Ferrari 2026 Q3 Results Conference Call - FERRARI NV

Explicit Guidance:

• FY2026 Revenue: Guidance upgraded; Q4 revenue growth acceleration implied to at least 9% YoY (vs. ~6% YTD), driven by higher ASPs rather than volume.
• FY2026 ASP: Expects Average Selling Price (ASP) to be slightly higher in H2 vs. H1, with Q4 ASP YoY growth to support the revenue upgrade despite volume stability.
• FY2026 Personalization: Assumed to be ~21% (exceeding original 20% target); Q4 expected to maintain elevated levels due to concentration of special versions, though expected to normalize in subsequent years.
• FY2026 FX: Full-year Euro/USD impact assumed at approximately 1.15 (blended spot and hedges); net FX headwind estimated between €150M and €200M for FY2026.
• FY2026 F1 Costs: Lower costs assumed in Q4 due to updated championship ranking (2nd place), with no material release of provisions expected beyond Q3 adjustments (a few million Euros).
• FY2027 Outlook: Confirmed "smooth and linear" growth trajectory remains consistent with Capital Market Day targets; specific volume and revenue numbers deferred until February 2027.

Business-Segment Outlook:

• Ferrari Sport Cars:
  • F80 Launch: Deliveries ramping slightly quarter-over-quarter (approx. 50 units in Q3); full global rollout expected to be "smooth and linear" without sharp acceleration in 2027.
  • Luce: All production for 2027 fully allocated (first deliveries Q4 2027); international media test drives planned for Q1 2027; client test drives to follow immediately after.
  • Special Series: Concentration of special versions continues through year-end; new physical models launching before year-end 2026.
  • Mix: F80, 849 Testarossa, and 12-cylinder families driving positive mix; 296 range deliveries decreasing as the family matures.
  • Spare Parts: Growth in volumes driven by increased car usage rates; expected to continue rising organically.
• Racing (F1 & Endurance):
  • F1: Fully focused on securing 2nd place in championship; costs assumed lower for remaining 2026 races.
  • Sailing: New 100-foot flying monohull entering final construction phase; operational hub in Livorno opening by end of 2026; 20+ patents registered.
• Lifestyle:
  • Store Expansion: Flagship store in New York opening Q1 2026; new dealer centers in Zug, Pasadena, and Riyadh already open.
  • Merchandise: Sketch Body capsule collection sold out for next year; new lifestyle collection unveiling planned for New York store.

Market and Competitive Outlook:

• Demand Trends: "Healthy demand" reported across all geographies and customer cohorts; no observed impact from affordability risks even on lower-priced models like Amalfi.
• Order Book: Order book for 2027 stands at "28 and more" (context implies 28,000+ units based on industry norms), with further volume to come.
• Residual Values: Reported as "very sound" across models and geographies, including plug-in hybrids; education initiatives and hybrid technology advantages driving improved perception.
• Supply Chain: Carbon fiber supply constraints resolved via secured contracts; no longer a limiting factor for personalization.
• Pricing Strategy: ASP expected to remain slightly elevated in H2 2026 vs. H1; no plans to normalize ASP growth immediately in 2027, maintaining focus on premium mix.

Macro / Industry Outlook:

• Foreign Exchange: Management expects continued benefit from a favorable Euro/USD spot rate (current spot < 1.15); hedging policy maintains ~70% coverage for the next 12 months on a rolling basis.
• Commodity/Supply: No anticipated supply headwinds for personalization materials (carbon, paints); capacity for in-house paint shop expansion proceeding.
• Regulatory/Industry: Acknowledges Formula One budget cap driving development costs upward with limited management control.

Strategic Initiatives:

• Capacity Additions: New paint shop approaching completion (2026 opening); capacity focused on supporting personalization and new model introductions.
• Brand Expansion: "Three sources" strategy (Sports Cars, Racing, Lifestyle) execution continuing; global rollout of new corporate identity in dealership networks.
• Product Development: Accelerated R&D/DNA expenses expected to grow smoothly, tied to new model lifecycle starts; F1 development costs dictated by evolving budget caps.
• M&A/Capital Allocation: Net cash position €219M post-share repurchases in Q3; focus remains on disciplined execution of the business plan.

Risks and Headwinds to Outlook:

• Model Changeover: Deliberate slight volume reduction in Q3/Q4 to ensure smooth transition between model life cycles (e.g., F8, 296, Roma Spider).
• FX Exposure: Despite favorable spot rates, remaining unhedged portions and "edges" (difference between spot and forward rates) could impact results; historical negative variance persists.
• F1 Cost Uncertainty: Dependency on championship ranking assumptions and potential changes to F1 budget caps.
• Special Version Concentration: Elevated personalization rates in 2026 are driven by specific one-off series; future years may see normalization.

Management Tone on the Future:

• Confidence: High confidence in strategy; "North Star" is consistent execution of the Capital Market Day plan.
• Differentiation: Management emphasizes being a "unique company" (luxury + technology) rather than a traditional luxury auto firm; stresses emotional connection and client experience as key differentiators.
• Guidance Stance: Firmly upholding long-term growth trajectory while adjusting short-term drivers (FX, mix) to reflect current realities; "smooth and linear" delivery pace remains the priority for 2027.

Miscellaneous:

• Luce Auction: First-ever Ferrari Luce auctioned for $40M (Pebble Beach); proceeds donated to a US legal educational project.
• Brand Rankings: Ferrari climbed 3 places in Interbrand's Best Global Brands 2026, retaining position as most valuable Italian brand.
• Capital Expenditure: Capex in Q3 focused on product and infrastructure development, including the new paint shop.