7900 Cars expected to be shipped this year.

very interesting... i wonder what measures they'll start taking to increase shareholder value. I can't see this being positive.

 

Yeah stock is 34 and change. IPO was at 52 with the high just under 61. Never have I been so happy to get such a tiny allocation of an IPO

On the bright side they are paying a dividend and will continue to payout about 40% of profits each year to shareholders. So we should be back to even in say 5 years or so if they can keep selling more cars.

I didn't realize that investors didn't "price in" the one time effects of 499 LaFerrari's as a one time event (per decade) producing about 750M USD in non-recurring revenue. Obviously Marchionne use the LaFerrari bump to his advantage. I figured most investors were aware of this so it was taken into account with the share price but clearly it was not and surprised people.

Considering the not so strong numbers and outlook it makes me think that getting any production car going forward isn't going to be such a difficult thing anymore or a long wait. I think dealers take orders and Ferrari increases production to simply push the wait to wherever they want it to be. Before they were ok with 1.5 or 2 plus years. Now I think they are going to push for getting cars into people's hands in a year if they want one and soon under a year. It may already be like this?

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Shares of Ferrari NV (NYSE: RACE) plunged more than 10 percent on Tuesday and hit a new 52-week low of $35.71 following the release of the company's fourth quarter results.

Ferrari earned 0.28 Euro per share in the fourth quarter on revenue of 744 million Euros, while net profit for the quarter was 55 million Euros. Ferrari earned 0.41 Euros per share in the same quarter a year ago on revenue of 751 million Euro and recorded a net profit of 79 million Euros.

Ferrari shipped a total of 2,021 vehicles in the quarter, marking an increase from the 1,975 vehicles it shipped a year ago.

Ferrari added that its full fiscal year 2015 was its "best ever results." The company earned 1.52 Euros per share on revenue of 2.854 billion Euros and recorded a net profit of 290 million Euros. This compares favorably to the 1.38 Euros per share the company earned in 2014 on revenue of 2.762 billion Euros and a net profit of 265 million Euros.

Total shipments throughout 2015 rose to 7,664 from 7,255 a year ago.

Despite Ferrari's "best ever results," shares tumbled lower as the company issued a concerning outlook.

Ferrari expects its total shipments in the coming fiscal year to be around 7,900 units. Net revenue is projected to be greater than 2.9 billion Euro. The company also guided its adjusted EBITDA to be more than 770 million - a figure that falls short of the 800 million Euros analysts were expecting, according to Reuters.

Reuters, citing a trader, noted that Ferrari's fourth quarter numbers were "in line" but the company's 2016 guidance is "super conservative."

 

Ferrari as a public corp can't be good on any front.

 

My advice to Sergio is to pump out a few more limited edition cars. That F60 they built. 2.5M for just 10 customers. Why not 40 customers? 25 million vs 100M. why leave that money on the table. Guaranteed they could find 40 buyers if not 100.

They should be pumping out 3 to 5 cars in this limited edition variant style every year in the 2M range. This is about keeping volumes down but profits and revenues way up. Limited editions are the key.

Ferrari needs to milk their clientele more. They need a baby LaFerrari. 999 units. Needs to ship in 4 years and be an in between car for the next Supercar replacement. Price it at 899k USD base. 1M out the door with options. Boom! Another billion dollars easy. Have it look like a toned down LaFerrari or something of a hybrid between the 488 and LaF. I'm sure they can figure out an interesting profile. Put a 12 cylinder in it with less HP than LaF and a smaller electric setup.

Then in 10 years up the production on the LaF replacement to 799 and the price should be $3M. We all know in 10 years they will pre-sell every single car. There is $2.4B in highly profitable revenue.

You get the idea. Let's hope Sergio does too. Ferrari owners have a lot more money to spend and lots more garage space to fill. If guys are paying 2.5M for the F60 there is so much more out there they can do to exploit the brand potential more.

 

In essence I think you are correct. There will be more Limited cars and I am also pretty sure we won't wait another 10 years for the LF successor. But I very much did not approve of the company going public and were it not for my feeling deeply disloyal, as I mentioned at the time to various friends, I would have shorted the stock.

