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Ferrari NV: Strongest Ever Q1, on the Way to Another Record Year


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SEE ALSO: My Ferrari Life By Nicholas Frankl

MARANELLO, Italy, May 2, 2016 --

  • Total shipments reached 1,882 units, up 15%
  • Net revenues grew 8.8% (+8.4% at constant currencies) to Euro 675 million
  • EBIT of Euro 121 million, 250bps margin increase
  • Net profit up 19% to Euro 78 million
  • Net industrial debt[1] slightly down from year end 2015 at Euro 782 million

 

 

(In Euro million unless otherwise stated)


For the three months ended March 31,


2016

2015

Change

%


Shipments (in units)

1,882

1,635

247

+15%


Net revenues

675

621

54

+8.8%


EBIT

121

96

25

+26%


Adjusted EBIT1

121

100

21

+21%


EBITDA1

178

156

22

+14%


Adjusted EBITDA1

178

160

18

+11%


Net profit

78

65

13

+19%


Earnings per share (in Euro )

0.41

0.34

0.07

+19%


Adjusted earnings per share1 (in Euro )

0.41

0.36

0.05

+13%









 

(Euro million)

Mar. 31,

2016

Dec. 31, 2015

Change

Net industrial debt1

(782)

(797)

15

 

Adjusted EBIT

  • Increased volume of approx. 260 cars (excluding LaFerrari), all regions up thanks to strong start of the new models 488 GTB, 488 Spider and F12tdf; higher margin contribution from personalization
  • Negative mix effect due to higher sales of V8 vs. V12 and lower sales of LaFerrari, finishing its limited series run, partially offset by FXX K and first deliveries of F60 America

Adjusted Net Profit

  • Net profit for Q1 2016 was Euro 78 million, up Euro 13 million (+19%) due to combined effect of strong adjusted EBIT partially offset by higher financial expenses and benefitting from a lower tax rate

Net Industrial Debt

  • Net industrial debt1 reduced to Euro 782 million, primarily due to strong adjusted EBITDA partially offset by capex and negative change in working capital

2016 Revised Outlook2

The Group is revising its guidance upwards as follows:

  • Shipments: >7,900 including supercars
  • Net revenues: ˜ €3 billion
  • Adjusted EBITDA: ? €800 million
  • Net Industrial debt3: ? €730 million  

Ferrari N.V. ("Ferrari" or the "Company") today announces its consolidated preliminary results4 for the first quarter ended March 31, 2016.

Shipments

Shipments5 (units)

For the three months ended March 31,





2016

2015

Change

%

EMEA


950

765

185

+24%

Americas


523

515

8

+2%

Greater China


156

134

22

+16%

Rest of APAC


253

221

32

+14%

Total shipments


1,882

1,635

247

+15%









Shipments totaled 1,882 units in Q1 2016, up 15% from previous year. This performance was driven by a 21% increase in sales of our 8 cylinder models (V8), led by the success of the two newly launched models: the 488 GTB and the 488 Spider. Shipments of the 12 cylinder models (V12) were down 6% due to the phase out of the FF, the completion of the lifecycle of the F12berlinetta (now in its 5th year of commercialization) and LaFerrari finishing its limited series run, partially offset by the introduction of the new F12tdf.

All regions experienced sound year-on-year growth: EMEA5, Americas5, Greater China5 and Rest of APAC5 were up 24%, 2%, 16% and 14% respectively.

Total net revenues

(Euro million)

For the three months ended March 31,





2016

2015

Change

%

Cars and spare parts[6]


481

429

52

+12%

Engines[7]


57

64

(7)

(11%)

Sponsorship, commercial and brand[8]


118

109

9

+8%

Other[9]


19

19

-

-

Total net revenues


675

621

54

+8.8%









 

Net revenues for Q1 2016 were Euro 675 million, an increase of Euro 54 million or 8.8% (+8.4% at constant currencies) from Q1 2015. Higher net revenues in Cars and spare parts6 (Euro 52 million, +12%), due to increased volumes led by new models 488 GTB, 488 Spider and F12tdf, along with a higher contribution from personalization, and Sponsorship, commercial and brand8 (Euro 9 million, +8%), mostly due to better championship ranking, were partially offset by a decrease in Engines7  (Euro 7 million, -11%), mainly attributable to lower shipments to Maserati despite higher rental revenues from other Formula 1 Teams.


