Corporate Valuation

T4 2019 - 2020
Group 1

Student Number Professor

Corina Popa 28918 Rosário André
Joana Reis 40932
Margarida Gouveia 29043
Nuno Street 40955
Consolidated Statement of Financial Position (€ thousands)
2016 2017
Assets
Goodwill 785,182 785,182
Intangible assets 354,394 440,456
Property plant and equipment 669,283 710,260
Investments and other financial assets 33,935 30,038
Deferred tax assets 119,357 94,091
Total non-current assets 1,962,151 2,060,027
Inventories 323,998 393,765
Trade receivables 243,977 239,410
Receivables from financing activities 790,377 732,947
Current tax receivable 1,312 6,125
Other current assets 53,729 45,441
Current financial assets 16,276 15,683
Cash and cash equivelents 457,784 647,706
Total current assets 1,887,453 2,081,077
Total assets 3,849,604 4,141,104

Equity/(Deficit) and Liabilities

Equity/(Deficit) attributable to owners of the parent 324,995 778,678
Non-controlling interests 4,810 5,258
Total Equity 329,805 783,936
Employee benefits 91,024 84,159
Provisions 215,227 197,392
Deferred tax liabilities 13,111 10,977
Debt 1,848,041 1,806,181
Other liabilities 656,275 620,350
Other financial liabilities 39,638 1,444
Trade payables 614,888 607,505
Current tax payables 41,595 29,160
Total Liabilities 3,519,799 3,357,168

Total Equity and Liabilities 3,849,604 4,141,104

Assumptions:
> Operating cash (over revenues) > 2%
> Provisions were classified as core since they are related to warranty coverage that applies to defects from the pur
> Other current assets include Italian and foreign VAT credits, security deposits, amounts due from personnel and o
> Receivables from financing activities relate entirely to the financial services portfolio in the United States.
> Deferred income includes advances and security deposits, accrued expenses, payables to personnel, social securi
> Goodwill is constant thus there is no impact in core invested capital variations.
> Considering as equity only commun shares, since non-controlling interests are not attributable to Ferrari.
 Reformulated Statement of Financial Position (€ thousands)
2018 2019
Core Invested Capital
785,182 785,182 Operating Cash
645,797 837,938 Other current assets
850,550 1,069,652 Current tax receivable
32,134 38,716 Receivables from financing activities
60,744 73,683 Trade receivables
2,374,407 2,805,171 Inventories
391,064 420,051 Current tax payables
211,399 231,439 Trade payables
878,496 966,448 Other liabilities
128,234 21,078 Provisions
64,295 92,830 Goodwill
10,174 11,409 Intangible assets
793,664 897,946 Property plant and equipment
2,477,326 2,641,201 Core Invested Capital
4,851,733 5,446,372
Non Core Invested Capital
Current financial assets
1,348,722 1,481,290 Investments and other financial assets
5,117 5,998 Deferred tax assets
1,353,839 1,487,288 Other financial liabilities
86,575 88,116 Employee benefits
182,539 165,572 Deferred tax liabilities
39,142 82,208 Non Core Invested Capital
1,927,167 2,089,737
589,743 800,015 Total Invested Capital
11,342 14,791
653,751 711,539 Financing
7,635 7,106 Excess cash
3,497,894 3,959,084 Debt
Non-controlling interest
4,851,733 5,446,372 Net Financial Assets

Equity/(Deficit) attributable to owners of the parent

pplies to defects from the purchase of the car.

unts due from personnel and other receivables.
o in the United States.
les to personnel, social security payables and others.

ttributable to Ferrari.
thousands)
2016 2017 2018 2019

62,102 68,338 68,406 75,332

53,729 45,441 64,295 92,830
1,312 6,125 128,234 21,078
790,377 732,947 878,496 966,448
243,977 239,410 211,399 231,439
323,998 393,765 391,064 420,051
-41,595 -29,160 -7,635 -7,106
-614,888 -607,505 -653,751 -711,539
-656,275 -620,350 -589,743 -800,015
-215,227 -197,392 -182,539 -165,572
785,182 785,182 785,182 785,182
354,394 440,456 645,797 837,938
669,283 710,260 850,550 1,069,652
1,756,369 1,967,517 2,589,755 2,815,718

16,276 15,683 10,174 11,409

33,935 30,038 32,134 38,716
119,357 94,091 60,744 73,683
-39,638 -1,444 -11,342 -14,791
0 -84,159 -86,575 -88,116
-13,111 -10,977 -39,142 -82,208
25,795 43,232 -34,007 -61,307

1,782,164 2,010,749 2,555,748 2,754,411

395,682 579,368 725,258 822,614

-1,848,041 -1,806,181 -1,927,167 -2,089,737
-4,810 -5,258 -5,117 -5,998
-1,457,169 -1,232,071 -1,207,026 -1,273,121

324,995 778,678 1,348,722 1,481,290

1 1 1 1
Auxilliary Calculations (€ thousands)
2016 2017 2018
Cash and Cash Equivalents Breakdown
Operating Cash 62,102 68,338 68,406
Excess Cash 395,682 579,368 725,258
Cash and Cash Equivalents 457,784 647,706 793,664

Provisions Breakdown
Warranty and recall campaigns provision 122,411 123,136 111,129
Legal proceedings and disputes 45,336 50,375 37,154
Other risks 47,480 23,881 34,256
Total provisions 215,227 197,392 182,539

Other Current Assets Breakdown

Italian and foreign VAT credits 12,032 11,988 20,466
Prepayments 31,611 27,980 35,758
Other 10,086 5,473 8,071
Total other current assets 53,729 45,441 64,295

Other Laibilities Breakdown

Deferred income 273,069 274,186 271,817
Advances and security deposits 229,975 167,293 145,394
Accrued expenses 61,403 77,024 81,408
Payables to personnel 36,843 38,488 25,434
Social security payables 18,559 20,553 18,209
Other 36,426 42,806 47,481
Total other liabilities 656,275 620,350 589,743

Liabilities Breakdown
Current liabilities
Trade payables 614,888 607,505 653,751
Current tax payables 41,595 29,160 7,635
Deferred income 273,069 274,186 271,817
Accrued expenses 61,403 77,024 81,408
Current Other liabilities 309,864 264,380 223,138
Other financial liabilities 39,638 1,444 11,342
Current Debt 399,876 306,031 352,409
Total current liabilities 1,740,333 1,559,730 1,601,500

Non-current liabilities
Non-current other liabilities 11,939 4,760 13,380
Provisions 215,227 197,392 182,539
Deferred tax liabilities 13,111 10,977 39,142
Employee benefits 91,024 84,159 86,575
Non-current Debt 1,448,165 1,500,150 1,574,758
Total non-current liabilities 1,779,466 1,797,438 1,896,394
Total liabilities 3,519,799 3,357,168 3,497,894

Check >>> 1 1 1
 2019

75,332
822,614
897,946

107,811
27,097
30,664
165,572

48,719
39,856
4,255
92,830

275,439
348,899
85,965
28,272
20,334
41,106
800,015

711,539
7,106
275,439
85,965
422,462
14,791
421,323
1,938,625

16,149
165,572
82,208
88,116
1,668,414
2,020,459
3,959,084

1
Consolidated Income Statement (€ thousands)
2,016 2,017
Net revenues 3,105,084 3,416,890
Cost of sales (1,579,690) (1,650,860)
Selling, general and administrative costs (295,242) (329,065)
Research and development costs (613,635) (657,119)
Other expenses, net (24,501) (6,867)
Result from investments 3,066 2,437
EBIT 595,082 775,416
Net financial (expenses)/income (27,729) (29,260)
Profit before taxes (EBT) 567,353 746,156
Income tax expense (167,635) (208,760)
Net profit 399,718 537,396
Basic and diluted earnings per common share (in €) 2.1 2.8
Diluted earnings per common share (in €) 2.1 2.8

