Earnings Call Transcript - RACE Q2 2024

Operator, Operator

Good day, and thank you for standing by. Welcome to the Ferrari 2024 Q2 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Aldo Benedetti, Investor Relations Manager. Please go ahead.

Aldo Benedetti, Investor Relations Manager

Thank you, Evan, and welcome to everyone who is joining us. Today, we plan to cover the Group's operating results of the second quarter of 2024. And the duration of the call is expected to be around 60 minutes. Today's call will be hosted by the Group CEO, Mr. Benedetto Vigna; and Group's CFO, Mr. Antonio Picca Piccon. 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 covered by this language. With that said, I'd like to turn the call over to Benedetto.

Benedetto Vigna, CEO

Thank you, everyone, for joining us today. I'd like to open today's call with a heartfelt thank you, firstly to our clients for their continuous trust in our brand; secondly, to all our partners, suppliers, dealers, and sponsors, with whom we have continued to strengthen our relationship; and last but not least, to all our Ferrari colleagues, for their outstanding working passion supported by a strong sense of belonging. Many important milestones and positive achievements took place in this second quarter, among which our victory at the 24 Hours of Le Mans for the second year in a row. During today's call, I will touch upon the following four key achievements: One, very strong Q2 financial results and the continued smooth execution of the year; two, a solid order book which has evolved as expected with the new Dodici Cilindri Spider and Coupe guiding the order intake; three, a full week of activities in June dedicated to sustainable innovation, which involved all our stakeholders and culminated in the inauguration of the e-building exactly two years from its announcement at the Capital Market Day; fourth, build progress in raising our lifestyle, we've announced the cohesion across our company's resources. So let's start with the financial result of the second quarter, which demonstrates again strong execution and continued growth. First, revenues were at €1.7 billion, up 16% versus the previous year, sustained by the continuing strength of the product mix and the growing demand for personalization. Second, profitability improved with adjusted EBITDA at about €670 million and the remarkable 39% margin. And third, the net profit reached €413 million. On the back of stronger personalizations and increased visibility for the remaining part of the year, we upgraded our 2024 guidance and Antonio will show you the details later in the call. The solidity of this quarter's results was accompanied by continued strong brand momentum, which brings me to my second key point for today. The enthusiastic reception of our latest new sports cars, the Dodici Cilindri and the Dodici Cilindri Spider drove the order collection in the quarter, adding to an already solid order book on current models, which covers well into 2026. Such visibility relies on the loyalty of our existing customers all over the world as well as the brand appeal to the new ones, on that and keeping an eye on current macro development market-by-market. We continue to allocate our products strategically across the different regions to announce our brand strength and exclusivity. After the world premiere in Miami, we hosted several regional launches of our newly-launched naturally-aspirated 12 cylinder sports cars in all major markets and they will continue in the second half of the year. I attended some of these beautiful events and I met clients from different European countries, and they all praised the Dodici Cilindri’s perfect synthesis between the past and the future. The front of the Dodici Cilindri recalls the 1968 365 GTB4 with the old styling interpreted in a very futuristic way. And now we go to the third point of today's call. Innovation is sustainability, and sustainability is innovation. This is our profound belief. Sustainable innovation has been the focus of a series of events that we hosted in Maranello at the end of June, involving all Ferrari stakeholders. We held a workshop with around 30 of our Ferrari partners aimed at sharing experiences and practices to reduce environmental impact. A full day was devoted to suppliers, who play a key role in our company's drive for innovation. This annual event brought together about 500 people from a few hundred suppliers from all over the world for a discussion on their contribution to sustainable innovation, which is increasingly central to our supply chain. And then a weekend was dedicated to Ferrari's employees, their families, and friends, with a record presence of more than 30,000 people visiting our factory. It was such a great emotion. I spent the entire Saturday there, and it was for me the first time, and I will never forget this unique experience. During that intense week, we also inaugurated the new e-building where 'E' stands for energy, evolution, and environment. Based on the concept of technological neutrality and flexibility, this new facility will house the