Ladies and gentlemen, thank you for standing by, and welcome to the Ferrari Third Quarter 2020 Results Conference Call. At this time, all participants are in a listen only mode. After the presentation, there will be a question and answer I must advise you that this conference is being recorded today, Tuesday, November 3, 2020. And now I would like to hand the conference over to your speaker today, Nicoletta Russo. Please go ahead.
Thank you, Martin, and welcome to everyone who's joining us. Today's call will be hosted by the Group CEO, Louis Camilleri and Group CFO, Antonio Piccapiccon. All relevant materials are available in the Investors section of the Ferrari corporate website. And at the end of the presentation, we will be available to answer your questions. Before we begin, let me remind you that any forward looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the safe harbor statement included on Page 2 of today's presentation, and the call will be governed by this language.
With that said, I'd like to turn the call over to Luis.
Thank you, Nicoletta, and welcome, everyone. We are pleased that you have joined us. All in all, I would characterize our 3rd quarter results as robust, particularly in terms of our income performance. As Antonio will describe shortly, our volume and top line performance was affected by the simultaneous impact of the end of the life cycle of certain models and the ramp up of the new ones, particularly the SF90 Stradale and the Ferrari Roma on our production planning. Hence, deliveries were affected by supply and certainly not demand.
Absent any potential dislocation caused by the resurgence of the COVID-nineteen pandemic, we're now confident that we will meet the top end of our previously released guidance for the full year across all measures. This implies a very strong 4th quarter, reaching record quarterly levels in terms of absolute volumes, revenues and EBITDA. Solid proof that we are now running on all cylinders and have overcome the embryonic issues that we and our suppliers faced with the industrialization phase of the SF90 Stravale. The key dynamics of our business model remain exceedingly strong and the momentum I referred to back in August remains in place with a record order book, robust residuals and the low level of cancellations. Indeed, orders received this October exceeded the average pre COVID first quarter monthly intake by some 30% and were essentially in line with the average that we received in the Q4 of last year, which witnessed several new models.
This is testament to the success of the digital activities that were implemented and much more recently, the very significant number of individual test drives that garnered record request and attendance levels. Clearly, a key watch out is the effect of any further lockdowns. For example, today in the United Kingdom, all showrooms have been closed, and therefore, some 81% of our dealers in Europe have now closed their showrooms and that reflects 74% on a weighted basis. We also are somewhat concerned that the test drives and dynamic activities that we had planned may be somewhat curtailed or even aborted. The quarter witnessed the launch of the latest addition to our family of models, the Portofino M, M standing for Modificata, with a redesigned powertrain, a brand new 8 speed gearbox and numerous other design and technical upgrades.
In keeping with the times, it is the first ever Ferrari to be previewed exclusively through vivid digital activities that have triggered very positive feedbacks to date. We are pleased with the reception that the Ferrari Roma continues to generate across the world. I'll particularly note today is the very strong orders emanating from China, Japan and Korea. The fact that it is attracting a higher percentage of new to Ferrari customers than the Ferrari Portofino and the younger cohort all goes well for the future. China in particular is exciting.
Orders are currently running at 50% above the Portofino in the equivalent time span since their respective launch. We're also encouraged by the demographics of the SF90 Stradale, as in terms of its current order book, the new to Ferrari customers are the youngest across all the models that we offer. Whether or not this is related to the fact that it's our 1st range hybrid model remains to be determined, but it is certainly an exciting prospect. This latter point, hybridization, allows me to segue to a matter that I know is of considerable interest to everyone on this call, namely carbon neutrality. As I have alluded to in recent calls and answer to direct questions on the matter, we have undertaken a significant company wide exercise to determine our total carbon footprint.
While many focus on carbon emissions alone, we firmly believe that this is only part of the equation, especially with regard to our products that on average only clock up very low annual mileage. We have studied the entire carbon footprint from cradle to grave or more accurately from the mine to the effective end of use across our entire activities, including Formula 1. This allows us to focus on the critical elements that compose our footprint, which in all honesty have led to some surprising findings, not least with regard to the impact of specialty metals and battery components on our overall footprint. It is my sincere hope that prior to the end of next year, we will be in a position to publish a 3rd party certified Ferrari carbon footprint and a clear plan to meet our ambitions to ultimately become carbon neutral through actions taken directly and indirectly. Although it represents a very small part of our footprint, this plan will also include Formula 1 as we work with all the interested parties on the power unit of the future, currently slated to come into VIGR in 2026.