Consolidated Statement of Comprehensive Income (€ thousands)

2,016 2,017
Net profit
Items that will not be reclassified to the consolidated income 399,718 537,396
statement in subsequent periods:
Gains/(losses) on measurement of defined benefit plans (1,448) (730)
Related tax impact (18) 203
Total items that will not be reclassified to the consolidate (1,466) (527)
Items that may be reclassified to the consolidated income statement in subsequent periods:
Gains/(losses) on cash flow hedging instruments 51,086 34,971
Exchange differences on translating foreign operations 4,118 (15,346)
Related tax impact (16,943) (9,757)
Total items that may be reclassified to the consolidated in 38,261 9,868
Total other comprehensive income/(loss), net of tax 36,795 9,341
Total comprehensive income 436,513 546,737
Attributable to:
Owners of the parent 435,691 545,071
Non-controlling interests 822 1,666
436,513 546,737

Check >>> 1 1
 Reformulated Income Statement (€ thousands)
2,018 2,019 2016
3,420,321 3,766,615 Core Operations
(1,622,905) (1,805,310) Net revenues 3,105,084
(327,341) (343,179) Cost of sales (1,579,690)
(643,038) (699,211) Selling, general and administrative costs (295,242)
(3,195) (4,991) Research and development costs (613,635)
2,665 3,522 Core resut before taxes 616,517
826,507 917,446 Taxes on Core Result (181,155)
(23,563) (42,082) NOPLAT 435,362
802,944 875,364
(16,317) (176,656) Non-Core Operations
786,627 698,708 Other expenses, net (24,501)
4.2 3.7 Result from Investments 3,066
4.1 3.7 Non-Core result before taxes (21,435)
Taxes on Non-core Result 5,895
Total other comprehensive income/(loss), net of t 36,795
Non-Core result 21,255
2,018 2,019
786,627 698,708 Financing
Net financial (expenses)/income (27,729)
385 (2,078) Financing Result before Taxes (27,729)
(88) 456 Taxes on Financial Results 7,625
297 (1,622) Non-controlling interest (822)
Financial Result (20,926)
(13,034) (2,272) Total Comprehensive Income 435,691
5,986 2,652
3,608 610 Check >>> 1
(3,440) 990
(3,143) (632)
783,484 698,076

781,585 695,075
1,899 3,001
783,484 698,076

1 1
 Auxiliary Calculations
2017 2018 2019 2,016
Taxes Breakdown
3,416,890 3,420,321 3,766,615 Statutory Tax Rate 28%
(1,650,860) (1,622,905) (1,805,310) Reported Taxes (167,635)
(329,065) (327,341) (343,179) Taxes on Non-Core Results 5,895
(657,119) (643,038) (699,211) Taxes on Financial Results 7,625
779,846 827,037 918,915 Taxes on Core Results (181,155)
(216,846) (22,099) (187,108) Effective Tax Rate 29%
563,000 804,938 731,807
EBITDA 842,799
Depreciation 129,615
(6,867) (3,195) (4,991) Amortization 118,102
2,437 2,665 3,522 EBIT 595,082
(4,430) (530) (1,469)
1,063 127 353
9,341 (3,143) (632)
5,974 (3,546) (1,748)

(29,260) (23,563) (42,082)

(29,260) (23,563) (42,082)
7,022 5,655 10,100
(1,666) (1,899) (3,001)
(23,904) (19,807) (34,983)
545,071 781,585 695,075

1 1 1
 2,017 2,018 2,019

24% 24% 24%

(208,760) (16,317) (176,656)
1,063 127 353
7,022 5,655 10,100
(216,846) (22,099) (187,108)
28% 3% 20%

1,036,022 1,115,255 1,269,392

143,484 156,384 191,482
117,122 132,364 160,464
775,416 826,507 917,446
Activity ratios
2016 2017 2018 2019
+ Average Collection Period (Days) 29 26 23 22
+ Average Holding Period (Days) 75 87 88 85
- Average Payable Period (Days) 142 134 147 144
Cash Conversion Cycle -39 -22 -37 -37

Liquidity Ratios
2016 2017 2018 2019
Current Ratio 1.08 1.33 1.55 1.36
Quick Ratio 0.90 1.08 1.30 1.15
Cash Ratio 0.26 0.42 0.50 0.46

Net Working Capital

2016 2017 2018 2019
Net Working Capital -52,490 31,619 308,226 122,946

Capital Structure
2016 2017 2018 2019
Gearing Ratio 81% 61% 47% 46%
D/E 448% 158% 89% 86%
Debt/EBITDA 173% 119% 108% 100%
Financial Autonomy 9% 19% 28% 27%
Profitability Auxiliar Table
2016 2017 2018 2019
Return on Assets 10.4% 13.0% 16.2% 12.8% Net Revenue
ROIC 31.9% 39.9% 28.6% Cost of Sales
Core ROIC 32.1% 40.9% 28.3% EBITDA
Return on Equity 134.1% 70.0% 58.0% 46.9%
Inventories
Trade Receivables
Trade Payables
Cash and Cash Equivalent

Current Assets
Current Liabilities
 2016 2017 2018 2,019
3,105,084 3,416,890 3,420,321 3,766,615
-1,579,690 -1,650,860 -1,622,905 -1,805,310
842,799 1,036,022 1,115,255 1,269,392

323,998 393,765 391,064 420,051

243,977 239,410 211,399 231,439
614,888 607,505 653,751 711,539
457,784 647,706 793,664 897,946

1,887,453 2,081,077 2,477,326 2,641,201

1,740,333 1,559,730 1,601,500 1,938,625
Revenue growth
2016 2017
Shipments 8,014 8,398
Growth Rate 5%
Net Revenues (€ thousands) 3,105,084 3,416,890
Growth Rate 10%

Shipments by Region (%)

2016 2017
Americas 34% 34%
Rest of APAC 14% 15%
EMEA 45% 45%
Mainland China, HK and Taiwan 8% 7%
Total 100% 100%

Shipments by Region #
2016 2017
Americas 2,685 2,813
Rest of APAC 1,098 1,235
EMEA 3,614 3,737
Mainland China, HK and Taiwan 617 613
Total 8014 8398
Check >>> 1 1

# Models by Range
2016 2017
Sports Range 3 4
GT Range 3 3
Special Series 1 1
Icona 0 0
Hypercar 2 1
Track Cars 1 0
Fuoriserie 1 0
Total 11 9

Model Base Price (2019) Range

Portofino 163,614 GT
488 Spider 210,026 SPORTS
488 Pista 243,893 SPECIAL SERIES
488 Pista Spider 268,811 SPECIAL SERIES
488 Challenge EVO 274,000 TRACK CARS
GTC4 LUSSO T 195,142 GT
F8 TRIBUTO 194,721 SPORTS
F8 SPIDER 216,023 SPORTS
ROMA 162,171 GT
SF90 STRADALE 353,728 SPORTS
GTC4LUSSO 225,089 GT
812 SUPERFAST 249,062 SPORTS
812 GTS 276,515 SPORTS
MONZA SP1/SP2 1,313,744 ICONA
Source: Ferrari South West Europe
Premium paid for customization/ extras 10% Assumption

