2021 Guidance subject to trading conditions unaffected by further Covid-19 pandemic restrictions:
Maranello (Italy), February 2, 2021 – Ferrari N.V. (NYSE/MTA: RACE) (“Ferrari” or the “Company”) today announces its consolidated preliminary results(4) for the fourth quarter and twelve months ended December 31, 2020.
Shipments totaled 9,119 units in 2020, down 1,012 units or 10.0% versus prior year, following the seven-week production suspension in H1 2020 and dealers’ temporary closure due to the Covid-19 pandemic, partially offset by a gradual production recovery in H2 2020.
Sales of both 8 cylinder models (V8) and 12 cylinder models (V12) were down 10.3% and 9.0%, respectively. The Ferrari Monza SP1 and SP2 were delivered as originally scheduled. The F8 family ramp up offset the 488 Pista family, which was approaching the end of its lifecycle. The 812 GTS was in the ramp up phase and reached global distribution, while the Ferrari Portofino phased out ahead of the introduction of the Ferrari Portofino M in 2021. The deliveries of the SF90 Stradale started in Q4 2020 following the industrialization delays experienced and then solved. In the same quarter also the Ferrari Roma commenced deliveries.
Yearly shipments were affected by the deliberate geographic allocation, driven by the phase-in pace of individual models. As a result, EMEA(6) and Rest of APAC(6) were almost in line with prior year, while Americas(6) was down 19.8%. Mainland China, Hong Kong and Taiwan posted a decrease of 45.5%, mostly as a consequence of the advance deliveries in 2019.
In 2020, for the first time ever in Ferrari’s history, three new cars were unveiled with dedicated digital events: the Ferrari Portofino M, the SF90 Spider and the 488 GT Modificata, whose shipments will commence in 2021.
Total net revenues
Net revenues for 2020 were Euro 3,460 million, down 8.9% at constant currency(1).
The decrease of revenues from Cars and spare parts(7) to Euro 2,835 million (down 3.1% or 4.1% at constant currency(1)) reflected lower deliveries as well as their personalizations. This was partially offset by the positive mix thanks to the Ferrari Monza SP1 and SP2.
The decrease in Engines(8) revenues (Euro 151 million, down 24.0%, also at constant currency(1)) reflected lower shipments to Maserati and revenues from the rental of engines to other Formula 1 racing teams.
Sponsorship, commercial and brand(9) revenues (Euro 390 million, down 27.5% or 27.8% at constant currency(1)) were significantly impacted by the Covid-19 pandemic, resulting in a decreased number of Formula 1 races as well as lower in-store traffic and museum visitors.
Other(10) revenues (Euro 84 million, down 19.5% or 18.3% at constant currency(1)) were mainly impacted by reduced sports-related activities and the cancellation of the Moto GP at the Mugello racetrack, only partially offset by the first ever Formula 1 Grand Prix held at the Mugello racetrack.
Currency – including translation and transaction impacts as well as foreign currency hedges – had a positive impact of Euro 32 million (mainly USD).
EBITDA(1) and EBIT
2020 EBITDA(1) decreased by 10.0% or 12.7% at constant currency(1) versus prior year and stood at Euro 1,143 million with an EBITDA margin(1) of 33.0%.
2020 EBIT was Euro 716 million, down 21.9% or 25.3% at constant currency(1) versus prior year.
Volume had a negative impact (Euro 126 million) reflecting the decrease in shipments.
The Mix / price variance performance was positive (Euro 130 million) thanks to the increase of the Ferrari Monza SP1 and SP2 and a richer product mix despite fewer FXX-K EVO, slightly affected by a lower contribution from personalization programs, in line with the decrease of shipments and the gradual phase-out of the 488 Pista family.
Industrial costs / research and development expenses increased (Euro 38 million) mainly due to higher depreciation and amortization of fixed assets, net of the benefit of technology-related incentives recognized in the year. This also included the full costs of employees’ paid days of absence during the Covid-19 production suspension.
SG&A diminished (Euro 6 million) reflecting significant cost containment actions, partly offset by Formula 1 racing activities.
Other decreased (Euro 211 million) due to the Covid-19 impact on the Formula 1 racing calendar, lower traffic for brand-related activities as well as engine sales to Maserati.
Financial charges in the year stood at Euro 49 million versus Euro 42 million for the prior year, reflecting both a decrease in the fair value of investments held by the Group and an increase in foreign exchange losses and hedging costs.
