Ferrari : H1 2019 results confirm 2019 guidance with improved cash flow

H1 2019 RESULTS CONFIRM 2019 GUIDANCE WITH IMPROVED CASH FLOW. UNVEILING OF FIRST HYBRID SERIES-PRODUCTION SUPERCAR, SF90 STRADALE

• • Total shipments of 2,671 units, up +8.4%

• • Net revenues of Euro 984 million, up +8.6% or +6.8% at constant currency(1)

• • Adj. EBITDA(2) of Euro 314 million, up +8.7% with an EBITDA margin of 32.0%

• • Adj. diluted EPS(2) of Euro 0.96 (+13.9%)

• • Industrial free cash flow(2) generation of Euro 139 million, reflecting also the positive cash impact from advances on the Ferrari Monza SP1 and SP2 as well as Patent Box benefit

For the three months ended

June 30,

2019	2018	Change	2019	2018
2,671	2,463	208 8% Shipments (in units)	5,281	4,591
984	906	78 9% Net revenues	1,924	1,737
314	291	23 8% EBITDA(2)	625	563
314	290	24 9% Adjusted EBITDA(2)	625	562
32.0%	31.9%	+10 bps Adjusted EBITDA margin(2)	32.5%	32.3%
239	218	21 9% EBIT	471	428
239	217	22 10% Adjusted EBIT(2)	471	427
24.3%	23.9%	+40 bps Adjusted EBIT margin(2)	24.5%	24.6%
184	160	24 14% Net profit	364	309
184	159	25 15% Adjusted net profit(2)	364	308
0.97	0.85	0.12 14%Basic earnings per share (in Euro)	1.92	1.63
0.96	0.85	0.11 13%Diluted earnings per share (in Euro)	1.91	1.62
0.97	0.84	Adjusted basic earnings per share 0.13 15% (in Euro)(2)	1.92	1.63
0.96	0.84	Adjusted diluted earnings per share 0.12 14% (in Euro)(2)	1.91	1.62

(In Euro million,	For the six months ended
unless otherwise stated)
Change
690	15%
187	11%
62	11%
63	11%
+20 bps
43	10%
44	10%

June 30,

(10 bps)

55

18%

56

18%

0.29

18%

0.29

18%

0.29 0.29

18% 18%

Confirming Guidance approaching the high end of the range on all metrics at currently prevailing exchange rates. Increasing industrial free cash flow target:

• • Net revenues: > Euro 3.5 billion

• • Adj. EBITDA: Euro 1.2-1.25 billion

• • Adj. EBIT: Euro 0.85-0.9 billion

• • Adj. diluted EPS (3): Euro 3.50-3.70 per share

• • Industrial free cash flow: > Euro 0.55 billion (from ~ Euro 0.45 billion)

• 1 The constant currency presentation eliminates the effects of changes in foreign currency (transaction and translation) and of foreign currency hedges

• 2 Refer to specific note on non-GAAP financial measures

• 3 Calculated using the weighted average diluted number of shares for 2018

Maranello (Italy), August 2, 2019 - Ferrari N.V. (NYSE/MTA: RACE) ("Ferrari" or the "Company") today announces its consolidated preliminary results(4) for the second quarter and six months ended June 30, 2019.

Shipments(5)(6)

For the three months ended

Shipments(5)(6)

For the six months ended

June 30,

(units)

June 30,

2019	2018	Change	2019	2018
1,195	1,073	122 11% EMEA	2,404	2,176
803	850	(47) (6%) Americas	1,523	1,419
289	177	112 63%Mainland China, Hong Kong and Taiwan	617	360
384	363	21 6% Rest of APAC	737	636
2,671	2,463	208 8% Total Shipments	5,281	4,591

Change

228

10%

104

7%

257

71%

101

16%

690

15%

Shipments totaled 2,671 units in the second quarter 2019, up 208 units or +8.4% vs. prior year. This achievement was driven by a 12.3% increase in sales of our 8 cylinder models (V8), while the 12 cylinder models (V12) decreased by a few units. The performance was mainly led by robust deliveries of the Ferrari Portofino as well as the 812 Superfast. This was partially offset by lower volume from the 488 family, with the 488 GTB and the 488 Spider approaching the end of their lifecycles, partially offset by the 488 Pista ramp up and the first deliveries of the 488 Pista Spider.

EMEA(6) grew 11.4%, Rest of APAC(6) was up 5.8%, while Mainland China, Hong Kong and Taiwan were up 63.3% and Americas(6) down 5.5%. Geographic mix shifted in favor of Mainland China as a result of the decision to accelerate client deliveries in advance of the early introduction of new emission regulations as was the case in the first quarter and with lower shipments to the U.S. reflecting the above mentioned model phase in and phase out within the 488 family.

• 4 These results have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and IFRS as endorsed by the European Union

• 5 Excluding the XX Programme, racing cars, Fuori Serie, one-off and pre-owned cars

• 6 EMEA includes: Italy, UK, Germany, Switzerland, France, Middle East (includes the United Arab Emirates, Saudi Arabia, Bahrain, Lebanon, Qatar, Oman and Kuwait) and Rest of EMEA (includes Africa and the other European markets not separately identified); Americas includes: United States of America, Canada, Mexico, the Caribbean and Central and South America; Rest of APAC mainly includes: Japan, Australia, Singapore, Indonesia, South Korea, Thailand and Malaysia

Total net revenues

For the three months ended

For the six months ended

(Euro million)

