Ferrari N.V. (NYSE:RACE) Q4 2022 Earnings Call Transcript

George Galliers: The first 2 questions, I just wanted to clarify a couple of points from earlier on the call. So earlier, you did mention that the Daytona would be relatively evenly distributed. Can you just confirm, is that over 2023 and 2024? Or does that also include 2025? The second question was just on the specials, at 3% of 2022 volumes that equates to around 400 units. Is that the right kind of level to think about for this year as well? Or as you ramp the Competizione Aperta,should we expect that number to be higher? And then the last question I had was just with respect to the other line in 2022 Obviously, it was a negative, and you did mention some nonrecurring items. Could you perhaps just quantify how large the nonrecurring items were there, and any detail on what they relate to would be much appreciated?

Benedetto Vigna: George, I will leave the last one, the nonrecurring items to Antonio. I will manage the other 2 related to the product. Well, just is important clarification. When we are talking about any new model going production, clearly, there is a ramp-up phase. And then there is a stabilization. This is true for all the products we do. So in these years, we will ramp up these new cars, and we will have an increase and then a stabilization over the course of years. When I talk about every distribution, I talk about every distribution in quarters when the production is stabilized. This is the year where we run the Daytona and also the same applies to Purosangue as your colleague asked before. For the nonrecurring items, Antonio, you can take it.

Antonio Piccon: The nature of that — first, do not forget this is a variance. So it means the difference between the nonrecurring of this year and the nonrecurring of the previous one. Last year, we had some positive nonrecurring mainly related, if I remember all of them correctly to the release on some provisions in respect of previous recall campaigns or excess provisions on that. Release of provisions in respect of bad debt that were previously accrued. And this year, particularly in the last quarter, has been our nonrecurring costs in respect of the organization of the company. So that is it. All in all, throughout the year, I think it amounts to — in terms of the difference is a negative of EUR 30 million year-over-year.

Operator: And your next question comes from the line of Adam Jonas from Morgan Stanley.

Unidentified Analyst: This is Matthias on for Adam. But within your industrial free cash flow outlook, you highlighted some negative working capital and rising CapEx impact. Can you dimension out each of these for us? So in terms of like how much CapEx and what’s the order of magnitude on the working capital outflow?

Antonio Piccon: Sure. I mentioned earlier on that capital expenditure for 2023 is targeted to be above EUR 800 million, slightly above that number, so slightly higher compared to 2022. Working capital is expected in its broader meaning, that is including the — I mean the lower cash-in coming from the fact that we had collected deposit in advance in 2022 is in the region of EUR 100 million or so.

Unidentified Analyst: Great. And then as a follow-up, for the Purosangue, you lost some cost inefficiencies in the prior year, but there will also be some ramp-related costs this year, I presume. So it’s not really clear whether the year-over-year impact on adjusted operating margins is going to be positive, negative or neutral. So how should we think about the Purosangue impact on margins for this year?