Average Annual Price Change 3%

Average Annual Price Change (High-End) 1%
 Revenues Breakdown
2018 2019 2016
9,251 10,131 Cars and Spare Parts
10% 10% Revenues 2,180,045
3,420,321 3,766,615 Growth Rate
0% 10% % Total 70%
Engines
Revenues 337,924
2018 2019 Growth Rate
32% 29% % Total 11%
14% 15% Sponsorhips, commercial and brand
46% 48% Revenues 488,514
8% 8% Growth Rate
100% 100% % Total 16%
Other
Revenues 98,601
2018 2019 Growth Rate
2,997 2,897 % Total 3%
1,332 1,499 Total Sales 3,105,084
4,228 4,893 Growth Rate
694 841 % Total 100%
9251 10131
1 1

2018 2019
3 5
3 4
1 2
0 2
1 0
1 1
1 0
10 14

Engine Base Price + Customization Premium

179,975
231,029
268,282
295,692
301,400
V8
214,656
214,193
 V8

237,625
178,388
389,101
247,598
273,968
V12
304,167
1,445,118
Source: Ferrari South West Europe 2019 Price Table
 Value Drivers Forecast
2017 2018 2019
Cars and Spare Parts
2,455,955 2,535,245 2,925,721 Total Shipments
13% 3% 15% Growth Rate
72% 74% 78%
Shipments Breakdown
373,313 284,546 198,308 SPORTS
10% -24% -30% V8
11% 8% 5% V12
Total Sports
494,082 505,701 538,238 % Total
1% 2% 6% GT
14% 15% 14% V8
V12
93,540 94,829 104,348 Total GT
13% 13% 13% % Total
3% 3% 3% SPECIAL SERIES
3,416,890 3,420,321 3,766,615 V8
13% 13% 13% Total SS
100% 100% 100% % Total
ICONA SERIES
V12
Total Icona
% Total
Check >>>
Average Price per Unit (€ thousands)
SPORTS
V8
V12
GT
V8
V12
SPECIAL SERIES
V8
ICONA
V12

Cars Revenue
Spare Parts Revenue
% Revenues
Total Cars and Spare Parts Revenue
Check >>>
Engines
Engines Revenues
Growth Rate

Sponsorships, commercial and brand

Sponsorships, commercial and brand Revenues
Growth Rate

Other
Other Revenues
% Cars Revenues

Total Revenues
Check >>>
 2016 2017 2018 2019 2020F 2021F 2022F 2023F

8,014 8,398 9,251 10,131 9,118 9,799 10,605 11,215

5% 10% 10% -10% 7% 8% 6%

79% 83% 77% 76% 79% 79% 79% 79%

21% 17% 23% 24% 21% 21% 21% 21%
4,728 5,375 5,921 6,484 5,471 5,488 5,515 5,720
59% 64% 64% 64% 60% 56% 52% 51%

89% 63% 60% 76% 72% 72% 72% 72%

11% 37% 40% 24% 28% 28% 28% 28%
2,645 2,519 2,960 3,597 3,374 3,773 4,242 4,598
33% 30% 32% 36% 37% 39% 40% 41%

100% 100% 100% 100% 100% 100% 100% 100%

641 504 370 0 137 294 477 505
8% 6% 4% 0% 2% 3% 5% 5%

100% 100% 100% 100% 100% 100% 100% 100%

0 0 0 51 137 245 371 393
0% 0% 0% 1% 2% 2% 4% 4%
1 1 1 1

245 253 260 268 276 284 293 302

265 272 281 289 298 307 316 325

175 180 185 191 197 203 209 215

227 233 240 248 255 263 271 279

274 276 279 282 290 299 308 317

1,403 1,417 1,431 1,445 1,460 1,474 1,489 1,504

1,831,553 2,018,439 2,285,656 2,579,394 2,493,435 2,863,293 3,300,428 3,575,116

348,492 437,516 249,589 346,327 405,492 465,640 536,729 581,400
19% 22% 11% 13% 16% 16% 16% 16%
2,180,045 2,455,955 2,535,245 2,925,721 2,898,927 3,328,933 3,837,156 4,156,516
1 1 1 1
337,924 373,313 284,546 198,308 162,271 138,681 0 0
10% -24% -30% -18% -15%

488,514 494,082 505,701 538,238 215,295 495,179 527,039 557,558

1% 2% 6% -60% 130% 6% 6%

98,601 93,540 94,829 104,348 88,592 104,597 123,866 134,175

5% 5% 4% 4% 4% 4% 4% 4%

3,105,084 3,416,890 3,420,321 3,766,615 3,365,086 4,067,390 4,488,061 4,848,248

1 1 1 1
 2024F 2025F

11,732 12,164
5% 4%

79% 79%
21% 21%
5,866 5,960
50% 49%

72% 72%
28% 28%
4,927 5,231
42% 43%

100% 100%
528 547
5% 5%

100% 100%
411 426
3% 3%

311 320
335 345

221 228
287 296

327 337

1,519 1,534

3,830,641 4,068,428
622,954 661,624
16% 16%
4,453,595 4,730,052
 0 0

586,615 614,130
5% 5%

143,765 152,689
4% 4%

5,183,975 5,496,870
Comments

Shipments reflect production, which we expect to decrease in the near future due to a
halt in production; in the long-term, Ferrari plans to increase shipments above current
levels

Forecasts from 2019 to 2022E were made according to Ferrari's 2018-2022

investment plan; 2022+ forecasts reflect the shift towards the GT model line

Since there is increased supply for this segment, the price is assumed to be reduced

Assume prior 4-year average

CEO said Ferrari will stop supplying Maserati in 2021-2022 (assume 2021),
there are no plans to supply other automakers
Assume average but extra 25% cut because of COVID-19

This line of revenue mainly depends on F1, which is has been cancelled since
the beginning of the year. We expect activities to return to normal in 2021+.

Decrease in Other Revenues is mainly driven by the impact on the Mugello

racetrack revenues.

TR is expected to return to normal in 2021 and be fuelled by an increased focus in SS and Icona sales
Revenues (€ thousands)
2016 2017 2018
Cars and Spare Parts
Cars
SPORTS
V8
Unit Shipments 3,735 4,461 4,559
Average Price (€ thousands) 245 253 260
V12
Unit Shipments 993 914 1,362
Average Price (€ thousands) 265 272 281
GT
V8
Unit Shipments 2,354 1,587 1,776
Average Price (€ thousands) 175 180 185
V12
Unit Shipments 291 932 1,184
Average Price (€ thousands) 227 233 240
SPECIAL SERIES
V8
Unit Shipments 641 504 370
Average Price (€ thousands) 274 276 279
ICONA SERIES
V12
Unit Shipments 0 0 0
Average Price (€ thousands) 1,403 1,417 1,431
Revenue Cars 1,831,553 2,018,439 2,285,656
Spare Parts
Revenue Spare Parts 348,492 437,516 249,589
Total Cars and Spare Parts 2,180,045 2,455,955 2,535,245
Check >>> 1 1 1
Engines
Engines Revenue 337,924 373,313 284,546