development and production of ICE, hybrid, and full electric models. Here let me remark once again our belief: we believe that there is no single solution to future automotive powertrains. This is particularly true during the current technology transition. Technological neutrality is a key principle for us and is consistent with our strategy. We continue to invest in three powertrains: internal combustion engines, hybrids, and full electrics to provide our clients with maximum freedom of choice. In the e-building, we will also engineer and handcraft the strategic electrical components that are highly relevant to differentiating Ferrari's technology and performance. High-voltage batteries, electric motors, and axles in these, the full electric Ferrari requires new technologies, new components, and processes, and the e-building will enable us to keep our critical know-how in-house and maintain our competitive advantage in the years to come. The advantages of the new e-building do not end here. It will also enable us to decouple the production of limited edition cars, such as Daytona, from the development of new models. This will allow us to place the research and development team closer to manufacturing, shortening the product development phase and time to market. I would like to be very clear on one point: We did not realize the e-building with the aim of growing our volumes. Our ethos remains the same; quality over quantity. On June 21, we completed the skeleton of the e-building and installed the equipment. Now we are focusing on testing the processes and debugging the lines to start production of hybrid and ICE models at the beginning of 2025. For this achievement, a special thanks goes to all the colleagues who were able to maintain the e-building schedule despite the difficulties we experienced during these times. It has not been easy, but they made it happen by acting nimbly with focus and determination. During the quarter, we made significant progress in both racing and lifestyle, creating stronger cohesion across our company's resources. Let's start with the racing world. In our second season in the top class of the World Endurance Championship, we achieved extraordinary success with our 499P at the 24 Hours of Le Mans. This marks our second Le Mans victory with our cars. This outstanding result deserves huge praise and is a testament to the exceptional teamwork of all colleagues in their perseverance. The same spirit and will to progress is vivid among our Formula 1 team. Scuderia Ferrari HP approached the 2024 Formula 1 season with the aim of always fighting at the front. We entered the summer break with encouraging signs. We scored two wins compared to zero last year and achieved 50% more points per race compared to the last year. The team remains focused and united and is pushing harder to continue improving the performance of the cars. Our recent racing sports car events have also been the perfect stage to gather our most loyal clients and showcase our lifestyle dimension. This brings me to my last point for today. We have recently been much more deliberate about including our lifestyle collections at our exclusive events and sharing our latest creations with our community. The successful activation at Pebble Beach in Las Vegas last year was just a first step. This year, at the beginning of May, we took a further step forward. We organized a series of engaging and unique experiences in Miami for our community. This encapsulated the elegance of our sports cars, the allure of the Ferrari lifestyle, and the excitement of racing. This was more than just hosting events; it created a coherent, coordinated, and inclusive narrative across each of our three sources. A similar approach was also taken during the most iconic endurance race at Le Mans with the creation of a pop-up store at the Ferrari location, which received very positive feedback from clients, resulting in improved sales and encouraging signs for the future. We are aware that Ferrari is an incredible, powerful, and unique brand—extremely accessible on our side when you think of our sports cars, while at the same time very inclusive, if you consider our racing DNA and the millions of brand enthusiasts that we inspire all over the world. Among them, during the Formula One Grand Prix, Ferrari enthusiasts had a once in a lifetime opportunity to spend a night inside our iconic museum in Maranello, which was the setting for a unique Airbnb stay and experience not usually available to the public. We were able to create this activation by leveraging our existing assets: our museums in Maranello and Modena, as well as our historic Cavallino restaurant. For the first time, we surpassed the threshold of 100,000 visitors in May alone. To conclude, the second quarter of 2024 has been full of significant milestones, and I believe these achievements mark a continuation of our journey as we are driven by our progress towards excellence in everything we do, always keeping four wheels on the ground. And on this note, I hand over to Antonio to review the Q2 2024 financial results. Please, Antonio.