 

Read the original Yahoo article carefully & your wish may be granted: "Shipments: ~7,900 including supercars"

They may mean F12Tdf - they may not....

 

Ferrari's stock price falls off a cliff

 

Look at the variations of all Porsche models. Easily 10 different 911, 10 different Cayman incl. cabs called Boxster etc.

Think of
F12Berlinetta
F12Aperta
F12Berlinetta S
F12Aperta S
F12tdf
F12BerlinettaFF ...

 

That's what I was thinking. You would have to follow Porsche's model instead of being more exclusive. This is probably a naive statement but there aren't many stand alone public high end exclusive luxury companies. Most end up being part of a group of they end up in private equity. Or Ferrari could go down the group path themselves by buying up a few companies.

 

Porsche is in a different marketplace + mostly sells Macan's and Cayenne's. Only 14% of Porsche's sold last year was a 911.
Marchionne fortunately declared Ferrari won't be making SUV's.

Fiat's objective was clear; Ferrari's ipo is just to fund investments in Alfa and Maserati. From an investor (and Ferrari's own) standpoint the ipo makes no real sence IMO, growth is limited. Some growth may come from a new Dino.

And I'm curious to see how Ferrari will deal with future developments in electric cars. No doubt that's where the market is heading.

 

Too many variations may decrease the overall rarity and therefore gradually reduce the feeling of exclusivity, then probably hurt the price of pre owned Fcar. Ferrari is in the dilemma.

 

They only offered up what, 10%? 20%? It's not like they're completely in the mold now, but it's a weird place and I don't like it for the company and as a stock.

http://www.cnbc.com/2015/10/20/5-things-to-consider-before-buying-ferrari-shares.html

 

They won't do it. They will want to maintain exclusivity as even the Sweater understands that is the brand.

Yes, there will be more limited cars and more of a run. When they do the tdf Aperta, that won't be a run of 50/80 and they will do another hypercar in a few years rather than 10.

Did I say I hate that they went public?

 

Great for shareholders but I sincerely think this will kill the brand.
"More limited editions" is by definition an oxymoron as each new limited edition is replaced quickly by another limited edition. Hardly "limited".... if you get my meaning...
Brandy equity is being eroded with every car they produce over 5000 units. More production is bad news.
My thoughts are simple: If Ferrari of Shanghai can take more cars that means they should become more difficult to get in Newport Beach. If India needs a dealership, then there should be one less in the UK. And the prices should go UP.

Being a public company and overproduction will irretrievably damage Ferrari. Interestingly I'm seeing Thierry Stern do this with Patek Philippe and the collectors are walking away - and oddly enough, he owns PP.....

My 2 pence.

 

Nothing wrong with your 2p but it's a little too rational for me. We all know we're dealing with completely irrational products. The Speciale coupe was not LE but it's already much sought after, a senior client not known for frivolities caught me off-guard last week when he asked me during a business meeting if he could have first refusal on my 458S if I come to sell it. Everything depends on the product and segment. Assuming Ferrari keeps to its proven segments and continues to produce brilliant "products" IMO you'll be surprised how elastic volumes might be.

 

Great point Camlet1. I agree wholeheartedly.

Brian, I think they sold 9% so far to the public markets with another 20% intended to be sold over the next year... eek...

 

Page 16 of this clearly shows about 66% free float. Wonder how long it will take a hedge fund to grab control of the company as they would only have to commit a $1b pre leverage....

Earnings call was interesting. Sergio was clearly not enjoying watching the share price fall over the duration of the call and the IR person was also not in a good mood. Nobody could hear very well and the call started late. I also found it interesting that the CEO was not on the call.

http://corporate.ferrari.com/sites/ferrari15ipo/files/2016_02_02_-_ferrari_-_fy15_results_presentation_002.pdf

 

I'd think in the current business/tech/regulatory climate 5,000 cars is probably both too small and too large for them to exist independently. And done right more special editions - models with differentiation like the F60 - could add to the exclusivity and aura of the brand. Ferrari could probably have sold 50 F12 TRS if it'd been a limited edition, not a Special Project. With each being a fine rolling showcase of a what a Ferrari is. Dilution is another 1k Californias with minor differences in paint schemes.

 

Agreed and me too. I wish they never did this. It strikes me as needlessly short term.