The tax rate in the year was 8.7%, attributable to the Patent Box, deductions for eligible research and development costs, hyper and super-depreciation of machinery and equipment, in addition to a tax benefit, with no cash impact on 2020, from the one-off partial step-up of the trademark’s book value in accordance with the Italian tax regulations. Such net benefit, of Euro 75 million, has been treated as an adjusting item.
As a result, the Net Profit for the period was Euro 609 million, reflecting a 12.9% decrease versus prior year, and the Diluted earnings per share for the year reached Euro 3.28, compared to Euro 3.71 in 2019. Adjusted Net Profit(1)(2), net of the positive non-cash one-off impact described above, was Euro 534 million and corresponding to an Adjusted Diluted EPS(1)(2) of Euro 2.88.
Industrial free cash flow(1) for 2020 was Euro 172 million, driven by EBITDA(1), partially offset by capital expenditures(11) of Euro 709 million – including over Euro 60 million in connection with the purchase of tracts of land contiguous to our facilities in Maranello – and an adverse working capital impact due primarily to the reversal of the Ferrari Monza SP1 and SP2 advances received in 2019 and higher product and raw material inventories to protect the supply chain.
Net Industrial Debt(1) as of December 31, 2020, was Euro 543 million, compared to Euro 337 million as of December 31, 2019. During 2020, a total worth of Euro 130 million of shares were repurchased and Euro 212 million(12) were distributed in dividends. Lease liabilities per IFRS 16 as of December 31, 2020, were Euro 62 million.
As of December 31, 2020, total available liquidity was Euro 2,062 million (Euro 1,879 million as of September 30, 2020), including undrawn committed credit lines of Euro 700 million.
2021 Guidance, subject to trading conditions unaffected by further Covid-19 pandemic restrictions and assuming:
Full Year 2020 highlights
Suspension of production in Maranello and Modena due to the Covid-19
On March 14, 2020, Ferrari announced the decision to suspend production in Maranello and Modena in light of the spread of the Covid-19 pandemic. Ferrari gradually restarted its Maranello and Modena plants on May 4, 2020, returning to full production by Friday May 8, 2020.
Termination of the third tranche of the disclosed multi-year share repurchase program
On April 1, 2020, Ferrari announced that it would temporarily suspend its multi-year share repurchase program in its Third Tranche (with Euro 154 million executed out of a total of Euro 200 million) and, consequently, to early terminate its non-discretionary share repurchase agreement in place.
“Back on Track”, Ferrari's program to protect the health of employees upon the restart of production
Back on Track is Ferrari's program to safeguard the health of employees upon the restart of production, also with regard to the spread of Covid-19. It entails, for example, voluntary screenings that provide an overview of the health status of the Ferrari Community. With these measures the Company continues to take care of its most precious resource, its people, facilitating the safest and most worry-free working life.
Ferrari initiatives on the Covid-19
Ferrari joined the collective fight against the Covid-19 through several solidarity projects.
The Company launched a fundraising among some of its clients, matching all of their donations. Funds were destined to the medical staff and the health system of Ferrari’s surrounding communities.
Other initiatives in the local community included the purchasing of equipment for local hospitals, emergency medical service vehicles, IT equipment for schools and essential goods for struggling families coping with the emergency situation. The overall funds donated for these specific initiatives were generated thanks to the Chairman, the former CEO and Board of Directors pledging their full compensation from April to the end of the year, with the Senior Management Team donating 25% of their salaries for the same period.
These contributions added to respirator valves and fittings for protective masks produced by the Company at its Maranello plant and donated to hospitals. Ferrari, with other companies, contributed to sourcing and purchasing a total of 210 ventilators, alongside other medical equipment from various overseas suppliers, providing for their immediate air transport to Italy.
Additionally, Scuderia Ferrari Mission Winnow and the Italian Institute of Technology joined forces to present the open source project of FI5, a revolutionary low cost and lightweight pulmonary ventilator that can be used by hospitals around the world dealing with emergencies such as the current Covid-19 pandemic.
Ferrari receives Equal Salary Certification
On July 2, 2020, Ferrari S.p.A. was the first Italian company awarded with the Equal Salary Certificate in recognition of the same compensation amongst women and men for equivalent roles and jobs. This testifies to the Company’s continued commitment to creating an inclusive and diverse working environment while fostering career development for all.
