Thank you everyone for joining us today. There are two topics that we plan to cover today; the Group's fourth quarter and 12 months 2016 financial results; and 2017 outlook. In light of this, the call is expected to last for one hour. All relevant materials are available in the Investor section of the Ferrari corporate Website. Today's call will be hosted by the Group’s Chairman and CEO, Sergio Marchionne and Alessandro Gili, Group Chief Financial Officer. At the end of the presentation, they 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 two of today's presentation, and the call will be governed by this language. With that, I would like to turn the call over to Mr. Marchionne.

Thanks very much. As we can see from the numbers that have released this morning, it's been a good year. I think we're satisfied with the progress that we've made. In terms of, both the strategic view of the house would start come back to in a couple of moments. But equally important, I think, is the performance on the metric sides of the business. We're now in a position to cross over 30% EBITDA numbers. I mean, this is pretty. This is the combination of a couple of things; one, the comments that we have taken into heart from most of the investors that we've spoken to about the pricing power associated with Ferrari. And we’ve made some strides I don’t think we have made all those strides necessary to reflect adequate pricing for what we produce, but I think we certainly have moved the agenda forward on that topic. And equally and important, I think we become a lot more rigorous in terms of costs within the house. And I think this is reflected in the operating margin for the business. A couple of broad comments about what we intent to do, the headline of the press release makes reference to the 70th anniversary of Ferrari. It's a big year. We have a number of celebrations, and has now have been set in motion with our clients to really celebrate in an effective way our 70 years worth of history for this brand. But one of the things that we have learned, and I've learned certainly in the last 12 months is that we have a phenomenal amount of unexplored territory in terms of augmenting the product range, a number of vehicles that we make. And this is without breaking some barriers, without producing an excessive number of…

Thank you, Marchionne. Hello, everyone and thank you for listening in on the call, and let me start with the deck on page three. Our 2016 full year shipments reached 8,014 units, showing an increase of 350 units or 4.6% compared to prior year. The increase was led by the solid performance by both the V8 and V12 models, and indeed the 488 GTB, the 488 Spider. The F12tdf posted a strong performance along with the newly launched GTC4Lusso and LaFerrari Aperta, which are ramping up. This was partially offset by LaFerrari that finished its limited series run. Group revenue grew by 9% to €3.1 billion. Adjusted EBITDA increased to 17.7% to €880 million with 28.3% margin 30% without FX hedges. Adjusted EBIT reached €632 million with the margin increase of 380 basis points to 20.4% or 22.2% without FX hedges. Our adjusted net profit for the Group surged 37% to €425 million. Finally, at December 31, 2016, our industrial net debt was reduced to €653 million from €797 million of 2015. Subject to the approval of the cash distribution by the Board of Directors and to the adoption of the Company's 2016 annual accounts by the Shareholders Annual General Meeting, the Company intends to make a cash distribution to the holders of common shares of €0.635 per share, corresponding to a total cash distribution to shareholders of approximately €120 million. 2016 marks an important milestone for our Company as you’re aware. At the beginning of the year, we spun-off from SDA, and subsequently listed on the Milan Stock Exchange. Throughout the year, we completed a bond issuance and a deconsolidation of the European Financial Services Business. The Group is expecting the following performance for 2017, assuming FX consistent with current market conditions; shipments of approximately 8,400 units, including supercars;…

We can now move on, and thank you. We are now ready to start the Q&A session.

Certainly, thank you [Operator Instructions]. We're now going to take the first question. It comes from Monica Bosio of Banca IMI. Please go ahead, ma'am.

The first one is on CapEx. Could you please give us any rough indication of the expected CapEx for the current year? And the second question is on the patent box. Have you any idea of the potential impact of the patent box for Ferrari? The third and last question, maybe it's not the last, but I'll try. What kind of growth can we project for the sponsorship and commercial brands? Because I was expecting a lower increase, and now it's time to deliver or some -- beside, I'm asking that what could be the strategy to extend this revenue line. Thank you very much.