Sponsorhips, commercial and brand

Sponsorhips, commercial and brand Revenues 488,514 494,082 505,701

Other
Other Revenues 98,601 93,540 94,829

Total Revenues 3,105,084 3,416,890 3,420,321

 2019 2020F 2021F 2022F 2023F 2024F 2025F

4,928 4,308 4,322 4,343 4,504 4,619 4,694

268 276 284 293 302 311 320

1,556 1,163 1,166 1,172 1,215 1,247 1,267

289 298 307 316 325 335 345

2,733 2,429 2,716 3,054 3,311 3,548 3,766

191 197 203 209 215 221 228

863 945 1,056 1,188 1,288 1,380 1,465

248 255 263 271 279 287 296

0 137 294 477 505 528 547

282 290 299 308 317 327 337

51 137 245 371 393 411 426

1,445 1,460 1,474 1,489 1,504 1,519 1,534
2,579,394 2,493,435 2,863,293 3,300,428 3,575,116 3,830,641 4,068,428

346,327 405,492 465,640 536,729 581,400 622,954 661,624

2,925,721 2,898,927 3,328,933 3,837,156 4,156,516 4,453,595 4,730,052
1

198,308 162,271 138,681 0 0 0 0

538,238 215,295 495,179 527,039 557,558 586,615 614,130

104,348 88,592 104,597 123,866 134,175 143,765 152,689

3,766,615 3,365,086 4,067,390 4,488,061 4,848,248 5,183,975 5,496,870

Income Statement Forecast (€ thousands)
2016 2017 2018
Core Operations
Net revenues 3,105,084 3,416,890 3,420,321
Cost of sales -1,579,690 -1,650,860 -1,622,905
% Revenues 51% 48% 47%
Selling, general and administrative costs -295,242 -329,065 -327,341
% Revenues 10% 10% 10%
Research and development costs -613,635 -657,119 -643,038
% Revenues 20% 19% 19%
Core resut before taxes 616,517 779,846 827,037
Taxes on Core Result -181,155 -216,846 -22,099
%Core result 29% 28% 3%
NOPLAT 435,362 563,000 804,938

Non-Core Operations
Other expenses, net -24,501 -6,867 -3,195
% Revenues 0.8% 0.2% 0.1%
Result from Investments 3,066 2,437 2,665
Non-Core result before taxes -21,435 -4,430 -530
Taxes on Non-core Result 5,895 1,063 127
% non-core result 28% 24% 24%
Total other comprehensive income/(loss), net of tax 36,795 9,341 -3,143
Non-Core result 21,255 5,974 -3,546

Financing
Net financial (expenses)/income -27,729 -29,260 -23,563
% Debt 2% 1%
Financing Result before Taxes -27,729 -29,260 -23,563
Taxes on Financial Results 7,625 7,022 5,655
% financial result 28% 24% 24%
Non-controling interest -822 -1,666 -1,899
Financial Result -20,926 -23,904 -19,807
Total Comprehensive Income 435,691 545,071 781,585

Assumptions:
(A) 2016 was not considered for the average to reflect Ferrari's increasing cost efficiency.
(B) Ferrari reports that it's planning to increase its R&D expenses, we assumed this this cost increases to start only in 20
 2019 2020F 2021F 2022F 2023F 2024F 2025F 2026F

3,766,615 3,365,086 4,067,390 4,488,061 4,848,248 5,183,975 5,496,870

-1,805,310 -1,611,796 -1,942,528 -2,148,067 -2,319,370 -2,478,972 -2,629,722
48% 48% 48% 48% 48% 48% 48%
-343,179 -318,172 -384,576 -424,351 -458,407 -490,150 -519,735
9% 9% 9% 9% 9% 9% 9%
-699,211 -642,375 -854,085 -942,419 -1,018,052 -1,088,550 -1,154,252
19% 19% 21.00% 21.00% 21.00% 21.00% 21.00%
918,915 792,742 886,201 973,223 1,052,419 1,126,303 1,193,161
-187,108 -190,258 -212,688 -233,574 -252,581 -270,313 -286,359
20% 24% 24% 24% 24% 24% 24%
731,807 602,484 673,513 739,650 799,838 855,990 906,802 945,335

-4,991 -4,459 -5,390 -5,947 -6,424 -6,869 -7,284

0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
3,522 2,923 2,923 2,923 2,923 2,923 2,923
-1,469 -1,536 -2,467 -3,024 -3,502 -3,947 -4,361
353 369 592 726 840 947 1,047
24% 24% 24% 24% 24% 24% 24%
-632 0 0 0 0 0 0
-1,748 -1,168 -1,875 -2,299 -2,661 -2,999 -3,315

-42,082 -45,632 -45,689 -51,444 -56,944 -60,598 -64,847 -68,347

2% 2% 2% 2% 2% 2% 2% 2%
-42,082 -45,632 -45,689 -51,444 -56,944 -60,598 -64,847 -68,347
10,100 10,952 10,965 12,347 13,666 14,543 15,563 16,403
24% 24% 24% 24% 24% 24% 24% 24%
-3,001 -3,001 -3,001 -3,001 -3,001 -3,001 -3,001 -3,001
-34,983 -37,681 -37,725 -42,099 -46,278 -49,055 -52,285 -54,945
695,075 563,635 633,913 695,253 750,899 803,935 851,203
-19% 12% 10% 8% 7% 6%

cost increases to start only in 2021, as in 2020 the company is being affected by Covid-19 and will likely postpone extra expenses.
 Auxiliary table
2016 2017 2018 2019 2020F
EBITDA 842,799 1,036,022 1,115,255 1,269,392 1,177,464
EBITDA margin 27% 30% 33% 34% 35%
Depreciation 129,615 143,484 156,384 191,482 202,847
(A) % PPE 19% 20% 18% 18% 19%
Amortization 118,102 117,122 132,364 160,464 186,334
% Intagibles 33% 27% 20% 19% 25%
EBIT 595,082 775,416 826,507 917,446 788,283
(B) EBIT margin 19% 23% 24% 24% 23%
Taxes
Statutory Tax Rate 28% 24% 24% 24% 24%
Reported Taxes -167,635 -208,760 -16,317 -176,656 -178,938
Taxes on Non-Core Results 5,895 1,063 127 353 369
Taxes on Financial Results 7,625 7,022 5,655 10,100 10,952
Taxes on Core Results -181,155 -216,846 -22,099 -187,108 -190,258

Check >>> 1 1 1 1

ostpone extra expenses.

