona, which is higher compared to the average for the rest of the year, and Ed. The other element that contributed positively was personalization. And obviously, as I said, the other information that I put out is that we expect, on average, price and mix to be growing 10% or above that in the course of 2024 compared to last year. This means that over the course of the quarter, in terms of contribution margin, depending on the cadence, the actual cadence of Daytona will probably be slightly lower compared to the first part of the first quarter of the year. This is it. Does it help?

Antonio Piccon: And.

Antonio Piccon: The other element that contributed positively was personalization.

Antonio Piccon: And obviously as I said the other information that I put is that we expect on average price and mix to be growing 10% or above that in the course of 2024 compared to last year.

Antonio Piccon: This means that over the course of the quarter in terms of contribution margin.

Antonio Piccon: Depending on the cadence the extra cadence of Daytona will probably be slightly lower compared to the first part of the first quarter of the year does it.

Antonio Piccon: Does it out.

Henning Cosman: I might follow up with the team afterwards, but thank you. Okay. Okay.

Antonio Piccon: Okay.

Speaker Change: My follow up with the team afterwards, but thank you okay. Okay.

Operator: Thank you. Thank you. I would now like to turn the conference back to Benedetto Vigna for closing remarks. Thank you. Thank you for your time. Thanks also for all your questions. The strong Q1 result and also the strong brand desirability are fueling our confidence for the development of the year and also forward.

Benedetto Vigna: Thank you.

Benedetto Vigna: Thank you.

Benedetto Vigna: I'd now like to turn the conference back to the needed convenience for closing remarks.

Benedetto Vigna: Thank you and thanks for your time. Thanks also for you all for your questions. The strong Q1 result, and also the stronger brand desirability.

Benedetto Vigna: Willing our confidence for the development of the year and also for award. This is the key messages that we wanted to pass to you and I wish you a good afternoon.

Benedetto Vigna: This is the key message that we wanted to pass to you. And I wish you a good afternoon and thank you again for your attention. Grazie. This concludes today's conference call. Thank you for participating. You may now disconnect. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music, [inaudible]

Benedetto Vigna: Thank you again for your attention fracture.

Benedetto Vigna: This concludes today's conference call. Thank you for participating you may now disconnect.

Benedetto Vigna: [music].

Benedetto Vigna: Yeah.

Benedetto Vigna: [music].

Benedetto Vigna: Okay.

Benedetto Vigna: [music].

Benedetto Vigna: Yeah.

Benedetto Vigna: [music].

Benedetto Vigna: Yes.

Benedetto Vigna: Sure.

Benedetto Vigna: [music].

Benedetto Vigna: Yes.

Benedetto Vigna: [music].

Benedetto Vigna: [music].

Benedetto Vigna: [music].