Good day and thank you for standing by. Welcome to the Ferrari 2022 Q3 Results Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nicoletta Russo, Head of Investor Relations. Please go ahead.

Thank you, Sharon, and welcome to everyone who is joining us. Today, we plan to cover the group's Q3 2022 operating results and the duration of the call is expected to be around 60 minutes. Today's call will be hosted by the group CEO, Mr. Benedetto Vigna; and the Group CFO, Mr. Antonio Picca Piccon. All relevant materials are available in the Investors section of the Ferrari corporate website. And at the end of the presentation we 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 2 of today's presentation and the call will be governed by this language. With that said, I'd like to turn the call over to Benedetto.

Thank you, Nicoletta. Thank you, everyone for joining us today. On behalf of everyone at Ferrari, I would like to begin this call by remembering with gratitude Mauro Forghieri, who has passed away. He had such an important impact on Ferrari's history and the motor racing. We will always remember his passion and determination that drove the evolution of our company over the years. With Mauro, we won no fewer than 11 F1 drivers and constructors championship titles and five endurance titles. Our thoughts and our prayers are with his family at this sad time. And now, let's go to the third quarter. The third quarter has been very, very strong with all key P&L metrics up double-digits versus last year. Revenues increased 19% with shipment up 16%. EBITDA and EBIT were up 17% and 11%, respectively. And industrial free cash flow generation was very sound. The very robust financial results we present today are further proof of the strength of our business and that's why we revised upward our 2022 guidance on all metrics. The current macroeconomic scenario brings new challenge on a global scale. This is true for us and this is true for our partners. Indeed to guarantee as move production, we are supporting our supply chain with tangible measures. Moreover, as we said in the last call, we have taken action on pricing to adequately react to cost inflation, focusing on the following three areas: one, price definition of new models; two, personalization offering; and three, mid-single-digit price increase on selected models and markets. Having said that, we continue to enjoy a very strong momentum with a remarkable order intake in the quarter, considering that our clients could order only a few models. Such a positive trend is visible all over the world. Since last time…

Many thanks, Benedetto. And good morning or afternoon to everyone joining us today. Let's start on page 7 with the highlights of the third quarter. Another very strong quarter indeed with double-digit growth on key metrics. Shipments were 3,188 units up 16% versus prior year. Group net revenues were €1.250 billion up 19%. EBITDA reached €435 million up 17% year-over-year with an EBITDA margin of 34.8% lower than last year given the absence of the Ferrari bond. EBIT was €299 million, up 11% with an EBIT margin of 23.9%. Percentage margins were in line with our expectations mainly reflecting the product mix and D&A evolution. Net profit came in at €228 million, up 10% versus prior year, resulting in a diluted EPS of €1.23 compared to €1.11 in Q3 2021. The industrial free cash flow generation in the quarter was €290 million, which implies a cash inflow for the nine months close to €600 million, almost €100 million higher than last year. Turning to page 8, you can see the details of the Q3 shipment. The product portfolio in the quarter included seven internal combustion engine models and three hybrid models, representing 81% and 19% of shipments, respectively. As mentioned by Benedetto in the quarter we were continuing to serve an impressive order book across all models. Deliveries increase were mainly driven by the 296 GTB, which was in the ramp-up phase along with the A12 competition. The Ferrari Portofino M and F8 family continue to sustain deliveries growth, partially offset by lower contribution from the SF90 family. There were no Icona deliveries in the quarter as the Ferrari Monza phased out in Q1 this year. Geographical locations were driven by product cadence. Mainland China, Hong Kong and Taiwan continued to post a double-digit growth versus the prior year, reflecting…

Thank you, Antonio. Sharon, we are now ready to open the Q&A session. Thank you.

Thank you. [Operator Instructions] Your first question comes from Michael Binetti from Credit Suisse. Please go ahead. Your line is open.