Before I hand over the call to Antonio, I need to correct a statement I made just in case. 81% of our dealers are open, not shut. Sorry about that. So now I'll hand it over to Antonio, who will review our quarterly results and guidance for the full year.
Thank you, Louis, and good morning or afternoon to everyone who is joining us today. Starting on Page 4, the Q3 of 2020 witnessed the resilience of our core business, leading to a very solid set of results across all metrics, which compares well with peers in the luxury domain. The core business, excluding Formula 1, branded related activities and engines for Maserati, performing in line with our plans and our margins were enhanced by the full deployment of the cost containment measures adopted since last March. Benefited from the improved forecast of F1 revenues received from the commercial right order, which nevertheless remained significantly down compared to last year. Our shipments in the 3rd quarter were 2,313 units, 6.5% less than in Q3 2019.
Group net revenues were EUR 888,000,000 down 3% compared to prior year, outstripping our shipment variance, thanks to the deliveries of the Ferrari Monzas SP1 and SP2, which enriched our mix. EBITDA, and please note that in this quarter, all adjusting metrics coincide with the reported ones since there were no unusual items, came in at EUR 330,000,000, up 6.4% with a robust margin of 37.2%. EBIT was EUR 222,000,000, essentially in line with prior year, embedding higher D and A. Net profit was €171,000,000 a slightly increase versus Q3 2019 and resulting in a diluted EPS of €0.92 compared to €0.90 of prior year. Industrial free cash flow for the quarter was back into positive territory, totaling €77,000,000 Moving to Page 5.
You can see the details of the Q3 2020 shipments, which decreased 6.5%, driven by the cadence of the company's full year production plan with some models gradually phased out and the new ones ramping up. I remind you that our full year production plan projects a recovery of 500 units out of the 2000 lost following the 7 week production suspension due to the COVID-nineteen pandemic. This obviously assumes that our manufacturing plants will remain unaffected by measures that may be taken to combat the pandemic. Going back to the deliveries of the quarter, the V8 models were down 12.8%, and on the other hand, the V12 were up 15.4%. The F8 Spider and the A12 GTS are in the ramp up phase, reaching mainly EMEA, gradually offsetting the 488 Pista family the Ferrari Portofino that arrived at the end of their life cycle.
The Ferrari Monzas continue to be delivered as the return is scheduled. As a consequence, quarterly shipments were affected by the deliberate geographical location driven by the phase in pace of individual models, resulting in EMEA increased by 12.7%. Americas declined by 34.7%. Mainland China, Hong Kong and Taiwan posted a decrease of 25.2%, also considering that the Q3 of 2019 was still somewhat flattered by the anticipation of our sales before the introduction of the new emission regulations, while deliveries to rest of APAC were in line with prior year. I remind you that the SF90 Stradale and the Ferra gueroma will start the deliveries in Q4 2020.
Actually, they started deliveries in Q4. Finally, within the end of the year, we will unveil an additional new model, the 8 out of the 15 planned over our planned period 2018, 2022. Turning to Page 6. You can see here display the walk of our group net revenues for the Q3 of 2020. Revenues from cars and spare parts were up 2.4% at constant currency.
Such growth, in spite of the volume decline, reflects the positive in mix price, mainly thanks to the Ferrari monger SP1 and SP2. This was partially offset by the phase out of the 488 Pista family, which in turn implies a lower contribution from personalizations from a volume perspective. Also, the personalization rate on cars and spare parts revenues was slightly lower than last year. Engines revenues were substantially in line with prior year. Revenues from sponsorship, commercial and brand were down EUR 43,000,000 significantly impacted by the COVID-nineteen pandemic, resulting in a lower number of Formula 1 races and corresponding lower revenue accrual as well as reduced in store traffic and museums visitors.
For the sake of clarity, our revenue accrual for F1 Sponsorship and Commercial was based on full year estimates updated in the 3rd quarter and improved compared to the first half of twenty twenty. Currency, including translation and transaction impact as well as foreign currency hedges, had a minor positive contribution of EUR 2,000,000, mainly the U. S. Dollar. Moving to Page 7.