So for your CapEx question, I think we mentioned, it would be in line with the most recent historical trend, so north of €350 million, €360 million for this year. It could be already depending on the R&D for hybridization timing, but obviously we will start spending on that side in order to turn our portfolio into an hybrid portfolio, as soon as we can. On the patent box side, we really can't disclose any number for the moment since we, obviously we have applied for the possibility with the ruling to get the benefit from the patent box. We are in line with that, but we don't know the amount yet. And that really depends on the process and the DWE will provide and the tax administration will go through as we get into the process. And growth was from sponsorship and commercial with what was your last question. So, I think we will try to gather as much as we can from that line. Obviously, you need to consider that there is exchange from 2016, and that is taken into consideration in our guidance. And I think you’ve seen the improvement in 2016 in the actual already.

Just as a follow-up. So, if I -- I’ll address directly, in terms of net-debt, if you assume any CapEx in the region of €350 million, €360 million, the assumption behind the net-debt is mainly due to the lack of advances if it's right, and partially to the higher, at least could be to higher CapEx vendor, the market consists or is expecting. Is it right?

Yes, I think its combination of three things, higher CapEx, the lack of advantage as we've said in the drivers that we provided, as well as taxes on 2017. Because obviously you need some corporate to higher PVT basis, as well as the fact that tax advances will still be paid based on the corporate tax rate that we have in 2016. Unfortunately, that’s the way it works, so we will have to take taxes based on that amount. So, the combination of the three elements drives the guidance that we provided for net industrial debt.

Just last follow-up, it's much on the -- you told before that Ferrari has a huge amount of an exploratory territory turnover, and number of capital products. Can you please give us some example of product or if customers segment that Ferrari can explore? And is it still too early to ask for the waiting list for GTC4Lusso?

Let me give you the short answer, the GTC4 is pretty well sold out for ’17. So I wouldn’t -- I am not sure. Well, you can probably get one within ’17 somewhere, but I think most of it has gone. Just to go back to the question, one of the things that we have not done in this house is that we have never talked about a car and we have never described it until we can actually reveal it to our customers or to the markets. And as a matter of fact today and for the next few days, we have within our facilities here, group of our select customers who are taking a look at the car that we will be unavailing in Geneva at the car show. And this is the tradition of the house, so it's a tradition that I do not want to break. But just a couple of broad comments about what is supporting my view now about the product portfolio. If you look at our, the development of the GT section of Ferrari over the last, probably decade, we have broken down our world into eight and 12 cylinder versions. We have been very disciplined in terms of keeping these two roles apart, so we have defined things such as the sports car being the 8 cylinder family, and through the 488 and the F12 world on the 12 cylinder side, and then we've developed ancillaries in Scuderia California and the GTC4 acquisitions. Those were arbitrary distinctions, which I think is probably down and the huge amount of injustice about the capability of the brand could be declined across the variety of applications that reflect particular customer taste. And I think that we need to explore the full width of the customer…

Thank you. And then we'll turn to next question, which comes from John Murphy of BoA.

I've got a follow-up on the statement and that last statement you just made on where you might go with form factors. I mean just it can be three angles; first, it sounds like you're seriously considering a crossover or SUV; second, is this how you get to a level above 10,000 units sometime down the line; and third, as you're doing this, do you consider capacity adds or could this be executed through your existing facility?

Let me answer in order of these. The existing facility can make everything that we need to make the numbers that we talked about. You're not far off in terms of the 10,000 objective of potential expansion of the product range. And I’d fundamentally disagree that this needs to be done through an SUV. That's the thing that I struggle with. I don't know what an SUV with the Ferrari driving dynamics would look like. And maybe it's signaling from my part that are need to be shown. But I find it very, very difficult to try and get track performance out of an SUV Ferrari style.

I 150% agree with you. I mean that's what I was asking. Second question, you mentioned that you pushed pricing a little bit this year, or 2016. But there's opportunity, potentially, push it materially more. What does that mean? You execute on in 2016. And what do you think you really can do, going forward?

Without telling you what I touched in 2016 before I make customers nervous, I did intervene and we did it by jurisdiction as we were launching models years. The more important thing for us is that when we launched new vehicles now, and one will be announce in Geneva, is that we will reflect as stands right at the beginning of the launch process and don’t go back in a correct and later on. So, the car that you see in Geneva will reflect this pricing view.

