RACE Q1 2025: Demand Holds Despite 50bps Tariff Margin Risk
- Resilient and consistent demand: Executives emphasized that they observed no concerning trends among new, repeat, or collector customers, even amid a mixed macro environment. This suggests that client demand remains strong and steady across all segments.
- Effective tariff and pricing strategy: Management highlighted that despite the new tariffs in the U.S., there was no visible negative impact on orders or cancellations. Clear communication of pricing policies—with only modest increases on some models—has been well received by clients, indicating that pricing adjustments and tariff mitigations are effectively managed.
- Robust product performance and personalization: Flagship models like the Dodici Cilindri and Purosangue continue to generate strong traction, and personalization trends are strong across geographies. This reinforces the brand’s premium positioning and supports revenue growth through enhanced customer customization.
- Tariff Risk Impact: Executives acknowledged a 50 basis point downside risk on EBITDA/EBIT margins from higher U.S. tariffs on EU cars, which, while currently mitigated, remains sensitive to global policy shifts.
- Declining Daytona Deliveries: With 77 Daytona shipments in Q1 and expectations for significantly lower deliveries in Q2/Q3 and zero in Q4, the changing product mix could pressure margins and revenue growth.
- Margin Pressure from Non-Car Revenues and Costs: Questions highlighted that non-car revenues have historically been dilutive and, coupled with rising SG&A and R&D expenses—driven by racing and brand investments—could further squeeze profitability over the year.
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Customer Demand | Q4 2024 and Q2 2024 calls emphasized resilient, strong order book performance and high customer loyalty through repeat business | Q1 2025 reaffirmed resilient and consistent demand across all segments, with strong traction in key markets like the U.S. | Consistently positive sentiment with recurring emphasis on robust demand. |
Tariff Impact | Q4 2024 mentioned uncertainty and a wait-and-see approach to tariffs with no concrete pricing actions; Q2 2024 did not address this topic | Q1 2025 provided detailed pricing strategies—including model-specific price increases and sharing the cost burden—and quantified a 50 basis point risk to margins | Evolving from speculative discussion to a more detailed, quantified mitigation strategy. |
Product Innovation | Q4 2024 focused on new model launches (e.g. F80, 12 Cilindri, declining Daytona deliveries) and an evolving product mix; Q2 2024 discussed strong new launches and shifting mix with phased-out models | Q1 2025 highlighted double-digit growth driven by new hybrid models (296 GTB/GTS) and announced the upcoming Ferrari elettrica, reinforcing a rich product mix | Sustained robust performance with an increasing focus on hybrid and electrification. |
Personalization | Q4 2024 noted that personalizations contributed around 20% of revenues and Q2 2024 confirmed a consistent 20% level across models | Q1 2025 showed personalization accounting for more than 19% of revenues, with growing client demand fueling the trend | Stable and slightly increasing as a key revenue growth driver. |
Margin Pressures | Q4 2024 highlighted rising SG&A and R&D costs with some pressure from non-car revenues; Q2 2024 mentioned increased SG&A and R&D expenses but no specific note on dilutive non-car revenues | Q1 2025 pointed to rising operating, SG&A, and R&D expenses and warned of potential EBITDA margin declines (partly due to product mix shifts) | Persistent pressure with growing concern over higher operating costs and product mix impacts. |
Repeat Customer Dependence | Q4 2024 showed a very high reliance on repeat customers (81% of new sales and many owning multiple Ferraris); Q2 2024 reported stable figures (74% repeat clients) | Q1 2025 reiterated that there are no significant differences among new, repeat, or collector customers, dispelling saturation concerns | Consistently high dependence on repeat clientele, with a strategic focus on individualizing customer engagement. |
Market Demand Variability | Q4 2024 discussed steady order books in China with strategies to manage residual values and tariff uncertainties; Q2 2024 acknowledged weaker traction in China due to an additional tax burden | Q1 2025 confirmed lower traction in China because of higher tax rates and outlined plans to adjust the product portfolio for the region | Ongoing regional variability with persistent challenges in China, prompting strategic adjustments. |
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FCF & CapEx
Q: What's the FCF and CapEx outlook?
A: Management expects strong industrial free cash flow, with non-car revenues holding stable, a tax rate of 22%, and a CapEx guidance of EUR 900–950 million. -
Tariff Impact
Q: How significant are US tariff effects?
A: They noted a 50 basis point margin risk from tariffs, with potential offsets but remaining cautious amid uncertainties. -
US Seasonality
Q: What seasonality is expected in the US?
A: Q2 is anticipated to be lighter than Q1, with adjustments in product mix and a planned phase-out of Daytona deliveries by Q4. -
Daytona Output
Q: How many Daytonas were shipped?
A: The team delivered 77 Daytonas in Q1, with future margins potentially pressured by mix changes along with increased SG&A and R&D expenses. -
Personalization
Q: What are the personalization trends?
A: Personalization remains robust for both the Dodici Cilindri and Purosangue, supported by sponsorship gains, though sponsorship benefits are transient. -
F80 & Residuals
Q: What's the F80 deposit impact and US residual effect?
A: Significant F80 deposits boosted working capital in Q1 with a likely tapering later, while pricing actions in the US could help improve residual values. -
Powertrain/Electric
Q: Is the full electric powertrain target still valid?
A: The focus remains on offering varied powertrains rather than strict sales splits, with an update expected in October; Purosangue is gaining traction, adding 10% new clients. -
China & Warranty
Q: What are the China outlook and hybrid warranty sign-ups?
A: China is targeted to represent 8–10% of sales, and about 550 hybrid warranty contracts have been secured, reflecting growing customer confidence. -
Customer Trends
Q: Are trends differing among customer types?
A: There are no distinct trends between new, repeat, and collector clients; limited-edition models like the 296 Speciale are offered for a fixed period, much like the 488 Pista. -
Market Reception
Q: How is the Dodici Cilindri being received globally?
A: The Dodici Cilindri enjoys strong, broad-based demand globally, with some regional variation where higher taxes, for example in China, impact uptake.
Research analysts covering Ferrari.