FERRARI N.V.
ANNUAL
REPORT
2021
TABLE
OF CONTENTS
BOARD
REPORT
5
Board of Directors and Auditors
Letter from the Chairman
and Chief Executive Officer
Certain Defined Terms
and Note on Presentation
Forward-Looking Statements
Selected Financial and Other Data
Creating Value for Our Shareholders
Risk Factors
Overview
Industry Overview
Overview of Our Business
COVID-19 Pandemic Update
Financial Overview
Results of Operations
Subsequent Events and 2022 Outlook
Major Shareholders
Corporate Governance
Non Financial Statement
6
8
11
12
14
16
18
48
50
54
94
96
104
126
128
130
154
Risk Management and Internal Control Systems 199
Remuneration of Directors
214
FINANCIAL
STATEMENTS
237
Consolidated Financial Statements
and Notes at December 31, 2021
Consolidated Income Statement
Consolidated Statement
of Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Cash Flows
Consolidated Statement
of Changes in Equity
Notes to the Consolidated
Financial Statements
Company Financial Statements
and Notes at December 31, 2021
Income Statement / Statement
of Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Equity
Notes to the Company
Financial Statements
OTHER
INFORMATION
331
Other information
Independent Auditor’s Report
239
240
241
242
243
244
245
303
304
305
306
307
308
332
334
Disclaimer: this document is a PDF copy of the Annual Report of Ferrari N.V. at December 31, 2021 and is not presented in the ESEF-format
as specified in the Regulatory Technical Standards on ESEF (Delegated Regulation (EU) 2019/815). The official Annual Report of Ferrari N.V.
in ESEF single reporting package, as filed with the AFM, is available at: https://corporate.ferrari.com/en/investors/results
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS BOARD
REPORT
BOARD OF DIRECTORS
AND AUDITORS
BOARD
OF DIRECTORS
Executive Chairman
John Elkann
Acting Chief Executive Officer
Benedetto Vigna
Vice Chairman
Piero Ferrari
Directors
Delphine Arnault
Francesca Bellettini
Eddy Cue
Sergio Duca
John Galantic
Maria Patrizia Grieco
Adam Keswick
INDEPENDENT
AUDITORS
Ernst & Young Accountants LLP
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FERRARI N.V.AR 2021 7
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS LETTER FROM
THE CHAIRMAN
AND THE CHIEF
EXECUTIVE OFFICER
John Elkann
Benedetto Vigna
Dear Stakeholders,
Group delivered 11,115 cars, recorded net revenues
of Euro 4,271 million and an exceptional EBITDA
2021 was a pivotal year for Ferrari. It was a year
margin at a record level of 35.9%. Beyond these
of continuity and renewal, with innovation and
figures there was an outstanding order intake, which
growth as its themes, in line with our strategic
we managed in line with our strategy to pursue a
objectives of brand exclusivity, product excellence,
controlled growth and to preserve brand exclusivity.
staying true to our racing DNA and achieving
carbon neutrality by 2030.
Everything we revealed to the world in 2021
Our annual financial results, with a double-digit
and driving experience. We have the broadest, most
growth across all main financial indicators and
innovative, and most beautiful range of cars ever
exceeding our guidance, proved once again the
offered to our customers, from the revolutionary
soundness of our business model. Last year the
aerodynamics of the 812 Competizione, the
demonstrates our leadership in technology, design
8
FERRARI N.V.AR 2021 exhilarating 296 GTB featuring our latest hybrid
Our founder said, “Ferrari is made above all by people.”
powertrain combining a V6 turbo and electric motor,
Last year, as ever, it was essential that we continued
and the evocative Ferrari Daytona SP3, our latest
to invest in training for our workers, care for their
limited edition Icona.
wellbeing and value the wonderful diversity of talent in
our company. Our efforts were rewarded in 2021 by
When you buy a Ferrari you also join a vibrant,
Equal Salary certification for the second consecutive
passionate community, and we focused on creating
year in Italy, and the first time in the United States.
memorable, unique and authentic experiences for our
clients on road, on track and in person. We marked
We have also refined our company’s organisational
Cavalcade’s 10th anniversary with a very special event
structure to foster innovation, optimise processes
in Sicily for Classiche and Moderne drivers, and we
and increase collaboration, both internally and
restarted our Tributi and Corse Clienti activities,
with our partners. By promoting internal talent and
culminating in the Finali Mondiali at Mugello – all in full
through the appointment of some key strategic
compliance with COVID-19 regulations.
external hires, we have enhanced our agility and are
ready to seize the opportunities ahead.
We also brought our brand into exciting new
territories: we launched our first fashion collection
The process of growing and learning together
– a range that truly reflects our excellence in quality
has always underpinned our success. In 2022 we
and design – and we have begun to give our stores
celebrate our 75th Anniversary since the opening of
a fresh new look to complement our merchandise.
the Maranello factory as a single, formidable team,
We reopened and revitalised our Cavallino restaurant
ready to embrace all the exciting challenges and
while retaining its heritage.
rewards that the future will hold.
On the track, this was our best ever season in
February 25, 2022
GT racing, with Ferrari winning the Drivers’ and
Manufacturers’ World titles in the FIA World
John Elkann
Benedetto Vigna
Endurance Championship and victory at 24 Hours
Chairman
CEO
of Le Mans. We also announced our eagerly-awaited
return to the top class of such Championship in 2023
with our Le Mans Hypercar (LMH) programme. We
have attracted a passionate new audience with the
Ferrari Esports Series, gaining 35,000 participants
across Europe. With five podium places and a third in
the constructor standings, the Formula One season
produced some encouraging signs – we’re focusing
our energy on the 2022 challenge, confident that the
Scuderia has the best pair of drivers on the grid in
Charles Leclerc and Carlos Sainz.
Amidst our achievements, we continue in our
unwavering pursuit of reaching carbon neutrality by
2030, addressing – in addition to our electrification
journey – both direct and indirect emissions with
a focus on energy and materials. As a further step
forward in this process, in 2021 we calculated our
carbon footprint considering the emissions related
to all the Group activities over our entire value chain.
Our calculation, based on GHG protocol methodology,
has been certified according ISO 14064 requirements
by a third-party player and allowed us to determine
priority areas for action.
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14
CERTAIN DEFINED
TERMS AND NOTE ON
PRESENTATION
CERTAIN DEFINED TERMS
BASIS OF PREPARATION OF THE
CONSOLIDATED FINANCIAL STATEMENTS
In this report, unless otherwise specified, the terms
The Group’s financial information is presented in
“we”, “our”, “us”, the “Group”, the “Company” and
Euro. In some instances, information is presented in
“Ferrari” refer to Ferrari N.V., individually or together
U.S. Dollars. All references in this document to “Euro”
with its subsidiaries as the context may require.
and “€” refer to the currency introduced at the start of
References to “Ferrari N.V.” refer to the registrant.
the third stage of European Economic and Monetary
NOTE ON PRESENTATION
Union pursuant to the Treaty on the Functioning of
the European Union, as amended, and all references
to “U.S. Dollars” and “$” refer to the currency of the
This Annual Report includes the consolidated financial
United States of America (the “United States”).
statements of Ferrari N.V. as of December 31, 2021
and 2020, and for the years ended December 31,
The language of this Annual Report is English. Certain
2021, 2020 and 2019 prepared in accordance with
legislative references and technical terms have
International Financial Reporting Standards (“IFRS”)
been cited in their original language in order that the
as issued by the International Accounting Standards
correct technical meaning may be ascribed to them
Board, as well as IFRS as adopted by the European
under applicable law.
Union. There is no effect on these consolidated
financial statements resulting from differences
The financial data in the section “Results of Operations”
between IFRS as issued by the IASB and IFRS as
is presented in millions of Euro, while the percentages
adopted by the European Union. The designation IFRS
presented are calculated using the underlying figures
also includes International Accounting Standards
in thousands of Euro.
(“IAS”) as well as all the interpretations of the
International Financial Reporting Interpretations
Certain totals in the tables included in this document
Committee (“IFRIC” and “SIC”). The consolidated
may not add due to rounding.
financial statements and the notes to the consolidated
financial statements are referred to collectively as the
“Consolidated Financial Statements”.
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS FERRARI N.V.
FORWARD-LOOKING
STATEMENTS
Statements contained in this
• the success of our Formula 1
operate, and changes in demand
Annual Report, particularly
racing team and the expenses
for luxury goods, including high
those regarding our possible or
we incur for our Formula 1
performance luxury cars, which
assumed future performance,
activities, the uncertainty of the
is highly volatile;
competitive strengths, costs,
sponsorship and commercial
dividends, reserves and growth
revenues we generate from our
• competition in the luxury
as well as industry growth and
participation in the Formula 1
performance automobile
other trends and projections, are
World Championship, including
industry;
“forward-looking statements” that
as a result of the impact of the
contain risks and uncertainties. In
COVID-19 pandemic, as well
• our ability to successfully carry
some cases, words such as “may”,
as the popularity of Formula 1
out our controlled growth
“will”, “expect”, “could”, “should”,
more broadly;
“intend”, “estimate”, “anticipate”,
strategy and, particularly, our
ability to increase our presence
“believe”, “remain”, “continue”,
• our ability to keep up with
in growth market countries;
“on track”, “successful”, “grow”,
advances in high performance
“design”, “target”, “objective”, “goal”,
car technology, to meet
• our low volume strategy;
“forecast”, “projection”, “outlook”,
the challenges and costs
“prospects”, “plan”, “guidance”
of integrating advanced
• global economic conditions,
and similar expressions are
technologies, including hybrid
macro events and pandemics,
used to identify forward-looking
and electric, more broadly into
including the effects of the
statements. These forward-
our car portfolio over time and
evolution of and response to the
looking statements reflect the
to make appealing designs for
COVID-19 pandemic;
respective current views of
our new models;
Ferrari with respect to future
• the impact of increasingly
events and involve significant
• our ability to preserve our
stringent fuel economy,
risks and uncertainties that could
relationship with the automobile
emission and safety standards,
cause actual results to differ
collector and enthusiast
including the cost of compliance,
materially from those indicated in
community;
and any required changes to our
the forward-looking statements.
products;
• changes in client preferences
Such risks and uncertainties
and automotive trends;
• reliance upon a number of
include, without limitation:
key members of executive
• our ability to preserve and
economic environment,
and the ability of our current
enhance the value of the Ferrari
including changes in some
management team to operate
brand;
of the markets in which we
and manage effectively;
• changes in the general
management and employees,
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BOARD REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
• the performance of our dealer
• our ability to provide or arrange
We expressly disclaim and do not
network on which we depend
for adequate access to financing
assume any liability in connection
for sales and services;
for our dealers and clients, and
with any inaccuracies in any of
associated risks;
the forward-looking statements
• increases in costs, disruptions
in this document or in connection
of supply or shortages of
• labor relations and collective
with any use by any third party of
components and raw materials;
bargaining agreements;
such forward-looking statements.
Actual results could differ
• disruptions at our
• exchange rate fluctuations,
materially from those anticipated
manufacturing facilities in
interest rate changes, credit risk
in such forward-looking
Maranello and Modena;
and other market risks;
statements. We do not undertake
an obligation to update or revise
• the effects of Brexit on the UK
• changes in tax, tariff or fiscal
publicly any forward-looking
market;
policies and regulatory,
statements.
political and labor conditions
• the performance of our
in the jurisdictions in which
Additional factors which
licensees for Ferrari-branded
we operate, including possible
could cause actual results and
products;
future bans of combustion
developments to differ from
engine cars in cities and the
those expressed or implied by
• our ability to protect our
potential advent of self-driving
the forward-looking statements
intellectual property rights
technology;
and to avoid infringing on the
are included in the section “Risk
Factors” of this Annual Report.
intellectual property rights of
• potential conflicts of interest due
These factors may not be
others;
to director and officer overlaps
exhaustive and should be read
with our largest shareholders;
in conjunction with the other
• the ability of Maserati, our
and
engine customer, to sell its
cautionary statements included
in this Annual Report. You should
planned volume of cars;
• other factors discussed
evaluate all forward-looking
elsewhere in this document.
statements made in this report
in the context of these risks and
uncertainties.
• our continued compliance with
customs regulations of various
jurisdictions;
• product recalls, liability claims
and product warranties;
• the adequacy of our insurance
coverage to protect us against
potential losses;
• our ability to ensure that
our employees, agents and
representatives comply with
applicable law and regulations;
• our ability to maintain the
functional and efficient
operation of our information
technology systems and
to defend from the risk of
cyberattacks, including on our
in-vehicle technology;
• our ability to service and
refinance our debt;
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS FERRARI N.V.
SELECTED FINANCIAL
AND OTHER DATA
The following tables set forth selected historical
This financial information has been prepared in
consolidated financial and other data of Ferrari and
accordance with IFRS.
have been derived from:
(i) the audited Consolidated Financial Statements,
included elsewhere in this Annual Report;
The following information should be read in
conjunction with “Certain Defined Terms and Note on
Presentation—Note on Presentation”, “Risk Factors”,
(ii) the audited consolidated income statement of the
“Financial Overview” and the Consolidated Financial
Company for the years ended December 31, 2018
Statements included elsewhere in this Annual Report.
and 2017 and the audited consolidated statement
Historical results for any period are not necessarily
of financial position at December 31, 2019, 2018
indicative of results for any future period.
and 2017.
CONSOLIDATED INCOME STATEMENT DATA
(€ million, except per share data)
Net revenues
EBIT
Profit before taxes
Net profit
Net profit attributable to:
Owners of the parent
Non-controlling interests
Basic earnings per common share (€) (1)
Diluted earnings per common share (€) (1) (2)
Dividend declared per common share (€) (3)
Dividend declared per common share ($) (3) (5)
Distribution declared per common share (€) (4)
Distribution declared per common share ($) (4) (5)
For the years ended December 31,
2021
4,271
1,075
1,042
833
831
2
4.50
4.50
0.867
1.0378
—
—
2020
3,460
716
667
609
608
1
3.29
3.28
1.13
1.23
—
—
2019
3,766
917
875
699
696
3
3.73
3.71
1.03
1.16
—
—
2018
3,420
826
803
787
785
2
4.16
4.14
0.71
0.88
—
—
2017
3,417
775
746
537
535
2
2.83
2.82
—
—
0.635
0.682
(1)
(2)
(3)
(4)
(5)
Basic and diluted earnings per common share in 2020 benefited from the one-off partial step-up of certain trademarks for tax purposes, which
resulted in a net tax benefit of €75 million. The increase in the basic and diluted earnings per common share in 2018 compared to 2017 includes the
effects of applying the Patent Box tax regime starting in the third quarter of 2018. See Adjusted Basic and Diluted Earnings per Common Share in the
section “Non-GAAP Financial Measures” as well as Note 10 to the Consolidated Financial Statements, both included elsewhere in this document, for
additional information.
In order to calculate the diluted earnings per common share the weighted average number of shares outstanding has been increased to take into
consideration the theoretical effect of (i) the potential common shares that would have been issued under the equity incentive plan for the years
ended December 31, 2021, 2020, 2019, 2018 and 2017 (assuming 100 percent of the related awards vested), and (ii) the potential common shares
that would have been issued for the Non-Executive Directors’ compensation agreement for the year ended December 31, 2017. See Note 12 to the
Consolidated Financial Statements for additional information.
Following approval of the annual accounts by the shareholders at the Annual General Meeting of the Shareholders on April 15, 2021, a dividend
distribution of €0.867 per outstanding common share was approved, corresponding to a total distribution of €160 million. Following approval of
the annual accounts by the shareholders at the Annual General Meeting of the Shareholders on April 16, 2020, a dividend distribution of €1.13 per
outstanding common share was approved, corresponding to a total distribution of €209 million. Following approval of the annual accounts by
the shareholders at the Annual General Meeting of the Shareholders on April 12, 2019, a dividend distribution of €1.03 per outstanding common
share was approved, corresponding to a total distribution of €193 million. Following approval of the annual accounts by the shareholders at the
Annual General Meeting of the Shareholders on April 13, 2018, a dividend distribution of €0.71 per outstanding common share was approved,
corresponding to a total distribution of €134 million. Such dividend distributions were made from the retained earnings reserve.
Following approval of the annual accounts by the shareholders at the Annual General Meeting of the Shareholders on April 14, 2017, a cash
distribution of €0.635 per outstanding common share was approved, corresponding to a total distribution of €120 million. Such distribution was
made from the share premium reserve which is a distributable reserve under Dutch law.
Translated into U.S. Dollars at the exchange rates in effect on the dates on which the distribution was declared in U.S. Dollars for common shares
that are traded on the New York Stock Exchange. These translations are examples only, and should not be construed as a representation that the
Euro amount represents, or has been or could be converted into, U.S. Dollars at that or any other rate.
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BOARD REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(€ million, except per share data)
Cash and cash equivalents
Receivables from financing activities
Total assets
Debt
Total equity
Equity attributable to owners of the parent
Non-controlling interests
Share capital
Common shares issued and outstanding
(in thousands of shares)
OTHER STATISTICAL INFORMATION
Shipments (number of cars)
Average number of employees for the period
2021
1,344
1,144
6,864
2,630
2,211
2,206
5
3
2020
1,362
940
6,262
2,725
1,789
1,785
4
3
At December 31,
2019
2018
898
966
5,446
2,090
1,487
1,481
6
3
794
878
4,852
1,927
1,354
1,349
5
3
2017
648
733
4,141
1,806
784
779
5
3
183,843
184,748
185,283
187,921
188,954
For the years ended December 31,
2021
11,155
4,571
2020
9,119
4,428
2019
10,131
4,164
2018
9,251
3,651
2017
8,398
3,336
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS CREATING VALUE
FOR OUR
SHAREHOLDERS
FERRARI IS AMONG THE WORLD’S LEADING LUXURY BRANDS WITH
UNIQUE, WORLD-CLASS CAPABILITIES, AND A VISION BUILT ON OUR
HISTORIC FOUNDATIONS AND STRENGTHS.
We are fiercely protective of
the demand for our cars and the
To provide for tangible long-
our brand, which is among the
image of luxury and exclusivity
term value creation, we place
most iconic and recognizable
inherent in our brand.
particular emphasis on:
in the world and critical to our
value proposition to all of our
Our commitment to excellence
stakeholders.
and our pursuit of innovation,
We strive to maintain and
state-of-the-art performance
enhance the power of our brand
and distinction in design and
and the passion we inspire
engineering in our luxury
in clients and the broader
cars is inseparable from our
community of automotive
commitment to integrity,
enthusiasts by continuing
transparency and responsibility
• a governance model based on
transparency and integrity;
• a safe and eco-friendly working
environment including excellent
working conditions and respect
for human rights;
• professional development of our
employees;
our rigorous production and
in the conduct of our business.
• mutually beneficial relationships
distribution model, which
By fully integrating environmental
with business partners and
promotes excellence in
and social considerations with
the communities in which we
innovation, design and exclusivity.
economic objectives we are
operate;
able to identify potential risks
• mitigation of environmental
We also support our brand
and capitalize on additional
value by promoting a strong
opportunities, resulting in
connection to our company and
a process of continuous
our brand among the community
improvement.
of Ferrari enthusiasts.
We focus relentlessly on
Sustainability is a core element
strengthening this connection by
of our governance model and
rewarding our most loyal clients
executive management plays a
impacts from our production
processes and the luxury cars
we produce, addressing direct
and indirect GHG emissions,
focusing on energy and
materials, in addition to our
electrification journey.
through a range of initiatives,
direct and active role in developing
The Non Financial Statement
such as driving events and client
and achieving our sustainability
section of our 2021 Annual Report
activities in Maranello and, most
objectives under the oversight of
addresses those aspects of our
importantly, by providing our
our Board of Directors.
sustainability efforts that we have
most loyal and active clients with
The foundation of a responsible
identified as being of greatest
preferential access to our newest,
company rests on being fully
importance to our internal and
most exclusive and highest value
attentive to the nature and extent
external stakeholders.
cars. As a result, in 2021 we sold
of this interconnection and
approximately 59% of our new
our understanding of both the
cars to already Ferrari customers
potential effects of our activities
and 32% to customers being
and how those effects can be
current owners of more than
mitigated through responsible
one Ferrari, which reinforces
management.
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RISK
FACTORS
WE FACE A VARIETY OF RISKS AND UNCERTAINTIES IN OUR BUSINESS.
THOSE DESCRIBED BELOW ARE NOT THE ONLY RISKS AND UNCERTAINTIES
THAT WE FACE. ADDITIONAL RISKS AND UNCERTAINTIES THAT WE ARE
UNAWARE OF, OR THAT WE CURRENTLY BELIEVE TO BE IMMATERIAL, MAY
ALSO BECOME IMPORTANT FACTORS THAT AFFECT US.
RISKS RELATED
TO OUR BUSINESS,
STRATEGY
AND OPERATIONS
WE MAY NOT SUCCEED
IN PRESERVING AND
ENHANCING THE VALUE
OF THE FERRARI BRAND,
WHICH WE DEPEND UPON
TO DRIVE DEMAND AND
REVENUES.
highest quality. The market for
We selectively license the Ferrari
luxury goods generally and for
brand to third parties that
luxury automobiles in particular
produce and sell Ferrari-branded
is intensely competitive, and
luxury goods and therefore we
we may not be successful in
rely on our licensing partners to
maintaining and strengthening
preserve and enhance the value
the appeal of our brand. Client
of our brand. If our licensees
preferences, particularly among
or the manufacturers of these
luxury goods, can vary over
products do not maintain
time, sometimes rapidly. We are
the standards of quality and
therefore exposed to changing
exclusivity that we believe are
perceptions of our brand image,
consistent with the Ferrari
Our financial performance is
particularly as we seek to attract
brand, or if such licensees or
influenced by the perception
new generations of clients and,
manufacturers otherwise misuse
and recognition of the Ferrari
to that end, we continuously
the Ferrari brand, our reputation
brand, which, in turn, depends
renovate and expand the range
and the integrity and value of
on many factors such as the
of our models. For example, the
our brand may be damaged and
design, performance, quality
gradual expansion of hybrid
our business, operating results
and image of our cars, the
engine technology (already
and financial condition may be
appeal of our dealerships and
integrated in past models
materially and adversely affected.
stores, the success of our
such as the LaFerrari and the
In addition, in 2019 we announced
promotional activities including
LaFerrari Aperta, as well as in
a brand diversification strategy
public relations and marketing,
the more recent 296 GTB, SF90
that will significantly increase the
as well as our general profile,
Stradale and SF90 Spider) and
deployment of our brand in non-
including our brand’s image
electric engine technology will
car products and experiences.
of exclusivity. The value of our
introduce a notable change in
If this strategy is not successful,
brand and our ability to achieve
the overall driver experience
our brand image may be diluted
premium pricing for Ferrari-
compared to the combustion
or tainted.
branded products may decline
engine cars of our historical
if we are unable to maintain the
models. Any failure to preserve
value and image of the Ferrari
and enhance the value of our
brand, including, in particular, its
brand may materially and
aura of exclusivity. Maintaining
adversely affect our ability to sell
OUR BRAND IMAGE
DEPENDS IN PART ON
THE SUCCESS OF OUR
FORMULA 1 RACING TEAM.
the value of our brand will
our cars, to maintain premium
The prestige, identity, and appeal
depend significantly on our
pricing, and to extend the value
of the Ferrari brand depend in
ability to continue to produce
of our brand into other activities
part on the continued success
luxury performance cars of the
profitably or at all.
of the Scuderia Ferrari racing
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BOARD REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
team in the Formula 1 World
of our racing team may suffer.
production at our plants in
Championship. The racing
As the success of our racing
Maranello and Modena, while
team is a key component of our
team forms a large part of our
implementing remote working
marketing strategy and may
brand identity, a sustained period
arrangements for all non-
be perceived by our clients
without racing success could
manufacturing related activities.
as a demonstration of the
detract from the Ferrari brand
We were able to return to full
technological capabilities of our
and, as a result, from potential
production in May 2020. We
sports, GT, special series and
clients’ enthusiasm for the Ferrari
generally realize minimal revenue
Icona cars, which also supports
brand and their perception of
while our facilities are shut
the appeal of other Ferrari-
our cars, which could have an
down, but we continue to incur
branded luxury goods.
adverse effect on our business,
expenses. Moreover, the negative
results of operations and financial
cash impact is exacerbated by
We are focused on improving
condition.
our racing results and restoring
our historical position as the
premier racing team particularly
in Formula 1 as our most recent
Drivers’ Championship and
Constructors’ Championship
were in 2007 and 2008,
respectively. If we are unable to
WE ARE SUBJECT TO RISKS
RELATED TO THE COVID-19
PANDEMIC OR SIMILAR
PUBLIC HEALTH CRISES
THAT MAY MATERIALLY AND
ADVERSELY AFFECT OUR
BUSINESS.
the fact that, despite not selling
cars, we have to continue to
pay suppliers for components
previously ordered. We continue
to take measures to combat
the spread of COVID-19 at our
facilities, while continuing to
guarantee the possibility of
remote work for those employees
attract and retain the necessary
Public health crises such as
whose job activity is compatible
talent to succeed in international
pandemics or similar outbreaks
with such work arrangements.
competitions or devote the capital
could adversely impact our
necessary to fund successful
business. Starting in early 2020
In connection with the
racing activities, the value of the
the global spread of COVID-19
COVID-19 pandemic and related
Ferrari brand and the appeal of
led to governments around the
government measures, we
our cars and other luxury goods
world mandating increasingly
experienced delays in shipments
may suffer. Even if we are able to
restrictive measures to contain
of cars from March 2020 to
attract such talent and adequately
the pandemic, including social
May 2020 due to restrictions on
fund our racing activities, there
distancing, quarantine, “shelter
dealers’ activities or the inability
is no assurance that this will lead
in place” or similar orders, travel
of customers to take deliveries
to competitive success for our
restrictions and suspension of
of cars.
racing team.
non-essential business activities.
The COVID-19 pandemic has
Although certain restrictions
The success of our racing team
caused significant disruption to
have remained in place or been
depends in particular on our
the global economy, including
reimplemented in some of the
ability to attract and retain top
changes in consumer spending
countries where Ferrari operates,
drivers, racing team management
and behavior, disruption to
since May 2020 substantially all
and engineering talent.
supply chains and financial
Ferrari dealerships remained
Our primary Formula 1 drivers,
markets, as well as restrictions
operational and order collections
team managers and other key
on business and individual
continued.
employees of Scuderia Ferrari
activities. In 2020, the pandemic
For further information on the
are critical to the success of
led to a global economic
impact of the COVID-19 pandemic
our racing team and if we were
slowdown and a severe
on our results of operations
to lose their services, this could
recession in several of the
and liquidity, see “COVID-19
have a material adverse effect
markets in which we operate
Pandemic Update” and “Financial
on the success of our racing
and while economies recovered
Overview”. While the overall
team and correspondingly the
partially in 2021, the pandemic
COVID-19 situation improved in
Ferrari brand. If we are unable to
continues to be unpredictable
2021 in countries that have rolled
find adequate replacements or
and additional containment
out vaccination campaigns, our
to attract, retain and incentivize
measures may lead to further
business and operating results
drivers and team managers,
economic downturns.
may be negatively impacted if
other key employees or new
From mid-March to early May
the virus worsens or mutates,
qualified personnel, the success
2020, we temporarily suspended
if vaccination efforts are
AR 2021
19
INDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS
unsuccessful or if regions or
capital needs, reduced liquidity
actions taken by governments
countries implement further
and certain limitations in the
around the world, as well as the
restrictions to contain the
supply of credit, which may
overall condition and outlook
virus. The resurgence of the
ultimately lead to higher costs
of the global economy. While
pandemic in several European
of capital for Ferrari. Any of the
we are continuing to monitor
countries and elsewhere in the
foregoing could limit customer
and assess the evolution of the
last months of 2021, including
demand or our capacity to meet
pandemic and its effects on both
due to the highly transmissible
customer demand and have a
the macroeconomic scenario
Delta and Omicron variants, have
material adverse effect on our
and our financial position and
led governments to reintroduce
business, results of operations
results of operations, significant
containment measures
and financial condition.
uncertainty remains around
and increasingly stringent
the length and extent of the
restrictions may be imposed
Our brand activities across
restrictions in the markets in
in the coming periods. We may
different jurisdictions have
which we operate. However, the
yet experience a new shutdown
also been, and may continue
effects on our business, results of
or slowdown of all or part of
to be, adversely impacted, due
operations, financial performance
our manufacturing facilities,
to the temporary closure of
and cash flows may be material
including in the event that our
the Ferrari stores, museums
and adverse.
employees are diagnosed with
and theme parks in the first
COVID-19 or our supply chains
quarter of 2020 to comply with
The COVID-19 pandemic may also
are disrupted, or if additional
government orders, with an
exacerbate other risks disclosed
“waves” of the pandemic
adverse impact on our revenues
in this section, including, but not
lead to further government
originating from such activities.
limited to, our competitiveness,
actions. Management time and
Although Ferrari stores gradually
demand for our products,
resources may need to be spent
reopened starting in May 2020,
shifting consumer preferences,
on COVID-19 related matters,
to date in-store traffic has not yet
exchange rate fluctuations,
distracting them from the
recovered to pre-pandemic levels
customers’ and dealers’ access to
implementation of our strategy.
and Ferrari stores, museums and
affordable financing, and credit
In addition, the prophylactic
theme parks may continue to be
market conditions affecting the
measures we have adopted or
subject to certain restrictions
availability of capital and financial
that we will be required to adopt
as a result of local regulations,
resources.
at our facilities may be costly
although overall brand activities
and may affect production
have increased in 2021 compared
Please refer to “COVID-19
levels. Our suppliers, customers,
to 2020.
dealers, franchisees and other
Pandemic Update” and “Financial
Overview” for additional
contractual counterparties may
The Formula 1 2021 World
information relating to how the
be restricted or prevented from
Championship was also disrupted
COVID-19 pandemic impacted our
conducting business activities
due to the COVID-19 pandemic,
results of operations and financial
for indefinite or intermittent
albeit to a lesser extent than the
condition.
periods of time, including as
prior’s year edition. Government
a result of safety concerns,
measures or decisions of Formula
shutdowns, slowdowns, illness
1 may disrupt the Formula 1
of such parties’ workforce and
2022 World Championship, with
other actions and restrictions
potential material adverse effects
requested or mandated by
on our revenues and profits.
governmental authorities.
Furthermore, the COVID-19
The impact of the COVID-19
pandemic may lead to financial
pandemic on Ferrari’s results of
distress for our suppliers or
operations and financial condition
dealers, as a result of which
will depend largely on future
they may have to permanently
events outside of our control,
discontinue or substantially
including ongoing developments
reduce their operations. In
in the pandemic, the success
addition, the COVID-19 pandemic
of containment measures,
may lead to higher working
vaccination campaigns and other
20
FERRARI N.V.AR 2021 IF WE ARE UNABLE TO
KEEP UP WITH ADVANCES
IN HIGH PERFORMANCE
CAR TECHNOLOGY, OUR
BRAND AND COMPETITIVE
POSITION MAY SUFFER.
available technology advances
and competition in the industry
increases. If our research
and development efforts do
not lead to improvements in
THE VALUE OF OUR BRAND
DEPENDS IN PART ON THE
AUTOMOBILE COLLECTOR
AND ENTHUSIAST
COMMUNITY.
car performance relative to
An important factor in the
Performance cars are
the competition, or if we are
connection of clients to the
characterized by leading-edge
required to spend more to
Ferrari brand is our strong
technology that is constantly
achieve comparable results,
relationship with the global
evolving. In particular, advances
the sales of our cars or our
community of automotive
in racing technology often lead
profitability may suffer.
collectors and enthusiasts,
to improved technology in road
cars. Although we invest heavily
in research and development,
we may be unable to maintain
our leading position in high
performance car technology
IF OUR CAR DESIGNS
DO NOT APPEAL TO
CLIENTS, OUR BRAND AND
COMPETITIVE POSITION
MAY SUFFER.
particularly collectors
and enthusiasts of Ferrari
automobiles. This is influenced by
our close ties to the automotive
collectors’ community and our
support of related events (such
and, as a result, our competitive
Design and styling are an integral
as car shows and driving events)
position may suffer.
component of our models
at our headquarters in Maranello
and our brand. Our cars have
and through our dealers, the
As technologies change, we plan
historically been characterized
Ferrari museums and affiliations
to upgrade or adapt our cars
by distinctive designs combining
with regional Ferrari clubs. The
and introduce new models in
the aerodynamics of a sports
support of this community also
order to continue to provide cars
car with powerful, elegant lines.
depends upon the perception of
with the latest technology.
We believe our clients purchase
our cars as collectibles, which
However, our cars may not
our cars for their appearance
we also support through our
compete effectively with our
as well as their performance.
Ferrari Classiche services, and
competitors’ cars if we are
However, we will need to renew
the active resale market for our
not able to develop, source
over time the style of our cars to
automobiles which encourages
and integrate the latest
differentiate the new models we
interest over the long-term.
technology into our cars. For
produce from older models, and
The increase in the number of
example, in the next few years
to reflect the broader evolution
cars we produce relative to the
luxury performance cars will
of aesthetics in our markets.
number of automotive collectors
increasingly transition to hybrid
We devote great efforts to the
and purchasers in the secondary
and electric technology, albeit
design of our cars and most of
market may adversely affect our
at a slower pace compared
our current models are designed
cars’ value as collectible items
to mass market vehicles. See
by the Ferrari Design Centre, our
and in the secondary market
“The introduction of hybrid
in-house design team. The design
more broadly.
and electric technology in our
of our electric cars and, more
cars is costly and its long-term
generally, of our future models
If there is a change in collector
success is uncertain”. We are
with increased connectivity
appetite or damage to the Ferrari
also increasingly investing in
features will depart from past
brand, our ties to, and the support
connectivity, which requires
designs in appearance and
we receive from, this community
significant investments in
functionality, thereby requiring
may be diminished. Such a loss of
research and development; we
new skills and presenting new
enthusiasm for our cars from the
expect that the future generation
challenges. If the design of our
automotive collectors’ community
of cars will feature a high degree
future models fails to meet the
could harm the perception of
of connectivity for purposes
evolving tastes and preferences
the Ferrari brand and adversely
of infotainment, safety and
of our clients and prospective
impact our sales and profitability.
regulatory compliance.
clients, or the appreciation of
the wider public, our brand may
Developing and applying new
suffer and our sales may be
automotive technologies is
adversely affected.
costly, and may become even
more costly in the future as
21
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS
OUR BUSINESS IS
SUBJECT TO CHANGES
IN CLIENT PREFERENCES
AND TRENDS IN THE
AUTOMOTIVE AND LUXURY
INDUSTRIES.
we expand in accordance with our
may result in downward price
strategy into adjacent segments of
pressure and adversely affect our
the luxury industry, where we do
business, operating results and
not have a level of experience and
financial condition. The impact of
market presence comparable to
a luxury market downturn may be
the one we have in the automotive
particularly pronounced for the
Our continued success depends
industry. Any of these risks could
most expensive among our car
in part on our ability to originate
have a material adverse effect on
models, which generate a more
and define products and trends
our business, results of operations
than proportionate amount of our
in the automotive and luxury
and financial condition.
profits, therefore exacerbating
industries, as well as to anticipate
and respond promptly to
changing consumer demands and
automotive trends in the design,
styling, technology, production,
merchandising and pricing of
our products. Our products must
DEMAND FOR LUXURY
GOODS, INCLUDING
LUXURY PERFORMANCE
CARS, IS VOLATILE, WHICH
MAY ADVERSELY AFFECT
OUR OPERATING RESULTS.
the impact on our results. In
addition, these effects may have
a more pronounced impact
on us given our low volume
strategy and relatively smaller
scale as compared to large
global mass-market automobile
appeal to a client base whose
Volatility of demand for luxury
manufacturers.
preferences cannot be predicted
goods, in particular luxury
with certainty and are subject
performance cars, may adversely
to rapid change. Evaluating and
affect our business, operating
responding to client preferences
results and financial condition.
has become even more complex
The market in which we sell
WE FACE COMPETITION
IN THE LUXURY
PERFORMANCE CAR
INDUSTRY.
in recent years, due to our
our cars is subject to volatility
We face competition in all
expansion in new geographical
in demand. Demand for luxury
product categories and markets
markets. The introduction of
automobiles depends to a large
in which we operate. We compete
hybrid and electric technology
extent on general, economic,
with other international luxury
and the associated changes in
political and social conditions
performance car manufacturers
customer preferences that may
in a given market as well as the
which own and operate well-
follow are also a challenge we will
introduction of new vehicles
known brands of high-quality
face in future periods. See also
and technologies. As a luxury
cars, some of which form part
“If we are unable to keep up with
performance car manufacturer
of larger automotive groups
advances in high performance
and low volume producer, we
and may have greater financial
car technology, our brand and
compete with larger automobile
resources and bargaining power
competitive position may suffer”
manufacturers many of which
with suppliers than we do,
and “The introduction of hybrid
have greater financial resources
particularly in light of our policy
and electric technology in our
in order to withstand changes
to maintain low volumes in order
cars is costly and its long-term
in the market and disruptions
to preserve and enhance the
success is uncertain”. In addition,
in demand. Demand for our
exclusivity of our cars. In addition,
there can be no assurance
cars may also be affected by
several other manufacturers
that we will be able to produce,
factors directly impacting
have recently entered or are
distribute and market new
the cost of purchasing and
attempting to enter the upper end
products efficiently or that any
operating automobiles, such
of the luxury performance car
product category that we may
as the availability and cost of
market, including with advanced
expand or introduce will achieve
financing, prices of raw materials
electric technology, thereby
sales levels sufficient to generate
and parts and components,
increasing competition.
profits. We will encounter this
fuel costs and governmental
risk, for example, as we introduce
regulations, including tariffs,
We believe that we compete
the Purosangue, a luxury high
import regulation and other taxes,
primarily on the basis of our
performance vehicle within the
including taxes on luxury goods,
brand image, the performance
GT range that we are developing
resulting in limitations to the use
and design of our cars, our
and is expected to commence
of high performance sports cars
reputation for quality and the
production in 2022 with deliveries
or luxury goods more generally.
driving experience for our
starting in 2023. Furthermore this
Volatility in demand may lead
customers.
risk is particularly pronounced as
to lower car unit sales, which
22
FERRARI N.V.AR 2021 If we are unable to compete
Day in September 2018, we
We continuously improve our
successfully, our business,
announced our plan to introduce
international network footprint
results of operations and financial
15 new models in the 2019-2022
and skill set. We also plan to
condition could be adversely
period (which is unprecedented
open additional retail stores
affected.
for Ferrari over a similar time
in international markets. We
OUR CONTROLLED
GROWTH STRATEGY
EXPOSES US TO RISKS.
period), including the Icona limited
do not yet have significant
editions, a concept that takes
experience directly operating
inspiration from our iconic cars
in many of these markets,
of the past and interprets them
and in many of them we face
Our growth strategy includes
in a modern way with innovative
established competitors. Many
a controlled expansion of our
technology and materials. In the
of these countries have different
sales and operations, including
GT range, we are developing a
operational characteristics,
the launching of new car models
luxury high performance vehicle,
including but not limited
and expanding sales, as well as
the Purosangue, and we are
to employment and labor,
dealer operations and workshops,
developing a new line of cars
transportation, logistics, real
in targeted growth regions
powered by V6 engines, starting
estate, environmental regulations
internationally. In particular, our
with the 296 GTB, which was
and local reporting or legal
growth strategy requires us to
unveiled in June 2021. In addition,
requirements.
expand operations in regions
we will gradually but rapidly
that we have identified as having
expand the use of hybrid and
Consumer demand and
relatively high growth potential.
electric technology in our road
behavior, as well as tastes and
We may encounter difficulties
cars, consistent with customer
purchasing trends may differ in
in entering and establishing
preferences and broader
these markets, and as a result,
ourselves in these markets,
industry trends. While we will
sales of our products may not
including in establishing new
seek to ensure that these changes
be successful, or the margins
successful dealership networks
remain fully consistent with the
on those sales may not be in
and facing more significant
Ferrari car identity, we cannot
line with those we currently
competition from competitors
be certain that they will prove
anticipate. Furthermore, such
that are already present in
profitable and commercially
markets will have upfront short-
those regions.
successful.
term investment costs that
may not be accompanied by
Our growth depends on the
Our growth strategy may expose
sufficient revenues to achieve
continued success of our
us to new business risks that
typical or expected operational
existing cars, as well as the
we may not have the expertise,
and financial performance and
successful introduction of new
capability or the systems to
therefore may be dilutive to us in
cars. Our ability to create new
manage. This strategy will also
the short-term. In many of these
cars and to sustain existing car
place significant demands on us
countries, there is significant
models is affected by whether
by requiring us to continuously
competition to attract and
we can successfully anticipate
evolve and improve our
retain experienced and talented
and respond to consumer
operational, financial and internal
employees.
preferences and car trends. The
controls. Continued expansion
failure to develop successful new
also increases the challenges
Consequently, if our
cars or delays in their launch that
involved in maintaining high levels
international expansion plans
could result in others bringing
of quality, management and client
are unsuccessful, our business,
new products and leading-edge
satisfaction, recruiting, training
results of operations and financial
technologies to the market
and retaining sufficiently skilled
condition could be materially
first, could compromise our
management, technical and
adversely affected.
competitive position and hinder
marketing personnel. If we are
the growth of our business. As
unable to manage these risks or
part of our growth strategy, we
meet these demands, our growth
plan to broaden the range of our
prospects and our business,
models to capture additional
results of operations and financial
customer demand for different
condition could be adversely
types of vehicles and modes of
affected.
utilization. At our Capital Markets
23
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS
OUR LOW VOLUME
STRATEGY MAY LIMIT
POTENTIAL PROFITS, AND
IF VOLUMES INCREASE OUR
BRAND EXCLUSIVITY MAY
BE ERODED.
A key to the appeal of the Ferrari
brand and our marketing strategy
is the aura of exclusivity and the
sense of luxury which our brand
conveys.
without eroding the image of
can be no assurance that we
exclusivity in our brand we may
will be successful in developing,
be unable to significantly increase
producing and marketing
our revenues.
THE SMALL NUMBER OF
CAR MODELS WE PRODUCE
AND SELL MAY RESULT IN
GREATER VOLATILITY IN
OUR FINANCIAL RESULTS.
We depend on the sales of a
small number of car models
additional new cars (including our
special series and limited edition
models) to sustain sales growth in
the future.
GLOBAL ECONOMIC
CONDITIONS, PANDEMICS
AND MACRO EVENTS MAY
ADVERSELY AFFECT US.
A central facet to this exclusivity
to generate our revenues. Our
Our sales volumes and revenues
is the limited number of models
current product range consists
may be affected by overall
and cars we produce and our
of eight range models (six sports
general economic conditions
strategy of maintaining our car
cars and two GT cars), two special
within the various countries in
waiting lists to reach the optimal
series models and three strictly
which we operate. Deteriorating
combination of exclusivity and
limited edition Icona models.
general economic conditions
client service.
While we anticipate expanding
may affect disposable incomes
Our low volume strategy is also
our car offerings as part of our
and reduce consumer wealth
an important factor in the prices
growth strategy, through our
impacting client demand,
that our clients are willing to
previously announced plan to
particularly for luxury goods,
pay for our cars. This focus on
introduce 15 new products in
which may negatively impact our
maintaining exclusivity limits our
the 2019-2022 period, a limited
profitability and put downward
potential sales growth and profits
number of models will continue
pressure on our prices and
compared to manufacturers less
to account for a large portion of
volumes. Furthermore, during
reliant on the exclusivity of their
our revenues at any given time in
recessionary periods, social
products.
the foreseeable future, compared
acceptability of luxury purchases
to other automakers. Therefore,
may decrease and higher taxes
On the other hand, our current
a single unsuccessful new model
may be more likely to be imposed
growth strategy contemplates a
would harm us more than it
on certain luxury goods including
measured but significant increase
would other automakers. There
our cars, which may affect
in car sales above current levels
can be no assurance that our cars
our sales. Adverse economic
as we target a larger customer
will continue to be successful
conditions may also affect the
base and modes of use, we
in the market, or that we will be
financial health and performance
increase our focus on GT cars,
able to launch new models on
of our dealers in a manner that
and our product portfolio evolves
a timely basis compared to our
will affect sales of our cars
with a broader product range.
competitors. It generally takes
or their ability to meet their
several years from the beginning
commitments to us.
We sold 11,155 cars in 2021
of the development phase to the
compared to 7,255 cars in
start of production for a new
The luxury performance car
2014, and sales are expected to
model and the car development
market is generally affected by
continue to increase gradually.
process is capital intensive. As a
global macroeconomic conditions
In pursuit of our strategy, we
result, we would likely be unable
and many factors affect the
may be unable to maintain the
to replace quickly the revenue lost
level of consumer spending in
exclusivity of the Ferrari brand.
from one of our main car models
the luxury performance car
If we are unable to balance
if it does not achieve market
industry, including the state of
brand exclusivity with increased
acceptance. Furthermore, our
the economy as a whole, stock
production, we may erode the
revenues and profits may also be
market performance, interest and
desirability and ultimately the
affected by our special series and
exchange rates, inflation, political
consumer demand or relative
limited edition models (including
uncertainty, the availability of
pricing for our cars. As a result,
the Icona limited editions) that
consumer credit, tax rates,
if we are unable to increase
we launch from time to time and
unemployment levels and other
car production meaningfully
which are typically priced higher
matters that influence consumer
or introduce new car models
than our range models. There
confidence. In general, although
24
FERRARI N.V.AR 2021 our sales have historically been
our products. In particular, the
services industry. See also “We
comparatively resilient in periods
majority of our current sales
depend on our suppliers, many of
of economic turmoil, sales of
are in the EU and in the United
which are single source suppliers;
luxury goods tend to decline
States; if we are unable to expand
and if these suppliers fail to
during recessionary periods
in other growth markets, a
deliver necessary raw materials,
when the level of disposable
downturn in mature economies
systems, components and parts
income tends to be lower or when
such as the EU and the United
of appropriate quality in a timely
consumer confidence is low.
States may negatively affect
manner, our operations may
Significant inflationary pressures
our financial performance. In
be disrupted”.
appeared in 2021 in many of the
addition, uncertainties regarding
markets in which we operate and
future trade arrangements and
this trend has continued in early
industrial policies in various
2022. If this trend continues going
countries or regions, such as in
forward, we could experience
the United Kingdom following the
DEVELOPMENTS IN CHINA
AND OTHER GROWTH
MARKETS MAY ADVERSELY
AFFECT OUR BUSINESS.
an increase in the costs we incur
exit from the European Union (see
We operate in a number of
for raw materials, utilities or
further “We may be adversely
growth markets, both directly and
services, which could adversely
affected by the UK’s exit from
through our dealers.
affect our business and results
the European Union (Brexit) ”)
We believe we have potential
of operations if we are not able
create additional macroeconomic
for further success in new
to pass on the increased costs to
risk. In the United States, any
geographies, in particular in
our customers or successfully
policy to discourage import into
China, but also more generally in
implement other mitigating
the United States of vehicles
Asia, recognizing the increasing
actions. Furthermore, following
produced elsewhere could
personal wealth in these markets.
the recent rise in inflation, many
adversely affect our operations.
While demand in these markets
central banks are signaling that
Any new policies may have an
has increased in recent years
interest rate increases may be
adverse effect on our business,
due to sustained economic
expected in the coming months,
financial condition and results of
growth and growth in personal
which is in turn expected to
operations. Although Mainland
income and wealth, we are
increase our cost of borrowing
China, Hong Kong and Taiwan
unable to foresee the extent
and the market rates for new car
only represented approximately
to which economic growth
financing as well. Such increases
8 percent of our net revenues in
will be sustained. For example,
could impact our ability to obtain
2021 and is expected to represent
rising geopolitical tensions and
affordable financing or could
a limited proportion of our
potential slowdowns in the rate
make our cars less affordable
growth in the short term, slowing
of growth there and in other
to clients, which could cause
economic conditions in Mainland
emerging markets could limit the
consumers to delay the purchase
China, Hong Kong and Taiwan may
opportunity for us to increase
of our cars or to purchase less
adversely affect our revenues in
unit sales and revenues in those
expensive cars.
that region. A significant decline
regions in the near term.
in the EU, the global economy
We are also susceptible to
or in the specific economies of
Our exposure to growth
risks relating to epidemics and
our markets, or in consumers’
countries is likely to increase, as
pandemics of diseases. See “We
confidence, could have a material
we pursue expanded sales in
are subject to risks related to the
adverse effect on our business.
such countries. Economic and
COVID-19 pandemic that may
See also “Developments in China
political developments in growth
materially and adversely affect
and other growth markets may
markets, including economic
our business”.
adversely affect our business”.
crises or political instability,
have had and could have in the
We distribute our products
Additionally, sanctions and
future material adverse effects
internationally and we may
export controls which could
on our results of operations and
be affected by downturns in
be introduced as a result of
financial condition. Further, in
general economic conditions or
geopolitical tensions and conflicts
certain markets in which we or
uncertainties regarding future
could adversely affect, directly or
our dealers operate, required
economic prospects that may
indirectly, our supply chain and
government approvals may limit
impact the countries in which
customers, as well as the global
our ability to act quickly in making
we sell a significant portion of
financial markets and financial
decisions on our operations in
25
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS
those markets. Other government
actions may also impact the
market for luxury goods in these
markets, such as tax changes
WE MAY BE ADVERSELY
AFFECTED BY THE UK’S
EXIT FROM THE EUROPEAN
UNION (BREXIT).
provides clarity with respect to
the intended relationship between
the European Union and the
United Kingdom going forward,
or the active discouragement
In a June 23, 2016 referendum,
uncertainty remains around
of luxury purchases. Consumer
the United Kingdom voted to
the details of such relationship,
spending habits in these markets
terminate the UK’s membership
which remain in progress and
may also change due to other
in the European Union (“Brexit”).
could evolve over time, and the
factors that are outside of our
The UK ceased to be a member
full extent of the consequences of
control. For instance, since August
of the European Union on
Brexit. Brexit could also negatively
2021 the President of the People’s
January 31, 2020. On December
impact economic conditions in
Republic of China has repeatedly
24, 2020, the European Union
Europe more generally, which
signaled the government’s
and the UK announced that
in turn could adversely impact
intention to regulate the spending
they had reached a new
global economic conditions. In
patterns of individuals and
bilateral trade and cooperation
addition, Brexit may contribute to
families with ultra-high incomes
agreement governing their future
significant volatility in exchange
and encourage high-income
relationship (the “EU-UK Trade and
rates. In 2021, approximately
groups and enterprises to
Cooperation Agreement”) which
11 percent of our net revenues
return more to society. While no
was formally approved by the
were generated in the UK;
regulatory action has been taken
European Council on December
therefore, any material adverse
to date, similar statements by
29, 2020 and by the UK parliament
effect of Brexit on global or
governmental authorities may
on December 30, 2020. The
regional economic or market
affect the social acceptability of
EU-UK Trade and Cooperation
conditions could adversely
spending on luxury goods.
Agreement was subsequently
affect our business, results of
ratified by the European
operations and financial condition
Maintaining and strengthening
Parliament and entered into force
as customers may reduce or
our position in these growth
on May 1, 2021.
delay spending decisions on our
markets is a relevant component
products.
of our global growth strategy.
Under the terms of the EU-
However, initiatives from
UK Trade and Cooperation
several global luxury automotive
Agreement, exports of cars
manufacturers have increased
between the European Union and
competitive pressures for luxury
the United Kingdom are exempt
cars in several growth markets.
from tariffs, to the extent the
As these markets continue to
goods contain a certain quantity
OUR SUCCESS DEPENDS
LARGELY ON THE ABILITY
OF OUR CURRENT
MANAGEMENT TEAM TO
OPERATE AND MANAGE
EFFECTIVELY.
grow, we anticipate that additional
of EU or UK inputs, as applicable.
Our success depends on the
competitors, both international
The application of such rules
ability of our senior executives
and domestic, will seek to enter
may result in increased costs
and other members of
these markets and that existing
for us or for our suppliers
management to effectively
market participants will try to
(which, in turn, they could seek
manage our business as a
aggressively protect or increase
to transfer to us), and difficulties
whole and individual areas of
their market share. Increased
in the procurement of parts.
the business. Most of our senior
competition may result in pricing
In addition, the new customs
executives and employees,
pressures, reduced margins
procedures set forth in the
including many highly skilled
and our inability to gain or hold
EU-UK Trade and Cooperation
engineers, technicians and
market share, which could have
Agreement may result in
artisans, are required to work
a material adverse effect on our
increased operational complexity,
from our offices and production
results of operations and financial
with full import controls for
facilities in and around Maranello,
condition. See also “Global
goods being imported from
Italy. If we were to lose the
economic conditions, pandemics
the European Union to the
services of any of these senior
and macro events may adversely
United Kingdom expected to
executives or key employees,
affect us”.
be gradually introduced by the
this could have a material
United Kingdom throughout
adverse effect on our business,
2022. While the EU-UK Trade
operating results and financial
and Cooperation Agreement
condition. We have developed
26
FERRARI N.V.AR 2021 incentive plans aimed at retaining
quality new dealers, based on,
electrical and electronic parts,
and incentivizing our senior
among other things, dealer
plastic components as well as
executives and employees, as well
margin, incentives and the
castings and tires, which makes
as management succession plans
performance of other dealers
us dependent upon the suppliers
that we believe are appropriate
in the region. If we are unable to
of such components. In coming
in the circumstances, although
attract a sufficient number of new
years, we will also require a
it is difficult to predict with any
Ferrari dealers in targeted growth
greater number of components
certainty that we will replace
areas, our prospects could be
for hybrid and electric engines
these individuals with persons
materially adversely affected.
as we introduce hybrid and
of equivalent experience and
capabilities. If we are unable to
find adequate replacements or
to attract, retain and incentivize
senior executives, other key
employees or new qualified
personnel, our business, results
of operations and financial
condition may suffer.
WE RELY ON OUR DEALER
NETWORK TO PROVIDE
SALES AND SERVICES.
WE DEPEND ON OUR
SUPPLIERS, MANY OF
WHICH ARE SINGLE
SOURCE SUPPLIERS; AND
IF THESE SUPPLIERS FAIL
TO DELIVER NECESSARY
RAW MATERIALS, SYSTEMS,
COMPONENTS AND PARTS
OF APPROPRIATE QUALITY
IN A TIMELY MANNER,
OUR OPERATIONS MAY BE
DISRUPTED.
electric technology in our cars,
and we expect producers of
these components will be called
upon to increase the levels of
supply as the shift to hybrid or
electric technology gathers pace
in the industry. While we obtain
components from multiple
sources whenever possible,
similar to other small volume car
manufacturers, most of the key
components we use in our cars
are purchased by us from single
We do not own our Ferrari
Our business depends on a
source suppliers. We generally
dealers and virtually all of our
significant number of suppliers,
do not qualify alternative sources
sales are made through our
which provide the raw materials,
for most of the single-sourced
network of dealerships located
components, parts and systems
components we use in our cars
throughout the world. If our
we require to manufacture cars
and we do not maintain long-term
dealers are unable to provide
and parts and to operate our
agreements with a number of
sales or service quality that our
business. We use a variety of
our suppliers. Furthermore, we
clients expect or do not otherwise
raw materials in our business,
have limited ability to monitor the
adequately project the Ferrari
including aluminum, and precious
financial stability of our suppliers.
image and its aura of luxury and
metals such as palladium and
exclusivity, the Ferrari brand may
rhodium. We source materials
While we believe that we may
be negatively affected. We depend
from a limited number of
be able to establish alternate
on the quality of our dealership
suppliers. We cannot guarantee
supply relationships and can
network and our business,
that we will be able to maintain
obtain or engineer replacement
operating results and financial
access to these raw materials,
components for our single-
condition could be adversely
and in some cases this access
sourced components, we may be
affected if our dealers suffer
may be affected by factors
unable to do so in the short term,
financial difficulties or otherwise
outside of our control and the
or at all, at prices or costs that we
are unable to perform to our
control of our suppliers. In
believe are reasonable. Qualifying
expectations. Furthermore, we
addition, prices for these raw
alternate suppliers or developing
may experience disagreements
materials fluctuate and while we
our own replacements for certain
or disputes in the course of our
seek to manage this exposure,
highly customized components of
relationship with our dealers or
we may not be successful in
our cars may be time consuming,
upon termination which may lead
mitigating these risks.
costly and may force us to make
to financial costs, disruptions and
As with raw materials, we are
costly modifications to the
reputational harm.
also at risk of supply disruption
designs of our cars. For example,
Our growth strategy also depends
and shortages in parts and
defective airbags manufactured
on our ability to attract a sufficient
components we purchase for use
by Takata Corporation (“Takata”),
number of quality new dealers to
in our cars. We source a variety
our former principal supplier of
sell our products in new areas.
of key components from third
airbags, have led to widespread
We may face competition from
parties, including transmissions,
recalls by several automotive
other luxury performance car
brakes, driving-safety systems,
manufacturers starting in 2015,
manufacturers in attracting
navigation systems, mechanical,
including us (see further “Car
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS
recalls may be costly and may
Donbas region of Ukraine, the
efforts may disrupt our normal
harm our reputation”; see also
governments of the United States,
production processes, thereby
“Overview of Our Business—
the European Union, Japan and
harming the quality or volume of
Regulatory Matters—Vehicle
other jurisdictions have recently
our production.
safety”). Following the acquisition
announced the imposition of
of Takata by Key Safety Systems
sanctions on certain industry
Furthermore, if our suppliers fail
(“KSS”) in April 2018, Joyson
sectors and parties in Russia
to provide components in a timely
Safety Systems, which is the
and the regions of Donetsk and
manner or at the level of quality
combined company of Takata
Luhansk, as well as enhanced
necessary to manufacture our
and KSS following the acquisition,
export controls on certain
cars, our clients may face longer
is our principal supplier of the
products and industries. These
waiting periods which could
airbags installed in our cars.
and any additional sanctions
result in negative publicity, harm
Failure by Joyson Safety Systems
and export controls, as well as
our reputation and relationship
to continue the supply of airbags
any counterresponses by the
with clients and have a material
may cause significant disruption
governments of Russia or other
adverse effect on our business,
to our operations.
jurisdictions, could adversely
operating results and financial
affect, directly or indirectly,
condition.
In the past, we have replaced
our supply chain, with negative
certain suppliers because they
implications on the availability and
failed to provide components that
prices of raw materials, and our
met our quality control standards.
customers, as well as the global
The loss of any single or limited
financial markets and financial
WE DEPEND ON OUR
MANUFACTURING
FACILITIES IN MARANELLO
AND MODENA.
source supplier or the disruption
services industry. See also “We
We assemble all of the cars that
in the supply of components
are subject to risks related to the
we sell and manufacture, and
from these suppliers could lead
COVID-19 pandemic that may
all of the engines we use in our
to delays in car deliveries to our
materially and adversely affect
cars and sell to Maserati, at our
clients, which could adversely
our business” for a discussion of
production facility in Maranello,
affect our relationships with our
the COVID-19 pandemic, which
Italy, where we also have our
clients and also materially and
may affect our supply chain
corporate headquarters. We
adversely affect our operating
directly or indirectly.
manufacture all of our car chassis
results and financial condition.
in a nearby facility in Modena, Italy.
The supply of raw materials,
Changes in our supply chain have
Our Maranello or Modena plants
parts and components may
in the past resulted and may in the
could become unavailable either
also be disrupted or interrupted
future result in increased costs
permanently or temporarily for
by natural disasters, or by
and delays in car production.
a number of reasons, including
unexpected fluctuations in market
We have also experienced
contamination, power shortage
demand and supply, such as
cost increases from certain
or labor unrest. Alternatively,
the ongoing global shortage of
suppliers in order to meet our
changes in law and regulation,
semiconductors that started
quality targets and development
including export, tax and
in 2021, which is impacting the
timelines and because of design
employment laws and regulations,
automotive industry in particular.
changes that we have made, and
or economic conditions, including
If any major disasters occur,
we may experience similar cost
wage inflation, could make it
such as earthquakes, fires,
increases in the future. We are
uneconomic for us to continue
floods, hurricanes, wars, terrorist
negotiating with existing suppliers
manufacturing our cars in Italy.
attacks, pandemics or other
for cost reductions, seeking new
In the event that we were unable
events, our supply chain may be
and less expensive suppliers for
to continue production at either
disrupted, which may stop or
certain parts, and attempting to
of these facilities or it became
delay production and shipment of
redesign certain parts to make
uneconomic for us to continue
our cars. As a result of the current
them less expensive to produce.
to do so, we would need to
geopolitical tensions and conflict
If we are unsuccessful in our
seek alternative manufacturing
between Russia and Ukraine,
efforts to control and reduce
arrangements which would take
and the recent recognition by
supplier costs while maintaining
time and reduce our ability to
Russia of the independence of
a stable source of high quality
produce sufficient cars to meet
the self-proclaimed republics
supplies, our operating results will
demand. Moving manufacturing
of Donetsk and Luhansk, in the
suffer. Additionally, cost reduction
to other locations may also affect
28
FERRARI N.V.AR 2021 the perception of our brand and
In the future, we may enter
In connection with our new
car quality among our clients.
into additional licensing or
brand diversification strategy
Such a transfer would materially
franchising arrangements. Many
announced in November 2019,
reduce our revenues and could
of the risks associated with
we continue to streamline our
require significant investment,
our own products, including
existing arrangements with
which as a result could have a
risks relating to the image of
licensing partners and decrease
material adverse effect on our
the Ferrari brand and its aura
the volume of our licensing
business, results of operations
of exclusivity, as well as to the
business. This may adversely
and financial condition.
demand for luxury goods, also
affect our results from brand
apply to our licensed products
activities, particularly in the
Maranello and Modena are located
and franchised stores. In addition,
short to medium term while our
in the Emilia-Romagna region of
there are problems that our
broader brand diversification
Italy which has the potential for
licensing or franchising partners
strategy is carried out.
seismic activity. For instance, in
may experience, including risks
2012 a major earthquake struck
associated with each licensing
the region, causing production
partner’s ability to obtain capital,
at our facilities to be temporarily
manage its labor relations,
suspended for one day. If major
maintain relationships with its
disasters such as earthquakes,
suppliers, manage its credit and
WE DEPEND ON THE
STRENGTH OF OUR
TRADEMARKS AND OTHER
INTELLECTUAL PROPERTY
RIGHTS.
fires, floods, hurricanes, wars,
bankruptcy risks, and maintain
Given the importance of our
terrorist attacks, pandemics
client relationships. While we
brand’s recognition on our
or other events occur, our
maintain significant control over
financial performance and
headquarters and production
the products produced for us
strategy, we believe that our
facilities may be seriously
by our licensing partners and
trademarks and other intellectual
damaged, or we may stop or delay
the franchisees running our
property rights are fundamental
production and shipment of our
Ferrari stores and theme parks,
to our success and market
cars. See also “We are subject
any of the foregoing risks, or the
position. Therefore, our business
to risks related to the COVID-19
inability of any of our licensing or
depends on our ability to protect
pandemic that may materially and
franchising partners to execute
and promote our trademarks
adversely affect our business”
on the expected design and
and other intellectual property
for a discussion of the COVID-19
quality of the licensed products,
rights. Accordingly, we devote
pandemic. Such damage from
Ferrari stores and theme park, or
substantial efforts to the
disasters or unpredictable events
otherwise exercise operational
establishment and protection
could have a material adverse
and financial control over its
of our trademarks and other
impact on our business, results
business, may result in loss
intellectual property rights
from operations and financial
of revenue and competitive
such as registered designs and
condition.
harm to our operations in the
patents on a worldwide basis.
WE RELY ON OUR
LICENSING AND
FRANCHISING PARTNERS
TO PRESERVE THE VALUE
OF OUR LICENSES AND THE
FAILURE TO MAINTAIN SUCH
PARTNERS COULD HARM
OUR BUSINESS.
product categories where we
We believe that our trademarks
have entered into such licensing
and other intellectual property
or franchising arrangements.
rights are adequately supported
While we select our licensing
by applications for registrations,
and franchising partners with
existing registrations and other
care, any negative publicity
legal protections in our principal
surrounding such partners
markets. However, we cannot
could have a negative effect on
exclude the possibility that our
licensed products, the Ferrari
intellectual property rights may
We currently have multi-year
stores and theme parks or the
be challenged by others, or that
agreements with licensing
Ferrari brand. Further, while we
we may be unable to register
partners for various Ferrari-
believe that we could replace our
our trademarks or otherwise
branded products in the
existing licensing or franchising
adequately protect them in
sports, lifestyle and luxury
partners if required, our inability
some jurisdictions, especially
retail segments. We also have
to do so for any period of time
in those foreign countries that
multi-year agreements with
could materially adversely affect
do not respect and protect
franchising partners for our
our revenues and harm our
intellectual property rights to
Ferrari stores and theme park.
business.
the same extent as do the United
29
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS
States, Japan and European
be subject to product piracy,
countries. If a third party were
where our components are
to register our trademarks, or
counterfeited, which may result
similar trademarks, in a country
in reputational risk for Ferrari.
OUR REVENUES FROM
FORMULA 1 ACTIVITIES MAY
DECLINE AND OUR RELATED
EXPENSES MAY GROW.
where we have not successfully
The risks described above arise
Revenues from our Formula 1
registered such trademarks,
particularly in our Brand activities
activities depend principally on
it could create a barrier to our
(see “Overview of Our Business—
the income from our sponsorship
commencing trade under those
Brand Diversification Strategy” ).
agreements and on our share
marks in that country.
of Formula 1 revenues from
WE MAY FAIL TO
ADEQUATELY PROTECT
OUR INTELLECTUAL AND
INDUSTRIAL PROPERTY
RIGHTS AGAINST
INFRINGEMENT OR
MISAPPROPRIATION BY
THIRD PARTIES.
If we fail to adequately protect
broadcasting and other sources.
our intellectual property rights,
See “Overview of Our Business—
this may adversely affect our
Formula 1 Activities.” If we are
results of operations and
unable to renew our existing
financial condition, as other
sponsorship agreements or if
manufacturers may be able to
we enter into new or renewed
manufacture similar products at
sponsorship agreements
lower cost, with adverse effects
with less favorable terms, our
on our competitive position. In
revenues would decline. In
Our success and competitive
addition, counterfeited products,
addition, our share of profits
positioning depend on, among
or products illegally branded as
related to Formula 1 activities
other factors, our registered
“Ferrari”, may damage our brand.
may decline if either our team’s
intellectual property rights, as well
In addition, we may incur high
performance worsens compared
as other industrial or intellectual
costs in reacting to infringements
to other competing teams, or if
property rights, including
or misappropriations of our
the overall Formula 1 business
confidential know-how, trade
intellectual property rights.
suffers, including potentially as a
secrets, database rights and
copyrights.
To protect our intellectual
property, we rely on intellectual
THIRD PARTIES MAY CLAIM
THAT WE INFRINGE THEIR
INTELLECTUAL PROPERTY
RIGHTS.
result of increasing popularity of
the FIA Formula E championship
or other racing events.
Furthermore, in order to compete
effectively on track we have been
property laws, agreements
We believe that we hold all the
investing significant resources in
for the protection of trade
rights required for our business
research and development and
secrets, confidentiality and non-
operations (including intellectual
to competitively compensate the
disclosure agreements, and other
property rights and third-party
best available drivers and other
contractual means.
licenses). However, we are
racing team members. These
Such measures, however, may be
exposed to potential claims from
expenses also vary based on
inadequate and our intellectual
third parties alleging that we
changes in Formula 1 regulations
property rights may be infringed
infringe their intellectual property
that require modification to
or challenged by third parties,
rights, since many competitors
our racing engines and cars.
and our confidential know-
and suppliers also submit patent
These expenses are expected to
how or trade secrets could be
applications for their inventions
continue, and may grow further,
misappropriated or disclosed to
and secure patent protection or
including as a result of any
the public without our consent.
other intellectual property rights. If
changes in Formula 1 regulations,
Consultants, vendors and
we are unsuccessful in defending
which would negatively affect our
current and former employees,
against any such claim, we may
results of operations.
for example, could violate their
be required to pay damages or
On October 31, 2019, the World
confidentiality obligations and
comply with injunctions which
Council (Formula 1’s legislative
restrictions on the use of Ferrari’s
may disrupt our operations. We
body) approved new technical,
intellectual property. Ferrari
may also as a result be forced
sporting and financial rules,
may not be able to prevent such
to enter into royalty or licensing
following the extensive talks held
infringements, misappropriations
agreements on unfavorable terms
in the past two years among
or disclosures, with potential
or to redesign products to comply
the owners of the Formula 1
adverse effects on our brand,
with third parties’ intellectual
business and all teams with
reputation and business. In
property rights.
particular, our components may
regards to the arrangements
relating to the participation of
30
FERRARI N.V.AR 2021 Ferrari and the other teams
resources that we are allowed to
local employees and establishing
competing in the championship
allocate to Formula 1 activities,
facilities in advance of generating
in the period following the
with potential adverse effects
any revenue. We are subject to
2020 expiration of the previous
on our team’s performance if
a number of risks associated
arrangements between racing
we are not able to optimize such
with international business
teams and the operator of
resources.
Formula 1. The new rules
provide for, among other things,
a new car design, a cap of $142
million in 2022 and $137 million
in 2023 (assuming 23 grand
ENGINE PRODUCTION
REVENUES ARE DEPENDENT
ON MASERATI’S ABILITY TO
SELL ITS CARS.
prix races in both years), to be
We produce V8 and V6 engines
further reduced in subsequent
for Maserati. We have a multi-
years, for all costs and expenses
year arrangement with Maserati
covering on-track performance
to provide V6 engines through
(excluding, among others, the
2023. While Maserati is required
activities to enable the supply of
to compensate us for certain
power units, marketing costs,
production costs, in the event that
drivers’ salaries and the top
the sales of Maserati cars decline
three personnel at each team),
compared to the contractual
limits on car upgrades over
requirements of our engine
race weekends, restrictions
production agreements with
on the number of times that
Maserati, our revenues from the
certain components can be
sale of engines may be adversely
replaced during a race and
affected.
the standardization of certain
parts. While it was originally
planned that the new sporting
and technical regulations would
come into effect in 2021, in
March 2020, Formula 1, FIA and
the racing teams agreed to
postpone effectiveness of such
regulations to 2022 due to the
disruption to the 2020 Formula 1
season caused by COVID-19. The
financial regulations (including
the budget cap) came into force
WE FACE RISKS
ASSOCIATED WITH
OUR INTERNATIONAL
OPERATIONS, INCLUDING
UNFAVORABLE
REGULATORY, POLITICAL,
TAX AND LABOR
CONDITIONS AND
ESTABLISHING OURSELVES
IN NEW MARKETS, ALL OF
WHICH COULD HARM OUR
BUSINESS.
activities that may increase our
costs, impact our ability to sell
our cars and require significant
management attention. These
risks include:
• conforming our cars to various
international regulatory and
safety requirements where our
cars are sold, or homologated;
• difficulty in establishing,
staffing and managing foreign
operations;
• difficulties attracting clients in
new jurisdictions;
• foreign government taxes,
regulations and permit
requirements, including foreign
taxes that we may not be able
to offset against taxes imposed
upon us in Italy;
• fluctuations in foreign currency
exchange rates and interest
rates, including risks related to
any interest rate swap or other
hedging activities we undertake;
• our ability to enforce our
contractual and intellectual
property rights, especially in
on January 1, 2021. Compliance
We currently have international
those foreign countries that
with the final set of rules
operations and subsidiaries
do not respect and protect
approved by the World Council
in various countries and
intellectual property rights to
requires significant changes to
jurisdictions in Europe, North
the same extent as do the United
our racing cars, processes and
America and Asia that are subject
States, Japan and European
operations, and the rules may
to the legal, political, regulatory,
countries, which increases
be subject to further changes
tax and social requirements
in the future. If we are unable
and economic conditions in
the risk of unauthorized, and
uncompensated, use of our
to effectively adapt our cars to
these jurisdictions. Additionally,
technology;
comply with changes in Formula
as part of our growth strategy,
1 regulations, our performance
we will continue to expand our
• European Union and foreign
at the races may suffer. These
sales, maintenance, and repair
government trade restrictions,
changes may result in adverse
services internationally. However,
customs regulations, tariffs and
effects on our revenues
such expansion requires us to
price or exchange controls;
and results of operations. In
make significant expenditures,
particular, the new cap on
including the establishment of
expenses affects the amount of
local operating entities, hiring of
• foreign labor laws, regulations
and restrictions;
31
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS
• preferences of foreign nations
for domestically produced cars;
• changes in diplomatic and trade
relationships;
• political instability, natural
disasters, war or events of
terrorism; and
• the strength of international
economies.
affect our revenue. Governmental
large volume manufacturers.
regulations may increase the
This change in legislation is
costs we incur to design, develop
expected to result in additional
and produce our cars and may
costs for Ferrari, either through
affect our product portfolio.
penalties or the purchase of
Regulation may also result in
emissions credits from other
a change in the character or
manufacturers.
performance characteristics of
our cars which may render them
In the United States, the U.S.
less appealing to our clients. We
Environmental Protection Agency
anticipate that the number and
(“EPA”) and the National Highway
extent of these regulations, and
Traffic Safety Administration
If we fail to successfully address
their effect on our cost structure
(“NHTSA”) have set the federal
these risks, many of which we
and product line-up, will increase
standards for passenger cars
cannot control, our business,
significantly in the future.
and light trucks to meet certain
operating results and financial
combined average greenhouse
condition could be materially
Current European legislation
gas (“GHG”) and fuel economy
harmed.
limits fleet average greenhouse
(“CAFE”) levels and more stringent
NEW LAWS, REGULATIONS,
OR POLICIES OF
GOVERNMENTAL
ORGANIZATIONS
REGARDING INCREASED
FUEL ECONOMY
REQUIREMENTS, REDUCED
GREENHOUSE GAS OR
POLLUTANT EMISSIONS,
OR VEHICLE SAFETY, OR
CHANGES IN EXISTING
LAWS, MAY HAVE A
SIGNIFICANT EFFECT ON
OUR COSTS OF OPERATION
AND/OR HOW WE DO
BUSINESS.
gas emissions for new passenger
standards have been prescribed
cars. Due to our small volume
for model years 2017 through
manufacturer (“SVM”) status
2025. Since Ferrari is considered
we benefit from a derogation
to be an SVM under EPA GHG
from the existing emissions
regulations (as it produces
requirement and we are instead
less than 5,000 vehicles per
required to meet, by 2021,
model year for the US market),
alternative targets for our fleet of
we expect to benefit from a
EU-registered vehicles. Despite
derogation from currently
global shipments exceeding
applicable standards. We also
10,000 vehicles in 2019, Ferrari
petitioned the EPA for alternative
still qualifies as an SVM under EU
standards for the model years
regulations, since its total number
2017-2021 and 2022-2025, which
of registered vehicles in the
are aligned to our technical and
EU per year is less than 10,000
economic capabilities. On June
vehicles. On July, 14, 2021, the
25, 2020, the EPA Administrator
European Commission published
signed the final determination
We are subject throughout
a proposal to amend the EU
for alternative GHG standards
the world to comprehensive
2019/631, which, among other
for SVMs for model years 2017
and constantly evolving laws,
things, would repeal from 2030
through 2021 and issued final
regulations and policies. We
the derogation granted to SMVs.
alternative GHG standards for us
expect the extent of the legal
If the proposed amendment is
and other SVMs. In September
and regulatory requirements
confirmed in the final rule, this
2016 we petitioned the NHTSA for
affecting our business and our
may have a significant effect on
recognition as an independent
costs of compliance to continue
our costs.
to increase significantly in the
manufacturer of less than 10,000
vehicles produced globally and
future. In Europe and the United
Switzerland has historically
we proposed alternative CAFE
States, for example, significant
adopted the targets approved by
standards for model years
governmental regulation is driven
the European Commission. On
2017, 2018 and 2019. Then, in
by environmental, fuel economy,
November 24, 2021, the Swiss
December, 2017, we amended
vehicle safety and noise emission
concerns. Evolving regulatory
Federal Council amended the CO2
emission regulations for cars and
the petition by proposing
alternative CAFE standards for
requirements could significantly
vans and starting from January
model years 2016, 2017 and 2018
affect our product development
1, 2022 the vehicles of niche and
instead, covering also the 2016
plans and may limit the number
small volume manufacturers
model year. In 2019, our global
and types of cars we sell and
where we sell them, which may
will have to meet the same CO2
emission targets as those of
production exceeded 10,000
vehicles, and therefore we are
32
FERRARI N.V.AR 2021 no longer considered an SVM by
and potential regulatory initiatives
model years 2012-2025 which
the NHTSA for the model year
are subject to review by federal
are in compliance with the EPA
2019. We previously purchased
or state agencies or the courts.
greenhouse gas emissions
the CAFE credits needed to fulfill
On March, 31, 2020, the NHTSA
regulations are also deemed to
this deficit. On July 15, 2020,
and the EPA issued the final Safer
be in compliance with California’s
we submitted to the NHTSA a
Affordable Fuel-Efficient (SAFE)
greenhouse gas emission
petition for an exemption from
Vehicles Rule (the “SAFE Vehicles
regulations (the so-called
the CAFE standards for the
Rule”) setting CAFE and carbon
“deemed to comply” option). On
model year 2020. We proceeded
dioxide emissions standards
December 12, 2018 the CARB
with this submission because,
for model years 2021-2026
amended its existing regulations
although Ferrari originally
passenger cars and light trucks.
to clarify that the “deemed-to-
intended to produce more than
Under the SAFE Vehicles Rule, the
comply” provision would not
10,000 vehicles in 2020, actual
overall stringency of the federal
be available for model years
production was lower than
standards is significantly reduced
2021-2025 if the EPA standards
10,000 vehicles as a result of
from the levels previously set: the
for those years were altered
the COVID-19 pandemic and
final rule will increase stringency
via an amendment of federal
the related shutdown of our
production facilities. Therefore,
of CAFE and CO2 emissions
standards by 1.5 percent each
regulations. On September 19,
2019, the NHTSA and the EPA
since we met the NHTSA definition
year through model year 2026,
established the “One National
of SVM, we have requested an
as compared with the previous
Program” for fuel economy
alternative fleet average GHG
standards issued in 2012, which
regulation, announcing the EPA’s
standard for model year 2020.
would have required annual
decision to withdraw California’s
The NHTSA has confirmed that
increases of approximately 5
waiver of preemption under the
it will not send a shortfall letter
percent. In May 2021, the NHTSA
Clean Air Act, and by affirming
to Ferrari requiring payment
issued a notice of proposed
the NHTSA’s authority to set
of CAFE civil penalties or the
rulemaking proposing to fully
nationally applicable regulatory
application of CAFE credits with
repeal the regulatory text and
standards under the preemption
regard to model year 2020 until
appendices promulgated in the
provisions of the Energy Policy
the NHTSA has ruled on Ferrari’s
SAFE Vehicles Rule. In August
and Conservation Act (EPCA).
petitions for an alternative
2021, the EPA published a
California and other states, along
standard. If our petitions are
notice of proposed rulemaking
with the cities of Los Angeles
rejected, we will not be able to
proposing to strengthen federal
and New York, initiated litigation
benefit from the more favorable
GHG emissions standards for
to challenge this final rule.
CAFE standard levels which we
passenger cars and light trucks
Several environmental groups
have petitioned for and this may
by setting stringent requirements
have also challenged such final
require us to purchase additional
for reductions from model years
rule. Ferrari currently avails
CAFE credits in order to comply
2023-2026. Consistent with the
itself of the “deemed-to-comply”
with applicable CAFE standards.
EPA approach, in September
provision to comply with CARB
In 2021, our global production
2021, NHTSA published a notice of
greenhouse gas emissions
exceeded 10,000 vehicles again,
proposed rulemaking proposing
regulations. Therefore, depending
and therefore we are no longer
revised fuel economy standards
on future developments, it may
considered SVM by the NHTSA for
for passenger cars and light
be necessary to also petition
the model year 2021. We already
trucks for model years 2024-
the CARB for SVM alternative
purchased the CAFE credits
2026. The EPA and the NHTSA did
standards and to increase the
needed to fulfill our 2021 deficit.
not propose any changes to the
number of tests to be performed
We expect to adopt the same
regulations regarding SVM status
in order to follow the CARB
approach in the coming years.
or alternative standards.
specific procedures.
In the United States, considerable
In the state of California (which
In addition, we are subject to
uncertainty is associated with
has been granted special
legislation relating to the emission
emissions regulations in light
authority under the Clean Air Act
of other air pollutants such as,
of changing policies under
to set its own vehicle emission
among others, the EU “Euro
the past and newly appointed
standards), the California Air
6” standards and Real Driving
administration. New regulations
Resources Board (“CARB”) has
Emissions (RDE) standards, the
are in the process of being
enacted regulations under which
“Tier 3” Motor Vehicle Emission
developed, and many existing
manufacturers of vehicles for
and Fuel Standards issued by
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the EPA, and the Zero Emission
fuel consumption regulation
our global production exceeded
Vehicle regulation in California,
targeted a national average fuel
10,000 vehicles, but we have
which are subject to similar
consumption of 5.0L/100km by
not lost our SVM status for EU
derogations for SVMs. In March
2020, and the Stage V regulation,
2020, the European Commission
issued on December 31, 2019,
CO2 regulations or for EPA GHG
regulations in the United States.
launched a public consultation on
targets a national average fuel
We could lose our status as an
its roadmap outlining the policy
consumption of 4.0 l/100km
SVM in the EU, the United States
options that it could pursue in
by 2025. In addition to the fuel
and other countries if we do
revising the emission standards
consumption target on the entire
not continue to meet all of the
for light and heavy duty vehicles
fleet, the Chinese regulation GB
necessary eligibility criteria
(Euro 7). This initiative is part of the
19578-2021 sets specific fuel
under applicable regulations as
European Green Deal, advocating
consumption limits on model
they evolve, not only in relation
the European automotive
types. Currently, this standard is
to volumes but also in relation
industry’s role as a leader in the
only applicable to domestic cars,
to the conditions of operational
global transition to zero-emission
as it is not adopted by the China
independence. In order to meet
vehicles. More stringent air
Certification and Accreditation
these criteria we may need to
pollutant emissions standards for
Administration (CNCA). If this
modify our growth plans or other
combustion engine vehicles are
regulation were also applied
operations. Furthermore, even
expected to be set by early 2022.
to importers, considering the
if we continue to benefit from
current Ferrari portfolio, only
derogations as an SVM, we will be
Depending on the future
the plug-in hybrid models would
subject to alternative standards
regulatory developments, the
be compliant.
that the regulators deem
technological solutions required
appropriate for our technical and
to ensure Euro 7 compliance may
In response to severe air
economic capabilities and such
affect customers’ expectations
quality issues in Beijing and
alternative standards may be
on performance, sound and
other major Chinese cities, in
significantly more stringent than
driving experience. The European
2016 the Chinese government
those currently applicable to us.
Commission is also expected to
published a more stringent
assess and evaluate the current
emissions program (National
Under these existing regulations,
noise emissions limits, with the
6), providing two different
as well as new or stricter rules
risk of more stringent thresholds.
levels of stringency effective
or policies, we could be subject
starting from 2020. Moreover,
to sizable civil penalties or have
In relation to the safety legislation
several autonomous Chinese
to restrict or modify product
framework, in 2016, the NHTSA
regions and municipalities have
offerings drastically to remain
published guidelines for driver
implemented the requirements
in compliance. We may have
distraction, for which rulemaking
of the National 6 program even
to incur substantial capital
activities have not progressed
ahead of the mandated deadlines.
expenditures and research
since early 2017. The costs of
During 2020, the Chinese Vehicle
and development expenditures
compliance associated with these
Emission Control Center (VECC)
to upgrade products and
and similar rulemaking may
launched the “Pre-study on Next
manufacturing facilities, which
be substantial.
Stage Emission Standards for
would have an impact on our
Light Duty Vehicles”, an ongoing
cost of production and results
Other governments around the
research project expected to
of operation. For a description
world, such as those in Canada,
be finalized in a more stringent
of the regulation referred to in
South Korea, China and certain
emission program in the coming
the paragraphs above please
Middle Eastern countries are also
years. Depending on the future
see “Overview of Our Business—
creating new policies to address
regulatory developments, the
Regulatory Matters”.
these issues which could be even
technological solutions required
In the future, the advent of self-
more stringent than the U.S. or
to ensure the compliance may
driving technology may result
European requirements. As in the
affect customers’ expectations on
in regulatory changes that we
United States and Europe, these
performance, sound and driving
cannot predict but may include
government policies if applied
experience.
to us could significantly affect
limitations or bans on human
driving in specific areas. In
our product development plans.
We have lost our status as an
2020 the European Commission
In China, for example, Stage IV
SVM for NHSTA in 2019, because
issued its new digital strategy
34
FERRARI N.V.AR 2021 policies, which represent
providing additional flexibilities for
In accordance with our
a priority in the European
SVMs (defined as manufacturers
strategy, we believe hybrid
Commission’s regulatory
with less than 2,000 units
and electric technology will
agenda. Although no regulations
imported in China per year)
be key to providing continuing
have been issued in this regard,
that achieve a certain minimum
performance upgrades to our
the European Commission
CAFC yearly improvement
sports car customers, and
has showed a determination
rate. Following the adoption of
will also help us capture the
to strengthen Europe’s digital
the Stage V fuel consumption
preferences of the urban, affluent
sovereignty and role as a
regulation, an update to the
GT cars purchasers whom we
standard setter, with a clear
Administrative Measures on CAFC
are increasingly targeting, while
focus on data, technology, and
and NEV credits was published
helping us meet increasingly
infrastructure.
in June 2020. The Administrative
stricter emissions requirements.
Measures have been extended
Similarly, driving bans on
to 2023. Because our CAFC is
In 2021 we launched the 296 GTB,
combustion engine vehicles
expected to exceed the regulatory
our third production model with
could be imposed, particularly in
ceiling, we will be required to
Plug-in Hybrid Electric Vehicle
metropolitan areas, as a result of
purchase NEV credits. There is
(PHEV) technology, while in 2020
progress in electric and hybrid
no assurance that an adequate
we made the first shipments
technology. On September 23,
market for NEV credits will
of the SF90 Stradale, the first
2020, the Governor of California
develop in China and if we are
series production Ferrari to
issued an executive order
not able to secure sufficient NEV
feature PHEV architecture, which
requiring that all in-state sales
credits this may adversely affect
integrates the internal combustion
of new passenger vehicles be
our business in China.
engine with three electric motors,
zero-emission by 2035. The
and the launch of the SF90 Spider,
CARB is developing regulations
Several others regulations are
the spider version of the SF90
to implement such executive
also emerging to take into account
Stradale and Ferrari’s first plug-in
order. During 2021, the state of
the non-exhaust emissions such
hybrid spider. Additionally, some
Washington also moved ahead
as brake particulate emissions
of our past models, such as
with legislation that could phase
and the environmental impact of
LaFerrari and LaFerrari Aperta,
out sales of non-zero-emission
the electric and hybrid vehicles
also included hybrid technology.
vehicles by 2030. In November
components, with a particular
The integration of hybrid and
2020, the UK Prime Minister, the
focus on batteries and waste
electric technology more broadly
Transport Secretary and the
batteries.