Okay, and then just last…

We shouldn’t be making a lot of noise about it. I think we should just do it, right, as a matter of practice.

I agree, okay. And then just lastly, was there any change in the order book that you saw in the U.S. post election in the U.S., either positively or negatively? I mean, I guess you can certainly argue that there might be a lot of folks that are at the high end of the income spectrum that might have a lot more money if the tax cuts go through. So, I was just curious if you’re seeing any bump or would expect any going forward?

I think we have seen the strength in the order books, in general. And December was a weird month, because we cleaned up distributor -- I mean, we had an order book on the 488 that could drop the horses. So we forced the distribution channel to cancel anything that we cannot deliver in 2017. And so, we cleaned it up, it's very difficult to read the month of December, because we forced the dealer network to clean it up. But the feedback that we're getting, and not just through a Ferrari, we have also noticed that for Maserati and the rest of the premium car brands that are unconnected with, the market is quite strong. And so there has been no disruption, nor do I see that interest weaning in 2017. I think we're going to see a strengthening of the commitment to the brands.

Thank you. We’ll now move to our next question, which comes from Martino de Ambroggi of Equita. Please go ahead.

The first question is on ForEx effect, because last year was positive and should be positive also in the current year. So I was wondering about the underlying assumption for ForEx for this year. And the second question connected to the first one is in regard with the guidance you gave at the time of the IPO, €1 billion EBITDA target in 2019. So, you are very close this year. So I understand the ForEx had a better contribution with what you expect at the beginning. But now, first, what else was better than expected and second you should update the target now, but I assume you will not do it today. But in any case, you are in a chart. You are presenting the range of luxury companies with an EBITDA margin between 33% and 37%. Can we take these as a sort of long-term targets for you?

Yes, I think there we feel really comfortable is when we define the segment as top-end. So, whenever I get there, you will know we stopped. And we're doing something else. But right now, we've got a long-way to go, so we have a long distance from us to training, ownership of the EBITDA margin generation world. But the easy answer to your target, yes we maybe there a couple of years before. Yes, ForEx may have helped other things regarding the other direction. But we have been able to perform well across all of the issues that we faced, both pricing, cost containment, distribution, everything else is running better than it has historically. I think I'm encouraged by the quality of the team that runs this business. So, I think that we have a bunch of good kids here who are doing a phenomenal job of moving the agenda forward. The only thing I can tell you is that the minute that I hit the billion, you'd be the first guy to know what the next target is. But until I get there, there's no use to be threatening you with something that I haven't got.

ForEx last year you mentioned at the beginning of the year, €50 million. Is it possible to have a rough indication for the current year?

Yes, I think it would be basically consistent. Just to clarify, the FX hedges impact foreseen for this year, so for the current year is close to be zero. Obviously, in terms of volumes compared to last year since we were penalized, especially in the first six months of the year, you'll see the benefits just coming from the balance analysis standpoint.

Yes, historical-to-historical. Well, if you remove the impact of hedges, you should not notice the difference.

And just if possible, any statement on the Formula One stake potential investment?

Look, we started exploring the opportunity now. We're in discussions with Liberty I just recently had a meeting with Chase. The issue is not just the question of the financial investment. This is something that we do for living in a very serious way. The Concorde Agreement expires in 2020. So, becoming a non-voting shareholder in an entity, which effectively keeps us trapped in without knowledge of what 2021 and later world will look like. It's something I consider unwise. And so one other things that we've tabled with Chase, and I think we're not the only one that are tabling these concerns. But one of the things that I tabled with Chase is clarity on what the post 2020 world looks like, and what Ferrari may be able to get from its involvement in Formula One activities. Once we have clarity, then I think it becomes a lot easier to decide whether we want to participate in this venture. I think that there's a huge amount of upside left in F1, which if properly managed, can deliver rewards for everybody who is an investor in this business. We need clarity and we're not there yet.

Thank you. We'll now move to our next question, which comes from Thomas Besson of Kepler Cheuvreux. Please go ahead.