Antonio Picca Piccon, CFO

Good morning or afternoon to everyone joining us today. I start on Page 6, where we present the highlights of the second quarter. Continuing the trends from the first quarter, the growth rate of revenues and profitability outpaced that of our deliveries, mainly thanks to the enriched product mix and increased personalization. Therefore, while shipments grew by less than 3%, revenues were up 16%, adjusted EBIT increased by 17% with a 29.9% margin. Adjusted EBITDA rose by 14% with a 39.1% margin. Such economic results led to remarkable industrial free cash flow generation, despite higher capital expenditures and tax payments. Moving to Page 7, we review our shipments for the second quarter, which increased by 92 units. As already mentioned by Benedetto, we leveraged our order book visibility and production flexibility to design our product allocation across the different regions consistently with the development observed in each respective market. As a result, deliveries increased in EMEA, Americas, and Rest of APAC, while decreased by roughly 60 units in Mainland China, Hong Kong, and Taiwan. The increase in deliveries was driven by the Purosangue, the Roma Spider, and the 296 GTS. Additionally, we commenced the first deliveries of the SF90 XX Spider, the special series hybrid with a limited production run of 799 units. The allocation of the Daytona SP3 grew in the quarter compared to the prior year, but was lower than in Q1 in line with our plans. The shipments of the Roma and the special series 812 Competizione decreased, approaching the end of their lifecycle, while the SF90 Stradale and 812 GTS phased out. In the quarter, the hybrid share reached 48%, in line with product cadence and mainly driven by the 296 GTS. On Page 8, you can see the net revenues bridge, which shows a 19% growth versus the prior year at constant currency. The increase in cars and spare parts was the most relevant contributor driven by the richer product mix and country mix, as well as higher personalizations. In the quarter, personalization further strengthened, representing almost 20% of total revenues from cars and spare parts, mainly supported by the Purosangue and Daytona SP3. Sponsorship, commercial, and brand revenues increased, thanks to new sponsorships related to our racing activities and improvements in lifestyle. The increasing sponsorships reflect the latest sponsors’ additions, including HP as the new title sponsor of Scuderia Ferrari in F1. Other revenues were almost flat, with an improved contribution from financial service activities substantially offset by the Maserati contract expiration. Currency, net of edges in place, had a negative net impact, mainly due to the adverse dynamics of the U.S. dollar, the Japanese yen, and the Chinese yuan versus the euro. Moving to Page 9, the change in adjusted EBIT is explained by the following variances: positive volume reflecting the unit increase versus the prior year; mix and price, strongly positive, thanks to the robust product mix sustained by the Daytona SP3 and the few 499P Modificata sales; the increased contribution from personalizations and the positive country mix, mainly supported by the increased weight of the Americas. Industrial and R&D expenses were almost flat in the quarter. SG&A increased and reflected marketing and brand investments and the ongoing development of our digital infrastructure and organization. The events we had in Miami and Le Mans exemplify our brand investments, perfectly integrating the sports car lifestyle and racing source. Other was almost flat in the quarter. The increased contribution from new sponsorship and a new release of current environmental provisions, approximately €10 million, was mostly offset by higher costs for racing, also due to better Formula 1 in-season ranking. Lastly, the total net impact of currency was negative for €35 million, resulting in EBITDA margins standing at 39.1%. As a reminder, the exceptional EBITDA margin of 40% in Q2 2023 was supported by certain timing and other positive effects, which in part took place during this quarter as well. The EBIT margin reached 29.9% and benefited from flattish depreciation and amortization compared to the prior year as a result of the production cadence of current models. Turning to Page 10, in the second quarter, our industrial free cash flow generation was €121 million, reflecting the increase in profitability, partially offset by capital expenditures that are higher than last year and in line with the pace of development of our product as well as the new infrastructure in Maranello. As previously mentioned, capital expenditures this year are progressing more linearly compared to our usual cadence due to advanced development of the product pipeline and ongoing spending for the new paint shop. Tax payments and an increase in net working capital provisions and other primarily driven by higher inventory reflect both our production plans and the enriched product mix. At the end of June, the company was in a net industrial debt position for €441 million since the dividend payment and share repurchases that occurred in the quarter more than offset the positive industrial free cash flow. Moving to Page 11, we revised upward our 2024 guidance, mainly to reflect improved visibility on stronger personalization following the very solid results of the first six months. We are also projecting higher R&D expenses for racing and other innovation activities as well as for marketing and brand initiatives for the rest of the year. This leads us to confirm the EBITDA margin target for the year while upgrading the EBIT margin to reflect the operating leverage on G&A. The improved EPS also reflects the new estimate on the tax rate for 2024, now in the region of 19.5%, benefiting from the temporary coexistence of two different patent box regimes. The strong profitability also translates to higher industrial free cash flow, notwithstanding the increased pace of our capital expenditures above the initial €950 million target, which also reflects the updated timeline for the new paint shop, which has been accelerated compared to our plans as per the last Capital Market Day. To sum up and focus on the second half of the year, we therefore expect a positive product mix, even though to a lesser extent compared to the first half, given the lower Daytona deliveries in line with our plans, the mentioned increase in R&D, OpEx and SG&A, and higher G&A in line with the start of production of new models and digital infrastructure. Regarding the quarterly pace, we confirmed the already flat, softer Q3 intentionally designed in terms of volumes, model, and country mix allocation to facilitate the company's transition to the new ERP. To conclude, the financial results we present today underscore the solid fundamentals of our business and flawless execution. Such results and the visibility we enjoy give us renewed confidence to sustain this positive momentum and continue delivering on our commitment. I thank you for your attention, and I now turn the call over to Aldo.