Business Secretary announced,
into our car portfolio over time
may present challenges and
in the context of the 10-Point
To comply with current and
costs. We expect to increase
Plan for a Green Industrial
future environmental rules in all
R&D spending in the medium
Revolution, the end of the sale
markets in which we sell our cars,
term particularly on hybrid and
of new petrol and diesel cars
we may have to incur substantial
electric technology-related
in the United Kingdom by 2030.
capital expenditure and research
projects. Although we expect
This will put the United Kingdom
and development expenditure
to price our hybrid and electric
on course to be the first G7
to upgrade products and
cars appropriately to recoup the
country to decarbonize cars
manufacturing facilities, which
investments and expenditures
and vans. Any further similar
would have an impact on our
we are making, we cannot be
developments in the future may
cost of production and results of
certain that these expenditures
adversely affect the demand for
operations.
will be fully recovered. In addition,
our cars and our business.
In September 2017, the Chinese
government issued the
Administrative Measures on
CAFC (Corporate Average Fuel
Consumption) and NEV (New
THE INTRODUCTION OF
HYBRID AND ELECTRIC
TECHNOLOGY IN OUR
CARS IS COSTLY AND ITS
LONG-TERM SUCCESS IS
UNCERTAIN.
this transformation of our car
technology creates risks and
uncertainties such as the impact
on driver experience, and the
impact on the cars’ residual value
over time, both of which may be
met with an unfavorable market
Energy Vehicle) Credits. This
We are gradually but rapidly
reaction. Other manufacturers
regulation establishes mandatory
introducing hybrid and electric
of luxury sports cars may be
CAFC requirements, while
technology in our cars.
more successful in implementing
35
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS
hybrid and electric technology.
harm our reputation and result
reputation and result in adverse
In the long-term, although we
in adverse publicity, lost revenue,
publicity, lost revenue, delivery
believe that combustion engines
delivery delays, product recalls,
delays, product liability claims and
will continue to be fundamental
product liability claims, harm to
other expenses, and could have
to the Ferrari driver experience,
our brand and reputation, and
a material adverse impact on our
hybrid and pure electric cars may
significant warranty and other
business, operating results and
become the prevalent technology
expenses, and could have a
financial condition.
for performance sports cars
material adverse impact on our
thereby displacing combustion
business, operating results and
engine models. See also “If
financial condition.
we are unable to keep up with
advances in high performance
car technology, our brand and
competitive position may suffer.”
CAR RECALLS MAY BE
COSTLY AND MAY HARM
OUR REPUTATION.
We have in the past and we
Because hybrid and electric
may from time to time in the
technology is a core component
future be required to recall
WE MAY BECOME SUBJECT
TO PRODUCT LIABILITY
CLAIMS, WHICH COULD
HARM OUR FINANCIAL
CONDITION AND LIQUIDITY
IF WE ARE NOT ABLE TO
SUCCESSFULLY DEFEND
OR INSURE AGAINST SUCH
CLAIMS.
of our strategy, and we expect
our products to address
We may become subject to
that a significant portion of our
performance, compliance or
product liability claims, which
shipments in the medium term
safety-related issues. We may
could harm our business,
will consist of vehicles that feature
incur costs for these recalls,
operating results and financial
hybrid and electric technology,
including replacement parts and
condition. The automobile
if the introduction of hybrid and
labor to remove and replace the
industry experiences significant
electric cars proves too costly
defective parts. For example, in
product liability claims and we
or is unsuccessful in the market,
the course of 2015 and 2016,
have inherent risk of exposure
our business and results of
we issued a series of recalls
to claims in the event our cars
operations could be materially
relating to defective air bags
do not perform as expected or
adversely affected.
manufactured by Takata and
malfunction resulting in personal
IF OUR CARS DO NOT
PERFORM AS EXPECTED
OUR ABILITY TO DEVELOP,
MARKET AND SELL OUR
CARS COULD BE HARMED.
installed on certain of our models.
injury or death. A successful
Also in light of uncertainties in
product liability claim against
our ability to recover the recall
us could require us to pay a
costs from Takata (which filed
substantial monetary award.
for bankruptcy in June 2017
Moreover, a product liability
and was later acquired by Key
claim could generate substantial
Our cars may contain defects
Safety Systems in April 2018), we
negative publicity about our cars
in design and manufacture that
recorded a provision regarding
and business, adversely affecting
may cause them not to perform
this matter in the second quarter
our reputation and inhibiting or
as expected or that may require
of 2016 for an amount of €37
preventing commercialization
repair. There can be no assurance
million. This provision has been
of future cars, which could have
that we will be able to detect and
used over time and amounted
a material adverse effect on
fix any defects in the cars prior to
to approximately €3 million
our brand, business, operating
their sale to consumers. Our cars
as of December 31, 2021. For
results and financial condition.
may not perform in line with our
additional information related to
While we seek to insure against
clients’ evolving expectations or in
the Takata airbag inflator recalls
product liability risks, insurance
a manner that equals or exceeds
see “Overview of Our Business—
may be insufficient to protect
the performance characteristics
Regulatory Matters—Vehicle
against any monetary claims we
of other cars currently available.
safety”. In addition, regulatory
may face and will not mitigate
For example, our newer cars
oversight of recalls, particularly in
any reputational harm. Any
may not have the durability or
the vehicle safety, has increased
lawsuit seeking significant
longevity of current cars, and may
recently. Any product recalls can
monetary damages may have a
not be as easy to repair as other
harm our reputation with clients,
material adverse effect on our
cars currently on the market.
particularly if consumers call into
reputation, business and financial
Any product defects or any other
question the safety, reliability or
condition. We may not be able
failure of our performance cars
performance of our cars. Any
to secure additional product
to perform as expected could
such recalls could harm our
liability insurance coverage on
36
FERRARI N.V.AR 2021 commercially acceptable terms
suffer loss or damage that is not
or at reasonable costs when
covered by insurance or which
needed, particularly if we face
exceeds our insurance coverage,
liability for our products and are
or have to pay higher insurance
forced to make a claim under
premiums, our financial condition
such a policy.
may be affected.
WE ARE EXPOSED TO RISKS
IN CONNECTION WITH
PRODUCT WARRANTIES AS
WELL AS THE PROVISION
OF SERVICES.
A number of our contractual and
legal requirements oblige us to
provide extensive warranties to
IMPROPER CONDUCT OF
EMPLOYEES, AGENTS, OR
OTHER REPRESENTATIVES
COULD ADVERSELY AFFECT
OUR REPUTATION AND OUR
BUSINESS, OPERATING
RESULTS, AND FINANCIAL
CONDITION.
A DISRUPTION IN
OUR INFORMATION
TECHNOLOGY,
INCLUDING AS A RESULT
OF CYBERCRIMES,
COULD COMPROMISE
CONFIDENTIAL AND
SENSITIVE INFORMATION.
We depend on our information
technology and data processing
systems to operate our business,
and a significant malfunction
or disruption in the operation
of our systems, human error,
interruption to power supply,
our clients, dealers and national
Our compliance controls,
or a security breach that
distributors. There is a risk
policies, and procedures may
compromises the confidential
that, relative to the guarantees
not in every instance protect
and sensitive information stored
and warranties granted, the
us from acts committed by our
in those systems, could disrupt
calculated product prices and the
employees, agents, contractors,
our business and adversely
provisions for our guarantee and
or collaborators that would
impact our ability to compete.
warranty risks have been set or
violate the laws or regulations
Our ability to keep our business
will in the future be set too low.
of the jurisdictions in which we
operating effectively depends
There is also a risk that we will be
operate, including employment,
on the functional and efficient
required to extend the guarantee
foreign corrupt practices,
operation by us and our third
or warranty originally granted in
environmental, competition,
party service providers of our
certain markets for legal reasons,
and other laws and regulations.
information, data processing
or provide services as a courtesy
Such improper actions could
and telecommunications
or for reasons of reputation
subject us to civil or criminal
systems, including our car
where we are not legally obliged
investigations, and monetary and
design, manufacturing, inventory
to do so, and for which we will
injunctive penalties. In particular,
tracking and billing and payment
generally not be able to recover
our business activities may be
systems. We rely on these
from suppliers or insurers.
subject to anticorruption laws,
systems to enable a number of
OUR INSURANCE
COVERAGE MAY NOT BE
ADEQUATE TO PROTECT US
AGAINST ALL POTENTIAL
LOSSES TO WHICH WE MAY
BE SUBJECT, WHICH COULD
HAVE A MATERIAL ADVERSE
EFFECT ON OUR BUSINESS.
regulations or rules of other
business processes and help
countries in which we operate. If
us make a variety of day-to-day
we fail to comply with any of these
business decisions as well as
regulations, it could adversely
to track transactions, billings,
impact our operating results and
payments and inventory. Such
our financial condition. In addition,
systems are susceptible to
actual or alleged violations could
malfunctions and interruptions
damage our reputation and
due to equipment damage, power
our ability to conduct business.
outages, and a range of other
We maintain insurance coverage
Furthermore, detecting,
hardware, software and network
that we believe is adequate to
investigating, and resolving
problems. Those systems are
cover normal risks associated
any actual or alleged violation
also susceptible to cybercrime, or
with the operation of our
is expensive and can consume
threats of intentional disruption,
business. However, there can
significant time and attention of
which are increasing in terms of
be no assurance that any claim
our executive management.
sophistication and frequency, with
under our insurance policies
will be honored fully or timely,
our insurance coverage will
be sufficient in any respect
or our insurance premiums
will not increase substantially.
Accordingly, to the extent that we
the consequence that such cyber
incidents may remain undetected
for long periods of time. For
any of these reasons, we may
experience system malfunctions
or interruptions. Although our
systems are diversified, including
37
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS
multiple server locations and a
Regulation, which came into force
competitors that have less debt.
range of software applications for
on May 25, 2018. To an increasing
To the extent we become more
different regions and functions,
extent, the functionality and
leveraged, the risks described
and we periodically assess and
controls of our cars depend on
above would increase. We may
implement actions to ameliorate
in-vehicle information technology.
also have difficulty refinancing
risks to our systems, a significant
The increased demand for
our existing debt or incurring
or large scale malfunction or
a “connected car” has led to
new debt on terms that we would
interruption of our systems could
increased digitization of car
consider to be commercially
adversely affect our ability to
systems, the wide application
reasonable, if at all.
manage and keep our operations
of software, and the creation of
running efficiently, and damage
new, fully digital mobility services.
our reputation if we are unable
Such technology is capable of
to track transactions and deliver
transmitting and storing an
products to our dealers and
increasing amount of personal
CAR SALES DEPEND IN
PART ON THE AVAILABILITY
OF AFFORDABLE
FINANCING.
clients. A malfunction that results
information belonging to our
In certain regions, financing for
in a wider or sustained disruption
customers. Any unauthorized
new car sales has been available
to our business could have a
access to in-vehicle IT systems
at relatively low interest rates for
material adverse effect on our
may compromise the car security
several years due to, among other
business, results of operations
or the privacy of our customers’
things, expansive government
and financial condition. In addition
information and expose us to
monetary policies. To the extent
to supporting our operations, we
claims as well as reputational
that interest rates may rise
use our systems to collect and
damage. Ultimately, any significant
generally based on governmental
store confidential and sensitive
compromise in the integrity of
monetary policies or actions of
data, including information about
our data security could have a
central banks, market rates for
our business, our clients and our
material adverse effect on our
new car financing are expected
employees.
business.
As our technology continues to
evolve, we anticipate that we will
collect and store even more data
in the future, and that our systems
will increasingly use remote
communication features that
OUR INDEBTEDNESS COULD
ADVERSELY AFFECT OUR
OPERATIONS AND WE
MAY FACE DIFFICULTIES
IN SERVICING OR
REFINANCING OUR DEBT.
to rise as well, which may make
our cars less affordable to
clients or cause consumers to
purchase less expensive cars,
adversely affecting our results
of operations and financial
condition. Following widespread
indications of returning inflation in
are sensitive to both willful and
As of December 31, 2021, our
several major economies, central
unintentional security breaches.
gross consolidated debt was
banks are signaling that interest
Much of our value is derived
approximately €2,630 million
rate increases may be expected
from our confidential business
(which includes our financial
in coming periods. Additionally, if
information, including car
services). See “Financial
consumer interest rates increase
design, proprietary technology
Overview—Liquidity and Capital
substantially or if financial
and trade secrets, and to the
Resources—Non-GAAP Financial
service providers tighten lending
extent the confidentiality of such
Measures—Net Debt and Net
standards or restrict their lending
information is compromised,
Industrial Debt” for additional
to certain classes of credit, our
we may lose our competitive
information. Our current and
clients may choose not to, or may
advantage and our car sales may
long-term debt requires us to
not be able to, obtain financing to
suffer. We also collect, retain and
dedicate a portion of our cash
purchase our cars.
use certain personal information,
flow to service interest and
including data we gather from
principal payments and, if interest
clients for product development
rates rise, this amount may
and marketing purposes, and
increase. In addition, our existing
data we obtain from employees.
debt may limit our ability to raise
Therefore we are subject to a
further capital or incur additional
variety of ever-changing data
indebtedness to execute our
protection and privacy laws
growth strategy or otherwise
on a global basis, including the
may place us at a competitive
EU General Data Protection
disadvantage relative to
38
FERRARI N.V.AR 2021 WE MAY NOT BE ABLE
TO PROVIDE ADEQUATE
ACCESS TO FINANCING
FOR OUR DEALERS
AND CLIENTS, AND OUR
FINANCIAL SERVICES
OPERATIONS MAY BE
DISRUPTED.
Ferrari Financial Services Inc.
partners, we may not be able to
See “Financial Overview—Liquidity
find a suitable alternative partner
and Capital Resources—Non-
with similar resources and
GAAP Financial Measures—Net
experience and continue to offer
Debt and Net Industrial Debt” for
financing services to support
additional information. Should
the sales of Ferrari cars in key
we lose the ability to access
European markets, which could
the securitization market at
adversely affect our results of
Our dealers enter into wholesale
advantageous terms or at all,
operations and financial condition.
financing arrangements to
the funding of our controlled or
In December 2021, Stellantis N.V.
purchase cars from us to hold in
associated finance companies
(hereinafter also “Stellantis” and
inventory or to use in showrooms
would become more difficult
together with its subsidiaries, the
and facilitate retail sales, and retail
and expensive and our financial
“Stellantis Group”) communicated
clients use a variety of finance and
condition may therefore be
its intention to create a leading
lease programs to acquire cars.
adversely affected.
operational leasing group and
enhanced captive finance arm. As
In most markets, we rely either on
Any financial services provider,
part of the proposed transaction,
controlled or associated finance
including our controlled finance
CACF is expected to acquire the
companies or on commercial
companies, will face other
50 percent stake in FCA Bank
relationships with third parties,
demands on its capital, as well as
currently owned by Stellantis. We
including third party financial
liquidity issues relating to other
will continue to monitor future
institutions, to provide financing
investments or to developments
developments in this area and
to our dealers and retail clients.
in the credit markets.
evaluate any potential impacts on
Finance companies are subject to
Furthermore, they may be subject
our partnership with FCA Bank.
various risks that could negatively
to regulatory changes that may
affect their ability to provide
increase their costs, which may
financing services at competitive
impair their ability to provide
rates, including:
• the performance of loans and
leases in their portfolio, which
could be materially affected by
delinquencies or defaults;
competitive financing products
to our dealers and retail clients.
To the extent that a financial
services provider is unable or
LABOR LAWS AND
COLLECTIVE BARGAINING
AGREEMENTS WITH OUR
LABOR UNIONS COULD
IMPACT OUR ABILITY TO
OPERATE EFFICIENTLY.
unwilling to provide sufficient
All of our production employees
financing at competitive rates
are represented by trade
• higher than expected car return
to our dealers and retail clients,
unions, are covered by collective
rates and the residual value
such dealers and retail clients
bargaining agreements and/
performance of cars they lease;
may not have sufficient access
or are protected by applicable
and
to financing to purchase or lease
labor relations regulations that
• fluctuations in interest rates and
currency exchange rates.
our cars. As a result, our car sales
may restrict our ability to modify
and market share may suffer,
operations and reduce costs
which would adversely affect our
quickly in response to changes
results of operations and financial
in market conditions. These
Furthermore, to help fund our
condition.
retail and wholesale financing
regulations and the provisions
in our collective bargaining
business, our financial services
Our dealer and retail customer
agreements may impede our
companies in the United States
financing in Europe are mainly
ability to restructure our business
also access forms of funding
provided through our partnership
successfully to compete more
available from the banking system
with FCA Bank S.p.A. (“FCA
efficiently and effectively,
in each market, including sales
Bank”), a joint venture between
especially with those automakers
or securitization of receivables
FCA Italy S.p.A. and Crédit
whose employees are not
either in negotiated sales or
Agricole Consumer Finance S.A.
represented by trade unions
through asset-backed financing
(“CACF”). If we fail to maintain
or are subject to less stringent
programs. At December 31, 2021,
our partnership with FCA Bank
regulations, which could have a
an amount of $1,020 million was
or in the event of a termination
material adverse effect on our
outstanding under revolving
of the joint venture or change of
results of operations and financial
securitizations carried out by
control of one of our joint venture
condition.
39
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS
WE ARE SUBJECT TO
RISKS ASSOCIATED
WITH EXCHANGE RATE
FLUCTUATIONS, INTEREST
RATE CHANGES, CREDIT
RISK AND OTHER MARKET
RISKS.
significant adverse movements
in foreign exchange rates have
occurred in early 2022. If the U.S.
Dollar or some other currencies
were to depreciate against the
CHANGES IN TAX, TARIFF
OR FISCAL POLICIES
COULD ADVERSELY
AFFECT DEMAND FOR OUR
PRODUCTS.
Euro, we expect that it would
Imposition of any additional
adversely impact our revenues
taxes and levies designed to limit
We operate in numerous markets
and results of operations. The
the use of automobiles could
worldwide and are exposed to
extent of adverse impacts from
adversely affect the demand for
market risks stemming from
exchange rate fluctuations could
our vehicles and our results of
fluctuations in currency and
increase if the portion of our
operations. Changes in corporate
interest rates. In particular,
business in countries outside
and other taxation policies as
changes in exchange rates
of Eurozone increases. See
well as changes in export and
between the Euro and the main
“Financial Overview—Trends,
other incentives given by various
foreign currencies in which we
Uncertainties and Opportunities”.
governments, or import or tariff
operate affect our revenues
policies, could also adversely
and results of operations. For
We seek to manage risks
affect our results of operations.
other risks related to a rise in
associated with fluctuations
The impact of any such tariffs
interest rates, see also “Our
in currency through financial
on our operations and results
indebtedness could adversely
hedging instruments. Although
is uncertain and could be
affect our operations and we
we seek to manage our foreign
significant, and we can provide
may face difficulties in servicing
currency risk in order to minimize
no assurance that any strategies
or refinancing our debt” and
any negative effects caused
we implement to mitigate the
“Car sales depend in part on
by rate fluctuations, including
impact of such tariffs or other
the availability of affordable
through hedging activities, there
trade actions will be successful.
financing”. The exposure to
can be no assurance that we will
While we are managing our
currency risk is mainly linked to
be able to do so successfully,
product development and
the differences in geographic
and our business, results of
production operations on a
distribution of our sourcing
operations and financial condition
global basis to reduce costs and
and manufacturing activities
could nevertheless be adversely
lead times, unique national or
from those in our commercial
affected by fluctuations in
regional standards can result
activities, as a result of which
market rates, particularly if these
in additional costs for product
our cash flows from sales are
conditions persist.
development, testing and
denominated in currencies
manufacturing. Governments
different from those connected
Our financial services activities
often require the implementation
to purchases or production
are also subject to the risk of
of new requirements during
activities. For example, we incur
insolvency of dealers and retail
the middle of a product cycle,
a large portion of our capital
clients, as well as unfavorable
which can be substantially more
and operating expenses in Euro
economic conditions in markets
expensive than accommodating
while we receive the majority
where these activities are carried
these requirements during the
of our revenues in currencies
out. Despite our efforts to mitigate
design phase of a new product.
other than Euro. In addition,
such risks through the credit
The imposition of any additional
foreign exchange movements
approval policies applied to
taxes and levies or change in
might also negatively affect the
dealers and retail clients, there
government policy designed to
relative purchasing power of our
can be no assurances that we will
limit the use of high performance
clients which could also have an
be able to successfully mitigate
sports cars or automobiles more
adverse effect on our results
such risks, particularly with
generally, or any decisions by
of operations. For example, the
respect to a general change in
policymakers to implement taxes
U.S. Dollar remained relatively
economic conditions.
on luxury automobiles, could also
stable during the first half of
2021 and appreciated against
the Euro during the second half
of 2021, while the pound sterling
appreciated against the Euro
throughout the year 2021. No
adversely affect the demand
for our cars. The occurrence of
the above may have a material
adverse effect on our business,
results of operations and financial
condition.
40
FERRARI N.V.AR 2021 IF WE WERE TO LOSE OUR
AUTHORIZED ECONOMIC
OPERATOR CERTIFICATE,
WE MAY BE REQUIRED TO
MODIFY OUR CURRENT
BUSINESS PRACTICES
AND TO INCUR INCREASED
COSTS, AS WELL AS
EXPERIENCE SHIPMENT
DELAYS.
Because we ship and sell our
RISKS RELATED
TO OUR COMMON
SHARES
THE MARKET PRICE AND
TRADING VOLUME OF OUR
COMMON SHARES MAY BE
VOLATILE, WHICH COULD
RESULT IN RAPID AND
SUBSTANTIAL LOSSES FOR
OUR SHAREHOLDERS.
cars in numerous countries, the
The market price of our common
customs regulations of various
shares may be highly volatile
jurisdictions are important to
and could be subject to wide
our business and operations. To
fluctuations. In addition, the
expedite customs procedure,
trading volume of our common
we obtained the European
shares may fluctuate and cause
Union’s Authorized Economic
significant price variations to
Operator (AEO) certificate. The
occur. If the market price of
AEO certificate is granted to
our common shares declines
operators that meet certain
significantly, a shareholder may
requirements regarding supply
be unable to sell their common
in laws or regulations, or
differing interpretations thereof,
affecting our business, or
enforcement of these laws and
regulations, or announcements
relating to these matters;
• adverse publicity about the
automotive industry or the
luxury industry generally, or
particularly scandals relating to
those industries, specifically;
• litigation and governmental
investigations; and
• general market and economic
conditions.
THE LOYALTY VOTING
PROGRAM MAY AFFECT THE
LIQUIDITY OF OUR COMMON
SHARES AND REDUCE OUR
COMMON SHARE PRICE.
chain security and the safety
shares at or above their purchase
The implementation of our loyalty
and compliance with law of the
price, if at all. The market price
voting program could reduce the
operator’s customs controls
of our common shares may
trading liquidity and adversely
and procedures. Operators
fluctuate or decline significantly
affect the trading prices of our
are audited periodically for
in the future. Some of the factors
common shares. The loyalty
continued compliance with the
that could negatively affect the
voting program is intended to
requirements. The AEO certificate
price of our common shares, or
reward our shareholders for
allows us to benefit from special
result in fluctuations in the price
maintaining long-term share
expedited customs treatment,
or trading volume of our common
ownership by granting initial
which significantly facilitates
shares, include:
the shipment of our cars in
the various markets where we
operate. If we were to lose the
AEO status, including for failure
to meet one of the certification’s
requirements, we would be
required to change our business
practices and to adopt standard
customs procedures for the
shipment of our cars. This could
result in increased costs and
shipment delays, which, in turn,
could negatively affect our results
of operations.
• variations in our operating
results, or failure to meet the
market’s earnings expectations;
• publication of research reports
about us, the automotive
industry or the luxury industry,
or the failure of securities
analysts to cover our common
shares;
• departures of any members
of our management team or
additions or departures of other
key personnel;
shareholders and persons
holding our common shares
continuously for at least three
years the option to elect to
receive special voting shares.
Special voting shares cannot be
traded and, if common shares
participating in the loyalty voting
program are sold they must be
deregistered from the loyalty
register and any corresponding
special voting shares transferred
to us for no consideration (om
niet). This loyalty voting program
is designed to encourage a
• adverse market reaction to any
stable shareholder base and,
indebtedness we may incur or
conversely, it may deter trading
securities we may issue in the
by shareholders that may be
future;
• actions by shareholders;
• changes in market valuations of
similar companies;
• changes or proposed changes
interested in participating in our
loyalty voting program. Therefore,
the loyalty voting program may
reduce liquidity in our common
shares and adversely affect their
trading price.
41
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO OUR COMMON SHARES
THE INTERESTS OF OUR
LARGEST SHAREHOLDERS
MAY DIFFER FROM THE
INTERESTS OF OTHER
SHAREHOLDERS.
in the public market by Piero
Stellantis (based on SEC filings).
Ferrari or the perception that
The percentages of ownership
such a sale could occur could
and voting power above are
adversely affect the prevailing
calculated based on the number
market price of the common
of outstanding shares net of
Exor N.V. (“Exor”) is our
shares.
largest shareholder, holding
approximately 24.21 percent
of our outstanding common
shares and approximately 36.00
percent of our voting power (as
of February 14, 2022). Therefore,
WE MAY HAVE POTENTIAL
CONFLICTS OF INTEREST
WITH STELLANTIS AND
EXOR AND ITS RELATED
COMPANIES.
treasury shares. Exor also owns
a controlling interest in CNH
Industrial N.V., which was part of
the former Fiat Group before its
spin-off several years ago. These
ownership interests could create
actual, perceived or potential
Exor has a significant influence
Questions relating to conflicts of
conflicts of interest when
over these matters submitted
interest may arise between us
these parties or our common
to a vote of our shareholders,
and Fiat Chrysler Automobiles
directors and officers are faced
including matters such as
N.V., our former largest
with decisions that could have
adoption of the annual financial
shareholder, renamed Stellantis
different implications for us and
statements, declarations of
N.V., in a number of areas relating
Stellantis or Exor, as applicable.
annual dividends, the election
to common shareholdings and
and removal of the members
management, as well as our past
of our board of directors (the
and ongoing relationships. There
“Board of Directors”), capital
are certain overlaps among
increases and amendments
the directors and officers of
to our articles of association.
us and Stellantis. For example,
In addition, as of February 14,
Mr. John Elkann, our Executive
2022, Piero Ferrari, the Vice
Chairman, is the Chairman
Chairman of Ferrari, holds
and an executive director of
approximately 10.30 percent
Stellantis and Chairman and
of our outstanding common
Chief Executive Officer of Exor.
shares and approximately 15.31
Certain of our other directors and
percent of voting interest in
officers may also be directors
us (as of February 14, 2022).
or officers of Stellantis or Exor,
OUR LOYALTY VOTING
PROGRAM MAY MAKE
IT MORE DIFFICULT
FOR SHAREHOLDERS
TO ACQUIRE A
CONTROLLING INTEREST
IN FERRARI, CHANGE
OUR MANAGEMENT OR
STRATEGY OR OTHERWISE
EXERCISE INFLUENCE OVER
US, WHICH MAY AFFECT
THE MARKET PRICE OF OUR
COMMON SHARES.
The percentages of ownership
our and Stellantis’s largest
The provisions of our articles
and voting power above are
shareholder. These individuals
of association which establish
calculated based on the number
owe duties both to us and to the
the loyalty voting program may
of outstanding shares net of
other companies that they serve
make it more difficult for a third
treasury shares. As a result,
as officers and/or directors,
party to acquire, or attempt to
Piero Ferrari also has influence
which may create conflicts as,
acquire, control of our company,
in matters submitted to a vote of
for example, these individuals
even if a change of control
our shareholders. Exor and Piero
review opportunities that may be
were considered favorably by
Ferrari informed us that they
appropriate or suitable for both
shareholders holding a majority
have entered into a shareholder
us and such other companies,
of our common shares. As
agreement pursuant to which
or we pursue business
a result of the loyalty voting
they have undertaken to consult
transactions in which both we
program, a relatively large
for the purpose of forming,
and such other companies
proportion of the voting power
where possible, a common
have an interest, such as our
of Ferrari could be concentrated
view on the items on the agenda
arrangement to supply engines
in a relatively small number of
of shareholders meetings.
for Maserati cars. Exor holds
shareholders who would have
See “Major Shareholders—
approximately 24.21 percent of
significant influence over us. As
Shareholders’ Agreement”. The
our outstanding common shares
of February 14, 2022, Exor had
interests of Exor and Piero Ferrari
and approximately 36.00 percent
approximately 24.21 percent
may in certain cases differ from
of the voting power in us (as of
of our outstanding common
those of other shareholders. In
February 14, 2022), while it holds
shares and a voting interest in
addition, the sale of substantial
approximately 14.4 percent of the
Ferrari of approximately 36.00
amounts of our common shares
outstanding common shares in
percent. As of February 14, 2022,
42
FERRARI N.V.AR 2021 Piero Ferrari held approximately
incorporated in the Netherlands.
are not required to file periodic
10.30 percent of our outstanding
The rights of our shareholders
reports and financial statements
common shares and, as a result
and the responsibilities of
with the SEC as frequently or
of the loyalty voting mechanism,
members of our Board of
as promptly as U.S. companies
had approximately 15.31 percent
Directors may be different from
whose securities are registered
of the voting power in our shares.
the rights of shareholders and the
under the Exchange Act, nor
The percentages of ownership
responsibilities of members of
are we required to comply with
and voting power above are
board of directors in companies
Regulation FD, which restricts the
calculated based on the number
governed by the laws of other
selective disclosure of material
of outstanding shares net of
jurisdictions including the United
information. Accordingly, there
treasury shares. In addition,
States. In the performance of its
may be less publicly available
Exor and Piero Ferrari informed
duties, our Board of Directors is
information concerning us than
us that they have entered into
required by Dutch law to consider
there is for U.S. public companies.
a shareholder agreement,
our interests and the interests of
summarized under “Major
our shareholders, our employees
Shareholders—Shareholders’
and other stakeholders, in all
Agreement”. As a result, Exor
cases with due observation of
and Piero Ferrari may exercise
the principles of reasonableness
significant influence on matters
and fairness. It is possible that
involving our shareholders. Exor
some of these parties will have
OUR ABILITY TO PAY
DIVIDENDS ON OUR
COMMON SHARES MAY BE
LIMITED AND THE LEVEL
OF FUTURE DIVIDENDS IS
SUBJECT TO CHANGE.
and Piero Ferrari and other
interests that are different from,
Our payment of dividends on our
shareholders participating in
or in addition to, your interests as
common shares in the future will
the loyalty voting program may
a shareholder.
be subject to business conditions,
have the power effectively to
prevent or delay change of
control or other transactions
that may otherwise benefit our
shareholders. The loyalty voting
program may also prevent or
discourage shareholder initiatives
aimed at changing Ferrari’s
management or strategy or
otherwise exerting influence
over Ferrari. See “Corporate
Governance—Loyalty Voting
Structure”.
WE ARE A DUTCH PUBLIC
COMPANY WITH LIMITED
LIABILITY, AND OUR
SHAREHOLDERS MAY HAVE
RIGHTS DIFFERENT TO
THOSE OF SHAREHOLDERS
OF COMPANIES ORGANIZED
IN THE UNITED STATES.
WE EXPECT TO MAINTAIN
OUR STATUS AS A
“FOREIGN PRIVATE ISSUER”
UNDER THE RULES AND
REGULATIONS OF THE SEC
AND, THUS, ARE EXEMPT
FROM A NUMBER OF RULES
UNDER THE EXCHANGE
ACT OF 1934 AND ARE
PERMITTED TO FILE LESS
INFORMATION WITH THE
SEC THAN A COMPANY
INCORPORATED IN THE
UNITED STATES.
financial conditions, earnings,
cash balances, commitments,
strategic plans and other factors
that our Board of Directors
may deem relevant at the time
it recommends approval of the
dividend. Our dividend policy is
subject to change in the future
based on changes in statutory
requirements, market trends,
strategic developments, capital
requirements and a number of
other factors. In addition, under
our articles of association and
Dutch law, dividends may be
As a “foreign private issuer,” we
declared on our common shares
are exempt from rules under the
only if the amount of equity
Securities Exchange Act of 1934,
exceeds the paid up and called
as amended (the “Exchange Act”)
up capital plus the reserves that
that impose certain disclosure
have to be maintained pursuant
and procedural requirements
to Dutch law or the articles of
for proxy solicitations under
association. Further, even if we
The rights of our shareholders
Section 14 of the Exchange Act. In
are permitted under our articles
may be different from the rights
addition, our officers, directors
of association and Dutch law
of shareholders governed by
and principal shareholders are
to pay cash dividends on our
the laws of U.S. jurisdictions.
exempt from the reporting and
common shares, we may not have
We are a Dutch public company
“short-swing” profit recovery
sufficient cash to pay dividends
with limited liability (naamloze
provisions of Section 16 of the
in cash on our common shares.
vennootschap). Our corporate
Exchange Act and the rules under
We are a holding company and
affairs are governed by our
the Exchange Act with respect to
our operations are conducted
articles of association and by
their purchases and sales of our
through our subsidiaries. As a
the laws governing companies
common shares. Moreover, we
result, our ability to pay dividends
43
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO OUR COMMON SHARES
primarily depends on the ability
upon these persons. It may also
demerger, it is possible that those
of our subsidiaries, particularly
be difficult for U.S. investors to
creditors may seek to recover
Ferrari S.p.A., to generate
enforce within the United States
from us, claiming that we remain
earnings and to provide us
judgments against us predicated
liable to satisfy such obligations.
with the necessary financial
upon the civil liability provisions of
While we believe we would prevail
resources.
the securities laws of the United
against any such claim, litigation
States or any state thereof. In
is inherently costly and uncertain
addition, there is uncertainty as
and could have an adverse effect.
to whether the courts outside the
See “Overview—History of the
United States would recognize
Company”.
OUR MAINTENANCE OF
TWO EXCHANGE LISTINGS
MAY ADVERSELY AFFECT
LIQUIDITY IN THE MARKET
FOR OUR COMMON SHARES
AND COULD RESULT IN
PRICING DIFFERENTIALS
OF OUR COMMON SHARES
BETWEEN THE TWO
EXCHANGES.
or enforce judgments of U.S.
courts obtained against us or our
directors and officers predicated
upon the civil liability provisions
of the securities laws of the
United States or any state thereof.
Therefore, it may be difficult to
Our shares are listed on both
enforce U.S. judgments against
the New York Stock Exchange
us, our directors and officers and
(“NYSE”) and the Euronext Milan.
our independent auditors.
The dual listing of our common
shares may split trading between
the NYSE and the Euronext Milan,
adversely affect the liquidity of
the shares and the development
STELLANTIS CREDITORS
MAY SEEK TO HOLD US
LIABLE FOR CERTAIN
STELLANTIS OBLIGATIONS.
RISKS RELATED
TO TAXATION
CHANGES TO TAXATION OR
THE INTERPRETATION OR
APPLICATION OF TAX LAWS
COULD HAVE AN ADVERSE
IMPACT ON OUR RESULTS
OF OPERATIONS AND
FINANCIAL CONDITION.
Our business is subject to various
taxes in different jurisdictions
(mainly Italy), which include,
among others, the Italian
of an active trading market for
One step of our Separation
corporate income tax (“IRES”),
our common shares in one or
(see “Overview—History of the
regional trade tax (“IRAP”), value
both markets and may result
Company”) from FCA (references
added tax (“VAT”), excise duty,
in price differentials between
to “FCA” or “FCA Group” refer to
registration tax and other indirect
the exchanges. Differences in
Fiat Chrysler Automobiles N.V.,
taxes. We are exposed to the risk
the trading schedules, as well
together with its subsidiaries,
that our overall tax burden may
as volatility in the exchange rate
prior to the merger between FCA
increase in the future.
of the two trading currencies,
and Peugeot S.A. completed on
among other factors, may result
January 16, 2021, which resulted
Changes in tax laws or
in different trading prices for
in the creation of Stellantis N.V.)
regulations or in the position
our common shares on the two
included a demerger from FCA of
of the relevant Italian and non-
exchanges.
our common shares previously
Italian authorities regarding
IT MAY BE DIFFICULT TO
ENFORCE U.S. JUDGMENTS
AGAINST US.
held by it. In connection with
the application, administration
a demerger under Dutch law,
or interpretation of these laws
the demerged company may
or regulations, particularly if
continue to be liable for certain
applied retrospectively, could
We are organized under the
obligations of the demerging
have negative effects on our
laws of the Netherlands, and
company that exist at the time
current business model and have
a substantial portion of our
of the demerger, but only to
a material adverse effect on our
assets are outside of the United
the extent that the demerging
business, operating results and
States. Most of our directors and
company fails to satisfy such
financial condition.
senior management and our
liabilities. Based on other actions
independent auditors are resident
taken as part of the Separation,
In order to reduce future potential
outside the United States, and all
we do not believe we retain any
disputes with tax authorities, we
or a substantial portion of their
liability for obligations of FCA, now
seek advance agreements with
respective assets may be located
Stellantis, existing at the time of
tax authorities on significant
outside the United States. As a
the Separation. Nevertheless, in
matters. In particular we filed a
result, it may be difficult for U.S.
the event that Stellantis fails to
ruling application for advance
investors to effect service of
satisfy obligations to its creditors
pricing agreement (APA) on
process within the United States
existing at the time of the
transfer pricing.
44
FERRARI N.V.AR 2021 In addition, tax laws are complex
and subject to subjective
valuations and interpretive
decisions, and we will periodically
be subject to tax audits aimed at
assessing our compliance with
direct and indirect taxes. The tax
authorities may not agree with our
interpretations of, or the positions
AS A RESULT OF THE
DEMERGERS AND THE
MERGER IN CONNECTION
WITH THE SEPARATION,
WE MIGHT BE JOINTLY AND
SEVERALLY LIABLE WITH
FCA FOR CERTAIN TAX
LIABILITIES ARISEN IN THE
HANDS OF FCA.
than rents and royalties which
are received from unrelated
parties in connection with the
active conduct of a trade or
business, as defined in applicable
Treasury Regulations), or (ii) at
least 50 percent of our assets for
the taxable year (averaged over
the year and determined based
we have taken or intend to take on,
Although the Italian tax authorities
upon value) produce or are held
tax laws applicable to our ordinary
confirmed in a positive advance
for the production of “passive
activities and extraordinary
tax ruling issued on October 9,
income”. U.S. persons who own
transactions. In case of challenges
2015 that the demergers and
shares of a PFIC are subject to
by the tax authorities to our
the Merger that was carried
a disadvantageous U.S. federal
interpretations, we could face long
out in connection with the
income tax regime with respect
tax proceedings that could result
Separation would be respected
to the income derived by the PFIC,
in the payment of penalties and
as tax-free, neutral transactions
the dividends they receive from
have a material adverse effect on
from an Italian income tax
the PFIC, and the gain, if any, they
our operating results, business
perspective, under Italian tax law
derive from the sale or other
and financial condition.
we may still be held jointly and
disposition of their shares in
On October 8, 2021, an agreement
combined application of the rules
severally liable, as a result of the
the PFIC.
was reached between 136
governing the allocation of tax
While we believe that shares
countries for a two-pillar approach
liabilities in case of demergers
of our stock are not stock of a
to international tax reform (the
and mergers, with FCA for
PFIC for U.S. federal income tax
“OECD Agreement”). Amongst
taxes, penalties, interest and
purposes, this conclusion is based
other things, Pillar One proposes
any other tax liability arising in
on a factual determination made
a reallocation of a proportion of
the actions of FCA because of
annually and thus is subject to
tax to market jurisdictions, while
violations of its tax obligations
change. Moreover, our common
Pillar Two seeks to apply a global
related to tax years prior to the
shares may become stock of a
minimum effective tax rate of
two Demergers described in the
PFIC in future taxable years if
15 percent starting from 2023.
section “Overview—History of the
there were to be changes in our
The OECD Agreement is likely to
Company”.
assets, income or operations.
determine changes in corporate
tax rates in a number of countries
in the coming years. The impact
of changes in corporate tax
rates on the measurement of
tax assets and liabilities depends
THERE MAY BE POTENTIAL
“PASSIVE FOREIGN
INVESTMENT COMPANY”
TAX CONSIDERATIONS FOR
U.S. HOLDERS.
THE CONSEQUENCES OF
THE LOYALTY VOTING
PROGRAM ARE UNCERTAIN.
No statutory, judicial or
administrative authority directly
on the nature and timing of
Shares of our stock would
discusses how the receipt,
the legislative changes in each
be stock of a “passive foreign
ownership, or disposition of
country, which are subject to
investment company,” or a PFIC,
special voting shares should
uncertainty. Additionally, there
for U.S. federal income tax
be treated for Italian or U.S.
are expected changes on the
purposes with respect to a U.S.
tax purposes and as a result,
horizon with respect to US
holder if for any taxable year
the tax consequences in those
tax reforms. At this time, it is
in which such U.S. holder held
jurisdictions are uncertain.
expected that these changes
shares of our stock, after the
will be substantively enacted in
application of applicable “look-
The fair market value of the
2022. There was no impact on
through rules” (i) 75 percent or
special voting shares, which
current or deferred taxes in 2021
more of our gross income for the
may be relevant to the tax
in relation to these potential tax
taxable year consists of “passive
consequences, is a factual
changes and management will
income” (including dividends,
determination and is not
continue to monitor developments
interest, gains from the sale or
governed by any guidance
in the related tax legislation going
exchange of investment property
that directly addresses such a
forward.
and rents and royalties other
situation. Because, among other
45
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / RISKS RELATED TO TAXATION
things, our special voting shares
of intangibles) with a 110% “super
are not transferable (other than,
tax deduction” for R&D expenses
in very limited circumstances,
related to eligible intangible
together with the associated
assets. The decree provides for
common shares) and a
a specific transitional procedure
shareholder will receive amounts
between the two regimes. The
in respect of the special voting
amount of the related tax benefits
shares only if we are liquidated,
(if any) that the Group may receive
we believe and intend to take the
from the Patent Box or other
position that the fair market value
tax regimes remains subject to
of each special voting share is
uncertainty.
minimal. However, the relevant tax
authorities could assert that the
Furthermore, we currently
value of the special voting shares
calculate taxes due in Italy based,
as determined by us is incorrect.
among other things, on certain
tax breaks recognized by Italian
The tax treatment of the loyalty
tax regulations for R&D expenses
voting program is unclear and
and for the investments on
shareholders are urged to consult
manufacturing equipment, which
their tax advisors in respect of
result in a tax saving.
the consequences of acquiring,
owning and disposing of special
In addition, we benefit from the
voting shares.
WE CURRENTLY BENEFIT
OR SEEK TO BENEFIT
FROM CERTAIN SPECIAL
TAX REGIMES, WHICH MAY
NOT BE AVAILABLE IN THE
FUTURE.
measures introduced in Italy
by art. 110 of Law Decree no.
104/2020, converted into Law
no.126/2020, which re-opened
the voluntary step up of tangible
and intangible assets, with the
application of a three-percent
substitutive tax rate. The 2022
Italian Law no. 190/2014, as
budget law introduced some
subsequently amended and
retroactive changes to the
supplemented, introduced an
step-up regime. In particular,
optional Patent Box regime in the
the 2022 budget law provides
Italian tax system. The Patent Box
for an extension from 18 years
regime is a tax exemption related
to 50 years of the amortization
to, inter alia, the use of intellectual
period for tax purposes for
property assets. Business
any trademarks and goodwill
income derived from the use of
that benefited from the step-up
each qualified intangible asset is
regime. The modification even
partially exempted from taxation
if reduces our annual financial
for both IRES and IRAP purposes.
benefit does not affect the overall
We are currently applying the
positive impact of the incentive.
Patent Box tax regime for the
period from 2020 to 2024, in line
These measures continue to
with applicable tax regulations
mitigate the tax burden in Italy.
in Italy. Law Decree No. 146 as
Significant changes in regulations
amended by the 2022 Italian
or interpretation might adversely
budget law, replaced the former
affect the availability of such
Patent Box regime (which allowed
exemptions and result in higher
taxpayers to exempt from
tax charges. See also “Changes to
corporate income tax (IRES) and
taxation or the interpretation or
regional income tax (IRAP) up to
application of tax laws could have
50% of their income derived from
an adverse impact on our results of
the direct or indirect exploitation
operations and financial condition.”
46
FERRARI N.V.AR 2021 47
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS FERRARI N.V.
OVERVIEW
FERRARI IS AMONG THE WORLD’S LEADING LUXURY BRANDS, FOCUSED
ON THE DESIGN, ENGINEERING, PRODUCTION AND SALE OF THE WORLD’S
MOST RECOGNIZABLE LUXURY PERFORMANCE SPORTS CARS. OUR BRAND
SYMBOLIZES EXCLUSIVITY, INNOVATION, STATE-OF-THE-ART SPORTING
PERFORMANCE AND ITALIAN DESIGN AND ENGINEERING HERITAGE.
Our name and history and the
range (including cars presented
announced at our 2018 Capital
image enjoyed by our cars are
in 2021, for which shipments will
Markets Day.
closely associated with our
commence in future years) is
Formula 1 racing team, Scuderia
comprised of six sports cars (the
In 2021, we shipped 11,155 cars
Ferrari, the most successful
812 GTS, the Ferrari F8 Tributo,
and recorded net revenues of
racing team in the history of
the Ferrari F8 Spider, the 296 GTB,
€4,271 million, EBIT of €1,075
Formula 1. From the inaugural
the SF90 Stradale and the SF90
million, net profit of €833
year of Formula 1 in 1950
Spider), two GT cars (the Ferrari
million and earnings before
through the present, Scuderia
Roma and the Ferrari Portofino
interest, taxes, depreciation, and
Ferrari has won 238 Grand Prix
M), two special series cars (the
amortization (EBITDA) of €1,531
races, 16 Constructors’ World
812 Competizione and the 812
million. For additional information
titles and 15 Drivers’ World titles.
Competizione A), two versions
regarding EBITDA, including a
We are the only team which
of our first Icona model, the
reconciliation of EBITDA to net
has taken part in all the editions
Ferrari Monza SP1 and the Ferrari
profit, as well as other non-GAAP
of the Championship, racing
Monza SP2, as well as the recently
financial measures we present,
in more than 1,000 Formula 1
presented new model in the Icona
see “Financial Overview—Liquidity
Grand Prix races.
range, the Ferrari Daytona SP3.
and Capital Resources—Non-GAAP
Financial Measures”.
We believe our history of
In 2021 we completed the
excellence, technological
shipments of the 812 Superfast,
Whilst broadening our product
innovation and defining style
while the shipments of the
portfolio to target a larger
transcends the automotive
Ferrari Monza SP1 and SP2
customer base, we continue to
industry, and is the foundation of
will be completed in the first
pursue a low volume production
the Ferrari brand and image.
quarter of 2022. We also produce
strategy in order to maintain a
We design, engineer and
limited edition hypercars and
reputation for exclusivity and
produce our cars in Maranello,
one-off cars. Our most recent
scarcity among purchasers of
Italy, and sell them in over 60
hypercar, the LaFerrari Aperta,
our cars and we carefully manage
markets worldwide through
was launched in 2016 to
our production volumes and
a network of 172 authorized
celebrate our 70th Anniversary
delivery waiting lists to promote
dealers operating 191 points of
and finished its limited series run
this reputation. We divide our
sale as of the end of 2021.
in 2018. In 2021, we launched
regional markets into (i) EMEA,
4 new models, including the
(ii) Americas, (iii) Mainland China,
We believe our cars are the
296 GTB, a new PHEV featuring
Hong Kong and Taiwan, and (iv)
epitome of performance, luxury
a new V6 engine, the limited
Rest of APAC, which represented
and styling.
series V12 812 Competizione
respectively 49.2 percent, 25.4
Our product offering comprises
and 812 Competizione A, and
percent, 8.1 percent and 17.3
four main pillars: the sports range,
the new Icona series model,
percent of units shipped in 2021.
the GT range, special series and
the Ferrari Daytona SP3, and
The geographical distribution
Icona, a line of modern cars
we have launched 13 models
of shipments reflects deliberate
inspired by our iconic cars of
in accordance with our plan to
allocations driven by the phase-in
the past. Our current product
launch 15 new models by 2022 as
pace of individual models.
AR 2021
48
BOARD REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
HISTORY
OF THE COMPANY
In 1947, we produced our
merger of Peugeot S.A. with
first racing car, the 125 S. The
and into FCA), which was
125 S’s powerful 12 cylinder
completed on January 3, 2016
Ferrari was incorporated as a
engine would go on to become
(the “Separation”) and occurred
public limited liability company
synonymous with the Ferrari
through a series of transactions
(naamloze vennootschap) under
brand. In 1948, the first road
including (i) an intragroup
the laws of the Netherlands
car, the Ferrari 166 Inter, was
restructuring which resulted in
on September 4, 2015 with an
produced. Styling quickly
the Company’s acquisition of the
indefinite duration. Our official
became an integral part of the
assets and business of Ferrari
seat (statutaire zetel) is in
Ferrari brand.
Amsterdam, the Netherlands,
North Europe Limited and the
transfer by FCA of its 90 percent
and our corporate address and
In 1950, we began our
shareholding in Ferrari S.p.A.
principal place of business are
participation in the Formula 1
to the Company, (ii) the transfer
located at Via Abetone Inferiore
World Championship, racing in
of Piero Ferrari’s 10 percent
n. 4, I-41053 Maranello (MO),
the world’s second Grand Prix in
shareholding in Ferrari S.p.A. to
Italy. Ferrari is registered with
Monaco, which makes Scuderia
the Company, (iii) the initial public
the Dutch Trade Register of
Ferrari the longest running
offering of common shares of
the Chamber of Commerce
Formula 1 team.
the Company on the New York
under number 64060977. Its
We won our first Constructor
Stock Exchange in October 2015
telephone number is +39-0536-
World Title in 1952. Our success
under the ticker symbol RACE,
949111. The name and address
on the world’s tracks and roads
and (iv) the distribution, following
of the Company’s agent in the
extends beyond Formula 1,
the initial public offering, of
United States is: Ferrari North
including victories in some of
FCA’s remaining interest in the
America, Inc., 250 Sylvan Avenue,
the most important car races
Company to FCA’s shareholders.
Englewood Cliffs, NJ 07632.
such as the 24 Hours of Le Mans,
On January 4, 2016 the Company
Its telephone number is
the world’s oldest endurance
also completed the listing of its
+1 (201) 816 2600.
automobile race, and the 24
common shares on the Mercato
Our company is named after our
Hours of Daytona.
Telematico Azionario (“MTA”,
subsequently renamed
founder Enzo Ferrari.
The Fiat group acquired a 50
Euronext Milan), under the
An Alfa Romeo driver since 1924,
percent stake in Ferrari S.p.A. in
ticker symbol RACE.
Enzo Ferrari founded his own
1969 and increased its stake to
racing team, Scuderia Ferrari, in
90 percent in 1988 following the
Modena in 1929 initially to race
death of Enzo Ferrari, with the
Alfa Romeo cars. In 1939 he set
remaining 10 percent held by
up his own company, initially
Enzo Ferrari’s son, Piero Ferrari.
called Auto Avio Costruzioni. In
Ferrari became an independent,
late 1943, Enzo Ferrari moved
publicly traded company
his headquarters from Modena
following its separation from
to Maranello, which remains our
FCA (renamed Stellantis in
headquarters to this day.
January 2021, following the
AR 2021
49
INDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS FERRARI N.V.
INDUSTRY
OVERVIEW
Within the luxury goods market, we define our target
pre-pandemic levels while shipments of the overall
market for luxury performance cars as two-door
luxury performance car market partially recovered
cars powered by engines producing more than
but remained below the 2019 pre-pandemic levels,
500 hp and selling at a retail price in excess of Euro
after the economic shock experienced in 2020 as a
150,000 (including VAT). The luxury performance
result of the COVID-19 pandemic. The actions taken
car market historically has followed relatively closely
worldwide for the containment of the pandemic,
growth patterns in the broader luxury market. The
including widespread vaccination campaigns, enabled
luxury performance car market is generally affected
Ferrari and some of its main competitors to fully
by global macroeconomic conditions and, although
recover and maintain their production capacity.
we and certain other manufacturers have proven
Furthermore, the renewed product offering by
relatively resilient, general downturns can have a
several competitors was another key element driving
disproportionate impact on sales of luxury goods in
the positive performance of the market.
light of the discretionary nature of consumer spending
in this market. Furthermore, because of the emotional
Unlike in other segments of the broader luxury
nature of the purchasing decision, economic
market, in the luxury performance car market, a
confidence and factors such as expectations
significant portion of demand is driven by new
regarding future income streams as well as the social
product launches. The market share of individual
acceptability of luxury goods may impact sales.
producers fluctuates over time reflecting the timing
Following the sharp recession of 2008-2009, the
sales volumes even in difficult market environments
luxury performance car market has been resilient
because the novelty, exclusivity and excitement of a
to further economic downturns and stagnation in
new product is capable of creating and capturing its
of product launches. New launches tend to drive
the broader economy, also a result of the increase of
own demand from clients.
new product launches. A sustained period of wealth
creation in several Asian countries and, to a lesser
Growing environmental concerns are leading to the
extent, in the Americas, has led to an expanding
implementation of increasingly stringent emissions
population of potential consumers of luxury goods.
regulations and an increase in demand for both
Developing consumer preferences in the Asian
hybrid and electric vehicles. Cost and limited charging
markets, where the newly affluent are increasingly
infrastructure are currently limiting factors in the
embracing western brands of luxury products, have
demand for electric vehicles, but advancements in
also led to higher demand for cars in our segment,
battery technology in coming years are expected to
which are all produced by established European
boost sales of hybrid and electric high performance
manufacturers. In turn, the changing demographic
luxury vehicles, although at a slower pace compared
of customers and potential customers is driving an
to mass market vehicles. The ability to combine
evolution towards luxury performance cars more
driving experience with hybrid and electric
suited to an urban, daily use.
technology will be key for the commercial success
of high performance luxury vehicles.
Additionally, the growing appetite of younger affluent
purchasers for luxury performance cars has led to
As shown in the chart on the following page, our
new entrants, which in turn has resulted in higher
volumes in recent years have proven less volatile
sales overall in the market.
than our competitors’. We believe this is due to our
strategy of maintaining low volumes compared to
In 2021, the luxury performance car market
demand, as well as to the higher number of models in
experienced a V-shaped recovery, with Ferrari
our range and our more frequent product launches
shipments returning to and surpassing the 2019
compared to our competitors.
AR 2021
50
20072008200920042005200620102011201220132014201520162019202020212018201710,0009,0008,0007,0006,0005,0004,0003,0002,0001,000055,00050,00045,00040,00035,00030,00025,00020,00015,000DECEMBER 31FERRARI VS. LUXURY PERFORMANCE CAR INDUSTRYLuxury performance car industryFerrariUnitsUnitsLuxury performance car industryFerrari pre-pandemic levels while shipments of the overall
luxury performance car market partially recovered
but remained below the 2019 pre-pandemic levels,
after the economic shock experienced in 2020 as a
result of the COVID-19 pandemic. The actions taken
worldwide for the containment of the pandemic,
including widespread vaccination campaigns, enabled
Ferrari and some of its main competitors to fully
recover and maintain their production capacity.
Furthermore, the renewed product offering by
several competitors was another key element driving
the positive performance of the market.
Unlike in other segments of the broader luxury
market, in the luxury performance car market, a
significant portion of demand is driven by new
product launches. The market share of individual
producers fluctuates over time reflecting the timing
of product launches. New launches tend to drive
sales volumes even in difficult market environments
because the novelty, exclusivity and excitement of a
new product is capable of creating and capturing its
own demand from clients.
Growing environmental concerns are leading to the
implementation of increasingly stringent emissions
regulations and an increase in demand for both
hybrid and electric vehicles. Cost and limited charging
infrastructure are currently limiting factors in the
demand for electric vehicles, but advancements in
battery technology in coming years are expected to
boost sales of hybrid and electric high performance
luxury vehicles, although at a slower pace compared
to mass market vehicles. The ability to combine
driving experience with hybrid and electric
of high performance luxury vehicles.
As shown in the chart on the following page, our
volumes in recent years have proven less volatile
than our competitors’. We believe this is due to our
strategy of maintaining low volumes compared to
demand, as well as to the higher number of models in
our range and our more frequent product launches
compared to our competitors.
• Ferrari and Luxury Performance Car Industry data are updated to December 31, 2021.
• The commercial criteria we used for evaluation of the Luxury Performance Car Industry include all two door GT and sports cars with power above 500
hp, and retail price above Euro 150,000 (including VAT) sold by Aston Martin, Audi, Bentley, BMW, Ferrari, Ford, Honda/Acura, Lamborghini, Maserati,
McLaren, Mercedes Benz, Polestar, Porsche and Rolls-Royce.
• Ferrari data based on internal information for the 22 top countries (excluding Middle East countries) for Ferrari annual registrations and sales (which
accounted for approximately 86% of the total Ferrari shipments in 2021).
• Data for the Luxury Performance Car Industry based on units registered (in Brazil, Japan, Taiwan, United Kingdom, Germany, France, Switzerland,
Italy, Poland, Spain, Sweden, Netherlands, Belgium and Austria) or sold (in USA, South Korea, Mainland China, Russia, Australia, New Zealand, Singapore
and Indonesia). Source: USA: US Maker Data Club, Brazil-JATO; Austria-OSZ; Belgium-FEBIAC; France-SIV; Germany-KBA; UK-SMMT; Italy-UNRAE;
Netherlands-VWE; Poland-CEPiK; Spain-TRAFICO; Sweden-BranschData; Switzerland-ASTRA; Mainland China-China Automobile Industry Association-
DataClub; Russia-AEBRUS; Taiwan-Ministry of Transportation and Communications; Australia-VFACTS-S; Japan-JAIA; Indonesia-GAIKINDO; New Zealand-
VFACTS; Singapore-LTA, MTA (Land Transport Authority, Motor Trader Associations); South Korea-KAIDA.
In 2021, Ferrari volumes in the largest 22 markets increased compared to 2020, primarily driven by contribution
from our renewed and enlarged product range. In 2021, we had a market share of 26% in the luxury performance
technology will be key for the commercial success
car market; with 30% of market share in the sports car segment and 20% of market share in the GT segment.
51
BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONAR 2021INDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS20072008200920042005200620102011201220132014201520162019202020212018201710,0009,0008,0007,0006,0005,0004,0003,0002,0001,000055,00050,00045,00040,00035,00030,00025,00020,00015,000DECEMBER 31FERRARI VS. LUXURY PERFORMANCE CAR INDUSTRYLuxury performance car industryFerrariUnitsUnitsLuxury performance car industryFerrari
The chart below sets forth our market shares in 2021 based on volumes in our largest 22 markets by geographical
area.
Top 22
Markets
Europe
Americas
Mainland China
and Taiwan
Rest
of APAC
26%
29%
19%
25%
38%
62%
74%
71%
81%
75%
Ferrari Market Share
Luxury Perfomance Car Industry
• Ferrari and Luxury Performance Car Industry data updated to December 31, 2021.
• The commercial criteria we used for evaluation of the Luxury Performance Car Industry include all two door GT and sports cars with power above 500
hp, and retail price above Euro 150,000 (including VAT) sold by Aston Martin, Audi, Bentley, BMW, Ferrari, Ford, Honda/Acura, Lamborghini, Maserati,
McLaren, Mercedes Benz, Polestar, Porsche, and Rolls-Royce.
• Ferrari data based on internal information for the 22 top countries (excluding Middle East countries) for Ferrari annual registrations and sales (which
accounted for approximately 86% of the total Ferrari shipments in 2021).
• Data for the Luxury Performance Car Industry based on units registered (Brazil, Japan, Taiwan, United Kingdom, Germany, France, Switzerland, Italy,
Poland, Spain, Sweden, Netherlands, Belgium and Austria) or sold (in USA, South Korea, Mainland China, Russia, Australia, New Zealand, Singapore
and Indonesia). Source: USA: US Maker Data Club, Brazil-JATO; Austria-OSZ; Belgium-FEBIAC; France-SIV; Germany-KBA; UK-SMMT; Italy-UNRAE;
Netherlands-VWE; Poland-CEPiK; Spain-TRAFICO; Sweden-BranschData; Switzerland-ASTRA; Mainland China-China Automobile Industry Association-
DataClub; Russia-AEBRUS; Taiwan-Ministry of Transportation and Communications; Australia-VFACTS-S; Japan-JAIA; Indonesia-GAIKINDO; New Zealand-
VFACTS; Singapore-LTA, MTA (Land Transport Authority, Motor Trader Associations); South Korea-KAIDA.
• Ferrari is market leader in several countries, including France, Italy, Switzerland, UK, USA, Australia, Japan and South Korea, among others.
While we monitor our market share as an indicator of our brand appeal, we do not regard market share in the
luxury performance market as particularly relevant as compared to other segments of the automotive industry.
We are not focused on market share as a performance metric. Instead, we deliberately manage our supply
relative to demand, to defend and promote our brand exclusivity and premium pricing.
COMPETITION
Competition in the luxury performance car market is
Competition in the luxury performance car market
concentrated in a fairly small number of producers,
is driven by the strength of the brand and the
including both large automotive companies that
appeal of the products in terms of performance,
own luxury brands as well as small producers
styling, novelty and innovation as well as on the
exclusively focused on luxury cars, like us. The luxury
manufacturers’ ability to renew its product offerings
performance car market includes sports cars and
regularly in order to continue to stimulate customer
GT cars.
demand.
Our current sports car models are the 812 GTS, the
Competition among similarly positioned luxury
Ferrari F8 Tributo, the Ferrari F8 Spider, the 296
performance cars is also driven by price and total
GTB and the SF90 Stradale and the SF90 Spider,
cost of ownership. Resilience of the car value after
our first series production Plug-in Hybrid Electric
a period of ownership is an important competitive
Vehicle (PHEV) models. Our principal competitors
dimension among similarly positioned luxury cars,
are Lamborghini, McLaren, Porsche, Mercedes,
as a higher resilience decreases the total cost of
Aston Martin and Audi. Our current GT range models
ownership and promotes repeat purchases: we
include the Ferrari Roma and the Ferrari Portofino M,
believe this is a strong competitive advantage of
while our main competitors are Rolls-Royce, Bentley,
Ferrari cars.
Aston Martin and Mercedes.
52
FERRARI N.V.AR 2021 53
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS FERRARI N.V.
OVERVIEW
OF OUR BUSINESS
FERRARI IS AMONG THE WORLD’S LEADING LUXURY BRANDS, FOCUSED
ON THE DESIGN, ENGINEERING, PRODUCTION AND SALE OF THE WORLD’S
MOST RECOGNIZABLE LUXURY PERFORMANCE SPORTS CARS.
Our brand symbolizes exclusivity,
series and Icona, a line of modern
the Ferrari Daytona SP3, and
innovation, state-of-the-art
cars inspired by our iconic cars
we have launched 13 models
sporting performance and Italian
of the past. Our current product
in accordance with our plan to
design and engineering heritage.
range (including cars presented
launch 15 new models by 2022 as
Our name and history and the
in 2021, for which shipments will
announced at our 2018 Capital
image enjoyed by our cars are
commence in future years) is
Markets Day.
closely associated with our
comprised of six sports cars (the
Formula 1 racing team, Scuderia
812 GTS, the Ferrari F8 Tributo,
In 2021, we shipped 11,155 cars
Ferrari, the most successful
the Ferrari F8 Spider, the 296 GTB,
and recorded net revenues of
racing team in the history of
the SF90 Stradale and the SF90
€4,271 million, EBIT of €1,075
Formula 1. From the inaugural
Spider), two GT cars (the Ferrari
million, net profit of €833
year of Formula 1 in 1950
Roma and the Ferrari Portofino
million and earnings before
through the present, Scuderia
M), two special series cars (the
interest, taxes, depreciation, and
Ferrari has won 238 Grand Prix
812 Competizione and the 812
amortization (EBITDA) of €1,531
races, 16 Constructors’ World
Competizione A), two versions
million. For additional information
titles and 15 Drivers’ World titles.
of our first Icona model, the
regarding EBITDA, including a
We are the only team which has
Ferrari Monza SP1 and the Ferrari
reconciliation of EBITDA to net
taken part in all the editions of the
Monza SP2, as well as the recently
profit, as well as other non-GAAP
Championship, racing in more
presented new model in the Icona
financial measures we present,
than 1,000 Formula 1 Grand Prix
range, the Ferrari Daytona SP3.
see “Financial Overview—Liquidity
races. We believe our history
and Capital Resources—Non-
of excellence, technological
In 2021 we completed the
GAAP Financial Measures”.
innovation and defining style
shipments of the 812 Superfast,
transcends the automotive
while the shipments of the
Whilst broadening our product
industry, and is the foundation
Ferrari Monza SP1 and SP2
portfolio to target a larger
of the Ferrari brand and image.
will be completed in the first
customer base, we continue to
We design, engineer and
quarter of 2022. We also produce
pursue a low volume production
produce our cars in Maranello,
limited edition hypercars and
strategy in order to maintain a
Italy, and sell them in over 60
one-off cars. Our most recent
reputation for exclusivity and
markets worldwide through
hypercar, the LaFerrari Aperta,
scarcity among purchasers of
a network of 172 authorized
was launched in 2016 to
our cars and we carefully manage
dealers operating 191 points of
celebrate our 70th Anniversary
our production volumes and
sale as of the end of 2021.
and finished its limited series run
delivery waiting lists to promote
in 2018. In 2021, we launched
this reputation.
We believe our cars are the
4 new models, including the
We divide our regional markets
epitome of performance, luxury
296 GTB, a new PHEV featuring
into (i) EMEA, (ii) Americas, (iii)
and styling.
a new V6 engine, the limited
Mainland China, Hong Kong and
Our product offering comprises
series V12 812 Competizione
Taiwan, and (iv) Rest of APAC,
four main pillars: the sports
and 812 Competizione A, and
which represented respectively
range, the GT range, special
the new Icona series model,
49.2 percent, 25.4 percent,
AR 2021
54
BOARD REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
8.1 percent and 17.3 percent
our image. We launched our
We continue in our unwavering
of units shipped in 2021. The
first fashion collection on
pursuit of reaching carbon
geographical distribution of
June 13, 2021 in Maranello,
neutrality by 2030, addressing –
shipments reflects deliberate
drawing inspiration from our
in addition to our electrification
allocations driven by the phase-in
marque’s style, innovation and
journey – both direct and
pace of individual models.
performance. We also license the
indirect emissions with a focus
Ferrari brand to a limited number
on energy and materials. As
We focus our marketing
of producers and retailers of
a further step forward in this
and promotion efforts in the
luxury and lifestyle sectors,
process, in 2021 we calculated
investments we make in our
including theme parks that,
our carbon footprint considering
racing activities and in particular,
we believe, enhance the brand
the emissions related to all of our
Scuderia Ferrari’s participation
experience of our loyal clients and
activities over our entire value
in the FIA Formula 1 World
Ferrari enthusiasts. The world of
chain. Our calculation, based
Championship which is the
Ferrari can also be experienced in
on greenhouse gas protocol
pinnacle of motorsport and is
our Ferrari Museum in Maranello
methodology, has been certified
one of the most watched annual
and in the Enzo Ferrari Museum
according to ISO 14064-1:2018
sports series in the world, with
in Modena.
approximately 445 million unique
requirements by a third-party and
allowed us to determine priority
viewers in 2021 and an average
Our international network of
areas for action.
total audience for a Grand Prix
Ferrari Stores consists of 16
weekend of 70.3 million. (Source:
Ferrari owned store and 14
We will continue focusing
Formula 1 Press Office). Although
franchised stores (including
our efforts on protecting and
our most recent Formula 1 world
12 Ferrari Store Junior) where
enhancing the value of our brand
title was in 2008, we continuously
visitors can find our fashion
to preserve our strong financial
enhance our focus on Formula
collection as well as on our
profile and participate in the
1 activities with the goal of
website. In 2021 we began giving
growth of the premium luxury
improving racing results and
a fresh new look to the stores,
market. We intend to pursue
restoring our historical position
starting with our stores in
controlled and profitable growth
as the premier racing team in
Maranello, Milan, Rome and
in existing and emerging markets
Formula 1. We believe that these
Los Angeles.
activities support the strength
while expanding the Ferrari
brand to carefully selected
and awareness of our brand
On June 15, 2021 we reopened and
lifestyle categories.
among motor enthusiasts, clients
revitalized our Ristorante Cavallino,
and the general public.
which is situated opposite to the
As one of the world’s most
entrance of our Maranello factory,
recognized premium luxury
while retaining the heritage of this
brands, we operate in carefully
historic location.
selected luxury and lifestyle
categories consistent with
AR 2021
55
INDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS
SPORTS AND GT RANGE, SPECIAL SERIES AND ICONA:
FERRARI LINE-UP STRATEGIC PILLARS
GRAN TURISMO
RANGE
SPORT
RANGE
SPECIAL
SERIES
ICONA
Our product offering comprises four main pillars:
existing clients to use a Ferrari in various moments of
the sports range, the GT range, special series and
their lives. Our diversified product offering includes
Icona. Our current product range as of the date of
different architectures (such as front-engine and
this report includes six sports cars (the 812 GTS, the
mid-rear engine), engine sizes (V6, V8 and V12),
Ferrari F8 Tributo, the Ferrari F8 Spider, the 296 GTB,
technologies (atmospheric, turbo-charged, hybrid,
the SF90 Stradale and the SF90 Spider), two GT cars
electric), body styles (such as coupes, spiders and
(the Ferrari Roma and the Ferrari Portofino M), two
targa), and seats (2 seaters and 2+ seaters).
special series cars (the 812 Competizione and the
812 Competizione A), and three strictly limited edition
We are also actively engaged in after sales activities
Icona models (the new Ferrari Daytona SP3, which
driven, among other things, by the objective of
was presented in November 2021, as well as the
preserving and extending the market value of the cars
Ferrari Monza SP1 and SP2). In 2021 we completed
we sell. We believe our cars’ performance in terms
shipments of the 812 Superfast. We target end clients
of value preservation after a period of ownership
seeking high performance cars with distinctive
significantly exceeds that of any other brand in the
design and state-of-the-art technology. Our broad
luxury car segment. High residual value is important
model range is designed to fulfill the strategy of
to the primary market because clients, when
“Different Ferrari for different Ferraristi, different
purchasing our cars, take into account the expected
Ferrari for different moments”, which means being
resale value of the car in assessing the overall cost
able to offer a highly differentiated product line-up
of ownership. Furthermore, a higher residual value
that can meet the varying needs of new customer
potentially lowers the cost for the owner to switch
segments (in terms of sportiness, comfort, on-board
to a new model thereby supporting client loyalty and
space, design, amongst others) and that can allow our
promoting repeat purchase.
56
FERRARI N.V.AR 2021 ROAD CARS
SPORTS
V8 Hybrid
SF90 Stradale
V8 Hybrid
SF90 Spider
V6 Hybrid
296 GTB
V8
F8 Tributo
V8
F8 Spider
V12
812 Superfast
V12
812 GTS
GRAN TURISMO
SPECIAL SERIES
ICONA
V8
Portofino M
V8
Roma
V12
812 Competizione
V12
812 Competizione A
V12
Monza SP1/SP2
V12
Daytona SP3
ONE-OFF
TRACK CARS
ONE-OFF
V12
BR20
Produced in 2021
FERRARI CHALLENGE
THE XX PROGRAMME
RACING CARS
V8
488 Challenge EVO
V12
FXX-K EVO
V8
488 GT Modificata
The charts below set forth the percentage of our unit shipments (excluding the XX Programme, racing cars,
one-off and pre-owned cars) for the years ended December 31, 2021, 2020 and 2019 by pillar:
2%
2%
< 1%
29%
24%
36%
2021
2020
2019
64%
69%
74%
Sports and Special Series
GT
Icona*
(*) Shipments of Icona models commenced in 2019 and contributed to less than 1 percent of our shipments for that year.
57
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS
/ SPORTS AND GT RANGE, SPECIAL SERIES AND ICONA: FERRARI LINE-UP STRATEGIC PILLARS
The table and charts below set forth our unit shipments(1) for the years ended December 31, 2021, 2020 and 2019,
by geographic market:
(Number of cars and % of total cars)
EMEA
Germany
UK
Italy
Switzerland
France
Middle East (2)
Other EMEA( 3)
Total EMEA
Americas (4)
Mainland China, Hong Kong and Taiwan
Rest of APAC (5)
Total
For the years ended December 31,
2021
%
2020
%
2019
%
1,252
11.2
996
668
481
473
334
1,288
5,492
2,831
899
1,933
8.9
6.0
4.3
4.2
3.0
11.6
49.2
25.4
8.1
17.3
11,155
100.0
995
971
574
456
463
304
1,055
4,818
2,325
456
1,520
9,119
10.9
10.6
6.3
5.0
5.1
3.3
11.6
52.8
25.5
5.0
16.7
967
1,120
559
454
452
309
1,034
4,895
2,900
836
1,500
9.5
11.1
5.5
4.5
4.5
3.1
10.1
48.3
28.6
8.3
14.8
100.0
10,131
100.0
(1) Excluding the XX Programme, racing cars, one-off and pre-owned cars.
(2) Middle East mainly includes the United Arab Emirates, Saudi Arabia, Bahrain, Lebanon, Qatar, Oman and Kuwait.
(3) Other EMEA includes Africa and the other European markets not separately identified.
(4) Americas includes the United States of America, Canada, Mexico, the Caribbean and Central and South America.
(5) Rest of APAC mainly includes Japan, Australia, Singapore, Indonesia, South Korea, Thailand, India and Malaysia.
17.3%
16.7%
14.8%
8.1%
2021
49.2%
25.4%
5.0%
25.5%
2020
52.8%
8.3%
28.6%
2019
48.3%
EMEA
Americas
Mainland China, Hong Kong and Taiwan
Rest of APAC
58
FERRARI N.V.AR 2021 SPORTS RANGE
Our sports cars are
and SF90 Spider, our first series
coupled with an electric motor
production cars which feature
capable of delivering a further
characterized by compact bodies,
PHEV technology that combines
122 kW (167 hp) – unprecedented
a design guided by performance
a V8 engine (780 hp) with three
performance for a V6 car.
and aerodynamics, and often
electric motors allowing the car
benefit from technologies initially
to reach 1,000 hp; the Ferrari F8
GT RANGE
developed for our Formula 1
Tributo and the Ferrari F8 Spider,
Our GT cars, while maintaining
single-seaters or Ferrari GT
equipped with a mid-rear V8
the performance expected of
racing activities. They favor
engine (720 hp), 4 time winner of
a Ferrari, are characterized by
performance over comfort,
the engine of the year award; the
more refined interiors with a
seeking to provide a driver with
812 GTS, equipped with a front
higher focus on comfort and on-
an immediate response and
V12 engine (800 hp) and the 296
board life quality. In our GT range,
superior handling, leveraging
GTB, which is the first 6-cylinder
we offer two models equipped
state-of-the-art vehicle dynamics
engine installed on a Ferrari
with our V8 engine, the Ferrari
components and controls. In
road car and produces 830 hp
Roma (620 hp) and the Ferrari
our sports car class, we offer
total power output delivered by
Portofino M (620 hp).
six models: the SF90 Stradale
a new 120° V6 engine (663 hp)
The following chart depicts the four dimensions of our customer value proposition for our sports and GT range
models:
SPORTINESS
SF90 Stradale
SF90 Spider
296 GTB
F8 Tributo
F8 Spider
COMFORT
& VERSATILITY
PERFORMANCE
Portofino M
812 GTS
812 Superfast
Roma
ELEGANCE
59
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / SPORTS AND GT RANGE, SPECIAL SERIES AND ICONA: FERRARI LINE-UP STRATEGIC PILLARS
SPECIAL SERIES
unveiled. This limited-edition targa
F12berlinetta in 2014), the Ferrari
From time to time, we also design,
takes inspiration from legendary
SP38 (a superlative mid-rear V8
engineer and produce special
Ferrari sports prototypes of the
turbo taking inspiration from
series cars which can be limited
1960s and sports a naturally
the legendary Ferrari F40), the
in time or volume and are usually
aspirated V12 engine, mid-rear-
458MM Speciale (the last mid
based on our range sports
mounted in typical racing car
rear model with a V8 naturally
models but introduce novel
style. Undisputedly the most
aspirated engine in 2016), the
product concepts. These cars
iconic of all of Ferrari’s engines,
Ferrari P80/C, a real track car
are characterized by significant
this power unit delivers 840 hp
taking inspiration from past
modifications designed to
– along with 697 Nm of torque
Ferrari Sport Prototipo models,
enhance performance and
and maximum revs of 9500 rpm
and the Ferrari Omologata,
driving emotions. Our special
– making it the most powerful
based on the 812 Superfast V12
series cars are particularly
naturally aspirated road engine
platform. The most recent model,
targeted to collectors and, from
ever built by Ferrari.
produced in 2021, is the BR20,
a very elegant V12 based on the
GTC4 Lusso.
a commercial and product
development standpoint, they
facilitate the transition from
existing to new range models.
LIMITED EDITION
HYPERCARS
AND ONE-OFFS
Following the completion of
In line with our tradition of
shipments for the Ferrari 488
hypercars starting with the GTO
Pista and Ferrari 488 Pista Spider
(288 GTO) in 1984 up to the Enzo
in 2020, in 2021 Ferrari launched
in 2002 and the LaFerrari Aperta,
the 812 Competizione and the
our latest hypercar launched in
812 Competizione A (830 hp).
2016, we also produce limited
Respectively a coupe and a targa,
edition hypercars. These are the
the 812 Competizione and the
highest expression of Ferrari
812 Competizione A represent
road car performance at the time
the pinnacle of our technical
and are often the forerunners
expertise and performance with
of technological innovations
an extraordinary weight to power
for future range models,
ratio of 1.79 kg/hp, which puts
with innovative features and
them at the top of our V12 car
futuristic design.
category, reaching 0-100 km/h
in 2.85 seconds and 0-200 km/h
In order to meet the varying
in 7.7 seconds.
ICONA
needs of our most loyal and
discerning clients, we also
produce a very limited number
In September 2018, we
of one-off models. While based
introduced a new pillar of our
on the chassis and equipped with
product portfolio: the Icona,
engines of one of the current
a unique concept that takes
range models for homologation
inspiration from the iconic cars
and registration purposes, these
of our history and reinterprets
cars reflect the exact exterior
them in a modern fashion, pairing
and interior design specifications
timeless design with state-of-
requested by the clients, and
the-art materials and technology.
are produced as a single, unique
The first examples of this strictly
car. Some of the most iconic
limited-edition product line-up
models emerged from our
are the Ferrari Monza SP1 and
One-Off program include the
SP2, which are inspired by the
SP12 EC (inspired by the 512 BB
classic collectible barchetta cars,
and created in 2011), the F12
the 750 Monza and 860 Monza. In
TRS (a radical two-seat roadster
2021 the Ferrari Daytona SP3 was
created on the platform of the
60
FERRARI N.V.AR 2021 PERSONALIZATION OFFER
WHERE (Sales Channel)
HOW (Initiatives)
One-off
Tailor Made
Special Equipment
Personalization Program
“Carrozzeria Scaglietti”
Maranello
TM Center
@Maranello
@Shanghai
@New York
Atelier
@Maranello
@New York
Dealership
with Special
Equipment
Dealership
New Sales Toolbox
New Special
Equipment
Process
Continuous
Enrichment
of OPT List
All of our models feature highly customizable
The “Tailor Made” program provides an additional
interior and exterior options, which are included in
level of personalization in accordance with the
our personalization catalog. Some of these options
expectations of our clients. A dedicated Ferrari
include performance contents like carbon fibre
designer assists clients in selecting and applying
parts, carbon fibre wheels, titanium exhaust systems,
virtually any specific design element chosen by the
alternative brake caliper colors, parking cameras,
client. Our clients benefit from a large selection of
MagnaRide dual mode suspension, various door panel
finishes and accessories in an array of different
configurations, steering wheel inserts and state-of-
materials (ranging from cashmere to denim),
the-art custom high fidelity sound systems. Starting
treatments and hues. To assist our clients’ choice we
with the SF90 Stradale and the SF90 Spider, we have
also offer three collections inspired by Ferrari’s own
also introduced the “Assetto Fiorano” configuration,
tradition: Scuderia (taking its lead from our sporting
which provides numerous exclusive features for
history), Classica (bringing a modern twist to the
those who seek radical performance and design.
styling cues of our signature GT models) and Inedita
This more extreme configuration is also available
(showcasing more experimental and innovation-led
for the 296 GTB.
personalization).
With our “Special Equipment” program, we offer
The “One-off” program is the maximum level of
clients additional customization choices for their cars.
personalization and exclusivity.
Our specialists are able to guide clients in creating
See “—Limited Edition Hypercars and One-Offs” above
a very customized car through a wide catalog of
for more details.
special items such as different types of rare leathers,
custom stitching, special paints, special carbon fiber,
and personalized luggage sets designed to match the
car’s interior.
61
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS DESIGN
created the Advanced Design team, a laboratory that
aims at defining the brand’s design vision, developing
Design is a fundamental and distinctive aspect of our
new concepts and formal languages through so far
products and our brand. Our designers, modelers
unexplored methods and tools, and trying to achieve
and engineers work together to create car bodies
simplification and formal purity while staying true to
that incorporate the most innovative aerodynamic
the Ferrari DNA which has characterized its history.
solutions in the sleek and powerful lines typical of
our cars. The interiors of our cars seek to balance
Ferrari Design is organized as an integrated automotive
functionality, aesthetics and comfort. Cockpits
design studio, employing a total workforce of
are designed to maximize the driving experience,
approximately 120 people (full-time workers as well as
tending towards more sporty or more comfortable
external contractors) including designers, 3D surfacing
depending on the model. The interiors of our vehicles
operators, physical modelers and graphic artists. It
boast elegant and sophisticated trims and details that
operates a modeling studio fully equipped with 5-axis
enhance the ergonomic layout of all main controls,
milling machines with the capacity to develop various
many of which are clustered on the steering wheel.
full-scale models (interior and exterior) in parallel.
A guiding principle of our design is that each new
model represents a clear departure from prior
In September 2018 we opened a new building for the
models and introduces new and distinctive aesthetic
Ferrari Design Centre, which is our first facility fully
elements, delivering constant innovation within the
dedicated to the Ferrari Design. The new building hosts
furrow of tradition.
two Ateliers and the Tailor Made department to engage
clients with Ferrari’s rich personalization services. The
For the design of our cars we have relied historically
Ferrari Design Centre has designed our most recent
on Italian coachbuilders such as Carrozzeria Touring,
cars, including our entire current line up.
Vignale, Scaglietti and Pininfarina. These partnerships
helped Ferrari in defining its design language at
During its 12 year history, the Ferrari Design Centre
the forefront of design advance. Throughout the
has received many prestigious design awards for the
years this area of excellence has been recognized
cars it has designed, including the following in the last
repeatedly by a long series of awards being bestowed
2 years:
upon Ferrari cars.
In 2010 we established the Ferrari Design Centre, our
in-house design department, with the objective of
improving control over the entire design process and
• Ferrari SF90 Spider: iF Design Award; Red Dot Design
Award (2021);
• Ferrari Omologata: Red Dot Design Award (2021);
• Ferrari Roma: iF Design Award (2021);
ensuring long-term continuity of the Ferrari style. The
• Ferrari Portofino M: AUTONIS - Best New Design 2021
mission of the Ferrari Design Centre is to define and
- Auto Motor und Sport - (2021);
evolve the stylistic direction of the marque, imprinting
all new products with a modern stamp, according to a
futuristic, uncompromised vision. The name and logo
• Ferrari Roma: The Most Beautiful Supercar of the
Year - Festival Automobile International, Paris (2020);
Red Dot Design Award (2020); Car Design Award
“Ferrari Design” denotes all concepts and works of the
(2020);
Ferrari Design Centre (see “—Intellectual Property”).
Ferrari Design handles all aspects of automotive
styling for the Ferrari road cars product range,
encompassing the styling of all bodywork, external
components and interior trim, applied to series
• Ferrari SF90 Stradale: iF Gold Design Award (2020);
Red Dot Best of The Best (2020);
• Ferrari F8 Tributo: iF Design Award (2020); Red Dot
Design Award (2020);
production models for the GT and sports car range
• Ferrari One Off P80/C: iF Design Award (2020);
special editions, limited edition hypercars, Iconas,
• Ferrari Monza SP1: XXVI PREMIO COMPASSO D’ORO
one-off models, concept cars and some track-only
(2020).
models. Ferrari Design also includes a Color & Trim unit
which manages the choice of materials and finishes
On September 27, 2021 we announced a long-term,
for both exterior and interior trim and, in addition, is
multi-year collaboration with the creative collective
responsible for the Tailor Made program in conjunction
LoveFrom. The first expression of this new partnership
with the Product Marketing department. Ferrari
will bring together Ferrari’s legendary performance
Design is also involved in the styling and conceptual
and excellence with LoveFrom’s unrivalled experience
definition of Ferrari branded products produced by
and creativity that has defined extraordinary world
our licensees (see “—Brand Activities”). In 2019, we
changing products.
62
FERRARI N.V.AR 2021 PRODUCT DEVELOPMENT
PRODUCT DEVELOPMENT AND TECHNOLOGICAL INNOVATION
Our development efforts take into account the three defining dimensions of Ferrari cars; performance; versatility
and comfort; and driving emotions.
PERFORMANCE
VERSATILITY & COMFORT
DRIVING EMOTIONS
Performance reflects features such as weight, horsepower, torque, grip, aerodynamic efficiency, acceleration,
and maximum speed, which all contribute to determine the lap time on track. We strive to ensure that every
Ferrari is the best performing car in its segment.
Versatility derives from spaciousness, accessibility and mode of traction, including rear-wheel-drive or
all-wheel-drive and, in future, electric-powered driving. Comfort results from the ease of the riding experience
and onboard interface. Regulation will affect development in this area; for example, a prescribed electric range
may be required in future to access city centers.
Driving emotions is a key differentiator of Ferrari cars. There are three elements to driving emotions: sound,
perceived acceleration and responsiveness of the car. Sound is an important part of the experience and very
involving for the driver. Perceived acceleration is the driver’s subjective impression of the instantaneous car
acceleration beyond the actual 0-100 or 0-200 km/h performance measured in the car technical specifications.