Thank you very much. Its Paul Besson with Kepler Cheuvreux, I'd like to follow-up on the F1 statistics, the change in ownership is potentially bringing new rules already. Is there any negative impact or positive impact to expect from that in the 2017 accounts, knowing as well that I think the ranking in the year will, in particular, impact 2017 has been a bit lower than the previous year?

I mean, obviously, there's an impact. We have not performed well, and we know it. What I do expect, to be honest, is the sport itself to do better in 2017. And I think there would be a great basis for us to continue and to continue our commitment to Formula One, and to really set the basis for a post-2020 world. And I would expect the Liberty and Chase, in particular, would have very clear understanding of the fact of that the entertainment side of this needs to come back to play. I mean, we cannot keep on committing to a sport that has decreasing audiences for a variety of reasons. And so we need to re-popularize follow that good expression, where we need to re-popularize the sports and we need to make it more accessible. And so, this all what needs to be done. We will do our part to this good area, in making sure that that happens. But that work needs to get underway in earnings now. But in terms of the economic impact, I will not -- I wouldn’t suggest there’s going to be any shattering events in 2017 that will change performance. And as you well know, if we do end-up winning, unfortunately there are a number of people that will claim ownership to the excess spoil. And there’s times we keeps on telling that financially it may not be a good idea to win, but we’ll see.

I'm sure you would likely do. Could you make a comment please on the mix for 2017, and give us an idea of how many Aperta have been sold already in 2016, please?

We are not disclosing the exact number, just for -- I think you’ve seen from the disclosure, the combination of LaFerrari and LaFerrari Aperta in 2016 was close to 100 units.

And can you comment on the mix for 2017, please?

In 2017, the mix should be improving on the V12 side, most likely because we have full power of the GTC4Lusso now, and then something will…

There may be other cars that would be launched in 12 cylinders fraction. I mean the oldest car in the line out today is the F12.

Last question from me please. Your engine business has roofed in the second half with the Levante and the F1 related business. Can you give us any big idea about the relative profitability of that business against the car business, please?

It's margin dilutive.

Thank you. We’ll now take our next question, which comes from Richard Hilgert from Morningstar. Please go ahead.

Two from my side, please. With respect to the discussion that we've seen in media lately about the Formula E and given the cap that Ferrari may run-up against at some point for being considered small manufacturer. Is there any potential for electric at some point, or is electric something that Ferrari would view as similar to crossover and SUV, since electrics don’t have the sound that you would equate with, Ferrari V12. Or is the performance something that, given some of the performance vehicles that we've seen in electrics, is something that is in enticing at all to Ferrari? And then to tag on to the earlier question about the new ownership in F1, I've seen some media reports lately about a change in the structure of payments made in annual winnings from F1. I wonder if you could comment any on potential changes in the future coming down the line on the contractual agreements that Ferrari has.

To put to mind the rest of it, there’s going to be no changes to the contractual agreements until 2020 with F1 and Ferrari. The topic has not even been brought, and I think it will be fairly unwise to raise it as a discussion topic. But the first issue, which has to do with our attachment to electrics, I think we do consider combustion to be an integral part of what we do. I mean, I think I am fine and I'm not sure when I did it, it may have been on the third quarter call, where I’ve highlighted the need for Ferrari to effectively embrace electrification as an integral part of its powertrain offering. And there's a huge amount, and Alessandro made reference to this in his remarks about the capital side. And the fact that there's a portion of our R&D and capital, which now needs to be devoted to the hybrid effort in Ferrari without being disrespectful of people far into emissions and so on. But really to accomplish two things; one is to make it relevant technologically and technically in today's world; but equally importance to augment the driving experience that one would get from driving a Ferrari by having a combination of both electric and combustion engines available to the driver. You made reference to the fact that the performance is now -- -- there maybe equivalent abilities in the electric cars in terms of performance. I hate to disagree with you. I think that the real problem with electric is that they will never give you the driving dynamics that the Ferrari does, and it's a combination of the weight of the car and the way in which the powertrain is located. I think a number of cars can actually -- especially electric cars, can produce a huge amount of torque, which is instantly available on the wheels and which can deliver exhilarating acceleration. The problem is not going straight the problem is driving a track. And that's where most electric cars, I think, would fall short of Ferrari standards and we need to continue to work on hybridization as a way in which we can bridge the distance between that reality and where Ferrari is today. And I think you'll see hopefully by 2019 that as difficult as that task is in terms of delivering a phenomenal driving experience, Ferrari is going to get very close. So, leave it with us. I mean, we will provide something which is technologically relevant by 2019 in terms of electrics. But it'll have to be reflective of Ferrari's DNA.