Hey, guys, congrats on a nice quarter. I know the macro is very tough. Let me ask you -- I want to ask you today, how you feel about the 2022 guidance for €1.8 billion to €2 billion of EBITDA. Even though you're raising today, I want to ask you whether you think it's conservative next year at this time, but I am curious how you see revenues and profitability building next year across the business lines? Maybe the cars business, how you see that contributing? How the P&L or the lifestyle businesses and the sport business will change as you bring back some of the core sponsors and expand into Le Mans, the lifestyle categories that you mentioned, maybe some of the biggest incremental changes? And then, I guess, longer term, I'm curious, what are the bigger challenges you see today and getting the first electric Ferrari in 2025 up to the margin levels that are in line with the averages you enjoy across the rest of the fleet?

Thank you. Thank you for the question, Mike. So, let's start from the first one. As Antonio said and this number are showing, we feel very much confident and that's the reason why we are increasing, number one, the confident -- the guidance for this year and we are also very positive for the next year. This is thanks to the order book that we have, that is, let me say, spanning all the products we have as well as all the regions. So this is very -- first important message. Now, if you talk about the bigger challenge for electric car, I think, I would say, would split the answer in two parts. If we talk about the product development, where we are, we are fully in line with our, let's say, project development. So we are proceeding as per plan. And this is true, as I said, on the technical side, but if I go to see on the profitability side, this is fully in line with our long-term view, mid-term view that we shared with you at Capital Market Day. This year we made a lot of progress in optimizing, on one side, the architecture of the cash. On the other side, also optimizing and strengthening our relation with some strategic supplier.

Thank you. Are you finished, Michael?

I am. Thank you.

Thank you. I will now go to the next question. Please stand by. And your next question comes from the line of Giulio Pescatore from BNP. Please go ahead, your line is open.

Hi, everyone. Thanks for taking my question. The first one on the -- the first, on grow the book. I understand you're not going to comment any more details on where the order book stands. But can you maybe share any color on the composition of this order intake? Is this achieving the goal you had in mind for this model? Anything you can share on that would be very interesting. The second one on the order book. I noticed that you're now defining it as remarkable vehicles record in pretty much any other presentation in the last few quarters. I don't want to read too much into this, but is that a function of the availability of models? Is there anything else, are you seeing a softening in order? Anything on that would be also helpful. And then the last one on the 296 GTB. If you look at the number of hybrids you sold in the quarter, it was pretty much flat sequentially versus Q2. I was expecting maybe an increase because of the ramp-up of the 296. Are you just giving priority to other older models, given the demand, or is there any delay on the ramp-up of that particular model? Thank you.

Okay. I'll start from the last one, Giulio, the 296, the hybrid and the split between ICE and hybrid. I would say that, so far it has been always in the ratio 80-20. We expect this ratio to change, consider that we will have also -- we have already a stronger order book when it comes to the GT, the Spider -- the 296 Spider. This is important. So if you want your prediction is correct. We will have an increase of the hybrid shares in our models. So this is question number three. The question number one, I go to Purosangue. To provide you a little bit more color. As I told you we had almost 2,500 clients visiting us and looking at the World Premier in Tuscany. It has been very well received because of performance, because of the design, because also some of them added a place or an opportunity to try the cars. But I have to say that, two things we told you at the Capital Market Day, keep -- let me say, we stick to that. So number one, we do not want to pass 20% of annual volume of this car. And two, we are let's say, if you want we are -- the order backlog is such that it is fully satisfied. So you cannot come in our factory. But if you come in our factory you see that, we made enough paces to accomplish and to realize our industrial plan for this naturally-aspirated V12 engine. So maybe what I can tell you is that, the order we got in Purosangue are really unlike any others, if you want a volume car in the sense that the order book is more similar to the special cars, to the limited edition cars, than to the bigger volume cars. And then there was the last -- the other question was the net order intake, the book. Clearly, by today, I mean we keep increasing continuously our order book. We expect a decrease in this speed also because we are sold out on a lot of model. And we are focusing -- I mean, today, if you go in a dealer you can buy a four model more or less. You have the room you go Purosangue, we have two-term ICE and two hybrids, 296 -- Spider 296 GTB, and then you have Purosangue Roma. Clearly we expect a slowdown in the buildup of the order book but this is planned obviously. So these are asking our dealers to push more on the motion to reach the customer experience through other dimension that we can offer our customers. So these are the little bit more color on the three questions you addressed to me Giulio.