(Euro million)

For the three months ended March 31,





2016

2015

Change

%

Adjusted EBIT


121

100

21

+21%

Adjusted EBIT margin


18.0%

16.1%

+190bps


Adjusted EBITDA


178

160

18

+11%

Adjusted EBITDA margin


26.3%

25.7%

+60bps










 

Adjusted EBIT1 was Euro 121 million, up Euro 21 million (+21%) from Q1 2015 as a result of higher volumes from the newly launched 488 GTB, 488 Spider and the F12tdf as well as a positive margin contribution from our personalization programs. The increase was also supported by lower Selling, general and administrative costs10 of Euro 2 million, mainly due to timing of the 2016 F1 racing season. Mix was negatively impacted (Euro 8 million) by higher V8 versus V12 range models, lower sales of LaFerrari partially offset by the increase of FXX K, the first deliveries of the F60 America, a strictly limited edition car (only ten units), which was produced to commemorate the 60th Anniversary of Ferrari in America. Research and development costs and industrial costs increased by Euro 1 million attributable to the 2016 development of the power unit for F1 racing activity which was partially offset by lower D&A for 458 family and efficiencies on production costs.

Tax rate dropped to 30.9% in Q1 2016 vs. 33.5% in Q1 2015, as a result of the Italian Government's decision to reduce the Italian nominal tax rate from 27.5% to 24% by 2017.

As a result of the items described above, net profit for Q1 2016 was Euro 78 million, up Euro 13 million (+19%).  

Industrial free cash flow1 for the three months ended March 31, 2016 was Euro 28 million, primarily driven by a strong increase in cash from operating activities but partially offset by capex and negative change in working capital (less down-payments received for the LaFerrari). Q1 2015 industrial free cash flow1 included a Euro 44 million one-time cash in-flow related to a partial reimbursement by Maserati of its inventory in China.

Net industrial debt1 at March 31, 2016 was Euro 782 million, down from the Euro 797 million at the end of 2015, due to industrial free cash flow generation.

The Company accessed the public debt markets for the first time with a Euro 500 million Bond issuance due 2023 with a fixed annual coupon of 1.50%.

Formula 1

Scuderia Ferrari has worked diligently throughout the 2015 calendar year to ready itself for the 2016 season, and the results are becoming visible: 4 podiums in the first 4 races, with missed opportunities in each one of the 4 events to place both drivers on the podium and even bring home the winner's trophy. The team is totally focused on regaining its rightful place as the standard setter in F1 racing and we look to the rest of the season with confidence. Scuderia Ferrari totaled 700 podiums throughout its racing history.

GTC4Lusso

The new Ferrari GTC4Lusso, unveiled at the recent Geneva Motor Show, is Maranello's latest interpretation of the four-seater concept, which combines extraordinary technology and performance in all driving conditions with sporty elegance and luxurious comfort for driver and passengers alike.

Brand

As previously announced we signed a non-binding memorandum of understanding for the licensing of the design, construction and operation of a new Ferrari theme park to be located in one of the primary cities in Mainland China.

As indicated during the IPO process, Ferrari is aggressively exploring the luxury goods space that extends beyond luxury performance sport cars, while nurturing and expanding the Scuderia Ferrari merchandising concept, which is inextricably linked to its racing activities in F1.

It is expected that the first evidence of this development (Ferrari branded goods akin to its luxury performance sport car offering) would be accessible to potential customers in 2017, when the Company celebrates its 70th anniversary.

Subsequent Events

Ferrari Financial Services S.p.A. (FFS S.p.A.), an Italian indirect subsidiary of Ferrari N.V., and FCA Bank S.p.A. (FCAB) today announced that they have signed a memorandum of understanding for FCAB to acquire a majority stake in Ferrari Financial Services AG, a wholly owned subsidiary of FFS S.p.A. which provides retail and leasing financial services in certain European countries. The consummation of the transaction is subject to approvals of competition and banking regulatory authorities.