Let me review the change in our EBIT, which was EUR 222,000,000 essentially in line with prior year, minus 2.1 percent or minus 4.1 percent at constant currency, with EBIT margin at 25%. The negative variance at constant currency remains mostly the COVID-nineteen impact on Formula 1, partially offset by the strength of the core business. More precisely, volume drove a negative variance of EUR 19,000,000 due to reduced deliveries. Mixed price variance was positive for EUR 46,000,000, thanks to the Ferrari Mondo SP1 and SP2, partially offset by the lower contribution from personalization programs due to the decrease of shipments and the gradual phase out of the 488 Vistra family. Industrial costs, research and development costs decreased EUR 5,000,000 due to the spending cadence, particularly in Formula 1 racing activities for the current season, partially compensated by higher depreciation and amortization as the production lines for the new models started being operated.
SG and A decreased EUR 18,000,000, reflecting fewer marketing initiatives as well as cost containment measures. Other was down €60,000,000 due to the already mentioned COVID-nineteen impact on the F1 racing calendar as well as lower traffic for brand related activities. The total net positive impact of currency was €5,000,000 year on year. Turning to Page 8. Industrial free cash flow for the quarter was EUR 77,000,000 positive.
The improvement in the quarter was essentially driven by the EBITDA growth, partially offset by the continuous investment to fuel our long term product development with capital expenditures of EUR 158,000,000 and the adverse working capital impact due primarily to higher raw material and component inventories as well as the reversal of the Ferrari Monter ST1 and ST2 advances already collected in 2019. Net industrial debt as of the end of September was €715,000,000 compared to EUR 776,000,000 as of June end. At the end of the Q3 2020, total available liquidity, including undrawn committed credit lines for EUR 700,000,000 was €1,879,000,000 which compares with approximately €1,250,000,000 as of last end of December. Moving to Page 9. On the back of the 3rd quarter results, we are revising our guidance to the top end of the range communicated in August, assuming trading conditions remain unaffected by further restrictions or impact from the COVID-nineteen pandemic that may help the pace of production and deliveries.
Net revenues greater than EUR 3,400,000,000 to reflect a drop in deliveries of nearly 9% compared to 2019 the positively revised assumption on the F1 championship the pace of restart of our brand activities and demand for engines from Maserati. Adjusted EBITDA at approximately EUR 1,125,000,000 with percentage margin of 32.5 percent adjusted EBIT close to EUR 700,000,000 targeting an EBIT margin of 20%, which reflects the higher D and A following the CapEx increase of most recent years adjusted diluted EPS of circa €2.8 per share, assuming a 20% tax rate, substantially in line with 2019 industrial free cash flow in the region of EUR 150,000,000 with capital expenditures of around EUR 750,000,000 It goes without saying that we are not immune to what happens around us, and you may be assured that our top priority remains to protect our people. However, barring any restriction that would inhibit our ability to keep operating diligently as we are currently doing, we believe we are well positioned to reach the targets that I've just outlined, targets that we consider remarkable in such a disruptive year. With that said, I turn the call over to Nicoletta.
Thank you, Antonio. Martin, we are now ready for the Q and A
And your first question today comes from the line of John Murphy of Bank of America. Please go ahead. Your line is now open.
Good afternoon, everybody. I just want to ask a first question on product cadence, because it doesn't seem like there's been any beat skips here whatsoever on product launches. So I'm just curious if you can confirm that and if you can just remind us how the order book builds around new product launches because it seems like that's very, very important in the book building or the waitlist building.
Sorry, John. I'm not sure I understood your question. Product cadence relative to new models?
Yes. Given the disruption around COVID, has anything changed or been delayed on your product cadence or your product launch cadence?
In terms of actual launches, I. E, presentations, it hasn't really changed. As we said back in August, the COVID did disrupt our supply chain and the industrialization phase, particularly the year of the SF90. So that's been somewhat delayed relative to our beginning of the year plans. As you know, for COVID, we've also said on at least two occasions that we've been prudent in terms of our investments and certain models going forward have been delayed by 3 months and others by 9 months.
So nothing really very material. There have been delays, John. I don't know if that answers your question.
That does. And the correlation with those launches and the wait list appears to be relatively high. So I'm just curious, it sounds like you're getting record orders for the wait list. But I'm just curious, has that changed anything with the wait list, where it's either shrunk or maybe grown as people are willing to wait longer?