Very clear. Thank you very much.

Thank you. We will now go our next question. One moment please. And your next question comes from the line of George Galliers from Goldman Sachs. Please go ahead. Your line is open.

Yeah. Thanks very much for taking my question. Actually the first question was just following on a little bit from Giulio's question. It sounds like you don't have any capacity constraints on the hybrid cars. So I just wanted to ask about the lower shipments of the SF90 whilst you saw a positive contribution from older models like the F8, particularly as first deliveries of the SF90 Spider only commenced in 3Q last year, hence full deliveries of that vehicle have been in progress for less than 12 months. Is this a temporary effect? Should we expect growth in SF90 at some point in coming quarters, or are you actually seeing a bit of a wind down in terms of the SF90? The second question, I had was just on the 499P, which I think has got everyone with a keen interest in the auto industry and Motorsport extremely excited. Is it reasonable to expect at some point a road car derived from this product? And just to revisit, I think the introduction of the Icona series, I believe originally it was flagged as bridging the gap between the hyper cars which you typically only introduce at least once every 10 years. Could you see a hyper car and Icona model in production in tandem, or would the intention still be that Icona bridges the gap between the hyper cars? Thank you.

Okay. So we start from the first one, George. One is the capacity constraint you were saying. So I would like to say one thing. One of the key strength of Ferrari is the ability to manage different model in production also, because the line that we ever not fully automated, but there are people human beings that are able to give flexibility and the agility to the production line. If you came here, you clearly see that, the same manufacturing line can manage ICE or hybrid cars. So what I can tell you is that, number one, we are producing as planned. There is no deviation. And the other complements go first of all to the team that is able to manage complicated supply chain; and two, also to our partners that are very much supportive. And other important message is that, the agility of this line is thanks to the presence of people that with their passion and their dedication are able to make this line very, very agile, and accommodate, what are the clients' needs. So this is very important. When it comes to 499P, I'm glad you also like the car. I can tell you that, I was with the colleague what was Saturday evening. It is really nice car. It is a big step forward for us. We – I don't want to comment about your question, because as you can imagine, our product strategy and what we intend to do is also part of our secret source. And I'm really – sorry, I cannot discuss more detail. But I can tell you that, as you have seen in the past Ferrari is very good in using all the things that are developed by the team. Thank you.

Thank you. We will now go to our next question, one moment please. And your next question comes from the line of Evan Silverberg from Morgan Stanley. Please go ahead. Your line is open.

Hi. It's Adam Jonas. Everybody can you hear me?

We hear you, yeah.

Great. Benedetto, I just wanted to kind of reconcile, you said that the order book for Purosangue is fully satisfied, but you'd still order it at a dealer. So I just want to confirm it's not quite sold out officially, correct?

Adam, it's a good deduction.

Thank you. Also, China 14% of total sales versus 9% last year dilutive to margin accretive to dollars, euros of profit. Is that normal that -- what are your thoughts on what a normal level or steady-state level of China as a percentage, once you kind of get some of your other launches flowing through to Western markets?

Adam, as we said in the Capital Market Day, we believe the right number for us exposure in China, if you want is between 11% -- 10%, 11%.

10%, 11%? Great. Thanks, so much. And just finally, if I can squeeze one more in and I'll shut up. You talked about strategic partnerships as you kind of get closer to production of your first pure EV in 2025. I know this call is too early for major milestones there. But would next year, by end of next year be too soon for you to disclose your battery cell partner, or should we wait until beyond '23 for that type of announcement? Thanks, everybody.

Adam, you know that the battery, we are a supplier. The cell, we do not even disclose the cell supplier, cell maker also for 26 and the SF90. I believe that, this is an important part we want to keep for us. So, what I can tell you and all the colleagues on the phone is that, the development of the cars is proceeding as planned and we did a big-big step forward in Q3. But unfortunately, we cannot tell you, who is going to be the cell supplier.

Thanks, Benedetto.

Thank you, Adam.

Thank you. We will now take our next question. One moment please. And your next question comes from the line of Stephen Reitman from Societe Generale. Please go ahead. Your line is open.