Responsiveness requires that every driver command (steering, gear shifting and braking) leads to an immediate,
linear and controllable reaction of the car.
These three dimensions variably interact in our sports and GT cars. As we work on the future product range, we
strive to improve on each of those dimensions, focusing for sports cars on performance and driving emotions,
and for GT cars on versatility and comfort on board and driving emotions.
SPORTS
Driving Emotions
GRAN TURISMO
Performance
Versatility & Comfort
63
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS
/ PRODUCT DEVELOPMENT
INNOVATION PRINCIPLES
aspirated engine. For example,
ARCHITECTURE
We believe there are five key
compared to Ferrari’s previous
In addition to engines, the other
guidelines to innovation at
line of V8 turbo engines, the
principal technical area we are
Ferrari: focus on the three key
specific power output of the
focusing on is the architecture. Our
defining dimensions described
Ferrari F8 Tributo and the Ferrari
architecture covers all principal
on the previous page; leveraging
488 Pista was increased to 184
technical specifications of future
on Formula 1 know-how; first
horsepower per litre without
Ferrari models. We expect that
mover positioning in core
meaningful turbo lag.
innovation requirements will arise
areas such as powertrain and
principally from: the evolution
aerodynamics; customization
We have undertaken an important
of engine families; the level of
of technologies available on
program to develop hybrid
hybridization and electrification;
the market (such as the turbo
and electric technology. One
modes of traction; the number
technology); and pursuit of
of the more relevant topics
of seats up to a real four-seater;
synergies (arising from common
of this generation, we expect
and the body style, which will vary
architectures within our range).
the concept of the car in an
much more significantly than in the
In addition to these internally
era of climate change to be an
past in light of the introduction of
driven factors, regulation is key
opportunity for us. We intend
the Purosangue.
in determining the direction of
to use hybrid and electric
innovation.
technology, as well as Formula 1
We expect that our core
COMBUSTION AND HYBRID
ENGINES
technology, to increase specific
architectures will be the
power output without turbo lag.
rear-mid-engine architecture and
the front-mid-engine architecture,
We believe internal combustion
Innovation runs within Ferrari,
each comprising several variants.
engines will remain important
so the challenge of building
in Ferrari’s powertrain mix
a Ferrari for a low-emissions
REAR-MID-ENGINE ARCHITECTURE
and therefore we continue
future is one that we are already
The rear-mid-engine architecture
to invest in new combustion
embracing. With the SF90
is optimal for sports cars thanks
engine technologies and the
Stradale we developed the first
to its compact dimensions, low
development or use of bio-fuels.
series production model in our
gravity center and favorable
range with PHEV technology,
mass repartitions. It is designed to
Going forward, Ferrari will have
which is also featured in the SF90
integrate multiple power units with
three engine families:
Spider. In 2021 we launched our
a higher specific power output
• V12 - We will maintain and
develop the V12 naturally
aspirated engine family, long the
pinnacle of Ferrari engines;
• V8 - We have implemented
further technological
enhancements for the V8 family;
and
• V6 - We developed and launched
this year a completely new V6
family based on a specific and
innovative architecture.
third production model with
than the Ferrari 488 Pista. In this
PHEV technology, the 296 GTB,
architecture, combustion engines
a pure rear wheel drive sports
can be combined with an electric
car that reaches the pinnacle
motor to realize hybridization,
of driving emotions thanks to
including a battery to enable
its V6 engine and significantly
electric range. This architecture
reduced weight, giving it a
also allows to install an E-Axle on
class-leading overall weight-
the front to increase overall power
to-power ratio. The increased
and to have an all-wheel drive
offering of hybrid powertrains
powertrain. The first application
will allow us to meet both specific
of this architecture is the SF90
regulatory requirements and also
Stradale. In combination, we
satisfy customers’ desires for
have developed a new and highly
significantly improved emissions,
innovative 8-shift double-clutch
The industry effort to combine
while enhancing the performance
transmission gearbox.
greater power outputs with lower
and driving experience that
Hybridization will impact the
emissions and consumption
render Ferrari cars unique.
weight of engines and therefore
often leads to a higher turbo
lag. Through a technological
breakthrough, Ferrari has
engineered a turbo engine with
turbo engine performance but
with the response of a naturally
we will deploy new lightweight
technologies to compensate
this impact. Package efficiency
will also be key to achieve a
compact car that reduces weight
and inertia. In order to apply
64
FERRARI N.V.AR 2021 Front-mid-engine
Rear-mid-engine
ARCHITECTURE
Power unit
Gearbox
NEW FERRARI PRODUCT RANGE
Engine
Hybridization
Traction
Seating
Body style
Clearance
V12
vs.
V8
vs.
V6
Yes
vs.
No
2WD
vs.
4WD
Coupè
vs.
Spider
vs.
“Purosangue”
Low
vs.
High
2
vs.
2+
vs.
2+2
vs.
4
PRODUCT SPECIFICATION
the architecture to different
powertrains, the wheelbase may
NEW-GENERATION HUMAN-
MACHINE INTERFACE
driving technology in response
to regulatory developments
vary. The second example of this
Particularly driven by growth
and customer preferences,
new architecture is the 296 GTB,
in the GT segment, Ferrari has
especially in the GT segment. For
where the V6 engine allowed for
developed the next generation
example, in 2018 we launched
a reduction in the wheel base of
of human-machine interface
initial functionalities for Advanced
500 mm with a positive impact on
(HMI) technologies. Using
Driving Assistant Systems (ADAS)
driving emotions and without any
state-of-the-art technologies we
such as predictive braking and
trade off of comfort on board.
will be guided by the Formula 1
automatic cruise control on
derived concept of “eyes on the
current models, and further
FRONT-MID-ENGINE ARCHITECTURE
street, hands on the steering
innovations will be introduced in
The front-mid-engine
wheel”, for a focused, safe and
future models.
architecture, also a transaxle
enjoyable drive. The new HMI
Ferrari is carefully monitoring
powertrain concept, is optimal
includes several new technologies,
the evolution of autonomous
for our GT cars in terms of
including a new head-up display,
driving technologies, including
dimensions. This architecture
a new innovative cluster, a new
sensors, new chips, artificial
is able to accommodate an
steering wheel that features
intelligence and connectivity,
all-wheel-drive powertrain, will
new commands and a new
and we will select and customize
allow for hybridization, and will
infotainment system, as well as
those innovations compatible with
have a flexible wheelbase suited
tools aimed at positively enhancing
the Ferrari experience and the
to a variety of engines as well
the passengers’ experience.
highest security standards. These
as seat configurations including
The first cars using all or part of
technologies combined with the
two-seaters and four-seaters.
these technologies are the SF90
hybridization and the incoming
It will be accessible, spacious
Stradale and the Ferrari Roma.
cybersecurity requirements will
and comfortable. Key to this
architecture will be the new
active suspension systems
AUTONOMOUS DRIVING
AND CONNECTIVITY
also have an important impact
on the electronic architecture of
our cars and we are presently
we are developing, with a high
While we do not intend to develop
developing our future electrical
range between comfort and
self-driving cars, we will adopt
and electronic architecture to take
sportiness.
certain features of autonomous
into account these requirements.
65
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS PRODUCTION AND PROCUREMENT
PRODUCTION PROCESS
volume of cars we produce per year and to our
Our production facilities are located in Maranello and
highly skilled and flexible employee base that can
in Modena, Italy (see “—Properties”). Our production
be deployed across various production areas. In
processes include supply chain management,
addition, we can adjust our make-or-buy strategies
production and distribution logistics of cars in our
to address fluctuations in the level of demand on
range models and special series, as well as assembly
our internal production resources. Our facilities can
of prototypes and avanseries.
accommodate a meaningful increase in production
compared to current output with the increase of
Notwithstanding the low volumes of cars produced,
weekend shifts to address special peaks in demand.
our production process requires a great variety
In 2021 we increased production with the introduction
of inputs - over 40,000 product identifier codes
of a second shift on car assembly lines in addition to
sourced from approximately 800 total suppliers
the single shift operated on the V8 assembly line. We
- entailing complex supply chain management
constantly work to increase the utilization rate and
to ensure continuity of production. Our stock of
reduce the internal scrap rate and we closely monitor
supplies is warehoused in Ubersetto, near Maranello,
an index of our production efficiency. We are also
and its management is outsourced to a third party
committed to continually improving the reliability of
logistics company.
our cars, reducing defects, and optimize finishing.
Most of the manufacturing process takes place in
Unlike most low volume car producers, we operate
Maranello, including aluminum alloy casting in our
our own foundry and machining department
foundry, engine construction, mechanical machining,
producing several of the main components of our
painting, car assembly, and bench testing; at our
engines, such as engine blocks, cylinder heads and
second plant in Modena (Carrozzeria Scaglietti) we
crankshafts. We believe this accelerates product
manufacture the aluminum bodyworks of our cars.
development and results in components that meet
All parts and components not produced in house at
our specifications more closely.
Ferrari are sourced from our panel of suppliers
(see “—Procurement”).
ENGINE PRODUCTION
Our engines are produced according to a vertical
Between 2002 and 2012 the plants housing our
structure, from the casting of aluminum in our
production processes were entirely renovated or
foundry up to the final assembly and testing of
rebuilt and in recent years we have continued to
the engine. Several of the main components of
make significant investments in our manufacturing
our engines, such as blocks and cylinder heads
facilities. Equipment may require substantial
are produced at our foundry in Maranello. For
investment with the introduction of new models or
this purpose, we use a special aluminum alloy that
to maintain state-of-the-art technology, particularly
includes seven percent silicon and a trace of iron,
in the case of shell tools for the foundry, tools for
which improves mechanical integrity, as well as
machining, feature tools for body welding and special
our own shell and sand casting molds. Once all
mounting equipment for the assembly. Starting from
components are ready, engines are assembled on
2021, we have been acquiring additional resources
different lines for our V12 engines, our V8 and V6
and production equipment, mainly in relation to
engines, and the V6 engines we manufacture for
Battery Electric Vehicles (“BEVs”), to successfully
Maserati. The assembly process is a combination of
manage the new technological advancements and
automatic and manual operations. At the start of the
related challenges resulting from the transition to
assembly process, each engine is identified with a
electrification.
barcode and operations are recorded electronically.
Every engine goes to the test benches to ensure it
As at December 31, 2021, our production processes
delivers the expected performance; 10-20 percent
employed 1,723 engineers, technicians and other
of engines are also hot tested and measured for
personnel (191 white collar employees and 1,532
power and torque. In 2021 we produced an average
workers, of which 449 were temporary production
of approximately 114 engines per day, including
employees). We have a flexible production
approximately 8 V12 engines and 49 V8 engines
organization, which allows us to adjust production
(including 5 V8 turbo for Maserati), as well as 57 V6
capacity to accommodate our expected production
engines for Maserati (see “—Manufacturing of Engines
requirements. This is primarily due to the low
for Maserati”).
66
FERRARI N.V.AR 2021 BODY ASSEMBLY
shift to two shifts. On the first floor there is also the
In parallel with the assembly of our engines, we
assembly line for the Ferrari Monza SP1 and SP2;
prepare our body-shells at our body shop Carrozzeria
starting from April 2021, the line on the ground floor
Scaglietti in Modena. The main components of
also moved from one to two shifts.
body-shells are not manufactured internally but are
sourced from manufacturers for chassis, bodies
PERSONALIZATION AND ROAD TESTS
and carbon fiber parts. At Carrozzeria Scaglietti we
During the assembly process of our cars we manage
have two different production lines dedicated to the
the fitting of all bespoke interiors, components and
assembly of our V8 and V12 aluminum bodies. We
special equipment options that our clients choose as
carefully check the alignment of the various parts
part of our personalization program (see “—Sports
– most importantly the engine cover and the wings
and GT, Special Series and Icona: Ferrari Line up
– with electronic templates and gauges. Our highly
Strategic Pillars—Personalization Offer ”). After the
trained specialists also perform surface controls on
assembly phase, every car completes a 40-kilometer
the aluminum panels and eliminate any imperfections
road test-drive.
by either filing or panel beating. In our Scaglietti plant
we also have a dedicated line for the assembly of a
FINISHING AND CLEANING
special carbon fiber body for the Ferrari Monza SP1
After the road test all cars go to the finishing
and SP2, and for the latest Icona model launched in
department. There, we thoroughly clean interior and
November 2021, the Ferrari Daytona SP3.
exterior, perform a comprehensive review of the
whole car, and polish and finish the bodies to give
PAINTING
them their final appearance.
When transferred to our paint shop, the bodies
are mounted on a loading bay, immersed in the
MANUFACTURING OF ENGINES FOR MASERATI
cataphoresis tanks and subsequently transferred
We have been producing engines for Maserati since
to a fixing gas fired oven at 140°C. Primers are then
2003. The V8 engines that we historically produced
applied and fixed at 190°C until the completely grey
and continue to produce for Maserati are variants
body-shell is ready for painting. All body-shells are
of Ferrari families of engines and are mounted on
cleaned with automatic pressure blowers (to avoid
Maserati’s highest performing models, such as the
the electrostatic effect) and carefully brushed with
Quattroporte and Levante (turbo engines), and the
emu feathers (because of their natural electrostatic
GranTurismo and the GranCabrio (aspirated engines).
properties) to clean off any dirt particles or impurities
All of the V8 engines that we sell to Maserati are
before painting. The painting process is automated
manufactured and assembled according to the same
for larger surfaces, while it is done by hand for some
production processes we adopt for the V8s equipped
other localized areas. In 2019, we replaced the robot
on our cars (see “—Production Process” ).
which performs the application of the base coat. The
whole car is painted at the same time to ensure color
In 2011 we began producing a family of engines
harmony. The bodies are finally polished with lacquer
exclusively for Maserati, in much larger production
to fix the paint and give the bodies their final finish.
volumes to be installed on the Quattroporte and
In 2018 we substituted our clear coat with a new
Ghibli (mainly the F160 3.0-liter V6 Turbo engines), and
generation 2K (bi-component) transparent coat that
in 2016 we started the production of F161 engines
allows us to decrease the temperature of the oven
to be installed on the Levante, Maserati’s SUV. The
from 140°C to 90°C; this is a very innovative process
term of our supply agreement with Maserati for the
that allows us to simultaneously paint aluminum and
production of V6 and V8 engines is until 2023. Under
carbon fiber parts.
the framework agreement, Maserati is required
to compensate us for certain costs we may incur
ASSEMBLY LINE AND FINAL CHECKS
from our suppliers if there is a shortfall in the annual
The final assembly of our cars takes place in
volume of engines actually purchased by Maserati
Maranello. We have three different lines placed at
in that year. In 2021, we sold approximately 1,250 V8
ground level and the first floor of the building. For
turbo engines to Maserati and approximately 13,650
each model, the initial assembly operations take place
V6 engines in six different versions, ranging from 330
simultaneously on different lines and sections to
hp to 450 hp.
maximize efficiency so while the body is assembled
on the main line, the powertrain, as well as the cockpit
In order to meet the V6 volume and specifications
and the doors, are prepared on a separate sub-line.
requirements, in 2012 we built a dedicated assembly
In 2018, the line on the first floor moved from one
facility in Maranello with a much higher level of
67
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / PRODUCTION AND PROCUREMENT
industrialization compared to
how or when we believe that
owning dealerships, we retain
production of our V12 engines.
outsourcing would impair the
flexibility to adapt to evolving
Due to the larger volumes and
efficiency and flexibility of our
market requirements over time.
product specifications, our
production process. Therefore,
make-or-buy strategy for the
we continue to invest in the
We believe that our careful and
production of F160 V6 and F161
skills and processes required
strict selection of the dealers
V6 engines also differs from
for low-volume production of
that sell our cars is a key factor
the strategy applicable to the
components that we believe
for promoting the integrity and
production of Ferrari engines.
improve product quality.
success of our brand.
The vast majority of the engine
Our selection criteria are based
components are sourced
For the year ended December
on the candidates’ reputation,
externally from our panel of
31, 2021, the purchases from
financial stability and proven
suppliers (see “—Procurement”)
our ten largest suppliers by value
track records. We are also intent
and in 2020 we started sourcing
accounted for approximately 20
on selecting dealers who are
all casting and machining of the
percent of total procurement
able to provide a purchase and
cylinder heads externally, while
costs, and no supplier accounted
after-sales experience aimed
the V6 assembly line and testing
for more than 10 percent of our
at exceeding our clients’ high
continued to be managed by us
total procurement costs.
expectations. Furthermore,
in Maranello.
our dealers are committed to
SALES AND AFTER-SALES
promoting and marketing our
PROCUREMENT
Our commercial team, which
cars in a manner intended to
We source a variety of
includes approximately 360
preserve the Ferrari brand
components, raw materials,
employees at December 31, 2021,
integrity and to ensure the highest
supplies, utilities, logistics and
is organized in four geographic
level of client satisfaction.
other services from numerous
areas covering our principal
suppliers. We recognize the
regional end markets: (i) EMEA,
While dealers may hold multiple
contribution of our suppliers
(ii) Americas, (iii) Mainland China,
franchises, we enjoy a high
to our success in pursuing
Hong Kong and Taiwan, and (iv)
degree of prominence and level
excellence in terms of luxury
Rest of APAC.
and performance, therefore we
of representation at each point
of sale, where most of the client
carefully select suppliers that are
DEALER NETWORK
interface and retail experience is
able to meet our high standards.
We sell our cars exclusively
exclusive to Ferrari. Our network
through a network of authorized
and business development team
For the sourcing of certain
dealers (with the exception of
works with all dealers to ensure
key components with highly
one-offs and track cars which
our operating standards are met.
technological specifications,
we sell directly to end clients).
Our rigorous design, layout and
we have developed strongly
In our larger markets we act as
corporate identity guidelines
synergic relationships with
importer either through wholly
guarantee uniformity of the
some of our suppliers, which we
owned subsidiaries or, in China,
Ferrari image and client interface.
consider “key strategic innovation
through a subsidiary partly
partners”. We currently rely on
owned by a local partner, and
In 2021 and through the date of
selected key strategic innovation
we sell the cars to dealers for
this report, our dealer network
partners, including for the supply
resale to end clients. In smaller
has successfully adapted to the
of transmissions and brakes.
markets we generally sell the cars
new and unforeseen challenges
We have also developed strong
to a single importer/dealer. We
resulting from the COVID-19
relationships with other industrial
regularly assess the composition
pandemic. We have supported
partners for bodyworks and
of our dealer network in order
our dealers network since the
chassis manufacturing and for
to maintain the highest level of
start of the pandemic, including
powertrain and transmissions,
quality. At December 31, 2021, our
through our “Back on Track”
among other things. Pursuant
network comprised 172 dealers
program, which has allowed our
to our make-or-buy strategy,
operating 191 points of sale.
dealers to welcome our clients
we generally retain production
in their showrooms safely. In
in-house whenever we have
We do not presently own
addition, the majority of our dealer
an interest in preserving or
dealerships and, while our
network’s worldwide facilities
developing technological know-
strategy does not contemplate
have been upgraded with the
68
FERRARI N.V.AR 2021 latest Ferrari Corporate Identity,
We collect and observe data
We provide a suggested retail
to provide clients with a superior
relating to dealer profitability
price or a maximum retail
experience while delivering a
and financial health in order
price for all of our cars, but
unique luxury environment and
to prevent or mitigate any
each dealer is free to negotiate
digital touchpoints to complement
adverse experience for clients
different prices with clients and
the physical environment.
arising from a dealer ceasing
to provide financing. Although
to do business or experiencing
many of our clients in certain
Through our in-house Ferrari
financial difficulties. Our regional
markets purchase our cars from
Academy we provide training to
representatives visit dealerships
dealers without financing, we
dealers for sales, after-sales and
regularly to monitor and measure
offer direct or indirect finance
technical activities. This ensures
performance and compliance
and leasing services to retail
that our dealer network delivers a
with our operating standards.
clients and to dealers (See “—
consistent level of market leading
We have the right to terminate
Financial Services ”).
standards across diverse cultural
dealer relationships in a variety
environments. During 2020 and
of circumstances, including
The total number of our dealers
2021 our training strategy was
failure to meet performance or
as well as their geographical
quickly adapted by introducing
financial standards, or failure
distribution tends to closely
and boosting virtual-training
to comply with our guidelines.
reflect the development or
solutions to cope with travel
Dealer turnover is relatively
expected development of sales
restrictions, while continuing to
low, reflecting the strength of
volumes to end clients in our
foster expertise in the network at
the franchise and our selection
various markets over time.
the highest level.
processes, but is sufficient to
guarantee an orderly renewal
The chart below sets forth the
over time and to stimulate
geographic distribution of our
the network’s health and
191 points of sale at December
performance.
31, 2021:
60 MARKETS . 172 DEALERS . 191 POINTS OF SALE . 237 SERVICE POINTS
FERRARI - MARANELLO
AMERICAS
55 POS - 55 WS
EMEA
80 POS - 120 WS
FGC - FERRARI
Greater China
20 POS - 21 WS
Rest of APAC
36 POS - 41 WS
HQ
HUBS
U.S.A.
43 POS - 41 WS
NORTH EUROPE
13 POS - 15 WS
MAINLAND CHINA
16 POS - 17 WS
NORTH EAST ASIA
10 POS - 13 WS
REGIONS
CANADA
5 POS - 4 WS
CENTRAL EUROPE
13 POS - 20 WS
TAIWAN
3 POS - 3 WS
SOUTH EAST ASIA
7 POS - 9 WS
LATIN AMERICA
7 POS - 10 WS
WEST EUROPE
22 POS - 31 WS
EAST EUROPE
14 POS - 20 WS
SOUTH EUROPE
18 POS - 34 WS
HONG KONG
1 POS - 1 WS
AUSTRALASIA
8 POS - 8 WS
MIDDLE EAST
11 POS - 11 WS
69
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS
/ PRODUCTION AND PROCUREMENT
Our sales are diversified across
AFTER-SALES
After the 7th year of life, a car (if in
our dealer network, with the
Dealers provide after-sales
perfect maintenance condition)
largest dealer representing
services to clients, either at
can be included in the Main Power
approximately 2.6 percent
facilities adjacent to showrooms,
warranty coverage program
of our shipments, and our 15
or in stand-alone service points
(Maintenance and Power)
largest dealers representing
across 237 facilities worldwide at
through to the car’s 15th year of
approximately 24 percent of our
December 31, 2021. After-sales
life. Between the 10th year of life
shipments in 2021.
activities are very important
and the Classiche eligibility (20
for our business to ensure the
year old car) Ferrari provides
As part of our supply and demand
client’s continued enjoyment
its customers, in addition to
management, we determine
of the car and the experience.
standard maintenance items, also
allocations based on various
Therefore, we enforce a strict
certain specific maintenance kits
metrics including expected
quality control on our dealers’
(Ferrari Premium) to preserve
developments in the relevant
services activities and we provide
car performance and safety
market, the number of cars sold
continued training and support
systems. When a car follows the
historically by the various dealers,
to the dealers’ service personnel.
full maintenance program up to
current order book of dealers and
This includes our team of “flying
the 20th year of life, it automatically
the average waiting time of the
doctors,” Ferrari engineers who
obtains the Ferrari Classiche
end client in the relevant market.
regularly travel to service centers
certification.
Our order reporting system
to address difficult technical
allows us to collect and monitor
issues for our clients.
While we do not have any direct
information regarding end client
involvement in pre-owned car
orders and is able to assist us in
We sell cars together with
sales, we seek to support a
production planning, allocation
a scheduled program of
healthy secondary market in
and dealer management.
recommended maintenance
order to promote the value of
services in order to ensure that
our brand, benefit our clients and
PARTS
these cars are maintained to
facilitate sales of new cars. Our
We supply parts for current and
the highest standards to meet
dealers provide an inspection
older models of Ferrari to our
our strict requirements for
service for clients seeking to
authorized dealer network.
performance and safety.
sell their car which involves
In addition to substitution of
detailed checks on the car and a
spare parts during the life of the
Our 7 Year Maintenance Program
certification on which the client
car, sales are driven by clients’
(free of charge for customers
can rely, covering, among other
demand for parts to customize
since 2011 on any new cars) is
things, the authenticity of the
their cars and maximize
offered to further strengthen
car, the conformity to original
performance, particularly after
customer retention in the official
technical specifications, and the
a change in ownership, as well
network and has been coupled
state of repair. Furthermore, we
as parts required to compete in
with the possibility to extend
offer owners of classic Ferrari
the Ferrari Challenge and other
the statutory warranty term of
cars maintenance and restoration
client races. We also supply parts
our standard warranty terms
services through the 73 “Officina
to Ferrari models currently out
through the Power warranty
Ferrari Classiche” workshops,
of production, with stocks dating
coverage program up to the 15th
part of our service network.
back to 1995. The stock of parts
year of life of the car. For certain
for even older models is currently
strictly limited series cars (for
In addition, owners of our classic
owned and managed by a third
example, the LaFerrari and the
cars can seek assistance in car
party which in some cases also
LaFerrari Aperta) we introduced
and engine restorations at our
manufactures out-of-stock parts
a Full Warranty Coverage
Ferrari Classiche department
based on our designs. The sale of
Extension that can be applied
in Maranello.
parts is a profitable component of
after the 36-month commercial
our product mix and is expected
contractual warranty.
to benefit from the increase
in the number of Ferrari cars
in circulation.
70
FERRARI N.V.AR 2021 FINANCIAL SERVICES
We offer retail client financing for
the purchase of our cars as well
as dealer financing through the
operations of Ferrari Financial
Services (“FFS”).
We offer retail client financing:
• directly in the United States
through our fully owned
subsidiary Ferrari Financial
Services Inc. (“FFS Inc”);
• through our associate Ferrari
Financial Services GmbH
in certain markets in EMEA
(primarily the UK, Germany and
Switzerland); and
• through various partnerships
in other European countries
and other major international
markets, such as Japan and
Mainland China.
FFS Inc also has remaining dealer
financing services in the United
States.
Through FFS, we offer a range
of flexible, bespoke financial and
ancillary services to clients (both
current and new) interested
in purchasing a wide range of
cars, from our current product
range to older pre-owned and
classic models. FFS also provides
special financing arrangements
to a selected group of our most
valuable and loyal customers.
Starting in 2016, FFS Inc has
pursued a strategy of autonomous
financing for our financial services
activities in the United States,
further reducing dependency
on intercompany funding and
increasing the portion of self-
liquidating debt with various
securitization transactions.
At December 31, 2021, the
consolidated financial services
portfolio was €1,144 million and
originated in the United States.
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OUR CLIENTS ARE THE BACKBONE OF OUR BUSINESS TOGETHER
WITH OUR BRAND AND OUR TECHNOLOGY.
WE DO NOT PROMOTE OUR BRAND OR OUR CARS THROUGH
GENERAL ADVERTISING. OUR MAIN BRAND MARKETING AND
PROMOTIONAL ACTIVITIES HAVE TWO PRINCIPAL TARGETS.
Firstly, we target the general public. Our most significant effort in this respect is centered on our racing activities
and the resonance of Scuderia Ferrari (see “—Formula 1 Activities”). We also engage in other brand-promotional
activities, including our participation in various public events. In light of the COVID-19 pandemic, in 2021 our brand-
promotional activities were carried out mainly through digital platforms such as eSports, and our official social
media channels.
Secondly, we target existing and prospective clients seeking to promote clients’ knowledge of our products, and
their enjoyment of our cars both on road and on track, and to foster long-term relationships with our clients,
which is key to our success. In 2021, approximately 59 percent of our new cars were sold to Ferrari owners.
By purchasing our cars, clients become part of a select community sharing a primary association with the Ferrari
image and we foster this sense of fellowship with a number of initiatives. We strive to maximize the experience of
our clients throughout their period of interaction with Ferrari – from first contact, through purchasing decision
process, to waiting-time management and ownership.
The MyFerrari App is available exclusively for Ferrari clients to enhance their connection to the Ferrari world
through the direct distribution of tailored content, including the digital editions of our 2021 model launches.
This new channel enables clients to directly access features and services, strengthening their relationship with
the brand and their preferred official Ferrari dealer.
72
FERRARI N.V.AR 2021 CLIENT EVENTS
Clients can continue to benefit
(Ferrari Cavalcade, including the
from a set of direct services
Cavalcade Classiche) and with
With client gatherings still
which enables them to participate
our own branded presence within
impacted by restrictions in
in remote Atelier and Tailor Made
established driving events. For
2021, we continued to hold the
sessions directly with our team
example, in the Ferrari Tribute
presentation of our latest product
of designers in Maranello. In
to Mille Miglia and the Ferrari
offerings using digital formats
addition, clients can send their
Tribute to Targa Florio modern
where appropriate.
creations in the configurator tool
Ferrari cars take part in their own
In May 2021, we livestreamed
of the MyFerrari app directly to
dedicated competition before the
on our social channels the
their official dealers.
start of the main racing.
presentation of the new limited
series 812 Competizione and
812 Competizione A from our
DRIVING EVENTS
To mark the tenth anniversary of
our most exclusive driving event
newly finished Attività Sportive
Driving events serve the dual
for clients, in 2021 the Ferrari
GT facility which overlooks our
objective of allowing clients to
Cavalcade was held in Taormina,
Fiorano race track. Viewers
enjoy the best emotions of driving
Sicily, gathering for the first time
were able to hear the wonderful
a Ferrari, and to foster client
both our best modern and classic
sounds of the naturally aspirated
loyalty and repeat purchases by
Ferrari models owned by clients
V12 engine while the 812
creating enhanced opportunities
from around the world.
Competizione completed hot laps
to experience new Ferrari cars.
A final gala was held in the
around the circuit.
The Ferrari community is a
spectacular Teatro Antico di
passionate group supported by a
Taormina, a perfect climax to the
In June 2021, the 296 GTB, an
wide array of experiences tailored
driving experience through the
evolution of Ferrari’s mid-rear-
to the dreams of modern car
charms and warm hospitality of
engined two-seater sports
owners, classic car connoisseurs,
Southern Italy.
berlinetta concept, was unveiled
and racetrack enthusiasts.
digitally across our social
All driving events managed
channels in an extended reality
We see nurturing our clients’
directly by Ferrari, such as the
format around the “Fun to Drive”
passion for driving as a key
Ferrari Cavalcade, and those
concept of the model.
asset for our future commercial
managed by third-party event
success, particularly in markets
organizers, such as the Ferrari
Additionally, in November 2021
where racing traditions are
Tribute to Mille Miglia and the
the Ferrari Daytona SP3, the
less pronounced. We offer our
Ferrari Tribute to Targa Florio,
third car to join the strictly
prospective and existing clients
proceeded in accordance with
limited-edition Icona series, was
interested in new Ferrari models
local government health and
presented to selected clients at an
our Esperienza Ferrari program,
safety regulations.
exclusive and private gathering
which consists of driving sessions
at Casa Ferrari in Florence. The
with a team of highly qualified
Another exclusive driving
Ferrari Daytona SP3 made its
and skilled Ferrari instructors
experience added in 2021 is the
public and livestream debut at the
and technicians. In addition we
Corso Pilota Classiche course
Finali Mondiali held at the Mugello
also offer to our clients on-track
led by experts of the Ferrari
circuit, where it led a parade
driving courses (Corso Pilota),
Classiche team, and aimed at
flanked by the legendary sports
catering to different levels
classic car enthusiasts and
prototypes of the 1960s that it
of skill and experience and
clients interested in learning
was inspired from.
teaching essential driving skills
more about the Ferrari Classiche
for high performance cars. In
certification program and
Following the digital launches of
selected markets, such as China,
the storied archives at our
our new product offerings, clients
we also offer complimentary
Officine Classiche restoration
were engaged locally by their
driving courses on-track to any
department. The initiative
preferred Ferrari dealers for
new car buyer.
conducting car configurations,
also offers the opportunity to
experience on-track driving of
static previews of the model, and
In addition to on-track racing,
those celebrated models on our
eventually dynamic test drives
we organize various on-the-
Fiorano race circuit.
when the dealer demonstrations
road driving events, both
became available.
under proprietary formats
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racing teams, the Competizioni
sustainable event management,
GT engineers kept planning for
making the Prancing Horse’s one-
Attività Sportive GT is our
the future. On February 24, 2021
make series the first European
department overseeing
Ferrari announced the launch
single-make series for thermal
the activities of Competizioni GT
of the Le Mans Hypercar (LMH)
cars to receive this certification.
and Corse Clienti which organizes
programme under which Ferrari
F1 Clienti and the XX Programme,
and supports client activities
will enter the new top category of
the non-competitive activities
on track.
the FIA WEC World Championship
of Corse Clienti F1 Clienti and
Ferrari is once again World
starting from 2023, in partnership
the XX Programme, and the
Endurance Champion, both in
with AF Corse. Ferrari has
non-competitive activities of
the Constructors’ and Drivers’
also announced a technical
Corse Clienti, experienced an
categories, four years after its
partnership agreement with
increase in the number of event
prior win, completing one of
ORECA for the assembly and
attendees in 2021 compared
the most successful seasons in
after-sales services of the new
to 2020 and featured two new
Ferrari’s history.
GT3, which will begin track testing
initiatives: F1 Clienti Masterclass
in early 2022. The technical
and XX Programme’s Exclusive
In 2021, the Competizioni GT
partnership confirms Ferrari’s
Experience.
Department enjoyed a year of
long-term commitment to the
extraordinary achievements on
main GT car championships.
track. Ferrari AF Corse’s 488
GTEs won the Constructors’
Among the non-competitive
title in the FIA World Endurance
activities, the Club Competizioni
Championship.
GT continued successfully
Ferrari drivers Alessandro Pier
and the event’s participation
Guidi and James Calado won
increased by 24 percent
the world championship for a
compared to 2020, benefiting
second time after winning in
from the debut of the 488 GT
2017, becoming the first World
Modificata, a limited series car
Endurance Championship
dedicated to sports clients,
drivers to achieve this result.
24 of which took part in the
Ferrari and AF Corse achieved
Finali Mondiali.
two titles in the LMGTE AM
category as well, and won the
Participants in the Corse Clienti
24 Hours of Le Mans in PRO
racing season in Europe, North
and Am classes. In the GT3 car
America and United Kingdom
championships, the 488 GT3
also increased in comparison
Evo 2020 continued its winning
with 2020, although the Asia
streak. Pier Guidi-Ledogar-
Pacific series had to contend
Nielsen’s victory in the GT World
with continued travel restrictions
Challenge Europe Endurance
and quarantines in the relevant
Cup was undoubtedly the most
geographies. For the first time
important result of the season,
in the history of the one-make
and the crew drove a Ferrari to
series, a woman – Michelle
glory in the 24 Hours of Spa-
Gatting – was crowned champion
Francorchamps for the first
of the European series. During
time since 2004. The 2021 488
the Finali Mondiali, 17-year-old
GTE and 488 GT3 statistics were
Finn Luka Nurmi won the Ferrari
updated with 44 victories in 93
Challenge World Championship,
races (48%) and 423 wins in 761
setting another record after
races (55%), respectively. Since
becoming the youngest winner
its racing debut, the various
in the history of the series at just
configurations of the 488 GT3
16 earlier in the year. The Ferrari
have achieved 106 titles.
Challenge Europe received
While providing direct and
the ISO 20121 certification,
indirect support to the various
the international standard for
74
FERRARI N.V.AR 2021 FERRARI CLASSICHE
The Ferrari Classiche department supports Ferrari
service network with 73 “Officina Ferrari Classiche”
customers in managing their historic Ferrari vehicles
workshops to date, primarily for vehicle repairs and
with the objective of keeping as many of these classic
the certifications’ inspections or revalidation, and the
cars on the road as possible. Services include the
network is expected to expand in future periods.
certification of the authenticity of classic Ferrari
cars and vehicles of particular historical relevance,
The originality of the car with respect to the initial
the management of Ferrari restoration and repair
specifications is checked via a technical inspection,
activities, as well as the management of Ferrari spare
performed either at the Ferrari Classiche facility
parts, including when these are no longer available
in Maranello or at an authorized Officina Ferrari
on the market. The department also provides advice
Classiche, and benefits from a comprehensive
on repair operations carried out on Ferrari Classiche
archive containing drawings of each of the
cars within its network.
individual chassis and details of historical
components. Based on the evidence gathered
Ferrari Classiche aims to create a platform of
during this inspection, the car is then presented to
information and technical expertise to preserve
an expert committee, chaired by the founder’s son,
and enhance over time the awareness and value of
Piero Ferrari, for the certification.
Ferrari’s heritage and brand. We view the surviving
Ferrari vehicles of historical value as the tangible
At the Maranello workshop, Ferrari Classiche carries
legacy and incarnation of our brand. The Ferrari
out full restorations using either original components
Classiche department also supports and encourages
and spare parts or replicas manufactured in
the direct participation of clients in strategic
accordance with the original specifications. Our
historical events.
The Ferrari Classiche department in Maranello
service offers our clients the opportunity to restore
any classic Ferrari to its original pristine conditions.
consists of an office of specialists and a workshop
The Ferrari Classiche department also provides basic
in which historic cars are restored and repaired. In
technical and instructional support to the Ferrari
addition, in order to provide an enhanced service to
Classiche Academy, a new driving school project that
owners away from the main workshop in Maranello,
launched in 2019 for vintage Ferrari cars, including
starting in 2017 Ferrari Classiche authorized a new
the Ferrari 308 and 550 Maranello.
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Championship since the series
Constructors’ Championship,
was launched in 1950, and won its
with 323.5 points, five podiums,
Participation in the FIA Formula 1
first Grand Prix in 1951.
two pole positions, and with fifth
World Championship with
We are the only team that has
and seventh place finishes in
Scuderia Ferrari is a core
competed in each season
the Drivers’ Championship, for
element of our marketing effort
since launch and the oldest and
Carlos Sainz and Charles Leclerc
and promotional activities, as
most successful in the history
respectively.
well as an important source of
of Formula 1, with 238 Grand
technological innovation for
Prix wins. Throughout our
Scuderia Ferrari’s continuing
the engineering, development
racing history, we have won 15
participation in the FIA Formula 1
and production of our sports,
Drivers’ Championships and 16
World Championship over the five
GT, special series and Icona
Constructors’ Championships,
year period from 2021 to 2025 is
cars. The FIA Formula 1 World
more than any other team. Many
governed by two agreements –
Championship is the pinnacle
of the best known drivers in
widely known as New Concorde
of motorsports with 445 million
the sport’s history have raced
Agreement - signed on August 18,
unique viewers and a total
in Scuderia Ferrari’s distinctive
2020.
cumulative global television
red cars including Alberto
The first of such agreements
audience of 1.55 billion in 2021.
Ascari, Juan-Manuel Fangio, Mike
governs the regulatory and
(Source: Formula 1 Press Office)
Hawthorn, Phil Hill, John Surtees,
governance aspects of the sport,
Niki Lauda, Jody Scheckter, Gilles
and the second governs the
Once again in 2021, Formula 1’s
Villeneuve, Michael Schumacher
commercial aspects. The New
social media platforms grew
and Kimi Raikkonen. Our drivers’
Concorde Agreement recognizes
significantly, with the total number
line-up in 2021 comprised Charles
the historical role of Ferrari, the
of followers up 40 percent to 49.1
Leclerc, the first graduate of the
only team that has participated
million, and video views increased
Ferrari Driver Academy training
in all Formula 1 World
by 50 percent to 7 billion.
scheme to race for our Formula
Championship editions since its
In 2021, Formula 1’s social media
1 race team, and Carlos Sainz, a
inception. In exchange for their
channels were once again the
young but already experienced
participation in Formula 1 races,
fastest growing major sports
talented Spanish driver.
the participating teams receive
league in the world across the
a share of a prize fund based on
four major social platforms and
In 2021 the new FIA financial
the profits earned from Formula
registered the fastest growth in
regulations entered into force,
1-related commercial activities
engagement compared to other
imposing a cap (which will
managed by Formula 1, including
major sports. (Source: Formula 1
gradually decrease over the
in particular, promoters’ fees,
Press Office)
next two years) on certain
television broadcasting royalties,
expenses and investments
partnership agreements and
Formula 1 cars rely on advanced
related to operations and the
other sources. Shares in the prize
technology, powerful hybrid
chassis of the cars which may be
fund are paid to the teams, largely
engines and cutting edge
incurred by any single Formula
based on the relative ranking of
aerodynamics. While Europe
1 team. Moreover, development
each team in the championship.
is the sport’s traditional base,
activities were also limited by
We use our share of these
longstanding non-European
the new regulation and only one
payments to offset a portion
venues such as Australia, Brazil,
development per component was
of the costs associated with
Canada, Japan, Mexico and the
allowed in the power unit area.
Scuderia Ferrari, including the
United States have been joined
costs of designing and producing
in the last two decades by racing
Though the 2021 season
the race cars each year and the
venues in China, Bahrain, United
remained affected by the
costs associated with managing
Arab Emirates, Singapore,
COVID-19 pandemic, thanks to the
a racing team, including the
Qatar, Saudi Arabia, Russia
efforts of FIA, Formula 1 and the
salaries of the drivers, who are
and Azerbaijan. This provides
teams, it was possible to organize
typically among the most highly
participants in the Formula 1
22 Grands Prix, a record number
paid athletes in the world. Please
World Championship exceptional
in the history of the sport.
see “Risk Factors—Our revenues
visibility on the world stage.
In terms of results, the season
from Formula 1 activities may
Scuderia Ferrari has been
ended with third place for
decline and our related expenses
racing in the Formula 1 World
the Scuderia Ferrari in the
may grow”.
76
FERRARI N.V.AR 2021 Improvements in technology
development of our road cars
the car to recover, store and
and, from time to time, changes
and their engines.
deploy energy generated both by
in regulations typically require
We often transfer technologies
the vehicle during braking and
the design and production
initially developed for racing to
by the exhaust gases through a
of a new racing car every
our road cars. Examples include
turbocharger.
year. Therefore, in addition to
steering wheel paddles for gear-
our long-term research and
shifting, the use and development
The great visibility, both on
development efforts, we begin
of composite materials, which
traditional media and on digital
designing our cars each year
make cars lighter and faster,
platforms, that Scuderia Ferrari
in the spring, in anticipation of
and technology related to hybrid
obtains thanks to its participation
the start of the racing season
propulsion.
the following March. While the
in the FIA Formula 1 World
Championship continues to
chassis and the power unit we
Our road cars (especially our
attract significant sponsorships.
build each year are designed to
sports car models) have benefited
be used throughout the racing
from the know-how acquired
The visibility and placement of
season, the majority of other
in the wind tunnel by our racing
partner logos on the car and team
components fitted on our cars
car development teams, enjoying
uniforms reflect their respective
are adjusted from race to race
greater stability as they reach
level of sponsorship.
depending on the characteristics
high speeds on and off the track.
We use the platform provided
of the circuits.
Our research and development
by Formula 1 for a number of
team focus on combining
associated marketing initiatives,
To maximize the performance,
minimal lap times with maximum
such as the hosting of clients
efficiency and safety of our
efficiency, leading to advances
and other key partners in Ferrari
Formula 1 cars, while complying
in kinetic energy recovery
Formula 1 Club Hospitality to
with the strict technical rules and
systems, or ERS, technology.
watch and experience the
restrictions set out by the FIA,
Current advanced ERS features
Grand Prix races with Scuderia
our research and development
two electric motor/generator
Ferrari, and our Formula 1
team plays a key role in the
units in every car, which allow
drivers’ participation in various
77
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promotional activities for our
MUGELLO CIRCUIT
The circuit was awarded the prize
road cars. We often sell older
Located in Scarperia just outside
for the Best Grand Prix circuit
Formula 1 cars to customers
Firenze, for more than 100 years
for a MotoGP event five times
for use in amateur racing or
the Mugello Circuit has carved
(1995, 1996, 1997, 2000, 2011),
collection.
its mark as one of the leading
and is also a leader in terms of its
motorsport venues globally.
sustainability practices. It was the
More generally, Formula 1 racing
Internationally renowned as
first circuit in the world to obtain
allows us to promote and market
the host venue for the Italian
FIA’s prestigious “Achievement
our brand and technology to a
MotoGP Grand Prix since 1976
of Excellence” in 2015 and to
global audience without resorting
(and consecutively since 1994),
be certified according to the
to traditional advertising
the Formula 1 Grand Prix of
sustainable event management
activities, therefore preserving
Tuscany Ferrari 1000 in 2020,
system ISO 20121. In July 2021, an
the aura of exclusivity around our
and numerous international
analysis carried out by Enovation
brand and limiting the marketing
motorsports competitions, the
Consulting and Right Hub on 96
costs that we, as a company
5,245 metres circuit mimicking
circuits worldwide, 23 of which
operating in the luxury industry,
the natural slopes of the Tuscan
host or have hosted a Formula 1
would otherwise incur.
hills is also famed for its ultimate
GP, featured the Mugello Circuit
driving experience and modern
on top of the Sustainable Circuits
In December 2021, the World
facilities.
Index.
Motor Sport Council validated
the framework for the 2026
Originally a 66 km road circuit,
In 2021 all certifications
Power Unit Regulations, which
the first motorsport event held
were renewed, including for
includes technical, operational
at Mugello starting from 1914
the international standards
and financial guidelines. The
were regularity. Enzo Ferrari
for sustainable and event
framework identifies key
won in 1921 on an Alfa Romeo
management as well as the
objectives related to, among
class 4.500. The current facilities
system of safety and health
other things, the environmental
were designed in the early 70’s
management on work places.
impact, cost reduction measures
and later re-modelled in 1988
and competitiveness of the FIA
when Ferrari bought the circuit.
Formula 1 World Championship.
Year after year the track has
A detailed document of the
seen consistent improvements
2026 Power Unit Regulations is
in terms of safety with FIA Grade
expected to be developed and
1 and FIM Grade A certifications,
submitted to the World Motor
the highest levels of homologation
Sport Council during the course
for a racetrack.
of 2022.
In 2021 the circuit hosted 250
days of track activities and 14
race weekends.
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FERRARI N.V.AR 2021 79
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STRATEGY
As one of the world’s leading
line of apparel and accessories sold
exclusive in relation to the luxury
luxury brands, Ferrari operates
in our monobrand stores, on our
pricing and aspirational character
in carefully selected luxury and
website www.store.ferrari.com
of our cars, but also inclusive in
lifestyle categories. We also
and in selected multi-brand stores,
relation to our F1 fan community.
engage in brand development
both physical and online.
and protection activities through
To ensure long-term profitable
licensing contracts with selected
In November 2019, management
growth, Ferrari intends to focus
partners, retail activities through
presented the principles of its
its offering on product categories
a chain of franchised or directly
brand diversification strategy,
that enhance the vibrancy and
managed stores, licensed theme
recognizing Ferrari as a unique
vitality of the brand through the
parks and the development of a
brand with a dual identity:
following pillars:
BRAND EXTENSION
ENTERTAINMENT
CAR ADJACENCIES
A REFINED COLLECTION OF
TO REACH OUT TO A WIDER AND
A COLLECTION OF EXCLUSIVE
PRODUCTS THAT WILL EMBODY
YOUNGER CUSTOMER BASE
LUXURY PRODUCTS AND
FERRARI’S DNA
WHILE LEVERAGING FERRARI’S
SERVICES TO COMPLEMENT THE
UNIQUE RACING ROOTS
FERRARI EXPERIENCE
In 2021, due to government restrictions on travel and certain business activities imposed as a result of the
COVID-19 pandemic, the number of visitors in our museums, our franchised and directly managed stores, and
our licensed theme parks (further described below) was significantly lower than pre-pandemic levels despite an
increase compared to 2020.
80
FERRARI N.V.AR 2021
RETAIL
Through our network of stores (franchised or directly
We use multiple criteria to select our franchisees,
managed), we offer a wide range of Ferrari branded
including know-how, financial condition, sales
products, including our fashion collection.
network and market access. Generally, we require
that applicants meet certain minimum working
At December 31, 2021, there were a total of 30 retail
capital requirements and have the requisite business
Ferrari stores, including those in Maranello, Milan,
facilities and resources.
Rome, Miami, Los Angeles and Abu Dhabi, of which
We typically enter into a standard franchising
16 stores directly owned and operated by us and 14
agreement with our franchisees. Pursuant to this
franchised stores (including 12 Ferrari Store Junior).
agreement, the franchisee is authorized to sell our
We require all franchisees to operate our monobrand
products at a suggested retail price. In exchange,
stores according to our standards. Stores are
we provide them with our products, the benefit of
designed, decorated, furnished and stocked
our marketing platform and association with our
according to our directions and specifications.
corporate identity.
MUSEUMS, LICENSING,
ENTERTAINMENT AND
THEME PARKS
products include consumer
classic double curve side profile
electronics, sportswear, toys,
of the Ferrari GT body, spanning
video games, watches and other
200,000 square meters and
Ferrari owns and manages two
accessories, as well as theme
carrying the largest Ferrari logo
museums, one in Maranello and
parks.
one in Modena.
ever created. Ferrari World
Abu Dhabi offers an all-around
In 2021, we consolidated our
Ferrari experience to children
We enter into license agreements
participation in eSports with the
and adults alike.
with a number of licensees for
second edition of the Ferrari
the design, development and
eSports series with more than
Our second theme park, Ferrari
production of Ferrari branded
34,000 participants.
Land Portaventura, opened in
products. We carefully select
A significant portion of our
April 2017 near Barcelona, and
our licensees through a rigorous
revenues from licensing activities
includes Red Force, the tallest
process and we contractually
consists of royalties we receive
and fastest roller-coaster in
seek to ensure that our brand
in connection with Ferrari World,
Europe. In the long-term we aim
and intellectual property are
our theme park in Abu Dhabi.
to open one theme park in each
protected and that the products
Ferrari World opened on Yas
of the main geographic areas
which will eventually bear our
Island, on the North East side of
where we operate, including
brand are of adequate quality,
Abu Dhabi’s mainland, in 2010.
North America and Asia.
appearance and market
Ferrari World’s iconic sleek red
positioning. Ferrari branded
roof is directly inspired by the
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INTELLECTUAL PROPERTY
We own a number of registered
• “Ferrari” (word)
designs and utility patents. We
expect the number to grow as we
• “Ferrari” logotype:
continue to pursue technological
innovations and to develop our
design and brand activities.
We file patent applications in
• the “Prancing Horse” (figurative):
Europe, and around the world
(including in the United States)
to protect technology and
improvements considered
important to our business. No
single patent is material to our
The names of our sports, GT,
special series and Icona car
models and Formula 1 single-
seater models are also registered
as trademarks (and logotypes)
and we also register their domain
names and the cars’ design.
The protection of intellectual
property is also increasingly
important in connection with
our design and brand activities.
Therefore, we adopt and
follow internal processes and
business as a whole.
• the trademark (figurative):
procedures to ensure both that
We also own a number of
registered trademarks,
designs and patents, including
approximately 510 trademarks
(word or figurative), registered
all necessary protection is given
to our intellectual property rights
and that no third party rights are
infringed by us. In addition, we are
particularly active in seeking to
limit any counterfeiting activities
in several countries and across
• the racing shield (figurative):
regarding our Ferrari branded
a number classes. In particular,
we ensure that the maximum
level of protection is given to the
following iconic trademarks, for
which we own approximately
4,020 applications/registrations
products around the world.
To reach this goal we closely
monitor trademark applications
and domain names worldwide,
actively interact with national and
local authorities and customs and
in approximately 140 countries,
• Scuderia Ferrari (word and
avail ourselves of a network of
in most of the main classes for
figurative):
experienced outside counsels.
goods and services:
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FERRARI N.V.AR 2021
~510
~4,020
TRADEMARKS
APPLICATIONS/
REGISTRATIONS
OWNED
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Our principal manufacturing facility is located in
In 2020, we purchased approximately 64 thousand
Maranello (Modena), Italy. It has an aggregate covered
square meters of land in Maranello to be used
area of approximately 823 thousand square meters.
for future developments. In 2021, we completed
Our Maranello plant hosts our corporate offices
the construction of the new building related to
and most of the facilities we operate for the design,
new GT sport activities (which covers an area of
development and production of our road and track
approximately 6 thousand square meters near the
cars, as well as of our Formula 1 single-seaters. (See
Fiorano track), the new building for our Formula 1
“Production and Procurement—Production Process” ).
simulator and the renovation of the offices used
Except for some leased technical equipment, we own
by our Marketing and Commercial department. In
all of our facilities and equipment in Maranello.
2020 we also purchased approximately 52 thousand
square meters of land in Maranello to be used for
Since 2002 we have either rebuilt or renovated most
future developments.
of the buildings in Maranello, including the paint shop
building and the production building. In 2015 we
Adjacent to the plant is our Fiorano track, of
completed construction of the new building entirely
approximately 3 thousand meters, built in 1972 and
dedicated to our Formula 1 team and racing activities,
remodeled in 1996. The track also houses the Formula
as well as the new wind tunnel 4WD.
1 logistics offices. Additional facilities in Maranello
include a product development center, a hospitality
In 2018 we completed the new Ferrari Design Centre,
area and the Ferrari museum.
a building that covers more than 7 thousand square
meters.
We also own the Mugello racing circuit in Scarperia,
near Florence, which we rent to racing events
In 2019 we completed the office area and workshop
organizers (see “Formula 1 Activities—The Mugello
area of the New Technical Center for the development
Circuit” ).
of engines and hybrid systems. The entire building
and the engine and hybrid test benches cover an area
We own a second plant in Modena, named
of approximately 20 thousand square meters and was
Carrozzeria Scaglietti. At this approximately 26
completed in 2021.
thousand square meter plant we manufacture
Also in 2019, we purchased land of approximately
aluminum bodyworks for our regular range, special
16 thousand square meters in line with our
series and prototype cars.
expansion plans.
The total carrying value of our property, plant and
equipment at December 31, 2021 was €1,353 million.
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FERRARI N.V.AR 2021
EMPLOYEES
Human capital is a crucial factor in our success,
work arrangements, commuting programs and a
building on our position as a global leader in the
dedicated welfare program, Formula Benessere,
luxury performance car sector and creating long-
which includes, among other programs, Formula
term, sustainable value. To recognize excellence,
Benessere Donna and Formula Benessere Junior
encourage professional development and create
(offering medical assistance to employees and their
equal opportunities, we adopt a number of initiatives,
families) and Formula Estate Junior (offering Summer
including our appraisal system to assess our middle-
Campus to the children of employees).
managers and white collar employees through
performance management metrics; our talent
At December 31, 2021, we had a total of 4,609
management and succession planning, in addition
employees, including 143 managers and senior
to assessment plans for blue collars; training and
managers. Of these, 4,337 were based at our
skill-building initiatives; employee satisfaction and
Maranello facility, and 272 in offices around the world
engagement surveys, including our so-called “Pit Stop”
(including 25 managers and senior managers), mostly
and “Pole Position” programs; and flexible
in North America and China.
White-collar employees and middle-managers
Italy
Rest of the world
Workers
Italy
Rest of the world
Managers and senior managers
Total
At December 31,
2021
2,276
2,039
237
2,190
2,180
10
143
2020
2,186
1,961
225
2,233
2,224
9
137
2019
1,983
1,772
211
2,179
2,170
9
123
4,609
4,556
4,285
Approximately 12 percent of the employees were trade union members in 2021. Our employees’ principal trade
unions are Federazione Italiana Metalmeccanici (FIM-CISL), Unione Italiana Lavoratori Metalmeccanici (UILM-UIL),
Federazione Italiana Sindacati Metalmeccanici e Industrie Collegate (FISMIC) and Federazione Impiegati Operai
Metallurgici (FIOM-CGIL).
All of our employees are covered by collective bargaining agreements. Our managers are represented by the
Italian trade union, Federmanager, and are subject to a collective bargaining agreement, which will expire on
December 31, 2022. Our other employees are covered by two agreements: the first one entered into by FCA,
CNH Industrial and Ferrari with FIM-CISL, UILM-IUL, FISMIC, UGL and AQCF signed on March 11, 2019 which will
expire on December 31, 2022, and the second one named “Accordo Premio di Competitività Ferrari” signed on
September 25, 2019 which will expire on December 31, 2023. This collective bargaining contract provides, among
other things, for the payment of bonuses linked to performance up to a maximum of approximately €13,000
gross per year and payable in four installments: three advances and a final balance.
In addition to the collective agreements, we have individually negotiated agreements with several of our managers
and other key employees providing for long-term incentives, exclusivity and non-compete provisions.
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REGULATORY MATTERS
We manufacture and sell our cars around the world
and our operations are therefore subject to a variety
GREENHOUSE GAS/CO2/FUEL ECONOMY
LEGISLATION
of laws and regulations relating to environmental,
European legislation limited fleet average greenhouse
health and safety and other matters. These laws
gas emissions for new passenger cars to 130 grams
regulate our cars, including their emissions, fuel
consumption and safety, as well as our manufacturing
of CO2 per kilometer for the period 2015-2019. Due to
our SVM status under EU regulations we benefited
facilities and operations, setting strict requirements
from a derogation from the 130 grams per kilometer
on emissions, treatment and disposal of waste,
emissions requirement available to small volume and
water and hazardous materials and prohibitions on
niche manufacturers during that period. Pursuant to
environmental contamination. Our vehicles, together
that derogation, we were instead required to meet
with the engines that power them, must comply
with extensive regional, national and local laws and
yearly CO2 emissions targets, beginning in 2012,
reaching a target level of 290 grams per kilometer in
regulations, and industry self-regulations (including
2016 for our fleet of EU-registered vehicles that year.
those that regulate vehicle safety). However, we
Despite global shipments exceeding 10,000 vehicles
currently benefit from certain regulatory exemptions,
in 2019, Ferrari continued to qualify as an SVM under
because we qualify as an SVM or similar designation
EU regulations, because its total number of registered
in certain jurisdictions where we sell cars. As outlined
vehicles in the EU per year is less than 10,000 vehicles.
below, these exemptions provide a range of benefits,
from less stringent emissions caps and compliance
In 2014, the European Union set new 2020 emissions
date extensions, to exemptions from zero emission
targets, calling for 95 percent of a manufacturer’s full
vehicle production requirements.
fleet of new passenger cars registered in the EU in
We are in substantial compliance with the relevant
2020 to average 95 grams of CO2 per kilometer, rising
to 100 percent of the fleet in 2021. The 2014 regulation
regulatory requirements affecting our facilities and
extends the small volume and niche manufacturers
products around the world. We constantly monitor
derogation. Pursuant to the derogation approved by
such requirements and adjust our operations as
the European Commission following our petition, we
necessary to remain in compliance.
were required to meet certain CO2 emissions target
levels in the 2017-2021 period, reaching a target of
APPROVAL AND MARKET SURVEILLANCE
277 grams per kilometer in 2021 for our fleet of EU-
In May 2018 the European Parliament and European
registered cars that year.
Council issued Regulation 2018/858, establishing
the new framework for the approval and market
In 2019, the European Union set new 2025 and
surveillance of motor vehicles (repealing Directive
2030 emissions targets, calling for respectively a
2007/46/EC). While the previous regulatory
15 percent and 37.5 percent reduction of the target
framework of Directive 2007/46/EC was focused on
applicable in 2021. An incentive mechanism for zero
technical standards, the new regulation has a broader
and low emission vehicles was also introduced. This
scope by including market surveillance requirements
new regulation (EU 2019/631) continues to state
in order to ensure the enforcement of applicable
that it is not appropriate to use the same method
standards. The key objectives of Regulation 2018/858
to determine the emissions reduction targets for
are: enhancing the independence of technical
large volume manufacturers as for small volume
services (i.e. the approved testing laboratories) as well
manufacturers that are considered as independent.
as improving the quality of the testing of vehicles and
Therefore, Ferrari and other SVMs have the possibility
setting stricter requirements for technical services;
to continue to apply for alternative emissions
introducing market surveillance in order to verify the
reduction and are required to submit the application
conformity of vehicles on the market to the applicable
at the latest by October 31 of the year in which the
standards, and requiring corrective measures in
related derogation shall apply.
case of non-compliance or where a vehicle poses a
safety risk or a risk to the environment; strengthening
The regulation EU 2019/631 sets out new EU rules
the type approval system with more stringent
on monitoring and reporting of average emissions:
oversight by the EU. The Commission has the power
the Commission will have to ensure the real-world
to suspend, restrict or withdraw the designation of
technical services, to order recalls, and to impose
financial penalties.
representativeness of the CO2 emission values
based on data from the fuel consumption meters
installed in new cars and will be obliged to publish
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FERRARI N.V.AR 2021 the performance of each manufacturer. For this
calendar year. Moreover, the proposal would increase
purpose, the Commission issued in March 2021 the
Implementing Regulation EU 2021/392 requiring
manufacturers to collect and report the real-world
on-board fuel consumption monitoring (OBFCM) data
and the vehicle identification numbers of new cars
registered starting from January 1, 2021, unless the
vehicle owner expressly refuses to make that data
the 2030 CO2 emissions target from a 37.5% to a 55%
reduction compared to 2021 and introduce a 2035
target whereby CO2 emissions from new cars and
vans would have to be 100% lower compared to 2021.
Similarly to the EU, Switzerland introduced CO2
emission regulations for new cars in July 2012.
available. The European Commission will then publish
Despite the existence of some specificities within
real-world data on an annual basis, aggregated at
the Swiss regulation, derogations aligned with EU
the level of manufacturer for comparison of the
regulation have been granted to SVMs up to and
same set of vehicles between data recorded in the
including 2021. Switzerland has historically adopted
certificates of conformity and the real-world data.
the targets approved by the European Commission.
In addition, regulation EU 2019/631 requires the
On November 24, 2021, the Swiss Federal Council
European Commission to evaluate the possibility of
a common methodology for the assessment and the
amended the CO2 emission regulations for cars
and vans. This regulation was repealed starting
consistent data reporting of full life-cycle emissions
from January 1, 2022 and the vehicles of niche and
from cars. The regulation also includes provisions
small volume manufacturers will have to meet the
on in-service conformity testing and on detecting
strategies which may artificially improve the CO2
performance. Because of these requirements, the
same CO2 emission targets as the large volume
manufacturers. This change in legislation is expected
to result in additional costs for Ferrari, either through
European Commission is currently working on a
penalties or the purchase of emissions credits from
Delegated Regulation defining the procedures for
other manufacturers. Ferrari does not expect such
verifying the CO2 emissions of vehicles in-service.
Detailed technical provisions (e.g. test procedures,
additional costs to be material.
statistical evaluations, tolerances, pass/fail criteria,
In the United States, both Corporate Average Fuel
etc.) for the in-service verification procedures will be
Economy (“CAFE”) standards and greenhouse
further defined by an Implementing Regulation.
gas emissions (“GHG”) standards are imposed on
manufacturers of passenger cars. Because the
The European Green Deal, adopted by the
control of fuel economy is closely correlated with
European Commission in December 2019, has at
the control of GHG emissions, the United States
its core combating climate change and reaching
Environmental Protection Agency (“EPA”) and the
the objectives of the Paris Agreement and other
National Highway Traffic Safety Administration
environmental goals (including addressing air
(“NHTSA”) have sought to harmonize fuel economy
pollution). One of its central elements is the
regulations with the regulation of GHG vehicle
2050 climate neutrality objective. The European
Commission enshrined the 2050 climate neutrality
emissions (primarily CO2). These agencies have set
the federal standards for passenger cars and light
objective into EU law entered into force in July 2021.
trucks to meet an estimated combined average fuel
In order to set the EU on a sustainable path to achieve
economy (CAFE) level that is equivalent to 35.5 miles
climate neutrality by 2050, the European Commission
per U.S. gallon for 2016 model year vehicles (250
has also presented a net EU-wide, economy-wide plan
to reduce greenhouse gas emissions by at least 55
grams CO2 per mile). In August 2012, these agencies
extended this program to cars and light trucks
percent by 2030, compared to 1990 levels.
for model years 2017 through 2025, targeting an
estimated combined average emissions level of 163
Building on the existing legislation and the EU’s
grams per mile in 2025, which is equivalent to 54.5
2030 climate ambitions, the European Commission
miles per gallon.
also published the “Fit for 55” Package on July, 14,
2021, which includes a proposed amendment to the
On September 27, 2019 the EPA and the NHTSA issued
regulation EU 2019/631. In particular, the European
the “Safer Affordable Fuel-Efficient (SAFE) Vehicles
Commission’s proposal would remove by 2030 the
Rule Part One: One National Program” (SAFE I Rule).
provision granting a derogation from the specific
These rules would exert federal preemption authority
emissions targets to manufacturers responsible for
under the CAFE statute over California’s ability to
between 1,000 and 10,000 new passenger cars in a
regulate greenhouse gases and would revoke the
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / REGULATORY MATTERS
current EPA waiver under the Clean Air Act which had
proposed alternative CAFE standards, for model
authorized California to regulate GHG from motor
years 2017, 2018 and 2019. Then, in December, 2017,
vehicles. The state of California along with other states
we amended the petition by proposing alternative
and certain NGOs filed challenges to these rules in
CAFE standards for model years 2016, 2017 and 2018
both US District Court for the District of Columbia
instead, covering also the 2016 model year. In 2019,
and the United States Court of Appeals D.C. Circuit.
our global production exceeded 10,000 vehicles, and
In May 2021, the NHTSA issued a notice of proposed
therefore we are not considered a SVM by the NHTSA
rulemaking proposing to fully repeal the SAFE I Rule.
for model year 2019. We previously purchased the
CAFE credits needed to fulfill this deficit. On July 15,
On March, 31, 2020 the EPA and the NHTSA issued
2020, we submitted to the NHTSA a petition for an
the final SAFE Vehicles Rule (Part Two) setting CAFE
exemption from the CAFE standards for the model
and carbon dioxide emissions standards for model
year 2020. We proceeded with this submission
years 2021-2026 passenger cars and light trucks.
because, although Ferrari originally intended to
Under the SAFE Vehicles Rule (Part Two), the overall
produce more than 10,000 vehicles in 2020, actual
stringency of the federal standards is significantly
production was lower than 10,000 vehicles as a result
reduced from the levels previously set as the final rule
of the COVID-19 pandemic and the related shutdown
will increase stringency of CAFE and CO2 emissions
standards by 1.5 percent each year through model
of our production facilities. Therefore since we met
the NHTSA definition of a SVM, we have requested an
year 2026, as compared with the standards issued in
alternative fleet average GHG standards for model
2012, which would have required annual increases
year 2020 standard. The NHTSA has confirmed that
of approximately 5 percent. In August 2021, the EPA
it will not send a shortfall letter to Ferrari requiring
published a notice of proposed rulemaking proposing
payment of CAFE civil penalties or the application of
to strengthen federal GHG emissions standards for
CAFE credits with regards to model year 2020 until
passenger cars and light trucks by setting stringent
the NHTSA has ruled on Ferrari’s petitions for an
requirements for reductions from for model years
alternative standard. We purchased the CAFE credits
2021-2026. Consistently with the EPA’s approach,
needed to fulfill our model year 2021 deficit and
in September 2021 the NHTSA published a notice
we are planning to continue with this approach for
of proposed rulemaking proposing revised fuel
subsequent model years.
economy standards for passenger cars and light
trucks for model years 2024-2026.
The state of California has been granted special
authority under the Clean Air Act to set its own vehicle
Under current regulation, for model years 2017-2026,
emission standards. In February 2010, the California
the EPA allows a SVM, defined as an operationally
Air Resources Board (“CARB”) enacted regulations
independent manufacturer with less than 5,000
under which manufacturers of vehicles for model
yearly unit sales in the United States, to petition for
years 2012-2016 which are in compliance with the
a less stringent standard. The EPA has granted us
EPA greenhouse gas emissions regulations are
SVM status. We therefore petitioned the EPA for
also deemed to be in compliance with California’s
alternative standards for the model years 2017-2021
greenhouse gas emission regulations (the so-called
and 2022-2025, which are aligned to our technical
“deemed to comply” provision). In November 2012,
and economic capabilities. On July 31, 2019 the EPA
the CARB extended these rules to include model
published a Notice in the U.S. Federal Register (Federal
years 2017-2025. In 2017 CARB performed a technical
Register /Vol. 84, No. 147) that in part proposed
assessment regarding greenhouse gas standards
that Ferrari be permitted an alternative standard
for model years 2022 through 2025, in parallel with
substantially in line with the alternative standard that
the EPA and the NHTSA, and confirmed in March
Ferrari proposed to the EPA for model years 2017-
2017 that the standards defined in 2012 may be
2021. The EPA approved Ferrari proposed standards
still considered appropriate. On December 12,
for model years 2017-2020, whereas it required a
2018 the CARB amended its existing regulations to
small reduction for the model year 2021 standard.
clarify that the “deemed to comply” provision would
On June 25, 2020, the EPA Administrator signed the
not be available for model years 2021-2025 if the
final determination for alternative GHG standards for
EPA standards for those years were altered via an
SVMs for model years 2017 through 2021.
amendment of federal regulations. On September
19, 2019, the NHTSA and the EPA established the “One
In September 2016, we petitioned the NHTSA for
National Program” for fuel economy regulation, taking
recognition as an independent manufacturer of
the first step towards finalizing the agencies’ August
less than 10,000 vehicles produced globally, and we
2018 proposal by announcing the EPA’s decision to
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FERRARI N.V.AR 2021 withdraw California’s waiver of preemption under the
In the future, driving bans on combustion
Clean Air Act, and by affirming the NHTSA’s authority
engine vehicles could be imposed, particularly in
to set nationally applicable regulatory standards
metropolitan areas, promoting progress in electric
under the preemption provisions of the Energy Policy
and hybrid technology. On September 23, 2020, the
and Conservation Act (EPCA). The two agencies
Governor of California issued an executive order
indicated that they anticipate issuing a final rule on
requiring that all in-state sales of new passenger
standards in the near future. Ferrari currently avails
vehicles be zero-emission by 2035. CARB is
itself of the “deemed-to-comply” provision to comply
developing regulations among the Advanced Clean
with CARB greenhouse gas emissions regulations.
Cars II (ACC II) regulatory package to implement such
Therefore, depending on future developments, it
executive order. The ACC II regulations will seek to
may be necessary to also petition the CARB for SVM
increase the number of zero-emission vehicles (ZEVs)
alternative standards and to increase the number
for sale and reduce criteria and greenhouse gas
of tests to be performed in order to follow the CARB
emissions from new light- and medium-duty vehicles
specific procedures.
beyond the 2025 model year. During 2021, the state
of Washington introduced legislation that could
While Europe and the United States lead the
phase out sales of non-ZEVs. The Washington State
implementation of these fuel consumption/CO2
emissions programs, other jurisdictions typically
House bill 1204 titled “Clean Cars 2030” provides that
all privately and publicly owned passenger and light
follow on with adoption of similar regulations within
duty vehicles of model year 2030 or later registered
a few years thereafter. In China, for example, Stage
in Washington state must be electric vehicles and the
IV targeted a national average fuel consumption of
state’s transportation commission will now work on
5.0L/100km by 2020. In September 2017, the Chinese
a scoping plan for achieving the 2030 requirement,
government issued the Administrative Measures on
anticipating the California target by five years. In
CAFC (Corporate Average Fuel Consumption) and
November 2020, the UK Prime Minister, the Transport
NEV (New Energy Vehicle) Credits. This regulation
Secretary and the Business Secretary announced, in
establishes mandatory CAFC requirements, while
the context of the 10-Point Plan for a Green Industrial
providing additional flexibility for SVMs (defined as a
Revolution, the end of the sale of new petrol and
manufacturer with less than 2,000 units imported in
diesel cars in the United Kingdom by 2030. On July 14,
China per year that achieve a certain minimum CAFC
2021 the UK Government published the Green Paper
yearly improvement rate). Manufactures that exceed
the CAFC regulatory ceiling are required to purchase
on a New Road Vehicle CO2 Emissions Regulatory
Framework for the United Kingdom. The commitment
NEV credits.
is to reach net zero carbon emissions by 2050.
Following Brexit, the UK Government is autonomous
The Stage V regulation, issued on December 31, 2019,
in defining the legal framework to deliver the
sets the fuel consumption fleet average targets for
internal combustion engine vehicles phase out dates
the period 2021-2025, targeting a national average fuel
announced and is expected to publish a proposal in
consumption of 4.0 l/100km by 2025. Following the
2022. This will put the United Kingdom on course to be
adoption of the Stage V fuel consumption regulation,
the first G7 country to decarbonize cars and vans.
an update to the Administrative Measures on CAFC
and NEV credits was published in June 2020, keeping
the additional flexibility for SVMs and relaxing the
EXHAUST AND EVAPORATIVE EMISSIONS
REQUIREMENTS
minimum CAFC yearly improvement rate required.
In 2007, the European Union adopted a series
In addition to the fuel consumption target on the
of updated standards for emissions of other air
entire fleet, the Chinese regulation GB 19578-2021
pollutants from passenger and light commercial
sets specific fuel consumption limits on model types.
vehicles, such as nitrogen oxides, carbon monoxide,
Currently, this standard is only applicable to domestic
hydrocarbons and particulates. These standards
cars, as it is not adopted by the China Certification and
were phased in from September 2009 (Euro 5) and
Accreditation Administration (CNCA). In the current
September 2014 (Euro 6) for passenger cars. In 2016,
Ferrari portfolio, only the plug-in hybrid models would
the European Union established that Euro 6 limits
be compliant with this regulation. Following the same
shall be evaluated through Real Driving Emissions
approach also with respect to pure electric vehicles,
(RDE) measurement procedure and a new test-cycle
during 2021 the relevant Chinese authorities have
more representative of normal conditions of use
published a notice to call for participation in a working
(Worldwide Light Vehicles Test Procedure). SVMs
group that should define the energy consumption
(vehicle manufacturers with a worldwide annual
limit standards for electric vehicles.
production lower than 10,000 units in the year prior
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / REGULATORY MATTERS
to the grant of the type-approval) are required to be
2020, the European Commission launched a public
compliant with RDE standards starting from 2020
consultation on its roadmap outlining the policy
while non-SVMs have been required to comply with
options that it could pursue in revising the emission
RDE standards starting from 2017. We believe all
standards for light and heavy duty vehicles (Euro
new Ferrari models are fully compliant with RDE
7). This initiative is part of the European Green Deal,
requirements. In 2018, the European Commission
advocating the European automotive industry’s role
issued Regulation 2018/1832 for the purpose of
as a leader in the global transition to zero-emission
improving the emission type approval tests and
vehicles. More stringent air pollutant emissions
procedures for light passenger and commercial
standards for combustion engine vehicles are
vehicles, including those for in-service conformity
expected to be set by early 2022. Depending on the
and RDE and introducing devices for monitoring the
future regulatory developments, the technological
consumption of fuel and electric energy. Under the EU
solutions required to ensure compliance with Euro
Regulation, which became applicable in January 2019,
7 standards may affect customers’ expectations on
among other things, the extended documentation
performance, sound and driving experience. The
package provided by manufacturers to type approval
European Commission is also expected to assess
authorities to describe Auxiliary Emission Strategies
and evaluate the current noise emissions limits, with
(AES) is no longer required to be kept confidential,
the risk of more stringent thresholds.
and the decision whether to allow access to such
documentation package is left to national authorities.
In the United States, the “Tier 3” Motor Vehicle
In addition, the Regulation introduced a new
Emission and Fuel Standards issued by the EPA
methodology for checking In-Service Conformity
were finalized in April 2014. With Tier 3, the EPA
(ISC) which includes RDE tests. Compliance is
has established more stringent vehicle emission
tested based on ISC checks performed by the
standards, requiring significant reductions in both
manufacturer, the granting type approval authority
tailpipe and evaporative emissions, including nitrogen
(GTAA), and accredited laboratories or technical
oxides, volatile organic compounds, carbon monoxide
services. Test results will be publicly available; in
and particulate matter. The new standards are
addition, the GTAA will publish annual reports on
intended to harmonize with California’s standards for
the ISC checks performed, in order to improve
2015-2025 model years (so called “LEV3”) and will be
transparency. The European Commission is currently
implemented over the same timeframe as the U.S.
working on another amendment to the WLTP and
federal CAFE and GHG standards for cars and light
RDE test procedures primarily to align them with the
trucks described above. Because of our status as an
corresponding UNECE Regulations. However, other
operationally independent SVM, Ferrari obtained
EU-specific requirements are also anticipated.
a longer, more flexible schedule for compliance
with these standards under both the EPA and
On December 13, 2018, the General Court of the
California Program.
European Union issued a ruling on the action started
in mid-2016 by the cities of Madrid, Brussels and Paris
In addition, California is moving forward with other
on the legality of the Commission introducing in the
stringent emission regulations for vehicles, including
second RDE Regulation (2016/646) RDE conformity
the Zero Emission Vehicle regulation (ZEV). The ZEV
factors (CF) which had the effect of increasing the
regulation requires manufacturers to increase their
emission limits. This led to the appeal proceedings
sales of zero emissions vehicles year on year, up to
during 2019 against the General Court’s judgment
an industry average of approximately 15 percent
that annulled the conformity factors in the RDE
of vehicles sold in the state by 2025. Because we
legislation. The appeal is currently pending.
currently sell fewer than 4,500 units in California, we
are exempt from these requirements.
During 2019, the European Commission announced
that it will propose more stringent air pollutant
Additional stringency of evaporative emissions also
emissions standards for combustion-engine
requires more advanced materials and technical
vehicles and indicated 2021 as a target timeline.
solutions to eliminate fuel evaporative losses, all for
The European Commission created an Advisory
much longer warranty periods (up to 150,000 miles in
Group on Vehicle Emission Standards (AGVES), by
the United States).
joining all the relevant expert groups working on
emission legislation, in order to provide technical
As already mentioned, the California Air Resources
advice for the development of the post-EURO 6/
Board is working on the development of the ACC
VI emission standards for motor vehicles. In March
II regulations and in December 2021 presented
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FERRARI N.V.AR 2021 proposals to amend the Low Emission Vehicle
and waste batteries. This proposal will apply to all
(or LEV) Regulation to reduce both tailpipe and
kind of batteries, including automotive and electric
evaporative emissions.
vehicle batteries, and establishes requirements on
sustainability, labelling, information and end-of-life.
In response to severe air quality issues in Beijing
This regulation is currently under discussion.
and other major Chinese cities, in 2016 the Chinese
To comply with current and future environmental
government published a more stringent emissions
rules, we may have to incur substantial capital
program (National 6), providing two different levels
expenditure and research and development
of stringency (6a and 6b) effective starting from
expenditure to upgrade products and manufacturing
2020. In July 2018 China’s central government
facilities, which would have an impact on our cost of
launched a three-year plan to reduce air pollution,
production and results of operation.
extending targets for reducing lung-damaging
airborne particulate pollution to the country’s
VEHICLE SAFETY
338 largest cities. This plan includes reductions
Vehicles sold in Europe are subject to vehicle safety
in steel and other industrial capacity, reducing
regulations established by the EU or by individual
reliance on coal, promoting electric vehicles and
member states. In 2009, the EU established a
cleaner transport, enhancing air-pollution warning
simplified framework for vehicle safety, repealing
systems, and increasing inspections of businesses
more than 50 directives and replacing them with a
for air pollution infractions. Several autonomous
single regulation (the “General Safety Regulation”)
regions and municipalities have implemented the
aimed at incorporating relevant United Nations
requirements of the National 6 program even ahead
standards. This incorporation process began in
of the mandated deadlines.
2012. With respect to regulations on advanced safety
systems, the EU now requires new model cars from
During 2020, the Chinese Vehicle Emission Control
2011 onwards to have electronic stability control
Center (VECC) launched the “Pre-study on Next
systems and tire pressure monitoring systems.
Stage Emission Standards for Light duty Vehicles”, an
Regulations on low-rolling resistance tires have
ongoing research project expected to be finalized in a
also been introduced. The framework is reviewed
more stringent emission program in the next years.
periodically, and a revised version of the General
Safety Regulation is currently under discussion.
Several others regulations are also emerging to
In May 2018, the European Commission adopted a
take into account the non-exhaust emissions and
proposal for a regulation to make certain vehicle
the environmental impact of electric and hybrid
safety measures mandatory. On March 25, 2019,
vehicles components. Brake particulate emissions
the European Parliament, Council and Commission
from passenger cars are currently not regulated
reached a provisional political agreement on the
by any UNECE or regional Regulations. However, the
revised General Safety Regulation. As of 2022, new
representatives of some contracting parties (e.g. the
safety technologies will become mandatory in
European Union, UK and Japan) are asking for the
European vehicles, such as Advanced Emergency
authorization to develop a new UN Global Technical
Braking, Emergency Lane Keeping systems, crash-
Regulation (UN GTR) on the topic of brake particulate
test improved safety belts, intelligent speed assistance
emissions of light duty vehicle’s brake systems. The
and warning of driver drowsiness or distraction.
Informal Working Group on Electric Vehicles and
In 2017, the EU published technical requirements
Environment of the United Nations proposed during
for the Emergency Call (eCall) system, mandatory
2021 a Global Technical Regulation on in-vehicle
for new model cars starting from 2018. Starting
battery durability. This regulation is applicable to
from July 1, 2019, new types of pure electric vehicle
both pure electric and plug-in hybrid vehicles and
and new types of hybrid electric vehicle capable of
establishes provisions regarding state-of-health
operating without propulsion from a combustion
monitors, minimum performance requirements
engine operating are required to be equipped with
and in-service conformity checks. A UN GTR is not
an Acoustic Vehicle Alerting System (AVAS), and from
binding for certification purposes. However, it could
July 1, 2021 for all new vehicles of such types, in order
be transposed into a UN Regulation or a regional
to alert pedestrians that a vehicle is moving at low
regulation required for the certification. The European
speeds. Starting from 2022, European authorities
Commission has expressed the will to include these
and United Nation’s contracting parties will enforce
GTR requirements in Euro 7 regulation. Moreover,
regulations on cyber security and over the air
the European Commission published, in December
updates. Starting from 2024, European authorities
2020, a proposal for a new regulation on batteries
and United Nation’s contracting parties will enforce
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amendments for the existing regulation on pedestrian
initiated a global recall campaign to include all
protection, modifying the current test procedures
Ferrari cars produced in all model years mounting
and enhancing the measurement methods on
such airbag inflators. The global recall campaign
extended vehicle areas such as the windscreen.
was implemented based on priority groups and
In 2020 the European Commission issued its new
the timeline set by the NHTSA. Ferrari recognized
digital strategy policies, which represent a priority
provisions of €37 million in 2016 for the estimated
in its regulatory agenda. During 2021, several draft
costs of the worldwide global Takata recall due to
proposals were issued in this respect, including
uncertainty of recoverability of the costs from Takata.
in relation to Real Time Traffic Information (RTTI),
At December 31, 2021 the provision amounted to
Connected and Intelligent Transport Systems (C-ITS),
approximately €3 million, reflecting the current best
Artificial Intelligence (AI). During 2022 more legislative
estimate for future costs related to the entire recall
acts are forecasted, including regarding access to
campaign to be carried out by the Group.
vehicle data and automated driving).
In 2017, the Chinese authorities published an updated
Under U.S. federal law, all vehicles sold in the United
version of the current local general safety standard
States must comply with Federal Motor Vehicle Safety
which allows China to become the driver market
Standards (“FMVSS”) promulgated by the NHTSA.
for the Event Data Recorder mandatory installation
Manufacturers need to provide certification that all
starting from 2021. Technical requirements were
vehicles are in compliance with those standards. In
defined in mid-2019, through the formal adoption
addition, if a vehicle contains a defect that is related
of the local standard. Among the United Nations
to motor vehicle safety or does not comply with an
contracting parties, China has been the first country
applicable FMVSS, the manufacturer must notify
to propose an early adoption of updated test
vehicle owners and provide a remedy at no cost
procedures on high-voltage batteries for hybrid and
to the owner. Moreover, the Transportation Recall
electric vehicles, which has been enforced starting in
Enhancement, Accountability, and Documentation
2020. During 2021, the Chinese authorities worked on
Act (“TREAD”) requires manufacturers to report
several rulemaking initiatives related to active safety
certain information related to claims and lawsuits
(e.g. ADAS, eCall), vehicle digitalization, cyber security
involving fatalities and injuries in the United States
and software updates which are not yet mandatory
if alleged to be caused by their vehicles, and other
for certification purposes and contribute to the
information related to client complaints, warranty
regulatory uncertainty in this market.
claims, and field reports in the United States, as well
as information about fatalities and recalls outside
the United States. Several new or amended FMVSSs
have taken or will take effect during the next few
years in certain instances under phase-in schedules
that require only a portion of a manufacturer’s fleet
to comply in the early years of the phase-in. These
include an amendment to the side impact protection
requirements that added several new tests and
performance requirements (FMVSS No. 214), an
amendment to roof crush resistance requirements
(FMVSS No. 216), and a rule for ejection mitigation
requirements (FMVSS No. 226). U.S. federal law also
sets forth minimum sound requirements for hybrid
and electric vehicles (FMVSS No. 141).