Well, the wait list has obviously increased, and that's something that we will need to address, particularly on the models where we have rather ambitious plans in terms of attracting new to Ferrari customers. And I think those are somewhat vulnerable to very long waiting lists as opposed to normal customers who are acclimatized to a longer waiting list. But essentially, I think we enter 2021 with a very strong order book. And as Antonio just mentioned, barring any dislocations because of the pandemic, we should have a pretty good year, obviously, off a weak base, but nevertheless, a pretty strong year.
Okay. That's helpful. And then
the second question just around the
EBITDA margins. It's hard not to get excited when we see 37.2%. I think that's one of the highest, if not the highest that you guys have ever printed at least in we have public data. I'm just curious, you think about the puts and takes in the quarter and as we go forward, what would actually potentially not be repeatable either on cost containment or mix, or is this something we could think about as a potential for the future on EBITDA margin?
Well, it's driven by a very strong performance in the core business, the car business, where the EBITDA margin, I'm looking at Antonio, but I believe it was above 45% in terms of the core business. So that's driven a lot by mix and particularly by the Monza. As you know, in the Q4, we will face a comparison where we had Monza's last year. So that huge uplift won't be there. But it will still nevertheless be pretty strong because of the advent of the SF90, the full ramp up of the 8 12 GTS that is performing strongly.
So we feel very good about the margin. I think from the Maserati perspective, as that becomes lower, that obviously has a favorable impact on our margin, because you can imagine that the margins on the Maserati engines are quite low. Brand margins are high. They're having a very difficult year for obvious circumstances. And hopefully next year, we'll be able to really start implementing the plan that we had announced, I guess, this time last year.
Okay. That's very helpful. And then just lastly, when you talk about mix, you keep highlighting the positive mix from the Monzas, which I certainly appreciate. But when you look at the V12 versus the V8 mix with V12 is up 15.4%, V8 is down 12.8% on unit shipments, Isn't that a significant driver of positive mix as well? And I'm just curious why you haven't sort of stated that as part of the positive mix?
Well, because for simple reason, the Portofino and the Pista are ending their life cycles and they're being replaced by the Roma and the Portofino M. So those will be coming up and being part of our volumes. So that's why I didn't mention it.
Okay. But in the quarter itself, I mean, that was a pretty definitely Yes.
In the quarter, absolutely. But I thought you were looking more in terms of the future.
Yes. No, I'm just trying to understand because it seems like that simple, not simple, but I mean that straightforward comparison of V12 versus V8 in the quarter was very, very strong. I mean obviously includes the Monza to some degree, but it wasn't highlighted as part of the significant driver of positive mix in the quarter as explicitly as the months. And so I was just trying to understand if I was missing something there.
Well, because the margin on the Pista and Pista Spyder in particular is pretty attractive. I think that's what you're missing in your equation.
Got you. Okay. All right, great. Thank you very much. I appreciate it.
Thank you.
Thank you. Your next question today comes from the line of Adam Jonas of Morgan Stanley. Please go ahead. Your line is now open.
Hey, Louis, I got a bit of a longer dated strategic question for you on EVs. So if I look at your COGS, cost of goods sold on a per unit basis for Ferrari, we get close to €150,000 per unit. And I'm thinking roughly half of that, could be related to the power unit, the engine, transmission, fuel delivery, exhaust and all the supporting mechatronics and electronics. Now I'm thinking if this is transitioned hypothetically to 100% BEV power unit, including the battery, e motors, charger inverters, etcetera, that this would be substantially less complex, less exquisite and lower variable cost per unit compared to today's ICE powertrain. Could this create a very large cost efficiency opportunity for Ferrari, while still providing your customers with the highest performance experience that they would expect from a Ferrari?
Please tell me, Louis, where I may be wrong with this logic.
I understand where you're going. I don't necessarily agree with you. I think that the way you said it, less complex and less exquisite is where you potentially derail because in fact to achieve the objectives you just mentioned, which is to retain the Ferrari DNA, the EV will actually be significantly more complex than you are assuming. And that's clearly something that we're working on. But just to have a standard EV and put the Cavallino on it is not what we're all about.