 2021F 2022F 2023F 2024F 2025F
1,325,079 1,457,492 1,575,552 1,685,662 1,786,282
33% 32% 32% 33% 32%
219,045 241,700 261,098 279,178 296,028
19% 19% 19% 19% 19%
225,222 248,516 268,460 287,050 304,376
25% 25% 25% 25% 25%
880,811 967,277 1,045,995 1,119,434 1,185,877
22% 22% 22% 22% 22%

24% 24% 24% 24% 24%

-201,131 -220,501 -238,074 -254,822 -269,749
592 726 840 947 1,047
10,965 12,347 13,666 14,543 15,563
-212,688 -233,574 -252,581 -270,313 -286,359
Balance Sheet Forecast
2016 2017
Core Invested Capital
Operating Cash 62,102 68,338
% revenues 2% 2%
Other current assets 53,729 45,441
% revenues 2% 1%
Current tax receivable 1,312 6,125
Receivables from financing activities 790,377 732,947
% of total cars and spare parts revenues 36% 30%
Trade receivables 243,977 239,410
Average Collection Period 29 26
Inventories 323,998 393,765
Average Holding Period 75 87
Current tax payables -41,595 -29,160
% of core taxes 23% 13%
Trade payables -614,888 -607,505
Average Payable Period 142 134
Other liabilities -656,275 -620,350
Provisions -215,227 -197,392
% cars revenues 12% 10%
Goodwill 785,182 785,182
Intangible assets 354,394 440,456
% revenues 11% 13%
Property plant and equipment 669,283 710,260
% revenues 22% 21%
Core Invested Capital 1,756,369 1,967,517

Non Core Invested Capital

Current financial assets 16,276 15,683
Investments and other financial assets 33,935 30,038
Deferred tax assets 119,357 94,091
Other financial liabilities -39,638 -1,444
Employee benefits 0 -84,159
Deferred tax liabilities -13,111 -10,977
Non Core Invested Capital 25,795 43,232

Financing
Excess cash 395,682 579,368
% of Debt 21% 32%
Debt -1,848,041 -1,806,181
% of Invested Capital 103.70% 89.83%
Non-controlling interest -481000.00% -525800.00%
Net Financial Assets -1,457,169 -1,232,071

Equity/(Deficit) attributable to owners of the parent 324,995 778,678

Check >>> 1 1
 2018 2019 2020F 2021F 2022F 2023F

68,406 75,332 67,302 81,348 89,761 96,965

2% 2% 2% 2% 2% 2%
64,295 92,830 62,293 75,293 83,081 89,748
2% 2% 2% 2% 2% 2%
128,234 21,078 39,187 39,187 39,187 39,187
878,496 966,448 969,567 1,113,386 1,283,365 1,390,177
35% 33% 33% 33% 33% 33%
211,399 231,439 204,699 244,947 267,578 286,161
23 22 22 22 22 22
391,064 420,051 375,025 440,679 475,124 500,189
88 85 85 83 81 79
-7,635 -7,106 -35,557 -40,436 -32,310 -43,388
35% 4% 19% 19% 14% 17%
-653,751 -711,539 -635,268 -765,622 -846,632 -914,149
147 144 144 144 144 144
-589,743 -800,015 -666,596 -669,176 -681,382 -704,292
-182,539 -165,572 -224,009 -257,237 -296,509 -321,187
8% 6% 9% 9% 9% 9%
785,182 785,182 785,182 785,182 785,182 785,182
645,797 837,938 748,612 904,850 998,434 1,078,563
19% 22% 22% 22% 22% 22%
850,550 1,069,652 1,069,652 1,155,067 1,274,530 1,376,817
25% 28% - 28% 28% 28%
2,589,755 2,815,718 2,760,090 3,107,468 3,439,408 3,659,974

10,174 11,409 13,386 13,386 13,386 13,386

32,134 38,716 38,716 38,716 38,716 38,716
60,744 73,683 86,969 86,969 86,969 86,969
-11,342 -14,791 -16,804 -16,804 -16,804 -16,804
-86,575 -88,116 -88,116 -88,116 -88,116 -88,116
-39,142 -82,208 -36,360 -36,360 -36,360 -36,360
-34,007 -61,307 -2,209 -2,209 -2,209 -2,209

725,258 822,614 760,749 856,572 948,136 1,008,978

38% 39% 36% 36% 36% 36%
-1,927,167 -2,089,737 -2,092,369 -2,355,921 -2,607,760 -2,775,100
75.41% 75.87% 76% 76% 76% 76%
-511700.00% -5,998 -5,998 -5,998 -5,998 -5,998
-1,207,026 -1,273,121 -1,337,618 -1,505,347 -1,665,622 -1,772,120

1,348,722 1,481,290 1,420,263 1,599,912 1,771,578 1,885,645

1 1
 2024F 2025F 2026F

103,680 109,937
2% 2%
95,963 101,755
2% 2%
39,187 39,187
1,489,537 1,582,000
33% 33%
302,917 317,989
21 21
521,243 539,117
77 75
-45,072 -45,516
17% 16%
-977,054 -1,036,470
144 144
-680,362 -683,803
-344,143 -365,506
9% 9%
785,182 785,182
1,153,250 1,222,858
22% 22%
1,472,157 1,561,014
28% 28%
3,916,486 4,127,745

13,386 13,386 13,386

38,716 38,716 38,716
86,969 86,969 86,969
-16,804 -16,804 -16,804
-88,116 -88,116 -88,116
-36,360 -36,360 -36,360
-2,209 -2,209 -2,209

1,079,736 1,138,011 1,189,578

36% 36% 36%
-2,969,712 -3,129,992 -3,271,822
76% 76% 76%
-5,998 -5,998 -5,998
-1,895,975 -1,997,979 -2,088,242

2,018,302 2,127,557 2,224,235

Comments

According to McKinsey, operating cash is usually defined as 2% of revenues.

Related to prepayments, security deposits and VAT credits, which depend on the revenues.

Ferrari applied for the Patent Box, an Italian tax exemption regime and there's no reason to believe it won't be approved;

Assume continuous improvements in Ferrari's bargaining power and convergence to the industry average (21).

The average holding period is expected to decrease as the firm's bargaining power increases.

No changes are expected.

Provisions mainly related to warranty coverage of the car sales, as such, this item was forecasted as a % of car sales.

No reason to assume changes.

Given the types of PPE owned by Ferrari, this caption is not expected to be affected by the 2020 Covid-19 break in producti

No reason to assume differences from the historical average.

No reason to assume changes in investments.
No reason to asume differences from the historical average.
No reason to asume differences from the historical average.
No reason to assume changes.
No reason to asume differences from the historical average.
Consolidated Free Cash Flows
(€ thousands) 2017 2018
EBIT 779,846 827,037
Notional Income Taxes (187,163) (198,489)
Tax Adjustments (29,683) 176,390
NOPLAT (or NOPAT) 563,000 804,938
Depreciation 143,484 156,384
Amortization 117,122 132,364
Gross Free Cash Flow 823,606 1,093,686
∆ Net CAPEX (184,461) (296,674)
∆ Net Working Capital (84,109) (276,608)
∆ Net Intangibles (203,184) (337,705)
Operating Free Cash Flow 351,852 182,699
Non Core Result 5,974 (3,546)
∆ Non-Core Invested Capital (17,437) 77,239
Non Operating Free Cash Flow (11,463) 73,693
Unlevered Free Cash Flow 340,389 256,392

Interest (29,260) (23,563)

Tax Shields 7,022 5,655
Change in Financial Debt (225,098) (25,044)
Minority Interest (1,666) (1,899)
Net Change in Equity (in Cash) (91,388) (211,541)
Financing and Equity Cash Flows (340,389) (256,392)
Check >>> 1 1

Adjusted Present Value

2018
Unlevered FCF
@ Ru
= Unlevered EV

Tax Shields
@Ru
= Value Tax Shields

= Levered EV

CF Finan. Debt
@ Rd
= Value Fin. Debt
+ Unlevered EV
+ Value Tax Shields
+ Value Fin. Debt
= Value of Equity