Aldo Benedetti, Investor Relations Manager

Thank you, Antonio. We are now ready to start the Q&A session.

Operator, Operator

Thank you. Our first question comes from the line of John Murphy of BofA S. Please go ahead. Your line is open.

John Murphy, Analyst

Hi. Good afternoon, everybody. I do want to ask two relatively simple but important questions. Benedetto, when you talk about the order book being full through 2026, that's sort of an indication that you know what your units are going to be, or planning on what your units are going to be for the next two and a half years. I'm just curious, as you know that and you plan for that, is there just a much greater focus on price and mix with very slow growth in units? Or could we see maybe a little bit of an acceleration in unit growth and a slightly less emphasis on price and mix? How do you think about balancing those and the volume growth for the next two and a half years?

Benedetto Vigna, CEO

Okay. So regarding the first question, we'll give—let's say what we see is an advantage in terms of mix and price and slower growth. Okay, coming back to your first question. The second?

John Murphy, Analyst

And the second question is the margins are bumping up against the high end of the range of the 2026 outlook. Is there a way to think about recasting margin potential in the company, really in light of the first question?

Antonio Picca Piccon, CFO

John, if I got your question right, in terms of the guidance and margin, this is very much driven by the development of our mix going forward. Obviously, the incidents are of expenses. If you look at Q2, I think the rationale for that is clear, but if we look forward to the second half of the year, I think there are additional costs that are partly seasonal that are denting deeper into the continuation of the similar level of profitability. As to 2025 and 2026, 2026 is out there in terms of guidance and remains firm. We will speak later on, beginning of next year.

Operator, Operator

Thank you. We'll now take our next question. Please stand by. Our next question comes from the line of Michael Binetti of Evercore ISI. Please go ahead. Your line is open.

Michael Binetti, Analyst

Hey guys. Add my congratulations on a great execution quarter. A couple of questions for me. One on personalization. Can you help us understand the increase in personalization? I think you said almost 20%, maybe break down what's helping move that higher and any headwinds? I'm curious how much the mix of cars is influencing that, and if the early shipments of the SF90 XX special models are suggesting that personalization will be in line with averages or above as we move past Q2. The second question is, as we think ahead to the EV next year, it's interesting to look back and see how the company has rolled out new technologies in the past. The LaFerrari introduced the KERS hybrid system and you chose to bring that out at a very high price, €1 million plus supercar price point. Conversely, the Purosangue you brought that out as a premium price road car with a higher unit count than the strictly limited LaFerrari. As you think about those two examples, what are the most important elements of the strategy that you think about in launching the EV?

Benedetto Vigna, CEO

Let's start with the first one regarding personalization. Michael, thanks for your question and the compliments will go to all the team. The story of personalization is one we have discussed several times. What we see and we focus on is supporting the demand for increased personalization from our client. I would like you all to remember a couple of things. One, the personalization level does not depend too much on the model; it's about 20%. Clearly, in absolute terms, when you sell something that is more expensive, the absolute number is higher, but in any case, it remains around 20%. The second thing I would like to share with you is that the dimension of personalization that our clients like most is the carbon finish. We keep analyzing the take rate of the different options we offer and we see a clear dominance of everything that is carbon finish, both inside the car and outside the car. We are bolstering our supply chain capabilities so that we can accommodate the different client needs. As for the second question regarding EVs, I would like to remind you that back in May 2022, during the CMD, it became clear that it wouldn't make sense to push only one kind of propulsion. Technological neutrality is key when the market is uncertain. For us, making the EV is a way to show our clients that whatever technology we harness, we do it in a unique way to provide them with unique driving experiences. We continue to believe in technological neutrality. Our EV introduction plan remains intact, and we unveiled the car in Q4 2025. We believe we will be able to deliver a unique driving experience to our customers with any kind of car produced in the e-building.

Michael Binetti, Analyst

Thank you very much, guys.

Benedetto Vigna, CEO

Thank you.