Mugello Circuit hosts Scuderia Ferrari’s 1000th Grand Prix
On July 10, 2020, it was announced that our Mugello racetrack would host a Formula 1 Grand Prix for the first time, on the occasion of Scuderia Ferrari’s 1000th Grand Prix race. The motor race was held during the weekend of September 13, 2020.
Ferrari signs the 2021-2025 Concorde Agreement
On August 18, 2020, Ferrari S.p.A. signed the two agreements that will govern the Scuderia’s participation in the FIA Formula One World Championship over the five year period from 2021 to 2025. The agreements, which were signed with the Fédération Internationale de l’Automobile and Formula One World Championship Ltd. (“Formula One”), cover the regulatory and governance aspects of the highest level motorsport series. The commercial aspects are defined in the agreement between Ferrari and Formula One.
Ferrari Portofino M unveiling: a voyage of rediscovery
On September 16, 2020, the Ferrari Portofino M, the evolution of the Ferrari Portofino was unveiled. For the first time ever in Maranello marque’s 70-year-plus history, the new car’s premiere took place entirely online. New technical innovations comprise a redesigned powertrain, a brand-new eight-speed gearbox and the five-position Manettino that includes a Race mode, an absolute first for a Maranello GT spider.
SF90 Spider: beyond imagination
On November 12, 2020, the spider version of the SF90 Stradale, the SF90 Spider, was unveiled during a dedicated digital event. Not only is the car the Prancing Horse’s first production plug-in hybrid spider, but the SF90 Spider also sets new benchmarks for performance, innovation and the thrill of driving, not only for the marque’s range, but for the entire sports car sector.
Ferrari Roma auctioned to benefit Save the Children
On November 20, 2020, Ferrari announced that it raised USD 750,000 for Save the Children’s education programs in the United States, including the winning bid for the Ferrari Roma grand tourer auctioned online.
The Ferrari 488 GT Modificata
On November, 25, 2020, the 488 GT Modificata was unveiled at Maranello. This limited edition car, that incorporates the latest innovations, skills and technologies developed from the 488 GT3 and 488 GTE, is exclusively for use on the track during track days and at Ferrari Club Competizioni GT events.
Chief Executive Officer Louis Camilleri retires for personal reasons; Executive Chairman John Elkann acting Chief Executive Officer
On December 10, 2020, Ferrari announced that Louis Camilleri communicated that day to the Company his decision, for personal reasons, to retire with immediate effect from his role as the Company’s Chief Executive Officer and as member of the Board of Directors.
Ferrari’s Executive Chairman, John Elkann, announced he would act as interim Chief Executive Officer while the Ferrari Board of Directors would manage the ongoing process of identifying Louis Camilleri’s successor.
Ferrari ranks among sustainability leaders according to CDP report
On December 23, 2020, Ferrari announced that it ranked among the global leaders in environmental performance and transparency in the annual report published by CDP (Carbon Disclosure Project), an independent non-profit organization. Ferrari was awarded an A- rating, ranking significantly above both the European regional average and the sector’s average, for actions implemented to combat climate change.
FIA Girls on Track - Rising Stars
The International Automobile Federation (FIA) and its Women in Motorsport Commission launched ‘FIA Girls on Track - Rising Stars’, a new project to detect and nurture the up and coming women drivers of the future. The project is run in association with Scuderia Ferrari and aims to identify the best 12-16 year old female drivers from around the world and help them towards having a professional career in motorsport. After the final assessment of the racing talents, on January 22, 2021, Maya Weug was awarded a one-year contract to join the Ferrari Driver Academy program and compete in one of the European FIA Formula 4 series in 2021.
Capex and R&D
Non-GAAP financial measures
Operations are monitored through the use of various non-GAAP financial measures that may not be comparable to other similarly titled measures of other companies.
Accordingly, investors and analysts should exercise appropriate caution in comparing these supplemental financial measures to similarly titled financial measures reported by other companies.
We believe that these supplemental financial measures provide comparable measures of financial performance which then facilitate management’s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions.
Certain totals in the tables included in this document may not add due to rounding.
Total net revenues, EBITDA, Adj. EBITDA, EBIT and Adj. EBIT at constant currency eliminate the effects of changes in foreign currency (transaction and translation) and of foreign currency hedges.
EBITDA is defined as net profit before income tax expense, net financial expenses and depreciation and amortization.
