Stephen Reitman: Very clear. Thank you very much.
Benedetto Vigna: Thank you, Stephen.
Operator: Thank you. We will now take the next question from the line of Anthony Dick from ODDO BHF. Please go ahead.
Anthony Dick: Yes. Thank you. Just a follow-up question on the HP title sponsorship. And so quite a significant partnership you’ve signed there. And so I was just wondering how that affects the profitability profile of the F1 business. Is this something that could actually improve the profitability of the business or is it just made largely to cover any cost increases that you might expect in the coming years, maybe especially in 2025 with likely some higher wage expenses? And then a second question on the paint shop. Just wondering if you could update us on the development of the paint shop and what kind of investments and ramp-up could we expect after that new building? Thank you.
Benedetto Vigna: Okay. The first question, yes, it improves. Very simple answer. The second, the paint shop, yes, we laid down the foundation in the last quarter, in Q1. And let’s say, the total investment is in the — is a part of the investment plan we declared to you two years ago. You remember, we said Euro 4.4 billion.
Antonio Picca Piccon: 2022 to 2026.
Benedetto Vigna: Yes, over five years, out of which, let me say, Euro 1.1 billion was for infrastructure and the paint shop as E-building are part of this Euro 1.1 billion over the five year cycle. So, nothing new, Anthony. It’s — we are moving according to the plan. The E-building will be announced next month as per plan and the paint shop started in Q1 as per plan. And the whole is part of this basket of Euro 1.1 billion.
Anthony Dick: Thank you.
Operator: Thank you. We will now take the next question from the line of Martino de Ambroggi from Equita. Please go ahead.
Martino de Ambroggi: Thank you. Good afternoon, everybody. Sorry to bother you on the profitability in Q1 and customizations, but you mentioned that customization was higher in Q1 than the 19% projected for the full-year. Am I right in assuming 21% first? And second, you also mentioned the higher is the price, the lower is the customization?
Benedetto Vigna: Martino, can I just stop you on this one just to avoid any misunderstanding? We guided the market to 19% for the full-year. And I just said in Q1, we are slightly above 19%. So that it’s not significantly different, okay?
Martino de Ambroggi: Okay. And the second part always on this question is, you mentioned that the higher is the price, the lower is the customization as a percentage of sales, but you also mentioned that the –?
Benedetto Vigna: It’s a simple math fact.
Martino de Ambroggi: Yes, yes. But you also mentioned that the Purosangue is ramping up and the Daytona had a higher contribution in Q1 than the rest of the year. I remember you mentioned in the previous call Daytona was expected to deliver 60 units in this quarter, so maybe it was higher. So — and the two things together show that probably it is not in this quarter that the relationship, the higher is the prices, the customization for the overall picture. So I don’t know if –?
Antonio Picca Piccon: Benedetto, maybe I can…
Benedetto Vigna: Yes, you take it, you’re right.
Antonio Picca Piccon: You’re right in the sense that the first quarter we had higher deliveries of the Daytona and the Purosangue is ramping up now global distribution, but it’s not yet at 20%. But well, when we said at the beginning, we are guiding to 19% average, obviously, take into account that we do not have full visibility of personalization over the rest of the year, because the decision on personalization is taken by the clients towards the end of this waiting time a few months before delivery. So, it’s actually an assumption, the one. We are not in a position to project on a precise math for the following quarter, particularly as we go towards the end of the year. I think 19% an average is a fair assumption.
Martino de Ambroggi: Okay. Thank you. And the second question is on costs. I’m probably referring to the previous question on HP sponsorship, am I right in assuming it is offsetting the Hamilton contract and just to have an idea of the Formula 1 contribution going ahead regardless of the ranking you will have this year, which is probably higher than last year?
Benedetto Vigna: We said before, Martin, it improves. This was the same question that we got, know, so…
Martino de Ambroggi: No, but the Hamilton contract in the middle, I know you do not disclose the precise figures and so on, but I suppose this, it helps to cover the Hamilton contract that will come next year?
Benedetto Vigna: No, no, but your answer — your question is very clear. And our answer, yes, it improves. We don’t disclose detailed [indiscernible], the plus and the minus or the equal, but it improves.
Martino de Ambroggi: Okay. Thank you.
Benedetto Vigna: Thank you, Martino.
Operator: Thank you. We will now take the next question from the line of Gianluca Bertuzzo from Intermonte SIM. Please go ahead.
Gianluca Bertuzzo: Hi, everybody, and thank you for taking my question. I’m sorry to bother you on the partnership with HP. Are we talking about triple-digit sponsorship here, such as the previous longstanding title sponsor? And second and third question are about the about volumes. Can we expect an acceleration of volumes deliveries throughout the year or can we assume a stable evolution? And on cost inflation, did you change expectation or the development is in line with your thinking at the beginning of the year? Thank you.
Benedetto Vigna: I will take the first two and the cost is Antonio will help us to go through. So HP, we never disclose the numbers, also because in the contract, if you see the contract we signed with all our sponsors, we cannot, this information confidential. So we cannot disclose the way the number if it is one, two, three, four, five digits, whatever, whatever measurement unit you are thinking to. The second is the volume we said since ever that we value — we give a priority value to certain volume. So, let me say, you know how many cars we did last year. We also said that the growing volume will be very limited. You see that Q1 basically we did to be precise, seven units less than last year. So, let’s say, we do not expect at all any acceleration of volume.
This is not — what a brand like us should do. And that’s also the reason why if you remember the previous question of Stephen. Stephen was saying why you have being — what is the rationale behind this strong price increase because we want to give always priority to value over volume. For the cost inflation, Antonio can add?
Antonio Picca Piccon: Oh, yes, it’s very simple. We haven’t changed our assumptions for the rest of the year actually.
Gianluca Bertuzzo: Okay. Thank you very much.
Antonio Picca Piccon: Welcome.
Operator: Thank you. We will now take the next question from the line of Thomas Besson from Kepler Cheuvreux. Please go ahead.
Thomas Besson: Thank you very much. I’d like to come back to the seasonality of earnings and talk as well about the seasonality of CapEx and free cash flow just to make sure I understood correctly. What I understood is that earnings would likely follow the shape of your deliveries for the Icona. So you likely have a better first half than the second half. I just want to confirm that. And I think you said as well that CapEx would be more linear this year than in previous years where it would have been more back-end loaded. Is that correct?
Antonio Picca Piccon: Maybe just clarify on the first one. I commented the development of the gross margin, the contribution margin, if you wish, which is dictated by the cadence of the Daytona. When you look at the entire P&L, obviously, there are other seasonality’s that cross over the top part of the profit and loss. Overall, I would not expect significant differences over time, but for probably Q3, it could be — but as it normally happens, a bit lower. With respect to CapEx, you’re right. I said usually we experience an exponential growth of capital expenditure over the course of the year. In 2024, we expect the growth to be more linear because several projects are already well advanced. We are basically finishing up on the development of the E-building and we have the ramp-up of the expenditure on the new paint shop.
Thomas Besson: Very clear. Thank you. My second question, I know you want to keep some surprises. I look-forward to visiting it, this E-building when we come there, are you already making something in it? Are we going to see something or is it just going to be for us to present us your projects in more details when it comes to both the one to every component you’re going to make there and cars or are you already manufacturing something in the building?