Operator, Operator

Thank you. We will now take our next question. Please stand by. Our next question comes from the line of George Galliers from Goldman Sachs. Please go ahead. Your line is open.

George Galliers, Analyst

Yes. Thank you very much for taking my questions. Obviously, it sounds like you are seeing very strong demand still for all of your products, and you have a very healthy order book. Obviously, just mindful of what we're hearing from other luxury companies about as you built up the order book for the Dodici Cilindri. Have you seen any areas where perhaps the market has not been as strong as you might have expected and potentially any areas where that's been more than compensated for by very high demand? Is there any sort of geographic development that's caused you to raise an eyebrow? The second question is with respect to the very strong price mix during the quarter. Can you give us any insights into how much of that was from the contribution from Daytona SP3 and the 499? If you are able to provide any sort of insight around the volume in the quarter and the volumes we should expect over the remainder of the year, that would be very helpful. Thank you.

Benedetto Vigna, CEO

Thank you, George. I will take the first question. The second will be handled by Antonio. So the first one regarding the Dodici Cilindri order book—that's what you mentioned. The traction of both models is very strong across all countries. There is, however, one country where we anticipated a weaker order book for the Dodici Cilindri due to additional tax burdens—China. But remember when we shared the plan during Capital Market Day, we said that China would always be lower than 10% for us. So I would say there are no surprises here. In fact, the traction for the Dodici Cilindri has been stronger than for the two predecessors in the same category—the 812 GTS and the 812 Superfast. Now I will pass it on to Antonio for the second question.

Antonio Picca Piccon, CFO

Yes, hi, George. During the quarter, we shipped 74 Daytona cars, which is higher than last year but less than in Q1 as we’ve communicated. For the second half, we expect a decline to maintain an average above 60 per quarter. Regarding the 499P, we shipped five in the quarter, and there should be a steady delivery pace moving forward at around four to five units depending on the quarter and the client.

George Galliers, Analyst

Fantastic. Thank you very much.

Operator, Operator

Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Thomas Besson of Kepler Cheuvreux. Please go ahead. Your line is open.

Thomas Besson, Analyst

Thank you very much for taking my questions, and congratulations on the numbers. I'd like to discuss with you the possibility of seeing your average prices moving even higher or not in the second half. I was impressed by the step up in Q2 versus Q1. With what you said, we should expect a substantially lower number of SP3, but a much higher level of Daytona and XX, I guess. Could you help us assess whether the average price in the second half could be higher than the first half or not? Also, could you mention the impact of the declining China share on that calculation? The second question is regarding your SF Ferrari; could you talk about the expected evolution of the hybrid share in the coming quarters? It has reached a high level driven by now the 296 GTS. What should we expect in the coming quarters? When should we expect you to release a new hybrid car?

Benedetto Vigna, CEO

I will take the second question, and Antonio will take the first. We continue to see strong traction for our hybrids and maintain a balanced distribution of hybrid and ICE models, targeting around 50/50. We also observe substantial interest in the 296 GTB compared to the 458. For the hybrid share moving forward, we anticipate it will maintain similar levels as before. We have launched a warranty for high-voltage batteries, and feedback has been positively received. I’ll pass it over to Antonio for the first question.

Antonio Picca Piccon, CFO

In terms of average selling prices for the second half of the year, I would expect it to be not significantly different from the first half, maybe slightly lower. This is mainly due to the expected decline in shipments of the Daytona alongside an increased number of SF90 XX cars—projected at around 100 or slightly more in the second half. Overall, I believe the net impact will reflect what I just mentioned earlier.

Thomas Besson, Analyst

Thank you very much.

Operator, Operator

Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Henning Cosman of Barclays. Please go ahead. Your line is open.

Henning Cosman, Analyst

Yes. Thanks so much for taking my question. I have one question on personalization, please. I believe at Q1 stage we talked about a level of slightly higher than 19%. At that time you said it was above average, but you're now at 20%. Can we say that expectations for personalization have shifted up and you're now expecting a more sustainable level of 20%? The second question perhaps relates to residuals. I know we've been talking about residual normalization. Could you share your latest observations and thoughts? I know you think that residual value should start to normalize to a greater degree than they have during COVID and semiconductor periods. Do you think this could affect your ability going forward to price successor models with as large a markup as you have done until now?