So the day we come out with an EV or what we call a BEV, it will be a pretty complex machine. And furthermore, there are a number of elements that we will have to put in, which are very costly. If I look at the SF90 Stradale and the cost aspects of the electric aspects of the hybridization and the electric axles and the front axle, those are pretty expensive considerations. Having said that, over the longer term, and that's what we're talking about, you would hope that there would be cost savings. I'm not sure they would be as extravagant as you imply, but there should be cost savings longer term as battery technologies improve as well.
However, my own sense is that to sort of say 100% electric, that's pushing things. I really don't see Ferrari ever being at 100% EV and certainly not in my lifetime will it reach even 50%.
That's great color. Thanks for that. Just as a follow-up, I don't know, is Michael Leiters on the call today?
No, he isn't, but ask away.
You can do your best Michael Leder's invitation. How's your German accent?
I can't. I can't. Okay.
Okay. Remind us and I know you've addressed it before, but I imagine that this is evolving, particularly as other more internal combustion engine manufacturers move to EVs, not 100%, but maybe 50%. Remind us how Ferrari is thinking about the sound of a Ferrari without an exhaust system? And I didn't know if you had if you could maybe address how you addressed it on the SF90 Stradale. I might have missed it when it's in e mode, just to give us some things to think about because I think in your own materials, you mentioned sound is the essence, the sexuality, the passion, the whole spirit of the brand.
It starts with sound and that's got a lot of investors' attention? Thanks.
Yes. And that's one element that we are working on. Obviously, for competitive reasons. I'm not going to give you the details, but that's something that we are quite comfortable that we can achieve. And it's really the depth of the sounds and the gradation of the sound, that's key.
But you're right, sound is in terms of all the consumer research we have is one of the key elements. And clearly, it is a big priority. We've done a lot of work on that and we feel comfortable that that is certainly one of the aspects that we can address.
Thanks, Louis.
Thank you.
Thank you. Your next question today comes from the line of Susie Tibaldi of UBS. Please ask your question.
Hi there. Thank you so much for taking my questions. So I have a few. So one just one clarification, because you are still planning to make up for these 500 units this year. So does it mean that you're still targeting minus 9% volume decrease for the full year, like you mentioned in the previous call?
Correct.
Okay. So basically, it implies that in Q4, we're going to see quite strong double digit growth in terms of volumes, which
Correct.
I guess
that's what implied. Okay. When it comes to the EBITDA margin also that is implied in your guidance, As you mentioned, clearly, Q3 was a little bit of an exceptionally strong level because of the Monza. But I was also wondering if by any chance there were any one offs maybe within OpEx that drove such strong margin expansion? And what exactly is happening there in Q4 because the guidance is implying a margin construction of 200, 300 bps versus last year?
Yes, I think it was really driven by mix, as we said in the first question. Mix was very, very strong in Q3 and will continue to be pretty strong in Q4. So that's what's driving it. I don't think there's much I can add. There's no other one timers in there that distorting the picture in one way or another.
Okay. And when it comes to these lockdowns in Europe, which obviously we have very low visibility, if these lockdowns are just limited to a few markets and you say there is 80% of dealerships are open, Are you able to sort of shuffle volumes within other countries in Europe? Because I suppose when it comes to Q4 and you will have the initial shipments of the Stradale and the Roma, typically, they will be directed to Europe. So if a large portion of Europe is closed, how would you react to that? Because I guess, deliveries to U.
S. Or Asia, they usually come with a least 6 month lag. So how do you think that you can manage the situation in terms of lockdowns in Europe?
Well, it very much depends on the actual regulations. So the U. K, the showrooms are closed, but deliveries continue. So in terms of deliveries per se, as rules stand today, they can continue. The showrooms, however, have an impact on the ability to drive orders, obviously.
But I think as long as rules stay the way they are and the UK probably has the most stringent at the moment, deliveries are possible. Furthermore, as you noticed in Q3, Europe's volumes were pretty strong, potentially in anticipation of issues in Europe. And I would say that in the 4th quarter, we'll have stronger performances in other geographic areas. So we do have some flexibility in terms of logistics and end markets, which I think was the genesis of your question.
Yes, that's very clear. Thank you so much.
Thank you very
much. Thank you. Your next question today comes from the line of Giulio Pescatore of Exane. Please ask your question.
