Ferrari Q3 2024 $RACE (+1,23%)

Financial performance

• Net sales: Net sales increased by 6.5% to €1.644 billion in Q3 2024 compared to Q3 2023. For the nine months ended September 30, 2024, net sales amounted to €4.941 billion, an increase compared to €4.447 billion in the same period in 2023.
• Adjusted EBIT: Increased by 10.3% to EUR 467 million in the third quarter of 2024, corresponding to a margin of 28.4%.
• Adjusted EBITDA: Increased to €638 million, an increase of 7.1% year-on-year, with a margin of 38.8%.

Balance sheet overview

• Total available liquidity: As at September 30, 2024, available liquidity amounted to EUR 2.079 billion, including unused credit lines of EUR 550 million.

Details of the income statement

• Cost of sales: Costs increased to EUR 827 million in the third quarter of 2024, compared to EUR 779 million in the third quarter of 2023.
• Selling and administrative expenses: Increased to 135 million euros compared to 119 million euros in the previous year.
• Research and development expenses: Recognized EUR 212 million in the third quarter of 2024, reflecting continued investment in innovation.

Cash flow overview

• Free cash flow: Totaled EUR 338 million in the third quarter of 2024, with free cash flow from industrial activities at EUR 364 million.
• Operating cash flow: Totaled 587 million euros in the third quarter of 2024.

Key figures and profitability ratios

• Net profit: Net profit increased to EUR 375 million in the third quarter of 2024, compared to EUR 332 million in the third quarter of 2023.
• Earnings per share (EPS): Both basic and diluted EPS amounted to EUR 2.08 in the third quarter of 2024.

Segment information

• Cars and spare parts: Remained the main sales drivers, with a positive mix of product offerings and pricing strategies strengthening growth.

Competitive position

Ferrari remains a leading luxury brand, leveraging a strong product mix and personalization options to consolidate its market position and drive sales.

Forecasts and comments from management

• Forecast 2024: Management is confident of achieving its 2024 target, with net sales expected to exceed €6.55 billion and an adjusted EBIT margin of at least 27.5%.
• Growth drivers: The expected performance is supported by a positive product and country positioning as well as increasing personalization.

Risks and opportunities

• Risks: Including cost inflation, regulatory changes and potential supply chain issues.
• Opportunities: Lie in the expansion of lifestyle activities and new sponsorships in racing.

Summary of the results

Ferrari delivered a strong financial performance in Q3 2024 with notable growth in revenue, EBIT and EBITDA, supported by a solid product mix and increased personalization. The company has a solid liquidity position and management is confident to achieve the 2024 targets despite inflation and regulatory challenges.

Positive aspects

• Sales growth: Ferrari's net sales increased by 6.5% to EUR 1.644 billion in the third quarter of 2024 compared to the third quarter of 2023. For the first nine months to September 30, 2024, sales increased by 11% to EUR 4.941 billion
• Strong EBIT and EBITDA: Adjusted EBIT increased by 10.3% to 467 million euros with a margin of 28.4%, and adjusted EBITDA increased by 7.1% to 638 million euros with a margin of 38.8%.
• Free cash flow: Ferrari generated strong free cash flow from industrial activities of €364 million in the third quarter of 2024.
• Product innovation: The launch of the new F80 super sports car, which is already fully allocated, underlines Ferrari's commitment to innovation and maintaining its status as a luxury brand.
• Positive mix/price effect: The enrichment of the product mix, driven by models such as the Daytona SP3, and increased personalization contributed positively to financial performance.

Negative aspects

• Volume decline: There was a slight negative impact on volume as deliveries decreased by 2% year-on-year to 3,383 units in the third quarter of 2024.
• Increased costs: Selling, general and administrative expenses increased to €135 million in Q3 2024, compared to €119 million in Q3 2023, reflecting higher investment in digital infrastructure and brand initiatives.
• Cost inflation: Ferrari expects cost inflation to continue, which could impact future profitability.
• Racing challenges: Despite new sponsorships, racing activities were impacted due to a lower Formula 1 ranking in 2023, which could impact future revenues from this segment.
• Net financial expenses: Net financial expenses of approximately EUR 1 million were incurred in the quarter, compared to net financial income of EUR 3 million in the prior year, indicating a deterioration in the financial position.