Thank you, and good afternoon. I have two questions. First of all, I think, it's been said that, it was a kind of set of unique circumstances that have led to the situation where you have a few vehicles that are available to sell because of delays with certain launches and other impacts from COVID and other delays. So, you had a limited number of part of the vehicles to sell. When in your mind, do you think we'll be in a situation where your dealers will have a much wider range of vehicles to sell? And secondly, could you comment on the trends in resi values? Obviously, I know that's the response of your dealers to do that. But obviously, you monitor those -- that situation quite closely as well. Thank you.

I start from the second, Stephen. The trend on residual value, we don't see any change. We see some model appreciating, but we don't see any change over there. And actually, we believe that the fact that, let's say the fact that a lot of models are sold out, this will give -- will be an opportunity for our dealer to focus also on the preowned business. And then, there was -- the first question was about the...

[indiscernible].

Yes. I think, look, the -- is what we said in Capital Market Day. We are planning to launch 15 models in this four years beyond the Purosangue. We are sticking to that. We may have some model more successful than others. But I think, what I can tell you that, we stick to our compass that is 15 new models with the split I told you on the Capital Market day. [Technical Difficulty] It means that in 2026, we will have the offering split between the -- we will have the three offerings the ICE, the hybrid, and the electric as per what we told you in the Capital Market Day. So there is no change. And we had -- actually I can also give more color, Stephen, last week we had the Distribution Dealers Annual Meeting here in Modena where we had 500 people visiting us. And the -- let me say they are very supportive very much engaged and they fully agree on our plan for the future in terms of new car launches. So, there is very, very titration and we are working very well with them and they with us.

Thank you.

Thank you. And your next question comes from the line of Monica Bosio from Intesa Sanpaolo. Please go ahead, your line is open.

Good afternoon everyone. I hope you can hear me. The first question is on Purosangue. The personalization of it on average is 18%. But I'm wondering if we can assume a much higher rationalization rate for Purosangue maybe in range of 23%, 24%. Am I too aggressive on this side? And the second question is more strategic. Looking forward when you see as reasonable an electric model with the same mission of the Purosangue just a statement from you. And the very last is on -- maybe it's too early to ask, but do you have a breakdown -- rough breakdown of the customer profile by gender and age group for the Purosangue? Thank you very much.

Thank you Monica. So, I start from the Purosangue. Okay. Let me tell you one thing that the Purosangue has a lot of accessories, a lot of optional, a lot of opportunities of personalization because we have been reaching the offer. I mean we -- I mentioned just one that is very interesting is electrochromic glass roof. It's very, very interesting. It's very well appreciated. I believe that there could be opportunities to have aggregate personalization. But at the end of the story it depends also what the clients and how much they want to personalize. So, I would -- allow me to say I would be arrogant if I would guess what is the personalization rate of the clients. What I can tell you is that offer is pretty wide. And usually as you've seen also in Q3 and the guidance in Q4 is also driven by a positive tailwind on the personalization. Then when it comes to the let me say electric Purosangue, if I allow me to say in this way, the second question?

Something similar, yes.

Yes, as I said before to another colleague, the plan for the future is something that we are very secret thereof also because we believe it constitutes a competitive advantage for us. So, let me say in this way we will use the technologies in a way keeping always in mind and putting always the client the center and the driving trials that we want to generate. So, we have a plan, but I cannot disclose here. Sorry, Monica. The point the customer picture yes, for sure we have a customer -- we know the customer of Purosangue, what I can tell you without disclosing anything confidential. What I can tell you is that we have a strong acceptance either by let me say, the collectors what was called in the previous call I think proper VIP and also by the new prospects. The reception of this model across different age, different region, different genders is very strong. So there is not a clear sign and a clear pattern. I can tell you that many women, Asian, European and American they all a little bit older, a little bit younger they will like this car the Purosangue. Q – Monica Bosio: Thank you very much. Benedetto [ph] it was very clear. Thank you. A – Benedetto Vigna: Thank you.

Thank you. We will now take your next question. One moment. And your next question comes from the line of John Murphy Bank of America. Please go ahead.