Hi, everyone. Thank you for taking my question. Just the first one, I mean, it has changed a lot of change since we're all dining together in your Maranello factory in 2018. So I'm just wondering if you are willing to reconfirm the 2022 targets or if there are any changes that you might have to make to those targets on a headline basis, I guess, more than on a margin basis?
Well, Giulio, as you said, a lot of things have changed since 2018, not least of which has been this very sad and destructive COVID, and we're now seeing a resurgence, as you know. I think that it's a bit early to talk about 2022 other than to say that what I said earlier in terms of our plans, we have delayed a number of models by 3 months and some by 9 months. So obviously, that has a longer term impact going forward. But we still very much remained focused on the plan that was given, but some models will slip, others will be delayed by a quarter or 2. But I mean, next year, we should have a strong year and I think that will form the base going forward and we'll give you obviously more details relative to 2021 at our next call, which will be in February, at which point we'll have a much better sense of where the world stands in terms of this COVID, which, regretfully, does create a lot of uncertainty.
Okay. Thank you. Very clear. Then the second question on your hybrid targets. Still about 2022, you had a 60% hybrid mix target by 2022.
And I think you're planning also to have a full hybrid range of mid engine like sport cars by 2021. Are those targets still valid? And what does it mean for the Tributo?
Well, again, we are pushing for hybrid. The SF90 Stradale is obviously the first one. There will be others. Some may be slightly delayed, but we're talking 6 to 12 months, we're not talking 2 or 3 years, Giulio. But clearly, we want to address hybridization because we think it has huge benefits.
But I think also that when you see the carbon footprint, people tend to just look at emissions. We look at the entire carbon footprint and a hybrid relative to an internal combustion engine, it's not necessarily that much more favorable. So it's something we're working on very carefully.
Yes. And I totally agree with you that people should be looking more at carbon footprint, but it doesn't seem to be the case, at least when we look at regulatory decisions at the local level. For example, if we look at the French model scheme that has basically been penalizing you with a €20,000 fine this year going up to €30,000,000, €50,000 in 2022. I mean, how are these penalties affecting you, your sales into this market? And are you afraid of more countries kind of adopting a similar type of scheme because, of course, all of your cars except for the S-ninety emit more than 200 grams of CO2?
Yes. You're right. They're adding, I guess, the sort of excise taxes. I think the whole car industry needs to really educate the regulators because to look at emissions and even then to look at just static emissions, I think is wrong from a scientific perspective. And the car industry needs to do a much better job at explaining the entire carbon footprint.
And I think they will do that going forward. We Ferrari have a role in that and we obviously have to do our job. And I think, as I said in my opening remarks, to come out with a detailed carbon footprint will form the basis to really start explaining the various aspects. Because if you take a V12 Ferrari that only runs 3 1,000 kilometers a year, probably has less emissions than a very small car that runs every day.
Thank you. Your next question today comes from the line of Monica Bossio of Intesa Panopolo. Please ask your question.
Yes, good afternoon. It's Monica Boccio from Intesa Sanpaolo, and thanks for taking my questions. The first one is on the personalization. Antonio told that they were a little bit lower on the quarter. Could you please quantify the level and reasonable projection for the full year and the next one?
And the second is on the CapEx. Do you still confirm €750,000,000 of CapEx by year end? And the second question is more in general. Could we please come back to the statement regarding the enlargement of the customer base and the fact that there is a high penetration of younger people. I would like to have more color on this maybe also a view in 3 years' time, if it's possible?
Thank you very much.
Maybe I'll start first, Monica. On personalization, we were just a touch lower in percentage terms compared to last year, which was, if I remember correctly, above 20%. And in terms of capital expenditure, I said EUR 750,000,000 more or less approximately at this stage. What's your question in that respect? I'm sorry.
The question the second question was on the enlargement the customer base. I heard in the initial statement that the penetration of
I got your question, Monica.
Thank you. Hi.
Clearly, one of our important strategies going forward is to attract new customers and ideally younger customers and also to expand our gender balance. So to attract women as well, which today is still a very low proportion of our sales. I think we've made progress, as I mentioned in the opening remarks, and it is something we're very much focused on. So far, the numbers are moving in the right direction. And I think the various activities that are in place predominantly in terms of digital activities, but also all the test drives.
And generally, the whole positioning of some of the models will attract new customers and hopefully younger customers. Roma is one example. The SF90 has attracted young customers as well. As I said, that may be linked to hybridization, we will see. But it's something we're very focused on and there has been progress and I am confident that we will continue to progress.
