Q3 2023 Earnings Summary
- Ferrari's demand remains robust and resilient, with the order book at the highest levels across all geographies and models, covering the entire 2025. This is despite competitors noting weakness in luxury car demand, highlighting Ferrari's unique bond with customers as a key factor in sustaining strong demand.
- Personalizations have reached approximately 19% of revenues from cars and spare parts, higher than the usual range, positively impacting profitability. This trend is expected to continue at around 18%, contributing to margins in 2024.
- Strong product mix with high-margin models like the Daytona SP3 and Purosangue. Deliveries of the Daytona SP3 are planned at 30 to 40 units per quarter in 2024, supporting a favorable product mix and enhancing profitability.
- Inflationary pressures remain a headwind, and while the company is considering price increases next year, there is uncertainty whether these will fully offset higher costs, potentially affecting margins.
- The company anticipates lower margins in Q4 2023 due to lower volumes and higher costs, including increased R&D and logistics expenses, which could signal ongoing margin pressure.
- Ferrari's profitability has been boosted by higher personalization revenues, but management is uncertain if this trend will continue into 2024, posing a risk if customers reduce spending on personalization.
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Guidance Updates
Q: Will you raise 2026 targets given strong performance?
A: We're not revising our 2026 targets before 2025. We're focused on delivering what we committed to our shareholders. -
Margin Outlook
Q: Why is Q4 margin guidance lower than expected?
A: Q4 margins will be lower due to planned lower volumes, higher R&D expenses, and increased depreciation from new models starting production. -
Order Book Growth
Q: Is order book growth slowing because you're sold out?
A: Yes, order book growth will slow as we're allocating final units of Purosangue, and other models are fully allocated. Clients eagerly bought everything we offered. -
Pricing Strategy
Q: Are you considering price increases next year due to inflation?
A: We're thinking about price increases next year across our revenue streams. We'll remain flexible and adjust based on cost developments. -
Product Mix in 2024
Q: Will mix improve in 2024 with new products?
A: We expect a similar mix to this year. While the product range remains rich, we don't anticipate a significant jump compared to 2023. -
EV Customer Preferences
Q: Do customers prefer ICE over EV, especially in China?
A: We offer ICE, hybrid, and electric models to cater to all preferences. Some clients prefer ICE, others are joining Ferrari because of electric cars. Customer feedback confirms our strategy. -
Personalization Trends
Q: Is higher personalization driving better margins?
A: Yes, personalization has positively surprised us and significantly contributed to our upward guidance revision. -
Pre-Owned Market Strategy
Q: How does sold-out production affect pre-owned sales?
A: The pre-owned market is healthy. We encourage dealers to engage more in pre-owned sales, which is an area for further development. -
Cryptocurrency Payments
Q: Will accepting crypto enlarge your customer base?
A: Yes, initial feedback is positive. Accepting crypto simplifies purchasing and appeals to customers of various ages. We don't expect volatility as transactions convert in real time. -
Purosangue Margins and Volumes
Q: Are Purosangue margins accretive? Update on volumes?
A: Purosangue margins are in line with our range. Volume is capped at 20% over the years; this year's volume is lower due to ramp-up.