RACE Q2 2025: Record backlog to 2027, tariff cut to support margins
- Strong Order Book & Product Pipeline: Management highlighted a robust order backlog extending into 2027 with a record backlog in key markets and noted that the product mix is transitioning successfully—with new models like the Ferrari Amalfi already attracting orders.
- Proactive Tariff Management: Executives stressed that the company has already adjusted its commercial policy by clearly separating tariffs on invoices and is well positioned to benefit from a future reduction in U.S. tariffs—from 27.5% to 15%—thereby mitigating margin risks.
- Cost Efficiency and Margin Stability: Management expects lower industrial costs in H2 due to easing supply chain inflation and enhanced operational efficiencies, which should help offset headwinds from other expense categories and support strong profitability.
- Tariff uncertainty could pressure margins and customer sentiment. There remains ambiguity over how quickly and effectively the transition from the 27.5% tariff to the 15% rate will take place, which may result in pricing discrepancies and potential order postponements or cancellations [Speaker 11, Speaker 2].
- Product mix transitions risk lower average selling prices and margin volatility. The phase-out of models like the Daytona and the introduction of new models create uncertainty over whether the improved mix and personalization will fully offset the negative impact of a reduced volume in Q3 and Q4 [Speaker 5, Speaker 13] .
- Electric vehicle strategy remains vague and could delay growth in a key segment. The lack of clarity and postponed details regarding the Ferrari Electratica, with key information not expected until October, raises execution risks and could limit initial market traction and revenue diversification into EVs [Speaker 7, Speaker 10] .
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Margins | FY 2025 | 50 basis point reduction risk on EBIT/EBITDA margins | Removed the 50 basis point risk on percentage margins | raised |
Product Mix | FY 2025 | Anticipated positive product mix with less reliance on Daytona SP3 | Softer product mix expected linked to Daytona SP3 phase-out | lowered |
SG&A | FY 2025 | Higher SG&A expected in the second half | Higher SG&A is expected | no change |
Depreciation and Amortization | FY 2025 | Higher D&A expected | Higher D&A anticipated | no change |
Industrial Costs | FY 2025 | no prior guidance | Expected to be lower | no prior guidance |
Deliveries | FY 2025 | no prior guidance | Anticipated to be deliberately reduced compared to 2024 | no prior guidance |
Foreign Exchange (FX) | FY 2025 | no prior guidance | Greater headwind from FX expected | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Tariff Management | Q4 2024: Ferrari noted they would manage sales based on facts amid tariff speculation. Q1 2025: They discussed higher U.S. tariffs causing margin risks and updated commercial policies to address potential price increases. | Q2 2025: Ferrari explained that they leveraged existing inventory and announced a political agreement to lower tariffs, although the timeline remains uncertain. | Consistent focus with improved clarity and detailed management, yet uncertainty on implementation timelines persists. |
Product Pipeline | Q4 2024: Launched new models such as F80 and 12 Cilindri with robust personalization and a sold-out order book, while phasing out older models. Q1 2025: Unveiled special editions like 296 Speciale and Ferrari Elettrica along with strong order coverage. | Q2 2025: Continued launching new models (e.g., Ferrari Amalfi) with an evolving product mix supported by high demand and an order book extending into 2027. | Consistent robust pipeline and mix transition with enhanced diversification and sustained market demand. |
Cost Efficiency, Inflation, Margin Stability | Q4 2024: Maintained strong margins (EBIT margin at 28.3%, EBITDA near 38.3%) with favorable product mix despite inflation and higher SG&A expenses. Q1 2025: Reported stable margins (EBITDA 38.7%, EBIT >30%) alongside increased SG&A and cost driver challenges. | Q2 2025: Demonstrated improved cost efficiency due to lower supply chain inflation, better efficiency and flat D&A, achieving EBITDA 39.7% and EBIT close to 31%. | Gradual improvement in cost metrics with ongoing margin stability despite external cost pressures. |
Customer Demand, Loyalty, Base Saturation Risks | Q4 2024: Reported high loyalty with 81% of new sales to existing customers and a robust order book through 2026, with attention to residual value concerns. Q1 2025: Noted no significant cancellation trends and a resilient, diverse customer base. | Q2 2025: Reiterated strong demand for new models (e.g., 296 Speciale, Ferrari Amalfi) and continued strong loyalty while acknowledging the need to manage potential saturation via innovation. | Consistently strong customer demand and loyalty; proactive measures continue to mitigate base saturation risks. |
Electric Vehicle | Q4 2024: Expressed clear commitment to the EV strategy with adherence to the original plan and a diverse powertrain mix. Q1 2025: Emphasized excitement and confidence in creating an EV that remains true to Ferrari’s emotional brand. | Q2 2025: Confirmed on-track EV development with a planned Q4 2025 launch while addressing regulatory challenges, reaffirming the electrification target of 40% by 2030. | Consistent commitment and clarity on the EV strategy, with a new nuance on regulatory challenges that are being actively managed. |
Non-Car Revenue Dilution | Q1 2025: Addressed concerns by stating that sponsorship and lifestyle agreements were in place, mitigating any dilution risks. Q4 2024: This topic was not mentioned. | Q2 2025: There is no mention of non-car revenue dilution concerns. | A brief focus in Q1 2025 with reassurance, but no further discussion—indicating low emphasis or resolved concerns. |
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Cost Outlook
Q: Why are H2 industrial costs lower?
A: Management explained that lower H2 industrial costs result from the absence of the higher racing expenses seen last year and a lower inflationary impact; the change in R&D capitalization reflects overlapping approved model developments, reinforcing cost discipline and transparency. -
Gross Margin Drivers
Q: Why strong margins despite softer ASP?
A: They noted that an enriched product mix—with 20% personalization—and cost efficiencies have offset softer average selling prices, keeping gross margins resilient even as tariff effects remain deferred pending policy clarity. -
Tariff Impact
Q: Any order cancellations or tariff delays?
A: Management reported no significant order cancellations; while some shipments remain affected by the current 27.5% tariffs, the outlook adjusts as reduced tariffs (around 15%) are expected once the political agreement is implemented. -
Electric Strategy
Q: Is Electratica meant as a halo EV?
A: They stressed that Electratica is being positioned for loyal Ferrari customers and to attract new enthusiasts, with a controlled approach and forthcoming detailed rollout in October, demonstrating a measured entry into electrification. -
China & Model Mix
Q: How will the Amalfi perform in China?
A: Management emphasized that the Amalfi launch is designed to broaden the offering in China and attract clients from other high-end brands, helping to mitigate past traction issues seen in models like the Dodi Cilindri. -
Hybrid Share & Guidance
Q: What are expectations on hybrids and guidance?
A: They indicated that hybrid penetration will vary by model volume, and the overall guidance benefits from the anticipated lower industrial costs and a neutral mix compared to last year, supporting steady earnings. -
Residual Value Concerns
Q: Should we worry about US residual values?
A: Management clarified that while markets like the US and UK are under commercial review, proactive pricing actions have been taken, and no specific residual value concerns are flagged at this time.
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