On May 4, 2016, the NHTSA published a Consent
Order Amendment to the November 3, 2015 Takata
Consent Order regarding a defect which may arise in
the non-desiccated Takata passenger airbag inflators
manufactured using phase stabilized ammonium
nitrate and mounted on certain vehicles, including
Ferrari cars. As a result of this order and subsequent
orders by the NHTSA relating to the non-desiccated
Takata passenger airbag inflators, in 2016 Ferrari
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COVID-19 PANDEMIC
UPDATE
The global spread of the COVID-19 virus (“COVID-19”),
return to full production by May 8, 2020 through
which was declared a global pandemic by the
the implementation of various safety measures to
World Health Organization in March 2020, has led to
combat and contain the spread of the COVID-19
governments around the world mandating various
virus in the workplace.
restrictive measures to contain the pandemic,
including social distancing, quarantine, “shelter
• Following various initiatives implemented by Ferrari
in place” or similar orders, travel restrictions and
since the start of the pandemic to support local
suspension of non-essential business activities. To
communities, the Group continues to provide
date, several of these measures are still in place or
logistical support as well as facilities at its Fiorano
were reintroduced at various points in time as a result
race track for the vaccination campaign, where
of further “waves” of the pandemic, although the
more than 230 thousand vaccine doses have
scope and timing of restrictive measures have varied
been administered to date by the local medical
greatly across jurisdictions.
authority. This is in addition to the more than 115
thousand serological tests, rapid swabs tests
As the virus spread and the severity of the COVID-19
and flu vaccinations provided at the Fiorano
pandemic became apparent, Ferrari’s leadership took
race track since the start of the pandemic. With
actions to protect and support its employees and
the commencement of the national COVID-19
communities, mitigate the impacts on the Group’s
vaccination campaign in Italy, in mid-June 2021
financial performance and strengthen the Group’s
Ferrari launched its own vaccination plan, dedicated
liquidity and financial position.
to its employees, their families and all the resident
The impacts of the COVID-19 pandemic on the
Health Authorities. The campaign resulted in a high
Group’s operations and the main actions taken
number of vaccinations and is now completed.
by Ferrari in response to the pandemic since its
Ferrari also organized an additional extraordinary
inception are summarized below:
COVID-19 vaccination campaign for employees,
consultants and suppliers; planned alongside local
• With the safety and well-being of Ferrari employees
center, with first doses administered on October 1,
in mind and considering government restrictions
2021 and second doses on October 29, 2021. Ferrari
implemented to combat the spread of the virus,
also implemented a flu vaccination campaign in
production and deliveries to the distribution network
November 2021 and more recently a campaign for
were temporarily suspended from the end of March
the booster dose of the COVID-19 vaccine.
resident consultants and suppliers at our screening
until the beginning of May 2020. Although certain
restrictions have remained in place in some of
• Although production and certain other activities,
the countries where Ferrari operates, since May
including Formula 1, our stores and our museums,
2020 substantially all Ferrari dealerships remained
were temporarily suspended near the end of March
operational and order collections continued as
2020, the Group continued many other key business
usual. The Group remains focused on maintaining a
activities and functions through remote working
robust order book going forward and on the careful
arrangements, and up to the date of this document
management of our waiting lists in line with our
it continues to take measures to combat the spread
strategy of controlled growth and preservation of
of COVID-19 at its facilities while guaranteeing the
brand exclusivity.
possibility of remote work for those employees
whose job activity is compatible with such work
• To protect the health and well-being of its workforce
arrangements.
and customers as Ferrari returned to regular
business operations, we successfully implemented
• In order to prudently manage potential liquidity
our “Back on Track” program, which facilitated our
or refinancing risks in the foreseeable future, the
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Group focused on increasing and preserving its
Ferrari’s leadership is continuously monitoring
available liquidity and took actions to contain costs
the evolution of the COVID-19 pandemic as new
and capital expenditures in 2020, while ensuring
information becomes available as well as the related
that all projects that are considered important for
effects on the results of operations and financial
the continuing success of Ferrari and its future
position of the Group. Ferrari has been gradually
development are maintained.
recovering from the effects of the COVID-19-related
suspension of production and other business
• The Group decided to temporarily suspend its share
activities that occurred primarily in 2020. The effects
repurchase program from the end of March 2020
of the pandemic on Ferrari in 2021 were limited and,
to the beginning of March 2021, when the program
building on the otherwise strong performance in a
was restarted.
year in which the Group exceeded its guidance on all
metrics, management looks to seize the opportunities
• The start of the 2020 Formula 1 World
ahead and share its future plans on June 16, 2022 in
Championship season was postponed from
Maranello at the Capital Markets Day.
March to July 2020 and it ultimately consisted of 17
Grand Prix events, five fewer than those originally
The future impacts of COVID-19 on Ferrari’s results
scheduled. Additionally, most of the races were
of operations and financial condition will depend on
held without public attendance, including Paddock
ongoing developments in relation to the pandemic,
Club and paddock guests. These circumstances
including the success of the gradual release of
adversely impacted our financial results in 2020
containment measures and vaccination programs
due to a reduction of sponsorships and consequent
worldwide, as well as the overall condition and outlook
reduced commercial revenues from partners
of the global economy. See also “Risk Factors—We are
and the holder of Formula 1’s commercial rights
subject to risks related to the COVID-19 pandemic or
(Formula One Management). Although the 2021
similar public health crises that may materially and
season remained affected by the COVID-19
adversely affect our business”.
pandemic, including changes in venues and
several races being held with a reduced number
of spectators, the season ultimately consisted of a
record number of 22 Grand Prix races.
• Brand activities were also adversely impacted as
a result of the temporary closure of Ferrari stores
and museums in the first quarter of 2020, which
gradually reopened starting from May 2020 with
appropriate safety measures in place to protect our
staff and customers. To date, in-store traffic has not
yet recovered to pre-pandemic levels and museums
continue to be subject to certain restrictions as a
result of local regulations, although overall brand
activities have increased in 2021 compared to 2020.
• There have been no significant effects on the
valuation of assets or liabilities and no increases in
allowances for credit losses as a result of COVID-19.
Moreover, no material impairment indicators have
been identified and there have been no changes
in accounting judgments or other significant
accounting impacts relating to COVID-19.
• No significant changes occurred in controls that
materially affect internal control over financial
reporting.
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FINANCIAL OVERVIEW
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF THE GROUP
The following discussion of our financial condition and results of operations should be read together
with the information included under “Overview—History of the Company” and the Consolidated Financial
Statements included elsewhere in this document. This discussion includes forward-looking statements,
and involves numerous risks and uncertainties, including, but not limited to, those described under
“Forward-Looking Statements” and “Risk Factors”. Actual results may differ materially from those contained
in any forward-looking statements.
TRENDS, UNCERTAINTIES
AND OPPORTUNITIES
Shipments — Our net revenues and results of
In order to maintain our brand’s reputation of
operations depend on, among other things, the
exclusivity among purchasers of our cars, we have
achievement of shipment targets established in our
continued our low volume strategy while responding
budgets and business plans, which we define in line
to growing demand and to demographic changes as
with our low volume strategy to pursue controlled
the size and spending capacity of our target clients
growth and preserve brand exclusivity. As part of
has grown, gradually increasing annual shipments
this strategy, we seek to manage waiting lists in
from 10,131 in 2019 to 11,155 in 2021, despite a
the various markets in which we operate in order
decrease to 9,119 in 2020 driven by the effects of
to respond optimally to relative levels of demand,
the COVID-19 pandemic, resulting in average annual
based on our order books, while being sensitive to
shipments of 10,135 over the three year period from
local client expectations in those markets. In certain
2019 to 2021. Our plans reflects a continuation of this
markets, we believe that waiting lists have promoted
strategy and a measured but significant increase
the sense of exclusivity of our products and,
in shipments above current levels as we broaden
accordingly, we monitor and manage waiting lists to
our product portfolio to target a potentially larger
maintain this exclusivity while ensuring that we do not
customer base, while preserving and enhancing the
jeopardize client satisfaction.
exclusivity and value of our brand.
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96
The following table sets forth our shipments (1) by geographic location:
EMEA
Germany
UK
Italy
Switzerland
France
Middle East (2)
Other EMEA (3)
Total EMEA
Americas (4)
Mainland China, Hong Kong and Taiwan
Rest of APAC (5)
Total
For the years ended December 31,
2021
%
2020
%
2019
%
1,252
11.2%
996
668
481
473
334
1,288
5,492
2,831
899
1,933
8.9%
6.0%
4.3%
4.2%
3.0%
11.6%
49.2%
25.4%
8.1%
17.3%
11,155
100.0%
995
971
574
456
463
304
1,055
4,818
2,325
456
1,520
9,119
10.9%
10.6%
6.3%
5.0%
5.1%
3.3%
11.6%
52.8%
25.5%
5.0%
16.7%
967
1,120
559
454
452
309
1,034
4,895
2,900
836
1,500
9.5%
11.1%
5.5%
4.5%
4.5%
3.1%
10.1%
48.3%
28.6%
8.3%
14.8%
100.0%
10,131
100.0%
(1) Excluding the XX Programme, racing cars, one-off and pre-owned cars.
(2) Middle East mainly includes the United Arab Emirates, Saudi Arabia, Bahrain, Lebanon, Qatar, Oman and Kuwait.
(3) Other EMEA includes Africa and the other European markets not separately identified.
(4) Americas includes the United States of America, Canada, Mexico, the Caribbean and Central and South America.
(5) Rest of APAC mainly includes Japan, Australia, Singapore, Indonesia, South Korea, Thailand, India and Malaysia.
We target our products to the upper end of the luxury
viable. Costs we incur for the development of our
car segment and buyers of our cars tend to belong to
cars and engines, as well as their related components
the wealthiest segment of the population. As the size
and systems, are recognized as an asset if, and only
and spending capacity of our target client base has
if, both of the following conditions under IAS 38 -
grown significantly in recent years, our addressable
Intangible Assets are met: (i) development costs can
market and the sense of exclusivity fostered by our
be measured reliably and (ii) the technical feasibility of
low volume strategy have been further enhanced.
the product, estimated volumes and expected pricing
Given that our shipment strategy is flexible, we are
all support the view that the development expenditure
able to adjust the geographical allocation of our
will generate future economic benefits. All other
shipments to respond to changes in our key markets.
research and development costs are expensed as
The geographic allocation of our shipments and their
incurred. Capitalized development costs include
mix by product is generally impacted by the phase-
all direct and indirect costs that may be directly
in/phase-out pace of individual models, as well as
attributed to the development process.
the length of waiting lists and other market-specific
factors and conditions, including the potential for
The level of our capitalized development costs is
future growth. We expect that further growth in
primarily affected by the timing of updates and
shipments will result primarily from our deliberate
renewals to our product range and, more recently,
targeting of new customer groups and modes of use
by our decision to integrate newly-introduced
through the expansion of our product range.
powertrain technologies (including hybrid and
electric) more broadly into our product portfolio.
Research, Development and Product Lifecycle —
We continually launch new cars with enhanced
We engage in research and development activities
technological innovations and design improvements.
aimed at improving the design, performance,
From 2019 to 2021 we launched 13 new models in
advanced technology, safety, efficiency and reliability
accordance with our plan to launch 15 new models
of our cars. The first stage of product development
by 2022 as announced at our 2018 Capital Markets
is the research phase. In this phase, we research
Day, with the objective of maintaining our product
the specifications of new models that we believe
portfolio’s leading position and to respond quickly to
will appeal to our clients and will be commercially
market demand and technological breakthroughs.
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A clear example of this is the integration of hybrid
the design, development and construction of a new
engine technology in several recent models, including
racing car are generally expensed as incurred and
the 296 GTB, which we launched in 2021 and features
classified as research and development costs in the
Plug-in Hybrid Electric Vehicle (PHEV) technology and
income statement, unless the technology is expected
a new V6 engine, as well as the SF90 Stradale and
to be used for more than one year and the costs
the SF90 Spider, our first series production models
meet the capitalization criteria in IAS 38. Research
to feature PHEV technology, which were launched
and development costs for Formula 1 activities
in 2019 and 2020, respectively. Additionally, some of
can vary from year to year and may be difficult to
our past models, such as LaFerrari and the LaFerrari
predict because they are subject to, among other
Aperta, also included hybrid technology. Our range
things, changes in racing regulations and the need to
models typically have a lifecycle of four to five years,
respond to our car’s performance relative to other
while our special series, Icona and limited edition
racing teams. Research and development costs are
hypercars typically have shorter lifecycles. A portion
recognized net of technology-related government
of our research and development efforts are related
incentives.
to the development of the various components used
in our models, and in particular, hybrid, electric,
Under the recently effective Formula 1 financial
electronic and mechanical components. The new
regulations, a budget cap has been introduced to
and advanced technological content integrated into
limit the amount of certain types of costs (primarily
our new models is in part driven by the output from
relating to the development and manufacturing of the
the research and development efforts for vehicle
racing car chassis) that may be incurred by the teams
components. Our continued focus on component
participating in the Formula 1 World Championship to
development has the objective of improving
a maximum of $147 million for the recently completed
performance and reducing the costs to develop new
2021 season and to a maximum of $142 million for the
models. Capitalized development costs are amortized
upcoming 2022 season, to be further reduced to $137
on a straight-line basis from the start of production
million for the 2023 season (assuming 23 Grand Prix
over the estimated lifecycle of the model or the useful
races in both the 2022 and 2023 seasons).
life of the related assets or components, which is
generally between four and eight years.
As a result of our strategy to update and broaden
our product range and significantly increase our
We also incur research and development costs in
efforts relating to hybrid, electric and other advanced
connection with Formula 1 racing activities, including
technologies, our overall research and development
initiatives to maximize the performance, efficiency
expenditure increased during the period from 2019
and safety of our racing cars. While we develop
to 2021. In particular, we made significant investments
these technologies for initial use in our Formula 1
in product development in relation to both our current
racing cars, we seek to transfer these technologies
product portfolio and models to be launched in
and components, where appropriate, to models in
future years, as well components. Notwithstanding
our current and future product range. Technological
actions taken in 2020 to contain costs as a result
developments and changes in the regulations of the
of the COVID-19 pandemic, we continued to invest
Formula 1 World Championship generally lead us to
significantly in research and development projects
design, develop and construct a new racing car to
that are considered important for the continuing
be used for one year only and the costs incurred for
success of Ferrari and its future development.
98
FERRARI N.V.AR 2021 The following table summarizes our research and development for the years ended December 31, 2021, 2020 and
2019:
Capitalized development costs (1)
Research and development costs expensed (A)
Total research and development
Amortization of capitalized development costs (B)
R&D costs as recognized in the consolidated income statement (A+B)
(1) Capitalized to development costs within intangible assets during the year.
For the years ended December 31,
2021
2020
363
574
937
194
768
320
527
847
180
707
2019
330
559
889
140
699
Car Profitability — The relative profitability of the
expect that our average price point will continue to
cars we sell tends to vary depending on a number
increase reflecting the superior technological content
of factors, including exclusivity of the offering,
of our new models.
technological advancement and content of the car,
engine size and performance, level of personalization
Additionally, the interior and exterior technology
and the geographic market in which it is sold. For
and content of the cars we sell can be customized
example, our Icona models, which include the Ferrari
through our personalization offerings, which can
Daytona SP3 presented in November 2021 and the
be further enhanced through additional bespoke
Ferrari Monza SP1 and SP2 (our first Icona models,
specifications. Incremental revenues from
whose shipments commenced in 2019), as well as our
personalization are a particularly favorable factor
limited edition hypercars (the latest of which was the
of our pricing and product mix, due to the fact that
LaFerrari Aperta which concluded shipments in 2018)
we generate incremental margin on each additional
have sales prices that are much higher than other
option selected by our clients.
models in the Ferrari product range in light of their
exclusivity, as well as the advanced technology and
Cost of Sales — Cost of sales comprises expenses
design integrated in these models. In general, more
incurred in the manufacturing and distribution of
exclusive offerings generate higher net revenues
cars and parts, including engines sold to Maserati
and provide better margins than those generated on
and engines rented to other Formula 1 racing teams.
shipments of range models and special series cars,
The cost of materials, components and labor are the
and therefore they benefit our results in the periods
most significant elements of our cost of sales, while
in which they are sold. We plan to launch our Icona
the remaining costs primarily include depreciation,
models more frequently compared to our limited
insurance and transportation costs. Cost of sales
edition hypercars, and we expect this to reduce the
also includes warranty and product liability-related
volatility in financial performance that we have at
costs, which are estimated and recorded at the time
times experienced historically due to the cadence of
our cars are shipped. Interest expenses and other
our limited edition hypercars.
financial charges that are directly attributable to our
We seek to increase the average price point of
risks and write-downs of financial assets, are also
financial services activities, including provisions for
our range and special series models over time by
reported in cost of sales.
continually improving performance, technology and
other features, as well as by leveraging the exclusivity
We purchase a variety of components (including
of certain model offerings and the scarcity value
mechanical, electrical, electronic, aluminum, steel and
resulting from our low volume strategy. In particular,
plastic components, as well as castings and tires), raw
in recent years we have been increasing the price of
materials (the most significant of which is aluminum)
selected models in certain markets and introduced
and supplies, and we incur costs for utilities, logistics
new models with higher average selling prices
and other services from numerous suppliers in the
compared to the corresponding predecessor models.
manufacture of our cars. Fluctuations in the cost
Furthermore, as we continue to integrate advanced
of sales are primarily related to the number of cars
technologies more broadly into our car portfolio, we
we produce and sell along with changes in car mix.
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Newer models generally have more technologically
Economic Conditions and Macro Events —
advanced components and enhancements, including
Significant inflationary pressures appeared in 2021
hybrid and electric technology, and therefore have
in many of the markets in which we operate and
higher costs per unit; however we aim to price our
this trend has continued in early 2022. Although
cars appropriately to recover these costs. Our Icona
there were no material effects on our results of
models, as well as our limited edition hypercars and
operations in 2021 from the recent rise in inflation in
one-off cars, also tend to have higher costs per unit,
certain goods and services, management is carefully
but these higher costs tend to be more than offset by
monitoring the inflation outlook, as well as any
higher sales prices. Cost of sales are also affected by
changes to interest rates, to appropriately address
fluctuations of certain raw material prices, although
the potential impacts on our operating costs and
we typically seek to manage these costs and minimize
financial expenses, as well as our new order intake.
their volatility through the use of long-term fixed price
purchase contracts.
Additionally, as a result of the current geopolitical
tensions and conflict between Russia and Ukraine,
In recent years we have made efforts to achieve
and the recent recognition by Russia of the
technical and commercial efficiencies. In particular,
independence of the self-proclaimed republics
technical efficiencies focus on efforts to produce
of Donetsk and Luhansk, in the Donbas region of
components using innovative and cost-effective
Ukraine, the governments of the United States, the
materials, without compromising the quality or
European Union, Japan and other jurisdictions have
performance of the components. In order to achieve
recently announced the imposition of sanctions on
these technical efficiencies, we perform in-house
certain industry sectors and parties in Russia and the
research and development activities and we invite
regions of Donetsk and Luhansk, as well as enhanced
our suppliers to present us with innovative technical
export controls on certain products and industries.
solutions that they have developed. Commercial
Despite the fact that Ferrari has very limited
efficiencies have been achieved through negotiating
commercial interests in Russia, Ukraine and the areas
discounts and entering into long-term contracts with
of conflict, these and any additional sanctions and
suppliers, who commit upfront to pass on to us a
export controls, as well as any counterresponses
portion of the efficiencies they achieve in performing
by the governments of Russia or other jurisdictions,
our supply contracts. Furthermore, efforts are
could adversely affect, directly or indirectly, our
made to award new business to existing suppliers,
supply chain, with negative implications on availability
where appropriate, in order to negotiate favorable
and prices of raw materials, and our customers,
pricing. As cost of sales also includes depreciation
as well as the global financial markets and financial
of plant and equipment, cost of sales is affected by
services industry.
the number and timing of product launches, which
trigger the commencement of depreciation of
Effects of Foreign Currency Exchange Rates —
plant and equipment acquired specifically for the
We are affected by fluctuations in foreign currency
production of certain car models.
exchange rates through (i) the translation into Euro
upon consolidation of foreign currency financial
As further described in the “Results of Operations”
statements of our subsidiaries with functional
section below, due to the effects of the temporary
currencies other than Euro, which we refer to as the
suspension of production and shipments, as well
translation impact, and (ii) transactions by entities
as the changes to the calendar and format of the
of the Group in currencies other than their own
2020 Formula 1 World Championship, which were
functional currencies, which we refer to as the
caused by the COVID-19 pandemic, costs as a
transaction impact.
percentage of net revenues were higher in 2020
compared to other years. Furthermore, a portion of
Translation impacts arise in the preparation of the
our costs are fixed in nature and we decided to pay all
consolidated financial statements; in particular, we
employees throughout the whole suspension period
present our consolidated financial statements in
and not accede to any government aid programs,
Euro, while the functional currency of each of our
therefore management actions to reduce costs only
subsidiaries depends on the primary economic
partially compensated the decrease in net revenues
environment of that entity. In preparing the
experienced in 2020 as a result of the pandemic.
consolidated financial statements, we translate into
Euro the assets and liabilities of foreign subsidiaries
expressed in local functional currency other than
Euro using the foreign currency exchange rates
100
FERRARI N.V.AR 2021
prevailing at the balance sheet date, while we
Patent Box Benefit — Income taxes for the years
translate income and expenses using the average
ended December 31, 2021, 2020 and 2019 benefited
foreign currency exchange rates for the period
from the application of the Patent Box tax regime,
presented. Accordingly, fluctuations in the foreign
which provides tax benefits for companies that
currency exchange rates of the functional currencies
generate income through the use of intangible assets.
of our subsidiaries against the Euro impacts our
Starting in 2020 the Group has applied the Patent
results of operations.
Box tax regime for the period from 2020 to 2024 and
determined the income eligible for the Patent Box
Transaction impacts arise when our Group entities
regime with recognition of the Patent Box tax benefit
conduct transactions in currencies other than their
in three equal annual installments.
own functional currency. Therefore, we are also
exposed to foreign currency risks in connection
Italian legislation recently enacted in 2021 will replace
with scheduled receipts and payments in multiple
the current Patent Box tax regime with a 110%
currencies. Our costs are primarily denominated
“super tax deduction” for certain costs related to
in Euro, while the majority of our revenues are
eligible intangible assets and provides for a specific
generated in currencies other than the Euro,
transitional procedure between the two regimes. The
including in U.S. Dollars, Pound Sterling, Japanese
new legislation should not have any impact on income
Yen, Chinese Yuan, Swiss Franc and, to a lesser
taxes of the Group for the year ended December 31,
extent, certain other currencies.
2021 and management will continue to follow updates
In general, an appreciation of the U.S. Dollar, and the
other currencies in which we operate, against the
For additional information see Note 10 “Income taxes”
Euro would positively impact our net revenues and
to the Consolidated Financial Statements included
results of operations.
elsewhere in this document.
in the legislation as they become known.
Our risk management policies contemplate the use
Trademark Step-up — In the fourth quarter of 2020,
of derivative financial instruments to hedge foreign
the Group benefited from the measures introduced
currency exchange rate risk. In particular, we have
in Italy by the art. 110 of the Law Decree n. 104/2020,
used derivative financial instruments as cash flow
converted in the Law n.126/2020, enacting “Urgent
hedges for the purpose of hedging the foreign
measures to support and relaunch the economy”
currency exchange rate at which a predetermined
which reopened the voluntary step up of tangible and
proportion of forecasted transactions denominated
intangible assets, with the application of a substitutive
in foreign currencies will occur. Accordingly, our
tax rate (3%). In particular, Ferrari S.p.A. benefited
results of operations have not been fully exposed
from the one-off partial step-up of its trademark
to fluctuations in foreign currency exchange rates.
for tax purposes, which resulted in the recognition
See Note 30 “Qualitative and Quantitative Information
in 2020 of deferred tax assets for €84 million and
on Financial Risks” to the Consolidated Financial
a substitute tax liability for €9 million, resulting in
Statements included elsewhere in this document for
a net tax benefit of €75 million. There was no cash
additional information related to our foreign currency
effect in 2020 from the step-up of the trademark.
exchange rate risk policies.
The deferred tax asset will be utilized over a 50-year
Regulation — We ship our cars throughout the world
following the approval of Law 234/2021; see also
and are therefore subject to a variety of laws and
Note 10 “Income taxes” to the Consolidated Financial
regulations, including tariffs. These laws regulate our
Statements included elsewhere in this document) and
cars, including their emissions, fuel consumption and
the substitute tax will be paid in three equal annual
period (recently extended from the previous 18 years
safety, as well as our manufacturing facilities. As we
installments starting in 2021.
are currently a small volume manufacturer in certain
jurisdictions, we benefit from certain regulatory
Management considers this item significant in nature
exemptions, including less stringent emissions caps.
but non-recurring and not reflective of ongoing
Developing, engineering and producing cars which
operational activities, therefore the positive impact
meet continuously evolving regulatory requirements,
of €75 million has been excluded in the calculation of
and can therefore be sold in the relevant markets,
Adjusted Net Profit and Adjusted Basic and Diluted
requires a significant effort and expenditure of
Earnings per Common Share for 2020.
resources. See “Overview of Our Business—Regulatory
Matters” for additional information.
101
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/ TRENDS, UNCERTAINTIES AND OPPORTUNITIES
Asset-backed Financing (Securitizations) —
Maserati Engine Volumes — We have been producing
We pursue a strategy of autonomous financing for
engines for Maserati since 2003. The V8 engines that
our financial services activities in the United States,
we historically produced and continue to produce for
which involves limiting or reducing dependency on
Maserati are variants of Ferrari families of engines
intercompany funding and increasing the portion
and are mounted on Maserati’s highest performing
of self-liquidating debt with various securitization
models. We also produce a V6 family of engines
transactions. At December 31, 2021 and 2020 our
exclusively for Maserati. We currently have a multi-
funding under securitization programs amounted to
year arrangement with Maserati to provide V6
€900 million and €761 million, respectively.
engines up to 2023. Net revenues generated from
For additional information see Note 24 “Debt” to
received from Maserati, which in turn depend on
the Consolidated Financial Statements included
Maserati production volumes and product launches.
elsewhere in this document.
Our net revenues from engines increased in 2021
sales of engines to Maserati depend on the orders
compared to 2020 as a result of higher orders
received from Maserati, although they remain below
2019 levels.
102
FERRARI N.V.AR 2021
103
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RESULTS
OF OPERATIONS
CONSOLIDATED RESULTS OF OPERATIONS
2021 COMPARED TO 2020
AND 2020 COMPARED TO 2019
The following is a discussion of the results of operations for the year ended December 31, 2021 as compared to
the year ended December 31, 2020, and for the year ended December 31, 2020 as compared to the year ended
December 31, 2019. The presentation includes line items as a percentage of net revenues for the respective
periods presented to facilitate year-over-year comparisons.
For the year ended December 31, 2020 our costs as a percentage of net revenues and our EBIT and EBIT
margin were negatively impacted by the COVID-19 pandemic, which caused a seven-week production and
delivery suspension in the first half of 2020 (during which we decided to pay all employees throughout the whole
suspension period and not accede to any government aid programs) as well as changes to the format of the 2020
Formula 1 World Championship.
(€ million, except percentages)
Net revenues
Cost of sales
Selling, general and administrative costs
Research and development costs
Other expenses, net
Result from investments
EBIT
Net financial expenses
Profit before taxes
Income tax expense
Net profit
For the years ended December 31,
2021
Percentage
2020
Percentage
2019
Percentage
of net
revenues
100.0%
48.7%
8.1%
18.0%
0.2%
0.2%
25.2%
0.8%
24.4%
4.9%
19.5%
4,271
2,081
348
768
6
7
1,075
33
1,042
209
833
of net
revenues
100.0%
48.7%
9.7%
20.4%
0.6%
0.1%
20.7%
1.4%
19.3%
1.7%
17.6%
3,460
1,686
336
707
19
4
716
49
667
58
609
of net
revenues
100.0%
47.9%
9.1%
18.6%
0.1%
0.1%
24.4%
1.2%
23.2%
4.6%
18.6%
3,766
1,805
343
699
5
3
917
42
875
176
699
AR 2021
104
NET REVENUES
The following table sets forth an analysis of our net revenues for each of the years ended December 31, 2021,
2020 and 2019:
(€ million, except percentages)
For the years ended December 31,
Increase/(Decrease)
2021 Percentage
2020 Percentage
2019 Percentage
2021 vs. 2020
2020 vs. 2019
of net
revenues
of net
revenues
of net
revenues
Cars and spare parts (1)
3,573
83.7%
2,835
81.9%
2,926
77.7%
738
26.0%
(91)
(3.1)%
Engines (2)
Sponsorship, commercial
and brand (3)
Other (4)
189
431
78
4.4%
151
4.4%
198
5.3%
38
25.7%
(47)
(24.0)%
10.1%
390
11.3%
538
14.3%
41
10.4%
(148)
(27.5)%
1.8%
84
2.4%
104
2.7%
(6)
(7.4)%
(20)
(19.5)%
Total net revenues
4,271
100.0% 3,460
100.0% 3,766
100.0%
811
23.4%
(306)
(8.1)%
(1)
Includes net revenues generated from shipments of our cars, any personalization generated on these cars, as well as sales of spare parts.
(2)
(3)
Includes net revenues generated from the sale of engines to Maserati for use in their cars and from the rental of engines to other Formula 1 racing
teams.
Includes net revenues earned by our Formula 1 racing team through sponsorship agreements and our share of the Formula 1 World Championship
commercial revenues, as well as net revenues generated through the Ferrari brand, including merchandising, licensing and royalty income.
(4) Primarily relates to financial services activities, management of the Mugello racetrack and other sports-related activities.
2021 COMPARED TO 2020
In particular, the increase in shipments was driven by
Net revenues for 2021 were €4,271 million, an
the F8 family, together with the Ferrari Roma and the
increase of €811 million, or 23.4 percent (an increase
SF90 Stradale, which both reached global distribution
of 26.0 percent on a constant currency basis), from
in the second quarter of 2021, as well as the ramp
€3,460 million for 2020.
up of the Ferrari Portofino M and the SF90 Spider,
partially offset by the Ferrari Portofino, the 488 Pista
The increase in net revenues was attributable to the
family and the 812 Superfast. Additionally, deliveries
combination of (i) a €738 million increase in cars and
of the Ferrari Monza SP1 and SP2 increased in 2021
spare parts, (ii) a €38 million increase in engines, and
compared 2020, in line with planning, and the models
(iii) a €41 million increase in sponsorship, commercial
are reaching the end of production. The positive mix
and brand, partially offset by a €6 million decrease in
impact was driven by the SF90 family and the Ferrari
other revenues.
Monza SP1 and SP2, as well as higher revenues from
personalizations.
CARS AND SPARE PARTS
Net revenues generated from cars and spare parts
All geographic regions positively contributed in the
were €3,573 million for 2021, an increase of €738
year, with increases in revenues of: (i) €251 million in
million, or 26.0 percent, from €2,835 million for 2020.
EMEA, (ii) €217 million in Americas, (iii) €137 million in
Mainland China, Hong Kong and Taiwan, and (iv) €133
The increase in net revenues from cars and spare
million in Rest of APAC. The performance in Mainland
parts was primarily attributable to higher car
China, Hong Kong and Taiwan was boosted by the
volumes, positive mix and personalizations, partially
launch of new models and the comparison versus
offset by negative foreign currency exchange impact
the prior year, which was negatively impacted by the
(mainly relating to the U.S. Dollar and the Japanese
decision to deliberately accelerate client deliveries
Yen). Shipments in 2020 were impacted by the seven-
in 2019 in advance of new emissions regulations.
week production and delivery suspension in the first
All changes include the effects of foreign currency
half of the year caused by the COVID-19 pandemic.
hedge transactions.
Overall, shipments increased by 2,036 cars, or
22.3 percent, driven by a 34.6 percent increase in
shipments of our V8 models while shipments of our
V12 models decreased by 16.1 percent, mainly due to
the 812 Superfast, which was phased out during 2021.
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/ CONSOLIDATED RESULTS OF OPERATIONS – 2021 COMPARED TO 2020 AND 2020 COMPARED TO 2019
ENGINES
percent while our V12 models decreased by 9.0. The
Net revenues generated from engines were €189
decrease in shipments also reflects the phase-out of
million for 2021, an increase of €38 million, or 25.7
the Ferrari Portofino as well as the Ferrari 488 Pista
percent, from €151 million for 2020. The increase was
and Ferrari 488 Pista Spider gradually approaching
mainly attributable to an increase in engines sold to
the end of their lifecycles, partially offset by the ramp
Maserati and, to a lesser extent, higher revenues from
up of the Ferrari F8 Tributo, the Ferrari F8 Spider, and
the rental of engines to other Formula 1 racing teams.
the 812 GTS which reached global distribution, as
SPONSORSHIP, COMMERCIAL AND BRAND
delivered as originally scheduled in 2020.
Net revenues generated from sponsorship, Formula
The deliveries of the SF90 Stradale started in the
1 commercial agreements and brand management
fourth quarter of 2020 following the industrialization
activities were €431 million for 2021, an increase
delays experienced and subsequently resolved.
of €41 million, or 10.4 percent, from €390 million
Deliveries of the Ferrari Roma also commenced
well as the Ferrari Monza SP1 and SP2, which were
for 2020. The increase was primarily attributable
in the fourth quarter.
to Formula 1 racing activities, driven by the more
favorable Formula 1 calendar compared to 2020, and
The €91 million decrease in net revenues was
brand-related activities, partially offset by a lower
composed of (i) a €170 million increase in EMEA, (ii) a
prior year Formula 1 ranking.
€143 million decrease in Americas (including positive
OTHER
foreign currency translation impact driven by the
strengthening of the U.S. Dollar compared to the
Other net revenues were €78 million for 2021, a
Euro), (iii) a €146 million decrease in Mainland China,
decrease of €6 million, or 7.4 percent, from €84
Hong Kong and Taiwan, and (iv) a €28 million increase
million for 2020.
in the Rest of APAC. Net revenues by geography were
impacted by the deliberate geographic allocations
2020 COMPARED TO 2019
driven by the phase-in/phase-out pace of individual
Net revenues for 2020 were €3,460 million, a
models, which primarily favored EMEA in 2020. The
decrease of €306 million, or 8.1 percent (a decrease
decrease in Mainland China, Hong Kong and Taiwan
of 8.9 percent on a constant currency basis), from
was primarily impacted by the decision to accelerate
€3,766 million for 2019.
client deliveries in the first half of 2019, in addition to
the effects of COVID-19 in 2020.
The change in net revenues was attributable to the
combination of (i) a €91 million decrease in cars and
ENGINES
spare parts, (ii) a €47 million decrease in engines, (iii)
Net revenues generated from engines were €151
a €148 million decrease in sponsorship, commercial
million for 2020, a decrease of €47 million, or 24.0
and brand, and (iv) a €20 million decrease in other
percent, from €198 million for 2019. The decrease
revenues.
was attributable to lower shipments of engines to
Maserati and lower revenues from the rental of
CARS AND SPARE PARTS
engines to other Formula 1 racing teams driven by the
Net revenues generated from cars and spare parts
reduced number of races in 2020 as a result of the
were €2,835 million for 2020, a decrease of €91
COVID-19 pandemic.
million, or 3.1 percent, from €2,926 million for 2019.
The decrease in net revenues was primarily
SPONSORSHIP, COMMERCIAL AND BRAND
attributable to lower volumes as well as their
Net revenues generated from sponsorship, Formula
personalizations, mainly due to the seven-week
1 commercial agreements and brand management
production suspension in the first half of 2020 and
activities were €390 million for 2020, a decrease of
the temporary closure of certain dealerships caused
€148 million, or 27.5 percent, from €538 million for
by the COVID-19 pandemic, partially offset by positive
2019. The decrease was primarily attributable to
mix driven by deliveries of the Ferrari Monza SP1
impacts of the COVID-19 pandemic, which resulted in
and SP2.
a reduced number of Formula 1 races in 2020 and a
decrease in-store traffic and museum visitors.
Overall, shipments decreased by 1,012 cars, or
10.0 percent, compared to the prior year, driven by
the COVID-19 pandemic, with a gradual recovery
of production and shipments in the second half of
2020. Shipments of our V8 models decreased by 10.3
106
FERRARI N.V.AR 2021
OTHER
Other net revenues were €84 million for 2020 a decrease of €20 million, or 19.5 percent, from €104 million for
2019. The decrease was primarily attributable to reduced sports-related activities and the cancellation of the Moto
GP event at the Mugello racetrack, the effects of which were only partially offset by the first ever Formula 1 Grand
Prix held at the Mugello racetrack.
COST OF SALES
(€ million, except percentages)
For the years ended December 31,
Increase/(Decrease)
Percentage
Percentage
Percentage
2021
of net
2020
of net
2019
of net
2021 vs. 2020
2020 vs. 2019
revenues
revenues
revenues
Cost of sales
2,081
48.7%
1,686
48.7%
1,805
47.9%
395
23.4%
(119)
(6.6)%
2021 COMPARED TO 2020
2020 COMPARED TO 2019
Cost of sales for 2021 was €2,081 million, an increase
Cost of sales for 2020 was €1,686 million, a decrease
of €395 million, or 23.4 percent, from €1,686 million
of €119 million, or 6.6 percent, from €1,805 million for
for 2020. As a percentage of net revenues, cost of
2019. As a percentage of net revenues, cost of sales
sales was 48.7 percent for both 2021 and 2020.
increased from 47.9 percent in 2019 to 48.7 percent
The increase in cost of sales was primarily
in 2020.
attributable to higher car volumes and a change
The decrease in cost of sales was primarily
in product mix, as well as higher Maserati engine
attributable to a decrease in car volumes due to
volumes and costs for other supporting activities.
COVID-19 pandemic and lower engine volumes
produced for Maserati, partially offset by higher
depreciation. Cost of sales in 2020 includes the full
cost of employees’ paid days of absence during the
COVID-19-related production suspension.
SELLING, GENERAL AND ADMINISTRATIVE COSTS
(€ million, except percentages)
For the years ended December 31,
Increase/(Decrease)
Percentage
Percentage
Percentage
2021
of net
2020
of net
2019
of net
2021 vs. 2020
2020 vs. 2019
revenues
revenues
revenues
Selling, general and
administrative costs
348
8.1%
336
9.7%
343
9.1%
12
3.5%
(7)
(2.1)%
2021 COMPARED TO 2020
2020 COMPARED TO 2019
Selling, general and administrative costs were €348
Selling, general and administrative costs for 2020
million for 2021, an increase of €12 million, or 3.5
were €336 million, a decrease of €7 million, or 2.1
percent, from €336 million for 2020. As a percentage
percent, from €343 million for 2019. As a percentage
of net revenues, selling, general and administrative
of net revenues, selling, general and administrative
costs were 8.1 percent in 2021 compared to 9.7
costs were 9.7 in 2020 compared to 9.1 percent
percent in 2020.
in 2019.
The increase was mainly attributable to
The decrease in selling, general and administrative
communication and marketing activities related to
costs was primarily attributable to the deployment of
models unveiled in 2021, as well as lifestyle events and
significant cost containment actions, partially offset
costs to support the organic growth of the business.
by Formula 1 racing activities.
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/ CONSOLIDATED RESULTS OF OPERATIONS – 2021 COMPARED TO 2020 AND 2020 COMPARED TO 2019
RESEARCH AND DEVELOPMENT COSTS
(€ million, except percentages)
For the years ended December 31,
Increase/(Decrease)
Percentage
Percentage
Percentage
2021
of net
2020
of net
2019
of net
2021 vs. 2020
2020 vs. 2019
revenues
revenues
revenues
574
13.4%
527
15.2%
559
14.9%
47
8.9%
(32)
(5.9)%
Research and
development costs
expensed during
the year
Amortization of
capitalized development
194
4.6%
180
5.2%
140
3.7%
14
7.7%
40
29.3%
costs
Research and
development costs
768
18.0%
707
20.4%
699
18.6%
61
8.6%
8
1.2%
2021 COMPARED TO 2020
from €699 million for 2019. As a percentage of net
Research and development costs for 2021 were €768
revenues, research and development costs were 20.4
million, an increase of €61 million, or 8.6 percent,
percent in 2020 compared to 18.6 percent in 2019.
from €707 million for 2020. As a percentage of net
revenues, research and development costs were 18.0
The increase of €8 million in research and
percent in 2021 compared to 20.4 percent in 2020.
development costs during the period was primarily
attributable to an increase in amortization of
The increase in research and development costs was
capitalized development costs of €40 million driven by
primarily attributable to an increase in research and
a general increase in capitalized development costs
development costs expensed of €47 million driven
in recent years in line with our strategy to update and
by product innovation and Formula 1 activities, and
broaden our product range and significantly increase
comparison was impacted by higher technology
our efforts relating to hybrid and other advanced
incentives in the prior year, as well as an increase
technologies, partially offset by lower research and
in amortization of capitalized development costs of
development costs expensed during the period of
€14 million driven by a general increase in capitalized
€32 million, including as a result of technology-related
development costs in recent years in line with our
government incentives recognized in 2020.
strategy to update and broaden our product range
and significantly increase our efforts in relation to
We continued to invest in research and development
hybrid and other advanced technologies.
projects important for the continuing success of
2020 COMPARED TO 2019
actions taken in 2020 to contain costs as a result of
Ferrari and its future development, despite certain
Research and development costs for 2020 were
the COVID-19 pandemic.
€707 million, an increase of €8 million, or 1.2 percent,
OTHER EXPENSES/(INCOME), NET
(€ million, except percentages)
Other expenses/(income), net
For the years ended December 31,
Increase/(Decrease)
2021
6
2020
19
2019
2021 vs. 2020
2020 vs. 2019
5
(13)
(69.9)%
14
270.2%
Generally, other expenses/(income), net consist of other expenses that primarily include indirect taxes, provisions
and other miscellaneous expenses, as well as other income that primarily includes rental income, gains on the
disposal of property, plant and equipment and other miscellaneous income, including the release of previously
recognized provisions.
Other expenses/(income), net in 2021 is composed of other expenses of €14 million, partially offset by €8 million of
108
FERRARI N.V.AR 2021 other income. Other expenses/(income), net in 2020 is
Other expenses/(income), net in 2019 is composed of
composed of other expenses of €25 million, partially
other expenses of €14 million, partially offset by €9
offset by €6 million of other income.
million of other income. Other expenses, net in 2021
and 2019 include releases of provisions relating to legal
disputes following developments favorable to Ferrari.
EBIT
(€ million, except percentages)
For the years ended December 31,
Increase/(Decrease)
Percentage
Percentage
Percentage
2021
of net
2020
of net
2019
of net
2021 vs. 2020
2020 vs. 2019
revenues
revenues
revenues
EBIT
1,075
25.2%
716
20.7%
917
24.4%
359
50.2%
(201)
(21.9)%
2021 COMPARED TO 2020
2020 COMPARED TO 2019
EBIT for 2021 was €1,075 million, an increase of €359
EBIT for 2020 was €716 million, a decrease of €201
million, or 50.2 percent, from €716 million for 2020. As a
million, or 21.9 percent, from €917 million for 2019. As a
percentage of net revenues, EBIT increased from 20.7
percentage of net revenues, EBIT decreased from 24.4
percent in 2020 to 25.2 percent in 2021.
percent in 2019 to 20.7 percent in 2020.
The increase in EBIT was primarily attributable to
The decrease in EBIT was attributable to the combined
the combined effects of (i) positive volume impact of
effects of (i) negative volume impact of €126 million,
€220 million, (ii) positive product mix impact of €212
(ii) positive product mix and price impact of €130
million, (iii) an increase in research and development
million, (iii) an increase in industrial costs of €58
costs of €61 million, (iv) an increase in selling, general
million, including higher depreciation, (iv) an increase
and administrative costs of €12 million, (v) positive
in research and development costs of €8 million (net
contribution of €77 million driven by Formula 1 racing
of the benefit from technology-related government
activities reflecting the more favorable Formula
incentives), (v) a decrease in selling, general and
1 calendar compared to 2020 as well as higher
administrative costs of €7 million, (vi) negative
contribution from brand-related activities, Maserati
contribution of €184 million due to the impacts of
engines and other supporting activities, partially
COVID-19 on the Formula 1 racing calendar, lower
offset by a lower prior year Formula 1 ranking, and
traffic for brand related activities and lower engine
(vi) negative foreign currency exchange impact of
sales to Maserati, and (vii) positive foreign currency
€77 million (including foreign currency hedging
exchange impact of €38 million (including foreign
instruments) primarily driven by the strengthening
currency hedging instruments) primarily driven by
of the Euro compared to the U.S. Dollar and the
the strengthening of the U.S. Dollar and Japanese Yen
Japanese Yen.
compared to the Euro.
The positive mix impact was driven by the SF90 family,
The negative volume impact was primarily attributable
the Ferrari Monza SP1 and SP2, and personalizations,
to the temporary suspension of shipments for seven
partially offset by the ramp up of the Ferrari Roma and
weeks during the first half of 2020 as a result of
the Portofino M and reduced contribution of the 812
the COVID-19 pandemic, the effects of which were
Superfast, which was phased out during 2021.
partially recovered in the second half of the year. The
positive product mix and price impact was primarily
attributable to deliveries of the Ferrari Monza SP1
and SP2 as well as an otherwise richer product mix,
partially offset by fewer shipments of the FXX-K EVO
and lower contributions from our personalization
programs, which are correlated to the decrease in
volumes.
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NET FINANCIAL EXPENSES
(€ million, except percentages)
Net financial expenses
For the years ended December 31,
Increase/(Decrease)
2021
33
2020
49
2019
2021 vs. 2020
2020 vs. 2019
42
(16)
(32.3)%
7
16.7%
2021 COMPARED TO 2020
2020 COMPARED TO 2019
Net financial expenses for 2021 decreased to €33
Net financial expenses for 2020 increased to €49
million compared to €49 million for 2020.
million compared to €42 million for 2019.
The decrease in net financial expenses was primarily
The increase in net financial expenses was primarily
attributable to a decrease in net foreign exchange
attributable to (i) a decrease in the fair value of
losses, including hedging costs.
investments held by the Group (compared to an
increase in the fair value of investments held by
the Group 2019), and (ii) an increase in net foreign
exchange losses, including the net costs of hedging.
INCOME TAX EXPENSE
(€ million, except percentages)
Income tax expense
For the years ended December 31,
Increase/(Decrease)
2021
209
2020
58
2019
2021 vs. 2020
2020 vs. 2019
176
151
n.m.
(118)
(67.1)%
2021 COMPARED TO 2020
In the fourth quarter of 2020, the Group benefited
Income tax expense for 2021 was €209 million, an
from the measures introduced in Italy by the art. 110
increase of €151 million, compared to €58 million
of the Law Decree n. 104/2020, converted in the Law
for 2020. Income taxes for both years benefited
n.126/2020, enacting “Urgent measures to support
from the application of the Patent Box regime. See
and relaunch the economy” which reopened the
Note 10 “Income Taxes” to the Consolidated Financial
voluntary step up of tangible and intangible assets,
Statements included elsewhere in this document for
with the application of a substitutive tax rate (3%). In
additional information related to the Patent Box tax
particular, Ferrari S.p.A. benefited from the one-off
regime in Italy.
partial step-up of its trademark for tax purposes,
which resulted in the recognition in 2020 of deferred
The increase in income tax expense was primarily
tax assets for €84 million and a substitute tax liability
attributable to the combined effects of (i) an
for €9 million, resulting in a net tax benefit of €75
increase in profit before taxes and (ii) a net tax
million. There was no cash effect in 2020 from the
benefit recognized in 2020 from the partial step up
step-up of the trademark. The deferred tax asset
of trademarks for tax purposes amounting to €75
will be utilized over a 50-year period (following the
million, as further described below.
introduction of the 2022 Italian budget law (Law
234/2021) which provides for an extension from
The effective tax rate was 20.1 percent in 2021
18 years to 50 years of the amortization period for
compared to 8.7 percent in 2020. The increase in the
tax purposes for any trademarks and goodwill that
effective tax rate was primarily attributable to the
benefited from the step-up regime) and the substitute
effects of a net tax benefit recognized in 2020 from
tax will be paid in three equal annual installments
the voluntary, partial step-up of trademarks for tax
starting in 2021. The net benefit has been treated as
purposes, as further described below.
an adjusting item in the calculation of Adjusted Net
Profit and Adjusted Basic and Diluted Earnings per
Common Share for 2020.
110
FERRARI N.V.AR 2021
2020 COMPARED TO 2019
Income tax expense for 2020 was €58 million, a decrease of €118 million, or 67.1 percent compared to €176
million for 2019.
The decrease in income tax expense was primarily attributable to the combined effects of (i) a tax benefit from
the partial step up of trademarks for tax purposes amounting to €75 million, as further described above, (ii) a
decrease in profit before taxes, and (iii) the effects of deductions for eligible research and development costs.
Income taxes for both years benefited from the application of the Patent Box regime.
The effective tax rate was 8.7 percent in 2020 compared to 20.2 percent in 2019. The decrease in the effective tax
rate was primarily attributable to the effects of the net tax benefit recognized in 2020 from the trademark step-up
as described above, and to a lesser extent, the effects of deductions for eligible research and development costs.
RECENT DEVELOPMENTS
See “Subsequent Events and 2022 Outlook”.
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FERRARI N.V.
LIQUIDITY
AND CAPITAL RESOURCES
LIQUIDITY OVERVIEW
edition models. We maintain sufficient inventory of
raw materials and components to ensure continuity
of our production lines, however delivery of most
raw materials and components takes place monthly
We require liquidity in order to fund our operations
or more frequently in order to minimize inventories.
and meet our obligations. Short-term liquidity is
The manufacture of one of our cars typically takes
required, among others, to purchase raw materials,
between 30 and 45 days, depending on the level
parts, components and utilities for car production,
of automation of the relevant production line, and
as well as to fund personnel expenses and other
the car is generally shipped to our dealers three
operating costs. In addition to our general working
to six days following the completion of production,
capital and operational needs, we require cash
although we may warehouse cars in local markets for
for capital investments to support continuous
longer periods of time to ensure prompt deliveries in
product range renewal and expansion and, more
certain regions. As a result of the above, including the
recently, for research and development activities to
advances received from customers for certain car
transition our product portfolio to hybrid and electric
models, we tend to receive payment for cars shipped
technology. We also make investments to, among
before or around the time we are required to make
others, enhance manufacturing efficiency, improve
payments for the raw materials, components or other
capacity, implement sustainability initiatives, ensure
materials used in manufacturing the cars.
environmental compliance and carry out maintenance
activities. We fund our capital expenditure primarily
Our investments for capital expenditure and
with cash generated from our operating activities.
research and development are, among other factors,
influenced by the timing and number of new models
We centrally manage our operating cash management,
launches. Our development costs, as well as our other
liquidity and cash flow requirements with the objective
investments in capital expenditure, generally peak
of ensuring efficient and effective management of our
in periods when we develop a significant number of
funds. We believe that our cash generation together
new models to renew or expand our product range.
with our available liquidity, including committed credit
Our investments in research and development are
lines granted from primary financial institutions, will be
also influenced by the timing of research costs for
sufficient to meet our obligations and fund our business
our Formula 1 activities, for which expenditure in
and capital expenditures.
a normal season is generally higher in the first and
last quarters of the year, and otherwise depends on
See the “Net Debt and Net Industrial Debt” section
the evolution of the applicable Formula 1 technical
below for additional details relating to our liquidity.
regulations, as well as the number and cadence of
races during the course of the racing season. We are
CYCLICAL NATURE OF OUR CASH FLOWS
currently undergoing a period of structurally higher
Our working capital is subject to month to month
capital spending as we broaden our car architectures
fluctuations due to, among other things, production
and work on the transition to hybrid and electric
and sales volumes, our financial services activities,
technologies. We also continue to make significant
the timing of capital expenditures and, to a lesser
capital investments by prioritizing capital projects that
extent, tax payments. In particular, our inventory
are considered important for the continuing success
levels generally increase in the periods leading up to
of Ferrari and its future development, including the
the launch of new models, during the phase out of
acquisition in 2020 and, to a lesser extent, in 2021, of
existing models when we build up spare parts, and
tracts of land adjacent to our facilities in Maranello as
at the end of the second quarter when our inventory
part of our expansion plans.
levels are generally higher to support the summer
plant shutdown.
The payment of income taxes also affects our cash
flows. We typically pay the first tax advance payment
We generally receive payment for cars between 30
in the second quarter of the year and the remaining
and 40 days after the car is shipped (or earlier when
portion in the third and/or fourth quarters. Our tax
sales financing schemes are utilized by us or by
expense and tax payments in 2021, 2020 and 2019
our dealers) while we generally pay most suppliers
benefited from applying the Patent Box tax regime.
between 60 and 90 days after we receive the raw
See Note 10 “Income Taxes” to the Consolidated
materials, components or other goods and services.
Financial Statements included elsewhere in this
Additionally, we also receive advance payments
document for additional information related to the
from our customers, mainly for our Icona and limited
Patent Box tax regime in Italy.
AR 2021
112
CASH FLOWS
The following table summarizes the cash flows from/(used in) operating, investing and financing activities for
each of the years ended December 31, 2021, 2020 and 2019. For additional details of our cash flows, see our
Consolidated Financial Statements included elsewhere in this document.
(€ million)
Cash and cash equivalents at beginning of the year
Cash flows from operating activities
Cash flows used in investing activities
Cash flows (used in)/from financing activities
Translation exchange differences
Total change in cash and cash equivalents
For the years ended December 31,
2021
1,362
1,283
(733)
(580)
12
(18)
2020
898
838
(708)
340
(6)
464
Cash and cash equivalents at end of the year
1,344
1,362
2019
794
1,306
(701)
(502)
1
104
898
2021 COMPARED TO 2020
(iv)
lower dividends paid to owners of the parent of
For the year ended December 31, 2021 cash and
48 million (€160 million paid in 2021 compared to
cash equivalents held by the Group decreased by
208 million paid in 2020, primarily driven by the
€18 million compared to an increase of €464 million
effects of the COVID-19 pandemic).
for year ended December 31, 2020. The difference
in the net change in cash and cash equivalents in
2020 COMPARED TO 2019
2021 compared to 2020 of €482 million was primarily
For the year ended December 31, 2020 the total
attributable to the combined effects of:
change in cash and cash equivalents was €464 million
(i)
the full repayment of a bond for €501 million in
compared to €104 million for year ended December
January 2021 (including a principal amount of
31, 2019. The increase in cash generation of €360
€500 million and interest of €1 million);
million in 2020 compared to 2019 was primarily
(ii)
lower cash proceeds from the issuance of bonds
attributable to:
and notes of €491 million (net proceeds of €149
(i) net cash proceeds of €640 million received in
million in 2021 from the issuance of the 2032
2020 from the issuance of the 2025 Bond; and
Notes (as defined below) compared to €640
(ii)
lower share repurchases of €257 million (€130
million in 2020 from the issuance of the 2025
million in 2020 compared to €387 million in 2019)
Bond (as defined below);
driven by our decision to temporarily suspend
(iii) higher share repurchases of €101 million (€231
the share repurchase program in March 2020
million in 2021 compared to €130 million in 2020
to preserve liquidity as a result of the COVID-19
as the share repurchase program was restarted
pandemic;
on March 11, 2021 following the decision to
temporarily suspend the program on March
partially offset by:
30, 2020 to preserve liquidity as a result of the
(i) a decrease in advances received for the Ferrari
COVID-19 pandemic); and
Monza SP1 and SP2 (which were primarily
(iv) higher investments in intangible assets of €33
received in 2019 ahead of shipments, including
million to support the development of our current
for cars actually delivered in 2020);
and future product offering;
(ii)
the adverse impacts on our cash flows from
partially offset by:
operating activities as a result of the COVID-19
pandemic, including the temporary suspension of
(i) an increase in EBITDA of €388 million;
production and deliveries for seven weeks during
(ii) an increase of €123 million in net proceeds from
the first half of 2020, as well as higher inventories
bank borrowings and other financial institutions;
reflecting efforts to mitigate potential supply
(iii) a positive impact of €62 million from working
chain issues;
capital and other operating assets and liabilities,
(iii) an increase in income taxes paid, and
and
(iv)
lower net proceeds from our securitization
programs.
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Please refer to the following discussion and to the
expense recognized in relation to the Group’s
Consolidated Statement of Cash Flows included
equity incentive plans);
elsewhere in this document for additional information
related to our cash flows.
partially offset by:
A summary of the cash flows from or used in
change in inventories, trade receivables and
operating, investing and financing activities for each
trade payables. In particular, the movement was
(i) €15 million of cash absorbed from the net
year is provided below.
attributable to: (a) cash absorbed by inventories
of €68 million driven by higher finished goods
OPERATING ACTIVITIES — YEAR ENDED
and raw materials, including the effects of efforts
DECEMBER 31, 2021
to protect the supply chain from potential COVID-
For the year ended December 31, 2021, our cash
19-related disruptions, partially offset by (b) cash
flows from operating activities were €1,283 million,
generated from trade receivables of €44 million
primarily the result of:
and (c) cash generated from trade payables of €9
(i) profit before tax of €1,042 million, adjusted for
million;
€456 million for depreciation and amortization
(ii) €137 million of cash absorbed related to the net
expense, €33 million of net finance costs and net
change in other operating assets and liabilities,
other non-cash expenses and income of €48
primarily attributable to reversals of advances
million (including provision accruals, result from
received for the Ferrari Monza SP1 and SP2;
investments and share-based compensation
(iii) €69 million related to cash absorbed from
expense recognized in relation to the Group’s
receivables from financing activities, driven by an
equity incentive plans);
increase in the financial receivables portfolio;
partially offset by:
(i) €123 million related to cash absorbed by
(iv) 52 million of net finance costs paid; and
(v) €91 million of income tax paid.
receivables from financing activities driven by an
OPERATING ACTIVITIES — YEAR ENDED
increase in the financial services portfolio;
DECEMBER 31, 2019
(ii) €30 million of cash absorbed from the change
For the year ended December 31, 2019, our cash
in other operating assets and liabilities, primarily
flows from operating activities were €1,306 million,
attributable to reversals of advances received for
primarily the result of:
the Ferrari Monza SP1 and SP2, partially offset by
(i) profit before tax of €875 million, adjusted to
advances received for the 812 Competizione and
add back €352 million of depreciation and
812 Competizione A;
amortization expense, €42 million of net finance
(iii) €6 million of cash absorbed from the net
costs and net other non-cash expenses and
change in inventories, trade receivables and
income of €49 million (including provision
trade payables. In particular, the movement was
accruals, result from investments and share-
attributable to: (a) cash absorbed by inventories
based compensation expense recognized in
of €81 million driven by higher volumes,
relation to the Group’s equity incentive plans); and
partially offset by (b) cash generated from trade
(ii) €146 million of cash generated by the change in
receivables of €2 million and (c) cash generated
other operating assets and liabilities, primarily
from trade payables of €73 million;
attributable to advances received for the Ferrari
(iv) €28 million of net finance costs paid; and
Monza SP1 and SP2;
(v) €109 million of income tax paid.
partially offset by:
OPERATING ACTIVITIES — YEAR ENDED
(i) €77 million of cash absorbed from receivables
DECEMBER 31, 2020
from financing activities driven by an increase in
For the year ended December 31, 2020, our cash
the financial services portfolio;
flows from operating activities were €838 million,
(ii) €9 million of cash related to the net change in
primarily the result of:
inventories, trade payables and trade receivables.
(i) profit before tax of €667 million, adjusted for
In particular, the movement was attributable to
€427 million for depreciation and amortization
(a) cash absorbed by inventory of €41 million
expense, €49 million of net finance costs, and
and (b) cash absorbed by trade receivables of
net other non-cash expenses and income of €59
€22 million, which were both primarily driven
million (including provision accruals, result from
by higher volumes, partially offset by (c) cash
investments and share-based compensation
generated from trade payables of €54 million
114
FERRARI N.V.AR 2021 driven by higher capital expenditures and an
in financing activities was €580 million, primarily the
increase in volumes;
result of:
(iii) €39 million of net finance costs paid; and
(i) €500 million for the full repayment of a bond
(iv) €33 million of income tax paid.
upon maturity in January 2021;
(ii) €231 million to repurchase common shares
INVESTING ACTIVITIES — YEAR ENDED
under the Company’s share repurchase program
DECEMBER 31, 2021
(including the “Sell-to-Cover” practice under the
For the year ended December 31, 2021, our net cash
equity incentive plans);
used in investing activities was €733 million, primarily
(iii) €161 million of dividends paid, of which €1 million
the result of: €385 million for additions to intangible
was to non-controlling interests;
assets, mainly related to externally acquired and
(iv) €22 million in repayments of lease liabilities; and
internally generated development costs to support
(v) €7 million related to the net change in other debt;
the development of our current and future product
offering and, (ii) €352 million of capital expenditures
partially offset by:
additions to property, plant and equipment, partially
(i) €149 million of net proceeds from the issuance of
offset by proceeds from disposals. For a detailed
the 2032 Notes in July 2021;
analysis of additions to property, plant and equipment
(ii) €121 million related to the net change in bank
and intangible assets see “—Capital Expenditures”
borrowings and other financial institutions; and
below.
(iii) €71 million of proceeds net of repayments related
to our revolving securitization programs in the
INVESTING ACTIVITIES — YEAR ENDED
United States.
DECEMBER 31, 2020
For the year ended December 31, 2020, our net cash
FINANCING ACTIVITIES — YEAR ENDED DECEMBER
used in investing activities was €708 million, primarily
31, 2020
the result of: (i) €352 million for additions to intangible
For the year ended December 31, 2020, our net cash
assets, mainly related to externally acquired and
from financing activities was €340 million, primarily
internally generated development costs and, (ii) €357
the result of:
million of capital expenditures additions to property,
(i) €640 million of net proceeds from the issuance
plant and equipment, mainly related to plant and
of the 2025 Bond;
machinery for new models as well as our acquisition
(ii) €44 million of proceeds net of repayments
of tracts of land adjacent to our facilities in Maranello
related to our revolving securitization programs
as part of our expansion plans, partially offset by
in the United States; and
proceeds from the disposals. For a detailed analysis
(iii) €18 million related to the net change in other
of additions to property, plant and equipment and
debt;
intangible assets see “—Capital Expenditures” below.
partially offset by:
INVESTING ACTIVITIES — YEAR ENDED
(i) €211 million of dividends paid, of which €3 million
DECEMBER 31, 2019
was to non-controlling interests;
For the year ended December 31, 2019, our net cash
(ii) €130 million paid to repurchase common shares
used in investing activities was €701 million, primarily
under the Company’s share repurchase program
the result of: (i) €354 million for additions to intangible
in the first quarter of 2020;
assets, mainly related to externally acquired and
(iii) €20 million in repayments of lease liabilities; and
internally generated development costs and, (ii) €352
(iv) €1 million related to the net change in bank
million of capital expenditures additions to property,
borrowings.
plant and equipment, mainly related to plant and
machinery for new models as well as our acquisition
FINANCING ACTIVITIES — YEAR ENDED
of tracts of land adjacent to our facilities in Maranello
DECEMBER 31, 2019
as part of our expansion plans, partially offset by
For the year ended December 31, 2019, our net cash
proceeds from disposals. For a detailed analysis
used in financing activities was €502 million, primarily
of additions to property, plant and equipment and
the result of:
intangible assets see “—Capital Expenditures” below.
(i) €387 million paid to repurchase common
shares under the Company’s share repurchase
FINANCING ACTIVITIES — YEAR ENDED
program;
DECEMBER 31, 2021
(ii) €315 million related to the cash tender offer to
For the year ended December 31, 2021, net cash used
repurchase an aggregate nominal amount of
115
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€200 million of 0.25 percent notes due January
(i) €298 million of net proceeds from the Company’s
2021 and an aggregate nominal amount of €115
issuance of 1.12 percent senior notes due August
million of the 1.5 percent notes due March 2023;
2029 and 1.27 percent senior notes due August
(iii) €195 million of dividends paid, of which €2 million
2031, each having a principal amount of €150
was to non-controlling interests; and
million;
(iv)
€7 million related to the net change in bank
(ii) €92 million of proceeds net of repayments
borrowings and lease liabilities.
related to our revolving securitization programs
partially offset by:
(iii) €12 million related to the net change in other debt.
in the United States; and
CAPITAL EXPENDITURES
Capital expenditures are defined as additions to property, plant and equipment (including right-of-use assets
recognized in accordance with IFRS 16 — Leases) and intangible assets. Capital expenditures for the years ended
December 31, 2021, 2020 and 2019 were €750 million, €734 million and €706 million, respectively.
The following table sets a forth a breakdown of capital expenditures by category for each of the years ended
December 31, 2021, 2020 and 2019:
(€ million)
Intangible assets
Externally acquired and internally generated development costs
Patents, concessions and licenses
Other intangible assets
Total intangible assets
Property, plant and equipment
Industrial buildings
Plant, machinery and equipment
Other assets
Advances and assets under construction
Total property, plant and equipment
Total capital expenditures
For the years ended December 31,
2021
2020
2019
363
17
5
385
35
123
20
187
365
750
320
27
5
352
28
115
24
215
382
734
330
18
6
354
16
176
18
142
352
706
116
FERRARI N.V.AR 2021 INTANGIBLE ASSETS
For the year ended December 31, 2019, we invested
Our total capital expenditures in intangible assets for
€330 million in externally acquired and internally
the year ended December 31, 2021 were €385 million
generated development costs, of which €145 million
(€352 million and €354 million for the years ended
related to development of models to be launched in
December 31, 2020 and 2019, respectively).
future years and €185 million primarily related to the
development of our current product portfolio as well
The most significant investments relate to externally
as components.
acquired and internally generated development
costs. In particular, we make such investments to
PROPERTY, PLANT AND EQUIPMENT
support the development of our current and future
Our total capital expenditures in property, plant and
product offering. The capitalized development costs
equipment for the year ended December 31, 2021
primarily include materials and personnel costs
were €365 million (€382 million and €352 million
relating to engineering, design and development
for the years ended December 31, 2020 and 2019,
activities focused on content enhancement of
respectively).
existing cars and new models, including to broaden
our product range and our ongoing investments in
Our most significant investments generally relate to
hybrid and electric technology and the development
plant, machinery and equipment, which amounted
of components, which are necessary to provide
to €123 million for the year ended December 31,
continuing performance upgrades to our sports car
2021 (€115 million and €176 million for the years
customers and to help us capture the preferences
ended December 31, 2020 and 2019, respectively)
of the urban, affluent purchasers of GT cars whom
as well as advances and assets under construction,
we are increasingly targeting as we transition our
which amounted to €187 million for the year ended
product portfolio to hybrid and electric technology.
December 31, 2021 (€215 million and €142 million
We continually invest in product development to
for the years ended December 31, 2020 and 2019,
ensure we can quickly and efficiently respond to
respectively). Our main investments primarily related
market demand and technological breakthroughs, as
to industrial tools needed for the production of cars
well as to maintain our position at the top of the luxury
and investments in car production lines (including
performance sports cars market.
those for models to be launched in future years), as
well as investments related to our personalization
For the year ended December 31, 2021, we invested
programs and engine assembly lines. Investments
€363 million in externally acquired and internally
in advances and assets under construction and
generated development costs, of which €229 million
industrial buildings for the periods presented reflect
related to the development of models to be launched
our focus on the hybridization and broadening of
in future years and €134 million primarily related to
our product range and supporting future model
the development of our current product portfolio and
launches, including our acquisition of tracts of land
components.
adjacent to our facilities in Maranello as part of our
expansion plans, which amounted to €42 million in
For the year ended December 31, 2020, we invested
2021 (cumulative acquisitions of land since the start of
€320 million in externally acquired and internally
2019 amounted to €117 million).
generated development costs, of which €244 million
primarily related to the development of models to be
At December 31, 2021, the Group had contractual
launched in future years and, to a much lesser extent,
commitments for the purchase of property, plant and
to investments required for new technical regulations
equipment amounting to €74 million (€101 million at
applicable for the 2022 to 2025 Formula 1 seasons,
December 31, 2020).
and €76 million related to the development of models
in our current product portfolio and car components.
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CONTRACTUAL OBLIGATIONS
The following table summarizes payments due under our significant contractual commitments at December 31,
2021:
(€ million)
Payments due by period
Less than
1 to 3 years
3 to 5 years
Long-term debt (1)
Interest on long-term debt (2)
Lease obligations (3)
Unconditional minimum purchase obligations (4)
Purchase obligations (5)
Total contractual obligations
1 year
343
28
15
80
74
540
After
5 years
Total
781
38
19
61
—
899
753
508
2,385
17
13
15
—
21
11
1
—
104
58
157
74
798
541
2,778
(1) Amounts presented relate to the principal amounts of long-term debt, excluding lease liabilities and the related interest expense that will be paid
when due. For additional information see Note 24 “Debt” to our Consolidated Financial Statements included elsewhere in this document. The table
above does not include short-term debt obligations. See the table below for a reconciliation of the contractual commitments of our long-term debt
to our debt recorded in the consolidated statement of financial position included within our Consolidated Financial Statements.
(2) Amounts include interest payments based on contractual terms and current interest rates on our long-term debt. Interest rates based on variable
rates included above were determined using the rates in effect at December 31, 2021.
(3) Lease obligations mainly relate to leases for Ferrari stores, industrial buildings and certain other assets used in our business.
(4) Unconditional minimum purchase obligations relate to our unconditional purchase obligations to purchase a fixed or minimum quantity of goods
and/or services from suppliers with fixed and determinable price provisions. From time to time, in the ordinary course of our business, we
enter into various arrangements with key suppliers in order to establish strategic and technological advantages. In particular, such agreements
primarily relate to research and development activities and, to a lesser extent, tooling obligations. This amount also includes unconditional purchase
obligations to purchase a minimum quantity of goods and/or services in connection with certain of our sponsorship contracts.
(5) Purchase obligations represent obligations to purchase property, plant and equipment.
The long-term debt obligations reflected in the table above can be reconciled to the amount in the consolidated
statement of financial position at December 31, 2021 (in our Consolidated Financial Statements included elsewhere
in this document) as follows:
(€ million)
Debt
Short-term debt obligations
Lease liabilities
Amortized cost effects
Long-term debt
Amount
2,630
(186)
(56)
(3)
2,385
PENSION, POST-EMPLOYMENT BENEFITS AND OTHER PROVISIONS FOR EMPLOYEES
We provide post-employment benefits for certain active employees and retirees of the Group. We classify these
benefits on the basis of the type of benefit provided and in particular as defined contribution plans, defined benefit
obligations and other provisions for employees. At December 31, 2021 the liability for such obligations amounted
to €101 million (€60 million at December 31, 2020). See Note 22 “Employee benefits” to the Consolidated Financial
Statements included elsewhere in this document.
OFF BALANCE SHEET ARRANGEMENTS
We have entered into various off-balance sheet arrangements with unconsolidated third parties in the ordinary
course of business. For additional information see Note 29 “Commitments” to our Consolidated Financial
Statements included elsewhere in this document.
118
FERRARI N.V.AR 2021 NON-GAAP FINANCIAL MEASURES
similarly titled measures used by other companies
nor are they intended to be substitutes for measures
We monitor and evaluate our operating and financial
of financial performance or financial position as
performance using several non-GAAP financial
prepared in accordance with IFRS.
measures including: Net Debt, Net Industrial Debt,
Free Cash Flow and Free Cash Flow from Industrial
NET DEBT AND NET INDUSTRIAL DEBT
Activities, EBITDA, Adjusted EBITDA, Adjusted EBIT,
Due to different sources of cash flows used for the
Adjusted Net Profit, Adjusted Basic and Diluted
repayment of debt between industrial activities and
Earnings per Common Share, as well as a number of
financial services activities, and the different business
financial metrics measured on a constant currency
structure and leverage implications, Net Industrial
basis. We believe that these non-GAAP financial
Debt, together with Net Debt, are the primary
measures provide useful and relevant information
measures used by us to analyze our capital structure
to management and investors regarding our
and financial leverage. We believe the presentation of
performance and improve our ability to assess our
Net Industrial Debt aids management and investors
financial performance and financial position. They
in their analysis of the Group’s financial position and
also provide us with comparable measures that
financial performance and to compare the Group’s
facilitate management’s ability to identify operational
financial position and financial performance with that
trends, as well as make decisions regarding future
of other companies. Net Industrial Debt is defined as
spending, resource allocations and other operational
total debt less cash and cash equivalents (Net Debt),
decisions. While similar measures are widely used
further adjusted to exclude the debt and cash and
in the industry in which we operate, the financial
cash equivalents related to our financial services
measures we use may not be comparable to other
activities (Net Debt of Financial Services Activities).
The following table sets forth a reconciliation of Net Debt and Net Industrial Debt at December 31, 2021 and 2020.
(€ million)
Cash and cash equivalents
Total liquidity
Bonds and notes
Asset-backed financing (Securitizations)
Lease liabilities
Borrowings from banks and other financial institutions
Other debt
Total Debt
Net Debt (A)
Net Debt of Financial Services Activities (B)
Net Industrial Debt (A-B)
At December 31,
2021
1,344
1,344
(1,487)
(900)
(56)
(154)
(33)
(2,630)
(1,286)
(989)
(297)
2020
1,362
1,362
(1,835)
(761)
(62)
(29)
(38)
(2,725)
(1,363)
(820)
(543)
On July 29, 2021, the Company issued 0.91 percent senior notes due January 2032 (“2032 Notes”) through a private
placement to certain US institutional investors, having a principal of €150 million. The net proceeds from the
issuance amounted to €149,495 thousand, and the yield to maturity, on an annual basis, equals the nominal coupon
rates of the Notes. The Notes are primarily used for general corporate purposes, including the funding of capital
expenditures.
On May 27, 2020, the Company issued 1.5 percent coupon notes due May 2025 (“2025 Bond”), having a principal of
€650 million. The notes were issued at a discount for an issue price of 98.898 percent, resulting in net proceeds of
€640 million after related expenses and a yield to maturity of 1.732 percent. The bond was admitted to trading on
the regulated market of Euronext Dublin.
119
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For additional information relating to our total debt, see Note 24 “Debt” to the Consolidated Financial Statements
included elsewhere in this document.
The increase in the Net Debt of Financial Services Activities (as defined above) of €169 million, from €820 million
at December 31, 2020, to €989 million at December 31, 2021, relates primarily to the increase in asset-backed
financing (securitizations) of the receivables generated by our financial services activities in the United States,
which grew by €204 million, from €940 million at December 31, 2020 to €1,144 million at December 31, 2021.
The following table presents our receivables from financing activities and our Net Debt of Financial Services
Activities at December 31, 2021 and 2020:
(€ million)
Receivables from financing activities
Net Debt of Financial Services Activities
At December 31,
2021
1,144
(989)
2020
940
(820)
For further details of our receivables from financing activities and our asset-backed financing (securitizations),
see Note 18 “Current Receivables and Other Current Assets” and Note 24 “Debt” to the Consolidated Financial
Statements included elsewhere in this document.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents amounted to €1,344 million at December 31, 2021 compared to €1,362 million at
December 31, 2020. See “Cash Flows” above for further details.
Approximately 85 percent of our cash and cash equivalents were denominated in Euro at December 31, 2021
(approximately 88 percent at December 31, 2020). Our cash and cash equivalents denominated in currencies
other than the Euro are available mostly to Ferrari S.p.A. and certain subsidiaries which operate in areas other
than Europe. Cash held in such countries may be subject to transfer restrictions depending on the jurisdictions
in which these subsidiaries operate. In particular, cash held in China (including in foreign currencies), which
amounted to €90 million at December 31, 2021 (€56 million at December 31, 2020), is subject to certain
repatriation restrictions and may only be repatriated as a repayment of payables, or debt, or as dividends or
capital distributions. We do not currently believe that such transfer restrictions have an adverse impact on our
ability to meet our liquidity requirements.
The following table sets forth an analysis of the currencies in which our cash and cash equivalents were
denominated at the dates presented.
(€ million)
Euro
Chinese Yuan
U.S. Dollar
Japanese Yen
Other currencies
Total
At December 31,
2021
1,144
88
68
20
24
2020
1,203
51
76
13
19
1,344
1,362
Cash collected from the settlement of receivables under securitization programs is subject to certain restrictions
regarding its use and is primarily applied to repay principal and interest of the related funding. Such cash
amounted to €48 million at December 31, 2021 (€37 million at December 31, 2020).
120
FERRARI N.V.AR 2021 TOTAL AVAILABLE LIQUIDITY
Total available liquidity (defined as cash and cash equivalents plus undrawn committed credit lines) at December
31, 2021 was €2,020 million (€2,062 million at December 31, 2020).
The following table summarizes our total available liquidity:
(€ million)
Cash and cash equivalents
Undrawn committed credit lines
Total available liquidity
At December 31,
2021
1,344
676
2,020
2020
1,362
700
2,062
The undrawn committed credit lines at December
in April 2021, the Group replaced an uncommitted
31, 2021 and at December 31, 2020 relate to revolving
credit line of $50 million, which was terminated, with
credit facilities. For further details, see Note 24 “Debt”
a new committed credit line for $100 million with a
in the Consolidated Financial Statements included
term of 24 months. At December 31, 2021 the line
elsewhere in this document.
had been drawn down for $70 million (€62 million)
representing the only committed credit line that has
To prudently manage potential liquidity or refinancing
been drawn down by the Group. The new credit line
risks as a result of the COVID-19 pandemic, in April
replaces the funding previously provided by one of
2020 the Group increased its undrawn committed
securitization programs in the US for funding of up
credit lines by securing an additional amount of €350
to $110 million that expired in April 2021. In October
million, doubling the total committed credit lines
2021, a committed credit line previously negotiated
available and undrawn to €700 million. In March 2021
in April 2020 for €100 million expired. At December
the Group cancelled a credit line of €100 million and
31, 2021 the Group had total committed credit lines
simultaneously replaced it with a new credit line for
available and undrawn of €676 million (€700 million at
€150 million with a term of 23 months. Subsequently,
December 31, 2020).
121
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / NON-GAAP FINANCIAL MEASURES
REE CASH FLOW AND FREE CASH FLOW
FROM INDUSTRIAL ACTIVITIES
adjusted to exclude the operating cash flow from
our financial services activities (Free Cash Flow from
Free Cash Flow and Free Cash Flow from Industrial
Financial Services Activities). Prior to 2020, we defined
Activities are two of our primary key performance
Free Cash Flow and Free Cash Flow from Industrial
indicators to measure the Group’s performance.
Activities without excluding from investments in
These measures are presented by management to
property, plant and equipment the right-of-use assets
aid investors in their analysis of the Group’s financial
recognized during the period in accordance with
performance and to compare the Group’s financial
IFRS 16 — Leases. Applying the current definition of
performance with that of other companies. Free
Free Cash Flow and Free Cash Flow from Industrial
Cash Flow is defined as cash flows from operating
Activities to 2019 would result in an immaterial
activities less investments in property, plant and
difference compared to the figures presented below.
equipment (excluding right-of-use assets recognized
during the period in accordance with IFRS 16 —
The following table sets forth our Free Cash Flow and
Leases) and intangible assets. Free Cash Flow from
Free Cash Flow from Industrial Activities for the years
Industrial Activities is defined as Free Cash Flow
ended December 31, 2021, 2020 and 2019.
(€ million)
Cash flows from operating activities
Investments in property, plant and equipment and intangible assets
Free Cash Flow
Free Cash Flow from Financial Services Activities
Free Cash Flow from Industrial Activities
For the years ended December 31,
2021
1,283
(737)
546
(96)
642
2020
838
(709)
129
(42)
171
2019
1,306
(706)
600
(75)
675
Free Cash Flow for the year ended December 31, 2021 was €546 million compared to €129 million for the year
ended December 31, 2020 and €600 million for the year ended December 31, 2019. For an explanation of the
drivers in Free Cash Flow see “Cash Flows” above.
Free Cash Flow from Industrial Activities for the year ended December 31, 2021 was €642 million, an increase
of €471 million compared to €171 million for the year ended December 31, 2020. The increase in Free Cash Flow
from Industrial Activities in 2021 compared to 2020 was primarily attributable to an increase in EBITDA and a
positive change in cash flows from other operating assets and liabilities driven by the collection of advances from
the 812 Competizione and 812 Competizione A, partially offset by the reversal of advances for the Ferrari Monza
SP1 and SP2 and higher investments to support the development of our current and future product offering and
higher taxes paid.
Free Cash Flow from Industrial Activities for the year ended December 31, 2020 was positive €171 million a
decrease of €504 million compared to €675 million for the year ended December 31, 2019. The decrease in
Free Cash Flow from Industrial Activities was primarily driven by a decrease in advances received for the
Ferrari Monza SP1 and SP2 (which were primarily received in 2019 ahead of shipments, including for cars
actually delivered in 2020), the adverse impacts on our EBITDA as a result of the COVID-19 pandemic and higher
inventories at year end reflecting efforts to mitigate potential supply chain issues, as well as an increase in
income taxes paid. Free Cash Flow from Industrial Activities in 2019 benefited from advances collected ahead of
shipments of the Ferrari Monza SP1 and SP2, including for cars actually delivered in 2020.
122
FERRARI N.V.AR 2021 EBITDA AND ADJUSTED EBITDA
by management to aid investors in their analysis of
EBITDA is defined as net profit before income tax
the performance of the Group and to assist investors
expense, net financial expenses and amortization and
in the comparison of the Group’s performance with
depreciation. Adjusted EBITDA is defined as EBITDA
that of other companies. Adjusted EBITDA is provided
as adjusted for certain income and costs, which are
in order to present how the underlying business has
significant in nature, expected to occur infrequently,
performed prior to the impact of the adjusting items,
and that management considers not reflective of
which may obscure the underlying performance and
ongoing operational activities. EBITDA is presented
impair comparability of results between periods.
The following table sets forth the calculation of EBITDA and Adjusted EBITDA for the years ended December 31,
2021, 2020 and 2019, and provides a reconciliation of these non-GAAP measures to net profit.
There were no adjustments impacting Adjusted EBITDA for the periods presented.
(€ million)
Net profit
Income tax expense
Net financial expenses
EBIT
Amortization and depreciation
EBITDA and Adjusted EBITDA
For the years ended December 31,
2021
833
209
33
1,075
456
1,531
2020
609
58
49
716
427
2019
699
176
42
917
352
1,143
1,269
ADJUSTED EBIT
impact of any adjusting items, which may obscure the
Adjusted EBIT represents EBIT as adjusted for certain
underlying performance and impair comparability of
income and costs which are significant in nature,
results between the periods.
expected to occur infrequently, and that management
considers not reflective of ongoing operational
The following table sets forth the calculation of
activities.
Adjusted EBIT for the years ended December 31, 2021,
We provide Adjusted EBIT in order to present how
2020 and 2019. There were no adjustments impacting
the underlying business has performed prior to the
Adjusted EBIT for the periods presented.
(€ million)
EBIT and Adjusted EBIT
For the years ended December 31,
2021
1,075
2020
716
2019
917
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / NON-GAAP FINANCIAL MEASURES
ADJUSTED NET PROFIT
impact of any adjusting items, which may obscure the
Adjusted Net Profit represents net profit as adjusted
underlying performance and impair comparability of
for certain income and costs (net of tax effects)
results between the periods.
which are significant in nature, expected to occur
infrequently, and that management considers not
The following table sets forth the calculation of
reflective of ongoing operational activities. We
Adjusted Net Profit for the years ended December 31,
provide Adjusted Net Profit in order to present how
2021, 2020 and 2019.
the underlying business has performed prior to the
(€ million)
Net profit
Trademark step-up (1)
Adjusted Net Profit
For the years ended December 31,
2021
833
—
833
2020
609
(75)
534
2019
699
—
699
(1) Reflects the application of the measures introduced in Italy by the art. 110 of the Law Decree n. 104/2020, converted in the Law n.126/2020, enacting
“Urgent measures to support and relaunch the economy” which reopened the voluntary step up of tangible and intangible assets, with the
application of a substitutive tax rate (3%). In particular, Ferrari S.p.A. benefited from the one-off partial step-up of its trademark for tax purposes,
which resulted in the recognition in 2020 of deferred tax assets for €84 million and a substitute tax liability for €9 million, resulting in a net tax benefit
of €75 million. There was no cash effect in 2020.
ADJUSTED BASIC AND DILUTED EARNINGS
PER COMMON SHARE
order to present how the underlying business has
performed prior to the impact of any adjusting items,
Adjusted Basic and Diluted Earnings per Common
which may obscure the underlying performance and
Share represents earnings per share, as adjusted for
impair comparability of results between the periods.
certain income and costs (net of tax effects) which are
significant in nature, expected to occur infrequently,
The following table sets forth the calculation of
and that management considers not reflective of
Adjusted Basic and Diluted Earnings per Common
ongoing operational activities. We provide Adjusted
Share for the years ended December 31, 2021, 2020
Basic and Diluted Earnings per Common Share in
and 2019.
Net profit attributable to owners of the Company
Trademark step-up (1)
€ million
€ million
Adjusted net profit attributable to owners of the Company
€ million
For the years ended December 31,
2021
831
—
831
2020
608
(75)
533
2019
696
—
696
Weighted average number of common shares
for basic earnings per share
thousand
184,446
184,806
186,767
Adjusted basic earnings per common share
€
4.50
2.88
3.73
Weighted average number of common shares
for diluted earnings per share (2)
thousand
184,722
185,379
187,535
Adjusted diluted earnings per common share
€
4.50
2.88
3.71
(1) Reflects the application of the measures introduced in Italy by the art. 110 of the Law Decree n. 104/2020, converted in the Law n.126/2020, enacting
“Urgent measures to support and relaunch the economy” which reopened the voluntary step up of tangible and intangible assets, with the
application of a substitutive tax rate (3%). In particular, Ferrari S.p.A. benefited from the one-off partial step-up of its trademark for tax purposes,
which resulted in the recognition in 2020 of deferred tax assets for €83.7 million and a substitute tax liability for €9.0 million, resulting in a net tax
benefit of €74.7 million. There was no cash effect in 2020.
(2) The weighted average number of common shares for diluted earnings per share was increased to take into consideration the theoretical effect of the
potential common shares that would be issued under the Group’s equity incentive plans (assuming 100 percent of the related awards vested).
124
FERRARI N.V.AR 2021 See Note 12 “Earnings per Share” to the Consolidated
period revenues of foreign subsidiaries expressed in
Financial Statements, included elsewhere in this
local functional currency other than Euro, (ii) applying
document, for the calculation of the basic and diluted
the prior-period average foreign currency exchange
earnings per common share.
rates to current period revenues originated in a
currency other than the functional currency of the
CONSTANT CURRENCY INFORMATION
applicable entity, and (iii) eliminating the variances of
The “Results of Operations” discussion above includes
any foreign currency hedging (see Note 2 “Significant
information about our net revenues on a constant
Accounting Policies” to the Consolidated Financial
currency basis, which excludes the effects of foreign
Statements, included elsewhere in this document,
currency translation from our subsidiaries with
for information on the foreign currency exchange
functional currencies other than Euro, as well as the
rates applied). Although we do not believe that these
effects of foreign currency transaction impact and
measures are a substitute for GAAP measures, we
foreign currency hedging. We use this information
do believe that revenues excluding the impact of
to assess how the underlying revenues changed
currency fluctuations and the impacts of hedging
independent of fluctuations in foreign currency
provide additional useful information to investors
exchange rates and hedging. We calculate constant
regarding the operating performance on a local
currency by (i) applying the prior-period average
currency basis.
foreign currency exchange rates to translate current
125
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS SUBSEQUENT EVENTS
AND 2022 OUTLOOK
SUBSEQUENT EVENTS
2022 OUTLOOK
On January 26, 2022 Ferrari announced that CEVA
The following 2022 outlook is subject to trading
Logistics will be a new Scuderia Ferrari team partner
conditions unaffected by COVID-19 pandemic
starting from the 2022 Formula 1 season. The
restrictions and based on the following assumptions:
multi-year agreement will also see CEVA involved in
Ferrari’s other racing activities in GT racing and the
• Carefully leveraging strong demand
Ferrari Challenge, with the Marseille-based company
taking on the role of Official Logistics Partner for
• Richer model mix being more than offset by the
those series.
negative impact from the Ferrari Monza SP1 and
SP2 phase out
On February 8, 2022 Ferrari announced a new
partnership with Qualcomm Technologies, Inc.