Benedetto Vigna, CEO

Henning, so the first question regarding personalization forecasting—the behavior of the client is not easy to predict. The best antidote or method to manage this is to be agile in accommodating needs and having flexibility. This is why we are proud of the e-building for its operational flexibility. For the rest of the year, we expect participation to hover around 19%, but it can occasionally rise to 19.5%; expect this number as a near-term target. Regarding your second question about residual values, they have remained strong, although there are some geographic variations, for example, in the UK where values are a bit weaker. We have analyzed around 20,000 transactions and found that functional personalization retains its value, though some specific customizations, like unique paint jobs, may not maintain as high of a value. Please note that customers' concerns regarding hybrid vehicles remain strong. We recently launched a warranty program for hybrid battery components to provide peace of mind. Thank you for your question.

Henning Cosman, Analyst

May I ask you a follow-up question?

Benedetto Vigna, CEO

Sure.

Henning Cosman, Analyst

To Antonio, please. Sorry, Antonio, you mentioned some of the positive one-off effects in the bridge from Q2 2023. Could you be more specific about that, please?

Antonio Picca Piccon, CFO

Absolutely. Last year, in the second quarter, we had a release of current environmental provisions, and we adjusted our expectations for ranking in Formula 1. This year, we've similarly released some environmental provisions while maintaining our second place anticipation in F1.

Henning Cosman, Analyst

Thank you so much.

Antonio Picca Piccon, CFO

You're welcome.

Operator, Operator

Thank you. We'll now take our next question. Please stand by. Our next question comes from the line of Stephen Reitman of Bernstein. Please go ahead. Your line is open.

Stephen Reitman, Analyst

Yes. Thank you, again. Also, congratulations on your results. I had a question again on personalization. I believe you've said in the past that Purosangue surprised you, indicating that demand was much stronger than anticipated and that you closed the order book then reopened it again. You noted that in Q1 the personalization rate was influenced heavily by collectors personalizing at a very high level. I had the impression that you thought this rate of personalization might not continue as those collectors were satisfied. Could you comment on what the personalization rate is looking like on the Purosangue as we progress through Q2 and the rest of the year? Secondly, again, congratulations on the extended warranty program for hybrid components. What feedback have you received from that already? It's clear that many cars aren't yet at the end of their warranty periods, but have you seen any uptake regarding the plan?

Benedetto Vigna, CEO

Thank you, Stephen. I appreciate the compliments, which should be passed to the whole team. Starting with personalization, you are correct. In Q1, we saw increased participation from collectors. What I can mention is that new clients also express strong preferences for personalization. We are gathering valuable data to analyze these trends. While we can state confidently that carbon finish is a standout trend, we believe we need more data from new clients to draw conclusions about their behaviors. We expect personalization rates to remain around 19%. Regarding the feedback on the warranty program, which started 27 days ago, preliminary customer feedback has been positive, and clients appreciate that we acknowledge the limited lifespan of certain components. We will monitor the overall uptake closely given the situation of warranties and the pace of new launches.

Stephen Reitman, Analyst

Can I just ask one more question, please? What feedback are you receiving from your dealers regarding foot traffic, people visiting showrooms, and inquiries in general? How does that compare to any periods you'd prefer to reference?

Benedetto Vigna, CEO

We haven't observed any signs of weakness in demand. We see no slowing trends in cohort activity. Following the Dodici Cilindri announcement in Miami, we hosted multiple events across Europe, which I personally attended. These were popular among clients. We were inviting clients in groups of around 100 per night, focusing on personalized approaches that resulted in strong engagement. We’re closely monitoring trends, but we certainly don’t see weakness here.

Stephen Reitman, Analyst

Very clear. Thank you very much.

Operator, Operator

Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Martino de Ambroggi of Equita. Please go ahead. Your line is open.

Martino de Ambroggi, Analyst

Thank you. Good afternoon, everybody. Again, on mix. It’s estimated that probably one-third, if not more, of the mix effect in the first half this year came from growing personalization. Is that what you're seeing?

Benedetto Vigna, CEO

I'm not able to give you confirmation. I think that's probably not far from reality, but I'm not in the position to confirm as of now. We will follow up on this.

Martino de Ambroggi, Analyst

Understood. I realize you don't provide future guidance for personalization levels, but are you anticipating any constraints preventing you from satisfying customer demands in the past due to your increased flexibility with the new e-building? Furthermore, are you prepared to expect rates beyond 20%?