Discounted Cash Flow

2018
Unlevered FCF
@ WACC
= Levered EV

CF Finan. Debt
@ Rd
= Value Fin. Debt

+ Levered EV
+ Value Fin. Debt
= Value of Equity

Flow to Equity

2018
Cash Flow Equity
@ Re
= Value of Equity

Economic Value Added

2018
NOPLAT
Invested Capital (Year 0)
ROIC
WACC
Annual Economic Profit (in %)
(in $)
PV Economic Value Added
Initial Invested Capital
= Levered EV

CF Finan. Debt
@ Rd
= Value Fin. Debt
+ Levered EV
+ Value Fin. Debt
= Value of Equity
 2019 2020F 2021F 2022F 2023F 2024F
918,915 792,742 886,201 973,223 1,052,419 1,126,303
(220,540) (190,258) (212,688) (233,574) (252,581) (270,313)
33,431 0 0 0 0 0
731,807 602,484 673,513 739,650 799,838 855,990
191,482 202,847 219,045 241,700 261,098 279,178
160,464 186,334 225,222 248,516 268,460 287,050
1,083,753 991,665 1,117,780 1,229,866 1,329,396 1,422,218
(410,584) (202,847) (304,460) (361,163) (363,384) (374,518)
185,280 (33,697) (105,726) (118,893) (38,149) (86,485)
(352,605) (97,008) (381,460) (342,100) (348,589) (361,738)
505,844 658,113 326,134 407,709 579,273 599,478
(1,748) (1,168) (1,875) (2,299) (2,661) (2,999)
27,300 (59,098) 0 0 0 0
25,552 (60,266) (1,875) (2,299) (2,661) (2,999)
531,395 597,847 324,260 405,411 576,612 596,478

(42,082) (45,632) (45,689) (51,444) (56,944) (60,598)

10,100 10,952 10,965 12,347 13,666 14,543
66,095 64,497 167,729 160,275 106,498 123,855
(3,001) (3,001) (3,001) (3,001) (3,001) (3,001)
(562,507) (624,663) (454,263) (523,587) (636,832) (671,278)
(531,395) (597,847) (324,260) (405,411) (576,612) (596,478)
1 1 1 1 1 1

2019 2020F 2021F 2022F 2023F 2024F

597,847 324,260 405,411 576,612 596,478
6.38% 6.38% 6.38% 6.38% 6.38%
23,810,969 24,731,964 25,985,294 27,237,420 28,398,215 29,613,187

10,952 10,965 12,347 13,666 14,543

6.38% 6.38% 6.38% 6.38% 6.38%
522,158 544,514 568,281 592,184 616,291 641,060

24,333,127 25,276,478 26,553,576 27,829,604 29,014,506 30,254,247

15,864 119,038 105,829 46,554 60,256

1.29% 1.29% 1.29% 1.29% 1.29%
(301,730) (321,499) (444,698) (556,283) (610,036) (678,188)
23,810,969 24,731,964 25,985,294 27,237,420 28,398,215 29,613,187
522,158 544,514 568,281 592,184 616,291 641,060
(301,730) (321,499) (444,698) (556,283) (610,036) (678,188)
24,031,397 24,954,979 26,108,877 27,273,321 28,404,470 29,576,059

2019 2020F 2021F 2022F 2023F 2024F

597,847 324,260 405,411 576,612 596,478
6.37% 6.37% 6.37% 6.37% 6.37%
23,879,582 24,804,033 26,060,981 27,316,578 28,480,727 29,699,102

15,864 119,038 105,829 46,554 60,256

1.29% 1.29% 1.29% 1.29% 1.29%
(301,730) (321,499) (444,698) (556,283) (610,036) (678,188)

23,879,582
(301,730)
23,577,851

2019 2020F 2021F 2022F 2023F 2024F

624,663 454,263 523,587 636,832 671,278
6.44% 6.44% 6.47% 6.48% 6.49%
24,031,397 24,954,979 26,108,877 27,273,321 28,404,470 29,576,059

2019 2020F 2021F 2022F 2023F 2024F

602,484 673,513 739,650 799,838 855,990
2,754,411 2,757,881 3,105,259 3,437,199 3,657,765 3,914,277
21.87% 24.42% 23.82% 23.27% 23.40%
6.37% 6.37% 6.37% 6.37% 6.37%
15.50% 18.05% 17.45% 16.90% 17.03%
426,893 497,703 541,735 580,801 622,909
21,848,896 22,814,848 23,771,545 24,744,900 25,740,977 26,758,339
2,754,411 2,757,881 3,105,259 3,437,199 3,657,765 3,914,277
24,603,308 25,572,728 26,876,804 28,182,100 29,398,742 30,672,616

15,864 119,038 105,829 46,554 60,256

1.29% 1.29% 1.29% 1.29% 1.29%
(886,871) (914,213) (1,045,083) (1,164,438) (1,226,062) (1,302,186)
24,603,308
(886,871)
23,716,437
 Auxiliary Calculations and Results
2025F 2026F (€ thousands) 2016 2017
1,193,161 Change in IC
(286,359) NWC (52,490) 31,619
0 Change in NWC 84,109
906,802 945,335
296,028 PPE 669,283 710,260
304,376 Depreciation 129,615 143,484
1,507,207 CAPEX 184,461
(384,885)
(52,794) Intangibles 354,394 440,456
(373,984) Amortisation 118,102 117,122
695,543 Change in Intangibles 203,184
(3,315)
0
(3,315)
692,229 758,394

(64,847) (68,347)
15,563 16,403
102,005 90,263
(3,001) (3,001)
(741,948) (793,712)
(692,229) (758,394)
1 1 Perpetual Growth Rate 3.92%

2025F 2026F
692,229 758,394
6.38% 6.38%
30,809,909

15,563 16,403
6.38% 6.38%
666,388

31,476,297

34,156 18,915
1.29% 1.29%
(721,121)
30,809,909
666,388
(721,121)
30,755,176 Implied Share Price 129.70

2025F 2026F
692,229 758,394
6.37% 6.37%
30,899,237

34,156 18,915
1.29% 1.29%
(721,121)

Implied Share Price 127.25

Deviation 1.92%

2025F 2026F
741,948 793,712
6.50% 6.50%
30,755,176 Implied Share Price 129.70
Deviation 0.00%

2025F 2026F
906,802 945,335
4,125,536
23.17% 22.91%
6.37% 6.37%
16.79% 16.54%
657,393 682,471
27,805,930
4,125,536
31,931,466

34,156 35,494
1.29% 1.29%
(1,353,195)
Implied Share Price 128.00
Deviation 1.33%

Average Implied Share Price 128.66

 2018 2019 2020F 2021F 2022F 2023F 2024F 2025F

308,226 122,946 156,644 262,369 381,262 419,412 505,897 558,691

276,608 (185,280) 33,697 105,726 118,893 38,149 86,485 52,794

850,550 1,069,652 1,069,652 1,155,067 1,274,530 1,376,817 1,472,157 1,561,014

156,384 191,482 202,847 219,045 241,700 261,098 279,178 296,028
296,674 410,584 202,847 304,460 361,163 363,384 374,518 384,885