And I think if you look at our market shares worldwide in the segments in which we participate, we are gaining solid share points across most geographies. So that in itself, I think is a good sign. Does that answer your question?
Yes, perfect. Thank you very much. Thank you.
Thank you.
Thank you. Your next question today comes from the line of George Galius of Goldman Sachs. Please ask your question.
Thank you for taking my questions. First question I had was just with respect to the dealers being closed. And you mentioned in the U. K. That you can actually still deliver cars.
Based on the last lockdown, do you find that your customers are happy to take delivery or indeed want to take delivery without having the full showroom experience? Or in general, is the showroom experience part of the excitement and the thrill of collecting your brand new Ferrari? The second question I had was just on the catch up of the 2,000 units lost this year. Obviously, you've referenced the 500. But in theory, and this is really hypothetical, not asking if you will do, but in theory, if you wanted to catch up the remaining 1500,000,000 all in 2021, are there any capacity issues that would prevent you from doing so?
Or is that something you could manage with incremental shifts or change in shift patterns? Thank you.
Thank you, George. I think our customers would rather have delivery than to wait. I think the whole showroom experience, certainly part of it is the delivery, but I think the real excitement is the order and all the elements of personalization, choosing the colors and all the various elements. I think the showrooms from that perspective are really part of the whole thrill of purchasing a Ferrari. I think that most people, once the car is in the dealer, they want to see it and they want to enjoy it and drive it.
So certainly nobody is complaining about the fact that they're getting a delivery without seeing it in the showroom. The showroom is more to get the thrill of the order and to trigger the orders. So the concern there is relative to orders going forward, rather than deliveries. I don't know if that addresses one of your questions. It's always difficult to talk about hypotheticals because we are there are capacity constraints.
And we will focus our volume very much based on the waiting lists, the mix of products on that waiting list, mix in terms of both models and geography. So I don't think I could really answer in terms of total capacity. I think in terms of total capacity utilization, if there was a constraint, it's people and the time it takes to train them, especially with regard to new models, especially with things that are very complex like the SF90, which has 2,000 new components. So putting those on the production line takes a bit of time to ramp it up to full capacity. That's just one example.
Great. Thank you. And if I may just slip in one quick final one. Obviously, Sebastian is leaving you at the end of this season. And I just wanted to ask, as a 4 times world champion, presumably, he was being very well remunerated.
Will that be a saving that will flow through your P and L next year assuming that he was remunerated largely by Ferrari rather than by sponsors?
I think that's a fair assumption. And I think going back to the earlier question in terms of attracting youth to have 2 drivers like Charles and Carlos, I think that gives us added equity in terms of attracting young people. Having said that, Seb has done a phenomenal job for Ferrari in the past and he'll always be part of the family.
Great. Thank you very much.
Thank you.
Thank you. Your next question today comes from the line of Michael Binetti of Credit Suisse. Please ask your question.
Hey, everybody. Good afternoon. Thanks for taking our questions. Just a quick near term one for the models and then I had a follow-up. But on Slide 9, the D and A component in the Q3, I guess the EBITDA margin was up a lot over 300 basis points, EBIT was only up 20 basis points.
When we started the year, I think you noted a pretty meaningful step up in D and A as a hold back to the margin guidance for the year as you started to develop or started to amortize a lot of the development of Stradale. I think earlier in the year, you thought that Stradale would start to ship in Q3. I just I want to look ahead to Q4 as you've now started to ship Stradale, do we see is that when you see a significant step up in the D and A impact to the margins in Q4? And I guess another way to ask that is last year, the mix was a significant positive, Louie, you pointed that out in Q4. Stradale, is that a could you just tell us, is that accretive to the gross margins and EBITDA margins in Q4 to the company?
Maybe Michael, hi. Antonio speaking. Yes. My answer on D and A, you should not see that as correlated to the numbers of cars that we sell, but more the time since the car is introduced. It goes to the P and L linearly from then on.
Okay.
It's Trudali, treat us
to I wouldn't just I wouldn't also just ascribe the investment to the SF90. There's a whole slew of other things related to future technology, innovation that
will eventually
find itself or themselves in models going forward. So it's not specific to one model per se. Got you. Your second question was?