• Ferrari Daytona SP3 and Ferrari Purosangue will
The San Diego, California-based company will
commence production in 2022 with deliveries
be a Scuderia Ferrari Premium Partner through
starting in 2023
Snapdragon, Qualcomm’s premium product
and experience brand leveraged across multiple
• Formula 1 revenues reflecting more diversified but
platforms and categories, including automotive. The
lower sponsorship, partially offset by better prior
agreement with Qualcomm Technologies will have a
year ranking
strong technological impact aimed at accelerating
the digital transformation process for Ferrari
• Increasing depreciation and amortization in line with
and its road cars. Starting from the first common
the start of production of new models
projects already identified, such as the digital cockpit,
the two companies will bring together ideas and
• Industrial free cash flow generation sustained by
expertise to explore new opportunities and a range of
Daytona SP3 advances collection
technological solutions.
• Disciplined capital expenditures to fuel long-term
Under the common share repurchase program, from
development
January 1, 2022 to February 18, 2022 the Company
purchased an additional 390,819 common shares for
Net revenues: ~ Euro 4.8 billion
total consideration of €80.1 million. At February 18,
2022 the Company held in treasury an aggregate of
Adj. EBITDA: Euro 1.65-1.70 billion (34.5%-35.5%)
10,470,922 common shares.
Adj. EBIT: Euro 1.10-1.15 billion (23%-24%)
On February 25, 2022, the Board of Directors of
Ferrari N.V. recommended to the Company’s
Adj. Diluted EPS: Euro 4.55-4.75 per share (*)
shareholders that the Company declare a dividend
of €1.362 per common share, totaling approximately
Industrial Free Cash Flow: ≥ Euro 0.60 billion
€250 million. The proposal is subject to the approval
of the Company’s shareholders at the Annual General
(*) Calculated using the weighted average diluted number of common
Meeting to be held on April 13, 2022.
shares as of December 31, 2021 (184,722 thousand).
126
FERRARI N.V.AR 2021 127
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS MAJOR
SHAREHOLDERS
Exor is our largest shareholder through its
which holds 84.37 percent of its share capital,
approximately 24.21 percent shareholding interest
based on regulatory filings with the Netherlands
in our outstanding common shares (as of February
Authority for the Financial Markets (stichting Autoriteit
14, 2022). See “Overview—History of the Company”.
Financiële Markten, the “AFM”). G.A. is a Dutch private
As a result of the loyalty voting mechanism, Exor’s
company with limited liability (besloten vennootschap
voting power is approximately 36.00 percent (as of
met beperkte aansprakelijkheid) with interests
February 14, 2022). In addition, as of February 14, 2022,
represented by shares, founded by Giovanni Agnelli
Mr. Piero Ferrari holds approximately 10.30 percent
and currently held by members of the Agnelli and Nasi
of our outstanding common shares and, as a result
families, descendants of Giovanni Agnelli, founder
of the loyalty voting mechanism, his voting power
of Fiat. Its present principal business activity is to
is approximately 15.31 percent. The percentages of
purchase, administer and dispose of equity interests
ownership and voting power above are calculated
in public and private entities and, in particular,
based on the number of outstanding shares net of
to ensure the cohesion and continuity of the
treasury shares.
administration of its controlling equity interests. The
managing directors of G.A., as of February 16, 2022,
Exor and Mr. Piero Ferrari informed us that they have
were John Elkann, Jeroen Preller, Florence Hinnen,
entered into a shareholder agreement, summarized
Tiberto Brandolini d’Adda, Alessandro Nasi, Andrea
below under “—Shareholders’ Agreement”.
Agnelli, Luca Ferrero de’ Gubernatis Ventimiglia and
Benedetto Della Chiesa.
Exor resulted from a cross-border merger of its
predecessor entity, Exor S.p.A. with and into Exor
Based on the information in Ferrari’s shareholder
N.V. As a result of that merger, which was completed
register, regulatory filings with the AFM and the
on December 11, 2016, all activities of Exor S.p.A.
SEC and other sources available to us, the following
are continued by Exor under universal succession,
shareholders owned, directly or indirectly, in excess
including with respect to the holding of our shares.
of three percent of the common shares holding
Exor is controlled by Giovanni Agnelli B.V. (“G.A.”),
voting rights of Ferrari, as of February 14, 2022:
Shareholder
Exor N.V. (2)
Piero Ferrari (2)
BlackRock, Inc. (3)
T. Rowe Price Associates, Inc (4)
Other public shareholders
Number of common shares
Percentage owned (1)
44,435,280
18,894,295
10,708,393
7,423,138
102,037,188
24.21%
10.30%
5.84%
4.04%
55.61%
(1) The percentages of share capital set out in this table are calculated as the ratio of (i) the aggregate number of outstanding common shares beneficially
owned by the shareholder to (ii) the total number of outstanding common shares (net of treasury shares) of Ferrari. These percentages may slightly
differ from the percentages of share capital included in the public register held by the AFM of all notifications made pursuant to the disclosure
obligations under chapter 5.3 of the Dutch Act on financial supervision (Wet op het financieel toezicht; the “AFS”), inter alia, because any shares held
in treasury by Ferrari are included in the relevant denominators for purposes of the AFS disclosure obligations.
(2) Each of Exor and Piero Ferrari participate in the loyalty voting program of Ferrari. As of February 14, 2022, Exor owned 44,435,280 special voting
shares and Mr. Ferrari owned 18,892,160 special voting shares. Therefore, as discussed above in this section, their voting power in Ferrari is higher
than the percentage of common shares beneficially held as presented in this table.
(3) Based on filings with the SEC (Amendment No. 1 to Schedule 13G filed on February 3, 2022, File No. 005-89223), BlackRock, Inc. is a parent holding
company or control person in accordance with Rule 13d-1(b)(1)(ii)(G) and, out of the common shares beneficially owned as set forth in the table, it
has sole voting power over 9,871,147 common shares.
(4) Based on filings with the SEC (Amendment No. 1 to Schedule 13G filed on February 14, 2018, File No. 005-89223), T. Rowe Price Associates, Inc. is an
investment adviser registered under Section 203 of the U.S. Investment Advisers Act of 1940. Based on subsequent filings with the SEC, out of the
common shares beneficially owned as set forth in the table, T. Rowe Price associates, Inc. has sole voting power over 4,112,710 common shares.
128
FERRARI N.V.AR 2021 Based on the information in Ferrari’s shareholder
to make a binding, unconditional and irrevocable all
register and other sources available to us, as of
cash offer for the purchase of such common shares.
February 14, 2022, approximately 63.8 million Ferrari
common shares, or 32.9 percent of the outstanding
The foregoing will not apply in the case of transfers
Ferrari common shares, were held in the United
of Ferrari common shares: (i) by any party to the
States. As of the same date, approximately 1,924
Shareholders’ Agreement, to a party that qualifies as a
record holders had registered addresses in the
“Loyalty Transferee” (as defined in the Ferrari Articles
United States.
SHAREHOLDERS’ AGREEMENT
of Association) of such party, (ii) by Exor, to any affiliate
of G.A., to a successor in business of G.A. and to any
affiliate of a successor in business of G.A., and (iii) by
any party to the Shareholders’ Agreement that is an
On December 23, 2015, Exor and Piero Ferrari
individual, to an entity wholly owned and controlled by
entered into a Shareholders’ Agreement, which
that same party. In addition, the provisions regarding
became effective at the completion of the Separation
the pre-emption right in favor of Exor and right of first
on January 3, 2016 (the “Shareholders’ Agreement”)
offer of Piero Ferrari shall not apply in relation to, and
and prior to the admission to listing and trading
Piero Ferrari shall be free and allowed to carry out,
of the common shares of Ferrari on the MTA, now
market sales to third parties of his Ferrari common
renamed Euronext Milan. Ferrari is not a party to the
shares which in the aggregate do not exceed, during
Shareholders’ Agreement and does not have any
the whole period of validity of the Shareholders’
rights or obligations thereunder. Below is a summary
Agreement, 0.5 percent of the number of common
of the principal provisions of the Shareholders’
shares owned by Piero Ferrari upon completion of
Agreement based on regulatory filings made by Exor
the Separation.
and Piero Ferrari.
CONSULTATION
TERM
The Shareholders’ Agreement entered into force
For the purposes of forming and exercising, to the
upon completion of the Separation on January 3,
extent possible, a common view on the items on the
2016 and provides that it shall remain in force until
agenda of any General Meeting of shareholders of
the fifth anniversary of the effective date of the
Ferrari, Exor and Piero Ferrari will consult with each
Separation, provided that if neither of the parties
other prior to each General Meeting. For the purposes
to the Shareholders’ Agreement terminates the
of this consultation right and duties, representatives
Shareholders’ Agreement within six months before
of each of Exor and Piero Ferrari shall meet in order
the end of the initial term, then the Shareholders’
to discuss in good faith whether they have or can
Agreement shall be renewed automatically for
find a common view as to the matters on the agenda
another five year term. Since neither of the parties
of the immediately following General Meeting. This
to the Shareholders’ Agreement terminated it within
consultation right does not include an obligation to
six months before January 3, 2021, the Shareholders’
vote in any certain way nor does it constitute a veto
Agreement was automatically renewed for another
right in favor of Piero Ferrari.
five year term and, therefore, until January 3, 2026.
PRE-EMPTION RIGHT IN FAVOR OF EXOR AND
RIGHT OF FIRST OFFER OF PIERO FERRARI
The Shareholders’ Agreement shall terminate and
cease to have any effect as a result of the transfer of
In the event that Piero Ferrari intends to transfer
all the common shares owned by either Exor or Piero
(in whole or in part) his Ferrari common shares or
Ferrari to a third party.
receives a third party offer for the acquisition of all
or part of his Ferrari common shares, Exor will have
GOVERNING LAW AND JURISDICTION
the right to purchase all (but not less than all) of the
The Shareholders’ Agreement is governed by
common shares Piero Ferrari intends to transfer on
and must be interpreted according to the laws of
the terms of the original proposed transfer by Piero
the Netherlands. Any disputes arising out of or in
Ferrari or, in case the original proposed transfer was
connection with the Shareholders’ Agreement are
for no consideration, at market prices determined
subject to the exclusive jurisdiction of the competent
pursuant to the Shareholders’ Agreement.
court in Amsterdam, the Netherlands, without
prejudice to the right of appeal and appeal to the
In the event Exor intends to transfer (in whole or
Supreme Court.
in part) its common shares to a third party, either
solicited or unsolicited, Piero Ferrari will have the right
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS FERRARI N.V.
CORPORATE
GOVERNANCE
INTRODUCTION
BOARD OF DIRECTORS
Ferrari is a public limited liability company,
Pursuant to the Company’s articles of association
incorporated under the laws of the Netherlands.
(the “Articles of Association”), its board of directors
The Company is the holding company of the Ferrari
(the “Board of Directors”) may have three or more
group following the separation of the Ferrari business
directors (the “Directors”). At the annual general
from FCA, now renamed Stellantis. In this section, the
meeting of shareholders held on April 15, 2021,
“Company” also refers to Ferrari N.V. predecessor,
the number of the Directors was set at nine and
formerly known as New Business Netherlands N.V., as
the current slate of Directors was appointed.
the context may require. Such predecessor of Ferrari
Mr. Benedetto Vigna was designated as Acting
N.V. was the holding company of the Ferrari group
Chief Executive Officer by the Board of Directors
following completion of the restructuring intended to
effective as of September 16, 2021. The term of
facilitate Ferrari’s IPO. When in this section reference
office of the current Directors will expire on the
is made to Ferrari N.V., it solely relates to the current
day the Company’s 2022 annual general meeting
Ferrari N.V. (previously known as FE New N.V.), which
of shareholders is held. Each Director may be
acquired Ferrari N.V. predecessor under universal
reappointed at any subsequent annual general
title through a merger under Dutch law. The Company
meeting of shareholders; the next annual general
qualifies as a foreign private issuer under the New
meeting of shareholders is currently expected to
York Stock Exchange (“NYSE”) listing standards and
be held on April 13, 2022. On December 10, 2020,
its common shares are listed on the NYSE and on the
Mr. Louis Camilleri communicated to the Company
Euronext Milan (previously named Mercato Telematico
his decision, for personal reasons, to retire with
Azionario).
immediate effect from his role as the Company’s
Chief Executive Officer and as member of the
In accordance with the NYSE rules, the Company
Board of Directors. As a result, Mr. John Elkann, the
is permitted to follow its so called “home country
Company’s Executive Chairman, acted as interim
practice” with regard to certain corporate
Chief Executive Officer pursuant to his appointment
governance standards. Therefore, the Company
by the Board of Directors at the meeting of the Board
has adopted, except as discussed below under
of Directors held on December 15, 2020, until Mr.
“Compliance with Dutch Corporate Governance
Benedetto Vigna was designated as Acting Chief
Code”, the best practice provisions of the revised
Executive Officer by the Board of Directors effective
Dutch corporate governance code issued by the
as of September 16, 2021. The Board of Directors
Corporate Governance Code Monitoring Committee,
recommended during its meeting of February 25,
which entered into force on January 1, 2018 (the
2022 the shareholders to appoint Mr. Benedetto
“Dutch Corporate Governance Code”) and is
Vigna as executive director at the Company’s 2022
applicable as from financial year 2017. The Dutch
annual general meeting of shareholders and the
Corporate Governance Code contains principles and
Board of Directors during its meeting shortly after
best practice provisions that regulate relations inter
the AGM 2022 envisages to confirm his title of CEO.
alia between the board of directors of a company and
On February 16, 2021, the Company announced
its committees and the relationship with the general
that Mr. Roberto Cingolani tendered his resignation
meeting of shareholders.
from his role as Company’s non-executive Director
and member of the ESG Committee of the Board of
In this report the Company addresses its overall
Directors effective as of February 13, 2021 when he
corporate governance structure. The Company
was appointed Minister of the new Italian Government.
discloses, and intends to disclose any material
Mrs. Delphine Arnault was appointed as a member
departure from the best practice provisions of the
of the ESG Committee on February 26, 2021, filling
Dutch Corporate Governance Code in this and in its
the vacancy left by the resignation of Mr. Roberto
future annual reports.
Cingolani.
AR 2021
130
The Board of Directors as a whole is responsible for
Team (hereinafter also the “FLT”, formerly Senior
the strategy of the Company. The Board of Directors
Management Team, and so renamed as a result of the
is composed of two executive Directors (i.e., Mr.
organizational changes executed in January 2022),
John Elkann, Executive Chairman, and Mr. Benedetto
which is responsible for reviewing the operating
Vigna, Acting Chief Executive Officer) and eight
performance of the businesses, collaborating
non-executive Directors, who do not have day-to-
on certain operational matters, supporting the
day responsibility within the Company or the Group.
executive Directors with their tasks and executing
Pursuant to Article 17 of the Articles of Association,
decisions of the Board of Directors and the day-to-day
the general authority to represent the Company shall
management of the Company, primarily to the extent
be vested in the Board of Directors and the Chief
it relates to the operational management.
Executive Officer.
The Board of Directors appointed the following
position of each of the persons currently serving as
internal committees: (i) an Audit Committee, (ii) a ESG
Directors of Ferrari N.V. Unless otherwise indicated,
Committee, and (iii) a Compensation Committee.
the business address of each person listed below
On certain key operational matters, the executive
will be c/o Ferrari, Via Abetone Inferiore n. 4, I-41053
Directors are supported by the Ferrari Leadership
Maranello (MO), Italy.
Set forth below is the name, year of birth and
Name
Year of Birth
Position
John Elkann
Benedetto Vigna
Piero Ferrari
Sergio Duca
Delphine Arnault
Francesca Bellettini
Eddy Cue
John Galantic
Maria Patrizia Grieco
Adam Keswick
1976
1969
1945
1947
1975
1970
1964
1961
1952
1973
Executive Chairman and Executive Director
Acting Chief Executive Officer
Vice Chairman and Non-Executive Director
Senior Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Eight Directors currently qualify as independent
The Board of Directors has also resolved to appoint
(representing a majority) for purposes of NYSE rules
Sergio Duca as chairman of the Board, as referred to
and Rule 10A-3 of the Securities Exchange Act of 1934,
in the Dutch Civil Code, who will in such capacity have
as amended (the “Exchange Act”) and seven Directors
the title Chair (Voorzitter).
qualify as independent (representing a majority) for
purposes of the Dutch Corporate Governance Code.
The following members are independent within the
meaning of the Dutch Corporate Governance Code
The non-executive Directors of the Company
and NYSE rules:
met to discuss the functioning of the Board and
its committees, the functioning of the executive
Directors as a corporate body of the company, or the
corporate strategy and the main risks of the business,
• Delphine Arnault;
• Francesca Bellettini;
• Eddy Cue;
pursuant to best practice provisions 2.2.6, 2.2.7 and
• Sergio Duca;
1.1.2 of the Dutch Corporate Governance Code.
• John Galantic;
The Board of Directors has resolved to grant the
following titles:
• John Elkann: Chairman of the Company;
• Benedetto Vigna: Acting Chief Executive Officer;
• Piero Ferrari: Vice-Chairman; and
• Maria Patrizia Grieco; and
• Adam Keswick.
In addition, Piero Ferrari is considered independent
within the meaning of the NYSE rules.
Directors are expected to prepare themselves for and
• Sergio Duca: Senior Non-Executive Director
to attend all Board of Directors meetings, the annual
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / BOARD OF DIRECTORS
general meeting of shareholders and the meetings
Piero Ferrari (Vice Chairman and non-executive
of the committees on which they serve, with the
Director) – Mr. Piero Ferrari has been Vice Chairman
understanding that, on occasion, a Director may be
of Ferrari S.p.A. since 1988. He also serves as
unable to attend a meeting.
Chairman of HPE-COXA, is board member and Vice
From January 1, 2021 to the year-end there were four
and Vice President of CRN Ancona (Ferretti Group).
meetings of the Board of Directors. The attendance
He was President of Piaggio Aero Industries S.p.A.
rate at these meetings was 100 percent.
from 1998 to 2014 and served as Chairman of the
President of Ferretti Group and a board member
The current composition of the Board of Directors is
2001 and BA SERVICE from 2000 to 2015. He was
Italian Motor Sport Commission (CSAI) from 1998 to
the following:
also a board member and Vice President of Banca
Popolare dell’Emilia Romagna in Modena from 2002
John Elkann (Chairman of the Company and
to 2011 and from 2011 to 2014 respectively. The son
Executive Director) – Mr. John Elkann is Chairman
of Ferrari’s founder Enzo Ferrari, Mr. Piero Ferrari
and Chief Executive Officer of Exor and Chairman
covered a variety of management positions in the
of Stellantis N.V. Mr. Elkann obtained a scientific
motor sport division of Ferrari from 1970 to 1988
baccalaureate from the Lycée Victor Duruy in Paris
with increasing responsibilities. His first position with
and graduated in Engineering from Politecnico, the
Ferrari dates back to 1965 working on the production
Engineering University of Turin. While at university,
of the Dino 206 Competizione racing car. Mr. Piero
he gained work experience in various companies of
Ferrari received an honorary degree in Aerospace
the Fiat Group in the UK and Poland (manufacturing)
Engineering from the University of Naples Federico
as well as in France (sales and marketing). He started
II in 2004 and an Honorary Degree in Mechanical
his professional career in 2001 at General Electric
Engineering from the University of Modena and
as a member of the Corporate Audit Staff, with
Reggio Emilia in 2005. In 2004, Mr. Piero Ferrari was
assignments in Asia, the USA and Europe. John Elkann
awarded the title of Cavaliere del Lavoro.
is Chairman of Giovanni Agnelli B.V. He is Chairman of
GEDI Gruppo Editoriale S.p.A. and board member of
Born in 1945, Italian citizenship.
PartnerRe Ltd. Mr. Elkann is a trustee of MoMA. He also
serves as Chairman of the Giovanni Agnelli Foundation.
Sergio Duca (Chairman of the Board of Directors and
Born in 1976, Italian citizenship.
a member of the Statutory Auditors of BasicNet S.p.A.
Senior Non-Executive Director) – Mr. Sergio Duca is
since 2017, independent director of OSAI Automation
Benedetto Vigna – Mr. Benedetto Vigna is Acting Chief
System S.p.A. since November 2020 and a director
Executive Officer since September 2021. Before joining
of Tofaş Türk Otomobil Fabrikasi Anonim Şirketi, as
Ferrari, he was President of STMicroelectronics’,
well as Chairperson of the corporate governance
Analog, MEMS and Sensors Group, since January 2016
committee, member of the risk management
and also a member of ST’s Executive Committee from
committee and member of the audit committee of the
May 31, 2018. Mr. Vigna joined ST in 1995 and founded
board of directors of Tofaş Türk Otomobil Fabrikasi
ST’s MEMS activities (Micro-Electro-Mechanical
Anonim Şirketi. He also serves as member of the board
Systems). Under his guidance, ST’s MEMS sensors
of Nedcommunity association since May 2019 and
established ST’s leadership with large OEMs in motion-
Chairman of the board of auditors of the Fondazione
activated user interfaces. His responsibilities were
per la Scuola of Compagnia di San Paolo and ISPI
expanded to include connectivity, imaging and power
(Institute for the Study of International Politics), as well
solutions and he piloted a series of successful moves
as a member of the board of auditors of the Intesa
into new business areas, with a particular focus on the
San Paolo Foundation Onlus. Mr. Duca has previously
industrial and automotive market segments. During his
served as Chairman of the Board of Statutory Auditors
career Mr. Vigna has filed more than 200 patents on
of Enel S.p.A. from April 2010 until May 2019, Chairman
micromachining, authored numerous publications and
of the Board of Directors of Orizzonte SGR S.p.A. from
has sat on the boards of several EU-funded programs
2008 until 2016, Chairman of the Board of Statutory
including start ups as well as worldwide recognized
Auditors of Exor S.p.A. until May 2015, Chairman of
boards of Asian and American research centers.
the Board of Statutory Auditors and effective auditor
Mr. Vigna graduated in Subnuclear Physics from the
of GTech until April 2015, member of the Board of
University of Pisa.
ASTM S.p.A. and Chairman of the Audit Committee of
ASTM S.p.A. from 2010 until 2013, Chairman of the
Born in 1969, Italian citizenship.
Board of Statutory Auditors of Tosetti Value SIM and
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FERRARI N.V.AR 2021 an independent director of Sella Gestione SGR until
From 2003 until 2008 she worked at Gucci, Italy, first
April 2010. From 1997 until July 2007, Mr. Duca was
as Assistant to the President and Managing Director
the Chairman of PricewaterhouseCoopers S.p.A. In
and, from 2005, as Strategic Planning Director and
addition, he has previously served as Chairman of
Associate Worldwide Merchandising Director. In
the board of auditors of the Silvio Tronchetti Provera
2008, she joined Bottega Veneta, Italy, as Worldwide
Foundation, Chairman of the board of auditors of
Merchandising Director and from 2010 she became
Compagnia di San Paolo until May 2016, member of the
Worldwide Merchandising-Communication Director
Edison Foundation’s advisory board and the University
based in Switzerland. From 1999 until 2002, Mrs.
Bocconi in Milan’s development committee, as well as
Bellettini worked in the Prada Group, Italy, first in the
Chairman of the Bocconi’s Alumni Association’s board
Planning and New Business Development Division of
of auditors and a member of the board of auditors
Prada and, in 2002, as Operations Manager of Helmut
of the ANDAF (Italian Association of Chief Financial
Lang. Previously, she worked in Compass Partners
Officers). As a certified chartered accountant and
International, UK from 1998 to 1999, in Deutsche
auditor, he acquired broad experience through the
Morgan Grenfell, UK from 1996 to 1998 and in
PricewaterhouseCoopers network as the external
Goldman Sachs International, UK from 1994 to 1996.
auditor of a number of significant Italian listed
While graduating, she interned at Citibank, Italy in 1994.
companies. Mr. Duca graduated with honors
Mrs. Bellettini graduated in Business Administration
in Economics and Business from University Bocconi
with a major in Finance from Bocconi University, Italy.
in Milan.
Born in 1947, Italian citizenship.
Born in 1970, Italian citizenship.
Eddy Cue (non-executive Director) – Mr. Eddy Cue is
Delphine Arnault (non-executive Director) – Mrs.
Apple’s senior vice president of Services, reporting
Delphine Arnault graduated from the EDHEC Business
to CEO Tim Cook. Mr. Cue oversees the full range of
School and the London School of Economics. She
Apple’s services, including Apple Music, Apple News,
began her career at McKinsey & Company, the
Apple Podcasts, the Apple TV app, and Apple TV+,
global management consultancy firm, where she
as well as Apple Pay, Apple Card, Maps, Search Ads,
was a Consultant for two years. In 2001, she joined
Apple’s iCloud services, and Apple’s productivity and
the Executive Committee of Christian Dior Couture
creativity apps. Mr. Cue’s team has an excellent track
where she directed several product lines. She was
record of building and strengthening world-class
appointed Deputy General Manager of Christian
services that meet and exceed the high expectations
Dior Couture in 2008 and in September 2013 Deputy
of Apple’s customers, and offer creators and
General Manager of Louis Vuitton Malletier. She has
storytellers the opportunity to bring their creative
been a board director of LVMH Moët Hennessy Louis
visions to people around the world. Mr. Cue joined
Vuitton SE since 2003. Delphine was appointed to
Apple in 1989. Mr. Cue was instrumental in creating
the board of Château Cheval Blanc, the Saint-Emilion
the Apple online store in 1998, the iTunes Store in
premier grand cru classé in 2008. In 2002 she joined
2003, and the App Store in 2008. He also played a key
the board of Loewe, the celebrated Spanish leather
role in developing Apple’s award-winning iLife suite
goods company, and was appointed to Pucci’s board
of applications. In his early years at Apple, he was a
of directors in 2007. She was appointed to the boards
successful manager of software engineering and
of Céline in December 2011 and Christian Dior SE in
customer support teams. Mr. Cue earned a bachelor’s
April 2012. Delphine Arnault previously served as a
degree in Computer Science and Economics from
director of both Havas and 21st Century Fox from 2013
Duke University. He serves on the Board of Trustees of
to 2019. In 2021, she has been appointed to the Board
both the Paley Center for Media and Duke University.
of Gagosian and Phoebe Philo Limited.
Born in 1975, French citizenship.
Born in 1964, American citizenship.
John Galantic (non-executive Director) – John
Francesca Bellettini (non-executive Director) – Mrs.
Galantic is President and Chief Operating Officer of
Francesca Bellettini is President and Chief Executive
Chanel Inc. Galantic obtained a Bachelor’s degree
Officer of Yves Saint Laurent (part of the Kering
from Tufts University and Master’s degree in Business
Group), based in France, since September 2013. Mrs.
Administration from Harvard Business School. He
Bellettini is a member of the Kering Group Executive
began his career at Procter and Gamble and worked
Committee since 2013. Mrs. Bellettini joined the Kering
in various Marketing and Sales roles in Italy, the UK and
Group in 2003, serving in several executive roles.
US. After stints at GlaxoSmithKline in global Marketing
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and at Coty Beauty, as President of Coty Americas,
BOARD REGULATIONS
he joined Chanel in 2006. He joined the board of
Chanel in 2018. Galantic has also been on the board of
The current regulations of the Board of Directors deal
Bacardi Limited since 2011. Since 2017, he has been
with matters that concern the Board of Directors and
on the board of the Chanel Fondation, a philanthropic
its committees internally.
organization focused on women and girls.
Born in 1961, American citizenship.
manner in which meetings of the Board of Directors
The regulations contain provisions concerning the
are called and held, including the decision-making
Maria Patrizia Grieco (non-executive Director) – Mrs.
process. The regulations provide that meetings may
Maria Patrizia Grieco has been the Chairperson of
be held by telephone conference or video-conference,
the board of directors of Banca Monte dei Paschi di
provided that all participating Directors can follow the
Siena since May 2020, after having gained experience
proceedings and participate in real time discussion of
in the financial sector during the six years spent
the items on the agenda.
on the board of directors of Anima Holding. From
May 2014 to May 2020 she was the Chairperson of
The Board of Directors can only adopt valid
the board of directors of Enel, the Italian company
resolutions when the majority of the Directors
world leader in the utilities sector. After graduating
in office shall be present at the meeting or be
in law from the University of Milan, she started her
represented thereat.
career in 1977 at Italtel, where in 1994 she became
chief of the Legal and General Affairs directorate.
A Director may only be represented by another
In 1999, she was appointed General Manager with
Director authorized in writing. A Director may not act
the task of reorganizing and repositioning the
as a proxy for more than one other Director.
company, and in 2002 she became Chief Executive
Officer. Subsequently, she held the positions of Chief
All resolutions shall be adopted by the favorable
Executive Officer of Siemens Informatica, Partner
vote of the majority of the Directors present or
of Value Partners and Chief Executive Officer of
represented at the meeting, provided that the
the Group Value Team (today NTT Data). From 2008
regulations may contain specific provisions in this
to 2013 she was Chief Executive Officer of Olivetti,
respect. Each Director shall have one vote.
where she also held the role of Chairperson from
2011. She has been a member of the boards of
The Board of Directors shall be authorized to
directors of Fiat Industrial and CIR and currently
adopt resolutions without convening a meeting if
serves on the boards of Ferrari, Amplifon and Endesa
all Directors shall have expressed their opinions in
S.A. Mrs. Grieco is also Chair of Assonime and is
writing, unless one or more Directors shall object in
a member of the board of directors of Bocconi
writing against the resolution being adopted in this
University. Maria Patrizia Grieco was appointed
way prior to the adoption of the resolution.
Chairperson of the Italian Corporate Governance
Committee in 2017. The Committee’s purpose is to
THE AUDIT COMMITTEE
promote good corporate governance practices of
Italian listed companies.
The Audit Committee is responsible, inter alia, for
assisting and advising the Board of Directors, and
Born in 1952, Italian citizenship.
acting under authority delegated by the Board of
Directors, with respect to: (i) the integrity of the
Adam Keswick (non-executive Director) – Mr. Adam
Company’s financial statements, (ii) the Company’s
Keswick first joined the Jardine Matheson Group
policy on tax planning, (iii) the Company’s financing,
in 2001 and was appointed to the Board of Jardine
(iv) the Company’s application of information and
Matheson in 2007. He was Deputy Managing Director
communication technology, (v) the systems of internal
of Jardine Matheson from 2012 to 2016, and became
controls that management and the Board of Directors
chairman of Matheson & Co. in 2016. Mr. Keswick is
have established, (vi) the Company’s compliance with
a director of Dairy Farm, Hongkong Land, Jardine
legal and regulatory requirements, (vii) the Company’s
Strategic and Mandarin Oriental. He is also Vice-
compliance with recommendations and observations
Chairman of the Supervisory Board of Rothschild & Co.
of internal and independent auditors, (viii) the
and is a Director of Yabuli China Entrepreneurs Forum.
Company’s policies and procedures for addressing
certain actual or perceived conflicts of interest, (ix)
Born in 1973, British citizenship.
the review and approval of related party transactions,
134
FERRARI N.V.AR 2021 (x) the independent auditors’ qualifications,
THE COMPENSATION COMMITTEE
independence, remuneration and any non-audit
services for the Company, (xi) the functioning of the
The Compensation Committee is responsible for,
Company’s internal auditors and of the independent
among other things, assisting and advising the
auditors, (xii) risk management guidelines and policies,
Board of Directors, and acting under authority
and (xiii) the implementation and effectiveness of the
delegated by the Board of Directors ,with respect to:
Company’s ethics and compliance program.
(i) determining executive compensation consistent
with the Company’s remuneration policy, (ii) reviewing
The Audit Committee currently consists of Mr. Duca
and approving the remuneration structure for the
(Chairperson), Mrs. Bellettini and Mrs. Grieco, each
executive Directors, (iii) administering equity incentive
of whom is independent within the meaning of
plans and deferred compensation benefit plans, (iv)
the Dutch Corporate Governance Code. The Audit
discussing with management the Company’s policies
Committee is elected by the Board of Directors and is
and practices related to compensation and issuing
comprised of at least three non-executive Directors.
recommendations thereon, and (v) to prepare the
Audit Committee members are also required (i) not
compensation report.
to have any material relationship with the Company
or to serve as auditors or accountants for the
The Compensation Committee currently consists of
Company, (ii) to be “independent”, for purposes of
Mr. Galantic (Chairperson), Mr. Cue and Mr. Ferrari.
NYSE rules, Rule 10A-3 of the Exchange Act and the
The Compensation Committee is elected by the Board
Dutch Corporate Governance Code, and (iii) to be
of Directors and is comprised of at least three non-
“financially literate” and have “accounting or selected
executive Directors, at most one of whom may not
financial management expertise” (as determined
be independent under Dutch Corporate Governance
by the Board of Directors). At least one member of
Code. Unless decided otherwise by the Compensation
the Audit Committee shall be a “financial expert” as
Committee, the Head of Human Resources of the
defined by the Sarbanes-Oxley Act and the rules of the
Company attends its meetings.
U.S. Securities and Exchange Commission and section
2(3) of the Dutch Decree on the Establishment of an
In 2021 the Compensation Committee met twice
audit committee. No Audit Committee member may
with 100 percent attendance of its members at such
serve on more than four audit committees for other
meeting. The Compensation Committee reviewed
public companies, absent a waiver from the Board of
the compensation report. Further information on
Directors, which must be disclosed in the Company’s
the activities of the Compensation Committee are
annual report. Unless decided otherwise by the Audit
included in the compensation report.
Committee, the independent auditors of the Company,
the Chief Financial Officer and the Head of Internal
THE ESG COMMITTEE
Audit are required to attend its meetings, while the
Chief Executive Officer is free, but not required, to
The ESG Committee (formerly the Governance and
attend the meetings of the Audit Committee, unless
Sustainability Committee) is responsible for, among
the Audit Committee determines otherwise, and shall
other things, assisting and advising the Board of
attend the meetings of the Audit Committee if the
Directors, and acting under authority delegated by
Audit Committee so requires. The Audit Committee
the Board of Directors, with respect to: (i) drawing up
shall meet with the independent auditor at least
the selection criteria and appointment procedures
once per year outside the presence of the executive
for members of the Board of Directors; (ii) periodic
Directors and management.
assessment of the size and composition of the Board
of Directors and as appropriate making proposals for
In 2021 the Audit Committee met six times and the
a composition profile of the Board of Directors; (iii)
average attendance rate was 88.89 percent. At these
periodic assessment of the performance of individual
meetings several matters were discussed, including
directors and reporting this to the Board of Directors;
the audit committee role and responsibilities, the
(iv) proposals to the non-executive members of
Company’s financial control and risk framework, risk
the Board of Directors for the nomination and
assessment, internal control over financial reporting
re-nomination of directors to be elected by the
pursuant to the applicable rules, and a financial
shareholders; (v) supervision of the policy on the
overview of operating results.
selection and appointment criteria for senior
management and on succession planning; and (vi)
monitoring, evaluation and reporting on the strategy,
targets, achievements, disclosures and reports
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relating to ESG matters globally of the Company
be entitled otherwise. Notwithstanding the above,
and its subsidiaries. On December 14, 2021 the
no indemnification shall be made in respect of any
Board of Directors changed the name of the former
claim, issue or matter as to which any of the above-
Governance and Sustainability Committee into ESG
mentioned indemnified persons shall be adjudged to
Committee and approved a new committee charter
be liable for gross negligence or willful misconduct
effective as of the same date.
in the performance of such person’s duty to Ferrari.
The ESG Committee consists of Mr. Elkann
insurance for the members of the Board of Directors
(Chairperson), Mrs. Arnault and Mr. Cue. The ESG
and certain other officers, substantially in line with
Committee is elected by the Board of Directors and
that purchased by similarly situated companies.
Ferrari has purchased directors’ and officers’ liability
is comprised of at least three Directors. At least more
than half of the members shall be independent under
CONFLICT OF INTEREST
the Dutch Corporate Governance Code, and at most
one of the members may be an executive Director.
A Director shall not participate in discussions and
decision making of the Board of Directors with
In 2021 the ESG Committee met once with 100
respect to a matter in relation to which he or she has
percent attendance of its members at such
a direct or indirect personal interest that is in conflict
meeting. The Committee reviewed the Board of
with the interests of the Company and the business
Directors’ and Committee’s assessments, the
associated with the Company (“Conflict of Interest”),
Sustainability achievement and objectives, and the
which shall be determined outside the presence
recommendations for Directors’ election.
of the director concerned. All transactions, where
there is a Conflict of Interest, must be concluded on
In addition, as described above, the charters of the
terms that are customary in the branch concerned
Audit Committee, Compensation Committee and ESG
and approved by the Board of Directors. In addition,
Committee set forth independence requirements for
the Board of Directors as a whole may, on an ad hoc
their members for purposes of the Dutch Corporate
basis, resolve that there is such a strong appearance
Governance Code. Audit Committee members are
of a Conflict of Interest of an individual Director in
also required to qualify as independent for purposes
relation to a specific matter, that it is deemed in the
of NYSE rules and Rule 10A-3 of the Exchange Act.
best interest of a proper decision making process
that such individual Director be excused from
INDEMNIFICATION OF DIRECTORS
participation in the decision making process with
respect to such matter even though such Director
Under Dutch law, indemnification provisions may be
may not have an actual Conflict of Interest.
included in a company’s articles of association. Under
the Articles of Association, the Company is required
At least annually, each Director shall assess in good
to indemnify any and all of its Directors, officers,
faith whether (i) he or she is independent under (A)
former Directors, former officers and any person
best practice provision 2.1.8 of the Dutch Corporate
who may have served at its request as a director or
Governance Code, (B) the requirements of Rule 10A-3
officer of another company in which it owns shares
under the Exchange Act, and (C) Section 303A of the
or of which it is a creditor, who were or are made a
NYSE Listed Company Manual; and (ii) he or she would
party or are threatened to be made a party to or are
have a Conflict of Interest in connection with any
involved in, any threatened, pending or completed
transactions between the Company and a significant
action, suit or proceeding, whether civil, criminal,
shareholder or related party of the Company,
administrative, arbitrative or investigative (each a
including affiliates of a significant shareholder
“Proceeding”), or any appeal in such a Proceeding
(such conflict, a “Related-Party Conflict”), it being
or any inquiry or investigation that could lead to
understood that currently Exor N.V. (“Exor”) would be
such a Proceeding, against any and all liabilities,
considered a significant shareholder.
damages, reasonable and documented expenses
(including reasonably incurred and substantiated
The Directors shall inform the Board of Directors
attorneys’ fees), financial effects of judgments, fines,
through the Senior Non-executive Director or the
penalties (including excise and similar taxes and
Secretary of the Board of Directors as to all material
punitive damages) and amounts paid in settlement
information regarding any circumstances or
in connection with such Proceeding by any of them.
relationships that may impact their characterization
Such indemnification shall not be deemed exclusive
as “independent,” or impact the assessment of their
of any other rights to which those indemnified may
interests, including by responding promptly to the
136
FERRARI N.V.AR 2021 annual D&O questionnaires circulated by or on
Common Share. Pursuant to the Terms and Conditions
behalf of the Secretary that are designed to elicit
of the Special Voting Shares (“Terms and Conditions”),
relevant information regarding business and other
and for so long as the Ferrari common shares remain
relationships.
in the Loyalty Register, such Ferrari common shares
shall not be sold, disposed of, transferred, except in
Based on each Director’s assessment described
very limited circumstances - i.e., transfers to affiliates
above, the Board of Directors shall make a
or to relatives through succession, donation or other
determination at least annually regarding such
transfers (defined in the Terms and Conditions as
Director’s independence and such Director’s Related-
“Loyalty Transferee”) - but a shareholder may create or
Party Conflict. These annual determinations shall
permit to exist any pledge, lien, fixed or floating charge
be conclusive, absent a change in circumstances
or other encumbrance over such Ferrari common
from those disclosed to the Board of Directors, that
shares, provided that the voting rights in respect of
necessitates a change in such determination.
such Ferrari common shares and any corresponding
special voting shares remain with such shareholder at
Mr. Elkann is Chief Executive Officer of Exor, our and
all times. Ferrari’s shareholders who want to directly
Stellantis’s largest shareholder, and an executive
or indirectly sell, dispose of, trade or transfer such
director of Stellantis. Stellantis, Exor and a number
Ferrari common shares or otherwise grant any
of companies in the Stellantis and Exor groups are
right or interest therein, or create or permit to exist
related parties to Ferrari. See “Risk Factors–We may
any pledge, lien, fixed or floating charge or other
have potential conflicts of interest with Stellantis and
encumbrance over such Ferrari common shares with
Exor and its related companies” and Note 28 “Related
a potential transfer of voting rights relating to such
Party Transactions” to our Consolidated Financial
encumbrances will need to submit a de-registration
Statements. Finally, Mr. Ferrari controls COXA S.p.A,
request as referred to in the Terms and Conditions,
from which Ferrari purchases components for
in order to transfer the relevant Ferrari common
Formula 1 racing cars, and HPE S.r.l., which provides
shares to the regular trading system (the “Regular
consultancy engineering services to Ferrari, see Note
Trading System”) except that a Ferrari shareholder
28 to our Consolidated Financial Statements.
may transfer Ferrari common shares included in the
LOYALTY VOTING STRUCTURE
Loyalty Register to a Loyalty Transferee (as defined in
the Terms and Conditions) of such Ferrari shareholder
without transferring such shares from the Loyalty
In connection with the separation from Fiat Chrysler
Register to the Regular Trading System.
Automobiles N.V., Ferrari issued special voting shares
with a nominal value of one Euro cent (€0.01) per share
Ferrari’s shareholders who seek to qualify to receive
to FCA, Piero Ferrari and FCA shareholders holding
special voting shares can also request to have their
FCA special voting shares prior to the separation
Ferrari common shares registered in the Loyalty
including Exor, in addition to Ferrari common shares.
Register. Upon registration in the Loyalty Register
such shares will be eligible to be treated as Qualifying
As of February 14, 2022, Exor held approximately
Common Shares, provided they meet the conditions.
24.21 percent of our outstanding common shares and
approximately 36.00 percent of the voting power in
Notwithstanding the fact that Article 13 of the Ferrari
us, Piero Ferrari held approximately 10.30 percent of
Articles of Association permits the Board of Directors
our outstanding common shares and approximately
of Ferrari to approve transfers of special voting
15.31 percent of the voting power in us and public
shares, the special voting shares cannot be traded and
shareholders hold approximately 48.69 percent of
are transferable only in very limited circumstances (i.e.,
the voting power in us. The percentages of voting
to a Loyalty Transferee described above, or to Ferrari
power above are calculated based on the number of
for no consideration (om niet)).
outstanding shares net of treasury shares.
Subject to meeting certain conditions, our common
Association, Ferrari shall maintain a special capital
shares can be registered in our loyalty register (the
reserve to be credited against the share premium
“Loyalty Register”) and all such common shares may
exclusively for the purpose of facilitating any issuance
qualify as qualifying common shares (“Qualifying
or cancellation of special voting shares. The special
Common Shares”). The holder of Qualifying Common
voting shares shall be issued and paid up against this
Pursuant to Article 23 of the Ferrari Articles of
Shares is entitled to receive without consideration one
special capital reserve.
special voting share in respect of each such Qualifying
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The special voting shares have immaterial economic
Shares or the relevant Ferrari common shares in
entitlements. Such economic entitlements are
the Loyalty Register. The voting rights attached to
designed to comply with Dutch law but are immaterial
the special voting shares issued and allocated in
for investors. The special voting shares carry the
respect of the relevant Qualified Common Shares
same voting rights as Ferrari common shares.
will be suspended upon a direct or indirect change
of control in respect of the relevant holder of such
Section 10 of the Terms and Conditions include
Qualifying Common Shares that are registered in the
liquidated damages provisions intended to deter
Loyalty Register.
any attempt by holders to circumvent the terms
of the special voting shares. Such liquidated
For the purposes of this section a “change of control”
damages provisions may be enforced by Ferrari by
shall mean, in respect of any Ferrari shareholder that
means of a legal action brought by Ferrari before
is not an individual (natuurlijk persoon), any direct
competent courts of Amsterdam, the Netherlands. In
or indirect transfer in one or a series of related
particular, a violation of the provisions of the Terms
transactions as a result of which (i) a majority of the
and Conditions concerning the transfer of special
voting rights of such shareholder, (ii) the de facto
voting shares, Electing Common Shares (common
ability to direct the casting of a majority of the votes
shares registered in the Loyalty Register for the
exercisable at general meetings of shareholders of
purpose of becoming Qualifying Common Shares in
such shareholder and/or (iii) the ability to appoint
accordance with the Ferrari Articles of Association)
or remove a majority of the directors, executive
and Qualifying Common Shares may lead to the
directors or board members or executive officers
imposition of liquidated damages. Because we expect
of such shareholder or to direct the casting of a
the restrictions on transfers of the special voting
majority or more of the voting rights at meetings of
shares to be effective in practice we do not expect the
the board of directors, governing body or executive
liquidated damages provisions to be used.
committee of such shareholder has been transferred
to a new owner, provided that no change of control
Pursuant to Section 12 of the Terms and Conditions,
shall be deemed to have occurred if (a) the transfer
any amendment to the Terms and Conditions (other
of ownership and/or control is an intra-group
than merely technical, non-material amendments
transfer under the same parent company, (b) the
and unless such amendment is required to ensure
transfer of ownership and /or control is the result of
compliance with applicable law or regulations or
the succession or the liquidation of assets between
the listing rules of any securities exchange on which
spouses or the inheritance, inter vivos donation or
the Ferrari common shares are listed) may only be
other transfer to a spouse or a relative up to and
made with the approval of the general meeting of
including the fourth degree or (c) the fair market
shareholders of Ferrari.
value of the Qualifying Common Shares held by such
shareholder represents less than twenty percent
At any time, a holder of Qualifying Common Shares
(20 percent) of the total assets of the Transferred
or Electing Common Shares may request the de-
Group at the time of the transfer and the Qualifying
registration of such shares from the Loyalty Register
Common Shares held by such shareholder, in the
to enable free trading thereof in the Regular Trading
sole judgment of the Company, are not otherwise
System. Upon the de-registration from the Loyalty
material to the Transferred Group or the change of
Register, such shares will cease to be Electing
control transaction. “Transferred Group” shall mean
Common Shares or Qualifying Common Shares as
the relevant shareholder together with its affiliates,
the case may be and will be freely tradable and voting
if any, over which control was transferred as part of
rights attached to the corresponding special voting
the same change of control transaction within the
shares will be suspended with immediate effect and
meaning of the definition of change of control.
such special voting shares shall be transferred to
Ferrari for no consideration (om niet).
If Ferrari is dissolved and liquidated, whatever
remains of Ferrari’s equity after all its debts have
A shareholder who is a holder of Qualifying Common
been discharged shall first be applied to distribute
Shares or Electing Common Shares must promptly
the aggregate balance of share premium reserves
notify the Agent and Ferrari upon the occurrence of
and other reserves (other than the special dividend
a “change of control” as defined in the Ferrari Articles
reserve), to holders of Ferrari common shares
of Association, as described below. The change of
in proportion to the aggregate nominal value of
control will trigger the de-registration of the relevant
the Ferrari common shares held by each holder;
Electing Common Shares or Qualifying Common
secondly, from any balance remaining, an amount
138
FERRARI N.V.AR 2021 equal to the aggregate amount of the nominal value
shares, representing approximately 24.62 percent
of the Ferrari common shares will be distributed to
of the aggregate issued share capital.
the holders of Ferrari common shares in proportion
b. The Company has imposed no limitations on
to the aggregate nominal value of Ferrari common
the transfer of common shares. The Articles of
shares held by each of them; thirdly, from any balance
Association provide in Article 13 for transfer
remaining, an amount equal to the aggregate amount
restrictions for special voting shares.
of the special voting shares dividend reserve will be
c. For information on participations in the Company’s
distributed to the holders of special voting shares
capital in respect of which pursuant to Sections
in proportion to the aggregate nominal value of the
5:34, 5:35 and 5:43 of the Dutch Financial
special voting shares held by each of them; fourthly,
Supervision Act (Wet op het financieel toezicht)
from any balance remaining, the aggregate amount
notification requirements apply, please refer to
of the nominal value of the special voting shares will
the chapter “Major Shareholders” of this Annual
be distributed to the holders of special voting shares
Report. There you will find a list of Shareholders
in proportion to the aggregate nominal value of the
who are known to the Company to have holdings of
special voting shares held by each of them; and,
3 percent or more at the stated date.
lastly, any balance remaining will be distributed to
d. No special control rights or other rights accrue to
the holders of Ferrari common shares in proportion
shares in the capital of the Company.
to the aggregate nominal value of Ferrari common
e. A mechanism for verifying compliance with a
shares held by each of them.
DISCLOSURES PURSUANT
TO DECREE ARTICLE 10 EU-DIRECTIVE
ON TAKEOVERS
scheme allowing employees to subscribe for or
to acquire shares in the capital of the company or
a subsidiary if the employees do not arrange for
such verification directly is not applicable to the
Company.
f. No restrictions apply to voting rights attached
In accordance with the Dutch Besluit artikel 10
to shares in the capital of the Company, nor are
overnamerichtlijn (the “Decree”), the Company makes
there any deadlines for exercising voting rights.
the following disclosures:
The Articles of Association allow the Company to
cooperate in the issuance of registered depositary
a. For information on the capital structure of the
receipts for common shares, but only pursuant to
Company, the composition of the issued share
a resolution to that effect of the Board of Directors.
capital and the existence of the two classes of
The Company is not aware of any depository
shares, please refer to Note 14 to the Company
receipts having been issued for shares in its
Financial Statements in this Annual Report. For
capital.
information on the rights attached to the common
g. The Company is not aware of the existence of any
shares, please refer to the Articles of Association
agreements with Shareholders which may result in
which can be found on the Company’s website. To
restrictions on the transfer of shares or limitation
summarize, the rights attached to common shares
of voting rights except for the shareholders’
comprise pre-emptive rights upon issuance of
agreement, dated December 23, 2015 between
common shares, the entitlement to attend to the
Exor (formerly Exor S.p.A.) and Piero Ferrari, which
general meeting of Shareholders and to speak
became effective upon the completion of the
and vote at that meeting and the entitlement to
Separation on January 3, 2016 (the “Shareholders’
distributions of such amount of the Company’s
Agreement”). The Shareholders’ Agreement
profit as remains after allocation to reserves.
includes certain preemption rights of Exor in the
For information on the rights attached to the
event of a proposed transfer of common shares
special voting shares, please refer to the Articles
by Piero Ferrari, and certain rights of first offer of
of Association and the Terms and Conditions
Piero Ferrari in the event of a proposed transfer
for the Special Voting Shares which can both
of common shares by Exor, in each case subject
be found on the Company’s website and more
to the exceptions set forth in the Shareholders’
in particular to the paragraph “Loyalty Voting
Agreement. The Shareholders’ Agreement will
Structure” of this Annual Report in the chapter
remain in force until the fifth anniversary of the
“Corporate Governance”. As at December 31, 2021,
Separation provided that if neither of the parties
the issued share capital of the Company consisted
to the Shareholders’ Agreement terminates the
of 193,923,499 common shares, representing
Shareholders’ Agreement within six months before
approximately 75.38 percent of the aggregate
the end of the initial term, then the Shareholders’
issued share capital, and 63,349,112 special voting
Agreement shall be renewed automatically for
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another five year term. Since neither of the parties
necessary in the opinion of the Board of Directors.
to the Shareholders’ Agreement terminated it
This authorization is limited in respect of special
within six months before January 3, 2021, the
voting shares to a maximum aggregate amount
Shareholders’ Agreement was automatically
of special voting shares as provided for in the
renewed for another five year term and, therefore,
Company’s authorized share capital as set out
until January 3, 2026.
in the Company’s Articles of Association. The
h. The rules governing the appointment and dismissal
authorization was granted for a period starting
of members of the Board of Directors are stated
from the date on which the prior authorization
in the Articles of Association of the Company. All
expires and therefore from January 2, 2021 up
members of the Board of Directors are appointed
to and including October 15, 2021. The Board of
by the general meeting of Shareholders. The term
Directors was also designated for the same period
of office of all members of the Board of Directors
as the authorized body to limit or exclude the rights
is for a period of approximately one year after
of pre-emption of shareholders in connection with
appointment, such period expiring on the day the
the authority of the Board of Directors to issue
first Annual General Meeting of Shareholders is
common shares and grant rights to subscribe for
held in the following calendar year. The general
common shares as referred to above. Pursuant to
meeting of Shareholders has the power to
the resolution of the Annual General Meeting held
suspend or dismiss any member of the Board
on April 15, 2021, the Board of Directors has been
of Directors at any time. The rules governing an
further authorized to issue shares in the capital
amendment of the Articles of Association are
of the Company and to grant rights to subscribe
stated in the Articles of Association and require a
for shares in the capital of the Company. This
resolution of the general meeting of Shareholders
authorization is limited in respect of common
which can only be passed pursuant to a prior
shares to 10 percent of the issued common shares
proposal of the Board of Directors.
for general corporate purposes as of the date
i. The general powers of the Board of Directors
of the 2021 Annual General Meeting (i.e. April 15,
are stated in the Articles of Association of the
2021), which can be used for any and all purposes
Company. For a period of five (5) years from
necessary in the opinion of the Board of Directors.
January 2, 2016, the Board of Directors has been
This authorization is limited in respect of special
irrevocably authorized to issue shares up to
voting shares to up to 10% of the maximum
the maximum aggregate amount of shares as
aggregate amount of special voting shares as
provided for in the Company’s authorized share
provided for in the Company’s authorized share
capital as set out in Article 4.1 of the Articles of
capital as set out in the Company’s Articles of
Association, as amended from time to time. The
Association. The authorization has been granted
Board of Directors has also been designated
for a period of 18 months starting from the date of
for the same period as the authorized body to
the 2021 Annual General Meeting of Shareholders
limit or exclude the rights of pre-emption of
on April 15, 2021 up to and including October
shareholders in connection with the authority of
14, 2022. The Board of Directors has also been
the Board of Directors to issue common shares
designated for the same period as the authorized
and grant rights to subscribe for common shares
body to limit or exclude the rights of pre-emption
as referred to above. Pursuant to the resolution
of shareholders in connection with the authority
of the Annual General Meeting held on April 16,
of the Board of Directors to issue common shares
2020, the Board of Directors was authorized to
and grant rights to subscribe for common shares
issue shares in the capital of the Company and to
as referred to above. In the event of an issuance of
grant rights to subscribe for shares in the capital
special voting shares, shareholders have no right
of the Company. This authorization is limited in
of pre-emption. The Company has the authority
respect of common shares to (i) 10 percent of
to acquire fully paid-up shares in its own share
the issued common shares for general corporate
capital, provided that such acquisition is made
purposes as of the date of the 2020 Annual General
for no consideration. Further rules governing the
Meeting (i.e. April 16, 2020), which can be used
acquisition of shares by the Company in its own
for any and all purposes, plus (ii) an additional 10
share capital are set out in article 8 of the Articles
percent of the issued common shares as of such
of Association.
date if the issuance occurs on the occasion of
j. The Company is not a party to any significant
the acquisition of an enterprise or a corporation,
agreements which will take effect, will be altered
or, if such issuance and/or the granting of rights
or will be terminated upon a change of control of
to subscribe for common shares is otherwise
the Company as a result of a public offer within
140
FERRARI N.V.AR 2021 the meaning of Section 5:70 of the Dutch Financial
All convocations of general meetings of shareholders
Supervision Act (Wet op het financieel toezicht ),
and all announcements, notifications and
provided that certain of the loan agreements
communications to shareholders shall be made
entered into by the Company contain clauses
by means of an announcement on the Company’s
that, as is customary for financing agreements
corporate website and such announcement shall
of similar type, may require early repayment or
remain accessible until the relevant general meeting
termination in the event of a change of control of
of shareholders. Any communication to be addressed
the Company.
to the general meeting of shareholders by virtue of
k. The Company did not enter into any agreement
Dutch law or the Articles of Association, may be either
with a director or employee of the Company
included in the notice, referred to in the preceding
providing for a payment / distribution upon
sentence or, to the extent provided for in such notice,
termination of employment as a result of a public
on the Company’s corporate website and/or in a
offer within the meaning of article 5:70 of the Dutch
document made available for inspection at the office
Financial Supervision Act.
of the Company and such other place(s) as the Board
GENERAL MEETING OF SHAREHOLDERS
At least one general meeting of shareholders shall be
may be sent to Shareholders through the use of an
held every year, which meeting shall be held within six
electronic means of communication to the address
months after the close of the financial year.
provided by such Shareholders to the Company for
Convocations of general meetings of shareholders
of Directors shall determine.
Furthermore, general meetings of shareholders shall
this purpose.
be held in the case referred to in Section 2:108a of the
The notice shall state the place, date and hour of the
Dutch Civil Code as often as the Board of Directors,
meeting and the agenda of the meeting as well as the
the Chairman or the Chief Executive Officer deems
other data required by law.
it necessary to hold them or as otherwise required
by Dutch law, without prejudice to what has been
An item proposed in writing by such number of
provided in the next paragraph hereof.
Shareholders who, by Dutch law, are entitled to
make such proposal, shall be included in the notice
Shareholders solely or jointly representing at least
or shall be announced in a manner similar to the
ten percent (10 percent) of the issued share capital
announcement of the notice, provided that the
may request the Board of Directors, in writing, to call a
Company has received the relevant request, including
general meeting of shareholders, stating the matters
the reasons for putting the relevant item on the
to be dealt with.
agenda, no later than the sixtieth day before the day of
If the Board of Directors fails to call a meeting, then
the meeting.
such shareholders may, on their application, be
Pursuant to Dutch law, the board of a listed company
authorized by the interim provisions judge of the
has the power to invoke a cooling-off period of up to
court (voorzieningenrechter van de rechtbank) to
250 days in the event of (i) a request by one or more
convene a general meeting of shareholders. The
shareholders for consideration of a proposal to
interim provisions judge (voorzieningenrechter
appoint, suspend or dismiss one or more members
van de rechtbank ) shall reject the application if he
of the board, or (ii) when an unsolicited public bid
is not satisfied that the applicants have previously
has been announced or made for the shares of the
requested the Board of Directors in writing, stating
listed company. The decision by the board to invoke
the exact subjects to be discussed, to convene a
the cooling-off period is subject to supervisory board
general meeting of shareholders.
approval. To invoke the cooling-off period, the request
General meetings of shareholders shall be held in
the board be substantially contrary to the interest of
Amsterdam or Haarlemmermeer (Schiphol Airport),
the listed company and its affiliated enterprises.
under i) or the public bid under ii) must in the view of
the Netherlands, and shall be called by the Board
of Directors, the Chairman or the Chief Executive
The agenda of the annual general meeting of
Officer, in such manner as is required to comply
shareholders shall contain, inter alia, the following
with the law and the applicable stock exchange
items:
regulations, not later than on the forty-second day
a. adoption of the annual report;
prior to the day of the meeting.
b. the remuneration report;
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c. at least every four years after adoption of the
of the meeting, after which the shareholders shall have
remuneration policy, the remuneration policy;
the opportunity to react to the minutes in the following
d. the policy of the Company on additions to reserves
three months. The minutes shall then be adopted in the
and on dividends, if any;
manner as described in the preceding paragraph.
e. granting of discharge to the Directors in respect
of the performance of their duties in the relevant
If an official notarial record is made of the business
financial year;
transacted at the meeting then minutes need not be
f. the appointment of Directors;
drawn up and it shall suffice that the official notarial
g. if applicable, the proposal to pay a dividend;
record be signed by the notary.
h. if applicable, discussion of any substantial change
in the corporate governance structure of the
As a prerequisite to attending the meeting and, to
Company; and
the extent applicable, exercising voting rights, the
i. any matters decided upon by the person(s)
shareholders entitled to attend the meeting shall be
convening the meeting and any matters placed
obliged to inform the Board of Directors in writing
on the agenda with due observance of applicable
within the time frame mentioned in the convening
Dutch law.
notice. At the latest this notice must be received by
the Board of Directors on the day mentioned in the
The Board of Directors shall provide the general
convening notice.
meeting of shareholders with all requested
information, unless this would be contrary to an
Shareholders and those permitted by Dutch law to
overriding interest of the Company. If the Board of
attend the general meetings of shareholders may
Directors invokes an overriding interest, it must
cause themselves to be represented at any meeting
give reasons.
by a proxy duly authorized in writing, provided they
shall notify the Company in writing of their wish to be
When convening a general meeting of shareholders,
represented at such time and place as shall be stated
the Board of Directors shall determine that, for the
in the notice of the meetings. For the avoidance of
purpose of Article 19 and Article 20 of the Articles of
doubt, such attorney is also authorized in writing if
Association, persons with the right to vote or attend
the proxy is documented electronically. The Board of
meetings shall be considered those persons who
Directors may determine further rules concerning
have these rights at the twenty-eighth day prior to
the deposit of the powers of attorney; these shall be
the day of the meeting (the “Record Date”) and are
mentioned in the notice of the meeting.
registered as such in a register to be designated by
the Board of Directors for such purpose, irrespective
The Company is exempt from the proxy rules under
whether they will have these rights at the date of the
the Exchange Act.
meeting. In addition to the Record Date, the notice of
the meeting shall further state the manner in which
The chairman of the meeting shall decide on the
shareholders and other parties with meeting rights
admittance to the meeting of persons other than
may have themselves registered and the manner in
those who are entitled to attend.
which those rights can be exercised.
For each general meeting of shareholders, the
The general meeting of shareholders shall be
Board of Directors may decide that shareholders
presided over by the Chairman or, in his absence, by
shall be entitled to attend, address and exercise
the person chosen by the Board of Directors to act as
voting rights at such meeting through the use of
chairman for such meeting.
electronic means of communication, provided that
shareholders who participate in the meeting are
One of the persons present designated for that
capable of being identified through the electronic
purpose by the chairman of the meeting shall act
means of communication and have direct cognizance
as secretary and take minutes of the business
of the discussions at the meeting and the exercising
transacted. The minutes shall be confirmed by the
of voting rights (if applicable). The Board of Directors
chairman of the meeting and the secretary and
may set requirements for the use of electronic means
signed by them in witness thereof.
of communication and state these in the convening
The minutes of the general meeting of shareholders
for each general meeting of shareholders decide
shall be made available, on request, to the
that votes cast by the use of electronic means of
shareholders no later than three months after the end
communication prior to the meeting and received
notice. Furthermore, the Board of Directors may
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FERRARI N.V.AR 2021 by the Board of Directors shall be considered to be
No voting rights shall be exercised in the general
votes cast at the meeting. Such votes may not be cast
meeting of shareholders for shares owned by the
prior to the Record Date. Whether the provision of the
Company or by a subsidiary of the Company. Pledgees
foregoing sentence applies and the procedure for
and usufructuaries of shares owned by the Company
exercising the rights referred to in that sentence shall
and its subsidiaries shall however not be excluded
be stated in the notice.
from exercising their voting rights, if the right of
pledge or usufruct was created before the shares
Prior to being allowed admittance to a meeting, a
were owned by the Company or a subsidiary. Neither
shareholder and each person entitled to attend the
the Company nor any of its subsidiaries may exercise
meeting, or its attorney, shall sign an attendance list,
voting rights for shares in respect of which it holds a
while stating his name and, to the extent applicable,
right of pledge or usufruct.
the number of votes to which he is entitled. Each
shareholder and other person attending a meeting
Without prejudice to the Articles of Association, the
by the use of electronic means of communication
Company shall determine for each resolution passed:
and identified in accordance with the above shall
a. the number of shares on which valid votes have
be registered on the attendance list by the Board of
been cast;
Directors. In the event that it concerns an attorney of
b. the percentage that the number of shares as
a shareholder or another person entitled to attend
referred to under a. represents in the issued share
the meeting, the name(s) of the person(s) on whose
capital;
behalf the attorney is acting, shall also be stated.
c. the aggregate number of votes validly cast; and
The chairman of the meeting may decide that the
d. the aggregate number of votes cast in favor of
attendance list must also be signed by other persons
and against a resolution, as well as the number of
present at the meeting.
abstentions.
The chairman of the meeting may determine the time
ISSUANCE OF SHARES
for which shareholders and others entitled to attend
the general meeting of shareholders may speak if
The general meeting of shareholders or alternatively
he considers this desirable with a view to the orderly
the Board of Directors, if it has been designated to
conduct of the meeting as well as other procedures
do so by the general meeting of shareholders, shall
that the chairman considers desirable for the efficient
have authority to resolve on any issuance of shares
and orderly conduct of the business of the meeting.
and rights to subscribe for shares. The general
Every share (whether common or special voting) shall
designation of the Board of Directors for this purpose
confer the right to cast one vote.
is in force, no longer have authority to decide on the
issuance of shares and rights to subscribe for shares.
meeting of shareholders shall, for as long as any such
Shares in respect of which Dutch law determines
that no votes may be cast shall be disregarded
For a period of five years from January 2, 2016 the
for the purposes of determining the proportion
Board of Directors has been irrevocably authorized
of shareholders voting, present or represented
to issue shares and rights to subscribe for shares
or the proportion of the share capital present or
up to the maximum aggregate amount of shares
represented.
as provided for in the company’s authorized share
capital as set out in Article 4.1 of the Articles of
All resolutions shall be passed with an absolute
Association, as amended from time to time.
majority of the votes validly cast unless otherwise
specified in the Articles of Association. Blank votes
The general meeting of shareholders or the Board
shall not be counted as votes cast.
of Directors if so designated in accordance with the
Articles of Association, shall decide on the price and
All votes shall be cast in writing or electronically. The
the further terms and conditions of issuance, with
chairman of the meeting may, however, determine
due observance of what has been provided in relation
that voting by raising hands or in another manner
thereto in Dutch law and the Articles of Association.
shall be permitted.
Voting by acclamation shall be permitted if none of
to decide on the issuance of shares or rights to
the shareholders present or represented objects.
subscribe for shares, such designation shall specify the
class of shares and the maximum number of shares or
If the Board of Directors is designated to have authority
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rights to subscribe for shares that can be issued under
Payment in a currency other than euro may only be
such designation. When making such designation the
made with the consent of the Company.
duration thereof, which shall not be for more than five
years, shall be resolved upon at the same time. The
The Board of Directors has also been designated as
designation may be extended from time to time for
the authorized body to limit or exclude the rights of
periods not exceeding five years. The designation may
pre-emption of shareholders in connection with the
not be withdrawn unless otherwise provided in the
authority of the Board of Directors to issue common
resolution in which the designation is made.
shares and grant rights to subscribe for common
shares as referred to above.
Pursuant to the resolution of the Annual General
Meeting held on April 16, 2020, the Board of Directors
In the event of an issuance of common shares
was authorized to issue shares in the capital of the
every holder of common shares shall have a right of
Company and to grant rights to subscribe for shares
pre-emption with regard to the common shares or
in the capital of the Company. This authorization is
rights to subscribe for common shares to be issued
limited in respect of common shares to (i) 10 percent
in proportion to the aggregate nominal value of his
of the issued common shares for general corporate
common shares, provided however that no such
purposes as of the date of the 2020 Annual General
right of pre-emption shall exist in respect of shares or
Meeting (i.e. April 16, 2020), which can be used for
rights to subscribe for common shares to be issued
any and all purposes, plus (ii) an additional 10 percent
to employees of the Company or of a group company
of the issued common shares as of such date if the
pursuant to any option plan of the Company.
issuance occurs on the occasion of the acquisition
of an enterprise or a corporation, or, if such
A shareholder shall have no right of pre-emption
issuance and/or the granting of rights to subscribe
for shares that are issued against a non-cash
for common shares is otherwise necessary in the
contribution.
opinion of the Board of Directors. This authorization
is limited in respect of special voting shares to a
In the event of an issuance of special voting shares to
maximum aggregate amount of special voting
qualifying shareholders, shareholders shall not have
shares as provided for in the Company’s authorized
any right of pre-emption.
share capital as set out in the Company’s Articles
of Association. The authorization was granted for
The general meeting of shareholders or the Board
a period starting from the date on which the prior
of Directors, as the case may be, shall decide when
authorization expired and therefore from January 2,
passing the resolution to issue shares or rights to
2021 up to and including October 15, 2021. Pursuant
subscribe for shares in which manner the shares
to the resolution of the Annual General Meeting held
shall be issued and, to the extent that rights of pre-
on April 15, 2021, the Board of Directors has been
emption apply, within what period those rights may be
further authorized to issue shares in the capital of the
exercised.
Company and to grant rights to subscribe for shares
in the capital of the Company. This authorization is
CORPORATE OFFICES
limited in respect of common shares to 10 percent
of the issued common shares for general corporate
The Company is incorporated under the laws of the
purposes as of the date of the 2021 Annual General
Netherlands. It has its official seat in Amsterdam, the
Meeting (i.e. April 15, 2021), which can be used for
Netherlands, and the place of effective management
any and all purposes necessary in the opinion of
of the Company is Via Abetone Inferiore n. 4 I-41053
the Board of Directors. This authorization is limited
Maranello (MO) Italy.
in respect of special voting shares to up to 10% of
the maximum aggregate amount of special voting
The business address of the Board of Directors and
shares as provided for in the Company’s authorized
the senior managers is Via Abetone Inferiore n. 4
share capital as set out in the Company’s Articles of
I-41053 Maranello (MO) Italy.
Association. The authorization has been granted for
a period of 18 months starting from the date of the
The Company is registered at the Dutch trade register
2021 Annual General Meeting of Shareholders on April
under number 64060977.
15, 2021 up to and including October 14, 2022.
Payment for shares shall be made in cash unless
state for the purposes of the EU Transparency
another form of consideration has been agreed.
Directive (Directive 2004/109/EC, as amended).
The Netherlands is the Company’s home member
144
FERRARI N.V.AR 2021 INTERNAL CONTROL SYSTEM
The approach adopted by the Company for the
evaluation, monitoring and continuous updating of the
The Company has in place an internal control system
system of internal control over financial reporting, is
(the “System”), based on the model provided by
based on a ‘top-down, risk-based’ process consistent
the COSO Framework (Committee of Sponsoring
with the COSO Framework. This enables focus on
Organizations of the Treadway Commission Report
areas of higher risk and/or materiality, where there is
– Enterprise Risk Management model) and the
risk of significant errors, including those attributable
principles of the Dutch Corporate Governance
to fraud, in the elements of the financial statements
Code, which consists of a set of policies, procedures
and related documents. The key components of the
and organizational structures aimed at identifying,
process are:
measuring, managing and monitoring the principal
• identification and evaluation of the source and
risks to which the Company is exposed. The System
probability of material errors in elements of financial
is integrated within the organizational and corporate
reporting;
governance framework adopted by the Company and
• assessment of the adequacy of key controls in
contributes to the protection of corporate assets, as
enabling ex-ante or ex-post identification of potential
well as to ensuring the efficiency and effectiveness of
misstatements in elements of financial reporting;
business processes, reliability of financial information
and
and compliance with laws, regulations, the Articles of
• verification of the operating effectiveness of
Association and internal procedures.
controls based on the assessment of the risk of
The System, which has been developed on the basis
focused on areas of higher risk.
of international best practices, relies on the so called
“Three Levels of Controls Model” as referred to and
Identification and evaluation of the risk of
outlined in the “Risk Management Process and Internal
misstatements which could have material effects
Control Systems” section of this Report.
on financial reporting is carried out through a risk
misstatement in financial reporting, with testing
PRINCIPAL CHARACTERISTICS
OF THE INTERNAL CONTROL SYSTEM
AND INTERNAL CONTROL OVER
FINANCIAL REPORTING
assessment process that uses a top-down approach
to identify the organizational entities, processes and
the related accounts, in addition to specific activities,
which could potentially generate significant errors.
Under the methodology adopted by the Company,
risks and related controls are associated with the
The Company has in place a system of risk
accounting and business processes upon which
management and internal control over financial
accounting information is based.
reporting based on the model provided by the COSO
Framework, according to which the internal control
Significant risks identified through the assessment
system is defined as a set of rules, procedures and
process require definition and evaluation of key
tools designed to provide reasonable assurance of
controls that address those risks, thereby mitigating
the achievement of corporate objectives.
the possibility that financial reporting will contain any
material misstatements.
In relation to the financial reporting process,
reliability, accuracy, completeness and timeliness
In accordance with international best practices, the
of the information contribute to the achievement
Group has two principal types of control in place:
of such corporate objectives. Risk management
• controls that operate at Group or subsidiary level,
is an integral part of the internal control system. A
such as delegation of authorities and responsibilities,
periodic evaluation of the system of internal control
separation of duties, and assignment of access
over financial reporting is designed to ensure the
rights to IT systems; and
overall effectiveness of the components of the COSO
• controls that operate at process level, such as
Framework (control environment, risk assessment,
authorizations, reconciliations, verification of
control activities, information and communication,
consistencies, etc. This category includes controls
and monitoring) in achieving those objectives.
for operating processes, controls for financial
The Company has a system of administrative and
carried out by captive service providers. These
accounting procedures in place that ensure a high
controls can be preventive (i.e., designed to prevent
degree of reliability in the system of internal control
errors or fraud that could result in misstatements
over financial reporting.
in financial reporting) or detective (i.e., designed to
closing processes and cross-sector controls
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reveal errors or fraud that have already occurred).
amended to include specific guidelines relating to:
They may also be classified as manual or automatic,
the Environment, Health and Safety, Business Ethics
such as application-based controls relating to the
and Anticorruption, Suppliers, Human Resource
technical characteristics and configuration of IT
Management, Respect of Human Rights, Conflicts of
systems supporting business activities.
Interest, Community Investment, Data Privacy, Use
of IT and Communications Equipment, Antitrust and
An assessment of the design and operating
Export Controls.
effectiveness of key controls is carried out
through tests performed by the Internal Audit
The Code of Conduct applies to the Directors and all
department, both at group and subsidiary level, using
employees of the Company and its subsidiaries and
sampling techniques recognized as best practices
other individuals or companies that act in the name
internationally.
and on behalf of the Company or its subsidiaries.
The assessment of the controls may require the
The Company promotes adoption of the Code of
definition of compensating controls and plans
Conduct as a best practice standard of business
for remediation and improvement. The results of
conduct by partners, suppliers, consultants,
monitoring are subject to periodic review by the
agents, dealers and others with whom it has a
manager responsible for the Company’s financial
long-term relationship. In fact, the Company’s
reporting and communicated by him to senior
contracts worldwide include specific clauses
management and to the Audit Committee (which in
relating to recognition and adherence to the
turn reports to the Board of Directors).
principles underlying the Code of Conduct and
CODE OF CONDUCT
related guidelines, as well as compliance with local
regulations, particularly those related to corruption,
money-laundering, terrorism and other crimes
We have adopted a Code of Conduct which applies to
constituting liability for legal persons.
all of our employees, including our principal executive,
principal financial and principal accounting officers.
The Company closely monitors the effectiveness of
Our Code of Conduct is posted on our website at
and compliance with the Code of Conduct. Violations
https://corporate.ferrari.com/sites/ferrari15ipo/
of the Code of Conduct are usually determined
files/codice_condotta_ferrari_eng_def.pdf. If the
through, among other things: periodic activities
provisions of our Code of Conduct that apply to our
carried out by the Internal Audit department of the
principal executive officer, principal financial officer
Group; reports received in accordance with the
or principal accounting officer are amended, or if a
whistleblowing management procedures; and checks
waiver is granted, we will disclose such amendment
forming part of the standard operating procedures.
or waiver.
The Internal Audit department investigates violations
of the Code of Conduct during standard periodic
The Code of Conduct represents a set of values
or specific audits. Periodic reporting is provided
recognized, adhered to and promoted by the
to the Chairman and CEO as well as to the Audit
Company which understands that conduct based on
Committee. For all Code of Conduct violations, the
the principles of diligence, integrity and fairness is an
disciplinary measures taken are commensurate with
important driver of social and economic development.
the seriousness of the case and comply with local
legislation. The relevant corporate departments are
The Code of Conduct is a pillar of the governance
notified of violations, irrespective of whether criminal
system which regulates the decision-making
action is taken by the authorities.
processes and operating approach of the Company
and its employees in the interests of stakeholders.
INSIDER TRADING POLICY
The Code of Conduct amplifies aspects of conduct
related to the economic, social and environmental
As of January 3, 2016 the Company’s Board of
dimensions, underscoring the importance of dialog
Directors adopted an insider trading policy setting
with stakeholders. Explicit reference is made to
forth guidelines and recommendations to all
the UN’s Universal Declaration on Human Rights,
Directors, officers and employees of the Group with
the principal Conventions of the International
respect to transactions in the Company’s securities.
Labor Organization (ILO), the OECD Guidelines for
This policy, which also applies to immediate family
Multinational Enterprises and the U.S. Foreign Corrupt
members and members of the households of
Practices Act (FCPA). The Code of Conduct was
persons covered by the policy, is designed to prevent
146
FERRARI N.V.AR 2021 insider trading or allegations of insider trading, and to
protect the Company for integrity and ethical conduct.
DIVERSITY POLICY
PROFILE OF THE NON-EXECUTIVE
DIRECTORS
In respect of the composition of the Board of
Directors, a profile of the non-executive Directors
(the “Profile”) has been adopted by the Company.
The Board of Directors adopted a diversity policy
The purpose of this profile is to provide guidance
for the Board of Directors (the “Diversity Policy”)
with respect to the composition and expertise of the
effective as of December 31, 2017, since the
non-executive Directors. The Profile provides that
Company believes that diversity in the composition
the Board of Directors shall be composed in such
of the Board of Directors in terms of age, gender,
manner that its composition reflects an adequate
expertise, professional background and nationality
mix of technical abilities, professional background
is an important mean of promoting debate, balanced
and experience, both general and specific, gained in
decision making and independent actions of the
an international environment and pertaining to the
Board of Directors.
dynamics of the macro-economy and globalization
of markets, more generally, as well as the industrial
The Diversity Policy gives weight to the following
and financial sectors, more specifically. In selecting
diversity factors in Board of Directors composition:
and nominating new non-executive Directors, the
age, gender, expertise, work and personal
Company shall ensure that such non-executive
background and nationality. The Company considers
Directors complement the knowledge and experience
each of these aspects key drivers to support the
of the other non-executive Directors. In selecting
above mentioned goals and to achieve sufficient
and nominating new non-executive Directors, the
diversity of views and the expertise needed for a
Company shall also ensure that the Diversity Policy
proper understanding of current affairs and longer-
is taken into account. In recommending prospective
term risks and opportunities related to the Company’s
candidates for nomination to the Board of Directors,
business. The Board of Directors and its ESG
the ESG Committee shall take into account the
Committee consider such factors when evaluating
Profile. The Profile is posted on our website at https://
nominees for election to the Board of Directors and
corporate.ferrari.com/sites/ferrari15ipo/files/e_fnv_
during the annual performance assessment process.
profile_non-executive_directors_13_09_2018_clean_
final_new_0.pdf.
The Company has achieved all the following concrete
targets: (a) at least 30 percent of the seats of the
Board of Directors are occupied by women and at
COMPLIANCE WITH DUTCH
CORPORATE GOVERNANCE CODE
least 30 percent by men; (b) diversity in the age of the
members of the Board of Directors by having one
The Company endorses the principles and best
or more members of the Board of Directors aged
practice provisions of the Dutch Corporate
under 50 at the day of their nomination; provided
Governance Code, except for the following best
that, in the candidate selection process, rules and
practice provisions which are explained below:
generally accepted principles of non-discrimination
(on grounds such as ethnic origin, race, disability or
• Best practice provision 2.2.4 of the Dutch Corporate
sexual orientation) will be taken into account; and
Governance Code: The supervisory board should
(c) the nationality of the members of the Board of
also draw up a retirement schedule in order to avoid,
Directors shall be reasonably consistent with the
as much as possible, supervisory board members
geographic presence of the Company’s business,
retiring simultaneously. The retirement schedule
and that no nationality should count for more than 60
should be published on the company’s website.
percent of the members of the Board of Directors.
The Company does not have a retirement schedule
To ensure its correct implementation, the Diversity
as referred to in best practice provision 2.2.4 of
Policy will be taken into account in the nomination of
the Dutch Corporate Governance Code, because
executive Directors, and in the adoption of a profile
the Company’s Articles of Association provide
for non-executive Directors as well as in nominating
for a term of office of member of the Board of
and recommending non-executive Directors. Since
Directors for a period of approximately one year
the financial year 2017, the targets relating to gender
after appointment, such period expiring on the day
and age have been realized. Since 2019 also the target
the first annual general meeting of shareholders
relating to nationality has been achieved.
is held in the following calendar year. Short terms
of office for board members are customary for
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companies listed in the U.S. As the Company is listed
Mr. Elkann, our Executive Chairman and Executive
on the NYSE, the Company also follows certain
Director, has a position on the ESG Committee,
common U.S. governance practices, one of which is
to which best practice provision 5.1.4 of the
the reappointment of our Directors at each annual
Dutch Corporate Governance Code applies. The
general meeting of shareholders. In light of this term
position of Mr. Elkann as executive Director in this
of office, the Company does not have a retirement
committee follows inter alia from the duties of the
schedule in place.
ESG Committee, which are more extensive than the
duties of a selection and appointment committee
• Best practice provision 4.1.8 of the Dutch
and include duties that warrant participation of an
Corporate Governance Code: Management board
executive Director in the view of the Company.
and supervisory board members nominated for
appointment should attend the general meeting at
which votes will be cast on their nomination.
ITALIAN CORPORATE
GOVERNANCE CODE
Pursuant to best practice provision 4.1.8 of the Dutch
As regards the Italian framework for corporate
Corporate Governance Code, every executive and non-
governance, the Company is aware that a new version
executive Director nominated for appointment should
of the corporate governance code (the “Italian CGC”)
attend the general meeting at which votes will be cast
has been issued by Borsa Italiana S.p.A., applicable
on its nomination. Since, pursuant to Article 14.3 of the
(starting from January 2021) to all companies with
Articles of Association, the term of office of Directors
shares listed on the Euronext Milan (formerly named
is approximately one year, such period expiring on the
Mercato Telematico Azionario, or MTA).
day the first annual general meeting of shareholders of
the Company is held in the following calendar year, all
As of December 31, 2021, the Company’s corporate
members of the Board of Directors are nominated for
governance structure is substantially in line with
(re)appointment each year. By publishing the relevant
all the principles and recommendations set forth
biographical details and curriculum vitae of each
in the Italian CGC, especially due to the fact that
nominee for (re)appointment, the Company ensures
the Company has adopted, and complies with, the
that the Company’s general meeting of shareholders
Dutch Corporate Governance Code, which contains
is well informed in respect of the nominees for (re)
principles and best practice provisions largely similar
appointment and in practice only the Chairman, the
to those highlighted in the Italian CGC, exception being
Chief Executive Officer and the Vice-Chairman will
made for the following:
therefore be present at the general meeting.
a) The independent Chair of the Board of Directors
• Best practice provision 5.1.4 of the Dutch Corporate
cannot chair the control and risk committee (Article
Governance Code: Neither the audit committee nor
2, Recommendation no. 7 of the Italian CGC).
the remuneration committee can be chaired by the
chairman of the management board or by a former
Our Senior Non-Executive Director and Chair of the
executive director of the company.
Board of Directors, Mr. Duca, is also the Chairperson
of the Audit Committee, which is not in line with best
Our Senior Non-Executive Director and Chair of the
practice provision under Article 2, Recommendation
Board of Directors, Mr. Duca, is also the Chairperson
no. 7 of the Italian CGC. The Company believes that Mr.
of the Audit Committee, which is not in line with best
Duca, in light of his extensive experience with audits
practice provision 5.1.4 of the Dutch Corporate
and his knowledge in this respect, brings a valuable
Governance Code. The Company believes that Mr.
contribution to the Audit Committee and therefore
Duca, in light of his extensive experience with audits
believes it is in Ferrari’s best interest and appropriate
and his knowledge in this respect, brings a valuable
for Mr. Duca to chair the Audit Committee.
contribution to the Audit Committee and therefore
believes it is in Ferrari’s best interest and appropriate
b) In large companies, the Board of Directors expresses
for Mr. Duca to chair the Audit Committee.
its guidelines on the maximum number of offices
that can be considered compatible with an effective
• Best practice provision 5.1.4 of the Dutch Corporate
performance and the time commitment required
Governance Code: The committees referred to in
by the role of the directors. The relevant offices
best practice 2.3.2 should be comprised exclusively of
are those held in corporate bodies of other listed
non-executive directors.
companies or of companies having a significant size
(Article 3, Recommendation no. 15 of the Italian CGC).
148
FERRARI N.V.AR 2021 Applicable Dutch corporate law already expressly
Executive Officer, which provides for, inter alia, the
regulates the maximum number of offices that may
involvement of, inter alia, a specific committee (i.e.,
be held by directors. Pursuant to Dutch law, persons
the CEO Search Committee), who will assist the ESG
may not be appointed as non-executive directors if
Committee with selecting a new candidate for this
such persons are non-executive director, member of
office.
the supervisory board or other similar bodies for five
or more (Dutch) companies of a certain size and such
persons cannot be appointed as executive directors
if such persons are non-executive director at more
REPORT OF THE
NON-EXECUTIVE DIRECTORS
than two other (Dutch) companies of a certain size
INTRODUCTION
or if such person is the chairperson of the board of
This is the report of the non-executive Directors of the
supervisors or the one tier board of another (Dutch)
Company over the financial year 2021, as referred to
company of a certain size. Ferrari is compliant with
in best practice provision 5.1.5 of the Dutch Corporate
the above-mentioned Dutch limits.
Governance Code.
c) In large companies, the Board of Directors
It is the responsibility of the non-executive Directors
elaborates, with the support of the nomination
to supervise the policies carried out by the executive
committee, a plan for the succession of the Chief
Directors and the general affairs of the Company and
Executive Officer and executive directors by
its affiliated enterprise, including the implementation
identifying, at least, the procedures to be followed in
of the strategy of the Company regarding long-
the event of an early termination of office (Article 4,
term value creation. In so doing, the non-executive
Recommendation no. 24 of the Italian CGC).
Directors act solely in the interest of the Company.
With a view of maintaining supervision on the
The Company’s Board of Directors believes that the
Company, the non-executive Directors regularly
members of the Board of Directors itself – chosen
discuss Ferrari’s long-term business plans, the
and appointed on the basis of their respective
implementation of such plans and the risks associated
expertise, level of professionalism and knowledge
with such plans with the executive Directors.
of the Company’s business – would be capable to
carry out (in the absence, due to early termination of
According to the Articles of Association, the Board
the office, of the Chief Executive Officer and/or any
of Directors is a single board and consists of three
other executive officer) the ordinary business of the
or more members, comprising both members
Company until the appointment, by the competent
having responsibility for the day-to-day management
corporate body, of the new Chief Executive Officer
of Ferrari (executive Directors) and members not
and/or other executive officer(s).
having such day-to-day responsibility (non-executive
Further, the Company’s Board of Directors believes
executive Directors in a one-tier board such as the
that the decision whether to adopt a succession
Company’s Board of Directors may be allocated
plan shall be further analysed bearing in mind the
under or pursuant to the Articles of Association,
Directors). The tasks of the executive and non-
sensitivity of the topic.
provided that the general meeting of shareholders
has stipulated whether such Director is appointed
Furthermore, the Company believes that the overall
as executive or as non-executive Director and
system of delegated powers adopted by the Company
furthermore provided that the task to supervise the
is sufficient to mitigate the risk of a vacancy for an
performance by the Directors of their duties can
executive director or a senior manager and ensure
only be performed by the non-executive Directors.
the continuity of the Company’s business. The overall
Regardless of an allocation of tasks, all Directors
system of delegated powers adopted by the Company
remain collectively responsible for the proper
already includes a succession plan for the top
management and strategy of the Company (including
management which in the Company is represented by
supervision thereof in case of non-executive
the Ferrari Leadership Team. The Company believes
Directors).
that the above measures help the Company achieving
the objective underlying the Code’s principles and in
Details of the current composition of the Board of
any case contributes to good corporate governance.