About Ferrari

Ferrari is among the world's leading luxury brands focused on the design, engineering, production and sale of the world's most recognizable luxury performance sports cars. Ferrari brand symbolizes exclusivity, innovation, state-of-the-art sporting performance and Italian design. Its history and the image enjoyed by its cars are closely associated with its Formula 1 racing team, Scuderia Ferrari, the most successful team in Formula 1 history. From the inaugural year of Formula 1 in 1950 through the present, Scuderia Ferrari has won 224 Grand Prix races, 16 Constructor World titles and 15 Drivers' World titles. Ferrari designs, engineers and produces its cars in Maranello, Italy, and sells them in over 60 markets worldwide.

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.

Adjusted Earnings Before Interest and Taxes ("Adjusted EBIT") represents EBIT as adjusted for income and costs, which are significant in nature, but expected to occur infrequently.

(Euro million)

For the three months ended March 31,


2016

2015

EBIT

121

96

Expenses incurred in relation to the IPO

-

4

Adjusted EBIT

121

100

EBITDA is defined as net profit before income tax expense, net financial expenses/(income) and depreciation and amortization. Adjusted EBITDA is defined as EBITDA as adjusted for income and costs, which are significant in nature, but expected to occur infrequently.

(Euro million)

For the three months ended March 31,


2016

2015

Net profit

78

65

Income tax expense

34

33

Net financial expense/(income)

9

(2)

Amortization and depreciation

57

60

EBITDA

178

156

 

(Euro million)

For the three months ended March 31,


2016

2015

EBITDA

178

156

Expenses incurred in relation to the IPO

-

4

Adjusted EBITDA

178

160

Adjusted EPS represents EPS as adjusted for income and costs, which are significant in nature, but expected to occur infrequently.

(Euro million)

For the three months ended March 31,


2016

2015

EPS

0.41

0.34

Expenses incurred in relation to the IPO

-

0.02

Adjusted EPS

0.41

0.36

Net Industrial Debt: defined as total Net Debt excluding the funded portion of the self-liquidating financial receivables portfolio, is the primary measure to analyze our financial leverage and capital structure, and is one of the key indicators used to measure our financial position.

 (Euro million)

Mar. 31,
2016

Dec. 31,
2015

Net Industrial Debt

(782)

(797)

Funded portion of the self-liquidating financial receivables portfolio

1,097

1,141

Net Debt

(1,879)

(1,938)

Financial liabilities with FCA Group

-

(3)

Deposits in FCA Group cash management pools

-

139

Cash and cash equivalents

563

183

Gross Debt

(2,442)

(2,257)

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 net cash generated from operations less cash flows used in investing activities. Free Cash Flow from Industrial Activities is defined as Free Cash Flow adjusted for the change in the self-liquidating financial receivables portfolio.

(Euro million)

For the three months ended March 31,


2016

2015

Cash flows from operating activities

112

63

Cash flows used in investing activities

(67)

(77)

Free Cash Flow

45

(14)

Change in the self-liquidating financial receivables portfolio

(17)

49

Free Cash Flow from Industrial Activities

28

35[11]

On May 2nd, 2016, at 6:00 p.m. CEST, management will hold a conference call to present the Q1 2016 results to financial analysts and institutional investors. The call can be followed live and a recording will subsequently be available on the Group 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] Assuming FX consistent with current market conditions

[3] Including an ordinary cash distribution to the holders of common shares

[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] 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; Greater China includes: China, Hong Kong and Taiwan; Rest of APAC mainly includes: Japan, Australia, Singapore, Indonesia and South Korea

[6] Includes the net revenues generated from shipments of our cars, including any personalization revenue generated on these cars and sales of spare parts

[7] Includes the 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

[8] Includes the net revenues earned by our Formula 1 racing team through sponsorship agreements and our share of the Formula 1 World Championship commercial revenues and net revenues generated through the Ferrari brand, including merchandising, licensing and royalty income

[9] Primarily includes interest income generated by the Ferrari Financial Services group and net revenues from the management of the Mugello racetrack

[10] Excluding expenses incurred in relation to the IPO

[11] Q1 2015 industrial free cash flow included a Euro 44 million one-time cash in-flow related to a partial reimbursement by Maserati of its inventory in China

SOURCE Ferrari NV