645,797 837,938 748,612 904,850 998,434 1,078,563 1,153,250 1,222,858

132,364 160,464 186,334 225,222 248,516 268,460 287,050 304,376
337,705 352,605 97,008 381,460 342,100 348,589 361,738 373,984
 Identifier (RIC) Company Name
RACE.MI Ferrari NV
AML.L Aston Martin Lagonda Global Holdings PLC
BMWG.DE Bayerische Motoren Werke AG
VOWG_p.DE Volkswagen AG
DAIGn.DE Daimler AG
FCHA.MI Fiat Chrysler Automobiles NV
Auto
F.N Ford Motor Co
RENA.PA Renault SA
HOG Harley-Davidson Inc
7267.T Honda Motor Co Ltd
PIRC.MI Pirelli & C SpA
PSHG_p.DE Porsche Automobil Holding SE
1913.HK Prada SpA
SFER.MI Salvatore Ferragamo SpA
TIF Tiffany & Co
HRMS.PA Hermes International SCA
BCU.MI Brunello Cucinelli SpA
Luxury
BRBY.L Burberry Group PLC
CFR.S Compagnie Financiere Richemont SA
PRTP.PA Kering SA
LVMH.PA LVMH Moet Hennessy Louis Vuitton SE
MONC.MI Moncler SpA
EBITDA Margin (%)
(FY0) Revenue FY 2019 (EUR, in thousands) Revenue FY 2018 (EUR, in thousands)
34.1% 3,766,600 3,420,300
16.8% 1,109,900 1,096,000
13.0% 104,210,000 96,855,000
16.6% 252,632,000 235,849,000
15.6% 172,745,000 167,362,000
10.6% 108,187,000 110,412,000
10.5% 139,303,000 135,941,000
11.6% 55,537,000 57,419,000
15.3% 4,791,000 4,847,000
9.1% 123,860,000 118,677,000
25.0% 5,323,100 5,194,500
7.8% 116,000 103,000
30.9% 3,225,600 3,142,200
24.6% 1,377,300 1,346,800
22.4% 3,962,400 3,787,300
40.9% 6,883,400 5,966,100
28.1% 607,800 553,000
20.8% 3,084,600 3,099,000
19.8% 13,989,000 11,013,000
37.9% 15,884,000 13,665,000
29.5% 53,670,000 46,826,000
40.7% 1,627,700 1,420,100
 50% 50%
Revenue Growth EBITDA Margin Deviation Revenue Growth Deviation Weighted Deviation
10% 0% 0% 0%
1% 12% 6% 9%
8% 15% 2% 8%
7% 12% 2% 7%
3% 13% 5% 9%
-2% 17% 9% 13%
2% 17% 5% 11%
-3% 16% 9% 13%
-1% 13% 8% 11%
4% 18% 4% 11%
2% 6% 5% 6%
13% 19% 2% 10%
3% 2% 5% 4%
2% 7% 6% 6%
5% 8% 4% 6%
15% 5% 4% 4%
10% 4% 0% 2%
0% 9% 7% 8%
27% 10% 12% 11%
16% 3% 4% 4%
15% 3% 3% 3%
15% 5% 3% 4%
Ranking
-
14
11
10
13
20
19
21
16
17
7
15
4
9
8
6
1
12
18
3
2
5
 Identifier (RIC) Company Name
1913.HK Prada SpA
HRMS.PA Hermes International SCA
BCU.MI Brunello Cucinelli SpA
Luxury
PRTP.PA Kering SA
LVMH.PA LVMH Moet Hennessy Louis Vui
MONC.MI Moncler SpA

RACE.MI Ferrari NV

LVMH Moet Hennessy_x000D_

Moncler
P/E 24.83 24.47
EV/EBITDA 14.46 15.22
EV/EBIT 20.15 20.51
P/Sales 3.23
EV/Sales 4.27 6.20
Note: McLauren is not publicly listed, therefore it is not possible to find data.

Multiples Min Q1
P/E 24 25
EV/EBITDA 12 14
EV/EBIT 17 20
P/Sales 3 4
EV/Sales 4 4

Equity
Min Q1
P/E 15,827,322 16,443,629
EV/EBITDA 14,368,167 16,139,623
EV/EBIT 14,314,186 17,305,265
P/Sales 10,898,811 12,043,940
EV/Sales 13,068,472 14,870,886

Share Price
Min Q1
P/E 85 89
EV/EBITDA 78 87
EV/EBIT 77 93
P/Sales 59 65
EV/Sales 71 80
 Multiples Min Range 1
P/E 85 3
EV/EBITDA 78 10
EV/EBIT 77 16
P/Sales 59 6
EV/Sales 71 10
 P/E EV/EBIT EV/Sales
30.44 39 3.38
46.24 28 10.39
37.03 31 4.07
26.90 17 4.63
24.83 20 3.88
24.47 21 5.68

39.17 41.54 7.44

Kering Hermes Prada

26.90 46.24 30.44
13.46 23.53 12.32
16.98 27.96 38.58
3.84 10.13
5.11 9.62 3.81

Median Q3 Max
29 35 46
15 15 24
24 30 39
4 7 10
5 6 10

Equity
Median Q3 Max
18,765,205 23,456,267 31,039,952
17,566,122 18,205,663 28,601,054
20,966,333 26,514,233 34,125,680
13,189,069 25,032,379 36,875,690
16,500,617 21,049,946 34,951,415

Share Price
Median Q3 Max
101 127 168
95 98 154
113 143 184
71 135 199
89 114 189
Range 2 Range 3 Range 4
13 25 41
8 3 56
20 30 41
6 64 64
9 25 75
 EV/Sales P/Sales EV/EBITDA
3.81 12.32
9.62 10.13 23.53
4.33 15.38
5.11 3.84 13.46
4.27 3.23 14.46
6.20 15.22

10.08 7.17 29.59

Brunello Cucinelli Average Average Auto Manufacturers

37.03 31.65 25.40
15.38 15.73 14.38
31.06 25.87 19.22
5.73 3.53
4.33 5.55 5.19

Ferrari @31.12.2019
Earnings 698,708
EBITDA 1,269,392
EBIT 917,446
Sales 3,766,615
Number of shares 185,283
EV 26,130,282
Price per share 147.90
Sales per share 20.33

Share Price (in €)

EV/Sales

P/Sales

EV/EBIT

EV/EBITDA

P/E
 EV/EBIT

EV/EBITDA

P/E

0 50 100 150 200 250

Average 94
Average w/o including Sales Multiple 103
Average Luxury Brands
37.90
17.08
32.53
10.13
5.92
150 200 250
 Identifier
Auto RACE.MI
1913.HK
HRMS.PA
BCU.MI
Luxury
PRTP.PA
LVMH.PA
MONC.MI
Source: Reuters

Ferrari @31.12.2019
Net Debt 1,267,123
Market Capitalization (k€) 27,403,403
Share price (€) 148
No. outstanding shares (thousand) 185,283
Tax Rate 24%

Ferrari's Capital Structure

D/EV 4.4%
E/EV 95.6%
D/E 4.6%

Market Data
Risk-free* -0.41%
Market Return** 7.17%
Market Risk Premium** 7.58%

Betas
β levered (Equity beta) 0.93
β debt 0.23
β unlevered (industry) 0.90

Returns
Cost of equity levered (Re) 6.61%
Cost of equity unlevered (Ru) 6.38%
Cost of debt (Rd) 1.29%

Yield 1.40%
Credit Rating (BBB)*** 0.23%

*10 years European Central Bank, Euro Area Yield - ECB (as of 29/04)
** MSCI World Index 10Y
***Eikon Implied Rating: BBB
 EBITDA Margin (%)
Company Name (FY0)
Ferrari NV 0.34
Prada SpA 0.31
Hermes International SCA 0.41
Brunello Cucinelli SpA 0.28
Kering SA 0.38
LVMH Moet Hennessy Louis Vuitton SE 0.30
Moncler SpA 0.41