Is that part of -- or would Formula E have to be a part of, participation there for Ferrari in Formula E, would that have to be a part of the developments into the electric side for Ferrari to generate the enthusiasm for potential electrics just as it's done with Formula One?

No, I think those two things are distinct. The Formula E arrangement now, as much as I think it’s a valiant tougher to make technology relevant on the track, it's still substantially short to what I would expect to have. I mean the fact that you have to change cars during the race is unhelpful simply because of the duration of the battery charges, I mean there are things that I think really mean the sport. And I think we need to find a better way of expressing the interest in electrification and to Formula E. Having said this, we continue to look at it. And I think I've not given up on the idea of potentially one day entering -- if the parameters of such that the Ferrari can effectively make a difference, if it cannot make a difference then it should not play.

Thank you. We'll now move to our next question, which comes from Ryan Brinkman of J. P. Morgan. Please go ahead.

Just a follow-up one of the recent questions about electrification, but maybe project [indiscernible] from a financial perspective, I think Sergio you’re quoted in November saying that Ferrari would embrace the hybrid world. What magnitude of upward pressure might there be on our D&A or CapEx ahead of these expected launches in 2019? And then when the vehicles do launch, would it be the case also for your range cars, like with the LaFerrari to the primary motivation would be really to enhance the performance and appeal and so maybe pricing rather than to comply with regulations like a mainstream car company. And so, therefore, the impact to profits from hybridization could actually be positive as opposed to no neutral or negative. I mean, how should investors think about the financial implications?

I think the commitment on the capital side is a number, which is manageable within the confines of Ferrari. There is additional capital coming out, and we have started looking at this now. And it's especially an issue in terms of the assembly line as opposed to anything else, because they do require a particular type of space to allow these powertrains to be installed. And so we are working ahead of this now to make sure that when we get there in 2019, the facilities would be there to handle it. The question, which is really relevant to me is the question is, what is the impact of that technology the cost of that technology on the placement of the cars and the pricing that while we get. And I'll give you a very simple answer. I think the price of the car will move up to reflect the technology, and it will be done with a way of retaining margin in that process, not just absolute margins but percentage margins. This is not -- the offering itself will be so unique in the marketplace. And I say this with all due respect to my competitors. But I think you would be so unique that it would actually been able to garner the price that it deserves. And more than enough to offset the cost of technology, because what's you’re getting in exchange is a unique driving experience that’s not available anywhere else. And I would assume, I think, that our customer base will adapt to that changing world, and I think that would affect the fact that the technology has a price, and that needs to be paid. Certainly, all indications with the interfaces that I've had with the customer base over the last two years suggest that they’re willing to do that.

And then just my last question, I see that the vehicle shipments to greater China, they were up 1% in all of 2016, but 36% lower in 4Q on termination of a distributor in Hong-Kong. So, I realized that you have less globally, so selling to your cars in one region doesn’t really -- and I mean your overall numbers have to be impacted, because it's reallocated. But are there plans in place or are you working on plans to secure a new distributor in Hong-Kong? And when should we think about your returning to growth in the Greater China market?

The answer is 2017. The answer to your second question, we're already working on the replacement now. And one other thing that’s not in the Asia-Pacific number is the introduction on eight-cylinder GTC which was redesigned for a variety of reasons, including the fact that the four-wheel drive was not required in the region. But also from a pricing and duty and taxation standpoint, it was a better car for the market. So that market is not -- that car has not been made available to that market, it will be in 2017. So, I would expect numbers to follow.

Thank you. We’ll now move to our next question, which comes from Michael Binetti of UBS. Please go ahead.

Just for very simplistic say for a model, as we look out to 2018, for the EBITDA numbers, should we expect that to grow which as just in very simple terms, the tailwind from FX rolls-off, the character rolls-off, again lot of questions about that. Considering how much supercars contribute to the EBITDA for the Company, is 2018 growth EBITDA year, correct?