Good afternoon. Just one additional question on the Purosangue. I mean, you've mentioned that it could be as much as 20% of your volume, and you would limit it there. If we look at the volumes that you put up this year in 2022, that would imply that you might be able to do 3,000 to 3,500 of the Purosangue's growth going forward. I'm just curious, based on your order book right now and what you're thinking, if that is a number you think is achievable and if we were to think about something like that, that would equate to about four to five years of the volume growth that most people are expecting. So, it seems like, that that would be sort of a high number. Just curious as you dimension where that segment actually could be for you? I know you're governing in a 20%, but is that something you think can happen more quickly, or based on your order book, maybe it might take longer? A – Benedetto Vigna: Thank you, Johnny. Maybe, I misunderstood you said that 3,500 per year?

So, yes, assuming you're going to do about 13,000 units this year, I mean just grossing it up and just saying, if you're going to do -- if you're limiting the Purosangue at 20%, you would add specifically 3,250 units to that base of 13,000 that would be Purosangue to get to 20% mix, at Purosangue. I mean basically, how fast do you think you can get there or how slow, do you think to get there? And I mean -- and how do you manage this based on the order book that you're seeing right now? A – Benedetto Vigna: No, the reason why I was asking is that, for me 20% of the 13,000 is 2,600, the reason why I wanted to check. So we take...

I would imagine it'd be incremental, right? I mean there wouldn't be any... A – Benedetto Vigna: I'm not saying incremental. I'm saying that out of the total number, up to 20% of yearly volumes will be Purosangue. So let's say, if it is 13,000 it's around 2,600. What I can tell you is that, we are pretty close to our target. And let's say, I think this is the most -- let's say, the most detailed information I can provide you, together with the fact that the car really received strong acceptance as I said before, by all people that attended because we had a customer traveling from all over the world. And let's say, that the acceptance has been very strong, a lot enthusiasm. They appreciate performance, they appreciate the design. They appreciate also the driving emotion, because during those days there was a very good idea of the marketing team -- of the commercial team, they offer the possibility to some customers that were selected on -- through a lottery, to drive the cars for around 40 kilometers. And I cannot share with you, but there are the video of the people that are really crying for the emotions that they can experience. So very strong acceptance, because of the performance design and driving trials, and we are very close to our target. And as I said, we stick to our plan to not pass the 20% threshold of our annual volumes whatever they will be.

We look forward to driving it. Just a second question real quick. If we think about 2023, mix is going to be a major positive with the Daytona and the Purosangue, it sounds like pricing is a small positive for you right now and that's likely to continue. Volume presumably will be up. Raws are easing, other cost inflation might not be too bad. It sounds like your earnings may gap open next year. I think the consensus is for better than a 20% increase in EBIT. Is there any major headwinds that I might be missing, or we should be thinking about or even positive factors we should think about besides those major ones for 2023?

I mean, the Capital Market Day was clear about the target also for next year. Clearly, we are paying close attention to the story of the inflation and this is also the reason why we said those in the previous call, we are increasing prices for next year. But for the rest, I mean we are proceeding as planned. And as in the past, we delivered on premise, on our promises we want also to continue to deliver on our promises. So this is our, I would say daily commitment to the people here and obviously to all the shareholders.

Great. Thank you very much.

Thank you.

Thank you. We will now go to our next question. One moment please. And your next question comes from the line of Thomas Besson from Kepler. Please go ahead. Your line is open.

Thank you very much. It's Tom Besson from Kepler Cheuvreux. I'd like to first follow-up on Jonas question if that's okay. I know you never want to give the exact numbers, but when you say 20% of the volumes emerge, I think we probably need to think about a few years out. So does that -- does it include only the current capacities with the two shifts of the existing production lines, or does that include as well potential incremental capacities from BDs? So should we think about 2,500 or more 3,000, 4,000 units per annum for Purosangue? That's the first question. Thank you.

No, no. As we said, I mean, we will not -- there will not be a big change in our capacity. We want always to keep to guarantee the exclusivity of all the car we sell, Purosangue as I said also in June when we met here in Maranello. It's not a car that is meant to double the volume for us like it is in the strategic plan of other players in this field. For us, it's a unique car. It's a sport car, it's a car unlike any others, for which we aim to have a maximum 20% of the yearly volumes, because I believe -- we believe that exclusivity and uniqueness of our car goes also through this avenue. We don't want to end up doubling the volume and let's say putting a lot of CapEx, also because as I said, exclusivity and uniqueness are the key drivers of our product strategy and our -- if you want our daily compass and that's what we want to speak to.