June 30,

June 30,

2019	2018	Change at current Constant currency Currency	2019	2018
766	670	14% 12%Cars and spare parts(7)	1,501	1,282
53	80	(35%) (35%) Engines(8)	111	157
131	127	4% 2%Sponsorship, commercial and brand(9)	259	252
34	29	16% 12% Other(10)	53	46
984	906	9% 7% Total Net Revenues	1,924	1,737

Change at

current	constant
currency	currency
17%	15%
(29%)	(29%)
3%	1%
14%	9%
11%	9%

Net revenues for the second quarter 2019 increased to Euro 984 million, up 8.6% at current currency and up 6.8% at constant currency(1). Revenues in Cars and spare parts(7) (Euro 766 million, +14.4% at current currency or +12.4% at constant currency(1)) were supported by the ramp up of the 488 Pista and the 488 Pista Spider, as well as higher volumes of the Ferrari Portofino and the 812 Superfast, this was partially offset by the prior year shipments of LaFerrari Aperta as well as lower sales of the 488 GTB and the 488 Spider. Revenues growth was also supported by a strong positive contribution from personalization programs along with deliveries of the FXX K EVO. The erosion in Engines(8) revenues (Euro 53 million, -34.8% at current and constant currency(1)) reflected lower shipments to Maserati. Sponsorship, commercial and brand(9) revenues (Euro 131 million, +3.6% at current currency or +2.1% at constant currency(1)) slightly increased due to higher revenues generated by Formula 1 racing activities. Currency, including translation and transaction impacts as well as foreign currency hedges, had a positive impact of Euro 17 million (mainly USD).

• 7 Includes the net revenues generated from shipments of our cars, including any personalization revenue generated on these cars and sales of spare parts

• 8 Includes the net revenues generated from the sale of engines to Maserati and the revenues generated from the rental of engines to other Formula 1 racing teams

• 9 Includes the net revenues earned by our Formula 1 racing team through sponsorship agreements and our share of the Formula 1 World Championship commercial revenues and net revenues generated through the Ferrari brand, including merchandising, licensing and royalty income

• 10 Primarily includes interest income generated by our financial services activities and net revenues from the management of the Mugello racetrack

Adjusted EBITDA(2) and Adjusted EBIT(2)

For the three months ended

For the six months ended

(Euro million)June 30,

June 30,

2019	2018	Change at current constant currency currency	2019	2018
314	290	9% 3% Adjusted EBITDA(2)	625	562
239	217	10% 4% Adjusted EBIT(2)	471	427

Change at

current	constant
currency	currency
11%	7%
10%	4%

Q2 2019 Adjusted EBIT(2) was Euro 239 million, +10.1% at current currency or +3.7% at constant currency(1) due to higher volumes (Euro 27 million) and a slight Mix / price variance favorability (Euro 5 million). This performance was attributable to the combined impact of the improved personalization rate and deliveries of the FXX K EVO, which more than offset product mix. Industrial costs / research and development costs increased (Euro 16 million), mainly due to higher operational start up costs due to the introduction of new models as well as higher spending in Formula 1 racing activities. SG&A increased (Euro 6 million) to support the Company's growth.

The tax rate was reduced to 20% as a result of the previously disclosed advance agreement on the Patent Box.

As a result of the items described above, Adjusted diluted earnings(2) per share for the second quarter reached Euro 0.96, up 13.9% vs. prior year.

Industrial free cash flow(2) for the three months ending on June 30, 2019 was Euro 139 million, driven by the Adjusted EBITDA(2) growth, the positive cash impact generated by the Patent Box benefit, as well as residual collection of initial advances on the Ferrari Monza SP1 and SP2. This was partially offset by capital expenditures of Euro 173 million.

Net Industrial Debt(2)(11) as of June 30, 2019 was Euro 353 million, which compares with Euro 370 million as of December 31, 2018 and with Euro 192 million as of March 31, 2019. The increase versus March 31, 2019 was due to the cash impact of the Euro

11 Net Industrial Debt redefined as Net Debt less Net Debt of Financial Services Activities

195 million dividend distribution(12) and of the Euro 99 million of share repurchases executed in the second quarter of 2019, which more than offset the positive industrial free cash flow. Lease liabilities per IFRS 16 as of June 30, 2019 remained close to stable at Euro 63 million.

(€B, unless otherwise stated)	2018A	2019E
NET REVENUES	3.4	>3.5
ADJ. EBITDA (margin %)	1.1	1.2-1.25
32.6%	~34%
0.825	0.85-0.9
		ADJ. EBIT (margin %)
24.1%	~24.5%
ADJ. DILUTED EPS(3) (€)	3.40	3.50-3.70
IND. FCF	0.4	>0.55
Second quarter 2019 highlights

Confirming Guidance approaching the high end of the range on all metrics at currently prevailing exchange rates. Increasing industrial free cash flow target:

Ferrari's V8 takes its fourth consecutive International Engine & Powertrain of the Year award

On May 22, 2019 the 21st edition of the International Engine & Powertrain of the Year saw Ferrari triumph again, taking the overall title with its 720-cv, 3.9-litre V8 for the fourth year running, a feat never achieved by any other engine in the history of the awards.

Ferrari SF90 Stradale - the new series-production supercar

On May 29, 2019 Ferrari introduced a new chapter in its history with the introduction of its first series production PHEV (Plug-in Hybrid Electric Vehicle), the SF90 Stradale.

The new top of the range model is revolutionary on every level and represents a true paradigm shift delivering unprecedented performance for a new series-production supercar. Statistics such as 1,000 cv, and a weight-to-power ratio of 1.57 kg/cv, and

12 Including Euro 12 million of quick refund to shareholders due to eligibility for withholding exemption, which will be paid in Q3 2019.