Yes.

And then at the time of the IPO, we talked a lot about the pace of the supercars, and it was, as long as every 10 years depending on technologies that you guys are ready to launch, but things have changed since then. How do you think about the frequency that the market and your very best customers can absorb for supercars today?

You’re going to be careful about defining supercars. So, I think the problem that we have and we've seen this now, we've seen the incarnation of the problems, so I'll give you two examples that have happened in the last 24 months. We launched LaFerrari in 2013, as a car; we launched the Enzo in 2003 and there was a decade cadence that was assigned through the introduction of the supercars. And they were really -- these were cars that set a technology tone that effectively guided the house for the following 10 years. And I would suggest that cadence is not going to be impacted by anything that we might do in the interim. It may very well be then in the next -- in 2023, that we would relaunch a car that sets the cadence for the next technology shift. The real issue to me is what happens in between. And we have seen now, certainly in 2015 and '16 with the introduction of the F60, the America version of the car that was launched, the J50 now in Japan, the two other forms, which was effectively the last version of the F12 in its extreme form, the incarnation of the supercar concept, as long as we stay faithful to those from limited editions and restricted distribution. There're things that don't have to be a supercar. We just -- are sufficiently supercars to make them more frequent and available on the marketplace throughout this decade, split between the Enzo's and LaFerrari and the LaFerrari successor. And this is something that we're learning how to do. We need to do more of this. But we do it -- to do it in such a way that does not minimize the relevance of the shift that we get on a…

And if I can get one last quick model question, and the -- shareholders think about the implied free cash flow in 2017, excluding some of the abnormal items that are real tough to model off in the taxes and advances et cetera.

The implied number is between €280 million and €300 million pre-dividend.

Thank you. We’ll now take our next question, which comes from Lello Della Ragione of Intermonte. Please go ahead.

One left from my side really it's actually on tax issue. In your press release at one point you stated that 29.5% of this year is due both the effect of the reduction in the years plus some deduction from R&D investment. But it means that you had already accounted for some of the effect this year, or we should wait for that final agreement with the tax authorities to understand the impact of the so called private books?

The final agreement.

Thank you. We’ll now take our next question, which comes from George Galliers of Evercore. Please go ahead.

I had a quick question, just around the Maserati engine agreement. I mean, clearly, Maserati has seen great shipment growth right now. When the agreement was put in place, you were both part of the same group. Can you give any indication whether the commercial terms of the agreement were as commercially beneficial to Ferrari as they might have been, had they not been part of the same group at the time? And if they weren’t, at what point might you’d be able to renegotiate the terms in order for them to be more favorable to yourself. Is there any opportunity there in the near to medium-term?

I’m terribly conflicted on this, because I'm the CEO of the buyer of the engine. So, I can only give you an account or what I have, what happened on the inside of this house when this transpired. The price was negotiated, and because of the fact that it was related party transaction, because there was a minority shareholder even in Ferrari at the time, it actually went through scrubbing, cleansing, car wash and every type of analysis you can think of without a committee of both FCA and now of Ferrari to make sure that there was nothing that was offensive in the agreement, and it reflected arms length conditions. I don’t know of a situation other than the four corners of the agreement today that would suggest that on this engine, there will be a room for renegotiation. The thing is accretive. The more engines we make, the better the margin performance gets, because it assumes it works off an existing fixed costs base. And therefore, it will never match car margins, because of the difference in pricing, but it gets better the more engines they take. There are additional ancillary benefits from the arrangement, including utilization of the assets and the training of the workforce to make this. It has additional operational benefits, so I wouldn’t -- there is nothing to write home to norm about. But it is overall a good package for Ferrari. The question is will Ferrari do as similar deal with another OEM, and the answer is probably yes. We would do it even if FCA, or non-FCA and another OEM showed up announced for this. The problem that you've got right now to be honest is that when you look at the size of the supply and given the success that Levante is having in the marketplace, the volumes that we're now pitching for 2017 are probably in excess of 30,000 engines a year. And at that kind of rhythm, you start reaching numbers where the production of that engine effectively becomes even viable for FCA on its own terms. So, we got to be very careful there, and I'm not giving any idea to the FCA CEO here who just left the room. But there's a point in time in which this thing could be internalized within FCA, perhaps some better terms, because of the work cycles and established infrastructure. So, I don't want to touch this engine for the time being nor do I want to see the arrangement disturbed. I think any future development going forward is going to reflect development of the Ferrari engineering skill on a wider basis in a relationship with FCA. And I think the Ferrari, as it matures through its technical development, will be able to do that for more than one entity and probably beyond FCA. But it's way too early to start talking about that now.