Second question on ForEx. When we look at 2023 is it reasonable to expect another decent boost from ForEx, given your hedging positioning, or have we seen always the bulk of the benefits from that bucket?

Okay. This is a good question for Antonio because otherwise he was silent. So, it's good. Thank you, Jonas for keeping my attention alive.

I think the question it really depends of course. I mean we hedge foreign exchange on a rolling basis, that means that we basically project on 2023 the trend of 2022. Whether this will be a positive or a negative it pretty much depends on how the foreign exchange rates behave on a spot basis. All in all, we try and have approximately 70% of our total exposure at in advance declining overtime. So we are basically projecting to 2023. As I said before the trend that we have witnessed in previous months. Then if the dollar goes to $1.10 obviously we have a huge positive. If it goes to one $1.80 sorry to $2.80 [ph] it's going to be a negative. That is the sense of my answer. I hope it helps.

It's very clear. Just a very quick follow up. Can you confirm the date of for deliveries for Purosangue [indiscernible] please? You'll have the first deliveries?

Yes, in Q2.

Thank you.

Welcome.

And your next question comes from the line are Philippe Houchois from Jefferies. Please go ahead. Your line is open.

Yes, thank you and good afternoon. I've got two questions. One is I'm just following up on the question on the used value. So, if I understand right, you started your comments saying you've got a remarkable order intake across models and that will probably more likely translate into better resin values rather than maybe the used market being more economically sensitive and people being kind of more shy about buying those cars. So my first question is, is there any way that Ferrari is directly leveraged to improvement in use values? What I mean by is any agreements with dealers where there's a bit of profit sharing if they're going to benefit the most, I guess of this improvement in used values. And I'm just wondering if in any way you are geared to that gain in profit sharing with dealers? And my other question is a lot of questions about Purosangue and 20% cap etcetera. If I hear you right again is this car drives every bit as well as any Ferrari so you're very proud of it. So this 20% cap is just arbitrary to -- but there's no -- because for years it was concern about SUVs might damage the brand etcetera but this is not at all the case. You're just trying to keep the diversification of your product portfolio rather than lose a car that might eventually dominate some of your volume. Is that correct?

Okay Philippe. I will start from the first one. When it comes to the preowned business, we have no profit sharing, okay? So there is no process sharing with our dealers. It's their business they manage in the way they want. And let me say unique. And what we have to do to help them is always to think about uniqueness exclusivity of the model. So this is what we do. When it comes to Purosangue, I think I would like to take this opportunity to remember that there are two orders that in Ferrari do not fit well, the Ferrari and utility, these are I mean SUV. And as I said it's not an SUV or SUV because putting together, the utility word with Ferrari have I think we all agree is no sense. Now the story of our Purosangue, that is a new category. It's unlike any others that is pushing and is very well appreciated, where we said the 20% because we believe that this is a car like the other car we have in our range we will have – if you make the math, we will have four to – around four cars Perrier, four to five cars, so it's around 20% the split of the cars that you put on the market. So that is not I would say literally. There is a rationale behind that is always meant to preserve the uniqueness and exclusivity because we consider Purosangue, a car like the others we have in terms of volume split and unlike any other cars in that sale of the category if you want from other competitors. It's a unique car and we want to preserve uniqueness and exclusivity. Maybe you can be not utility it can be uniqueness. Yes. I will make a good one.

Yes. Thank you very much. Thank you very much.

Thank you. We will now go to our next question. One moment please. And your next question comes from the line of Tom Narayan from RBC. Please go ahead. Your line is open.