Directors, including the non-executive Directors, and
Finally, it should be noted that the Company’s Board
its committees are set forth in the section “Board of
of Directors has already defined a procedure to be
Directors”.
applied for the appointment of, at least, the Chief
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SUPERVISION BY THE NON-EXECUTIVE DIRECTORS
The non-executive Directors supervise the policies carried out by the executive Directors and the general affairs
of the Company and its affiliated enterprise. In so doing, the non-executive Directors have also focused on the
effectiveness of the Company’s internal risk management and control systems, the integrity and quality of
the financial reporting and Ferrari’s long-term business plans, the implementation of such plans and the risks
associated.
The non-executive Directors also determine the remuneration of the executive Directors and nominate candidates
for the Director appointments. Furthermore, the Board of Directors may allocate certain specific responsibilities
to one or more individual Directors or to a committee comprised of eligible Directors of the Company and
subsidiaries of the Company. In this respect, the Board of Directors has allocated certain specific responsibilities
to the Audit Committee, the Compensation Committee and the ESG Committee. Further details on the manner in
which these committees have carried out their duties, are set forth in the sections “The Audit Committee”, “The
Compensation Committee” and “The ESG Committee”.
The non-executive Directors supervised the adoption and implementation of the strategies and policies by the
Group, reviewed this annual report, including the Compensation Report and the Group’s financial results, received
updates on legal and compliance matters and they have been regularly involved in the review and approval of
transactions entered into with related parties. The non-executive Directors have also reviewed the reports of the
Board of Directors and its committees and the recommendations for the appointment of Directors.
During 2021, there were four meetings of the Board of Directors. Portions of these meetings took place without
the executive Directors being present. The average attendance at those meetings was 100 percent. An overview
of the attendance of the individual Directors per meeting of the Board of Directors and its committees set out
against the total number of such meetings is set out below:
Name
John Elkann
Benedetto Vigna (1)
Piero Ferrari
Sergio Duca
Delphine Arnault
Francesca Bellettini
Roberto Cingolani (2)
Eddy Cue
John Galantic
Maria Patrizia Grieco
Adam Keswick
Meeting Board
of Directors
Audit
Committee
4/4
2/2
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
6/6
5/6
5/6
ESG
Committee
1/1
Compensation
Committee
2/2
2/2
2/2
1/1
(1) Mr. Benedetto Vigna was designated as Acting Chief Executive Officer by the Board of Directors effective as of September 16, 2021.
(2) On February 16, 2021, the Company announced that Mr. Roberto Cingolani tendered his resignation from his role as Company’s non-executive.
Director and member of the ESG Committee of the Board of Directors effective as of February 13, 2021.
During these meetings, key topics discussed were, amongst others: the Group’s strategy, the Group’s financial
results and reporting, sustainability, acquisitions and divestments, executive compensation, technological
developments, risk management, updates on legal and compliance, risk management, human resources with the
Head of Human Resources, implementation of the Remuneration Policy and the Compensation Report.
150
FERRARI N.V.AR 2021 INDEPENDENCE OF THE NON-EXECUTIVE
DIRECTORS
Director. During such meeting the ESG Committee
dealt also with the directors’ nomination process,
The non-executive Directors are required by Dutch
the assessment of Directors’ qualifications, the size
law to act solely in the interest of the Company.
and composition of the Board of Directors and the
The Dutch Corporate Governance Code stipulates
committees, and the recommendations for Directors’
the corporate governance rules relating to the
election.
independence of non-executive Directors and
requires under most circumstances that a majority of
The non-executive Directors have been regularly
the non-executive Directors be “independent.”
informed by each committee as referred to in best
Currently, eight out of eight non-executive Directors
Governance Code and the conclusions of those
are considered to be independent under the NYSE
committee were taken into account when drafting
definition while seven non-executive Directors are
this report of the non-executive Directors.
practice provision 2.3.5 of the Dutch Corporate
considered to be independent under the Dutch
Corporate Governance Code. Mr. Piero Ferrari
The non-executive Directors were able to review and
is considered not to be independent under the
evaluate the performance of the Audit Committee,
Dutch Corporate Governance Code, since he
the ESG Committee and the Compensation
holds approximately 10 percent of our outstanding
Committee based on the assessments made by
common shares. Mr. Sergio Duca, the Senior Non-
the ESG Committee. The self-assessment of the
Executive Director of the Board of Directors, is
Committees were also discussed by the Board of
independent under the Dutch Corporate Governance
Directors. The outcome of the evaluations is that
Code in accordance with best practice provision 2.1.9
there is no need to amend the size or composition
of the Dutch Corporate Governance Code.
of the Audit Committee, the ESG Committee and the
Ferrari is of the opinion that the independency
Compensation Committee, nor is there any reason to
requirements as referred to in best practice provision
amend their charters on this basis. Further details on
2.1.10 of the Dutch Corporate Governance Code are
the manner in which these committees have carried
met by the Company.
out their duties, are set forth in sections “The Audit
Committee”, “The Compensation Committee” and “The
EVALUATION BY THE NON-EXECUTIVE
DIRECTORS
ESG Committee”.
The non-executive Directors are responsible
On the basis of the preparations by the ESG
for supervising the Board of Directors and its
Committee, the non-executive Directors were able
committees, as well as the individual executive and
to review the Board of Director’s assessments,
non-executive Directors, and are assisted by the ESG
the individual Directors’ assessments and the
Committee in this respect.
recommendation for Directors’ election. The Board
of Directors concluded that each of the Directors
In accordance with the ESG Committee Charter,
continues to demonstrate commitment to its
the ESG Committee assists and advises the Board
respective role in the Company.
of Directors with respect to periodic assessment
of the performance of individual Directors. In this
Also, pursuant to the Compensation Committee
respect, the ESG Committee has, amongst others,
Charter, the Compensation Committee implements
the duties and responsibilities to review annually
and oversees the remuneration policy as it applies
the Board of Directors’ performance and the
to non-executive Directors, executive Directors and
performance of its committees and to review each
senior officers reporting directly to the executive
Director’s continuation on the Board of Directors at
Directors. The Compensation Committee administers
appropriate regular intervals as determined by the
all the equity incentive plans and the deferred
ESG Committee.
compensation benefits plans. On the basis of the
assessments performed, the non-executive Directors
In 2021, the ESG Committee’s periodic assessments
determine the remuneration of the executive
took place during the meeting held on February 25.
Directors and nominate candidates for the Director
During that meeting, the ESG Committee focused
appointments.
on the results of the periodic assessments and
the performance of the Board of Directors, its
The non-executive Directors have supervised
committees and the individual Directors, keeping also
the performance of the Audit Committee, the
into account the self-assessment prepared by each
Compensation Committee and the ESG Committee.
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Based on the assessment performed, the Board of Directors believes that, as of December 31, 2021, the Group’s
and the Company’s Internal Control over Financial Reporting is considered effective and that (i) the Board Report
provides sufficient insights into any material weaknesses in the effectiveness of the internal risk management
and control systems (please refer to section “Principal Characteristics of the Internal Control System and
Internal Control over Financial Reporting” of this Annual Report), (ii) the internal risk management and control
systems are designed to provide reasonable assurance that the financial reporting does not contain any material
inaccuracies (please refer to section “Principal Characteristics of the Internal Control System and Internal Control
over Financial Reporting” of this Annual Report), (iii) based on the current state of affairs, it is justified that the
Group’s and the Company’s financial reporting is prepared on a going concern basis (please refer to Note 1 to
the Consolidated Financial Statements of this Annual Report and Note 2 to the Company Financial Statements of
this Annual Report for additional information on the basis of preparation), and (iv) the Board Report states those
material risks and uncertainties that are, in the Board of Director’s judgment, relevant to the expectation of the
Company’s continuity for the period of twelve months after the preparation of the Board Report (please refer to
the chapter “Risk Factors” of this Annual Report).
February 25, 2022
John Elkann
Executive Chairman
Benedetto Vigna
Acting Chief Executive Officer
RESPONSIBILITIES IN RESPECT TO THE ANNUAL REPORT
The Board of Directors is responsible for preparing the Annual Report, inclusive of the Consolidated and
Company Financial Statements and Board Report, in accordance with Dutch law and International Financial
Reporting Standards as issued by the International Accounting Standards Board and as adopted by the
European Union (IFRS).
In accordance with Section 5:25c, paragraph 2 of the Dutch Financial Supervision Act, the Board of Directors
states that, to the best of its knowledge, the Consolidated and Company Financial Statements prepared in
accordance with IFRS as adopted by the European Union provide a true and fair view of the assets, liabilities,
financial position and profit or loss for the year of the Company and its subsidiaries and that the Board Report
provides a true and a fair view of the performance of the business during the financial year and the position at
balance sheet date of the Company and its subsidiaries, together with a description of the principal risks and
uncertainties that the Company and the Group face.
February 25, 2022
Board of Directors
John Elkann
Benedetto Vigna (Acting Chief Executive Officer)
Piero Ferrari
Sergio Duca
Delphine Arnault
Francesca Bellettini
Eddy Cue
John Galantic
Maria Patrizia Grieco
Adam Keswick
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FERRARI N.V.AR 2021 153
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NON FINANCIAL
STATEMENT
FERRARI GROUP
ABOUT FERRARI
Ferrari is among the world’s leading luxury brands, focused on the design, engineering, production and sale of the
world’s most recognizable luxury performance sports cars. Our brand symbolizes exclusivity, innovation, state-
of-the-art sporting performance and Italian design and engineering heritage. Our name and history and the image
enjoyed by our cars are closely associated with our Formula 1 racing team, Scuderia Ferrari, the most successful
racing team in the history of Formula 1. From the inaugural year of Formula 1 in 1950 through the present,
Scuderia Ferrari has won 238 Grand Prix races, 16 Constructors’ World titles and 15 Drivers’ World titles. We are
the only team which has taken part in all the editions of the Championship, racing in more than 1,000 Formula 1
Grand Prix races. We believe our history of excellence, technological innovation and defining style transcends the
automotive industry, and is the foundation of the Ferrari brand and image. We design, engineer and produce our
cars in Maranello, Italy, and sell them in over 60 markets worldwide through a network of 172 authorized dealers
operating 191 points of sale as of the end of 2021.
OUR STRATEGY
Our strategy focuses on maintaining our leading position in the luxury performance sports car market, while
enhancing and protecting the value and exclusivity of the Ferrari brand. We focus on cost-efficiencies and aim to
achieve profitable growth by pursuing the following strategies.
Controlled growth
Regular new model introductions and enhancements
Pursue excellence in racing
Controlled growth in adjacent luxury and lifestyle categories
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MATERIALITY MATRIX AND STAKEHOLDER ENGAGEMENT
THE MATERIALITY MATRIX HIGHLIGHTS THE ASSESSED TOPICS THAT
ARE MOST RELEVANT FOR THE GROUP AND OUR STAKEHOLDERS AND
THEREFORE REPRESENT OUR STRATEGIC SUSTAINABILITY PRIORITIES.
In 2021, we updated the analysis
the SASB Materiality Matrix, which
paragraph) and has been
of the most relevant sustainability
highlighted those sustainability
complemented through a
topics(1) (materiality analysis) for
topics that may have financial
qualitative analysis performed
the Group and our stakeholders
impacts, in line with a double
by our Ferrari Leadership
to better reflect sustainability
materiality perspective which
Team (hereinafter also the “FLT”,
context developments, changes
will be further developed in
previously referred to as the
in our drivers and goals, as
the future. In particular, this
Senior Management Team, and
well as our 2019-2022 plan and
was prepared by taking into
so renamed as a result of the
our sustainability strategy. The
account various stakeholder
organizational changes executed
materiality analysis has been
engagement initiatives carried
in January 2022), which resulted in
implemented in line with the GRI
out during the year (as described
the materiality matrix below.
Standards and consistently with
in the “Stakeholder Engagement”
MATERIALITY MATRIX OF FERRARI GROUP
T
N
A
T
R
O
P
M
I
Y
R
E
V
S
R
E
D
L
O
H
E
K
A
T
S
R
O
F
E
C
N
A
V
E
L
E
R
Quality and safety
of products
and customers
Customer
satisfaction
Innovation:
technology and
design
Human capital
Health and safety
Image and
brand
reputation
Ethical business
conduct
Emissions
Economic and financial
performance
Environmental
commitment
Supply chain
responsible
management
Risk
management
& Compliance
Education
Diversity, inclusion and
non-discrimination
Work-life balance and
employees wellness
Responsible
communication
and marketing
Industrial relations
Local communities
Relationship
with Institutions
and Authorities
Relationship
with sponsors
LEGEND:
Proactively fostering best practice governance
Exceeding expectations
Being the employer of choice
Reducing environmental footprint
Creating and sharing value with the community
IMPORTANT
RELEVANCE FOR FERRARI GROUP
VERY IMPORTANT
significance of economic, environmental & social impacts
(1) The potentially relevant topics are identified by taking into consideration sector benchmarking analyses, UN Sustainable Development Goals (SDGs),
and relevant international studies and publications.
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/ MATERIALITY MATRIX AND STAKEHOLDER ENGAGEMENT
The materiality matrix highlights
considered a priority and are
development of Human capital
the assessed topics that are
increasingly relevant to Ferrari;
and Health and safety. Compared
most relevant for the Group
Quality and safety of products and
to last year’s materiality
and our stakeholders and
customers, Customer satisfaction,
matrix, for our stakeholders,
therefore represent our strategic
Supply chain responsible
Environmental commitment,
sustainability priorities.
management and Emissions are
Diversity inclusion and non-
also considered of the upmost
discrimination as well as Work-life
Specifically, the most relevant
importance. Special attention is
balance and employees’ wellness
topics are related to product
paid to Ethical business conduct
increased their relevance, while
responsibility: Image and brand
and Risk management and
Responsible communication and
reputation and Innovation:
compliance as well. The analysis
marketing slightly decreased.
technology and design are
confirmed the importance of the
This materiality matrix is directly linked with our sustainability strategy, characterized by:
EXCEEDING EXPECTATIONS
BEING THE EMPLOYER OF CHOICE
Drive technological innovation while pursuing excellence
Provide an inclusive, educational and inspiring work
in design and craftsmanship to fuel the passion of our
environment to unleash everyone’s passion, creativity
customers and enthusiasts.
MATERIAL TOPIC
• Image and brand reputation
• Innovation: technology and design
and talent.
MATERIAL TOPIC
• Human capital
• Health and safety
• Quality and safety of products and customers
• Work-life balance and employees wellness
• Customer satisfaction
• Diversity inclusion and non-discrimination
• Responsible communication and marketing
RELEVANT UNITED NATIONS SDGs
RELEVANT UNITED NATIONS SDGs
PROACTIVELY FOSTERING BEST
PRACTICE GOVERNANCE
Maintain Ferrari’s corporate governance and risk
management systems aligned with best practices to
ensure an ethical business conduct while providing
superior and sustainable returns to our shareholders.
MATERIAL TOPIC
• Ethical business conduct
• Risk management and compliance
• Supply chain responsible management
• Relationship with Institutions and Authorities
• Relationship with sponsors
RELEVANT UNITED NATIONS SDGs
REDUCING ENVIRONMENTAL FOOTPRINT
Increase our environmental awareness to continuously
set and implement related programs and actions.
MATERIAL TOPIC
• Emissions
• Environmental commitment
RELEVANT UNITED NATIONS SDGs
CREATING AND SHARING VALUE WITH
THE COMMUNITY
Encourage strategic partnerships and the creation of
positive externalities for all stakeholders.
MATERIAL TOPIC
• Economic and financial performance
• Education
• Local communities
• Industrial relations
RELEVANT UNITED NATIONS SDGs
156
FERRARI N.V.AR 2021 The abovementioned material topics have been linked to the Sustainable Development Goals (SDGs) that are
impacted by our business. Each material topic is analyzed in the subsequent chapters within this Sustainability
Report and includes a qualitative description of management’s approach and, where available, selected
performance indicators. For the most material topics, the table below shows the pursued policies, the related key
risks and risk trends and the relevant chapters within this Annual Report.
MOST SIGNIFICANT
MATERIAL TOPICS
PURSUED
POLICIES
KEY RISKS
AND RISK TRENDS
RELEVANT CHAPTERS
OF THIS ANNUAL REPORT
Image and brand reputation
value and exclusivity of the
• Enhancing and protecting the
Ethical business conduct
Innovation: technology and
design
Ferrari brand
• Maintaining a culture
dedicated to integrity,
responsibility and ethical
behavior
• Being focused on developing
new technologies and
distinctive designs
• Creating an inspiring working
• Brand image;
• Climate Change
Ferrari Group
• Non-compliance with laws,
regulations, local standards
(including tax) and codes
Proactively fostering best
practice governance
• Brand image;
• Competition;
• Technological and regulatory
uncertainty
Exceeding expectations
Human capital
environment, enabling the
• Attraction, development and
development of everyone’s
retention of talents
Being the employer of choice
Emissions
talent
• Focusing on researching
technologies that further
reduce emissions and
preparing for a low-emission
future
• Designing and manufacturing
Quality and safety of
while keeping the safety of
products and customers
our customers and other
road users always in mind
• Taking an integrated
approach to risk
management;
Risk management &
Compliance
• Non-compliance with laws,
regulations, local standards
(including tax) and codes;
Reducing environmental
• Technological and regulatory
footprint
uncertainty;
• Climate Change
• Non-compliance with laws,
regulations, local standards
Exceeding expectations
(including tax) and codes
• Non-compliance with laws,
regulations, local standards
Proactively fostering best
• Acting with the highest level
(including tax) and codes;
practice governance
of integrity, complying with
• Climate Change
applicable laws.
Customer satisfaction
level of customer satisfaction
• Being devoted to the highest
Health and safety
• Enforcing a safety-first
culture
• Brand image;
• Competition;
• Technological and regulatory
uncertainty
• Non-compliance with laws,
Exceeding expectations
regulations, local standards
Being the employer of choice
(including tax) and codes
Supply chain responsible
management
• Implementing a responsible
• Non-compliance with laws,
and efficient supply chain
regulations, local standards
management;
(including tax) and codes;
• Encouraging the adoption
• Cybersecurity including third
of sustainable practices and
parties vulnerabilities;
sharing among our business
• Climate Change;
partners and suppliers.
• Relationship with suppliers
Proactively fostering best
practice governance
Further disclosure on key risks is presented within paragraph “Sustainability Risks”.
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/ MATERIALITY MATRIX AND STAKEHOLDER ENGAGEMENT
STAKEHOLDER ENGAGEMENT
As an international firm with ambitious corporate objectives and a complex value chain, we need to develop
forms of communication and collaboration with both our internal and external stakeholders that allow us to
understand their needs, interests and expectations. Ferrari’s approach to engaging stakeholders aims for honest,
clear and effective communication and consultation, based on constant dialog. To fully understand the needs and
perspectives of our stakeholders is a fundamental part of the value generation process we continuously strive to
promote both inside and outside our organization.
This Statement is addressed to all stakeholders involved in our activities, as shown in the following image:
Enthusiasts
Clients
Dealers
Financial
Community
and
Shareholders
Suppliers
Media and
Influencers
Community
and University
Sponsors
Business
and Licensing
Partners
Government,
Regulators
and Sport
Institutions
Employees
and
Trade Unions
Ferrari believes that building and honing effective communication and collaboration with its internal and
external stakeholders is a key element of sustainable and lasting growth, with a view to conciliate interests and
expectations. With this in mind, over the years we set an ongoing process of stakeholder engagement carrying
out initiatives with different levels of interaction and methods of involvement.
Our Stakeholder Engagement Practice, inspired by the values and principles of the Code of Conduct, seeks to
give all directors, managers and employees of the Ferrari Group, and anyone else working for it or on its behalf,
guidelines on the right methods and forms of interaction with different stakeholders.
In line with the Stakeholder Engagement Practice, in 2021 we carried out various specific activities to enhance
the voice of our stakeholders on sustainability themes. We engaged with our employees through two face-to-
face workshops that had a dual purpose: to further communicate the importance of the sustainability theme
and explain what it stands for within Ferrari, as well as to collect their priorities and suggestions. In addition, we
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158
BOARD REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
organized two meetings with our employees participating in the two Ferrari MBA courses to gather their views on
the main sustainability-related risks and opportunities that Ferrari will face in the near future, in connection with
the main trends we are witnessing. Moreover, we realized an ad hoc virtual workshop to engage the students of
the Motorvehicle University of Emilia-Romagna (MUNER). Furthermore, we collected our dealers’ expectations
on ESG topics through a questionnaire. Finally, we engaged with our top investors to better understand what
they consider to be the main ESG drivers for Ferrari, as well as participating every year in a variety of ESG
questionnaires such as the SAM Corporate Sustainability Assessment (CSA), ranking in the top quartile of our
industry in the last assessment, the CDP Climate Change and CDP Water questionnaires, obtaining a “B” and “C”
rating respectively in 2021. All these activities allowed us to further strengthen our materiality analysis.
Considering the rising environmental and social changes, these engagement activities are an important part of
the sustainability approach that helps us identify potential updates in our sustainability material topics, risks and
opportunities, as well as supporting management in achieving the Company’s objectives.
The main outcomes of the engagement activities implemented in 2021 showed an increased attention of our
stakeholders toward environmental responsibility, confirming the importance of reducing emissions, and the
attention to employee-related topics. Education was confirmed as a key element by the stakeholders involved.
Ferrari firmly believes that keeping a profitable dialog and collaboration with its stakeholders is essential and
intends to continue the path of engagement undertaken, with a view to continuous improvement.
PROACTIVELY FOSTERING BEST
PRACTICE GOVERNANCE
OUR ESG COMMITTEE
environment, its carbon footprint and its response to
the relevant challenges, including pollution, efficient
use of natural resources (i.e. water and energy),
waste management and reduction, emissions and
The ESG Committee (formerly the Governance and
environmental impact of the Company’s supply chain;
Sustainability Committee) of our Board of Directors
(2) Social: the Company’s role within the society and
is responsible for, among other things, assisting and
its interaction with stakeholders and communities,
advising the Board of Directors, and acting under
including workplace policies, employee engagement
authority delegated by the Board of Directors, with
and well-being, diversity, nondiscrimination and equal
respect to: (i) drawing up the selection criteria and
treatment, responsible sourcing, social aspects of the
appointment procedures for members of the Board
supply chain and engagement with the communities
of Directors; (ii) periodic assessment of the size
in which the Company operates (charitable donations
and composition of the Board of Directors and as
and social projects); (3) Governance: the Company’s
appropriate making proposals for a composition
corporate governance framework and any applicable
profile of the Board of Directors; (iii) periodic
standards, codes and best practices.
assessment of the performance of individual directors
and reporting this to the Board of Directors; (iv)
In 2021, the ESG Committee consisted of Mr. Elkann
proposals to the non-executive members of the Board
(Chairperson), Mrs. Arnault and Mr. Cue.
of Directors for the nomination and re-nomination
of directors to be elected by the shareholders;
The ESG Committee is elected by the Board of
(v) supervision of the policy on the selection and
Directors and is comprised of at least three Directors.
appointment criteria for senior management and on
At least more than half of the members shall be
succession planning; and (vi) monitoring, evaluation
independent under the Dutch Corporate Governance
and reporting on the strategy, targets, achievements,
Code, and at most one of the members may be an
disclosures and reports relating to ESG matters
executive Director.
globally of the Company and its subsidiaries. On
December 14, 2021 the Board of Directors changed
In 2021 the ESG Committee met once with
the name of the former Governance and Sustainability
100 percent attendance of its members. The
Committee into ESG Committee and approved a new
Committee reviewed, inter alia, the Board of
committee charter effective as of the same date.
Directors’ and Committee’s assessments, the
Sustainability achievement and objectives, and the
The term “ESG” refers to the following: (1)
recommendations for Directors’ election.
Environmental: the Company’s impact on the natural
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / PROACTIVELY FOSTERING BEST PRACTICE GOVERNANCE
OUR DECISION-MAKING PROCESS
Ferrari’s integrity system sets the foundation for the
The FLT is responsible for reviewing the operating
corporate governance of Ferrari Group and includes
performance of the businesses, collaborating on
a framework comprised of the following primary
certain operational matters, supporting the Chief
elements:
Executive Officer with his tasks and executing the
decisions of the Board of Directors and the day-to-day
• Principles that capture Ferrari’s commitment to
management of the Company, primarily as it relates to
important values in business and personal conduct;
operational management. The FLT is led by the Chief
Executive Officer and is composed of the heads of the
• Practices that are the basic rules that must
operating and central functions.
guide our daily behaviors in order to achieve our
overarching Principles;
Starting from 2022, at management level we have
defined new cross-functional committees, among
• Procedures that further articulate Ferrari’s specific
which one is responsible for the strategic positioning
operational approaches for achieving compliance
of the Ferrari Brand and cross-functional projects
and that may have specific applications limited to
to sustain excellence in every area, starting from our
certain geographical regions and/or businesses, as
priority to reach carbon neutrality by 2030, addressing
appropriate.
direct and indirect GHG emissions, focusing on energy
and materials, in addition to our electrification journey.
Our Code of Conduct is approved by the board
of directors of Ferrari N.V. and is applicable to the
Our Chief Financial Officer, a member of the FLT, is
whole Ferrari Group. It applies to all Ferrari Group
responsible for the sustainability function, which
board members and officers, full-time and part-time
oversees the coordination of the sustainability
employees, as well as to all temporary, contract and
activities within the Group, promoting dialog between
all other individuals and companies that act on behalf
different teams and functions, and identifying risks
of Ferrari Group, regardless of their location. The
and opportunities.
Group Compliance and Internal Audit departments
investigate possible violations of the Code of Conduct
INTEGRITY OF BUSINESS CONDUCT
also through the management of the Ethics Helpline,
At Ferrari, we seek to develop a cooperative
as well as during standard periodic audits and
environment in which the dignity of each individual
through specific Business Ethics and Compliance
is respected and that embodies the highest ethical
(“BEC”) audits. In 2021, BEC surveys were conducted
standards in business conduct. We are committed to
in order to measure employees’ awareness on topics
maintaining a fair, secure, productive and inclusive
such as: Code of Conduct, Whistleblowing Procedure,
workplace for all members of our workforce, in which
Gifts and Entertainment Expenses’ Management. In
everyone is valued for their unique contribution.
light of the results, dedicated actions, such as training
and awareness activities, have been implemented.
The foundation of Ferrari’s governance model is
the Code of Conduct that embodies a set of values
HUMAN RIGHTS
recognized, adhered to and promoted by the
Ferrari’s commitment to respect, protect and
Company. Ferrari believes that a conduct based on
promote human rights is laid down in the Human
the principles of diligence, integrity and fairness is a
Rights Practice, which is inspired by the guiding
key driver for the social and economic development.
principles set forth in the Code of Conduct and
Ferrari endorses the United Nations (“UN”)
defines Ferrari’s main commitments to a corporate
Declaration on Human Rights, the International Labor
culture dedicated to ethics and integrity. In particular,
Organization (“ILO”) Conventions and the Organization
the Human Rights Practice sets out key principles
for Economic Co-Operation and Development
such as the prohibition of child labor, compulsory
(“OECD”) Guidelines for Multinational Companies.
labor and forced labor, the attention to a healthy
Accordingly, our Code of Conduct aims to ensure that
and safe working environment for our employees,
all members of Ferrari Group workforce act with the
the rejection of any form of abuse, harassment
highest level of integrity and comply with applicable
and discrimination, the zero tolerance in respect of
laws, thus contributing to build a better future for
corruption and the protection of the rights of local
our Company and the communities in which we do
communities.
business. Ferrari’s Code of Conduct can be found
on our corporate website at
http://corporate.ferrari.com/en/governance/code-conduct.
160
FERRARI N.V.AR 2021 The table below provides an overview of the relevant information on human rights policies regarding four of our
stakeholder groups, particularly related to human rights issues.
REFERENCE TABLE ON HUMAN RIGHTS
STAKEHOLDERS
PARTICULARLY
RELATED TO HUMAN
RIGHTS ISSUES
MATERIAL
TOPICS
KEY APPLICABLE
POLICIES
Section Reference of
MAIN KPIs
Section Reference of
RISKS, OPPORTUNITIES
AND MANAGEMENT
ACTIONS
Employees and
• Human capital
• Human Rights
• Being the employer of
• Proactively fostering
trade unions
• Health and safety
Practice
choice/Our employees in
best practice
• Work-life balance and
employees wellness
• Ethics Helpline
numbers
governance /
• Being the employer of
Sustainability Risks
• Diversity inclusion and
• Code of Conduct
choice/ Occupational
• Being the employer
non-discrimination
• Industrial relations
• Ethical business
conduct
• Risk management and
compliance
• Stakeholders’
engagement practice
• Being the employer of
choice/Our employees in
Health and Safety
of choice
numbers
• Being the employer of
choice/ Training and talent
development
• Being the employer of
choice/ Talent Recruitment
and Employee Retention
• Proactively fostering best
practice governance/
Whistleblowing
• SASB index/Labor
practices
Suppliers
• Supply chain
• Human Rights
• Proactively fostering best
• Proactively fostering
responsible
management
• Ethical business
conduct
Practice
practice governance/
best practice
• Stakeholders’
engagement practice
Responsible Supply Chain
governance/
• Proactively fostering best
Sustainability Risks
practice governance/
• Proactively fostering
• Risk management and
• Ethics Helpline
Responsible Supply Chain/
best practice
compliance
Conflict minerals
governance/Responsible
• Third Parties’
Compliance Practice
• Anticorruption
Compliance Practice
• Proactively fostering best
Supply Chain
practice governance/
• Proactively fostering
Whistleblowing
best practice
governance/Responsible
Supply Chain/ Conflict
minerals
Community and
• Local Communities
• Human Rights
• Creating and sharing
• Creating and sharing
university
• Education
Practice
value with the community/
value with the
• Stakeholders’
engagement practice
Ferrari & Education
community/Ferrari &
Education
• Economic and financial
performance
• Ethical business
conduct
• Risk management and
compliance
Clients
• Quality and safety
• Human Rights
• Proactively fostering best
• Proactively fostering
of products and
Practice
customers
• Ethical business
conduct
• Stakeholders’
engagement practice
practice governance/
Cybersecurity, data
best practice
governance/
protection and privacy
Sustainability Risks
• Exceeding expectations/
• Exceeding expectations/
• Risk management and
• Ethics Helpline
Vehicle Safety
Vehicle Safety
compliance
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ANTI-BRIBERY AND CORRUPTION
requirement for the protection of its assets, integrity
Ferrari Group is committed to the highest
and reputation in an overall and long-term vision.
standards of integrity, honesty and fairness in
all internal and external affairs and does not
Ferrari is committed to only collaborating with Third
tolerate any kind of bribery. The laws of virtually all
Parties that meet certain requirements both in terms
countries in which Ferrari operates prohibit bribery
of compliance with applicable laws and regulations
and any violation of anti-bribery and anticorruption
and in relation to ethics, integrity and transparency.
laws would entail serious consequences for both
In this respect, Ferrari has adopted the Third Parties
companies and individuals, which can result in
Compliance Practice, that establishes the general
significant fines, imprisonment of individuals and
rules of conduct that must be followed at Group
reputational damages.
level when dealing with any Third Parties, including
active and passive counterparties as well as any
Ferrari’s policy is that no one - director, officer or
further Third Parties with which Ferrari may establish
other employee, consultant, agent, representative,
contractual relationships.
supplier or business partner - shall, directly or
indirectly, give, offer, request, promise, authorize,
In particular, the Third Parties Compliance Practice
solicit or accept bribes or any other perquisite
underlines the importance of carrying out a
(including gifts or gratuities, with the exception
“compliance evaluation” before establishing any
of commercial items universally accepted in an
business relationship with a Third Party in order
international context of modest economic value,
to examine its ethical reliability and reputation, its
permitted by applicable laws and in compliance with
involvement in a legitimate and lawful business, and
the Code of Conduct and all applicable practices and
its commitment to share Ferrari’s values of integrity
procedures) in connection with their work for Ferrari
and fairness.
at any time or for any reason.
By adhering to the principles outlined in the Third
In this respect, Ferrari has adopted the Anticorruption
Parties Compliance Practice, Third Parties are
Compliance Practice, which is considered the
therefore expected not only to comply with applicable
document of reference for anticorruption matters
laws and Ferrari’s ethical principles and standards,
by all worldwide Ferrari branches and subsidiaries
but also to become active parties towards their own
and is applied in each country in accordance with
employees and their respective third parties in order
local legislation. The Anticorruption Compliance
to disseminate a culture of compliance, integrity and
Practice establishes the general rules of conduct
transparency.
that must be followed in order to prevent corruption-
related crimes and ensure compliance with the
In this respect, during 2021 numerous internal
anticorruption laws to which Ferrari is subject. Such
Procedures governing dealings with Third Parties
rules are further enhanced in internal Procedures
have been revised in order to strengthen the
regulating those specific areas deemed at risk from
preventive control activities that must be carried out
an anticorruption perspective.
prior to the establishment of the respective business
Furthermore, during 2021 dedicated trainings on
Anticorruption and Conflict of Interests have been
ANTITRUST
relationships.
provided to our employees, with the aim to promote
Ferrari Group recognizes the paramount importance
the consistency of their behaviors with the applicable
of a competitive market and is committed to fully
anticorruption laws and regulations.
comply with antitrust and other pro-competition
DEALINGS WITH THIRD PARTIES
(“Antitrust Laws”), believing that compliance with
Dealing with third parties entails inherent risks, in
Antitrust Laws is crucial to Ferrari Group’s reputation.
legislation in force in the countries where it operates
particular in terms of potential corporate liabilities,
as well as financial and reputational damages that
Ferrari defines and pursues its commercial
Ferrari may suffer as a consequence of unlawful
activities and targets in autonomy and
conducts carried out by third parties with which
independence with respect to any competitors,
it does business (“Third Parties”). Hence, Ferrari
operating on the basis of its own strategic and
strongly believes that the capability to adequately
commercial decisions, and strictly rejects any form
evaluate Third Parties, as well as promptly address
of anticompetitive conduct. The Ferrari Group and
any threats and risk factors, represents an essential
its directors, officers, and other employees shall
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FERRARI N.V.AR 2021 comply with these principles and refrain from any
Organizational Models, laws and regulations, as
form of action, omission or business practices that
well as business practices and corporate rules. The
might represent an antitrust violation.
allegations are assessed by the relevant departments
of Ferrari and managed in accordance with the
To strengthen its commitment to a free and fair
Whistleblowing Procedure, that has been prepared on
competition, Ferrari adopted the Antitrust Compliance
the basis of the international best practices as well as
Practice, which outlines - at Group level - the rules and
to the applicable laws and regulations.
principles that all members of Ferrari’s workforce
must follow, as well as the actions and controls that
The Ethics Helpline can be accessed either by phone
they shall perform in order to prevent antitrust
or by web (with multiple languages available) and is
offences and ensure compliance with Antitrust Laws.
an essential element of the management process, in
accordance with the Code of Conduct. It is managed
Furthermore, during 2021 Ferrari has started the
by an independent provider, available 24 hours a day,
adoption of an Antitrust Compliance Program in
seven days a week. All reports are processed with the
line with the Guidelines on Antitrust Compliance
utmost confidentiality on reported subjects and facts,
developed by the Italian Competition Authority, which
so that the individuals who report an alleged violation
includes procedures, internal controls, as well as
in good faith are not subject to any form of retaliation.
training and awareness activities.
In particular, stakeholders can also report alleged
violations anonymously if permitted by local law.
COMPLIANCE WITH ECONOMIC SANCTIONS’
REGULATIONS
Furthermore, Ferrari employees may also seek advice
Economic Sanctions are those provisions adopted
concerning the application and/or interpretation of
by governments and institutions for managing crisis
the Code of Conduct by contacting the reference
scenarios, such as resolution of conflicts and fight
people included in the Worldwide Ethics and
against terrorism, and guaranteeing respect for
Compliance Contact List.
human rights and fundamental freedoms, in the
common foreign and security policy.
Internal Audit and Group Compliance departments,
Such provisions may include export license
Resources departments, as well as other business
obligations, commercial restrictions, such as the
functions possibly involved, assess all the
so-called trade embargoes, financial restrictions and
allegations. The results and potential disciplinary
restrictions on movement, which can be targeted to
actions are then reported based on the necessary
states, organizations, natural and legal persons.
escalation process (the relevant internal functions
with the support of the Legal Affairs and Human
are notified of the violations).
It follows that Ferrari Group, in carrying out its
activities, is required to evaluate and respect such
In addition, in order to provide maximum
blocks, prohibitions and restrictive measures, in
transparency to the entire process, a Whistleblowing
particular in relation to dealings with third parties and
Committee has been appointed, composed of the
transactions that potentially determine the involvement
heads of Internal Audit, Group Compliance, Legal
of countries for which Sanctions risks apply.
Affairs and Human Resources departments. The
In this respect, during 2021 Ferrari adopted the
monitor the progress of the investigations and
Sanctions Compliance Practice, designed to formalize
ensures that the concerns raised are handled
the internal roles and responsibilities as well as the
appropriately. Periodic reporting on whistleblowing
principles and general rules aimed at preventing
management is provided to the CEO as well as to the
conducts that may violate Economic Sanctions laws
Audit Committee.
Whistleblowing Committee meets periodically to
and regulations.
WHISTLEBLOWING
Ferrari Group adopts the Ethics Helpline, a channel
which allows all stakeholders (employees, customers,
suppliers and partners) to request advice and/or
report concerns about alleged situations, events
or actions which may be inconsistent with values
and principles set out in the Code of Conduct,
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The violations are categorized according to the Principles of the Code of Conduct listed in the table below.
WHISTLEBLOWING REPORTING AS OF DECEMBER 31, 2021
Category
Conducting business
Interacting with external parties
Managing our assets and information
Protecting our workforce
Total
Reports received
in 2021
Reports closed
in 2021
Reports in which a
violation was confirmed
1
5
3
5
14
1
5
2
4
12
-
-
1
2
3
In this context, the reports received are a key instrument for Internal Audit and Group Compliance departments to
identify violations of the Code of Conduct. For all Code of Conduct violations, the disciplinary measures taken are
commensurate with the seriousness of the case and comply with the applicable legislation.
Furthermore, in 2021 a dedicated training on whistleblowing has been provided in favor of our employees, in
order to raise awareness on the importance of a company culture based on ethics and integrity, as well as detail
the process by which employees can report suspected or actual misconducts.
CYBERSECURITY, DATA PROTECTION
AND PRIVACY
CYBERSECURITY
information. As experienced during the COVID-19
pandemic, allowing people to work from home with
the same level of security as if they were in the office.
As our technology continues to evolve, we anticipate
All employees are provided with specific training on
to collect and store even more data in the future,
information security and cybersecurity. Training is also
and that our IT systems will improve security
offered to external workers. This training is delivered
countermeasures against the risks of willful and
both online and in classroom, and it is part of regularly
unintentional security breaches. Much of our value is
launched training campaigns. A specific session on
derived from our confidential business information,
information security and cybersecurity is also part of
including car design, proprietary technology and
the two-day induction program for new employees.
trade secrets. We also collect, retain and use certain
personal information, including data we gather from
On a weekly basis, the Company performs
clients for product development and marketing
vulnerability analysis to detect areas of weakness in
purposes, and data we obtain from employees.
the information/cyber security system, both internally
Any unauthorized access to our IT systems may
and externally. Penetration tests are executed
compromise the confidentiality of Ferrari’s intellectual
periodically by an external provider.
property or the privacy of our customers’ information
and expose us to claims as well as reputational
Until the end of 2021, the Head of IT Security &
damage. For these reasons, Ferrari has always paid
Compliance was the function responsible for
the outmost attention to cybersecurity. We have
overseeing cybersecurity. It directly reported to the
created a system of procedures, policies, services,
Group’s CIO who, in turn, reported to the Group’s CFO,
infrastructures and training as well as awareness to
who is a member of the Ferrari Leadership Team.
address all facets of cybersecurity currently known.
The area that has been nurtured the most is
Digital & Data department directly reporting into the CEO.
information protection with a focus on preventing
The head of IT Security & Compliance changed in Head
data breaches, which has been addressed through
of Cybersecurity and continues to report directly into the
several tools & countermeasures, for example by
Chief of Digital & Data Officer, formerly the CIO, who is a
providing Ferrari tested and managed PCs to all
member of the Ferrari Leadership Team.
Starting from January 2022, the ICT department became
users who connect to our network, extending it to
our employees as well as to third parties. The user
Cybersecurity topics are discussed in various internal
and device authentication has strongly increased
Committees several times per year, as well as at the
the control over the access and management of
Audit Committee level at least once a year.
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FERRARI N.V.AR 2021 DATA PROTECTION AND PRIVACY
SUSTAINABILITY RISKS
We care about processing data in a safe and
We are committed to creating a culture of
transparent manner and act in accordance with
sustainability. Creating such a culture requires
the current legislative framework that governs the
effective risk management, responsible and proactive
processing of our personal data at global scale,
decision-making, and innovation. Our efforts are aimed
including but not limited to the General Data Protection
at minimizing the negative impacts of our business.
Regulation “GDPR” (EU Regulation no. 2016/679) and
Our risk management approach is an important
the California Consumer Privacy Act of 2018 “CCPA”.
business driver and it is integral to the achievement
The data protection legal framework has steadily
of the Group’s long-term business plan. We take an
developed in the recent years and has brought a
integrated approach to risk management, where
new consciousness about privacy. More than ever
risk and opportunity assessment are at the core of
before, data protection and privacy have become
the leadership team agenda. The Board of Directors
fundamental, as they have been heavily impacted by the
is responsible for considering the ability to control
COVID-19 pandemic. In these specific circumstances,
and manage risks crucial to achieving its identified
processing of personal data is necessary in order to
business targets, and for the continuity of the Group.
take appropriate measures to contain the spread of the
virus and subsequently mitigate its effects.
Ferrari has adopted the last publication (“Enterprise
Data protection and privacy law requires, among
Performance”) of the COSO Framework (Committee
others, the application of increased transparency
of Sponsoring Organizations of the Treadway
obligations, the introduction of common records
Commission) as the foundation of its enterprise risk
Risk Management - Integrating Strategy and
of processing activities, the appointment of a Data
management (ERM).
Protection Officer “DPO”, an effective response
mechanism to data subjects’ privacy-related requests
In order to ensure the adequateness of its internal
and - where advisable - privacy impact assessments
risk management and control systems, Ferrari has
before processing personal data.
structured its risk management process and internal
control systems based on the “Three Level of Controls
Within this context, we have adopted a progressive
Model”. Each level of controls has different roles and
approach to ensure compliance with data
responsibilities with clearly defined boundaries:
protection and privacy law requirements, such as
the implementation of new processes (e.g. system
• The first level of control is composed of the
collecting consents and privacy notices adoption
functional management who is responsible for
of a new Governance tool in order to periodically
embedding risk management and internal control
update the records of processing activities as well
systems into each business process. First line
as to perform privacy impact assessments), the
of control has the ownership, responsibility and
creation of new internal procedures (e.g. Privacy
accountability for assessing and mitigating risks. It
Procedure, Privacy by Design , appointment and
is constituted by core business Risk Owners, staff
management of system administrators, management
functions Risk Owners and by the FLT.
of requests from data subjects etc.), the guarantee
of an effective and prompt response to requests
• The second level of control is composed of the
from data subjects (e.g. implementation of an online
functions that oversee risk management across
portal which will allow consumers to make privacy
the company processes, monitoring and facilitating
requests), the update of privacy notices, the drafting
the implementation of effective risk management
of operating instructions for authorized persons
and control activities by the first line of control. It is
within the Company, the designation of internal
constituted by Compliance, Strategic, Operational
privacy referents within Company departments and
and Reporting functions such as Enterprise Risk
the creation of an internal Privacy Committee. Regular
Management, Group Compliance, Sustainability,
e-learning courses, aimed at raising the awareness
SOX, Health & Safety, Ecology & Energy, Supplier Risk
on the data privacy regulations and requirements,
Management, Financial Risk Management, Quality,
are organized for and addressed to the newly hired
Group Financial Control and IT Security.
employees who are involved in the processing of
personal data.
• The third level of control is composed of Internal Audit
that provides independent assurance on efficiency
Dedicated face-to-face trainings have been delivered
and effectiveness of Ferrari’s risk management,
to the Privacy Referents and to the Customer Care.
governance and internal control processes.
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The FLT is responsible for identifying, prioritizing and mitigating risks, and for the establishment and maintenance
of a risk management system across our business functions. Our risk management framework is discussed with
the Group’s Audit Committee at least on an annual basis.
We have integrated the analysis and assessment of socio-environmental risks in our risk management framework
and are currently integrating our risk management activities with the outcomes of the materiality analysis
described in the paragraph “Materiality Matrix of Ferrari Group”.
In particular, the following key risks and risk trends are the ones related to our most material topics. Further
information on sustainability risks and the related management approaches put in place by Ferrari are reported
throughout this Statement.
Key Risk
Material topics
Further references
Brand Image (Strategic Risk(2)
and Reputational risk(3))
Image and brand reputation, Innovation:
Ferrari Group, Overview of Our Business
technology and design, Customer
satisfaction.
The preservation and enhancement of the value of the Ferrari brand is crucial in driving revenue and demand for
our cars. The perception and recognition of the Ferrari brand are of strategic importance and depend on many
factors such as the design, technology, performance, quality and image of our cars, as well as the appeal of our
dealerships and stores, the success of our client activities, and our general profile, including our brand’s image of
exclusivity.
The prestige, identity and appeal of the Ferrari brand also depend on the continued success of the Scuderia
Ferrari racing team in the Formula 1 World Championship.
Key Risk
Material topics
Further references
Competition (Strategic risk)
Innovation: technology and design,
Exceeding expectations, Overview
Customer satisfaction.
of Our Business
We face competition in all product categories and markets in which we operate. We believe that we compete
primarily thanks to our brand image, the performance and design of our cars, our reputation for quality and the
driving experience we offer our customers.
Key Risk
Material topics
Further references
Technological and regulatory uncertainty
Innovation: technology and design,
Exceeding expectations
(Strategic risk)
Customer satisfaction, Emissions.
Performance cars are characterized by leading-edge technology that is constantly evolving. In particular,
advances in racing technology often lead to improved technology in road cars. As technologies change, we plan
to upgrade or adapt our cars and introduce new models in order to continue to provide cars with the latest
technology. However, our cars may not compete effectively with our competitors’ cars if we are not able to
develop, source and integrate the latest technology into our cars, also taking into consideration external factors
such as the shortening of raw materials and components, faster obsolescence of components and the evolution
of regulations on (for example) safety, noise, environmental and sustainability.
(2) Strategic risks: risks which affect or are created by Ferrari’s business strategy and could affect Ferrari’s long-term positioning and performance.
(3) Reputational risks: risks which affect Ferrari’s Brand image, credibility and/or integrity.
166
FERRARI N.V.AR 2021 Key Risk
Material topics
Further references
Relationship with suppliers
(Operational risk (4))
Supply chain responsible management.
Responsible Supply Chain, Integrity
of Business Conduct.
Our business depends on a significant number of suppliers that provide raw materials, parts and systems we
require to manufacture cars and parts to run our business. We source materials from a limited number of
suppliers. In addition, similar to other small volume car manufacturers, most of the key components we use in our
cars are purchased from single source suppliers.
We work with strategic partners in various areas of our business such as manufacturing and since their
approach might differ from our own standards, Ferrari is exposed to performance, operational, financial and
reputational risks regarding its suppliers. The COVID-19 pandemic could contribute to the financial distress for
our suppliers leading to reduction or termination of their operations.
In addition, potential unethical or improper business practices by suppliers could have a negative effect on the
company’s reputation considering the high exposure of the Ferrari brand and image.
Furthermore, the increase of components and products’ complexity and the increase of car volumes produced
could result in further pressure on suppliers’ activities.
Key Risk
Material topics
Further references
Attraction, development and retention
Human Capital.
Talent Recruitment and Employee Retention,
of talents (Operational risk)
Training and talent development.
Our success depends on the ability of our senior executives and other members of management to effectively
manage individual areas of the business and our business as a whole. If we are unable to attract, retain and
incentivize senior executives, drivers, team managers and key employees to succeed in international competitions
or devote the capital necessary to fund successful racing activities, new models and innovative technology,
this may adversely affect the level of enthusiasm of Ferrari clients for the brand and their perception of our
cars, which could have an adverse effect on our business, results of operations and financial condition. The fast
technology evolution that automotive industry is experiencing requires us to always reinforce and update our
competences in new and emerging skill areas in order to guarantee a continuous alignment with market and
technology trends.
Key Risk
Material topics
Further references
Cybersecurity including third parties
Supply chain responsible management.
Cybersecurity, data protection and privacy.
vulnerabilities (Operational risk)
Our IT systems architecture and industrial machinery are exposed to external cyber-attacks. In addition, we
have to consider also that our third parties could be subjected to external cyber-attacks. In case the third party is
connected to our system, the cyber attacker could also penetrate our IT systems.
Also in the next years, we expect to increase the connectivity features of our cars. These new features may
increase the cyber security risk of our cars with the chance that an external attack may occur.
Moreover, in consideration of the UN-ECE regulations we will be required to adopt a Cyber Security Management
System in order to obtain a certification to continue to register and sell our cars and to demonstrate that we are
able and aware to deal with potential cyber risk, both at car level and enterprise level.
(4) Operational risks: risks impacting the internal processes, people, systems and/or external resources of the organization and affect Ferrari’s ability
to execute its business plan.
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Key Risk
Climate Change (Strategic risk and Health,
Safety and Environmental risk (5))
Material topics
Emissions,
Further references
Further Climate-related Disclosures (TCFD)
Image and brand reputation,
Innovation: technology and design,
Risk management and Compliance, Supply
chain responsible management.
As relevant factors for long-term value creation, Ferrari considers pivotal to manage risks related to climate
change. The fight against climate change and the preservation of the environment are becoming crucial around
the world and these concerns have resulted in rapidly evolving climate and environmental regulations emitted
across international markets.
Ferrari aims to increase the environmental awareness to continuously set and implement new programs and
actions. We are conscious that these goals require an effort both from us and from our third parties and the
Company is working on adapting internal processes, developing components, studying materials and sharing this
perspective with our partners.
Key Risk
Material topics
Further references
Non-compliance with laws, regulations,
Ethical business conduct,
Integrity of Business Conduct, Reducing
local standards (including tax) and codes
(Compliance risk (6))
Emissions,
environmental footprint
Risk management and Compliance, Quality
and safety of products and customers,
Supply chain responsible management,
Health and safety.
We are subject to comprehensive and constantly evolving laws, regulations and policies throughout the world. In
Europe, United States and China, for example, significant governmental regulation is driven by environmental, fuel
economy, vehicle safety and noise emission concerns, and regulatory enforcement has become more active in
recent years.
A detailed description of how we respond to these risks can be found in the section “Risk Management Process
and Internal Control Systems”.
RESPONSIBLE SUPPLY CHAIN
values recognized, adhered to and promoted by our
Our focus on excellence, in terms of luxury,
Company. The Code of Conduct was updated to include
quality, aesthetics and performance, requires us
specific guidelines relating to the respect of human
to implement a responsible and efficient supply
rights and conflicts of interest. The Group made its best
chain management in order to select suppliers
effort to ensure that the Code of Conduct is regarded
and partners that are able to meet our high
as a best practice of business conduct and followed by
standards. Notwithstanding the low volume of cars
third parties, including long lasting relationships and
manufactured, our production process requires
business partners such as suppliers, dealers, advisors
a great variety of inputs entailing a complex
and agents. The selection of suppliers is based not only
supply chain management to ensure continuity of
on the quality and competitiveness of their products
production. We source a variety of components
and services, but also their adherence to social, ethical
(among which transmissions, brakes, driving-
and environmental principles.
safety systems and others), raw materials (such as
aluminum or special steel), supplies, utilities, logistics
Strategic suppliers are assessed through a risk
and other services from numerous suppliers.
analysis that aims at identifying critical suppliers,
thanks to a mix of financial-compliance and industrial
Ferrari encourages the adoption and sharing of
assessments. Their growth capability is analyzed to
sustainable practices among our business partners,
identify where we need to support the development
suppliers and dealers. All suppliers must respect the
of our business partners to help them meet the
Ferrari Code of Conduct, which includes the set of
requests of the Group. Starting from 2020, we
(5) Health, Safety and Environmental risks: risks which affect health and safety and the environment.
(6) Compliance risks: risks of non-compliance with laws, regulations, local standards, code of conduct, internal policies and procedures.
168
FERRARI N.V.AR 2021 are strengthening our suppliers’ qualification and
Covered Countries are not harmed by our efforts.
selection processes in order to verify not only their
In particular, Ferrari has developed actions and
technical capability and financial solidity, but also -
strategies aimed at complying with the applicable
through a screening methodology - their reliability in
Conflict Minerals provisions, with specific reference
terms of ethics, integrity and reputation (the so-called
to those established by Section 1502 of the Dodd-
“Compliance Evaluation”). Moreover, a pilot project
Frank Act and the subsequent rules promulgated
was launched in 2021 to assess suppliers according
by the U.S. Securities and Exchange Commission,
to sustainability criteria. A considerable part of our
requiring companies to determine whether 3TG in
relevant suppliers have been engaged and assessed
their supply chain originated from the Democratic
through a questionnaire that covered the following
Republic of the Congo and its adjoining countries,
topics: ethics, human rights, health and safety and
and whether the procurement of those minerals
environmental impact. Based on the results of the
supported the armed conflict.
assessment, different action plans will be undertaken.
In the next few years, we aim to progressively extend
Due to the complexity of our supply chain, we are
the scope of this activity. In addition, we identified
dependent upon suppliers to provide the information
and engaged 91 suppliers who were among the most
necessary to correctly identify the smelters and
impactful in terms of GHG emissions in relation to our
refiners that produce the 3TG contained in our
activities through CDP Supply Chain questionnaire. All
products and take appropriate action to determine
of this aims at reducing supply chain emissions and
that these smelters and refiners source responsibly.
driving the low-carbon transition.
In accordance with the Organization for Economic
Co-operation and Development (“OECD”) Due Diligence
Before engaging a new supplier(7), the competent
Guidance for Responsible Supply Chains of Minerals
departments of Ferrari Group conduct an adequate
from Conflict-Affected and High-Risk Areas, we have
Compliance Evaluation on the potential supplier in
established an internal management system in relation
order to examine its ethical reliability and reputation,
to the supply of Conflict Minerals with the objective,
its involvement in a legitimate and lawful business,
inter alia, of: (1) minimizing the trade in Conflict
and its commitment to share Ferrari’s values of
Minerals that directly or indirectly finance or benefit
integrity, fairness and compliance. The Compliance
armed groups anywhere in the world; and (2) enabling
Evaluation is capable of identifying potential risks
legitimate minerals from conflict and high-risk
for Ferrari under different perspectives, such as:
regions to enter Ferrari’s global supply chain, thereby
anticorruption, trade sanctions, money-laundering,
supporting the economies and the local communities
conflict of interests, ethics and reputation.
that depend on the export of such minerals.
CONFLICT MINERALS
Specifically, we:
Ferrari supports the goal of preventing the
exploitation of minerals violating human rights, with
• expect our suppliers to assure that the 3TG in their
specific reference to tantalum, tin, tungsten and gold
products do not directly or indirectly finance or
(collectively, “3TG” or “Conflict Minerals”) originated
benefit armed groups in the Covered Countries; and
from high-risk or conflict affected countries
(“Covered Countries”), that may be included in our
• require all of our 3TG suppliers to conduct the
cars. As part of Ferrari’s commitment to respect and
necessary due diligence and provide us with
promote human rights and the sustainability of its
adequate information on the country of origin and
operations, Ferrari selects suppliers based not only
source of the materials used in the products they
on the quality and competitiveness of their products
supply to us.
and services, but also on their adherence to social,
ethical and environmental principles, as outlined in
In 2020, 94% of Ferrari’s direct suppliers by
Ferrari’s Code of Conduct.
purchased value submitted responses to our
Therefore, we place a high priority on responsible
the coverage of our analysis and the response rate
survey. We are strongly committed to increasing
sourcing and the integrity of our suppliers and we
through targeted actions.
strive to ensure that the livelihoods of individuals in
(7)
In 2021, 100% of Ferrari S.p.A. new suppliers were evaluated with this screening methodology.
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products, methods and the working environment.
Pole Position Evo, for instance, rewards ideas put
Innovation is in our DNA and we will continue pushing
forward by individual staff members. In 2021, we
boundaries to respond to customers’ desires, always
received around 8,200 suggestions from employees.
setting new standards in the “Ferrari way”.
RESEARCH, INNOVATION AND TECHNOLOGY
collaboration with our suppliers, and a handful
Innovation drives products and processes, which
of them are considered “key strategic innovation
represents one of our key differentiating factors.
partners”. Collaborations with leading universities are
This is why we are focused on developing new
also in place to foster the development of new ideas.
Our focus on excellence requires a strong
technologies and distinctive designs.
Technological breakthroughs are further enhanced
Participation in the Formula 1 World Championship
through design. In 2010, the Ferrari Design Center
with Scuderia Ferrari is an important source of
was established as a best-in-class in-house design
technological innovation, which is then transferred
department to improve control over the design
or adapted into our road cars, such as the hybrid
process and to ensure long-term continuity of the
configuration of the SF90 Stradale. Moreover, our
Ferrari style. A guiding principle of the Ferrari style is
development efforts take into account the three
that each new model represents a clear departure
defining dimensions of Ferrari cars: performance,
from prior models and introduces new and distinctive
versatility and comfort, as well as driving emotions. In
aesthetic elements, delivering constant innovation
addition to these internally driven factors, regulation
within the furrow of tradition. Our designers,
is key in determining the direction of technical
modelers and engineers work together to create
innovation.
car bodies that incorporate the most innovative
aerodynamic solutions within the elegant and
One of our other main focuses is on innovating our
powerful lines typical of Ferrari cars.
working methods, which involves stimulating the
creativity of our employees. With this in mind, we have
The R&D investments and expenses to fuel the growth
implemented programs designed to encourage the
of the Group, as described above, are represented in
development of ideas and solutions that will improve
the charts below(8).
R&D and CAPEX (€m)
EXPENSED R&D AND CAPEX
GROSS CAPEX
1,265
1,261
1,324
706
734
750
1,167
948
639
392
639
392
356
342
330
271
745
630
803
852
356
342
330
271
359
415
447
510
556
528
559
527
574
16
93
16
145
17
154
25
141
18
185
162
169
185
176
189
706
734
750
32
320
22
363
24
330
352
382
365
20
318
301
2013
2014
2015
2016
2017
2018
2019
2020
2021
2013
2014
2015
2016
2017
2018
2019
2020
2021
R&D expensed to the P&L
Capex
PP&E
Other intagible Assets
Captalised R&D
(8) Capital expenditures (Capex) include right-of-use assets recognized in accordance with IFRS 16 – Leases within PP&E, for approx. Euro 13 million in
2021, for approx. Euro 25 million in 2020 and for approx. Euro 13 million in 2019.
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FERRARI N.V.AR 2021 CUSTOMER SATISFACTION
We are devoted to the highest level of customer satisfaction. We have a structured process to assess the overall
customer satisfaction on product, service provided, events organized by us and the overall customer experience
with the car. Specific KPIs are constantly monitored and analyzed by the Marketing Intelligence department. The
KPIs are measured through bespoke surveys for each car launch and collected for every new model, from range
vehicles to special and limited editions. A similar approach is adopted for evaluating the quality of service and
satisfaction of our events.
The results of the product and service satisfaction analyses are used to outline any necessary action plans for
current models and, additionally, to identify potential features to be added to the next generation of vehicles.
Recent surveys show that customer satisfaction for Ferrari products and services has constantly stayed at a very
high level.
The chart below shows the flow between clients, dealers and Ferrari.
We have developed an integrated system between our customer care, dealers, marketing department and area
managers to track all contacts with clients, manage inquiries and share the results of customer and dealer
satisfaction analysis.
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development of the human-machine interface in every
Ferrari F1 car and its subsequent gradual transfer
Vehicle safety is among our top priorities and Ferrari
to our road-going sports cars. The SF90 Stradale’s
cars are always designed and manufactured with
steering wheel completes the transfer process from
the safety of our customers and other road users
racing and also ushers in a new era by introducing
in mind. Given the nature of our cars, the electronic
a series of touch commands that allow the driver
equipment is developed with an integrated approach,
to control the most important performance-related
ensuring the best balance between safety, control and
aspect of the car without ever taking their hands off
best-in-class performance, to further enhance the
the wheel. The Head Up Display is another part of the
Ferrari driving emotions.
innovative HMI and allows various data to be projected
All of our range models are subject to a series of
so that their attention is not distracted from driving.
tests to obtain approval from the relevant authorities.
We extended this innovative HMI to the Ferrari Roma
onto the windshield within the driver’s field of vision
Moreover, we start assessing all our new models at an
and 296 GTB.
early stage of planning and design to identify areas of
improvement.
Regarding further aspects of vehicle safety, please
refer to See “Overview of Our Business - Regulatory
To guarantee the highest level of passenger safety,
Matters – Vehicle safety”.
we develop both passive and active safety systems.
Passive safety requirements are the initial guidelines
BEING THE EMPLOYER OF CHOICE
assigned to the engineers in order to define the
design of every component, from car framework
The high attention and care for our products is the
to all the retain components (airbags, seat belts,
foundation upon which Ferrari’s success is built and
etc.). Moreover, specific devices are installed in
this is feasible thanks to the efforts of the people
racing cars to obtain FIA (Federation International de
working in Ferrari. One of the many strengths is the
l’Automobile) approval.
ability to attract, retain and develop talents. Since 1997,
we have developed the “Formula Uomo” initiative, with
With the aim of solving issues beforehand and
the intention of developing a high quality working
reducing the environmental impact of these activities,
life for our employees. In 2021, we carried out all
all tests are reproduced in a state-of-the-art virtual
the initiatives for our people, always in accordance
environment before conducting them with real cars.
with the most stringent COVID-19 pandemic related
laws and protocols. Over the years, the project has
Regarding active safety, we believe that the future
become a pillar of our culture, based on redesigning
developments of vehicle safety will be linked to
the working environment, enforcing a safety-first
Advanced Driver Assistance Systems (ADAS)
culture, enabling individual development, enhancing
and Human-Machine Interface (HMI), capable of
teamwork and building a community now comprising
preventing or mitigating crash occurrences. We
57 different nationalities.
are currently assessing the implementation of the
most recent trends and developments in terms of
In 2021, we started the program “Formula Insieme”,
simplifying and easing the interaction between the
whose aim is to pursue the continuous development
car and the driver to avoid any distraction. ADAS are
of Ferrari through a “plan, do, check, act” approach,
included into our entire fleet and we are working to
starting from our employees’ opinions, gaining
implement new solutions for our upcoming models,
awareness of their points of view and identifying
such as lane keeping assist, intelligent speed assist
opportunities for continuous improvement. The
and driving drowsiness.
starting point was an online survey, which took place
between April and May, through which we collected
The SF90 Stradale, the first hybrid series-production
the opinions of our employees on different topics
car in Ferrari’s history, encapsulates the most
concerning the working environment like safety,
advanced technologies developed in Maranello,
change readiness, open culture and many others. This
including the HMI which, with its track-derived
survey reached an exceptional participation rate of
“eyes on the road, hands on the steering wheel”
about 90%. Following this, Ferrari shared the survey
philosophy, takes on a truly central role. The result is
results with all employees and structured an action
an HMI (Human-Machine Interface) that is a complete
plan based on the employees’ proposals.
departure from previous models. The “hands-on-the-
steering-wheel” philosophy has consistently driven the
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FERRARI N.V.AR 2021 WORKING ENVIRONMENT
performance and medical programs. Moreover,
We know that the best individual and team
people can access medical and physiotherapeutic
performance is only achieved if employees feel they
support during trips related to the Formula 1 World
are in the right environment. We also believe that the
Championship.
quality of our products cannot be separated from the
lives of the people working in Ferrari.
Our attention to the promotion of health and safety
among our employees goes beyond what is required
This is why the working environment and wellbeing
by law and, to this effect, special workshops are
of the Company’s employees are among our most
organized for employees to raise awareness on the
important priorities, representing the key focus of our
importance of these topics.
“Formula Uomo” initiatives.
To foster a sense of belonging among employees
Our complex in Maranello, a state-of-the-art work
and their families and to offer concrete support
environment, was designed to reinforce the
to working parents with the demanding duties of
synergistic relationship between work and results.
childcare during school holidays, we have launched
With the needs of our employees firmly in mind,
the program “Formula Estate Junior”. This initiative
our manufacturing facilities are specifically created
consists of a free day camp for employees’ children
to combine carefully designed lighting systems,
aged 3 to 13, with various programs including sports,
projected to maximize the amount of natural light, and
outdoor activities, excursions and workshops. The
several external and internal green areas. Thermal
program, which has reached its 13th edition, allows
comfort throughout the factory is also a crucial
children to enjoy an exciting experience with a
requirement and, since 2013, the in-plant foundry is
didactic purpose: each edition of the “Formula Estate
equipped with a cooling system that makes it air-
Junior” camp has an educational theme developed by
conditioned and climate controlled. Special measures
professional educators (136 in 2021) and is organized
aimed at reducing the environmental impact and
in collaboration with the local community. The 2021
noise through the use of advanced technologies
edition was still affected by COVID-19 restrictions
are also in place. As an example, the design of our
but showed a participation of over 600 children, an
Machining department is aimed at providing the
increase compared to the previous one, even if the
workplace with maximum acoustic comfort thanks to
number of educators was the same as in 2020, as the
noise reduction solutions (source and reverberation).
legislation changed.
To promote an active lifestyle among our employees,
Education is also the focus of a series of different
we rely on our “Formula Benessere” program, aimed
initiatives that provide scholarships to talented junior
at providing preventative healthcare to employees
high, high school and university students. In 2021,
and their children. A gym is available for all the
our scholarship program, named after our founder
employees at Maranello, while employees at the
“Enzo Ferrari”, was awarded to 85 talented students
Modena plant have free membership in one of the
with the awards handed out by our Chairman during
city gyms. Initially provided to the F1 racing team
an outdoor event. Moreover, in 2021 we reimbursed
as part of their training program for the Grand Prix
about 800 employees for the cost of their children’s
activities, the initiative was subsequently rolled out
textbooks (reimbursement is offered to all employees’
to all employees. While waiting for the reopening
children until high school and, in certain cases, we
of the gym, virtual training classes are available
reimburse the cost of school textbooks for employees
on demand for all employees with the dedicated
in continued education).
App. As part of the “Formula Benessere” benefits,
preventative healthcare is provided to all employees
In compliance with the anti-COVID regulations, more
and their children. Medical specialists are available for
than 1,850 Ferrari children aged 0 to 10 were able to
consultation in areas such as ophthalmic, cardiology,
enjoy the collection of a Christmas gift dedicated to
osteopathy and dermatology, among others. A free
every age group.
annual check-up focusing on general health and
fitness is also provided to managers and children of
We offer additional benefits to our employees in five
all employees aged 5 to 15. For our people involved
different areas - food, free time, wellness, travel and
in F1 World Championship we developed the “Health
personal services - including personalized loans at
Pit Stop”. This program aims to foster people’s health
competitive rates within the internal branch of a local
by enhancing their psycho/physical performance
bank, special rates for housing needs and discounts
through annual medical check-ups and nutritional,
at the Ferrari Museums, Ferrari Stores and at the
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Ferrari Company Outlet, as well as a service that gives
junior workers, which in our manufacturing process
the opportunity to Ferrari employees to delegate their
takes place directly on the job because we believe in
own bureaucratic practices.
constantly maintaining excellence through “learning
Regarding sustainable mobility, we offered our
by doing”.
employees the possibility of long-term rental of
Human capital development ensures that our
electric cars and bicycles. In addition, Ferrari has
Company has the appropriate skill set to execute
launched a new project in collaboration with local
the business strategy and improve employee
authorities to encourage the use of bicycles to reach
attraction, retention, as well as motivation, and,
the workplace.
as a result, enhance productivity and the quest
for innovation. Training requests for employees
To foster the sense of belonging, the Company
who receive a regular performance and career
usually organizes multiple events, most of which
development review, are identified during this
were paused in 2021 as in 2020 due to the COVID-19
review process in order to address the needs of
pandemic. For the first time since the beginning of the
both parties.
pandemic, in 2021 we hosted, at the Mugello Circuit,
the Ferrari Challenge championship World Finals, an
A Training Plan with three specific objectives is
event attended by a large number of our employees
in place:
together with their guests, adopting the highest
COVID-19 precautionary measures.
• To protect and pass on the strategic and specific
know-how of Ferrari
Over the last years, several culture and sport
associations have been created: employees and
– Among all the training initiatives in Ferrari, we are
former employees that share a common interest
very proud of our “Scuola dei mestieri”, started
have the opportunity to cultivate their passions and
in 2009. It is a unique, in-house, technical training
organize sport and recreational activities together.
project for both white collars and workers, which
increases the professionalism of junior talents
All these benefits are provided to all of our employees.
and motivates senior employees, recognizing
TRAINING AND TALENT DEVELOPMENT
Maestri and to pass on Ferrari’s unique heritage
Along with the need to hire, develop and retain talents,
to the next generation. The initiative combines
we are aware that we must manage human capital as
different didactic methodologies, including on
a critical resource to achieve the best possible results.
the job sessions and in-classroom training, both
their competencies by asking them to become
The success, prestige and appeal of our brand
skills, with a particular focus on innovation. Being
depends on the ability to attract talents and retain
a Maestro is an aspirational position and key to the
focused on the consolidation of competencies and
them. In particular, top drivers, racing management,
Company’s success.
engineering talent and all the employees that make
Ferrari unique have to be rewarded based on
In 2021, we further consolidated the activities
their ability, determination, and expectations. This
of the previous years, with the three main areas
is why we offer career progression opportunities
of focus being: product innovation (mainly with
tailored to each individual’s strengths, ambitions
regard to hybridization, HMI and new components,
and our Company’s requirements, underpinned
in a cross-functional training), process innovation
by substantial investments in training. A total of
(as in the case of low bake painting and additive
over 70,100 hours (up 11% vs. 2020) of training
manufacturing) as well as support and induction
have been provided to the Company’s employees
of new colleagues. Moreover a new course on the
in 2021. This result was achieved mostly thanks to
new V6 engine was added.
the high-quality volunteering training we provide
to our employees, through internally developed
As in the previous year, also in 2021, to ensure
activities, among which the two MBA programs and
effective training opportunities to employees
the technical training projects such as “La Scuola
during the COVID-19 pandemic, all the courses
dei Mestieri” and the training course dedicated to
have been implemented through e-learning
all members of the purchasing department. What
platforms and webinars. A dedicated virtual
makes Ferrari’s craftsmanship unique is the direct
library containing all the courses was created
transfer of knowledge and expertise from senior to
while a number of tablets were distributed
174
FERRARI N.V.AR 2021 among participants to guarantee accessibility.
worked on integration objectives, with many
Such an effort guaranteed all the 2021 scheduled
proposals emerging at the end of the course on
course.
how to improve working activities. Moreover,
we implemented training courses for Scuderia
Furthermore, within “Scuola dei mestieri” we
Ferrari managers to address their specific needs,
have implemented an activity called “Scuola delle
covering Ferrari’s leadership model and other
professioni”, dedicated to young engineers and all
topics.
employees of the Purchasing department, in order
to provide them with an overview of all the phases
• To foster and support the inclusion, growth and
of product development and to pass on the Ferrari
development of our people.
DNA. In 2021, a new class provided participants with
“technical” visits to all production departments to
– In line with business and Company requirements,
show the unique manufacturing process in Ferrari.
and consistent with the needs expressed in the
Performance & Leadership Management system,
training activities were provided with respect to
• To shape and prepare the future managerial class
managerial, technical and language skills.
for the business, innovation, management and
human capital development challenges.
Launched in 2019, we continue to offer our
employees the possibility to access the Harvard
– In 2021, despite the permanence of the COVID-19
Manage Mentor e-learning platform. The
pandemic, the activities concerning the Ferrari
training provided through this platform has
Corporate Executive MBA were confirmed. The
been customized according to our needs and
objective of the master’s program is to improve
the following three lines of development: to
the management skills of the attendees, to let them
integrate this platform with the Performance
gain experience on the most recent innovation
and Leadership Management system; to give
trends and to convey the Ferrari leadership model.
employees, especially newcomers, the basic
This master’s degree offers a unique tailor-
managerial skills that we consider essential
made program to form a critical mass within
requirements; and to adapt professional
the management class that will be able to grasp
development paths based on employees’ career
the challenges of the future, while at the same
levels. Soft skills and language courses are
time preserving the tradition of Ferrari. During
included in this platform, as well as several training
the course of study, innovation talks, leadership
activities on diversity topics sustaining our Equal
scrums and site visits to production plants are
Salary Certification.
carried out. This master’s degree will help to
develop a group of managers with a shared
In addition, an online training campaign is
approach to leadership, while respecting and
launched twice a year and includes all the
valuing individual differences. A group on which
corporate mandatory trainings dedicated to
Ferrari can rely on to tackle future challenges.
new employees. These kind of campaigns are
In 2021, in addition to the third edition of this
repeated periodically to provide a training update
master’s degree, a new program was launched for
to all employees. Among the mandatory courses,
employees aged between 27 and 35. The Ferrari
a session is dedicated to our Code of Conduct
Global Corporate MBA, in addition to providing
that covers also anticorruption and human rights
participants with managerial skills, pays special
topics. In 2021, a mandatory online campaign was
attention to the three main disruptive trends
launched on Anticorruption, Conflicts of interest,
of our time: technological innovation, digital
Whistleblowing and Italian Legislative Decree
transformation and sustainable transition.
231/2001, regarding the principle of corporate
administrative responsibility for certain types of
In 2021, we completed the second edition of
crimes committed by qualified representatives of
the managerial growth program called “Fly the
the Company in the interest or to the advantage
Flag”, that involved all managers of Direzione
of the Company itself. In 2021, the training course
Tecnica with individual and group activities. The
dedicated to all members of the purchasing
objective of this program is to strengthen the
department, realized in partnership with the
peculiar characteristics of a manager: assuming
European Institute of Purchasing Management,
responsibility, increasing accountability and
was concluded and the participants were provided
enhancing teamwork. Cross-functional groups
with a certification of completion.
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In 2021, we made additional progress regarding the activities started the previous years to ensure know-
how continuity and we promoted the strengthening of employee skills to meet our ambitions for the future.
Collaboration, innovation, focus and learning, together with agility at all levels, represent some of the key values we
pursue to thrive in a rapidly changing world.
All these training activities, delivered both in presence and online, resulted in an increase in the overall number of
training hours provided compared to the previous year.
AVERAGE HOURS OF TRAINING
Total
2021
15.2
2020
13.9
2019
13.5
TALENT RECRUITMENT AND EMPLOYEE
RETENTION
and consolidating partnerships with leading
engineering universities and companies. Within this
The excellence that our products and our brand
project, for the third edition we also included our
embody is what attracts and retains the best talents
Brand Diversification team with the goal to attract the
worldwide.
best fashion and luxury management and master’s
graduates. “Ferrari F1 Engineering Academy”,
At Ferrari, recruitment and selection is about sourcing
active since 2015, is dedicated to the recruitment of
the right qualities and skills that will represent the
talented engineers to be introduced to our F1 team.
backbone of our future success. Our recruitment
We regularly perform dedicated communication
process provides a platform to engage with future
activities at universities, integrating on-line testing as
employees, to assess competencies through a
well as dedicated assessment centers managed in
structured selection process and to prepare for post-
Maranello to ensure that the most suitable applicants
recruitment integration and development.
have the opportunity to join the Ferrari team. We
have now reached the 7th edition of this program;
The mission of the recruitment team is to identify,
retention rates continue to be high. Moreover in 2021,
evaluate and bring onboard the individuals which
we took part to an onboarding program together
are aligned with our requirements and values. We
with three companies, also members of MUNER, to
received in excess of 46,000 applications during 2021,
share knowledge with students around: vehicle setup,
including specific as well as spontaneous applications
electronics and homologations.
from around the world for engineering, technical,
marketing and financial positions.
To ease employees into their new jobs, Ferrari
provides a two-day induction program. The first day
We also undertake partnership programs with
is dedicated to introducing the Company culture and
top universities around the world to engage with
mission, as well as guiding new employees through
students, professors, career offices and a network
the corporate offices and production plants. The
of professionals in order to identify talents for the
following day is focused on health and safety training.
future. In 2021, we organized 53 events, attended by
almost 4,500 students. We offer Company insight
To promote a responsible behavior during the
presentations, testimonials by Ferrari staff, selected
assembling phase of cars and engines, we launched
case studies at university campus and, for partner
many years ago the “Pit Stop” and “Fiorano Race”
universities such as the Motorvehicle University of
initiatives, where colleagues on the same shift are
Emilia-Romagna (MUNER), we also offer the selected
assigned to “teams”, with key performance indicators
opportunity to visit the Ferrari facilities. These activities
in place for the improvement of quality, efficiency
allow us to transmit the key values of the Company,
and environmental sustainability. The teams are then
and therefore to engage directly, or indirectly through
ranked based on the data, with the best performers
communications and social media, nourishing our
being rewarded. Furthermore, we organize the
recruitment pipeline. Our program includes different
“Pole Position Evo” program to evaluate individual
graduate projects: “Ferrari GT Academy” is dedicated
performances.
to the recruitment of engineering, production and
commercial personnel, with the aim of attracting,
We reward our employees, excluding senior
evaluating and hiring future talents and establishing
management, through a productivity bonus called
176
FERRARI N.V.AR 2021 “Premio di Competitività”, based on yearly shipments
aspirations and the final evaluation. Starting from
and adj. EBITDA results, as well as a product quality
2021, the training on our Performance Management
index adjusted for individual absenteeism rates. In
process was transformed in online training video
2021, each employee received around Euro 5,500 on
courses that are always available to all of our
top of the additional Euro 2,100, as provided for in a
employees, besides delivering in-person training.
specific agreement signed with the trade unions.
On the side, Ferrari organizes assessment classes
with external psychologists and HR experts with the
All employees, excluding workers, receive a regular
aim of evaluating employee potential. Due to COVID
performance review based on performance and
19 restrictions, these assessments of potential
leadership behaviors, which ends with a final
were carried out in an online format for white-collar
evaluation from their assessors at the end of the year.
employees, while individual development interviews
Workers undergo a different review, which is based
were organized for workers. In addition, for the
on regular assessments, aimed at developing their
first time in 2021, we started for our Managers
career path.
and Senior Managers the leadership development
project, an individual assessment of leadership
In 2021, more than 2,200 employees received a
behaviors aimed at continuous improvement and
performance evaluation through our specific
professional development, which also includes a 360
online tool, covering almost 100% of white collars
degree feedback. The results of these assessments
and managers. This online tool allows us to track
are a fundamental asset for succession plans in
and share with employees and management the
key positions, identifying career development
results of the assessment, including strengths and
opportunities and defining consistent retention
improvement areas as well as their professional
actions.
EMPLOYEES WHO RECEIVED A REGULAR PERFORMANCE AND CAREER DEVELOPMENT REVIEW BY
EMPLOYEE CATEGORY
Employee category
Managers and Senior Managers
Middle Managers
White Collars
Workers
2021
2020
2019
98%
96%
90%
0%
97%
99%
92%
0%
86%
73%
66%
0%
Thanks to our career development program, Ferrari encourages the professional growth of its employees and
tries to fill key positions with talented internal candidates before tapping into the external market. The results of
the analysis carried out on our key positions covered by our employees are used to develop specific succession
plans, with a timeframe of 2-4 years, to ensure the competitiveness of Ferrari over time and to take advantage of
our employees’ talents.
In 2021, Ferrari S.p.A. and Ferrari North America Inc. confirmed the Equal Salary Certificate for providing equal
pay to men and women with the same qualifications and positions in the Company. This accreditation attested
the Company’s commitment to creating an inclusive and diverse working environment while fostering career
development for everybody. In 2020, Ferrari was the first Italian Company to receive this specific certification.
The certification process included a detailed statistical analysis of compensation levels, which revealed that the
Prancing Horse is one of Europe’s companies having successfully eliminated the gender pay gap. Ferrari sees this
certification not as an end point but as a further stage of growth and an opportunity to implement tangible actions
to ensure that everyone can pursue their professional growth.
In 2021, Ferrari took advantage of all the training courses offered by Valore D, the association with over 240
member companies in Italy, whose commitment is to promote gender balance and an inclusive culture in
organizations and across the country: 32 Ferrari women employees were selected to get access to discussions
on diversity, inclusive leadership, language and soft skills. Moreover, on Ferrari intranet all employees can access
several “open talks” on these topics.
For the third year in a row, our effort to guarantee employee attraction and retention was also recognized by the
Top Employers Institute in 2022.
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management to review safety issues. Periodic internal
health and safety audits are performed to ensure
We are particularly focused on the safety of our
compliance with our health and safety management
people and we are dedicated to the prevention of
system, current laws and best practices. Ferrari
accidents at work(9). Our hazard identification, risk
S.p.A. and Mugello Circuit S.p.A. health and safety
assessment and incident investigation processes
management systems are certified ISO 45001:2018(10),
are developed in accordance with the highest
a voluntary international standard, which specifies the
international and national voluntary standards and
requirements of an occupational health and safety
normative requirements on health and safety. In
management system with reference to the activities
addition to formal meetings being held with employee
performed within the premises of the organization by
representatives, periodic meetings are also held with
its employees or external workers.
HOURS OF HEALTH AND SAFETY TRAINING PER YEAR AND NUMBER OF PARTICIPANTS(11)
Training hours
Number of participants
2021
22,044
3,957
2020
18,169
3,089
2019
22,313
2,927
We continue to make significant investments in safety at work: improvements in the existing structures and
specific training have allowed us to achieve significant results. Mandatory health and safety training is provided
to all new hires during the second day of the induction program, while periodic sessions are developed for all
employees. We provide employees who test our cars with specific on-track driving training to make sure they
have all the skills required to perform emergency maneuvers, if necessary. As shown in the table above, in 2021,
the number of training hours increased and returned in line with pre COVID-19 pandemic level. In addition, a
constantly updated dynamic health protocol is in place and a specific health and safety section is part of the
training program of the “Department Team Leaders”.
Particularly effective has been the program to highlight the so-called “near misses”: events that could have caused
injuries but did not. Moreover, most of the buildings are provided with a defibrillator along with the standard health
and safety equipment.
The table below shows a substantially stable trend in the lost time injuries rate over the last three years. In 2021,
the injury rate was 1.2, with 9 occurrences (6 in 2020) and no fatalities occurring. The types of work-related injuries
include bruises and one case of a collision with a vehicle, occurred during an exhibition of the single-seaters at
the Motor Valley Fest in Modena, that resulted in high-consequence injury. Each work-related injury is analyzed to
determine the cause and appropriate measures to avoid recurrence are then implemented.
(9)
In this section, we refer to Ferrari S.p.A., which operates primarily in the Maranello and Modena plants and to Mugello Circuit S.p.A., which operates
the Mugello racing circuit.
(10) Ferrari S.p.A. and Mugello Circuit S.p.A. include 94% of all Ferrari Group employees.
(11) The figures provided refer to all employees and external staff of Ferrari S.p.A. and Mugello Circuit S.p.A.
178
FERRARI N.V.AR 2021 NUMBER OF INJURIES AND INJURY RATE(12)
Total number of lost time injuries
of which causing more than 3 days of absence
(excl. high-consequence injury and fatalities)(13)
of which high-consequence injury
of which fatalities
Total lost time injury rate(14)
of which causing more than 3 days of absence
(excl. high-consequence injury and fatalities)(15)
of which high-consequence injury
of which fatalities
Hours worked
2021
2020
9
5
1
0
1.2
0.7
0.1
0
6
4
0
0
1.0
0.6
0
0
2019
10
7
0
0
1.5
1.1
0
0
7,263,995
6,280,881(16)
6,471,529
During the course of 2021, three injuries have been recorded for agency workers, two resulting in more than
3 days of absence and one resulting in less than 3 days of absence.
During the last year, no cases of diseases arising from a work situation or activity, or from a work-related injury
have been recorded. Due to the nature of the activity conducted in Ferrari plants, workers are not considered
exposed to high risks relating to specific diseases. Every employee undergoes a regular work-related medical
examination, as prescribed by law.
Health and safety contents are covered by the CCSL (Contratto Collettivo Specifico di Lavoro), signed on March 11,
2019, and also by the Accordo Premio di Competitività Ferrari, signed on September 25, 2019, providing a specific
health and safety Commission involving, on a monthly basis, both the Company and the workers’ representatives
for health and safety. CCSL and Accordo Premio di Competitività Ferrari cover 100% of Ferrari employees in Italy.
OUR EMPLOYEES IN NUMBERS
As of December 31, 2021, Group(17) employees were 4,609, an increase of 1.2% compared to December 31, 2020
(4,556). We expect to continue growing over the next few years in order to meet our key priorities.
Number of employees
December 31, 2021
December 31, 2020
December 31, 2019
Total
of which women
4,609
15.2%
4,556
14.8%
4,285
14.0%
We also rely on external collaborators such as contractors, self-employed persons, workers hired through
external agencies and interns.
(12) The figures provided are referred to all the employees of Ferrari S.p.A. and Mugello Circuit S.p.A., with the exception of Managers and Senior
Managers; this category of employees did not incur any injuries in 2021. All data does not include first aid medical treatments.
(13) Injuries that must be reported to INAIL (Italian National Institute for Insurance against Accidents at Work), according to Italian legislation.
(14) The injury rate is the ratio of the number of injuries reported to the number of hours worked (including overtime), multiplied by 1,000,000, excluding
commuting accidents.
(15) Injuries that must be reported to INAIL (Italian National Institute for Insurance against Accidents at Work), according to Italian legislation.