Just as we look, I know you had a big mix tailwind on the EBIT bridge in the Q4 last year. As Stradale comes on, that seems like the biggest year over year change in the fleet in Q4. Is that accretive to gross and EBITDA margin in Q4?
Stradale is accretive to the average, yes.
Okay. I guess then, Louis, longer term, so we have a pandemic that's obviously disrupted your path to the original 2022 plan. You talked about that a little earlier. We also have a new Concord agreement signed that gives you visibility on part of the business there through 2025. As you look at this, is it time for another Capital Markets Day?
How are you thinking about keeping updated targets for the long term?
Well, it's something we've discussed internally as to when we'll have our next Capital Markets Day. The time will come for us to have 1. Obviously, we can't have 1 now because we would like to have one, which is face to face. So news to come, but I guess we will have 1 in the not too distant future.
Okay. And then if I could ask you just one last one. I know you talked a little bit about electrification, but there's been some interviews from people at FIA that have noted a Formula 1 shift towards synthetic fuels and biofuels as an answer to some of the environmental concerns coming up. And there's even been some that have mentioned that they expect Ferrari will be co investing in those initiatives. I know you have one eye on electrification, but where do you see biofuels, synthetic fuels as part of the answer for the SG initiatives that you talked about earlier as you look over the longer term?
I think they potentially have a big role to play, particularly in terms of biofuels as opposed to synthetic fuels. But clearly, they have a role to play big time. It'll probably start with Formula 1. It provides now as of 2023, it has to have a 10% sorry, 2022 has to have a 10% biofuel percentage, which is the start. The FIA obviously wants to increase that.
As I mentioned, there's a new power unit that has to come into VIGA as of 2026. So defining that power unit is going to have to be done in the very near future. And once that's defined, we'll be able to figure out what the components will be and particularly with regard to the fuels.
Thanks a lot guys. Congrats on a nice quarter.
Thank you very much, Michael.
Thank you. Your next question today comes from the line of Thomas Besson of Kepler Cheuvreux. Please ask your question.
Thank you very much. I have 2 very quick ones, please. First, on the mix, would you mind giving us the number of Mondal deliveries in Q3? And tell us if it was the biggest quarter yet or if you've done better before? And second, on your small engine business, it was unusually strong compared with what we've seen in Q1, Q2.
Could you explain why and what we should expect in 2021, specifically for the Maserati part? Is there still going to be any business left? Or whether it's linked with Formula 1 that has seen eventually a pickup here? Thank you.
In terms of Monza, it was approximately 50 units in the Q3, year to date 120. And in terms of Maserati, it's really a reflection of the orders we receive. We anticipate that next year, the volumes will decline.
Very clear. Thank you very much.
Thank you.
Thank you. And your next
Two questions, please. First of all, I was intrigued by your comment about the high the increase in orders you've seen on the Roma compared to the Borda
of Fino in China?
Because clearly, China has not been the market for the 2 seaters, but do you think that you're seeing potentially a way to crack that market even before you launch the Purosangue? And my second question is about the SF90 Stradale. The Estetto Fiorano option, are you limited? And what percentage of sales would you build supply with that option? And what is the demand been for that?
Because obviously, it's a significant upgrade in terms of cost and I suppose profitability.
Thank you.
Yes. We're very encouraged by the Roma up to now in China. We're very encouraged by the level of orders we're receiving and the demographics. So that's a good sign. And yes, potentially it could start the process of really penetrating the Chinese market in a more material manner than we've been able to.
Obviously, the 2 plus 2 is an attractive combination. So that's one. The Assetto Fiorano, yes, generates a higher margin than the SF90. We've actually been very encouraged by the level of orders on the asset, significantly higher than we had expected and is running around 40% of total orders. We do not really have capacity constraints in terms of the Assetto Fiorano.
It takes time for our suppliers to gear up, But over time, we don't have capacity constraints on that one. It really is not an issue, I don't think.
Does that count as personalization as well?
Correct.
Thank you very much.
Thank you.
Thank you. There are no further questions at this time. Nicolas, please go ahead.
Thank you, everyone, for joining us today. The IR will be soon available to answer all your follow-up questions. Thank you. Bye bye.
Bye, everyone. Thank you. Bye bye.
That does conclude our conference for today. Thank you all for participating. You may now disconnect.