And then just one quick question on FX, in the EBIT bridge, you did flagged sterling as a driver of negative transaction prices. Can you just give us an idea of what actions you have taken to mitigate the full-in sterling, or what actions you're looking to take? I mean, given you're Ferrari and a mass market OEM. Can you not push through prices when there is structural change in FX very quickly?

The answer is, yes, and we will. I mean we'll just have to adjust. But I cannot -- there's nothing that I can do to compensate for sterling, not a thing. And so, to make the car viable and present in their market and be offered to reflect my cost structure and nor can I jeopardize margins in order to accommodate the drop. I actually think we're going to have long discussions here as to whether this is a permanent drop in sterling or whether it's a temporary one. Reality is that there's enough substance in the realignment in sterling rates that it makes our pricing decisions unavoidable. We have to adjust them, and we have.

Thank you. We'll now take our final question from Massimo Vecchio of Mediobanca. Please go ahead, your line is open.

Mr. Marchionne earlier in the call, you said that EBITDA guidance is conservative. Now I was hearing about industrial free cash flow for 2017 clean of all the unusual being almost equal to the '16 one, so €300 million. Can we say that also this indication is conservative?

There you are, yes. Yes, you can. You're going to accuse Alessandro of a lot of things not being consistent is not one of them.

Second question, if I may, again earlier in the call you said that this year we may see some manifestation of expansion beyond cash. Should it be anything bikes or motorbikes, or is it probably too ambition for 2017?

To the motorbike story, motorbikes will not be available in 2017. But I think that there're ways in which we can express the brand to the luxury side that we're experimenting with. To be honest with you, if you have to ask me whether that was -- whether I was 100% certain that all of this things are viable and whether we should make them a core business, I'm not sure. That's why I think we need to experiment and experiment carefully. One of the things that we cannot do is to do something which will bring ill-repute to the brand. That's something that I will not allow to happen. And so regardless of all the appealing and maybe, from a financial standpoint, we will not let it disrupt the DNA of Ferrari, we just won't. We spent the last two years just making sure that all our retail exposures reflect the Scuderia Ferrari and not the Ferrari brand by itself. Because those are two different worlds, we're dealing with fans, and we're dealing with people who will follow the racing activity. The Ferrari brand is reserved for our customers. And those customers, the people that buy GT cars have unique set of requirements and expectations, which fundamentally cannot be accomplished to the retail side of the business. So, we need to go back and rethink if we have. And I think our introduction into the luxury space needs to be cautious, and it needs to be paced. So, give us some time, we’ll get it right. But the important thing from our standpoint is that none of the targets that we set, as we were talking to people about what we expected from this business in the next five years, are at all impacted or minimized by the care, and they were now taking on the launch of the luxury side of the business. Because the car itself, the car business itself, is offering a greater number of possibilities for expansion at a much more certain margin rate than anything else would. So, we need to get really good at this, while at the same time exploring things that we’re not that familiar with and which have, at least from a risk standpoint, have lesser opportunity for margin generation that we have today. So, the business is in great shape. I think it knows where it's going. And I think it's going to play with these areas, because I think if you get those right, there could be a significant long-term as car is. But it needs time and it needs maturity, and things which we don’t have going for us right now. So, you tell me at the end of 2017, a story you think that we’ve done anything that value. You’d be able to see it.

Thank you. That will conclude today's question-and-answer session. I would now like to turn the call back to Ms. Russo for any additional or closing remarks.

Thank you everyone for joining us today. The Ferrari team will be soon available for any follow-up questions you may have. Thank you everyone.

Thank you. That concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.