(16) In 2020, total hours worked decreased mainly due to the seven-week production suspension caused by the COVID-19 pandemic.
(17) In this chapter, “The Group” refers to all the legal entities indicated as consolidated line by line by Ferrari N.V. in 2021 Annual Report.
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PERCENTAGE OF EMPLOYEES PER EMPLOYEE CATEGORY BY GENDER
Employee category
December 31, 2021
December 31, 2020
Managers and Senior Managers
Middle Managers
White Collars
Workers
Total
Male
Female
Total
Male
Female
Total
86.0%
84.0%
75.3%
92.1%
84.8%
14.0%
16.0%
24.7%
7.9%
15.2%
143
639
1,637
2,190
85.4%
84.1%
75.8%
92.2%
14.6%
15.9%
24.2%
7.8%
4,609
85.2%
14.8%
137
603
1,583
2,233
4,556
As indicated in the table above, compared to the previous year in 2020, the percentage of female employees
slightly grew from 14.8% to 15.2%. This was mainly due to an increase in the “Middle Managers” and “White Collars”
categories.
PERCENTAGE OF EMPLOYEES BY AGE GROUP
Total
13.0%
68.5%
18.6%
4,609
15.2%
66.8%
18.0%
4,556
December 31, 2021
December 31, 2020
<30
30-50
>50
Total
<30
30-50
>50
Total
The majority of the workforce is between the age of 30 and 50 (68.5%).
NEW EMPLOYEE HIRES AND EMPLOYEE TURNOVER
New Hires
Departures
New Hires (%)
Departures (%)
2021
2020
Total Group
Total Group
240
187
5.2%
4.1%
405
134
8.9%
2.9%
All the employees of the Group in Italy (representing 94.1% of the total workforce) are subject to collective
agreements (CCSL, Contratto Collettivo Specifico di Lavoro and Accordo Premio di Competitività Ferrari). Ferrari
pays salaries that are in line with industry standards. In addition to the statutory minimum wages, salaries are
often determined by collective bargaining agreements.
ABSENTEEISM RATE IN ITALY(18)
Employees
2021
1.64%
2020
1.53%
(18) The absenteeism rate is calculated as a ratio of hours lost for sickness divided the number of hours to be worked. The perimeter considered relates
only to Ferrari N.V., Ferrari S.p.A. and Mugello Circuit S.p.A. employees.
180
FERRARI N.V.AR 2021 REDUCING ENVIRONMENTAL FOOTPRINT
developments while monitoring the emissions of
Ferrari cars reporting to our Chief Research &
OUR ENVIRONMENTAL RESPONSIBILITY
Development Officer.
We assemble all of our cars and manufacture all
the engines used in our cars or sold to Maserati
In 2021, we calculated our 2019 and 2020 carbon
at our production facility in Maranello19 (Italy). The
footprint considering the GHG emissions related to
Carrozzeria Scaglietti plant, located in Modena (Italy),
all the Group activities over our entire value chain,
is where we manufacture aluminum bodyworks
including both direct and indirect GHG emissions.
and chassis. The two plants cover a cumulative
Our carbon footprint calculation, based on GHG
area of approximately 850,000 m2. We also own the
protocol methodology, has been verified by a
Mugello racing circuit in Scarperia, near Florence
certification entity according to ISO 14064-1:2018
(Italy), which covers an area of 1,700,000 m2 (of
requirements. This analysis enhanced our awareness
which approximately 1,200,000 m2 of green or tree-
on our overall environmental impact, allowing us
covered areas).
We directly operate 16 retail stores and maintain
offices for our foreign subsidiaries and other
to determine priority areas for action. Our 2019
base year carbon footprint is approximately 600
ktons CO2eq. Direct GHG emissions account for
14% of the total, while indirect upstream GHG
smaller facilities in Italy, such as the Museo Enzo
emissions accounts for 54%, the majority referring
Ferrari (MEF) in Modena and the Ferrari Museum
to “Purchased goods and services” category and
in Maranello. The environmental impact of these
indirect downstream for 32% of the total, mainly due
additional facilities is deemed negligible and is
to “Use of sold products” category.
excluded in this chapter’s data.
Group Carbon Footprint
The monitoring and management of the
environmental performance of our productive
14%
plants is assigned to a team that reports to our Chief
Technologies & Infrastructures Officer. Their effort
is aimed at minimizing the impact of our activities
on the environment, particularly in relation to the
energy consumption of the production facilities. A
different team is in charge of overseeing regulatory
32%
2019
54%
Upstream
Downstream
Direct
We are committing to achieve carbon neutrality by 2030 on our entire value chain, addressing direct and indirect
GHG emissions, focusing on energy and materials, in addition to our electrification journey.
PLANTS AND CIRCUITS
ENVIRONMENTAL MANAGEMENT SYSTEMS
We have invested heavily to minimize our environmental impact since 2001, when the Company reached the
ISO 14001:2015 certification for our plants in Maranello and Modena. In 2019, we obtained the renewal of the
certification of our environmental management system according to the new standard ISO 14001:2015. In
addition, in 2007, we obtained and renewed the Integrated Environmental Authorization. As mentioned in our
Environmental Policy, our effort is to minimize the negative impact of our activities on natural resources and the
global environment.
(19) Maranello production facility is composed of the main offices and production buildings, the “Nuova Gestione Sportiva” building and the adjacent
Fiorano track (of approximately 3,000 meters).
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In addition, Ferrari S.p.A. has obtained the three stars
system with ISO 14001:2015 and EMAS (Eco-
of the FIA Environmental Accreditation Program.
Management and Audit Scheme). Moreover, in
The program development by the Fédération
2020, Mugello Circuit S.p.A. obtained the ISO 20121
Internationale de l’Automobile aims at helping
certification, confirmed also in 2021. Mugello Circuit
key players in the motorsport and automotive
has been the first circuit in the world to obtain this
sector measure and enhance their environmental
certification. This standard applies to the activities
performance by means of an independent
related to the events hosted and is evidence of the
certification process.
commitment of Mugello Circuit to implement a
responsible and sustainable management system.
To further reflect our sustainability commitment,
in 2021 we obtained the ISO 20121 certification,
EFFICIENT ENERGY USE
the international standard for sustainable event
Our culture embraces a rational use of energy,
management, for the Ferrari Challenge Europe,
which is mainly utilized for the manufacturing of cars
becoming the first European one-make championship
and engines. Over the years, the Group has strived
for combustion-powered cars to receive this
to lower its energy consumption and to minimize
certification. The standard applies to the planning and
its environmental impact, adopting innovative
realization of the 2021 Championship. In the same
solutions and using renewable energy sources for
year, the ISO 20121 certification was obtained also
its manufacturing facilities. In 2008, we installed
by Passione Ferrari, for SPA-Francorchamps event.
our first solar panels and subsequently increased
Passione Ferrari is the official program of track
capacity in 2011 and 2015. Since 2014, Ferrari has
events for Ferrari owners and sports car lovers,
been purchasing electricity with Guarantee of Origin
hosted by the Ferrari European Challenge series.
certificates.
During 2021, we also obtained the ISO 20121
In addition, from 2009, we started using electricity
certification for Ferrari Factory Tour, a unique
along with hot and cold water generated by the
experience for customers, prospects and guests of
trigeneration plant(20), allowing us to optimize our
sponsors, where ad-hoc guided tours are organized
energy needs. In 2021, the trigeneration plant
to the “Cittadella Ferrari” and the iconic places of the
produced 78% of the electricity needed for the
“Cavallino Rampante”.
Maranello plant, while the renewable sources(21) cover
the remaining 22%.
The Mugello Circuit S.p.A. obtained and renewed the
certification for the environmental management
ENERGY CONSUMPTION WITHIN THE ORGANIZATION
Unit of measurement: TJ
Non-renewable fuel consumption
Natural Gas (used for trigenerator)
Natural Gas (for other uses)
Gasoline
Diesel(22)
Total electricity bought for consumption
From renewable sources
From non-renewable sources
Electricity self-produced for consumption(23)
Electricity sold
Total
2021
1,638
1,117
452
56
13
142
142
—
3
(9)
2020
1,515
1,079
376
47
13
108
107
1
4
(8)
1,774
1,619
(20) Even if the trigenerator plant was bought by Ferrari in September 2016, data referring to energy consumption and GHG emissions consolidate
trigenerator plant data for the whole 2016 for comparative reasons.
(21) Thanks to our photovoltaic system and the purchase of Guarantee of Origin certificates.
(22) Data also include Ferrari’s trucks and power generator related to F1 activities.
(23) From photovoltaic.
182
FERRARI N.V.AR 2021 The total energy consumption within the Group for
building related to new GT sport activities, the new
2021 was 1,774 TJ, with an increase of 9.6% from 2020
building for Formula 1 simulator and the renovation
(1,619 TJ). In 2021 we returned to pre COVID-19 level.
of the offices of Marketing and Commercial
Direction, all of them built with high standard of
We are constantly implementing actions such as the
energy efficiency.
replacement of traditional illumination systems to
LED technology and the use of high efficiency engine
AIR EMISSIONS
with inverter technology in pumps for the industrial
water distribution system. As of today, all our new
The emissions of CO2eq deriving from the Maranello
and Modena plants and from the Mugello racing
buildings in Maranello are Class A-ranked and the
circuit (Scope 1 and Scope 2 market-based) are equal
Formula 1 team headquarters comply with the net
zero energy building protocol (NetZeb), meaning
that the total amount of energy used by the building
is approximately equal to the amount of renewable
energy it generates. In 2021, we completed the new
to 95,514 tCO2eq in 2021, compared to 88,380 tCO2eq
in 2020, 94,615 tCO2eq in 2019, 91,773 tCO2eq in 2018,
92,609 tCO2eq in 2017 and 93,086 tCO2eq in 2016.
DIRECT AND ENERGY INDIRECT GHG EMISSIONS
Unit of measurement: tCO2eq
Scope 1(24)
2021
2020
2019
2018
2017
2016
95,514
88,242
93,789
91,001
91,789
92,319
Scope 2 (market-based method)(25)
—
138
826
Scope 2 (location-based method)(26)
12,423
10,095
11,603
772
9,219
820
9,822
767
9,105
In 2021, our Scope 1 GHG emissions increased by 8% compared to 2020. In 2021 we managed to reduce to zero
our Scope 2 market based GHG emissions, thanks to the purchase of renewable energy by Ferrari S.p.A. and
Mugello Circuit S.p.A. If we had not purchased Guarantee of Origin certificates these emissions would have been
higher by 18,102 tons CO2eq.
Other significant air emissions are mainly related to volatile organic compounds (VOCs) released during vehicle
manufacturing. In addition, NOX, SOX and dust emissions are constantly monitored.
OTHER SIGNIFICANT AIR EMISSIONS
Unit of measurement: tons
NOX
SOX
Volatile Organic Compounds (VOCs)
Dusts
2021
2020
63
1
62
5
59
1
46
3
(24) Direct greenhouse gas emissions, measured in tons of CO2 equivalent, were calculated using emission factors indicated in “Emission Factors from
Cross-Sector Tools; March 2017” and “Global Warming Potential Values Guidance; May 2015”, published by The Greenhouse Gas Protocol. Gases
included in the calculation of the Scope 1 GHG emissions: CO2, CH4, N2O, HFCs and other refrigerant gases.
(25) Market-based indirect greenhouse gas emissions, measured in tons of CO2, were calculated using the Residual Mix emission factors indicated in
“2020 European Residual Mixes, V.1.0”, published by AIB. The Group purchases Guarantee of Origin (GO) certificates in order to reduce the impact of
CO2 emissions in the atmosphere.
(26) Location-based indirect greenhouse gas emissions, measured in tons of CO2, were calculated using the emission factor indicated in “Confronti
internazionali; 2019”, published by Terna.
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WASTE MANAGEMENT
is the first raw material (by weight) used in our
We acknowledge that rational use of raw materials,
manufacturing process. Other projects aimed at
together with careful waste management,
reducing waste are undergoing a feasibility analysis.
helps reduce the environmental impact of the
In particular, according to the concept of the circular
manufacturing process. In addition, innovative
economy, in some cases our production scraps
solutions and advanced technical processes minimize
can be used for our manufacturing processes (e.g.
waste and negative environmental impact. The reuse
processed sand used in the foundry, aluminum that
of production scraps in our manufacturing process
cannot be smelted).
also has the objective of reducing waste.
To achieve this target, a series of initiatives in the
increase of 2% compared to 2020 (9,785 tons), entirely
different phases of the manufacturing process
treated offsite, increasing at a lesser pace than our
have been implemented. As an example, aluminum
production growth, also thanks to new washing water
scraps are melted in the foundry to avoid waste, this
treatment that allowed us to avoid the generation of
is particularly important considering that aluminum
more than 600 tons of waste.
Total waste for(27) 2021 was equal to 9,992 tons, with an
WASTE DIVERTED FROM DISPOSAL
Unit of measurement: tons
2021
2020
Total Hazardous Waste
Total Non-Hazardous Waste
Weight
Percentage
Weight
Percentage
630.7
4,165.5
13.2%
86.8%
587.6
3,902.8
13.1%
86.9%
Total Waste Diverted From Disposal
4,796.2
100.0%
4,490.4
100.0%
WASTE DIRECTED TO DISPOSAL
Unit of measurement: tons
2021
2020
Total Hazardous Waste
Total Non-Hazardous Waste
Weight
Percentage
Weight
Percentage
1,240.3
3,955.6
23.9%
76.1%
1,533.4
3,761.3
29.0%
71.0%
Total Waste Directed To Disposal
5,195.9
100.0%
5,294.7
100.0%
LOGISTICS
We produce all of our vehicles and spare parts in our Maranello and Modena plants, however, our network of
third-party dealers comprises 191 point of sales around the world. A meticulous work is constantly carried out to
optimize logistical operations with the aim of reducing the environmental impact and associated air emissions.
WATER MANAGEMENT
We are well aware of the importance of a responsible management of water and, even if our plants are not
located in areas exposed to high or extremely high overall water risks, nor our production process can be
considered water intensive, we have developed a series of initiatives to reduce water consumption in our
manufacturing processes. This commitment was reinforced by introducing the adiabatic cooling system in our
New Technical Center, a new technology which allows us to save more water compared to traditional methods.
Moreover, we collect and reuse rainwater and condensation for sanitary facilities.
All the water sourced comes from municipal water supplies and wells: as of today, no water bodies are directly
affected by the withdrawal of water.
(27) 2021 and 2020 data includes waste generated by Ferrari S.p.A. in the plants of Maranello and Modena and warehouses and Mugello Circuit S.p.A.
184
FERRARI N.V.AR 2021 WATER WITHDRAWAL BY SOURCE(28)
Unit of measurement: ML
2021
2020
Groundwater
Third-party water
Total(31)
All areas
of which
All areas
areas with
water
stress(29)
25.1
0.0
25.1
537.0
198.7
735.7
496.0
205.4
701.4
of which
areas with
water
stress(30)
18.4
0.0
18.4
We treat our wastewater in accordance with all applicable laws and regulations. All the wastewater of our plants
is always monitored and channeled in the public sewage system and not directly into water bodies. The water
used in some of the industrial processes (such as washing solutions or paint washing), before its discharge in the
public sewer system, is treated by an industrial water treatment plant where it undergoes the necessary chemical,
physical, and biological treatments.
WATER DISCHARGE BY DESTINATION
Unit of measurement: ML
Effluents / Water bodies
Public sewer system
Total
BIODIVERSITY AND NOISE POLLUTION
2021
0
404.6
404.6
2020
0
371.0
371.0
Our plants and racing circuits, as of December 2021, are not located in any protected or highly biodiverse areas
and, to our best knowledge, they do not have a significant environmental impact on such areas. Moreover, our
plants and racing circuits are not adjacent to any protected or highly biodiverse areas. This analysis is conducted
annually and is based on the World Database on Protected Areas.
However, the Mugello racing circuit is located in an extremely important natural landscaping area. Therefore, the
main tribune has been constructed using eco-active materials with zero impact on the surrounding zone to help
reduce both pollutants and bacteria.
With regard to the noise produced in proximity of the Fiorano and Mugello circuits, the acoustic monitoring of the
plant perimeter is regularly carried out and the Mugello Circuit complies with the authorization received by the
appropriate authorities.
VEHICLE ENVIRONMENTAL IMPACT
Part of the environmental impact of our activities is related to our product lifecycle, including both downstream
and upstream GHG emissions. Ferrari cars are perceived as collectibles and therefore the number of cars
demolished each year is very scarce. In addition, our cars are generally not considered means of transportation.
(28) Water stress analysis performed with 2019 Aqueduct Water Risk Atlas(World Resources Institute).
(29) 2021 data refers to Mugello racing circuit.
(30) 2020 data refers to Mugello racing circuit.
(31) Total water withdrawal refers to freshwater (≤1,000 mg/L Total Dissolved Solids).
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improving core components such as the powertrain,
car dynamics and the use of materials such as special
We are subject to a variety of laws and regulations
aluminum alloys and carbon fiber. The expertise
that, among others, are related to car emissions
acquired in these fields has recently enhanced our
and fuel consumption. Ferrari vehicles must comply
efforts to combine improved performance with
with extensive regional, national and local laws and
reductions in CO2 emissions.
regulations, as well as industry self-regulations
(including those that regulate vehicle safety). However,
We have undertaken an important program to
we currently benefit from certain regulatory
develop hybrid and electric technology. One of the
exemptions because we qualify as a Small Volume
more relevant topics of this generation, the concept
Manufacturer or similar designation in most of the
of the car in an era of climate change, will likely be an
jurisdictions where we sell our cars (for more details
opportunity for us. Innovation runs within Ferrari, so
refer to the “Regulatory Matters” paragraph of 2021
the challenge of building a Ferrari for a low-emissions
Annual Report).
future is one that we are already embracing. To this
effect, we have already started our journey towards
We continue focusing on researching technologies
carbon neutrality by 2030, addressing direct and
that further reduce emissions in the use phase, such
indirect GHG emissions, focusing on energy and
as hybrid and electric engines. We started working
materials, in addition to our electrification journey. The
with hybrid technology back in 2011, when we
SF90 Stradale, our first hybrid series-production car
introduced the HY-KERS (Kinetic Energy Recovery
in Ferrari history, launched in 2019, the SF90 Spider,
System) technology in our F1 cars, which was
launched in 2020, and the 296 GTB launched in 2021,
transferred in 2013 to LaFerrari, our first road car to
perfectly reflect our commitment to this approach.
use hybrid technology. Further enhancing the hybrid
The increased offering of hybrid powertrains
technology, in 2014, we introduced hybrid power units
will allow us to meet both specific regulatory
in our F1 cars and, in 2019, we launched the SF90
requirements but also to satisfy customers’ desires
Stradale, our first hybrid series-production car.
for significantly improved emissions, while enhancing
the driving emotions that render Ferrari cars simply
Through innovations in areas such as turbochargers,
unique.
engine downsizing, transmission, electric steering
and hybrid technology we constantly reduced our
emissions on our entire fleet. Consistent with our
In 2020, we achieved a 35% reduction in CO2 emissions
(compared to 2007) for our European fleet through
mission to develop cutting edge sports and GT cars,
improvements in the car’s energy efficiency.
product development efforts continually focus on
186
FERRARI N.V.AR 2021 450
430
410
390
370
350
330
310
290
270
250
AVERAGE SPECIFIC NEDC BASED CO2 EMISSIONS 2007-2020 (FERRARI EU FLEET(32))
435
404
357
-35%
322
321
323
317
316
299
281
283
281
280
281
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020E
Registration Year
)
m
k
/
g
i
(
s
n
o
s
s
m
E
2
i
0
C
In 2021 we saw an important decrease of 9% versus prior year in our EU fleet average CO2 emissions also thanks to
the SF90 family. For the purpose of the graph below, 100% of the Ferrari fleet in EU has been taken into account to
determine the average specific WLTP based emissions of CO2, despite the phase-in criteria granted in 2020, while
the previous graph considered average specific NEDC based emissions of CO2. As part of the implementation of
Regulation (EC) No. 715/2007 of the European Parliament and of the Council, a new test procedure for measuring
CO2 emissions from, and fuel consumption of, passenger cars and light commercial vehicles, the Worldwide
Harmonised Light Vehicles Test procedure (‘WLTP’), set out in Commission Regulation (EU) 2017/1151, started to
apply in 2017. However, as defined by Regulation (EU) 2019/631, WLTP based CO2 emissions are considered for CO2
target compliance purposes from 2021.
AVERAGE SPECIFIC WLTP BASED CO2 EMISSIONS 2020-2021 (FERRARI EU FLEET(33))
)
m
k
/
g
i
(
s
n
o
s
s
m
E
2
i
0
C
310
300
290
280
270
260
250
303
-9%
277
Registration Year
2020E
2021E
(32) For the purpose of this graph, 100% of the Ferrari fleet in EU has been taken into account to determine the average specific NEDC based emissions
of CO2, despite the phase-in criteria granted in the years 2010-2014 and 2020. 2020: provisional fleet average emissions of CO2.
(33) 2020: provisional fleet average emissions of CO2, 2021: provisional fleet average emissions of CO2.
187
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RAW MATERIALS
GOVERNANCE:
Car makers consume large amounts of raw
for the overall strategy of the Company, including in
materials and a conscientious planning of
relation to sustainability and climate change topics.
The Board of Directors as a whole is responsible
the manufacturing process is essential to the
management of scarce resources.
On these matters, within the Board of Directors, the
ESG Committee, is responsible for, among other
Among the most used materials in our cars are light
things, assisting and advising the Board of Directors,
alloys, such as aluminum: to reduce the sourcing
and acting under authority delegated by the Board
of aluminum specific initiatives to reuse scraps
of Directors, with respect to: monitoring, evaluation
have been developed (see “Our Environmental
and reporting on the strategy, targets, achievements,
Responsibility - Waste management”).
disclosures and reports relating to ESG matters
globally of the Company and its subsidiaries. The FLT is
We measure and monitor the presence of hazardous
responsible for reviewing the operating performance
substances in our homologated vehicles, as required
of the businesses, collaborating on certain operational
by local regulations. Every Ferrari homologated vehicle,
matters, supporting the Chief Executive Officer with
therefore, every component installed, follows the
his tasks and executing the decisions of the Board
REACH prescriptions. Every Ferrari vehicle is compliant
of Directors and the day-to-day management of
to 2000/53/EC (End-of-life Directive), as applicable.
the Company, primarily as it relates to operational
management. The FLT is led by the Chief Executive
Our suppliers are requested to comply with 2011/65/
Officer and composed of the heads of the operating
UE (RoHS Directive) and 2000/53/EC (End-of-life
segments and certain central functions. Starting
Directive), and to provide, through the International
from 2022, at management level we have defined
Material Data System, all the information related
new cross- functional committees, among which
to the composition of substances used in the
one is responsible for the strategic positioning of the
manufacturing process. Our internal systems
Ferrari Brand and cross-functional projects to sustain
automatically reject non-compliant components.
excellence in every area, starting from our priority
VEHICLE’S END OF LIFE
to reach sustainability journey towards carbon
neutrality by 2030, addressing direct and indirect
GHG emissions, focusing on energy and materials, in
We are not directly involved in product take back
addition to our electrification journey.
programs due to the nature of our business: the
number of Ferrari cars demolished each year is very
Our Chief Financial Officer, a member of the FLT,
scarce as Ferrari cars are perceived as collectibles,
is responsible for the Sustainability function that is
which the Group also supports through its “Ferrari
involved in coordinating the activities within the Group
Classiche” services and the active preowned market.
with regard to sustainability, promoting the discussion
FURTHER CLIMATE-RELATED
DISCLOSURES (TCFD)
between different teams and functions, and aiming
at identifying risks and opportunities regarding
sustainability and climate change. The monitoring
and management of the environmental performance
Ferrari is conscious of the risks and opportunities
of our productive plants is assigned to a team that
related to climate change, as one of the more relevant
reports to our Chief Technologies & Infrastructures
defining factors for long-term value creation. The
Officer. Their effort is aimed at minimizing the impact
following section aims at providing a transparent
of our activities on the environment, particularly in
disclosure on climate change-related matters, in
relation to the energy consumption of the production
accordance with the recommendations of the Task
facilities. A different team is in charge of overseeing
Force on Climate-related Financial Disclosures (“TCFD”).
regulatory developments while monitoring the
The following paragraphs summarize how Ferrari is
emissions of Ferrari cars reporting to our Chief
tackling climate-change risks and opportunities in the
Research & Development Officer.
areas of Governance, Strategy, Risk, Management as
well as Metrics and Targets. For further details, please
STRATEGY:
see the TCFD correspondence table at the end of this
Ferrari is aware of the challenges and opportunities
section. We are committed to progressively develop our
posed by climate change for sustainable business
environmental governance, strategy, metrics and goals,
development. Recently, Ferrari made significant and
in line with best practices and TCFD guidelines.
substantial strides on its journey to sustainability.
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FERRARI N.V.AR 2021 This progress was driven by a sustainability strategy
Our CFO, who directly reports to the CEO, is
designed around five pillars. One of the pillars of our
responsible for the risk management function that is
sustainability strategy is “Reducing environmental
involved, among the other risks, in the assessment,
footprint: increase our environmental awareness to
monitoring and management of climate related risks.
continuously set and implement related programs and
Operating areas represent the first line of defense,
actions”. In particular, we are committing to achieve
they identify and assess climate-related risks and
carbon neutrality by 2030 on our entire value chain.
in collaboration with the central function of risk
Our business strategy is also influenced by climate
management those risks are assessed, monitored
change-related commitments and developments at
and managed at corporate level. In particular, this year
the international, regional and national level, such as
we have further implemented the reporting of our
the Paris Agreement and Sustainable Development
climate-related risk & opportunities, included in the
Goals (SDGs). In particular, we take into consideration
paragraph “Sustainability Risks” of this document.
GHG-related normative requirements, as in many
parts of the world, significant governmental regulation
As relevant factors for long-term value creation,
is driven by environmental, fuel economy and GHG
Ferrari considers pivotal to manage risks related to
emissions concerns. In this context, our most significant
climate change. The fight against climate change and
environmental efforts are deployed through a program
the preservation of the environment are becoming
for the reduction of polluting and GHG emissions,
crucial around the world and these concerns have
both direct and indirect. In particular, we are currently
resulted in rapidly evolving climate and environmental
working on developing hybrid powertrains and
regulations emitted across international markets.
other innovations also to meet specific regulatory
requirements and preparing for a low-emission future,
METRICS AND TARGETS:
thanks to our DNA based on innovation. Climate change
We are committing to achieve carbon neutrality by
is a key megatrend for Ferrari. In the coming years, we
2030 on our entire value chain looking at both direct
are planning to carry out the scenario analysis as well
and indirect GHG emissions. All our functions are
as setting targets accordingly.
involved in reaching this strategic objective and we
RISK MANAGEMENT:
have started identifying actions to reduce our carbon
footprint, with a focus on energy consumption and
Our risk management approach is an important
materials, in addition to our electrification journey.
business driver and it is integral to the achievement
of the Group’s long-term business plan. We take an
In 2021, we calculated our carbon footprint
integrated approach to risk management, where risk
considering the GHG emissions related to all the
and opportunity assessment are at the core of the
Group activities over our entire value chain, including
leadership team agenda. Ferrari has adopted the last
both direct and indirect GHG emissions. Our carbon
publication of the COSO Framework as the foundation
footprint calculation, based on GHG protocol
of its enterprise risk management (ERM) which also
methodology, has been certified according ISO
integrates the analysis and assessment of socio-
14064-1:2018 requirements. This analysis enhanced
environmental risks, including climate related risks, in
our awareness on our overall environmental impact,
our risk management framework.
allowing us to determine priority areas for action.
In order to ensure the adequateness of its internal
risk management and control systems, Ferrari has
Our base year carbon footprint is approximately
600 ktons CO2eq. Direct GHG emissions account
for 14% of the total, while indirect upstream GHG
structured its risk management process and internal
emissions accounts for 54%, the majority referring
control systems based on the “Three Level of Controls
to “Purchased goods and services” category and
Model”. The Board of Directors is responsible for
indirect downstream for 32% of the total, mainly due
considering the ability to control and manage risks
to “Use of sold products” category.
crucial to achieving its identified business targets, and
for the continuity of the Group.
In this Statement we disclose our impacts and
performance according to the requirements of the
The FLT is responsible for identifying, prioritizing
GRI Standards, GHG protocol and SASB. Moreover,
and mitigating risks and for the establishment and
we report two indicators to monitor our economic
maintenance of a risk management system across
growth and its climate impact: the Carbon on net
our business functions. Our risk management
revenues ratio and the Carbon on Adj. EBITDA ratio.
framework is discussed with the Group’s Audit
These two indicators show that Ferrari managed to
Committee at least on an annual basis.
decouple its economic growth from its environmental
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impact. In other words, we keep on growing our business activities while at the same time maintaining almost
stable our CO2 emissions.
TCFD REFERENCE TABLE
For further details, please refer to the documents mentioned in the table below.
TCFD AREA
RECOMMENDED TCFD DISCLOSURE
FURTHER REFERENCES
Governance:
Disclose the organization’s governance
around climate-related risks and
opportunities.
a) Describe the board’s oversight
of climate-related risks and
opportunities.
b) Describe management’s role in
assessing and managing climate-
related risks and opportunities.
• Annual Report: Board Report/ Corporate
Governance.
• Annual Report_Board Report_Non Financial
Statement: Proactively fostering best practice
governance/ Our ESG Committee – Our
Decision making process.
• CDP Climate Change Questionnaire: C1 –
Governance.
• Annual Report: Board Report/ Corporate
Governance.
• Annual Report_Board Report_Non Financial
Statement: Proactively fostering best practice
governance/ Our ESG Committee – Our
Decision making process.
• CDP Climate Change Questionnaire: C1 –
Governance.
• Annual Report: Board Report/Risk Factors;
Risk Management Process and Internal Control
Systems.
a) Describe the climate-related risks and
• Annual Report_Board Report_Non Financial
opportunities the organization has
Statement: Materiality matrix and stakeholder
identified over the short, medium, and
engagement/ Materiality matrix of Ferrari
long-term.
Strategy:
Disclose the actual and potential
impacts of climate related risks and
opportunities on the organization’s
businesses, strategy, and financial
planning where such information is
material.
b) Describe the impact of climate-
related risks and opportunities on the
organization’s businesses, strategy,
and financial planning.
Group; Proactively fostering best practice
governance/ Our Governance.
• CDP Climate Change Questionnaire: C2 - Risks
and Opportunities; C3 -Business strategy.
• Annual Report: Board Report/Risk Factors;
Risk Management Process and Internal Control
Systems.
• Annual Report_ Board Report _Non
Financial Statement: Materiality matrix and
stakeholder engagement/ Materiality matrix
of Ferrari Group; Proactively fostering best
practice governance/ Our ESG Committee
– Our Decision making process; Reducing
environmental footprint/ Vehicle environmental
impact.
• CDP Climate Change Questionnaire: C2 - Risks
and Opportunities; C3 -Business strategy.
c) Describe the resilience of the
organization’s strategy, taking into
• CDP Climate Change Questionnaire: C3
consideration different climate-
-Business strategy.
related scenarios, including a 2°C or
lower scenario.
190
FERRARI N.V.AR 2021 TCFD AREA
RECOMMENDED TCFD DISCLOSURE
FURTHER REFERENCES
Risk Management:
Disclose how the organization identifies,
assesses, and manages climate-related
risks.
Metrics & Targets:
Disclose the metrics and targets used
to assess and manage relevant climate
related risks and opportunities where
such information is material.
a) Describe the organization’s processes
for identifying and assessing climate-
related risks.
• Annual Report: Board Report/ Risk
Management Process and Internal Control
Systems.
• Annual Report_Board Report_Non Financial
Statement: Proactively fostering best practice
governance.
• CDP Climate Change Questionnaire: C2 - Risks
and Opportunities.
• Annual Report: Board Report/Risk Factors;
Risk Management Process and Internal Control
Systems.
• Annual Report_ Board Report _Non Financial
Statement: Proactively fostering best practice
b) Describe the organization’s processes
governance/ Our ESG Committee – Our
for managing climate-related risks.
Decision making process/ Sustainability
Risks; Reducing environmental footprint/
Our environmental responsibility, Plants and
circuits, Vehicle environmental impact.
• CDP Climate Change Questionnaire: C2 - Risks
and Opportunities.
• Annual Report: Board Report/ Risk
Management Process and Internal Control
c) Describe how processes for
Systems.
identifying, assessing, and managing
• Annual Report_ Board Report _Non Financial
climate-related risks are integrated
Statement: Proactively fostering best practice
into the organization’s overall risk
governance/ Our ESG Committee – Our
management.
Decision making process.
• CDP Climate Change Questionnaire: C2 - Risks
and Opportunities.
• Annual Report: Board Report/ Non financial
statement.
a) Disclose the metrics used by the
• Annual Report_ Board Report _Non Financial
organization to assess climate-related
Statement: Reducing environmental footprint/
risks and opportunities in line with
Plants and circuits, Vehicle environmental
its strategy and risk management
impact.
process.
• CDP Climate Change Questionnaire: C4 -
Targets and performance; C6 -Emissions data;
C7 – Emissions breakdowns; C8 – Energy.
• Annual Report: Board Report/ Non financial
statement.
b) Disclose Scope 1, Scope 2, and, if
• Annual Report_Board Report_Non Financial
appropriate, Scope 3 greenhouse gas
Statement: Reducing environmental footprint/
(GHG) emissions, and the related risks.
Plants and circuits.
• CDP Climate Change Questionnaire: C6
-Emissions data; C7 – Emissions breakdowns.
• Annual Report: Board Report/ Non financial
statement.
c) Describe the targets used by the
• Annual Report_Board Report_Non Financial
organization to manage climate-
Statement: Reducing environmental footprint/
related risks and opportunities and
Plants and circuits, Vehicle environmental
performance against targets.
impact.
• CDP Climate Change Questionnaire: C4 -
Targets and performance.
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The Regulation (EU) 2020/852 (hereinafter the “Regulation”) introduced the EU Taxonomy, a classification system
that translates the EU’s climate and environmental objectives into criteria related to specific economic activities
for investment purposes. Starting from the 2021 financial year, we disclose to what extent our activities and
operations are considered in line with the criteria defined by the Regulation and related documentation, with
particular reference to the available technical annexes regarding two out of six environmental objectives
(Climate Change Mitigation and Adaptation) set out in article 9 of the same Regulation. Accordingly, Ferrari has
been developing specific analysis to respond to such new disclosure requirements. A study was performed in
accordance with the following methodological steps, briefly described below:
1) General understanding of the requirements established by the Regulation and analysis of the list of
economic activities of Ferrari eligible(34) for the EU Taxonomy.
• We thoroughly analyzed the requirements established by the Regulation and related documentation.
• We identified the economic activity 3.3 “Manufacture of low carbon technologies for transport” as the one
that correlates the most with Ferrari’s core activities and operations. Further linkages can be found with
the economic activity 6.5 “Transport by motorbikes, passenger cars and light commercial vehicles”, with
particular reference to our financial services activities. Such a process was conducted by analyzing both
formal Ferrari-related NACE codes as well as its substantial business activities and operations in comparison
to the list provided by the EU Taxonomy. Further residual Ferrari activities and operations are currently
considered not pertinent to other Taxonomy-related economic activities and/or not significant for the
purpose of this disclosure.
2) Analysis of 2021 Ferrari Turnover, CapEx and OpEx, in line with the previously mentioned points and
calculation of EU Taxonomy-related KPIs.
• We analyzed our turnover, capital and operating expenditure for the calculation of the KPIs requested
pursuant to the Regulation and related documentation, according to our current interpretation of the
applicable requirements(35):
Turnover(36) KPI:
a) Regarding the denominator, we based it on our consolidated net turnover in accordance with IAS 1.82(a).
For further details on our accounting policies regarding our consolidated net turnover please refer to the
Consolidated Financial Statements of our Annual Report.
b) Regarding the numerator, we analyzed our potential turnover derived from products or services in line
with the previous mentioned assumptions:
› we considered as “eligible”: the revenues related to the shipments of our cars and to financial services
activities;
› we considered as “not eligible”: the revenues generated from the sales of spare parts as well as of engines
to Maserati for the use in their cars and from the rental of engines to other Formula 1 racing teams; the
revenues earned by our Formula 1 racing team through sponsorship agreements and our share of the
Formula 1 World Championship commercial revenues; the net revenues generated through the Ferrari
(34) Taxonomy-eligible economic activity means an economic activity that is described in the delegated acts supplementing the Taxonomy Regulation
irrespective of whether that economic activity meets any or all of the technical screening criteria laid down in those delegated acts.
(35) The analysis was made also taking into consideration the “Draft Commission notice on the interpretation of certain legal provisions of the
Disclosures Delegated Act under Article 8 of the EU Taxonomy Regulation on the reporting of eligible economic activities and assets” published on
February 2, 2022.
(36) The financial data included in these KPIs are a portion of group net revenues included in our 2021 Annual Report: Consolidated Financial Statements,
note 4 and Financial Overview _Results of Operations.
192
FERRARI N.V.AR 2021 brand, including merchandising, licensing and royalty income; any other revenue, primarily related to the
management of the Mugello racetrack and other sports-related activities.
CapEx(37) KPI:
c) Regarding the denominator, it consists of additions to tangible and intangible fixed assets during the
financial year, before depreciation, amortization and any re-measurements, including those resulting
from revaluations and impairments, as well as excluding changes in fair value. It includes acquisitions of
tangible fixed assets (IAS 16), intangible fixed assets (IAS 38) and right-of-use assets (IFRS 16). Additions
resulting from business combinations are also included. Goodwill and Borrowing costs are not included in
denominator, as it is not defined as a tangible or intangible asset in accordance with IAS 16 and IAS 38 . For
further details on our accounting policies regarding our Capex, please refer to the Consolidated Financial
Statements of our Annual Report.
d) Regarding the numerator, we analyzed our capital expenditures in line with the previous mentioned
assumptions:
› we considered as “eligible”:
– the additions of tangible assets related to our production facilities in Maranello and Modena, plus
our subsidiaries (excluding racetrack management and retail business) as well as financial services
activities;
– the additions of intangible assets related to externally acquired and internally generated development
costs for our cars as well as patents, concessions and licenses and other intangible assets mainly
related to the registration of trademarks.
› we considered as “not eligible”: the remaining additions of tangible and intangible assets.
OpEx(38) KPI:
e) Regarding the denominator, it consists of direct non-capitalized costs that relate to research and
development, building renovation measures, short-term lease, maintenance and repair, and any other direct
expenditures relating to the day-to-day servicing of assets of property, plant and equipment.
f) Regarding the numerator, we analyzed our direct non-capitalized costs in line with the previous mentioned
assumptions:
› we considered as “eligible”:
– the direct non-capitalized costs that relate to research and development, mainly including Formula 1
activities and research and development activities to support the innovation of our product range and
components, in particular, in relation to hybrid and electric technology;
– the maintenance expenditures related to the manufacturing of our vehicles, and our subsidiaries
(excluding racetrack management and retail business) as well as those related to financial services
activities;
› we considered as “not eligible”: the remaining direct non-capitalized costs.
(37) The financial data included in these KPIs are a portion of group Capital Expenditures included in our 2021 Annual Report, Consolidated Financial
Statements, notes 14 and 15.
(38) The financial data included in these KPIs are a portion of group Operating Expenditures included in our 2021 Annual Report, Consolidated Financial
Statements.
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• According to the analysis performed, we calculated the share of Ferrari turnover, capital expenditures and
operating expenditures that we currently consider to be taxonomy “eligible” and “not eligible”.
Turnover
Capital expenditures
Operating expenditures
2021
EU Taxonomy - Eligible
EU Taxonomy – Not Eligible
81%
98%
100%
19%
2%
-%
• Potential double counting in the allocation in the numerator of Turnover, CapEx and OpEx has been avoided
through the use of the financial information which are at the base of the Consolidated Financial Statements as of
31 December 2021.
Further analysis will be made over time according to the progressive evolution of the Regulation (EU)
2020/852, with particular reference to the second delegated act for the remaining objectives, and its concrete
interpretation/application for reporting purposes in accordance with Ferrari’s strategic approach.
In order to truly understand the importance and actions that Ferrari is putting in place to achieve the climate
mitigation objective, it should be noted our unwavering pursuit of reaching carbon neutrality by 2030, addressing
both direct and indirect emissions with a focus on energy and materials. As a further step forward in this process,
in 2021 we calculated our carbon footprint considering the emissions related to all the Group activities over our
entire value chain. Our calculation, based on GHG protocol methodology, has been certified according ISO 14064-
1:2018 requirements by a third-party player and allowed us to determine priority areas for action.
CREATING AND SHARING VALUE WITH
THE COMMUNITY
technologies within the automotive industry, and in
particular innovative solutions for state-of-the-art
performance in luxury cars, is also a prerequisite for
Our goal is to create and share long-term value with
the Group to seize future opportunities.
our stakeholders. On the one side, the economic value
generated and distributed provides an indication
Ferrari aims to promote education in the local
on how we created wealth, on the other, there are
community at high school level by establishing long-
plenty of intangible resources and initiatives that
term relationships with technical schools in Maranello,
contribute to the value creation processes. In this
such as the istituti tecnici superiori, and other
context, community engagement and involvement
towns nearby. In 2021, Ferrari promoted orientation
with the local territory are of fundamental importance
activities towards STEM disciplines for students in a
to us, with particular reference to Maranello and
secondary school, by setting up a technological lab.
Modena, where all our cars are manufactured. To
maintain alive the spirit of Ferrari and the story of its
Ferrari is partner of the Motorvehicle University
founder Enzo Ferrari, two different museums have
of Emilia-Romagna (MUNER), an association which
been established, attracting every year thousands
was strongly advocated by the Emilia-Romagna
of visitors from all over the world to the heart of the
region. It was created thanks to a synergistic
Italian “Motor Valley”.
FERRARI & EDUCATION
connection between the universities of Modena and
Reggio Emilia, Bologna, Ferrara and Parma along
with car companies (Lamborghini, Dallara, Ducati,
We are aware of our responsibility towards the
HaasF1Team, HPE COXA, Marelli, Maserati, Pagani,
community and our efforts are directed to support
Scuderia AlphaTauri) in the region that represent the
its development, mainly through collaborations with
excellence of Italian brands, which of course
local universities and schools and thanks to the
includes Ferrari.
industry network in the Emilia-Romagna region. We
believe that promoting the education of young talents
Furthermore, in 2021, Ferrari Group around the
is an essential step to reinforce the connection with
world promoted educational and charity activities
local communities. Shaping brilliant engineers with a
for their local communities, in collaboration with
specific academic background that focuses on new
different partners.
194
FERRARI N.V.AR 2021 FERRARI MUSEUM MARANELLO & MUSEO
ENZO FERRARI (MEF)
our rigorous production and distribution model,
promoting hard-to-satisfy demand and scarcity
The Ferrari Museum Maranello invites visitors to
value in our cars. We also support our brand value by
experience the Prancing Horse dream first-hand,
enabling a strong connection between Ferrari and
offering them a journey through the Group’s history,
our community of enthusiasts.
values and automotive world.
Scuderia Ferrari Club is a non-profit consortium
The Museo Enzo Ferrari is built around the house in
company founded in 2006 by Ferrari S.p.A. to
which Enzo Ferrari was born in 1898. The MEF tells
coordinate the activities of the Scuderia’s many fans
the story of Enzo Ferrari as a young boy discovering
who have founded clubs around the world. Today
the irresistible allure of the world of motor racing,
the Company has nearly 200 officially-recognised
his career as a driver in 1920s, as the driving force
Clubs in over 20 countries. An incredible mix of
behind the Scuderia Ferrari in the 1930s, and then as
different nationalities, cultures and lifestyles is
Ferrari, the Constructor, from 1947 onwards.
united by one enduring passion for Ferrari. Scuderia
SCUDERIA FERRARI CLUB
Ferrari Club also works with the Clubs to support the
organization of their events. Before joining Scuderia
We strive to maintain and enhance the power and
Ferrari Club, an organisation must demonstrate a
passion we inspire in customers and the broader
significant track record and engage in a conduct in
community of automotive enthusiasts by continuing
line with Ferrari’s values.
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Through this Non-Financial Statement, we aim to provide our stakeholders with non-financial information, illustrate
our sustainability strategy and our corporate social responsibility initiatives in 2021 (from January 1st, 2021 to
December 31st, 2021) to ensure transparent and structured communication with our stakeholders.
This Statement was prepared in accordance with the Dutch Civil Code, and with the Dutch Decree on Non-
Financial Information (Besluit bekendmaking niet-financiële informatie), which is a transposition of Directive
2014/95/EU ‘Disclosure of non-financial and diversity information’ into Dutch law. The table below shows the
internal references to the chapter(s) or paragraph(s) of this Annual Report where the relevant aspects of the
Dutch Decree are discussed in particular.
DUTCH DECREE ASPECTS
INTERNAL REFERENCE – CHAPTER / PARAGRAPH
Business model
• Our Business
Policies and due diligence
• Corporate Governance
• Proactively fostering best practice governance / Integrity of Business Conduct
• Being the employer of choice / Working environment
• Being the employer of choice / Training and talent development
• Being the employer of choice / Occupational health and safety
• Reducing environmental footprint / Environmental management systems
• Risk Factors
Principal risks and their management
• Proactively fostering best practice governance / Sustainability Risks
• Risk, Risk Management and Control Systems
Thematic aspects
Environmental matters
• Reducing environmental footprint / Vehicles environmental impact
• Reducing environmental footprint / Plants and circuits;
• Reducing environmental footprint /Further Climate-related Disclosures (TCFD)
• Our Business
• Proactively fostering best practice governance / Integrity of Business Conduct
• Proactively fostering best practice governance / Responsible supply chain
Social matters
• Exceeding expectations / Research innovation technology
• Exceeding expectations / Customer Satisfaction
• Exceeding expectations / Vehicle safety
• Creating and sharing value with the community / Ferrari & education
• Being the employer of choice / Working environment
• Being the employer of choice / Training and talent development
Employee matters
• Being the employer of choice / Talent recruitment and Employee Retention
• Being the employer of choice / Occupational Health and Safety
• Being the employer of choice / Our employees in numbers
• Proactively fostering best practice governance / Integrity of Business Conduct
• Proactively fostering best practice governance / Responsible supply chain
Respect for human rights
• Being the employer of choice / Talent recruitment and Employee Retention
• Being the employer of choice / Occupational Health and Safety
• Being the employer of choice / Our employees in numbers
Fight against corruption and bribery
• Proactively fostering best practice governance / Integrity of Business Conduct
Supply Chain
Conflict minerals
• Proactively fostering best practice governance / Integrity of Business Conduct
• Proactively fostering best practice governance /Responsible Supply Chain
• Proactively fostering best practice governance / Integrity of Business Conduct
• Proactively fostering best practice governance / Responsible Supply Chain
This Statement is an extract of our Sustainability Report, that is prepared in accordance with the GRI Standards:
Core option. This Statement also includes further disclosures in line with the recommendations of the Task Force
on Climate-related Financial Disclosures (TCFD), the Automobiles Sustainability Accounting Standards, prepared by
the Sustainability Accounting Standards Board (SASB), and the EU Taxonomy Regulation 2020/852. This has been
shared with the Executive Officers of the Group and with the ESG Committee of the Board of Directors.
196
FERRARI N.V.AR 2021 With regard to the financial data, the scope of reporting corresponds to that of Ferrari N.V.’s Consolidated
Financial Statements.
Regarding the qualitative and quantitative data on social and environmental aspects, the scope of reporting
corresponds to Ferrari N.V. and our subsidiaries consolidated on a line-by-line basis (as indicated in the note 3
“Scope of consolidation”). Environmental data and information is reported for our principal manufacturing facility
in Maranello, for our second plant in Modena and for our Mugello racing circuit. Any exceptions, with regard to the
scope of this data, are clearly indicated throughout this Statement.
Directly measurable quantities have been included, while limiting, as far as possible, the use of estimates. Any
estimated data is indicated accordingly, additionally certain totals in the tables included in this document may not
add due to rounding.
During the reporting period, we did not face any significant change concerning the organization’s size, structure,
ownership or supply chain.
SASB INDEX
FERRARI – AUTOMOBILES ACCOUNTING STANDARD
SUSTAINABILITY ACCOUNTING STANDARDS BOARD RESPONSE (SASB) INDEX 2021
TOPIC
METRIC
CODE
UNIT OF M. Response/Comment
Activity Metrics
Number of vehicles manufactured
TR-AU-000.A
Number of vehicles sold
TR-AU-000.B
Percentage of vehicle models rated
by NCAP programs with an overall
TR-AU-250a.1.
5-star safety rating, by region
Product Safety
Number of safety-related defect
complaints, percentage investigated
TR-AU-250a.2.
Number of vehicles recalled
TR-AU-250a.3.
N°
N°
%
N°
N°
11,831
11,155
N/A(39)
1
100%
Mandatory recalls: 37,962
Voluntary recalls: 6,207
Labor Practices
agreements
Percentage of active workforce
covered under collective bargaining
TR-AU-310a.1
%
94.1%
(1) Number of work stoppages and
(2) total days idle
TR-AU-310a.2.
N°
0
Sales-weighted average passenger
fleet fuel economy, by region
TR-AU-410a.1.
Avg
EU: 277 gCO2/km (provisional data)
USA: 416 g/mi (GHG emissions)
China: 10.91 l/100 km
Number of (1) zero emission
vehicles (ZEV), (2) hybrid vehicles,
TR-AU-410a.2.
N°
1,722 (plug-in hybrid)
and (3) plug-in hybrid vehicles sold
Fuel Economy and
Use-phase Emissions
Discussion of strategy for managing
fleet fuel economy and emissions
TR-AU-410a.3
risks and opportunities
• Annual Report: Board Report/
Overview of Our Business/
Regulatory Matters;
• Annual Report: Board Report/Non
Financial Statement/ Reducing
environmental footprint/ Vehicle
environmental impact;
• Annual : Board Report/Non
Financial Statement/ Reducing
environmental footprint/Further
Climate-related Disclosures
(“TCFD”);
(39) N/A non applicable. We do not take part to NCAP (New Car Assessment Program) programs.
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TOPIC
METRIC
CODE
UNIT OF M. Response/Comment
Materials Sourcing
of risks associated with the use of
TR-AU-440a.1
Description of the management
critical materials
• Annual:Board Report/Non
Financial Statement/ Reducing
environmental footprint/Vehicle
environmental impact/ Raw
materials;
• Annual Report: Board Report/
Non Financial Statement/
Proactively fostering best practice
governance/Responsible Supply
Chain;
• Annual Report:Board Report/
Non Financial Statement/
Proactively fostering best practice
governance/Responsible Supply
Chain/ Conflict minerals;
• Annual Report: Board Report/Risk
Management Process and Internal
Control System
9,992.0 tons
48% recycled
Total amount of waste from
manufacturing, percentage
recycled
TR-AU-440b.1
Tons
• Annual Report: Board Report/Non
Financial Statement/Reducing
environmental footprint/ Plants and
circuits/Waste management;
• Annual Report: Board Report/Non
Financial Statement/Reducing
environmental footprint/Vehicle
environmental impact/ Vehicle’s
end of life;
85% (recycled) - 95% (recovered)_
These values refer to the minimum
percentage by mass guaranteed on
our European fleet and determined
in accordance with EU Directive
2005/64/EC
85%
This value refers to the minimum
percentage by mass guaranteed on
our European fleet and determined
in accordance with EU Directive
2005/64/EC
Materials Efficiency
& Recycling
Weight of end-of-life material
recovered, percentage recycled
TR-AU-440b.2
Tons; %
Average recyclability of vehicles
sold
TR-AU-440b.3
%
198
FERRARI N.V.AR 2021 RISK MANAGEMENT
PROCESS AND INTERNAL
CONTROL SYSTEMS
Our risk management approach is an important
Management, Quality, Financial Risk Management,
business driver and it is integral to the achievement
Group Financial Control and IT Security.
of the Group’s long-term business plan. We take an
• The third level of control is composed of Internal
integrated approach to risk management, where
Audit that provides independent assurance on
risk and opportunity assessment are at the core of
efficiency and effectiveness of Ferrari’s risk
the leadership team agenda. The Board of Directors
management, governance and internal control
is responsible for considering the ability to control
processes.
and manage risks crucial to achieving its identified
business targets, and for the continuity of the Group.
The FLT is responsible for identifying, prioritizing
For this reason, Ferrari has developed varying
and mitigating risks and for the establishment and
appetites to achieve different strategic objectives,
maintenance of a risk management system across
focusing attention at all relevant risk levels, from risk
our business functions. As the decision making body
management to internal control.
led by the CEO and composed of the heads of the
operating segments and certain central functions,
Ferrari has adopted the last publication (“Enterprise
the FLT reviews the risk management framework and
Risk Management - Integrating Strategy and
the Company’s key global risks on a regular basis. For
Performance”) of the COSO Framework (Committee
those risks deemed to be significant, comprehensive
of Sponsoring Organizations of the Treadway
risk response plans are developed and reviewed on
Commission) as the foundation of its enterprise risk
a regular basis to ensure the actions are relevant
management (ERM).
and sufficient. Our risk management framework is
discussed with the Group’s Audit Committee at least on
In order to ensure the adequateness of its internal
an annual basis.
risk management and control systems, Ferrari has
structured its risk management process and internal
control systems based on the “Three Level of Controls
FERRARI’S ENTERPRISE RISK
MANAGEMENT PROCESS
Model”. Each level of controls has different roles and
responsibilities with clearly defined boundaries:
The Ferrari Enterprise Risk Management system is
• The first level of control is composed of the
oriented by and structured in six different components:
functional management who is responsible for
1. Risk Governance: A structure through which our
embedding risk management and internal control
organization directs, manages and reports its
systems into each business process. First line
risk management activities. The Risk Governance
of control has the ownership, responsibility and
structure encompasses clearly defined roles and
accountability for assessing and mitigating risks. It
responsibilities, decision-making powers, a risk
is constituted by core business Risk Owners, staff
operating model and reporting lines.
functions Risk Owners and by the FLT.
2. Risk Culture: The values and the attitude
• The second level of control is composed of the
consistent with our risk management culture are
functions that oversee risk management across
communicated to and understood at all levels of the
the Company processes, monitoring and facilitating
organization.
the implementation of effective risk management
3. Risk Strategy & Appetite: Our risk management
and control activities by the first line of control. It is
principles are intended to enable the achievement
constituted by Compliance, Strategic, Operational
of our business plan, goals and strategic objectives.
and Reporting functions such as Enterprise Risk
Our risk appetite is balanced by risk tolerance, limits
Management, Group Compliance, Sustainability,
and associated protocols in case of a breach to
SOX, Health & Safety, Ecology & Energy, Supplier Risk
control risk levels within our organization.
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4. Risk Assessment & Measurement: Established
monitoring the identified risks and management
activities that allow Ferrari to identify, assess
activities against established metrics permits
and quantify potential risks on regular basis. This
timely proactive response where warranted.
activity allows Ferrari to consider the potential
6. Risk Reporting: Reporting of risk and related
impact that events may have on the achievement of
information (e.g. mitigation activities) provide
the Company’s objectives.
genuine insight into the strengths and weaknesses
5. Risk Management & Monitoring: Management’s
of the risk management activity. Disclosure of
response to manage, mitigate or accept risk. Risk
risk management information to key internal
management efforts create value through the use
and external stakeholders, also supporting the
of information on risks and controls, in order to
decision-making processes.
improve business performance. Systematically
RISK APPETITE
The risk appetite of Ferrari, (i.e. the level of risk that Ferrari is willing to accept to achieve its objectives), has been
defined based on the parameters identified below and will be applied to our strategy, Code of Conduct, Company
values and policies. Ferrari does not rank by importance the individual types of risk reported in this section
because it believes such ranking would be an arbitrary exercise as all risks mentioned have relevance for the
Group and the business. The types of risk identified are as follows:
Risk category
Risk description
Risk appetite statement
Strategic risks (S)
Risks which affect or
are created by Ferrari’s
business strategy and
could affect Ferrari’s
long-term positioning and
performance.
Operational risks (O)
Risks impacting the internal
processes, people, systems
and/or external resources of
the organization and affect
Ferrari’s ability to execute its
business plan.
Moderate
Ferrari is willing to accept moderate risks in order to achieve
its strategic objectives. Ferrari recognizes the need of
continuing to invest in research and development to design
and build technically innovative, aesthetically iconic and
highly performing cars able to deliver the most “fun to drive”
Moderate
experience and feature design excellence. Strategic risks
are taken in a responsible way considering all stakeholders’
interests in order to preserve its brand exclusivity, an
extraordinary level of demand and the unique customer
experience and the current technological and regulatory
trends.
Ferrari seeks to minimize execution risks on its plans by
implementing a manufacturing system capable of flexibly
meeting expected targets, maintaining a quality of products
and services in line with Ferrari’s customers’ expectations,
developing and retaining talents within the organization,
securing business continuity as well as production line
performances and ensuring the adequacy of our business
partners.
Financial risks (F)
valuation, currency, liquidity,
commodity and impairment
Low
risks. Ferrari continuously seeks to improve and strengthen
its financial position to generate the required cash to finance
Risks including areas such as
Ferrari has a cautious approach with respect to financial
risks.
its operations and reward its stakeholders.
Compliance risks (C)
local standards, code of
Risks of non-compliance
with laws, regulations,
conduct, internal policies and
procedures.
Zero
tolerance
Ferrari does not tolerate infringements and abides to all
applicable laws and regulations through the implementation
of preventive measures, the rigorous enforcement of its
internal Code of Conduct to ensure that ethics and integrity
are respected and the promotion of its values.
Reputational risks (R)
Brand image, credibility and/
Risks which affect Ferrari’s
or integrity
Ferrari strives to protect and enhance its reputation by
Zero
mitigating all the potential threats that could impact the
tolerance
organization's reputation, credibility and the operational
integrity, while constantly increasing its brand awareness.
Health, Safety and
Risks which affect health and
Zero
Environmental risk (H)
safety and the environment
tolerance
Ferrari does not tolerate risks that could have effect on its
employees or clients as well as on the environment of the
surrounding world.
200
FERRARI N.V.AR 2021 RISK TRENDS AND KEY RISKS
Ferrari assesses risks according to their potential impact, likelihood and the entity’s preparedness, which,
properly combined, determine an overall risk exposure to prioritize risks and focus the efforts on the most
important ones. Ferrari expects that the risk responses which have been implemented or that will be deployed
when activated by ad-hoc triggers, will mitigate the risks up to the level defined within the risk appetite.
Below we identify and discuss our key Company-specific risks. The risks listed and the response plans
are not exhaustive and may be adjusted from time to time. The image below shows the listed risks divided
by risk category.
al Risks (R )
n
tio
ta
u
p
e
R
S t r ategic Risks (S)
Unfavorable global
economic conditions
Technological and
regulatory uncertainty
Competition
Climate Change
Delays in brand
diversification
strategy execution
Brand image
E
n
v
i
r
H
o
e
n
a
m
l
t
h
e
,
n
S
t
a
a
l
f
e
R
t
i
s
y
k
a
(
H
n
d
)
Delay in products launch
Dependence on local
manufacturing facilities
Talents’ attraction,
development and
retention
Relationship
with suppliers
Formula 1
Revenues
O
p
e
r
a
t
i
o
Non-compliance
laws, regulations,
local standards
Internal
control over
financial
reporting
n
a
l
R
i
s
k
s
Cybersecurity
including
third parties
vulnerabilities
(
O
)
Financial Risks (F )
Exchange
rate and commodity
prices
o
C
Internal Risks
External Risks
k
s (C)
e Ris
m plianc
201
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BRAND IMAGE (S/R)
as the appeal of our dealerships and stores, the
success of our client activities, and our general profile,
The preservation and enhancement of the value of the
including our brand’s image of exclusivity.
Ferrari brand is crucial in driving revenue and demand
for our cars. The perception and recognition of the
The prestige, identity and appeal of the Ferrari
Ferrari brand are of strategic importance and depend
brand also depend on the continued success of the
on many factors such as the design, technology,
Scuderia Ferrari racing team in the Formula 1 World
performance, quality and image of our cars, as well
Championship.
Key aspects
Response plans:
Selective licensing of the Ferrari brand
Internal function dedicated to monitoring and maximizing residual value of Ferrari cars, monitoring
of pre-owned market and estimating evolution of residual values
Preserving brand value
Selective choice of franchising partners
Success of the Formula 1 team
Dealer score cards
Social Media management
Ferrari Academy (in-house training center for dealers)
Close monitoring of social media and Ferrari perception
Adoption of a Ferrari Social Media Practice
UNFAVORABLE GLOBAL ECONOMIC
CONDITIONS (S)
purchases may decrease and higher taxes may be
more likely to be imposed on certain luxury goods
including our cars.
Deteriorating general economic conditions may
affect disposable income and reduce consumer
In general, although our sales have historically been
wealth, which in turn may impact client demand,
comparatively resilient in periods of economic
particularly for luxury goods, which may negatively
turmoil, sales of luxury goods tend to decline during
impact our profitability and put downward pressure
recessionary periods when the level of disposable
on our prices and volumes. Furthermore, during
income tends to be lower or when consumer
recessionary periods, social acceptability of luxury
confidence is low.
Key aspects
Response plans:
Dependency on mature
economies, particularly in
EMEA and the United States
Expanding in emerging markets, diversifying and monitoring economic trends; developing
growth plans in line with growth in number of High Net Worth Individuals and Ultra High Net Worth
Individuals
Closely monitoring all market developments and continuously reviewing the countries in which we
do business and their geo-political events
Monitoring budget and timing of capital expenditures
Global economic development
Monitoring customers’ orders and waiting lists
Planning car volumes to optimise dealer network stock levels
Incorporation of economic trends in financial forecasts
202
FERRARI N.V.AR 2021 COMPETITION (S)
for quality and the driving experience we offer our
We face competition in all product categories
customers.
and markets in which we operate. We compete
Several global luxury automotive manufacturers
with other international luxury performance car
have increased competitive pressure for luxury
manufacturers which own and operate well-known
cars particularly in EMEA and the United States.
brands of high-quality cars. Some of them are part
Considering that these are mature markets, we
of larger automotive groups and may have greater
anticipate that existing market participants will try
financial resources and bargaining power with
to aggressively protect or increase their market
suppliers than us, particularly in light of our policy
share. Increased competition may result in pricing
to maintain low volumes in order to preserve and
pressure, reduction of marginality and our inability
enhance the exclusivity of our cars. We believe that
to meet our shipment targets, which could have a
we compete primarily thanks to our brand image, the
material adverse effect on our results of operations
performance and design of our cars, our reputation
and financial condition.
Key aspects
Response plans:
Order book and residual
value management
Focus on client relationships, including Maranello Experience, selected participation for new model
launches and Ferrari clubs
Close contact with dealers and client programs
Indirectly support residual values through financial services products for pre-owned cars
Margin pressure
Definition and monitoring of waiting list targets
Shipments
Internal department dedicated to monitor customer base renewal
Customer base renewal
Definition and monitoring of a customer satisfaction index
Personalization services (Atelier and Tailor Made)
Protection of our intellectual property through patents
TECHNOLOGICAL AND REGULATORY
UNCERTAINTY (S)
External factors such as the shortages of raw
materials and components, faster obsolescence
of components and the evolution or introduction
Performance cars are characterized by leading-edge
of new regulations on (for example) safety, noise,
technology that is constantly evolving. In particular,
environmental and sustainability require us to further
advances in racing technology often lead to improved
focus on defining new strategies on products and
technology in road cars. Although we invest heavily
components. A failure in defining and establishing
in research and development, we may be unable to
this strategy could prejudice the preservation of
maintain our leading position in high performance
individual initiatives’ profitability, our capacity to
car technology and, as a result, our competitive
develop new attractive products and to guarantee
position may suffer. As technologies change, we plan
alignment between products’ features and customers’
to upgrade or adapt our cars and introduce new
preferences.
models in order to continue to provide cars with
the latest technology. However, our cars may not
We are gradually but rapidly introducing hybrid
compete effectively with our competitors’ cars if we
and electric-electronic technology in our cars. In
are not able to develop, source and integrate the latest
accordance with our strategy, we believe hybrid and
technology into our cars.
electric technology will be key to providing continuing
performance upgrades to our sports car customers,
Developing and applying new automotive technologies
and will also help us capture the preferences of
is costly, and may become even more costly in
the urban, affluent GT cars purchasers whom we
the future as available technology advances and
are increasingly targeting, while helping us meet
competition in the industry increases. If our research
increasingly stricter emissions requirements.
and development efforts do not lead to improvements
in car performance relative to the competition, or if we
We expect to increase R&D spending in the medium
are required to spend more to achieve comparable
term particularly on hybrid and electric technology-
results, sales of our cars or our profitability may suffer.
related projects. This transformation of our car
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technology creates risks and uncertainties such as the impact on driver experience, and the impact on the cars’
residual value over time, both of which may be met with an unfavorable market reaction. Finally, other luxury
sports cars manufacturers may be more successful in implementing hybrid and electric technology.
Key aspects
Response plans:
Increase of complexity of
products and components
Misalignment between
product features & customer
preferences
Shortening of components'
and technologies life-cycle
New dominant design/
technologies
Increase of complexity in after
sales activity
Close monitoring of luxury car markets, technological evolution, social trends and customer
experiences change
Continuous alignment between R&D department and Product Marketing department
Preparation of product briefs to provide effective guidance to all relevant functions during the new
products development phase
Monitoring of new market entrants and possible new actions adopted by existing competitors
Structured dealership network in order to offer a close after sales services to the clients
Global RRR (Retain-Recruit-Reward) project dedicated to dealerships in order to increase the
efficiency and effectiveness of dealership network
DELAYS IN BRAND DIVERSIFICATION
STRATEGY EXECUTION (S)
Furthermore, our capacity to recruit new business
partners, in the current pandemic and consequent
economic conditions, may be impacted resulting in
The COVID-19 pandemic conditions could influence
a potential delay of our new Brand Diversification
our capacity to correctly and timely execute our
strategy expansion.
Brand Diversification strategy announced in
2019, which is centered on the strengthening the
If we are unable to manage the current conditions,
deployment of our brand in non-car products and
to monitor on a regular basis the achievement of the
experiences.
milestones, to introduce new branded products that
meet customers’ expectation, to monitor the potential
Our Brand Diversification activities across different
misalignment between results and milestones and
jurisdictions have been, and may continue to be,
to put in place promptly the necessary corrective
adversely impacted, due to the temporary closure
actions, this may adversely affect our ability to achieve
of the Ferrari stores, museums and theme parks to
our strategy and prevent our investments from
comply with government orders, with an adverse
generating the volumes and revenues estimated. In
impact on the our revenues originating from such
addition, if our strategy is not successful, our brand
activities.
image may be weakened or tainted.
Key aspects
Response plans:
Close monitoring of business strategy, its results and adoption of timely corrective actions
Definition of product development’s milestones and the related approval flow
Brand diversification strategies
Dedicated resources focused on business development activities and definition of procedures to
Selection of new potential
identify, select and evaluate business partners
business partners
Assessment, qualification and monitoring of business partners
Relationship with business
partners (e.g. licensees,
franchisees, theme parks, etc.)
IT/digital tools and activities to engage customers and potential new partners
Development of sections dedicated to Health & Safety in new contracts and regular collection from
Business Partners of all Health & Safety certifications
Social Audit procedures and supporting tools for conducting risk assessments and social audits to
check compliance to the Minimum Required Ethical Standards
204
FERRARI N.V.AR 2021 DELAY IN PRODUCTS LAUNCH (O)
place significant demands on us by requiring us to
continuously evolve and improve our operational,
Our growth depends on the continued success of
financial and internal controls. Continued expansion
our existing cars, as well as the successful and timely
and continuous increasing of complexity of our car
introduction of new cars. Our ability to create new
models also could increases the challenges involved
cars and to sustain existing car models is affected
in maintaining high levels of quality, management
by whether we can successfully anticipate and
and client satisfaction, recruiting, training and
respond to consumer preferences and car trends.
retaining sufficient skilled management, technical and
The failure to develop successful new cars or delays
marketing personnel, supplying new components
in their launch that could result in others bringing
from our suppliers.
new products and leading-edge technologies to the
market first, could compromise our competitive
If we are unable to manage these risks or meet these
position and hinder the growth of our business.
demands, our growth prospects and our business,
results of operations and financial condition could be
Our growth strategy may expose us to new business
adversely affected. In detail, we may have potential
risks that we may not have the expertise, capability
delay in new products launch resulting in lower
or the systems to manage. This strategy will also
revenues volumes than planned.
Key aspects
Response plans:
Close monitoring of business strategy, its results and adoption of timely corrective actions
Structured internal process with assigned roles and responsibilities and defined activities for every
product development project
Delay in product launch
Project Management team in charge to define timing and monitoring every product development
project
Monitoring of issues on quality and timing both at manufacturing level and at suppliers level to
promptly take corrective actions
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FACILITIES IN MARANELLO AND MODENA
AND PRODUCTION COSTS (O)
Modena are located in the Emilia-Romagna region
of Italy, which has the potential for seismic activity. If
major disasters such as earthquakes, fires, floods,
hurricanes, wars, terrorist attacks, pandemics or
All cars sold and assembled by us and all engines
other events occur, our headquarters, Formula 1
we use for our cars or we sell to Maserati are
activities and production facilities may be seriously
manufactured at our production facility in Maranello,
damaged, or we may have to stop or delay the
Italy, where we also have our corporate headquarters
production and shipment of our cars.
and Formula 1 activities. We manufacture all our car
chassis in a nearby facility in Modena, Italy.
Furthermore, we face risks related to supply chain
disruption and to shortages of raw materials, parts,
In the event that we are unable to continue production
components and systems used in our cars. Our ability
at either of these two facilities, we would need to
to manage costs related to production activities
seek alternative manufacturing arrangements which
could be impacted by general market conditions
would take time and reduce our ability to produce
and by the fluctuation of prices for raw materials,
sufficient cars to meet demand.
parts and components. If we are unable to manage
Our Maranello or Modena plants could become
new mitigations activities, such as hedging activities,
unavailable either permanently or temporarily for a
increase in productivity or higher cars prices, this
number of reasons, including contamination, power
could result in a reduction of or profitability.
shortage or labor unrest. In addition, Maranello and
a relevant increase in our operating costs through
Key aspects
Response plans:
Dependence on two
manufacturing facilities
Investments in the last 15 years to reduce the extent of possible damage from earthquakes
located in close proximity to
IT disaster recovery plans
each other
Insurance coverage
Production and operations
suspension
Safety Stock for critical components
Shortage of critical production
inputs (e.g., raw-materials)
Identification of an internal task force that monitors, identifies and address possible raw materials,
parts and components shortages
206
FERRARI N.V.AR 2021 RELATIONSHIP WITH SUPPLIERS (O)
additional costs, liabilities and leading to not having
access to components/products supplied by the
Our business depends on a significant number of
business partner. Furthermore, potential unethical
suppliers that provide raw materials, parts and
or improper business practices by suppliers could
systems we require to manufacture cars and parts to
have a negative effect on the Company’s reputation
run our business. We source materials from a limited
considering the high exposure of the Ferrari brand
number of suppliers. In addition, similar to other
and image.
small volume car manufacturers, most of the key
components we use in our cars are purchased from
Furthermore, the increase of components and
single source suppliers.
products’ complexity and the increase of car
volumes produced could result in further pressure
We work with strategic partners in various areas
on suppliers’ activities. If suppliers are unable to
of our business, such as manufacturing, and since
strengthen their operation or are unable to work on
our strategic partners’ approach might differ
multiple projects, this could lead to critical issues
from our own standards, Ferrari is exposed to
and lack of respect of requirements. In addition, if we
performance, operational, financial and reputational
are unable to monitor suppliers’ activities, ensuring
risks regarding its suppliers. The COVID-19 pandemic
the respect of the highest standards in terms of
could contribute to the financial distress for our
technology, quality and timing, we could face a
suppliers leading to reduction or termination of their
potential increase of reworks, delay in car deliveries
operations. Suppliers’ default could have a negative
and recall/services campaigns.
effect on Ferrari’s business activities resulting in
Key aspects
Response plans:
Single source suppliers for
components
Dependence on limited number
of suppliers for raw materials,
parts and components
Critical issues from suppliers
and lack of respect of
requirements
Difficulties in accessing
and building long-term
relationships with critical
suppliers
High quality reputable suppliers assessed by the Supplier Risk Management function
Identifying alternative suppliers for critical components
KPIs’ definition for a continuous monitoring of supplier issues
A dedicated Supplier Development function with the mandate to monitor the suppliers’ conditions
and encourage a continuous improvement of their activities
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS ATTRACTION, DEVELOPMENT
AND RETENTION OF TALENTS (O)
has become pivotal and whenever a gap is identified,
the transition to new capabilities is pursued either
through internal capabilities development or through
Our success and our innovation capacity depend
talent acquisition on the external market. Being unable
on the ability of our senior executives and other
to be ahead of technology trends or to develop new
members of management to effectively manage
capabilities could increase the risks of both not
individual areas of our business and our business as
meeting expectations of existing and new customers
a whole.
and not maintaining our current competitive
The prestige, identity, and appeal of the Ferrari
advantage.
brand depend on the continued success of the
If we are unable to attract, retain and incentivize
Scuderia Ferrari racing team in the Formula 1 World
senior executives, drivers, team managers and key
Championship, which depends on our ability to attract
employees to succeed in international competitions
and retain top drivers, racing management and
or devote the capital necessary to fund successful
engineering talent.
racing activities, new models and innovative
technology, this may adversely affect the level of
The fast technology evolution that automotive industry
enthusiasm of Ferrari clients for the brand and their
is experiencing requires us to always reinforce and
perception of our cars, which could have an adverse
update our competences in new and emerging skill
effect on our business, results of operations and
areas in order to guarantee a continuous alignment
financial condition.
with market and technology trends. Mapping current
and comprehend future necessary competences
Key aspects
Response plans:
Requirement for skilled
engineers
Preparing current successful employees for future key positions
Improving talent development program for key resources
Talent reviews and succession plans
Requirement to attract and
Retention plans
retain the best drivers
Management potential
Labor unions
Implementation of “Scuola dei mestieri” initiative where skills are transferred to the new generations
to retain highly specific skills and knowledge over time, as well as the Ferrari Corporate Executive
MBA and the new Ferrari Global Corporate MBA
People survey to periodically evaluate employees’ engagement, retention and potential issues
Training and development
FORMULA 1 REVENUES (O)
with spectators’ participation and corresponding
Revenues from our Formula 1 activities depend
lower revenues.
principally on the income from our sponsorship
In addition, our share of profits related to Formula 1
agreements and on our share of Formula 1 revenues
activities may decline if either our team’s
from broadcasting and other sources.
performance worsens compared to other competing
teams, or if the overall Formula 1 business suffers,
If we are unable to renew our existing sponsorship
including potentially as a result of increasing
agreements or if we enter into new or renewed
popularity of the FIA Formula E championship.
sponsorship agreements with less favorable terms,
our revenues would decline. Our capacity to renew
Moreover, in order to compete effectively on track we
our existing sponsorship agreements and to have
have been investing significant resources in research
other more competitive sponsorship agreements also
and development and competitively to compensate
depends on our performance in Formula 1 activities
the best available drivers and other racing team
and our ability to win Formula 1 championships, both
members. These expenses also vary based on
drivers and constructors. Furthermore, the COVID-19
changes in Formula 1 regulations that require
pandemic has impacted the 2021 Formula 1 season,
modification to our racing engines and cars. These
resulting in a reduced number of Formula 1 races
expenses are expected to continue, and may grow
208
FERRARI N.V.AR 2021 further, including as a result of any changes in Formula 1 regulations, which would negatively affect our results of
operations and consequently our capacity to attract new business sponsorships.
Key aspects
Response plans:
Internal organizational unit dedicated to F1 business partners
Definition of Branding Guidelines
F1 sponsorship revenues
F1 financial regulation
Negotiation of new sponsorship contracts or renewal of current sponsorship contracts
Defining new services and custom experience and different activities to provide to our sponsors
Participation in Formula 1 Strategic Group
Continuous monitoring and implementation of required changes in the F1 regulations and
identification of early remediation plans
CYBERSECURITY INCLUDING
THIRD PARTIES VULNERABILITIES (O)
In case the third party is connected to our system, the
cyber attacker could penetrate also our IT systems.
Our IT systems architecture and industrial machinery
If we are unable to protect our system IT systems
are exposed to external cyber-attacks. The number
architecture and industrial machinery, to design
and sophistication of attacks have dramatically
a well-functioning security architecture for our
increased in recent years. Furthermore, external
cars and to promote good practices with our third
cyber organizations are currently better structured
parties, we are exposed to the risk that both our
and organized than in the past and can more
internal sensitive data and customers’ data stored in
effectively perform cyber-attacks.
the cars can be stolen and disseminated externally.
Alternatively, the data can be encrypted and a ransom
Also in the next years, we expect to increase the
could be requested (ransomware practices).
connectivity features of our cars. These new features
may increase the cyber security risk of our cars
Moreover, we have to consider that UN-ECE regulations
with the chance that an external attack may occur. In
has been introduced and we will be required to adopt
this case, potential impact may occur on road users
a Cyber Security Management System (“CSMS”) in
in term of safety, operational conditions of cars,
order to obtain a certification to continue to register
financial impact and privacy damage. Furthermore,
and sell our cars and to demonstrate that we are able
the reputation and the integrity and value of our
and aware to deal with potential cyber risk, both at
brand may be damaged and our business, operating
car level and enterprise level. Failing in obtaining the
results and financial condition may be materially and
Cyber Security Management System Certification
adversely affected.
could result, for the countries where the regulation is
applicable, in impossibility to homologate and sell new
In addition, we have to consider also that our third
types vehicle from July 2022 and to register and sell
parties could be subjected to external cyber-attacks.
existing types from July 2024.
Key aspects
Response plans:
Increasing our employees’ awareness on phishing activities and other ways to perform an external
cyber attacks
Increased sophistication of
Continuous monitoring of potential external cyber-attacks and remediation plans
Cyber Attacks
Assessment of internal vulnerability level (vulnerability assessment) and implementation of further
Third Parties cybersecurity
technical actions where necessary
Remote working impact
on IT Security
Cars connectivity
Assessment and monitoring the cyber security maturity level of third parties (suppliers and dealers)
and promotion of good practices
Ferrari started gathering insights in Cyber Security and Connected Experience with different
streams and internal projects
CSMS Program
Roll-out of a specific project to allow the Company to obtain and maintain over the time cyber
security management system certification
Appointment of a CSMS Committee to coordinate activities related to CSMS
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Ferrari, by 2030, aims to address direct and indirect
GHG emissions, focusing on energy and materials, in
As relevant factors for long-term value creation,
addition to its electrification journey.
Ferrari considers pivotal to manage risks related to
climate change. The fight against climate change and
Ferrari aims to increase the environmental awareness
the preservation of the environment are becoming
to continuously set and implement new programs and
crucial around the world and these concerns have
actions. We are conscious that these goals require an
resulted in rapidly evolving climate and environmental
effort both from us and from our third parties and the
regulations emitted across international markets.
Company is working on adapting internal processes,
Any difficulty or delay in implementing actions to
sharing this perspective with our partners.
become Carbon neutral by 2030, could negatively
affect our revenues, profits, image and our capacity
Climate Change topic is also strongly connected to
to work with new and existing third parties that ask
environmental laws’ changes and tightening. Please
more attention on climate change matters.
refer to paragraph dedicated to “Technological and
developing components, studying materials and
regulatory uncertainty” risk for further details on
Ferrari’s view on this aspect.
Key aspects
Response plans:
Complete mapping of direct and indirect emissions, including an estimation of indirect emissions by
suppliers and materials
Mapping specific suppliers carbon footprint and raising awareness to improve bottom up
information sharing
Climate Change
Monitoring fleet emissions over time
Activities on going to identify new co-designer and new innovation / product development activities,
also considering CO2 potential impacts
Starting activities for analysing and defining plan to use renewable energy sources in Company
activities (photovoltaic, hydrogen and geothermal)
210
FERRARI N.V.AR 2021 NON-COMPLIANCE WITH LAWS,
REGULATIONS, LOCAL STANDARDS
(INCLUDING TAX) AND CODES (C)
and where we sell them, which may adversely affect
our revenue and operating results.
Our compliance controls, policies, and procedures
We are subject to comprehensive and constantly
may not protect us in every instance from acts
evolving laws, regulations and policies throughout
committed by our employees, agents, contractors
the world. We expect the legal and regulatory
or collaborators that would violate the laws or
requirements affecting our business and our costs of
regulations of the jurisdictions in which we operate,
compliance to keep increasing significantly in scope
including employment, foreign corrupt practices,
and complexity in the future. In Europe, United States
environmental, competition, and other laws and
and China, for example, significant governmental
regulations. In particular, our business activities may
regulation is driven by environmental, fuel economy,
be subject to anticorruption laws, regulations or
vehicle safety and noise emission concerns, and
rules of other countries in which we operate. If we
regulatory enforcement has become more active in
fail to comply with any of these regulations, it could
recent years. Evolving regulatory requirements could
adversely impact our operating results, financial
significantly affect our product development plans
condition and reputation.
and may limit the number and types of cars we sell
Key aspects
Response plans:
Technical regulatory
requirements regarding our
cars
Increasing knowledge and awareness of laws, regulations, standards and codes
Monitoring, reviewing, reporting and adapting to relevant changes in rules and regulations
Specific project teams activated in case of new requirements to put in place the required
HSE (Health, Safety and
organizational and process changes
Environment)
Tax
Human Resources
Implement and update global HSE system
Risk-based reviews of operations by HSE professionals
Strengthening IT infrastructure for standard operational procedures
Legal
Increasing internal compliance awareness and effective communication between central
compliance team and managers working at the subsidiary level
Anti-Bribery & Corruption
Code of Conduct
Communicating and implementing business conduct standards internally
Maintaining a global whistle blower procedure
EXCHANGE RATE FLUCTUATIONS,
INTEREST RATE CHANGES,
COMMODITY PRICES, CREDIT RISK
AND OTHER MARKET RISKS (F)
U.S. Dollars in the United States and other markets
where the U.S. Dollar is the reference currency.
In 2021, the value of commercial activity exposed
to changes in the Euro/U.S. Dollar exchange rate
accounted for about 51 percent of the total currency
Ferrari operates in numerous markets worldwide
risk from commercial activity. Ferrari uses derivative
and is exposed to market risks stemming from
financial instruments (primarily forward currency
fluctuations in currency and to a lesser extent
contracts and currency options) to hedge up to
interest rates and commodity prices. The exposure
90 percent of the principal exposures to foreign
to currency risk is mainly linked to our cash flows
currency exchange risk, typically for a period of up to
from sales which are denominated in currencies
twelve months. Derivatives financial instruments are
different from those connected to purchases or
executed for hedging purposes only.
production activities. We incur a large portion of
our capital and operating expenses in Euro while we
Several subsidiaries are located in countries that are
receive the majority of our revenues in currencies
outside the Eurozone exposing Ferrari to translational
other than Euro.
exchange risk, in particular the United States, China,
Japan, Australia and Singapore. The Group monitors
The main foreign currency exchange rate to which
its principal exposure to translational exchange risk,
Ferrari is exposed is the Euro/U.S. Dollar for sales in
although there was no specific hedging in this respect
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / EXCHANGE RATE FLUCTUATIONS, INTEREST RATE CHANGES, COMMODITY PRICES, CREDIT RISK AND OTHER MARKET RISKS (F)
at the reporting date because the relative exposure is
Ferrari’s most important financial asset is cash. It
not material.
is held on bank and deposit accounts with primary
financial institutions and money market funds. Our
In addition, foreign exchange movements might also
group policy requires us to continuously monitor
negatively affect the relative purchasing power of our
counterparty risk and limit concentration of financial
clients, which could also have an adverse effect on
assets to a maximum of 25% of the total with a
our revenues and results of operations.
single financial counterpart. Ferrari owns a financial
services portfolio secured on the titles of cars or
Ferrari generally has a positive cash flow that
other guarantees, spread over more than 4,400
almost offsets the exposure to liquidity risk. The
clients that are mainly in the US. Impairment risk
Group uses various forms of financing to cover the
mainly relates to the financial services portfolio which
funding requirements of its industrial activity and
is evaluated on an individual basis for material or
for financing offered to customers and dealers.
overdue credit positions. The amount of any write-
The terms of these financings, which include bank
down is based on an estimate of the recoverable cash
facilities (committed and uncommitted), access to
flows, their timing, recovery costs and the fair value of
capital markets and private placements, are intended
any guarantees received.
to limit the Group exposure to interest rate fluctuation.
Approximately 37 percent of the Group’s total debt
In addition, an increase of certain commodity
bears floating interest rates and Ferrari enters into
prices can have a negative impact on Ferrari’s
interest rate caps as requested by certain of its
results. Ferrari uses derivative financial instruments
asset-backed financing agreements for its financial
(primarily commodity swaps) to hedge a portion of
services activities. Considering the current capital
certain exposure to commodity price risk.
structure of the Group, Ferrari has not entered into
any interest rate derivatives other than the interest
Further information is included in Note 30 to the
rate caps mentioned, however, the exposure is
Consolidated Financial Statements.
regularly monitored.
Key aspects
Response plans:
Exposure to foreign exchange
Foreign exchange hedging instruments authorized within the Company’s foreign exchange risk
movements from non-Euro
management policy
related sales
Exposure to interest rate
movements on financial assets
and liabilities
Monitoring interest rate movements for hedging purposes and execution of the foreseen interest
rate caps
Commodity hedging instruments defined and authorized for specific commodities’ price exposure
risk
Exposure to commodity price
Credit approval policies applied to dealers and retail clients
Credit risk of default or
insolvency
Bank guarantees, pre-payments (also title of the vehicle for the financial services business)
212
FERRARI N.V.AR 2021 INTERNAL CONTROL OVER FINANCIAL
REPORTING
Starting from October 2015 Ferrari N.V. is listed on the
Significant risks identified through the assessment
process require definition and evaluation of key
controls that address those risks, thereby mitigating
New York Stock Exchange (NYSE), while from January
the possibility that financial reporting will contain any
2016 Ferrari N.V. is also listed on the Euronext Milan
material misstatements.
(previously named Mercato Telematico Azionario).