Benedetto Vigna, CEO

Look, I understand the intent behind your queries about the future data. What I can assure you is that we have been collaborating with suppliers to enhance the speed of fulfilling customer preferences. We've also been evaluating client behavior closely. We've observed a strong interest in carbon finishes from our clients, and we are bolstering suppliers to ensure their capabilities as our flexibility increases. For the future, we are targeting around 19% for this year, and we’ll inform you once we garner additional signals.

Antonio Picca Piccon, CFO

In the meantime, I wanted to clarify that your assumption of one-third of the price mix effect in H1 being attributed to personalization is not far from the current estimates.

Martino de Ambroggi, Analyst

Thank you very much.

Operator, Operator

We will now take our next question. Please stand by. Our next question comes from the line of Anthony Dick of ODDO BHF. Please go ahead. Your line is open.

Anthony Dick, Analyst

Yes. Hello, and again, congrats on the amazing results. My first question is on the Dodici Cilindri. Great to hear your comments on the order momentum versus previous generations. I was just wondering if you might share the length of the order book for that car. You haven’t said it’s sold out, so I’d assume it's less than two years, but if you could confirm that would be great. Relatedly, during Q1 results, you mentioned order book normalization because most of your cars were sold out. So now with this new car, is the order book higher than Q1, broadly the same, or lower? If I have time, I could squeeze in a second question about ASP. I'm also very impressed by the sequential ASP increase despite lower Daytona and even after stripping out the 499P. To put this in context of your previous comments, you expected a 10% ASP increase for the full year. Is this still your expectation, or should we expect something higher?

Benedetto Vigna, CEO

The first question on the order book depends a little bit on whether it's for the Dodici Cilindri Coupe or Spider. For the Coupe, the order book is over 20 months, while for the Spider it’s more than two years. Additionally, the ratio of orders we are receiving shows a preference for the Spider, which accounts for about 60-65% of the orders. So to summarize, we are still accepting orders for both variants, but the Spider has a stronger demand. The second question is to Antonio.

Antonio Picca Piccon, CFO

Yes, fair to say that the order book remains flat as we experienced a decline in orders from previous models while simultaneously increasing orders for the Dodici Cilindri. Please consider that the impact on the order book can vary depending on the type of model being introduced, with limited volume cars obviously not contributing significantly.

Anthony Dick, Analyst

Okay. Thank you very much.

Benedetto Vigna, CEO

Thank you.

Operator, Operator

We will now take our next question. Please stand by. Our next question comes from the line of Monica Bosio of Intesa SanPaolo. Please go ahead. Your line is open.

Monica Bosio, Analyst

Good afternoon, everyone. Most of my questions have already been answered, but I have two remaining. One is a general curiosity. In the previous conference call, Benedetto, you mentioned that 74% of new cars were sold to existing clients. I’m curious about the new Ferrari SP. Any information on the distribution of the new cars by country, age, and powertrain would be helpful, especially since the personalization appeal is quite high. My second question is housekeeping: in the second quarter, there were no impacts from financial charges. Can you give us a rough indication by year-end?

Benedetto Vigna, CEO

Monica, thank you. In terms of the share of new cars sold to existing clients versus new clients, the data doesn't fluctuate rapidly, especially on a quarterly basis. We continuously analyze the demographic shifts in our clientele. What we see is that new clients are increasingly interested in personalizing their vehicles. However, this varies by geography and model type. Certain models have a higher percentage of female buyers. While the overall difference between repeat buyers and new clients remains consistent, we will continue to observe these trends across different demographics. When it comes to hybrid powertrains, we don't see notable divergence by age or country, implying a consistent interest preference. Regarding the new Ferrari SP, unfortunately, I don’t have the specific distribution data available at the moment. Regarding the second question you raised about the financial impacts, you can expect them to be around last year’s levels—approximately €15 million.

Antonio Picca Piccon, CFO

You may assume a number not far from that of last year.

Monica Bosio, Analyst

Perfect. Thank you, Antonio.

Antonio Picca Piccon, CFO

Welcome.

Operator, Operator

Thank you. There are no further questions. I'll now hand over to Benedetto Vigna for closing remarks.

Benedetto Vigna, CEO

Thanks, all. Thanks for your time today and also for your questions. These strong Q2 results and the continued desirability of our brand all over the world will allow our confidence for the development of the year and for the years to come. I wish you a good afternoon and also a relaxing summer break for the ones who are going to have it. Thanks again for your attention.

Operator, Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.