Ferrari N.V. — FY2021 Form 20-F
Reporting period: Fiscal year ended December 31, 2021, with comparisons to FY2020 and FY2019. This is an annual report, not a standalone fourth-quarter filing. Financial statements are prepared under IFRS as issued by the IASB and adopted by the EU. The auditor issued an unqualified opinion; internal control over financial reporting was also assessed as effective.
Business context and performance
Ferrari designs, manufactures and sells luxury performance cars, alongside engines, Formula 1-related activities and selected brand and lifestyle businesses. It shipped 11,155 cars in 2021 through 172 dealers operating 191 points of sale. Management maintains controlled production and manages waiting lists to protect exclusivity.
| Metric | FY2021 | FY2020 | Change |
|---|---|---|---|
| Car shipments | 11,155 | 9,119 | +22.3% |
| Net revenue | €4,271m | €3,460m | +23.4% (+26.0% constant currency) |
| EBIT | €1,075m | €716m | +50.2% |
| EBIT margin | 25.2% | 20.7% | +4.5 percentage points |
| Net profit | €833m | €609m | +36.8% |
| Basic earnings per share | €4.50 | €3.29 | +36.8% |
| EBITDA (non-GAAP) | €1,531m | €1,143m | +34.0% |
Cash flow, debt and liquidity
- Operating cash flow was €1,283m, compared with €838m in 2020. Capital expenditure was €750m, up from €734m. Free cash flow was €546m versus €129m; free cash flow from industrial activities was €642m versus €171m. These are company-defined non-GAAP measures.
- Cash and cash equivalents were €1,344m at year-end, down €18m. Total available liquidity, including €676m of undrawn committed credit lines, was €2,020m.
- Total debt was €2,630m, down from €2,725m. Reported net debt was €1,286m; net industrial debt, excluding financial-services net debt, was €297m, compared with €543m in 2020.
- Financial-services receivables rose to €1,144m from €940m, while related net debt increased to €989m from €820m. U.S. asset-backed financing was €900m at year-end.
- Cash outflows included €500m repayment of a bond, €231m of share repurchases and €160m of dividends paid to parent-company shareholders. The company issued €150m of 0.91% notes due 2032.
Material changes versus prior periods
- Revenue recovered above pre-pandemic 2019 levels, with shipments rising to 11,155 from 9,119 in 2020 and 10,131 in 2019. FY2020 had been affected by a seven-week production and delivery suspension.
- Cars and spare parts revenue increased 26.0%, driven by higher shipments, favorable product mix and personalization. V8 shipments rose 34.6%; V12 shipments fell 16.1%, partly reflecting the phase-out of the 812 Superfast.
- EBIT improved on positive volume and product mix and a stronger Formula 1 calendar and brand contribution. A €77m adverse foreign-exchange impact partly offset these factors. Cost of sales remained 48.7% of revenue.
- Research and development expense rose 8.6% to €768m, reflecting product innovation, Formula 1 activity and higher amortization of capitalized development. Capitalized development additions were €363m.
- Net profit increased, but FY2020 included a one-time €75m net tax benefit from a trademark tax step-up. Excluding that item, adjusted net profit was €534m in 2020; FY2021 reported net profit was €833m.
Outlook, management commentary and risks
- Management said the Group exceeded its guidance on all metrics in 2021, but the provided filing text does not give a clear numerical FY2022 guidance. Management planned to present future plans at a Capital Markets Day on June 16, 2022.
- The Purosangue was expected to enter production in 2022, with deliveries starting in 2023. Ferrari launched four models in 2021 and had launched 13 of its planned 15 new models for 2019–2022.
- Ferrari reiterated its ambition to reach carbon neutrality by 2030 and is expanding hybrid and electric technology. It expects elevated R&D and investment needs as its product portfolio and manufacturing capabilities transition.
- Management reported limited operational effects from COVID-19 in 2021, while noting that renewed restrictions, supply-chain disruption and further pandemic developments could affect production, demand and cash flow.
- Key risks include semiconductor and other supplier shortages, inflation and higher interest rates, foreign-exchange movements, evolving emissions and safety rules, and geopolitical tensions and sanctions. Ferrari also relies on low-volume exclusivity, a limited number of models, its Maranello and Modena facilities, and Maserati engine orders.
- Legal proceedings include matters involving vehicle safety, emissions, contracts, intellectual property and warranties. The warranty and recall provision was €109m at year-end; the auditor identified it as a critical audit matter because estimating future claims and campaign costs involves judgment. The Takata airbag recall provision was approximately €3m.
- The Board proposed a dividend of €1.362 per common share, approximately €250m in total, subject to shareholder approval. The stated policy was to target dividends of 30% of annual net profit, subject to relevant financial and strategic factors.
Most important facts for investors to verify
- Reconcile the reported FY2021 results and non-GAAP measures, including free cash flow and net industrial debt, to the audited IFRS statements.
- Check the actual FY2022 guidance and subsequent commentary; numerical guidance is not clearly provided in the filing text summarized here.
- Monitor whether model launches, especially Purosangue, support planned growth without weakening pricing, waiting lists or brand exclusivity.
- Assess the effect of supply constraints, inflation, currency movements and regulatory changes on margins, deliveries and investment needs.
- Review the adequacy and development of the €109m warranty and recall provision and the status and potential financial exposure of material legal proceedings.
- Confirm shareholder approval and payment of the proposed €1.362-per-share dividend, and weigh ongoing buybacks against investment and debt commitments.