Total

D/EV
E/EV
D/E
WACC
Re

Probability of default
Sr. Unsecured Bond****
Loss given default
Probability of default * Loss given default
****Annual Default Study: Corporate Default and Recovery Rates, 1920-2017

Ferrari Corporate Bonds

Face Value
500
700

ield - ECB (as of 29/04)

 Market Cap (EUR) Net Debt (FY0, EUR) Current EV (EUR) Raw Beta (5 Year)
28,540,973,758 1,188,511,000 29,613,997,778 0.55
7,997,328,441 2,819,834,000 10,804,538,721 1.01
74,320,503,883 -3,242,500,000 70,769,457,812 0.61
1,962,674,145 480,890,000 2,436,900,000 0.53
57,962,682,940 7,092,400,000 64,968,864,120 1.10
176,830,462,620 18,829,000,000 196,685,781,742 1.03
8,599,468,320 -23,415,000 8,539,529,586 0.60

327,673,120,349

2020F 2021F 2022F 2023F

1.24% 1.27% 1.67% 2.00%
98.76% 98.73% 98.33% 98.00%
1.26% 1.29% 1.70% 2.04%
6.37% 6.37% 6.37% 6.37%
6.44% 6.44% 6.47% 6.48%

0.23%
53.90%
46.10%
0.11%
ate Default and Recovery Rates, 1920-2017

Ferrari Corporate Bonds

Yield Maturity
1.40% 2023
1.24% 2021
 Price Close
Adjusted Beta (EUR) Weight D/EV
0.70 146.55 0.09 0.04
1.01 3.13 0.02 0.26
0.74 701.00 0.23 -0.05
0.69 28.74 0.01 0.20
1.07 457.05 0.18 0.11
1.02 348.65 0.54 0.10
0.73 33.15 0.03 -0.00
1.00
Check >>> 1

2024F 2025F 2026F

2.10% 2.24% 2.29%
97.90% 97.76% 97.71%
2.15% 2.29% 2.34%
6.37% 6.37% 6.37%
6.49% 6.50% 6.50%
E/EV D/E Unlevered Beta
0.96 0.04 0.68
0.74 0.35 0.80
1.05 -0.04 0.76
0.80 0.25 0.60
0.89 0.12 0.98
0.90 0.11 0.94
1.00 -0.00 0.73
0.90
Long term growth
2016 2017 2018
NOPLAT 435,362 563,000 804,938
Core Invested Capital 1,756,369 1,967,517 2,589,755
Invested Capital 1,782,164 2,010,749 2,555,748
New Invested Capital 228,585 545,000
Core ROIC - 32% 41%
Overall ROIC - 32% 40%
RONIC - 106%
RR - 41% 68%
Free Cash Flows (unlevered) - 340,389 256,392
Growth Rate (Unlevered FCF method) - - -25%
Growth Rate (RONIC*RR) 72%
Growth Rate (Overall ROIC*RR) 13% 27%
 2019 2020F 2021F 2022F 2023F 2024F 2025F
731,807 602,484 673,513 739,650 799,838 855,990 906,802
2,815,718 2,760,090 3,107,468 3,439,408 3,659,974 3,916,486 4,127,745
2,754,411 2,757,881 3,105,259 3,437,199 3,657,765 3,914,277 4,125,536
198,663 3,469 347,378 331,940 220,565 256,512 211,259
28% 21% 24% 24% 23% 23% 23%
29% 22% 24% 24% 23% 23% 23%
-13% -65% 2047% 19% 18% 25% 20%
27% 1% 52% 45% 28% 30% 23%
531,395 597,847 324,260 405,411 576,612 596,478 692,229
107% 13% -46% 25% 42% 3% 16%
-4% 0% 1056% 9% 5% 8% 5%
8% 0% 13% 11% 6% 7% 5%
 Assumptions
Terminal Value
945,335

4,312,478
186,942

23%
20%
20% -15% Although we've assumed that the RR from 2025 will further decrease at the same 4Y
758,394

3.92%
5%
urther decrease at the same 4Y historical rate, we expect it to stabilize from 2025 onwards.
Adjusted Present Value

2018 2019 2020F 2021F 2022F 2023F

Unlevered FCF 597,847 324,260 405,411 576,612
@ Ru 6.38% 6.38% 6.38% 6.38%
= Unlevered EV 23,810,969 24,731,964 25,985,294 27,237,420 28,398,215

Tax Shields 10,952 10,965 12,347 13,666

@ Ru 6.38% 6.38% 6.38% 6.38%
= Value Tax Shields 522,158 544,514 568,281 592,184 616,291

= Levered EV 24,333,127 25,276,478 26,553,576 27,829,604 29,014,506

CF Fin. Debt 15,864 119,038 105,829 46,554

=@ Rd 1.29% 1.29% 1.29% 1.29%
= Value Fin. Debt - 301,730 - 321,499 - 444,698 - 556,283 - 610,036

+ Unlevered EV 23,810,969
+ Value Tax Shields 522,158
+ Value Fin. Debt (301,730)
 Ru 6.38%
Terminal Growth Rate 3.92%
2024F 2025F 2026F RR in perpetuity 19.78%
596,478 692,229 758,394 RONIC in perpetuity 19.81%
6.38% 6.38% 6.38%
29,613,187 30,809,909 0
Growth Rate calculation Sensitivity Analysis
14,543 15,563 16,403
6.38% 6.38% 6.38%
641,060 666,388 0 3.92% 17.78%
15.81%
30,254,247 31,476,297 0 16.81%
17.81%
60,256 34,156 18,915 18.81%

RONIC
1.29% 1.29% 1.29% 19.81%
- 678,188 - 721,121 20.81%
21.81%
22.81%
23.81%

Levered EV Sensitivity Analysis

(APV)
24,333,127 5.38%
2.92%
Terminal growth rate

3.17%
3.42%
3.67%
3.92%
4.17%
4.42%
4.67%
4.92%

Share Price Sensitivity Analysis

(APV)
5.38%
2.92% 137.02
inal growth rate

3.17% 151.04
3.42% 168.64
Terminal growth rate
3.67% 191.38
3.92% 221.90
4.17% 265.01
4.42% 330.55
4.67% 442.14
4.92% 674.62
 RR
18.28% 18.78% 19.28% 19.78% 20.28% 20.78% 21.28%

Ru
5.63% 5.88% 6.13% 6.38% 6.63% 6.88% 7.13%

Ru
5.63% 5.88% 6.13% 6.38% 6.63% 6.88% 7.13%
123.87 112.94 103.72 95.84 89.02 83.06 77.82
135.14 122.18 111.41 102.32 94.55 87.83 81.96
148.97 133.30 120.52 109.91 100.95 93.29 86.67
166.32 146.93 131.49 118.89 108.43 99.60 92.05
188.74 164.04 144.93 129.70 117.29 106.98 98.27
218.83 186.14 161.79 142.95 127.95 115.71 105.54
261.33 215.81 183.58 159.58 141.01 126.22 114.16
325.94 257.71 212.83 181.07 157.41 139.10 124.52
435.96 321.41 254.15 209.91 178.60 155.27 137.22
21.78%

7.38%

7.38%
73.16
76.79
80.88
 85.52
90.83
96.96
104.13
112.63
122.85