Adjusted EBITDA is defined as EBITDA as adjusted for certain income and costs which are significant in nature, expected to occur infrequently, and that management considers not reflective of ongoing operational activities.
Adjusted Earnings Before Interest and Taxes (“Adjusted EBIT”) represents EBIT as adjusted for certain income and costs which are significant in nature, expected to occur infrequently, and that management considers not reflective of ongoing operational activities.
Adjusted net profit represents net profit as adjusted for certain income and costs (net of tax effect) which are significant in nature, expected to occur infrequently, and that management considers not reflective of ongoing operational activities.
Adjusted EPS represents EPS as adjusted for certain income and costs (net of tax effect) which are significant in nature, expected to occur infrequently, and that management considers not reflective of ongoing operational activities.
Basic and diluted EPS(14)
Net Industrial Debt, defined as total Debt less Cash and Cash Equivalents (Net Debt), further adjusted to exclude the debt and cash and cash equivalents related to our financial services activities (Net Debt of Financial Services Activities).
Free Cash Flow and Free Cash Flow from Industrial Activities are two of management’s primary key performance indicators to measure the Group’s performance. Free Cash Flow is defined as cash flows from operating activities less investments in property, plant and equipment (excluding right-of-use assets recognized during the period in accordance with IFRS 16 - Leases) and intangible assets. Free Cash Flow from Industrial Activities is defined as Free Cash Flow adjusted to exclude the operating cash flow from our financial services activities (Free Cash Flow from Financial Services Activities). Prior to the first quarter of 2020, we defined Free Cash Flow and Free Cash Flow from Industrial Activities without excluding from investments in property, plant and equipment the right-of-use assets recognized during the period in accordance with IFRS 16 - Leases. Applying the current definition of Free Cash Flow and Free Cash Flow from Industrial Activities to the three and twelve months ended December 31, 2019 would result in an immaterial difference compared to the figures presented below. The following table sets forth our Free Cash Flow and Free Cash Flow from Industrial Activities for the three and twelve months ended December 31, 2020 and 2019.
On February 2, 2021, at 3.00 p.m. CET, management will hold a conference call to present the FY 2020 results to financial analysts and institutional investors. Please note that registering in advance is required to access the conference call details. The call can be followed live and a recording will subsequently be available on the Group’s website http://corporate.ferrari.com/en/investors. The supporting document will be made available on the website prior to the call.
1 Refer to specific note on non-GAAP financial measures
2 Net of a tax benefit, with no cash impact on 2020, from the one-off partial step-up of the trademark’s book value in accordance with the Italian tax regulations
3 Calculated using the weighted average diluted number of common shares as of December 31, 2020 (185,379 thousand)
4 These results have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and IFRS as endorsed by the European Union
5 Excluding the XX Programme, racing cars, Fuori Serie, one-off and pre-owned cars
6 EMEA includes: Italy, UK, Germany, Switzerland, France, Middle East (includes the United Arab Emirates, Saudi Arabia, Bahrain, Lebanon, Qatar, Oman and Kuwait) and Rest of EMEA (includes Africa and the other European markets not separately identified); Americas includes: United States of America, Canada, Mexico, the Caribbean and Central and South America; Rest of APAC mainly includes: Japan, Australia, Singapore, Indonesia, South Korea, Thailand and Malaysia
7 Includes net revenues generated from shipments of our cars, any personalization net revenues generated on cars, as well as sales of spare parts
8 Includes net revenues generated from the sale of engines to Maserati for use in their cars, and the revenues generated from the rental of engines to other Formula 1 racing teams
9 Includes net revenues earned by our Formula 1 racing team through sponsorship agreements and our share of the Formula 1 World Championship commercial revenues, as well as revenues generated through the Ferrari brand, including merchandising, licensing and royalty income
10 Primarily relates to financial services activities, management of the Mugello racetrack and other sports-related activities
11 Capital expenditures excluding right-of-use assets recognized during the period in accordance with IFRS 16 - Leases
12 Including approx. Euro 1 million related to withholding taxes, which are expected to be paid
13 Capitalized as intangible assets
14 For the three and twelve months ended December 31, 2020 and 2019 the weighted average number of common shares for diluted earnings per share was increased to take into consideration the theoretical effect of the potential common shares that would be issued under the equity incentive plans
15 Free Cash Flow from Industrial Activities for the three and twelve months ended December 31, 2020 includes approx. Euro 1 million related to withholding taxes, which are expected to be paid