Specialist
Former VP at Aston Martin Lagonda Global Holdings plc
Agenda
- Ferrari’s (BIT: RACE) volume outlook by model and region, highlighting key growth drivers including SUV launch
- Pricing growth opportunities across models and impacts on ASPs
- Challenges associated with electrification growth and Ferrari’s opportunity in this market
- Margin outlook, considering supply chain bottlenecks and cost pressures
Questions
1.
Where do you expect Ferrari to end 2022 in terms of volume? I believe Q3 2022 reported around 16% increase in shipments YoY.
2.
What would be your volume growth outlook for 2023 and should we expect a similar pace or would it stabilise a bit more?
3.
How are you expecting Ferrari’s volume to split between geographies?
4.
Ferrari did hit 14% in China in Q3 2022 which was the company’s last reporting. You would imagine its China volume to be slightly margin dilutive, but accretive in dollar terms. Do you expect that 14-15% to be a sustainable percentage of sales for Ferrari in the region?
5.
How do you assess Ferrari’s competitive positioning relative to Lamborghini and Bentley, and are there variations across regions? You mentioned the competitive positioning in China.
6.
What volume contribution do you expect from Ferrari’s 296, with a new variation coming in 2023, as well as from the Daytona SP3?
7.
What model introductions or launches do you expect from Ferrari over the next two years? Are there any gaps that the company needs to fill in its model portfolio?
8.
Demand has not been a problem for Ferrari and you can expect a lot of demand for the SUV and a lot of the company’s cars, but supply has been an issue over the past couple of years. What manufacturing capacity expansion is required to support the medium-term volume growth we’ve talked about?
9.
What would be your volume growth outlook for 2025? We spoke about around 15,000-16,000 in 2023.
10.
What price or price mix shifts do you expect for Ferrari in 2023, particularly given its lack of a hypercar, as you mentioned?
11.
Could we dig deeper into those inflation challenges? Would you be confident in Ferrari’s ability to pass on all of that cost to customers? What price increases are required to achieve this?
12.
What are your thoughts on Ferrari’s hybrid models to date?
13.
How can Ferrari remain competitive in an EV environment as we shift not just towards hybrids but pure EVs?
14.
Are there any particular things or investments Ferrari needs to make to maintain its brand strength?
15.
What are your volume expectations for Ferrari’s hybrids and battery EVs over the next 5-10 years? Obviously, the company is only going to start producing pure EVs in 2025.
16.
Do you see a scenario where ICE [internal combustion engine] models don’t exist? Why or why not?
17.
What would be your expectations for the timeline of Ferrari’s model electrification?
18.
We’re seeing a number of JVs in the luxury automotive sector. What do you think is the correct approach for Ferrari in terms of insourcing vs outsourcing when it comes to electrification?
19.
What M&A strategy could make sense for Ferrari?
20.
You alluded to the CAPEX that Ferrari has spent, EUR 700m approximately. What levels of investment is required to achieve the shift to EVs by 2025-26, and then the 40% you mentioned in 2030?
21.
What impact does the introduction of EVs have on Ferrari’s current customer base? Is there already early interest, and could we expect it to attract new customers to the company?
22.
Could electrification drive away certain customers of Ferrari?
23.
When it comes to used EVs and the residual value, in some cases it isn’t as high due to battery decay and therefore the range of the EV. Do you think that would have an impact on Ferrari’s EVs?
24.
How competitive is the company in technology and software as that becomes a more important aspect of the car?
25.
Is software an area where some M&A would make sense?
26.
You mentioned ADAS [advanced driver-assistance systems], and I believe the CEO has said that Ferrari will stop at level 2+ in terms of ADAS capabilities. What’s the rationale behind that? How do you assess the decision?
27.
Are there any plans to create other possible revenue streams that would increase Ferrari’s visibility and attract bigger audiences? That hasn’t been a problem in terms of demand, as we’ve discussed, but what about in the context of the transition towards EVs?
28.
How do you see Ferrari’s new CEO? He’s coming from a luxury industry per se. How do you think about him in the context of protecting the company’s brand strength?
29.
What do you see as the biggest risk for Ferrari in the next 1-3 years?
30.
What do you think is a sustainable long-term operating margin for Ferrari? Is the company already at that level, or is there more room for growth? If so, why?
31.
What might impact future margin growth for Ferrari? In the short term we spoke about inflation, but what about the 27-30% range the company gave for 2026?
32.
How do margins differ by model?
33.
Is there anything else you’d like to note that you think is important for investors to be cognisant of when it comes to Ferrari?
