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Ferrari N.V. (RACE) Q2 2024 Earnings Call Transcript

AInvestFriday, Aug 2, 2024 6:06 pm ET
2min read

Ferrari, the iconic luxury sports car brand, reported a strong second quarter performance for 2024, showcasing a solid financial result and continued growth. The company's Q2 revenues reached €1.7 billion, marking a 16% increase compared to the previous year, driven by the sustained strength of the product mix and the growing demand for personalization. This growth was also reflected in the profitability figures, with adjusted EBITDA at €670 million and a remarkable 39% margin.

Financial Highlights and Strategic Direction

The solidity of Ferrari's Q2 results was accompanied by a continued strong brand momentum. The enthusiastic reception of the latest new sports cars, the Dodici Cilindri and the Dodici Cilindri Spider, drove the order collection in the quarter, adding to an already solid order book on current models. This visibility relies on the loyalty of existing customers and the brand appeal to new ones, as Ferrari continues to allocate its products strategically across different regions to announce its brand strength and exclusivity.

Innovation is a key focus for Ferrari, and sustainable innovation has been at the forefront of the company's efforts. A series of events were hosted in Maranello in June, involving all Ferrari stakeholders, to discuss and share experiences and practices to reduce environmental impact. This commitment to sustainability is reflected in Ferrari's plans to engineer and handcraft the strategic electrical components in-house, maintaining its competitive advantage in the years to come.

Market Trends and Competitive Landscape

During the call, Benedetto Vigna, Ferrari's CEO, highlighted the company's focus on technological neutrality and its belief that there is no single solution to future automotive powertrains. This approach, coupled with the ongoing investment in the three powertrains – Internal Combustion Engine, hybrid, and full electric – positions Ferrari well in the current technology transition. The company's ethos remains focused on quality over quantity, as evidenced by the upcoming e-building, which will house the development and production of ICE, hybrid, and full electric models.

Investor and Shareholder Engagement

The earnings call also provided insight into the concerns and priorities of key shareholders and investors. John Murphy of Bank of America Merrill Lynch, for instance, asked about the balance between price and mix, and the potential for unit growth in the future. Benedetto Vigna acknowledged the importance of maintaining a strong product mix while accommodating the needs of clients, with a focus on agility and flexibility. Antonio Picca Piccon, Ferrari's CFO, addressed the potential impact of technology neutrality on the company's margins and the projected growth in R&D expenses for racing and other innovation activities.

Looking Ahead

As Ferrari moves into the second half of 2024, it faces a positive product mix, despite the lower Daytona deliveries. The company remains focused on its commitment to sustainability and innovation, with the production of hybrid and ICE models expected to begin from the beginning of 2025. Ferrari's strong financial performance, coupled with its strategic focus on sustainability and innovation, positions it well for continued growth and success in the years to come.

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