Hi, yes. Tom Narayan, RBC. Thanks for taking the questions. The first one is on the guidance you guys have out there for 2023. I know that's – it does feel I think somewhat scale. And I think some investors may be just wondering if – why maybe you have withdrawn it or commented on it. I know usually you only comment on the annual guidance in the full year call, but I was just curious if there was any commentary on the current Q3 guidance that you have out there. And then the second question on Purosangue. A number of us on this call attended this Rolls-Royce event and we were – I found it surprising to hear that a lot of customers for that brand really didn't care as much for software or assisted driving in those sorts of features and cared more about luxury aspects of the car and stuff like that. Just curious if this is what you were hearing from your latest event from consumers looking at the Purosangue as well? Thank you.

I start from the second one. If I understand well Tom is how much is valued to the softer in this kind of car. I'd like to say that, when you talk about the luxury cars and this is true we have seen now I am in this role since 14 months, it's true that there are features that are maybe important in mass market cars, but are not at all important in luxury cars. You have had the pleasure to talk with many customers during this year. So what I can tell you that the software, the digital, the electronics in the cars must be placed in the right value because if you exaggerate, nobody will appreciate that value. So not to comment specifically about Purosangue, but I can tell you that when you talk about luxury cars well it is a place where typical dimension that are important for the mass market players do not find the spot and meaning in this world. When it comes to 2023 guidance, I think, you understood well we provide the guidance for 2022. I can repeat what Antonio and myself said before that we, the business model is very robust. The order portfolio is very strong, is very robust. And then we feel confident about this year and next year, but we do not provide any specific guidance. Sorry, Tom.

Okay. No problem. Thank you.

In addition to what we said at the Capital Market Day, of course.

Yes.

Understood.

Thank you. We will now go to our next. One moment please. And your question comes from the line of Anthony Dick from ODDO. Please go ahead. Your line is open.

Yes, thanks. Thanks for taking my question. I had a first one on the 2022 margin guidance. It seems in Q4 you're going to have probably some positive product mix with the SF90 some positive mix ramping up of the FX tailwind and also maybe fewer expenses with fewer events. Yet your Q4 EBITDA margin guidance is for a very moderate increase in terms of margins. So I was just wondering if there were any particular headwinds to expect from the margins in Q4? And then a second quick question on the topic of energy and energy supply. I understand that you use a lot of gas production in your factories and Italy is reliant quite heavily on Russian gas. So I just wondered, if you put in place any measures to significantly reduce your gas consumption or any contingency plans you had in case the country faced a gas shortage the next? Thank you.

Okay. So I take it, Anthony, I'll take the one on energy and I'll let Antonio comment on the first one. So I would like to clarify a few things. Number one, we do not rely on Russian gas. Number two, we produce 80% -- almost 80% of our energy is coming through the three generators that we have in our factory. Number three, as I show you, we are working – we are increasing the share of electricity that we are generating in house and we are also reducing the energy waste through better efficiencies or let me say leveraging the ideas that the team has. If you remember, I was talking about reducing the gas consumption by 2% that is a good number that has been done by let me say putting the people around the table. So we are putting also some contingency plan in place, because in case there are some national, let me say national direction well we will – we are here in Italy we will stick to them. But we are putting contingency plan in place. And clearly, the stock that we have is also a way to manage this situation. For the first one, I would like Antonio to comment.

To your question on the implied margin for Q4 Anthony, I think these are in line with the nine months in terms of EBITDA, so 35% expected to be confirmed in the last quarter. In terms of the rationale, I think the directionally you may think of the business being particularly strong in terms of personalization in addition to what the range of models that we sell may provide. We have a positive from foreign exchange rates compared to the initial expectations for the year. And in terms of the negative, the cost inflation is the only one I can think of. So all-in-all, I think we are in line with what we had expected since overall throughout the year.

Okay. Thanks very much.

Thank you.

Thank you. I will now hand the call back to Benedetto Vigna. Please go ahead. End of Q&A:

Thank you. Thanks to all of you for your time today, and also for all your useful questions. As you have heard a few minutes ago from myself and Antonio, we did what we said. We delivered on all what we promised, and we look with great confidence to Q4 and beyond. Before closing, I also take the occasion to thank all the men, all the women Ferrari in Maranello, and the whole of the World that contribute daily to the success of our company. For the time being, have a good afternoon everyone. Thanks again for your attention, and talk to you in a quarter. Bye-bye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers please standby.