Our shares’ listing on regulated markets involves
Group has two principal types of control in place:
In accordance with international best practices, the
being compliant with the related securities
regulations and listing rules. In particular, publicly
• controls that operate at Group or subsidiary level,
traded companies filing financial statements with
such as delegation of authorities and responsibilities,
the US Securities and Exchange Commission are
separation of duties, and assignment of access
required to comply with the Sarbanes Oxley Act
rights to IT systems; and
requirements, in particular sections 302, 404 and 906
that involve a periodical management assessment of
• controls that operate at process level, such as
internal controls and CEO and CFO Certifications of
authorizations, reconciliations, verification of
Periodic Financial Reports and SEC Filings. In addition,
consistencies, etc. This category includes controls
our independent registered public accounting firm
for operating processes, controls for financial
is also required to report on the effectiveness of the
closing processes and controls carried out by
internal control over financial reporting.
specific service providers. These controls can
be preventive (i.e., designed to prevent errors or
Under the COSO Internal Control-Integrated
fraud that could result in misstatements in financial
Framework, according to which the internal control
reporting) or detective (i.e., designed to reveal errors
system is defined as a set of rules, procedures and
or fraud that have already occurred). These controls
tools designed to provide reasonable assurance of
may also be classified as manual or automatic,
the achievement of corporate objectives, Ferrari
such as application-based controls relating to the
has developed an Internal Control System over the
technical characteristics and configuration of IT
Financial Reporting in order to assure completeness,
systems supporting business activities.
accuracy and reliability of the group financial
reporting.
An assessment of the design and operating
effectiveness of key controls is carried out through
Within the above mentioned context, identification
tests performed periodically during the year, both at
and evaluation of the risk of misstatements which
Group and subsidiary level, using sampling techniques
could have material effects on financial reporting
recognized as best practices internationally.
is carried out through a risk assessment process
that uses a top-down approach to identify the
The assessment of the controls may require the
organizational entities, processes and the related
definition of compensating controls and plans
accounts, in addition to specific activities that could
for remediation and improvement. The results of
potentially generate significant errors. Under the
monitoring are subject to periodic review by the
methodology adopted by the Company, risks and
manager responsible for the Company’s financial
related controls are associated with the accounting
reporting and communicated by him to senior
and business processes upon which accounting
management and to the Audit Committee.
information is based.
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REMUNERATION
OF DIRECTORS
INTRODUCTION
2. Implementation of remuneration strategy:
details how remuneration features have been
The description below summarizes the guidelines and
implemented during the 2021 financial year and
the principles followed by Ferrari in order to define
actual remuneration received by each executive
and implement the remuneration policy applicable to
and non-executive director. In 2021, there was no
the executive directors and non-executive directors
deviation from the remuneration policy.
of the Company, as well as members of the Ferrari
Leadership Team (FLT). In addition, this section
provides the remuneration paid to these individuals
for the year ended December 31, 2021. The form and
1. REMUNERATION STRATEGY
FOR THE 2021 FINANCIAL YEAR
amount of compensation received by the directors
REMUNERATION PRINCIPLES
of Ferrari for the year ended December 31, 2021 was
The main goal of Ferrari’s remuneration strategy
determined in accordance with the remuneration
is to develop a system which consistently supports
policy. The Compensation Committee oversees
the business strategy and value creation for all
the remuneration policy, remuneration plans and
shareholders, establishing a compensation structure
practices of Ferrari and recommends changes when
that allows us to attract and retain the most highly
appropriate. The Committee is solely comprised
qualified executive talent and motivate such
of non-executive directors from the Board of
executives to achieve business and financial goals that
Directors who are independent pursuant to the Dutch
create long-term value for shareholders in a manner
Corporate Governance Code. Through this document,
consistent with our core business and leadership
Ferrari aims to provide its stakeholders with a high
values and taking into account the social context
level of transparency and disclosure in order to
around the Company.
strengthen the trust they and the market place in
Ferrari, as well as provide them with the information
In defining the remuneration strategy, the
they need to assess the Company’s remuneration
Compensation Committee has taken into account
principles and exercise shareholders’ rights in an
certain principles which characterize Ferrari’s
informed manner. The Company may from time to
remuneration policy, such as:
time amend the remuneration policy, subject to our
shareholders’ approval when necessary.
1. The identity, mission and values of the Company,
to attract, retain and reward skilled women and
This Compensation Report consists of two sections:
men who constitute the soul of the Company. Their
passion, courage, creativity, ambition and pride
1. Remuneration strategy: our current remuneration
constitute the essence of Ferrari and fuel its legend
policy (which is available on our corporate
to ever greater heights. Being Ferrari means being
website) governs compensation for both
part of a unique future-focused team in which
executive and non-executive directors. In
people are the most valuable resource. Together
2020, Ferrari confirmed these remuneration
with all our employees we have crafted the vision,
features through the positive vote expressed by
mission and values that are the very essence
shareholders in the Annual General Meeting held
of being part of Ferrari and which guide our
on April 16, 2020 (the “2020 AGM”).
employees as we tackle our day-to-day challenges;
Our current remuneration strategy further
strengthens the alignment with shareholders’
2. The provision of statutory requirements, with
interests and long-term sustainability of our
specific focus on the Shareholder Rights Directive
business, adopting certain updates to reflect
(Directive (EU) 2017/828) and the implementation
developing best practices in the Dutch Corporate
thereof into Dutch law;
Governance Code.
AR 2021
214
3. International competitive remuneration market
assets or the environment, in order to guarantee
trends, based on the idea that it is becoming
an optimal working environment for all employees
increasingly challenging to attract and retain
and attract the best talents. Our results in this field
employees in today’s competitive labor market.
reflect, once again, our strategic commitment
For our executive directors and members
to protecting the environment and ensuring
of the FLT, fixed remuneration, short-term
personal safety;
incentive opportunities and long-term incentive
opportunities are calculated based on the position
6. The views of the Board of Directors, members of
and responsibilities assigned to each, taking
the FLT, other senior leaders and all employees,
into account average remuneration levels on
in order to make the health and safety of the
the market for positions with similar levels of
Company’s employees essential to the successful
responsibility and managerial complexity in large
conduct and future growth of the Company. In
international companies, in order to maintain high
this respect and in line with the Dutch Corporate
levels of competitiveness and engagement;
Governance Code, the internal pay ratio is an
important input for determining the remuneration
4. Corporate governance and executive
for the Board of Directors; and
remuneration best practices as expressed by
institutional investor guidelines, developing a
7. The centrality for Ferrari of value creation and
remuneration policy compliant with the Dutch
the interest of our shareholders, the importance
Corporate Governance Code and the interest of
of which is recognized through the use of Total
Ferrari’s shareholders. We analyze any gaps in
Shareholder Return (TSR) as a performance
each of our remuneration components in order
metric in the Company’s long-term incentive plans.
to provide a high level of alignment with the main
The Compensation Committee considers that
guidelines of our stakeholders;
the use of relative TSR remains one of the most
appropriate measures of long-term performance
5. The societal context around and social support
for Ferrari. The structure of our PSU awards
in respect of the Company, developing a specific
demonstrates the centrality of this factor and helps
focus on trends in sustainability among our
to promote a strong correlation between pay and
employees. We are committed to provide a
performance for our Executives.
healthy and safe workplace for all employees
and stakeholders by implementing a high level of
The main principles of Ferrari’s remuneration policy
safety standards to avoid potential risks to people,
are outlined in the chart below:
FERRARI’S STRATEGY
1 ALIGNMENT WITH
2 PAY FOR PERFORMANCE
3 COMPETITIVENESS
4 LONG-TERM SHAREHOLDER
5 COMPLIANCE
VALUE CREATION
>
>
>
>
>
Compensation is strongly linked to the achievement of targets
aligned with the Company’s publicly disclosed strategic objectives
Compensation must reinforce our performance driven culture
and meritocracy
Compensation is set with the objective of attracting, retaining
and motivating highly qualified executives and effective leaders
Targets triggering any variable compensation are aligned to the
long-term interests of shareholders
Ferrari compensation policies and plans are designed to comply
with applicable laws and corporate governance requirements
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / 1. REMUNERATION STRATEGY FOR THE 2021 FINANCIAL YEAR
OVERVIEW OF REMUNERATION
ELEMENTS
in order to motivate its beneficiaries to achieve
challenging targets. In particular, Ferrari’s 2021
As anticipated above, Ferrari’s current remuneration
achievements, success and developments were
policy was approved by shareholders at the 2020
driven by organization-wide alignment with the
AGM and will be resubmitted to a vote by the
Company’s strategy and values, through incentives
Company’s General Meeting at least every four years.
that reward the achievement of those goals;
The structure of the remuneration applicable to our
executive directors, non-executive directors and
(iii)
long-term incentives linked to the first and
other key management under Ferrari’s remuneration
fourth pillars of Ferrari’s remuneration policy
policy has not changed in 2021 and consists of the
(Alignment with Ferrari’s Strategy and Long-Term
following elements:
Shareholder Value Creation) with the aim to align
the behavior of executives critical to the business
(i) fixed remuneration linked to the third pillar of
with shareholders’ interests, motivate executives
Ferrari’s remuneration policy (Competitiveness)
to achieve long-term strategic objectives, and
with the objective of attracting, retaining
enhance retention of key resources;
and motivating our qualified executives
and effective leaders. For this reason, we
(iv) non-monetary benefits which are related
periodically benchmark comparable salaries
to the overall remuneration and linked to the
paid to executives with similar experience by
third pillar of Ferrari’s remuneration policy
comparable companies;
(Competitiveness).
(ii) short-term incentives linked to the first and
Ferrari’s remuneration policy provides that a substantial
second pillars of Ferrari’s remuneration policy
portion of the compensation of our executive directors
(Alignment with Ferrari’s Strategy and Pay for
and members of the FLT should be “at-risk”, meaning
Performance) and tied to specific financial targets
that each will receive a certain percentage of his or
which are set at challenging levels; short-term
her total compensation only to the extent Ferrari and
incentives are also linked to the contribution of the
the executive accomplish short and long-term goals
individual member (Individual Performance Factor)
established by the Compensation Committee.
STAKEHOLDER ENGAGEMENT
The Compensation Committee regularly reviews the directors’ remuneration policy against the best corporate
governance practices adopted by institutional shareholders and the recommendations of the main proxy
advisors, considering also the view of the stakeholders on the remuneration policy and main features of the
compensation report.
In this respect, the Annual General Meeting of shareholders held on April 15, 2021 approved the remuneration report
for the year 2020 (the “Ferrari Remuneration Report 2020”) and the voting results are reflected in the following table:
Resolution
Votes For
%
Votes Against
%
Votes Total
Abstain
2.c - Remuneration Report 2020
(discussion and advisory vote)
180,789,386
86.96943
27,087,542
13.03057
207,876,928
158,295
Considering the previous vote of the Annual General Meeting of shareholders and to further understand
shareholders’ feedback to the Ferrari Remuneration Report 2020, we engaged with our stakeholders prior
to drafting the Compensation Report for the year 2021. We believe that those conversations have been very
constructive and have led to improvements in our Compensation Report. In particular, our reporting on both short
term and long-term incentive plans was identified as an area for improvement for the below reasons:
• some stakeholders issued negative voting advice on the Ferrari Remuneration Report 2020 due to (i) the accelerated
vesting of PSU awards pursuant to the Equity Incentive Plan 2019-2021 of the former CEO, Louis Camilleri, upon his
resignation; (ii) the vesting below median of the Equity Incentive Plan with reference to the TSR metric; and (iii) the
argued lack of link between one-third of the awards granted under the Equity Incentive Plan (33% of RSUs) to any
performance targets;
216
FERRARI N.V.AR 2021
• some stakeholders also issued negative voting
structure by further improving some elements
advice on the Ferrari Remuneration Report 2020
and with a specific view on sustainability-linked
due to the lack of short-term incentive plans
performance indicators.
for executive directors, based on an annual
performance assessment of collective and
Through this Compensation Report we continue to
individual indicators.
pursue our objective to provide our stakeholders
each year with clear and comprehensive disclosure
Since we constantly work on the improvement of
of the decisions relating to the remuneration of our
our remuneration strategies, we have taken into
executive and non-executive directors and members
account the previous vote of the general meeting in
of the FLT.
the process of reviewing of our variable incentive
schemes which will become effective in 2022, as
We trust that stakeholders will consider these
further described below in this Compensation Report.
changes positively and appreciate the spirit of
More specifically, (i) we included short-term incentives
transparency and continuous improvement which
in the Chairman’s and the CEO’s compensation
drives them.
packages for 2022, in order to better align executive
directors’ actions to Ferrari’s strategy and
The Compensation Report for the financial year 2021
performance and in line with best market practices,
is subject to a consultative vote at the Annual General
and (ii) we are re-designing our long-term incentive
Meeting of Shareholders scheduled for April 2022.
REMUNERATION STRUCTURE FOR 2021 AND MAIN 2022 CHANGES AT A GLANCE
Ferrari faced a change in Executive Director leadership during the year 2021. Our Executive Chairman, John
Elkann, had the role of Acting CEO until September 2021, when Benedetto Vigna joined Ferrari as its new CEO(40).
The purpose and features of the different elements of our remuneration structure for 2021 and main changes for
2022 are outlined in the table below:
Component
Purpose
Terms and Conditions
Amounts
Outlook 2022
Remuneration
Structure
• Attract, retain and
motivate highly qualified
executives to achieve
challenging results
• Competitively position
our compensation
package compared to
the compensation of
comparable companies,
• Offer a highly competitive
compensation package
Ferrari’s remuneration
structure is organized as
compared to the
reference market
follows:
• Reference Market:
• Fixed remuneration
Roles with the same
mainly represented by
• Short-term incentives
the reference panel
(“Reference Panel”) and
companies that compete
• Long-term incentives
• Non-monetary benefits
for similar talent
• Reinforce our
performance driven
culture and meritocracy
managerial complexity
and responsibilities within
comparable companies,
comprised of those
represented by the
Reference Panel.
The remuneration
structure remains
unchanged for 2022
(40) Benedetto Vigna was appointed by the Board of Directors on September 16, 2021 as acting CEO.
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Component
Purpose
Terms and Conditions
Amounts
Outlook 2022
• Executive Chairman
and Acting CEO: Fixed
remuneration is set in
relation to the delegated
powers assigned over the
term and positions held
• Executive Chairman and
in line with the reference
Acting CEO: €250,000
Based on the results
of benchmarking
conducted on the
market.
annually; starting from
practices of the
• CEO: Fixed remuneration
is set in relation to the
delegated powers
assigned over the term
and positions held in line
Chairman has been
increased to €500,000
per year.
October 1, 2021, the base
companies belonging
salary of the Executive
to the Executive
Fixed
Remuneration
• Reward skills, contribution
and experience required
for the position held
with the Reference Market.
• CEO: €1,500,000 annually
• Non-Executive Directors:
Remuneration of Non-
Executive Directors is
fixed and not dependent
(the amount is annualized
since the current
CEO joined Ferrari in
September 2021).
on the Company’s financial
• Non-Executive Directors:
results. It is approved
$75,000 annually.
by the Company’s
shareholders and
periodically reviewed
by the Compensation
Committee.
• FLT Members: the fixed
remuneration is related to
the position held and the
responsibilities attributed,
as well as the experience
• FLT Members: the fixed
and strategic nature
Chairman’s Reference
Panel (for further
details, see the section
“2021 remuneration
of executive directors
and FLT members” in
the paragraph about
benchmarking and in
line with best market
practices, starting
from October 1, 2021,
the base salary of the
Executive Chairman
has been increased
to €500,000 per
year. The same
applies to the fixed
remuneration of the
remuneration is related to
of the resource, in line
current CEO increased
the position held and the
with reference market
to €1,500,000, as
responsibilities attributed,
offering for roles of
as well as the experience
similar responsibility and
and strategic nature of
complexity.
the resources, in line
with reference market
offering for roles of
similar responsibility and
complexity.
compared to the
remuneration of
the former CEO
(€700,000).
Short-Term
Incentive Plan
• Achieve the annual
2021 Short-term incentives
financial, operational
and other targets and
additional business
priorities
targets:
• Based on achievement of
annually predetermined
performance objectives
• Motivate and guide
• Annual financial,
executives’ activities over
the short-term period
operational and other
identified objectives
• Executive Chairman: The
compensation package
for 2021 did not include
any short-term incentives.
• CEO: The compensation
package for 2021 did not
include any short-term
incentives since he joined
In order to further
align Executive
Chairman and CEO’s
compensation to the
best market practices
(for further details,
see the section “2021
remuneration of
executive directors
and FLT members”
Ferrari in September 2021.
in the paragraph
• FLT Members: Variable
incentive percentage
of fixed remuneration
based on the position held
with an average target
pay-opportunity equal to
100% of base salary and
an average maximum pay-
opportunity equal to 225%
of base salary.
about benchmarking),
the compensation
package for 2022,
for both Executive
Chairman and CEO will
include a short-term
incentive plan with a
target pay-opportunity
equal to 100% of base
salary and maximum
pay-opportunity equal
to 225% of base salary.
218
FERRARI N.V.AR 2021 Component
Purpose
Terms and Conditions
Amounts
Outlook 2022
• Equity awards to promote
creation of value for the
shareholders
• PSUs and RSUs: vesting in
instalments
• PSUs: 50% linked to
• Executive Chairman:
With reference to Long-
Term Incentive Plans
currently in place (LTI Plan
2020-2022 and LTI Plan
2021-2023), the target pay-
opportunity is 300% and
maximum pay-opportunity
is 400% of base salary,
in accordance with the
• Align the behavior of
TSR compared to Peer
long-term shareholder
executives critical
to the business with
Group, 30% linked to
value creation and pay for
The new LTI Plan 2022-
EBITDA; 20% linked to a
performance principles
2024 for the Executive
shareholders’ interests
qualitative factor related
of Ferrari’s remuneration
Long-Term
Incentive Plan
• Motivate executives
to achieve long-term
to the sustainability and
policy.
innovation of business.
• CEO: Our CEO will be
strategic objectives
• The new LTI Plan 2022-
eligible as beneficiary of
• Enhance retention of key
resources
2024 will introduce
Long-Term Incentive Plan
relevant changes as to
starting from LTI Plan
the amount of PSUs and
2022-2024.
Chairman and the CEO
will provide for a pay-
opportunity equal to
200% and a maximum
pay-opportunity equal
to 274% of base salary.
RSUs to be awarded to
the executive directors
(which will be awarded
only with PSUs) and as to
the metrics to which PSUs
are linked.
• FLT Members: variable
incentive percentage
of fixed remuneration
based on the position held
with an average target
opportunity equal to 125%
and average maximum
pay opportunity equal to
156% of base salary.
• Customary welfare,
retirement-related and
Non-monetary
Benefits
• Retain executives through
a total reward approach
• Represent an integral
fringe benefits such as
part of the remuneration
company cars and drivers,
• Enhance executive and
employee security and
productivity
package with welfare
personal/home security,
No changes
and retirement-related
medical insurance,
benefits
accident insurance, tax
preparation and financial
counselling
Share
Ownership
Guidelines
• Ensures alignment with
shareholders’ interests
• Executive Directors,
other FLT members,
other senior leaders
• Executive Chairman and
CEO: 6 times net base
and key employees are
salary
No changes
expected to build up share
• FLT Members: 3 times net
ownership over a period
base salary
of 5 years
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EXECUTIVE DIRECTORS’ PAY-MIX
In light of the foregoing considerations, our Executive Chairman’s and CEO’s compensation packages are
structured as follows:
2021
CHAIRMAN AND INTERIM CE0
TARGET AMOUNTS
CHAIRMAN AND INTERIM CE0
MAXIMUM AMOUNTS
25%
20%
75%
80%
Fixed Remuneration
Long-Term Incentives
As shown in the charts above, our compensation structure places an appropriate amount of compensation
opportunities for our Executive Chairman and CEO at risk, based on financial and non-financial performance
measures and relative TSR. A significant portion of the compensation opportunities is delivered in equity, the
vesting and value of which are intended to align the executive’s interests with shareholder returns. The Chairman
and Acting CEO compensation package for 2021 did not include any short-term incentives, which have been
included in the Chairman’s and CEO’s compensation packages for 2022 (as shown in the charts below), in order
to better align executive directors’ action to Ferrari’s performance and strategy and in line with best market
practices (see the section “2021 remuneration of executive directors and FLT members” in the paragraph about
benchmarking):
CHAIRMAN TARGET AMOUNTS
CHAIRMAN MAXIMUM AMOUNTS
2022
50%
50%
25%
25%
46%
17%
37%
CEO TARGET AMOUNTS
CEO MAXIMUM AMOUNTS
25%
25%
46%
17%
37%
Fixed Remuneration
Short-Term Incentives
Long-Term Incentives
Our remuneration policy is aligned with Dutch law and the Dutch Corporate Governance Code. In particular, the
Dutch Corporate Governance Code (the “Code”) requires listed companies to disclose certain information about
220
FERRARI N.V.AR 2021 the compensation of their Board and executive
non-executive directors will take into account, among
directors. Through this remuneration strategy, Ferrari
other things, Ferrari’s financial and operational results
fulfills the requirements of the Code ensuring full
and other business objectives, while considering the
transparency with our shareholders.
executive directors’ view concerning the level and
2021 REMUNERATION OF EXECUTIVE
DIRECTORS AND FLT MEMBERS
structure of their own remuneration. Performance
targets are set by the Compensation Committee to be
both achievable and stretching, considering Ferrari’s
The Board of Directors determines the compensation
strategic priorities and the automotive landscape. The
for our executive directors following the
performance measures that are used for variable
recommendation of the Compensation Committee
components have been chosen to support Ferrari’s
and with reference to the remuneration policy. The
strategy, long-term interests and sustainability. We
compensation structure for executive directors
establish target compensation levels using a market-
and FLT members includes a fixed component and a
based approach and we monitor compensation
variable component based on short and long-term
levels and trends in the market. We also periodically
performance. As anticipated above, the Chairman’s
benchmark our executive compensation program
and Acting CEO’s compensation package for 2021
against peer companies.
did not include any short-term incentives, which
have been included in the Chairman’s and CEO’s
In particular, Ferrari identified for the role of CEO an
compensation packages for 2022 in order to make
ad hoc Reference Panel composed of 15 companies.
their compensation packages more competitive
Ferrari benchmarked its CEO’s total remuneration
with the relevant market (considering the companies
with those of listed companies deemed comparable
belonging to the Reference Panel described below).
with Ferrari in light of some or all of the following
criteria: a) representing excellence and luxury in
We believe that this compensation structure
their respective sectors; b) operating in the same
promotes the interests of Ferrari in the short and the
business as Ferrari; c) acting in similar sectors ; d)
long-term and is designed to encourage the executive
presenting overall a similar Market Cap, Revenues and
directors and FLT members to act in the best interests
number of Employees with Ferrari. The companies
of Ferrari. In determining the level and structure of
in the Reference Panel used by Ferrari for the CEO’s
the compensation of the executive directors, the
compensation benchmarking are listed below:
Chief Executive Officer Reference Panel
Aston Martin Lagonda
Bayerische Motoren Worke
Compagnie Financiere Richemont
Harley-Davidson
Kering
Moncler
Renault
Volkswagen
Brembo
Burberry
Mercedes-Benz Group
Hermes International
LVMH
Pirelli
The Estée Lauder Companies
The Executive Chairman’s Reference Panel comprises the companies of the CEO’s Reference Panel which
have a Chairman with powers and delegations comparable to Ferrari (5 Companies out of 15 of those inserted
in CEO’s Reference Panel), along with two additional companies (added in order to benchmark a statistically
significant number of peers and determined based on companies that have a chairman with powers and
authority comparable to the powers and authority of the Executive Chairman). The companies forming part of the
Reference Panel for the Executive Chairman target compensation benchmarking are listed below:
Executive Chairman Reference Panel
Aston Martin Lagonda
Compagnie Financiere Richemont
Hermes International
The Estèe Lauder Companies
Brembo
Ford Motors
Salvatore Ferragamo
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/ 1. REMUNERATION STRATEGY FOR THE 2021 FINANCIAL YEAR
The Executive Chairman’s and the Acting CEO’s
directors and FLT members is to attract and retain
Reference Panels remained unchanged in 2021.
highly qualified senior executives.
The level and structure of the Executive Chairman’s
Our policy is to periodically benchmark comparable
and CEO’s compensation packages for 2022 have
salaries paid to executives with similar experience by
been determined taking into account the results
comparable companies.
of benchmarking conducted on the practices of
the companies belonging to the abovementioned
VARIABLE COMPONENTS
Reference Panels.
Executive directors and FLT members are also
eligible to receive variable compensation subject
In particular, the current Executive Chairman’s and
to the achievement of pre-established financial and
CEO’s compensation packages (i) have been adjusted
other identified performance targets. The short and
in order to result in line with the best market practice,
long-term components of executive directors’ and
in terms of level of compensation and structure, and
FLT members’ variable remuneration are linked to
with the Ferrari’s remuneration policy as approved by
predetermined, assessable targets in order to create
shareholders at the 2020 AGM; and (ii) are competitive
long-term value for the shareholders.
with the companies belonging to the identified
Reference Panel. More in detail, the CEO’s base salary
Our variable compensation programs are designed
is aligned to the median of the abovementioned
to recruit, motivate and reward executive directors
Reference Panel (in 2020, it was below the 25th
and members of the FLT delivering operational and
percentile) while the Executive Chairman’s base salary
strategic performance over time. The provisions and
is slightly below the 25th percentile of the relevant
financial objectives of our variable compensation
Reference Panel (in the 2020 was far below the 25th
programs are evaluated on an annual basis and
percentile); the total target compensation for both of
modified in accordance with industry and business
them is aligned to the median of the Reference Panel
conditions.
(in the 2020 were both below the 25th percentile). The
same applies for the pay mix (considered as ratio
SHORT-TERM INCENTIVES (STI)
between base salary, LTI and STI components) which
The primary objective of our performance-based
is aligned to the best market practice.
short-term variable cash-based incentives is to
On the basis of the remuneration policy objectives,
business priorities for the current or next year. The
compensation of executive directors and FLT
short-term incentive plan is designed to motivate
members consists, inter alia, of the elements
its beneficiaries to achieve challenging targets, by
incentivize the members of the FLT to focus on the
discussed below.
FIXED COMPONENT
recognizing individual contributions to the Group’s
results on an annual basis. The Compensation
Committee believes that it is appropriate to use a
The primary objective of the base salary (the fixed
balance of corporate financial targets, strategic
part of the annual cash compensation) for executive
objectives and individual performance objectives.
The methodology for Short Term Incentive Calculation is the following:
Base Salary
x
STI%
Adjusts
opportunity
based on
business results
Links directly
to individual
current
contribution
(X)
$
Target
Bonus
x
Company
Performance
Factor
x
Individual
Performance
Factor
=
STI
Payout
222
FERRARI N.V.AR 2021 The target level for both the Company Performance
Pursuant to the Welcome Bonus, the CEO has been
Factor and the Individual Performance Factor is 100%,
granted (i) an extraordinary cash lump sum of
reaching a possible maximum level which is equal to
€1,000,000 and (ii) 16,256 Ferrari common shares,
the 150% of target set level, resulting in a maximum
in each case subject to approval by shareholders at
pay-opportunity equal to 225% of base salary.
the 2022 Annual General Meeting. Subject to approval
by shareholders at the 2022 Annual General Meeting,
To determine the executive directors’ annual
the shares have been granted by Ferrari without the
performance bonus, the non-executive directors,
obligation to hold the shares for a least five years,
upon proposal of the Compensation Committee:
because the attraction and the appointment of the
• approve the executive directors’ targets and
new CEO – considering his deep understanding
maximum allowable bonuses;
of the technologies driving the change in the
• select the appropriate metrics and their weighting;
Company’s industry, and his proven innovation,
• set the stretch objectives;
business-building and leadership skills – was
• consider any unusual items in a performance year
considered a transaction of strategic importance
to determine the appropriate measurement of
and effect for Ferrari’s results.
achievement; and
• approve the final bonus determination.
With the exception of the Welcome Bonus, no special
bonuses were awarded to the executive directors or
In 2021, the Compensation Committee defined the
members of the FLT for 2021.
Company Performance Factor by reference to four
metrics:
• Net Revenues (20%)
As described above, our executive directors
(Executive Chairman and CEO) were not included in
• Consolidated Adjusted EBIT (20%)
the Short-Term Incentive Plan in 2021, but they will be
• Consolidated Adjusted EBITDA Margin (20%)
included in the Short-Term Incentive Plan for 2022,
• Industrial Free Cash Flow (40%)
in order to better align executive directors’ action to
Ferrari’s strategy and performance and in line with
The Compensation Committee established
best market practice.
challenging goals for each metric, each of which
pays out independently. There is no minimum bonus
LONG-TERM INCENTIVES (LTI)
payout; as a result, if none of the threshold objectives
We believe that the equity incentive plan discussed
are satisfied, there is no bonus payment.
below increases the alignment between the
Company’s performance and shareholder interests,
In addition, upon proposal of the Compensation
by linking the compensation opportunity of the
Committee, the non-executive directors have
executive directors and members of the FLT to
authority to grant special bonuses for specific
increasing shareholder value.
transactions that are deemed exceptional in terms of
strategic importance and effect on Ferrari’s results,
During 2021, Ferrari had three long-term equity
taking into account standards of reasonableness and
incentive plans in place, consistent with the
fairness. The form of any such bonus (cash, common
Company’s business plan presented at the Capital
shares of Ferrari or options to purchase common
Markets Day in September 2018 and awarding to their
shares) is determined by the non-executive directors
beneficiaries a combination of performance share
from time to time.
units (“PSUs”) and restricted share units (“RSUs”), each
representing the right to receive one Ferrari common
In particular, during 2021, a special bonus was
share:
awarded to Benedetto Vigna (subject to approval by
(i) Equity Incentive Plan 2019-2021, approved on
shareholders at the 2022 Annual General Meeting)
February 26, 2019 by the Board of Directors,
for having joined Ferrari (the “Welcome Bonus”).
covering a performance period from 2019 to
The attraction and the appointment of the new
2021, having the Executive Chairman and the
CEO - considering his deep understanding of the
former CEO of the Company, as well as members
technologies driving the change in the Company’s
of the FLT and other key employees of the Group,
industry, and his proven innovation, business-
as beneficiaries; this plan ended on December 31,
building and leadership skills – was considered a
2021;
transaction of strategic importance and effect for
(ii) Equity Incentive Plan 2020-2022, approved on
Ferrari’s results.
February 17, 2020 by the Board of Directors,
covering a performance period from 2020 to
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2022, having the Executive Chairman, as well as
The PSU awards are earned based on the level of
members of the FLT and other key employees
achievement of defined key performance indicators
of the Group as beneficiaries. The former CEO
relating to: i) a relative total shareholder return
was not eligible for the Equity Incentive Plan
(“TSR”) target (which is relative to the TSR of a defined
2020-2022;
peer group (“Peer Group”)), ii) an EBITDA target, and
(iii) Equity Incentive Plan 2021-2023, approved on
iii) an innovation target. Each target is measured
February 26, 2021 by the Board of Directors,
independently of the other targets and relates to
covering a performance period from 2021 to
separate portions of the aggregate awards. The RSU
2023, having the Executive Chairman and Interim
awards are service-based and vest conditional on the
CEO of the Company, as well as members of
executive directors’ continued employment with the
the FLT and other key members of the Group as
Company at the time of vesting.
beneficiaries.
Details of the equity long-term incentives granted to the Executive Chairman and Interim CEO are summarized
below:
Executive
Chairman
and Interim
CEO
Type of Equity Long-Term
Incentive Vehicle
Proportion of Equity
Long-Term Grant
Vesting Cycle
Performance Metrics
(Weighting) or Vesting
Condition
1) TSR (50%)
67%
Vest at the end of 3-years
2) EBITDA (30%)
Rolling Plan
3) Innovation Performance
Goal (20%)
Equity Incentive Plan
2019-2021
Performance
Share Units
(PSUs)
Equity Incentive Plan
2019-2021
Retention Restricted
33%
Share Units
(RSUs)
Vest at the end of 3-years
Conditional on continued
Rolling Plan
employment
Type of Equity Long-Term
Incentive Vehicle
Proportion of Equity
Long-Term Grant
Vesting Cycle
Performance Metrics
(Weighting) or Vesting
Condition
1) TSR (50%)
67%
Vest at the end of 3-years
2) EBITDA (30%)
Rolling Plan
3) Innovation Performance
Goal (20%)
Executive
Chairman and
Interim CEO
Equity Incentive Plan
2020-2022
Performance
Share Units
(PSUs)
Equity Incentive Plan
2020-2022
Retention Restricted
33%
Share Units
(RSUs)
Vest at the end of 3-years
Conditional on continued
Rolling Plan
employment
Executive
Chairman and
Interim CEO
Equity Incentive Plan
2021-2023
Performance
Share Units
(PSUs)
Equity Incentive Plan
2021-2023
Type of Equity Long-Term
Incentive Vehicle
Proportion of Equity
Long-Term Grant
Vesting Cycle
Performance Metrics
(Weighting) or Vesting
Condition
1) TSR (50%)
67%
Vest at the end of 3-years
2) EBITDA (30%)
Rolling Plan
3) Innovation Performance
Goal (20%)
Vest at the end of 3-years
Conditional on continued
Rolling Plan
employment
Retention Restricted
33%
Share Units
(RSUs)
224
FERRARI N.V.AR 2021 The number of PSU awards earned is determined based on the level at which the three performance criteria
described below are achieved. At the end of the vesting period, the total number of PSUs earned is equal to the
sum of:
• the number of PSUs earned under the TSR payout factor; plus
• the number of PSUs earned under the EBITDA payout factor; plus
• the number of PSUs earned under the Innovation Performance Goal.
Metrics
(weight)
Metrics
(type)
Benchmark
Rationale
Link between pay and performance
TSR (50%)
Financial
criteria
Peer Group
(8 companies:
Ferrari, Aston
Martin, Burberry,
Hermes, Kering,
LVMH, Moncler,
Richemont)
TSR is tracked for both Ferrari
and the companies in the
defined Peer Group calculating
starting and ending prices as an
average of the 30 calendar days
prior to grant and award date.
Ranking
% of Target Awards
1°
2°
3°
4°
5°
6° - 7° - 8°
150%
120%
100%
75%
50%
0
EBITDA (30%)
Financial
criteria
5-year Business
Plan
Innovation
Performance
Factor (20%)
Non-financial
Critical project
criteria
milestones
Earnings before interest, taxes,
depreciation and amortization
takes a company’s earnings, and
subtracts its cost of debt, cost
of goods sold and operating
expenses and taxes, resulting
in an indicator of Ferrari’s
profitability.
Performance
% of Target Awards
+10%
+5%
5 Years Plan
-5%
< -5%
140%
120%
100%
80%
0
The Innovation Performance Factor focuses on the new product launches
in line with Ferrari’s plan and on technological innovation. It is measured in
terms of product launches (milestones, volumes and contribution margin), for
a weight of 70%, and key technological projects, for the remaining 30%, to be
achieved during the performance period.
Our non-financial criterion, the Innovation Performance Factor, is included in the Equity Incentive Plans in order
to have a performance indicator directly linked to the long-term sustainability and technological innovation of our
business.
The TSR Peer Group was updated during the course of 2019 in order to consider more strategically relevant
comparable companies for Ferrari and remained the same in 2020 and 2021.
In relation to the vesting of the PSUs awarded to the Executive Chairman, the vesting of all units under each
plan occurs after the end of the relevant performance period (i.e., December 31, 2021, December 31, 2022 and
December 31, 2023), to the extent that the conditions for vesting are satisfied.
The performance period for the Equity Incentive Plan 2019-2021 PSUs commenced on January 1, 2019 and
terminated on December 31, 2021. The fair value of the awards used for accounting purposes was measured at
the grant date using a Monte Carlo Simulation model. The fair value of the PSUs that were granted to Mr. Elkann in
2019 is € 111.64 per share.
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The key assumptions used to calculate the grant-date fair values for these awards are summarized below:
Key Assumptions
Grant date share price
Expected volatility
Dividend yield
Risk-free rate
PSU Awards Granted to the Chairman in 2019
€122.90
26.5%
0.9%
0%
The performance period for the Equity Incentive Plan 2020-2022 PSUs commenced on January 1, 2020. The
fair value of the awards used for accounting purposes was measured at the grant date using a Monte Carlo
Simulation model. The fair value of the PSUs that were granted to Mr. Elkann in 2020 is €136.06 per share.
The key assumptions used to calculate the grant-date fair values for these awards are summarized below:
Key Assumptions
Grant date share price
Expected volatility
Dividend yield
Risk-free rate
PSU Awards Granted to the Chairman in 2020
€142.95
26.6%
0.8%
0%
The performance period for the Equity Incentive Plan 2021-2023 PSUs commenced on January 1, 2021. The
fair value of the awards used for accounting purposes was measured at the grant date using a Monte Carlo
Simulation model. The fair value of the PSUs that were granted to Mr. Elkann in 2021 is €130.42 per share.
Key Assumptions
Grant date share price
Expected volatility
Dividend yield
Risk-free rate
PSU Awards Granted to the Executive Director in 2021
€175.80
27.0%
0.75%
0%
The expected volatility was based on the observed volatility of the defined Peer Group. The risk-free rate was
based on the iBoxx sovereign Eurozone yield.
The RSUs granted to Mr. Elkann under the Equity Incentive Plan 2019-2021 vested at the end of the three-years cliff
vesting period in 2022, while the RSUs granted under the Equity Incentive Plan 2020-2022 and the Equity Incentive
Plan 2021-2023 will vest in 2023 and 2024 at the end of the three-years cliff vesting period, subject to continued
employment with the Company.
The fair value of the RSUs that were granted to Mr. Elkann in 2019 is 119.54 per share, the fair value of the RSUs
that were granted to Mr. Elkann in 2020 is €139.39 per share and the fair value of the RSUs that were granted to
the Chairman and Interim CEO in 2021 is €171.86 per share.
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FERRARI N.V.AR 2021 EQUITY INCENTIVE PLAN 2022-2024
SEVERANCE
DESIGN MAIN FEATURES
The terms of service of the CEO provide that
The design of the new Equity Incentive Plan 2022-2024,
termination of the contract by either party is subject
which Ferrari will implement in 2022, subject to the
to six months’ notice period. However, if the Company
approval of the next Annual General Meeting, provides
terminates his services for reasons other than
for significant changes compared to the former Long-
for just cause (as defined) or if he terminates his
Term Equity Incentive Plans. The main changes, which
services due to the reduction or limitations of his
will be better illustrated in the Agenda and Explanatory
managing powers or following his dismissal in case
Notes of the Annual General Meeting to be held in April
of change of control, the Company shall pay the CEO
2022, include:
an amount equal to 18 monthly installments of his
• Combination of PSUs and RSUs: different weight
base monthly salary, including any amount due for
of their distribution in relation to the responsibilities
the six months’ notice period (which means that the
and the level of contribution to the results of each
severance amount does not exceed 12 months’ salary,
cluster of beneficiaries. Executive Directors will
in line with the Code), plus the accrued pro rata of
be entitled only to PSUs in order to strengthen the
the Company’s contribution to the pension fund as
alignment of their long-term interests with those of
well as STI and LTI variable compensation accrued at
shareholders;
the date of termination of employment. If an actual
• Financial criteria related to the vesting of PSUs:
severance payment will be made at the termination
TSR Peer Group will be updated in order to consider
of employment and such severance payment would
more comparable companies to Ferrari and the
exceed 12 months’ base salary, then a disclosure will
pay-out scale will be amended accordingly, requiring
be made in line with the Code.
performance at the benchmark median before
rewarding beneficiaries;
If within twenty-four months following a change of
• Non-financial criteria: the Innovation Performance
control (as defined), the Chairman’s services are
Factor will be replaced by two ESG-related criteria.
terminated by the Company (other than for cause),
OTHER BENEFITS
or are terminated by the Chairman for good reason,
the Chairman is entitled to receive the accelerated
Executive directors may also be entitled to
vesting of awards under his long-term incentive plan.
customary fringe benefits such as personal use of
aircraft, company cars and drivers, personal/home
security, medical insurance, accident insurance,
tax preparation and financial counselling. The
Compensation Committee may grant other benefits to
the executive directors in particular circumstances.
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / 1. REMUNERATION STRATEGY FOR THE 2021 FINANCIAL YEAR
INTERNAL PAY RATIOS
data) is as follows: using the CEO’s total annual
In line with the Dutch Corporate Governance Code,
remuneration(41) provided for 2021 (€4,486,151), the
the internal pay ratio is an important input for
resulting CEO pay ratio versus the average employee
determining the Remuneration Policy for the Board of
annual remuneration(42) was 48.4 (in 2020: 87.4).
Directors. In addition, also in line with new guidance
The value of the CEO pay ratio as compared with
on methodology, the Company has applied a different
the pay ratios disclosed in the previous years is not
methodology when compared to previous years.
representative due to the change of the calculation
For the financial year 2021 the internal pay ratio (the
methodology, as explained above. For this reason and
ratio between (i) the total annual remuneration of the
in order to provide a comparison, the table below
CEO and (ii) the average annual remuneration of the
reports the pay ratios of the previous years calculated
employees of the company and the group companies
following the current calculation methodology.
of which the company consolidates the financial
CEO Total Remuneration Costs (A)
Average Employee (FTE) Total Remuneration Costs (B)
PAY RATIO (A/B)
2021
2020
2019
4,486,151
6,835,721
8,631,030
92,656
78,193
48.4
87.4
83,780
103.0
The decrease in the pay ratio in 2021 when compared to 2020 can be explained, inter alia, by the fact that for 2020
and 2019 the pay ratio is calculated considering the remuneration of the former CEO, Louis Camilleri, whose
compensation package was different from that of the current CEO and included a large portion of LTI variable
compensation.
For 2021 the pay ratio is calculated considering the remuneration of the current CEO, Benedetto Vigna payable
for the period from September 16, 2021 which includes a one-off Welcome Bonus. There is no significant
difference between the pay ratio so calculated and the pay ratio calculated based on the target remuneration
elements pro rated on a full year basis. In addition, the compensation payable to Mr. Elkann as interim CEO
during 2021 is not included in the calculation of the pay ratio, because such compensation has been forfeited by
Mr. Elkann (see “—Implementation of Remuneration Strategy in 2021—Directors’ Compensation” below).
RECOUPMENT OF INCENTIVE COMPENSATION (CLAW BACK POLICY)
The Equity Incentive Plans (the Equity Incentive Plan 2019-2021, the Equity Incentive Plan 2020-2022 and the Equity
Incentive Plan 2021-2023) include a claw back clause, which allows the Company to claim the refund of part or all
of the variable component of remuneration awarded or paid on the basis of information or data that subsequently
prove manifestly incorrect, if the Board of Directors determines that circumstances that would have constituted
“cause” (as defined) existed while the remuneration remained unvested or due to the beneficiaries’ fraud or
negligence (each, a “Recovery Event”).
In particular, if a Recovery Event occurs within two years after the payment of cash or delivery of any shares in
respect of the PSUs or RSUs, a participant will be required to repay the net amount received, as determined by the
Board of Directors in its discretion.
(41) The total annual remuneration of the CEO includes all remuneration components (such as fixed remuneration, variable remuneration in cash
(bonus), the share-based portion of the remuneration (value of the share-based payment is determined at the time of allocation in line with the
applicable regulations under IFRS), social premiums, pension, expense allowance, et cetera), as included in the (consolidated) financial statements on
an IFRS basis.
(42) The average annual remuneration of the employees is determined by dividing the total wage costs in the financial year (as included in the
(consolidated) financial statements on an IFRS basis) by the average number of FTEs during the financial year. Hiring of external employees is taken
into account on a pro rata basis, insofar as these are hired for at least three months during the financial year.
228
FERRARI N.V.AR 2021 STOCK OWNERSHIP
In 2019 the Board of Directors determined stock ownership guidelines applicable to Ferrari’s directors and
certain employees, recognizing the critical role that stock ownership has in aligning the interests, in particular,
of Ferrari’s Executive Chairman, CEO, FLT members and senior leaders and key employees with those of the
shareholders. As of the end of the 2021 financial year, covered employees should own Ferrari common shares in
the following minimum amounts (as a multiple of net base salary):
Incumbent
Executive Chairman and Chief Executive Officer
Other FLT members
Other senior leaders
Other key employees
Share Ownership Guideline
6 times net base salary
3 times net base salary
1.5 times net base salary
1 times net base salary
The above listed covered employees are required to
EBITDA and Innovation Performance Factor), which
achieve the applicable ownership threshold within
represents a significant part of the Chairman’s and
five years, through acquisitions of Ferrari common
the CEO’s compensation package, supports both
shares as a result of the vesting of PSUs or RSUs
Ferrari’s business strategy and value creation for
until the required ownership level has been met,
our shareholders. As specified above, in 2022 the
excluding any shares sold to pay taxes in connection
non-financial criteria will be updated, replacing the
with the granting of those shares. In addition to the
Innovation Performance Factor with two ESG-related
stock ownership guidelines, the Executive Chairman
factors.
and the CEO are each required to retain one hundred
percent (100%) of the number of shares of common
The Compensation Committee evaluates the mix of
stock issued, on a net, after-tax basis, upon vesting
variable compensation linked to financial and non-
and settlement of any equity awards granted to
financial performance, as well as shareholder returns,
such individual until the fifth anniversary of the grant
taking also into account the wages and employment
date of such award other than in the event of death,
conditions of our employees. Our incentive plans
termination of service due to total disability, approved
are based on peer and market benchmarked
leave of absence or retirement.
performance metrics.
SCENARIO ANALYSIS
In the event that specific long-term threshold
On an annual basis, the non-executive directors, upon
performance targets are not achieved, there will
proposal of the Compensation Committee, examine
be no variable pay vesting or payout for executive
the relationship between the performance criteria
directors for the relevant period.
chosen and the possible outcomes for the variable
remuneration of our executive directors (scenario
The following table and chart describe compensation
analysis). To date, the non-executive directors believe
levels that the Executive Chairman and the CEO
the remuneration policy has proven effective in
could receive in 2022 (2021 has not been considered
terms of establishing a correlation between Ferrari’s
since less representative) under the compensation
strategic goals and the chosen performance criteria,
packages to be implemented and different scenarios
as the main key performance criteria of our executive
in a calendar year, assuming a constant share price
directors’ long-term incentive plan (i.e. the TSR,
(i.e. no appreciation):
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / 1. REMUNERATION STRATEGY FOR THE 2021 FINANCIAL YEAR
Element of remuneration
Details of assumption
Fixed remuneration
This comprises base salary with effect from January 1, 2022. The Executive Chairman salary is
€500,000 (starting from October 1, 2021) and the CEO annualized salary is €1,500,000.
Short-term Incentive Plan
the Chairman and the CEO will include a short-term incentive plan with a target pay-opportunity
Subject to approval by the next Annual General Meeting, the compensation packages for 2022 for
equal to 100% of base salary and maximum pay-opportunity equal to 225% of base salary.
The new LTI Plan 2022-2024 will introduce significant changes as to the amount of PSUs and RSUs
to be awarded to the executive directors (which will be awarded only with PSUs) and as to the
metrics to which PSUs are linked.
Executive Chairman and CEO:
Long-term Incentive Plan
• in case of failure to achieve any of the performance criteria the scenario assumes no award of
PSUs;
• in case of achievement of the targets for each of the performance criteria, the scenario
assumes an award equal to target pay opportunity (200% of base salary);
• in case of achievement of the maximum level of each performance criteria the scenario
assumes the award equal to maximum pay opportunity (274% of base salary).
Chairman Remuneration (€)
CEO Remuneration (€)
10,000,000
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
Chairman
Minimum
Chairman
Target
Chairman
Maximum
CEO
Minimum
CEO
Target
CEO
Maximum
Fixed Remuneration
Short-Term Incentives
Long-Term Incentives
N.B. Details about the Chairman and the CEO’s actual 2021 remuneration are included in section 2. Implementation of remuneration policy in 2021.
230
FERRARI N.V.AR 2021
REMUNERATION POLICY FOR NON-EXECUTIVE DIRECTORS
Remuneration of non-executive directors is approved by the Company’s shareholders and periodically reviewed
by the Compensation Committee.
Remuneration of non-executive directors is fixed and not dependent on the Company’s financial results. Non-
executive directors are not eligible for variable compensation and do not participate in any incentive plans.
The current annual remuneration for the non-executive directors (which was approved at the AGM, held on April
15, 2020) is shown in the table below:
Non-Executive Director Compensation
Annual cash retainer
Additional retainer for Audit Committee member
Additional retainer for Audit Committee Chairman
Additional retainer for Compensation Committee member
Additional retainer for Compensation Committee Chairman
Additional retainer for ESG Committee member
Additional retainer for ESG Committee Chairman
Additional retainer for the senior non-executive Director
U.S. $
$75,000
$10,000
$20,000
$5,000
$15,000
$5,000
$15,000
$25,000
All remuneration of the non-executive directors is paid in cash.
REMUNERATION OF OTHER EMPLOYEES
Ferrari aims to provide a market-competitive and fair remuneration package for its workforce, in line with the
remuneration policy and in order to better pursue the Company’s strategy and purpose and contribute to long-
term value creation.
Furthermore, Ferrari operates a merit-based remuneration policy, not discriminating on the basis of gender,
age, nationality, social status or cultural background. In 2020, Ferrari S.p.A. started an in-depth analysis on equal
remuneration, which led, in July 2020, to the award of the Equal Salary Certificate for providing equal pay to
men and women with the same qualifications and positions in the Company which has been maintained also
in 2021. This award is a testament to the Company’s commitment to creating an inclusive and diverse working
environment while fostering career development for all. Ferrari was the first Italian Company to receive this
award The certification process included a detailed statistical analysis of compensation levels, which revealed that
Ferrari is one of Europe’s companies successfully eliminating the gender pay gap. Ferrari sees this certification
not as an end point but as a further stage of growth and an opportunity to implement tangible actions to ensure
that everyone can pursue his own professional growth.
The same process was conducted in 2020 also for Ferrari North America Inc. which has been awarded with the
Equal Salary Certification as well as Ferrari S.p.A. and maintains it in 2021.
231
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS
2. IMPLEMENTATION OF REMUNERATION
STRATEGY IN 2021
INTRODUCTION
This section sets out the implementation of Ferrari’s remuneration strategy for the year ended December 31,
2021. The remuneration granted in the year ended December 31, 2021 is in accordance with the substance and
the procedures of the remuneration strategy (as set out above) and therefore we believe it allows us to seek to
attract and retain the most highly qualified executive talent and motivate such executives to achieve business and
financial goals that create long-term value for shareholders in a manner consistent with our core business and
leadership values and taking into account the social context around the Company.
DIRECTORS’ COMPENSATION
The following table summarizes the remuneration received by the members of the Board of Directors for the year
ended December 31, 2021 from Ferrari and its subsidiaries.
Name
Office held
Fixed remuneration
Annual
fee
(€)
Fringe
benefits
(€)
Variable
remuneration
(€)
Extraordinary
items (€)
Pension
expense
(€)
Total
remuneration
(4)(5)
(€)
John Elkann (1)
Chairman and
Executive Director
325,405
11,533(3)
— (*)
—
Benedetto Vigna (2)
Chief Executive Officer
and Executive Director
500,000
3,852(3)
Total
Executive Directors
825,405
15,385
Piero Ferrari
Sergio Duca
Vice Chairman and
Non-Executive Director
Senior Non-Executive
Director
Delphine Arnault
Francesca Bellettini
Roberto Cingolani (5)
Eddy Cue
John Galantic
Maria Patrizia Grieco
Adam Keswick
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
68,825
12,237(3)
103,238
68,171
73,127
8,225
73,127
77,429
73,127
64,524
—
—
—
—
—
—
—
—
Total
Non-Executive Directors
609,793
12,237
—
—
—
—
—
—
—
—
—
—
—
—
3,982,299(6)
3,982,299
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
336,938
4,486,151
4,823,089
81,062
103,238
68,171
73,127
8,225
73,127
77,429
73,127
64,524
622,030
(1) From 01/01/2021 to 09/15/2021: Chairman, CEO and Executive Director. From 09/16/2021 to 12/31/2021: Chairman, and Executive Director.
(2) Mr. Vigna joined Ferrari as CEO and Executive Director on 09/16/2021.
(3) Relate to car benefits provided to Mr. Vigna, Mr. Elkann and Mr. Ferrari in accordance with the remuneration policy.
(4) Certain amounts have been translated from U.S. Dollars to Euro.
(5) Mr. Roberto Cingolani was Non-Executive Director from 04/16/2020 to 02/13/2021.
(6) As a Welcome Bonus for having joined Ferrari, the CEO has been granted (i) an extraordinary lump sum of €1,000,000 and (ii) 16,256 Ferrari
common shares, in each case subject to approval by shareholders at the 2022 Annual General Meeting.
(*) For information regarding equity-based variable compensation see Share- Based Compensation of Executive Directors below.
The Chairman, Mr. John Elkann, asked not to receive any remuneration for the period during which he served as
Interim CEO. The Board of Directors acknowledged this and decided to allocate an equivalent sum as a charitable
donation to an education fund with the mandate to provide locally quality, fair and inclusive education as well as
equal learning opportunities.
232
FERRARI N.V.AR 2021 The following table summarizes the remuneration received by the members of the Board of Directors for the year
ended December 31, 2020 from Ferrari and its subsidiaries.
Variable
remuneration
(€)
Extraordinary
items (€)
Pension
expense
(€)
Total
remuneration
(4) (€)
Name
Office held
John Elkann (1)
Louis C. Camilleri (2)
Chairman and
Executive Director
Chief Executive Officer
and Executive Director
Fixed remuneration
Annual
fee
(€)
Fringe
benefits
(€)
65,904
11,886(3)
363,960
11,886(3)
Total
Executive Directors
429,864
23,772
Piero Ferrari
Sergio Duca
Delphine Arnault
Francesca Bellettini (6)
Giuseppina Capaldo (7)
Roberto Cingolani (8)
Eddy Cue
John Galantic (6)
Maria Patrizia Grieco
Adam Keswick
Elena Zambon (7)
Vice Chairman and
Non-Executive Director
Senior Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
18,155
11,886(3)
27,233
17,020
—
23,829
—
19,290
—
19,290
17,020
17,020
—
—
—
—
—
—
—
—
—
—
—(*)
—(*)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
77,790
375,846
453,636(5)
30,041
27,233
17,020
—
23,829
—
19,290
—
19,290
17,020
17,020
170,743(5)
Total
Non-Executive Directors
158,857
11,886
—
(1) From 01/01/2020 to 12/15/2020: Chairman and Executive Director. From 12/15/2020 to 12/31/2020: Chairman, CEO and Executive Director.
(2) Mr. Camilleri was CEO until 12/10/2020.
(3) Relate to car benefits provided to Mr. Camilleri, Mr. Elkann and Mr. Ferrari in accordance with the remuneration policy.
(4) Certain amounts have been translated from U.S. Dollars to Euro.
(5)
In response to the healthcare crisis caused by the COVID-19 pandemic, the Board of Directors waived their full cash compensation from April to the
end of the year to help fund Company initiatives to support the communities in which Ferrari operates.
(6) Mrs. Francesca Bellettini and Mr. John Galantic were Non-Executive Directors from 04/16/2020.
(7) Mrs. Elena Zambon and Mrs. Giuseppina Capaldo were Non-Executive Directors from 01/01/2020 to 04/16/2020.
(8) Mr. Roberto Cingolani was Non-Executive Director from 04/16/2020 to 02/13/2021.
(*) For information regarding equity-based variable compensation see Share- Based Compensation of Executive Directors below.
233
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/ 2. IMPLEMENTATION OF REMUNERATION STRATEGY IN 2021
The following table shows a comparison of the total remuneration of directors over the last five years, based on
Ferrari directors who served as directors in 2021.
Name
Office held
2021
2020
2019
2018
2017
Directors’ Total Remuneration (€)
Chairman and
Executive Director
Chief Executive Officer and
Executive Director
Former Chief Executive Officer
and Executive Director
Vice Chairman and
Non-Executive Director
Senior Non-Executive
Director
336,938(1)
77,790
223,586
92,579(3)
115,317
4,486,151(6)
—
—
—
—
—
375,846(4)
887,255
270,412(5)
133,021
81,062
30,041
83,472
80,546
111,919
103,238
27,233
109,810
94,890(7)
119,743
John Elkann (*)
Benedetto Vigna (*)
Louis C. Camilleri (*)
Piero Ferrari
Sergio Duca
Delphine Arnault
Francesca Bellettini (8)
Roberto Cingolani (10)
Eddy Cue
John Galantic (8)
Maria Patrizia Grieco
Adam Keswick
Adjusted EBITDA
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Average Ferrari Share Price
Median fixed remuneration of employees (**)
68,171
17,020
67,080
63,889
97,614
73,127
8,225
—
—
—
—
—
—
—
—
73,127
19,290
73,542
68,149
102,039
77,429
—
—
—
—
73,127
19,290
76,024
72,408
106,465
64,524
17,020
67,080
63,889
97,614
1,531
185.25
34,071
1,143
155.98
32,876
1,269
1,114
131.44
105.49
1,036
79.93
31,782
30,600
30,385
(1) From 01/01/2021 to 09/15/2021: Chairman, CEO and Executive Director. From 09/16/2021 to 12/31/2021: Chairman and Executive Director.
(2) From 01/01/2019 to 04/12/2019: Chairman and Non-Executive Director. From 04/12/2019 to 12/31/2019: Chairman and Executive Director.
(3) From 01/01/2018 to 07/21/2018: Vice Chairman and Non-Executive Director. From 07/21/2018 to 12/31/2018: Chairman and Non-Executive
Director.
(4) Chief Executive Officer and Executive Director until 12/10/2020.
(5) From 01/01/2018 to 07/21/2018: Senior Non-Executive Director. From 09/07/2018 to 12/31/2018: Chief Executive Officer and Executive Director.
(6) Mr. Vigna joined Ferrari as CEO and Executive Director on 09/16/2021. As a Welcome Bonus for having joined Ferrari, the CEO has been granted
(i) an extraordinary lump sum of €1,000,000 and (ii) 16,256 Ferrari common shares, in each case subject to approval by shareholders at the 2022
Annual General Meeting.
(7) From 07/21/2018 to 12/31/2018: Senior Non-Executive Director
(8) Mrs. Francesca Bellettini and Mr. John Galantic were Non-Executive Directors from 04/16/2020.
(9) Mr. Roberto Cingolani was Non-Executive Director from 04/16/2020 to 02/13/2021.
(*) For information regarding equity-based variable compensation see Share- Based Compensation of Executive Directors below.
(**) This information does not include the “Premio di Competitività”, which is on top of the fixed remuneration.
As a Welcome Bonus for having joined Ferrari, the CEO has been granted (i) an extraordinary lump sum of
€1,000,000 and (ii) 16,256 Ferrari common shares, in each case subject to approval by shareholders at the 2022
Annual General Meeting.
234
FERRARI N.V.AR 2021 SHARE-BASED COMPENSATION OF EXECUTIVE DIRECTORS
The following table provides an overview of the outstanding Equity Incentive Plans provided to Ferrari Executive
Directors in 2021:
Main conditions of share award plans
Movements in share awards during 2021
Name,
position
Plan
Performance
period
Grant
date
Vesting
date
Number of
unvested
shares at
January 1,
2021
Shares
awarded
Shares
vested
Number of
unvested
shares at
December
31, 2021
of which are
subject to
performance
conditions
Equity
Incentive
Plan
2019-2021
Equity
Incentive
Plan
2020-2022
Equity
Incentive
Plan
2021-2023
Equity
Incentive
Plan
2019-2021
John Elkann,
Executive
Chairman
Louis C. Camilleri,
Former Chief
Executive Officer
2019 - 2021
April 2019 March 2022
20,703
—
—
20,703
13,802
2020 - 2022
April 2020 March 2023
4,829
—
—
4,829
3,219
2021 - 2023
April 2021 March 2024
—
4,448
—
4,448
2,965
2019 - 2021
April 2019
March 2021
100,479
— 100,479
—
—
March 2020
March 2022
COMPENSATION OF THE MEMBERS OF THE FLT
The compensation paid to or accrued during the year ended December 31, 2021 by Ferrari and its subsidiaries
to the members of the FLT (excluding the CEO) amounted to €18.7 million in aggregate, €14.1 million for salary
and other short-term benefits (which is linked to the FY 2021 performance and represents slightly more than the
target set levels), €4.2 million for share-based compensation in relation to PSUs and RSUs awarded under the
Group’s Equity Incentive Plans (2019-2021; 2020-2022; 2021-2023) and €0.4 million for the Group’s contributions to
pension funds. The PSU and RSU awards will vest in March 2022, 2023 and 2024, subject to continued employment
and, for the PSU awards, to the achievement of performance conditions related to TSR, EBITDA and Innovation, as
described above. Given Ferrari’s third place positioning in the TSR ranking against the Peer Group (corresponding
to the vesting of 100 per cent. of the target PSUs awarded) for the vesting of the Equity Incentive Plan 2016-2020,
which covers the performance period from 2018 to 2020, ending at December 31, 2020, 37,082 PSUs and 19,812
RSUs had vested for FLT members.
DIRECTOR AND OFFICER OVERLAPS
There are overlaps among certain directors and officers of Stellantis (formerly FCA) and our directors and
officers. These individuals owe duties both to us and to the other companies that they serve as officers and/or
directors. This may raise certain conflicts of interest as, for example, these individuals review opportunities that
may be appropriate or suitable for both Ferrari and such other companies, or business transactions are pursued
in which both Ferrari and such other companies have an interest, such as Ferrari’s arrangement to supply
engines for Maserati cars. For example, Mr. John Elkann our Chairman, is also the Chairman of Stellantis and the
Chairman and Chief Executive Officer of Exor. At February 14, 2022, Exor held approximately 24.21 percent of our
outstanding common shares and approximately 36.00 percent of the voting power in the Company, while it holds
approximately 14.4 percent of the outstanding common shares in Stellantis, based on SEC filings. The percentages
of ownership and voting power above are calculated based on the number of outstanding shares net of treasury
shares. See “Risk Factors - Risks related to our Common Shares - We may have potential conflicts of interest with
Stellantis and Exor and its related companies”.
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STATEMENTS
238
FERRARI N.V.AR 2021 INDEX
TO CONSOLIDATED
FINANCIAL STATEMENTS
Consolidated Income Statement
Consolidated Statement
of Comprehensive Income
240
241
Consolidated Statement of Financial Position
242
Consolidated Statement of Cash Flows
243
Consolidated Statement of Changes in Equity
244
Notes to the Consolidated Financial
Statements
245
239
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS CONSOLIDATED
INCOME
STATEMENT
FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019
(€ thousand)
Net revenues
Cost of sales
Selling, general and administrative costs
Research and development costs
Other expenses/(income), net
Result from investments
EBIT
Net financial expenses
Profit before taxes
Income tax expense
Net profit
Net profit attributable to:
Owners of the parent
Non-controlling interests
Basic earnings per common share (in €)
Diluted earnings per common share (in €)
For the years ended December 31,
Note
2021
2020
2019
4
5
6
7
8
9
4,270,894
3,459,790
3,766,615
2,080,613
1,686,324
1,805,310
348,024
768,104
5,561
6,896
336,126
707,385
18,475
4,647
343,179
699,211
4,991
3,522
1,075,488
716,127
917,446
33,257
49,092
42,082
1,042,231
667,035
875,364
10
209,095
58,155
176,656
833,136
608,880
698,708
3
12
12
830,767
607,817
695,818
2,369
4.50
4.50
1,063
3.29
3.28
2,890
3.73
3.71
The accompanying notes are an integral part of the Consolidated Financial Statements.
240
FERRARI N.V.AR 2021 CONSOLIDATED
STATEMENT OF
COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019
(€ thousand)
For the years ended December 31,
Note
2021
2020
2019
Net profit
833,136
608,880
698,708
Items that will not be reclassified to the consolidated income statement
in subsequent periods:
(Losses)/Gains on remeasurement of defined benefit plans
Related tax impact
Total items that will not be reclassified to the consolidated income
statement in subsequent periods
Items that may be reclassified to the consolidated income statement
in subsequent periods:
(Losses)/Gains on cash flow hedging instruments
Exchange differences on translating foreign operations
Related tax impact
Total items that may be reclassified to the consolidated income
statement in subsequent periods
20
20
20
20
20
(463)
110
(353)
34
1
35
(64,130)
14,229
17,960
40,109
(11,731)
(11,291)
(31,941)
17,087
Total other comprehensive (loss)/income, net of tax
(32,294)
17,122
(2,078)
456
(1,622)
(2,272)
2,652
610
990
(632)
Total comprehensive income
800,842
626,002
698,076
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interests
797,988
625,053
695,075
2,854
949
3,001
The accompanying notes are an integral part of the Consolidated Financial Statements.
241
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS CONSOLIDATED
STATEMENT OF
FINANCIAL POSITION
AT DECEMBER 31, 2021 AND 2020
(€ thousand)
Assets
Goodwill
Intangible assets
Property, plant and equipment
Investments and other financial assets
Deferred tax assets
Total non-current assets
Inventories
Trade receivables
Receivables from financing activities
Current tax receivables
Other current assets
Current financial assets
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity attributable to owners of the parent
Non-controlling interests
Total equity
Employee benefits
Provisions
Deferred tax liabilities
Debt
Other liabilities
Other financial liabilities
Trade payables
Current tax payables
Total equity and liabilities
At December 31,
Note
2021
2020
13
14
15
16
10
17
18
18
18
18
19
3
20
22
23
10
24
25
19
26
785,182
1,138,173
785,182
979,290
1,353,165
1,226,630
54,509
168,757
42,841
152,221
3,499,786
3,186,164
540,575
185,000
1,143,968
14,306
122,224
13,500
460,617
184,260
939,607
12,438
76,471
40,084
1,344,146
1,362,406
3,363,719
3,075,883
6,863,505
6,262,047
2,205,898
1,785,186
5,518
4,018
2,211,416
1,789,204
101,200
150,868
95,973
59,985
155,335
113,474
2,630,011
2,724,745
726,775
36,520
797,832
112,910
687,462
2,140
713,807
15,895
6,863,505
6,262,047
The accompanying notes are an integral part of the Consolidated Financial Statements.
242
FERRARI N.V.AR 2021 CONSOLIDATED
STATEMENT OF
CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019
(€ thousand)
Cash and cash equivalents at the beginning of the year
1,362,406
897,946
793,664
For the years ended December 31,
2021
2020
2019
Cash flows from operating activities:
Profit before taxes
Amortization and depreciation
Provision accruals
Result from investments
Net finance costs
Other non-cash expenses, net
Change in inventories
Change in trade receivables
Change in trade payables
Change in receivables from financing activities
Change in other operating assets and liabilities
Finance income received
Finance costs paid
Income tax paid
1,042,231
455,989
30,284
(6,896)
33,257
23,941
(81,309)
1,771
72,568
(122,746)
(29,840)
1,679
(29,202)
(109,001)
667,035
426,637
25,805
(4,647)
49,092
39,073
(67,797)
44,477
8,594
(69,376)
(137,313)
2,109
(54,427)
(91,051)
875,364
351,946
14,253
(3,522)
42,082
38,987
(40,627)
(22,377)
53,940
(76,694)
145,547
3,274
(42,600)
(33,480)
Total cash flows from operating activities
1,282,726
838,211
1,306,093
Cash flows used in investing activities:
Investments in property, plant and equipment
(352,316)
(357,018)
(352,154)
Investments in intangible assets
(384,827)
(351,978)
(353,458)
Proceeds from the sale of property, plant and equipment and intangible assets
4,405
969
4,539
Total cash flows used in investing activities
(732,738)
(708,027)
(701,073)
Cash flows (used in)/from financing activities:
Repayment of bonds and notes
Proceeds from bonds and notes
Net change in borrowings to banks and other financial institutions
Proceeds from securitizations, net of repayments
Repayment of lease liabilities
Net change in other debt
Dividends paid to owners of the parent
Dividends paid to non-controlling interests
Share repurchases
(500,000)
—
(315,395)
149,495
121,385
71,444
(21,605)
(8,037)
640,073
298,316
(1,740)
44,126
(20,035)
18,081
(3,516)
92,173
(3,896)
12,322
(160,101)
(208,100)
(192,664)
(1,354)
(2,929)
(2,120)
(230,899)
(129,793)
(386,749)
Total cash flows (used in)/from financing activities
(579,672)
339,683
(501,529)
Translation exchange differences
Total change in cash and cash equivalents
Cash and cash equivalents at the end of the year
11,424
(5,407)
(18,260)
464,460
1,344,146
1,362,406
791
104,282
897,946
The accompanying notes are an integral part of the Consolidated Financial Statements.
243
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS CONSOLIDATED
STATEMENT OF CHANGES
IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019
(€ thousand)
Share
capital
Retained
earnings
and other
reserves
Cash
flow
hedge
reserve
Currency
translation
differences
Remeasurement
of defined benefit
plans
Equity
attributable
to owners of
the parent
Non-
controlling
interests
Total
At January 1, 2019
2,504
1,319,478
(2,992)
37,850
(8,118)
1,348,722
5,117
1,353,839
Net profit
Other comprehensive income/
(loss)
Dividends to owners of the parent
Dividends to non-controlling
interests
Share repurchases
Share-based compensation
—
—
—
—
—
—
Special voting shares issuance (1)
69
695,818
—
—
—
695,818
2,890
698,708
—
(1,662)
2,541
(1,622)
(743)
111
(632)
(193,238)
—
(386,749)
17,480
(69)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(193,238)
—
(193,238)
—
(2,120)
(2,120)
(386,749)
17,480
—
—
—
—
(386,749)
17,480
—
At December 31, 2019
2,573
1,452,720
(4,654)
40,391
(9,740)
1,481,290
5,998
1,487,288
Net profit
Other comprehensive income/
(loss)
Dividends to owners of the parent
Dividends to non-controlling
interests
Share repurchases
Share-based compensation
—
—
—
—
—
—
607,817
—
—
—
28,818
(11,617)
(208,765)
—
(129,793)
17,401
—
—
—
—
—
—
—
—
—
35
—
—
—
—
607,817
1,063
608,880
17,236
(114)
17,122
(208,765)
—
(208,765)
—
(2,929)
(2,929)
(129,793)
17,401
—
—
(129,793)
17,401
At December 31, 2020
2,573
1,739,380
24,164
28,774
(9,705)
1,785,186
4,018
1,789,204
Net profit
Other comprehensive income/
(loss)
Dividends to owners of the parent
Dividends to non-controlling
interests
Share repurchases
Share-based compensation
Other movements
—
—
—
—
—
—
—
830,767
—
—
—
830,767
2,369
833,136
—
(46,170)
13,744
(353)
(32,779)
485
(32,294)
(160,272)
—
(230,899)
13,895
(418)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
418
(160,272)
—
(160,272)
—
(1,354)
(1,354)
(230,899)
13,895
—
—
—
—
(230,899)
13,895
—
At December 31, 2021
2,573
2,192,453
(22,006)
42,518
(9,640)
2,205,898
5,518
2,211,416
(1) See Note 20 “Equity” for additional details.
The accompanying notes are an integral part of the Consolidated Financial Statements.
244
FERRARI N.V.AR 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. BACKGROUND AND
BASIS OF PREPARATION
BACKGROUND
The consolidated financial statements are prepared
on a going concern basis and applying the
historical cost method, modified as required for the
measurement of certain financial instruments, which
Ferrari is among the world’s leading luxury brands.
are generally measured at fair value.
The activities of Ferrari N.V. (herein referred to as
“Ferrari” or the “Company” and together with its
The Group’s presentation currency is the Euro, which
subsidiaries the “Group”) and its subsidiaries are
is also the functional currency of the Company, and
focused on the design, engineering, production and
unless otherwise stated information is presented in
sale of luxury performance sports cars. The cars are
thousands of Euro.
designed, engineered and produced in Maranello
and Modena, Italy and sold in more than 60 markets
2. SIGNIFICANT ACCOUNTING POLICIES
worldwide through a network of 172 authorized
dealers operating 191 points of sale. The Ferrari
FORMAT OF THE FINANCIAL STATEMENTS
brand is licensed to a selected number of producers
The consolidated financial statements include
and retailers of luxury and lifestyle goods, with Ferrari
the consolidated income statement, consolidated
branded merchandise also sold through a network
statement of comprehensive income, consolidated
of 16 Ferrari-owned stores and 14 franchised stores
statement of financial position, consolidated
(including 12 Ferrari Store Junior), as well as on
statement of cash flows, consolidated statement
Ferrari’s website. To facilitate the sale of new and
of changes in equity and the accompanying notes
pre-owned cars, the Group provides various forms
(referred to collectively as the “Consolidated Financial
of financing to clients and dealers, including through
Statements”).
cooperation and other agreements with certain
financial institutions. Ferrari also participates in the
For presentation of the consolidated income
Formula 1 World Championship through Scuderia
statement, the Group uses a classification based on
Ferrari. The activities of Scuderia Ferrari are a core
the function of expenses, as it is more representative
element of Ferrari marketing and promotional
of the format used for internal reporting and
activities and an important source of innovation to
management purposes and is consistent with
support the technological advancement of Ferrari
international practice.
range models.
BASIS OF PREPARATION
In the consolidated income statement, the Group
presents a subtotal for Earnings Before Interest and
AUTHORIZATION OF CONSOLIDATED FINANCIAL
Taxes (EBIT). EBIT distinguishes between the profit
STATEMENTS AND COMPLIANCE WITH
before taxes arising from operating items and those
INTERNATIONAL FINANCIAL REPORTING STANDARDS
arising from financing activities. EBIT is one of the
These consolidated financial statements of Ferrari
primary measures used by the Board of Directors
N.V. were authorized for issuance by the Board of
(the Group’s “Chief Operating Decision Maker” as
Directors on February 25, 2022.
defined in IFRS 8 — Operating Segments) to assess
The consolidated financial statements have been
performance.
prepared in accordance with the International
For presentation of the consolidated statement of
Financial Reporting Standards (“IFRS”) as issued
financial position, a mixed format has been selected
by the International Accounting Standards Board
to present current and non-current assets and
(“IASB”), as well as IFRS as adopted by the European
liabilities, as permitted by IAS 1 paragraph 60. More
Union. There is no effect on these consolidated
specifically, the Consolidated Financial Statements
financial statements resulting from differences
include both industrial and financial services activities.
between IFRS as issued by the IASB and IFRS as
Receivables from financing activities are included in
adopted by the European Union. The designation
current assets as the investments will be realized in
IFRS also includes International Accounting
their normal operating cycle. The funding for financial
Standards (“IAS”) as well as the interpretations of
services activities is primarily obtained through
the International Financial Reporting Interpretations
securitization programs and funding from certain
Committee (“IFRIC” and “SIC”).
of the Group’s operating companies. This financial
service structure within the Group does not allow the
separation of financial liabilities funding the financial
services operations (whose assets are reported
245
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / 2. SIGNIFICANT ACCOUNTING POLICIES
within current assets) and those funding the industrial
There was no effect from the adoption of these
operations. Presentation of financial liabilities as
amendments.
current or non-current based on their date of
maturity would not facilitate a meaningful comparison
The Group adopted the amendments to IFRS 4 —
with financial assets, which are categorized on the
Insurance Contracts which deferred the expiry date
basis of their normal operating cycle. Disclosure as
of the temporary exemption from applying IFRS 9
to the due date of the various components of debt is
to annual periods beginning on or after January 1,
provided in Note 24.
2021. There was no effect from the adoption of these
The consolidated statement of cash flows is
amendments.
presented using the indirect method.
The Group adopted the amendments to IFRS 16 for
NEW STANDARDS AND AMENDMENTS
EFFECTIVE FROM JANUARY 1, 2021
COVID-19-related rent concessions beyond 30 June
2021. The amendment extended the applicability of a
previous amendment to IFRS 16 in 2020 that permits
The following new amendments that are applicable
lessees, as a practical expedient, not to assess
on or subsequent to January 1, 2021 were adopted by
whether particular rent concessions occurring as
the Group for the preparation of these Consolidated
a direct consequence of the COVID-19 pandemic
Financial Statements.
are lease modifications and instead to account
for those rent concessions as if they are not lease
The Group adopted a package of amendments to
modifications, thus giving the possibility to the lessees
IFRS 9 — Financial Instruments, IAS 39 — Financial
to recognize the entire economic benefit of such
Instruments: Recognition and Measurement, IFRS 7 —
discounts immediately through profit or loss. There
Financial Instruments: Disclosures, IFRS 4 — Insurance
was no significant effect from the adoption of this
Contracts and IFRS 16 — Leases in response to the
amendment.
reform of inter-bank offered rates (IBOR) and other
interest rate benchmarks. The amendments aim at
helping companies to provide investors with useful
NEW STANDARDS, AMENDMENTS AND
INTERPRETATIONS NOT YET EFFECTIVE
information about the effects of the reform on those
The standards, amendments and interpretations
companies’ financial statements. These amendments
issued by the International Accounting Standards
focus on the effects on financial statements when a
Board (“IASB”) that will have mandatory application in
company replaces the old interest rate benchmark
2022 or subsequent years are listed below:
with an alternative benchmark rate as a result of the
reform. The new amendments relate to:
In May 2017 the IASB issued IFRS 17 — Insurance
• changes to contractual cash flows – a company
Contracts, which establishes principles for the
is not be required to derecognize or adjust the
recognition, measurement, presentation and
carrying amount of financial instruments for
disclosure of insurance contracts issued as well
changes required by the interest rate benchmark
as guidance relating to reinsurance contracts
reform, but will instead update the effective
held and investment contracts with discretionary
interest rate to reflect the change to the alternative
participation features issued. In June 2020 the IASB
benchmark rate;
issued amendments to IFRS 17 aimed at helping
• hedge accounting – a company does not have to
companies implement IFRS 17 and make it easier for
discontinue its hedge accounting solely because
companies to explain their financial performance.
it makes changes required by the interest rate
The new standard and amendments are effective on
benchmark reform if the hedge meets other hedge
or after January 1, 2023. The Group does not expect
accounting criteria; and
any material impact from the adoption of these
• disclosures – a company is required to disclose
amendments.
information about new risks that arise from the
interest rate benchmark reform and how the
In January 2020 the IASB issued amendments to IAS 1
company manages the transition to alternative
— Presentation of Financial Statements: Classification
benchmark rates.
of Liabilities as Current or Non-Current to clarify how
to classify debt and other liabilities as current or non-
current, and in particular how to classify liabilities with
an uncertain settlement date and liabilities that may
be settled by converting to equity. These amendments
are effective on or after January 1, 2023. The Group
246
FERRARI N.V.AR 2021 does not expect any material impact from the
material accounting policy information rather than
adoption of these amendments.
their significant accounting policies and provide
In May 2020 the IASB issued amendments to IFRS 3 —
to accounting policy disclosures. These amendments
Business combinations to update a reference in IFRS 3
are effective on or after January 1, 2023. The Group
to the Conceptual Framework for Financial Reporting
does not expect any material impact from the
without changing the accounting requirements for
adoption of these amendments.
guidance on how to apply the concept of materiality
business combinations. These amendments are
effective on or after January 1, 2022. The Group does
In February 2021 the IASB issued amendments to
not expect any material impact from the adoption of
IAS 8 — Accounting Policies, Changes in Accounting
these amendments.
Estimates and Errors: Definition of Accounting
Estimates which clarify how companies should
In May 2020 the IASB issued amendments to IAS 16
distinguish changes in accounting policies from
— Property, Plant and Equipment. The amendments
changes in accounting estimates. These amendments
prohibit a company from deducting from the cost
are effective on or after January 1, 2023. The Group
of property, plant and equipment amounts received
does not expect any material impact from the
from selling items produced while the company is
adoption of these amendments.
preparing the asset for its intended use. Instead, a
company should recognize such sales proceeds
In May 2021 the IASB issued amendments to IAS
and the related cost in the income statement. These
12 — Income Taxes: Deferred Tax related to Assets
amendments are effective on or after January 1, 2022.
and Liabilities Arising From a Single Transaction that
The Group does not expect any material impact from
clarify how companies account for deferred tax on
the adoption of these amendments.
transactions such as leases and decommissioning
obligations. These amendments are effective on or
In May 2020 the IASB issued amendments to IAS 37
after January 1, 2023. The Group does not expect
— Provisions, Contingent Liabilities and Contingent
any material impact from the adoption of these
Assets, which specify which costs a company
amendments.
includes when assessing whether a contract will be
loss-making. These amendments are effective on
In December 2021 the IASB issued an amendments
or after January 1, 2022. The Group does not expect
to IFRS 17 — Insurance Contracts: Initial Application of
any material impact from the adoption of these
IFRS 17 and IFRS 9 - Comparative Information, which
amendments.
provides a transition option relating to comparative
information about financial assets presented on
In May 2020 the IASB issued Annual Improvements
initial application of IFRS 17. The amendment is aimed
to IFRSs 2018 - 2020 Cycle. The improvements have
at helping entities to avoid temporary accounting
amended four standards with effective date January
mismatches between financial assets and insurance
1, 2022: i) IFRS 1 — First-time Adoption of International
contract liabilities, and therefore improve the
Financial Reporting Standards in relation to allowing
usefulness of comparative information for users of
a subsidiary to measure cumulative translation
financial statements. The amendment is effective
differences using amounts reported by its parent,
on or after January 1, 2023. The Group does not
ii) IFRS 9 — Financial Instruments in relation to
expect any material impact from the adoption of this
which fees an entity includes when applying the ‘10
amendment.
percent’ test for derecognition of financial liabilities,
iii) IAS 41 — Agriculture in relation to the exclusion of
BASIS OF CONSOLIDATION
taxation cash flows when measuring the fair value of
SUBSIDIARIES
a biological asset, and iv) IFRS 16 — Leases in relation
Subsidiaries are entities over which the Group has
to an illustrative example of reimbursement for
control. Control is achieved when the Group has
leasehold improvements. The Group does not expect
power over the investee, when it is exposed to, or has
any material impact from the adoption of these
rights to, variable returns from its involvement with
amendments.
the investee, and has the ability to use its power over
the investee to affect the amount of the investor’s
In February 2021 the IASB issued amendments to
returns. Subsidiaries are consolidated on a line by
IAS 1 — Presentation of Financial Statements and
line basis from the date on which the Group achieves
IFRS Practice Statement 2: Disclosure of Accounting
control. The Group reassesses whether or not it
policies which require companies to disclose their
controls an investee if facts and circumstances
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / 2. SIGNIFICANT ACCOUNTING POLICIES
indicate that there are changes to one or more of the
are recognized in other comprehensive income/(loss)
three elements of control listed above.
with a corresponding adjustment to the carrying
amount of the investment.
The Group recognizes any non-controlling interests
(“NCI”) in the acquiree on an acquisition-by-acquisition
Unrealized gains on transactions between the Group
basis, either at fair value or at the non-controlling
and its associates are eliminated to the extent of the
interest’s share of the recognized amounts of the
Group’s interest in the associate. Unrealized losses
acquiree’s identifiable net assets. Net profit or loss
are also eliminated unless the transaction provides
and each component of other comprehensive
evidence of an impairment of the asset transferred.
income/(loss) are attributed to the owners of the
parent and to the non-controlling interests. Total
When the Group’s share of the losses of an associate
comprehensive income/(loss) of subsidiaries is
exceeds the Group’s interest in that associate, the
attributed to owners of the parent and to the non-
Group discontinues recognizing its share of further
controlling interests even if this results in the non-
losses. Additional losses are provided for, and a
controlling interests having a deficit balance.
liability is recognized, only to the extent that the Group
All significant intra-group balances and transactions
made payments on behalf of the associate.
and any unrealized gains and losses arising from
intra-group transactions are eliminated in preparing
The Group discontinues the use of the equity method
the Consolidated Financial Statements.
from the date the investment ceases to be an
associate or when it is classified as available-for-sale.
has incurred legal or constructive obligations or
Subsidiaries are deconsolidated from the date
when control ceases. When the Group ceases to
INTERESTS IN JOINT OPERATIONS
have control over a subsidiary, it derecognizes the
A joint operation is a joint arrangement whereby the
assets (including any goodwill) and liabilities of the
parties that have joint control of the arrangement
subsidiary at their carrying amounts, derecognizes
have rights to the assets and obligations for the
the carrying amount of non-controlling interests in
liabilities, relating to the arrangement. Joint control
the former subsidiary and recognizes the fair value
is the contractually agreed sharing of control of an
of any consideration received from the transaction.
arrangement, which exists only when decisions about
Any retained interest in the former subsidiary is then
the relevant activities require the unanimous consent
remeasured to its fair value.
of the parties sharing control.
In 2016 the Group sold a majority stake in Ferrari
When the Group undertakes its activities under joint
Financial Services GmbH. From such date, the Group’s
operations, it recognizes in relation to its interest in
remaining interest has been remeasured at fair value
the joint operation: (i) its assets, including its share
and accounted for using the equity method.
of any assets held jointly, (ii) its liabilities, including its
share of any liabilities incurred jointly, (iii) its revenue
INTERESTS IN ASSOCIATES
from the sale of its share of the output arising from
An associate is an entity over which the Group has
the joint operation, (iv) its share of the revenue from
significant influence. Significant influence is the power
the sale of the output by the joint operation, and (v)
to participate in the financial and operating policy
its expenses, including its share of any expenses
decisions of the investee but without having control
incurred jointly.
or joint control over those policies. Associates are
accounted for using the equity method of accounting
FOREIGN CURRENCY TRANSACTIONS
from the date significant influence is obtained.
The functional currency of the Group’s entities is the
currency of their primary economic environment.
Under the equity method, the investments are
In individual companies, transactions in foreign
initially recognized at cost and adjusted thereafter to
currencies are recorded at the exchange rate
recognize the Group’s share of the profit/(loss) and
prevailing at the date of the transaction. Monetary
other comprehensive income/(loss) of the investee.
assets and liabilities denominated in foreign
The Group’s share of the investee’s profit/(loss) is
currencies at the balance sheet date are translated at
recognized in the consolidated income statement.
the foreign currency exchange rate prevailing at that
Distributions received from an investee reduce the
date. Exchange differences arising on the settlement
carrying amount of the investment. Post-acquisition
of monetary items or on reporting monetary items at
movements in other comprehensive income/(loss)
rates different from those at which they were initially
248
FERRARI N.V.AR 2021 recorded during the period or in previous financial
Average foreign currency exchange rates for the
statements are recognized in the consolidated
period are used to translate the cash flows of foreign
income statement.
subsidiaries in preparing the consolidated statement
CONSOLIDATION OF FOREIGN ENTITIES
of cash flows.
All assets and liabilities of foreign consolidated
Goodwill, assets acquired and liabilities assumed
companies with a functional currency other than the
arising from the acquisition of entities with a
Euro are translated using the closing rates at the date
functional currency other than the Euro are
of the consolidated statement of financial position.
recognized in the Consolidated Financial Statements
Income and expenses are translated into Euro at
in the functional currency and translated at the
the average foreign currency exchange rate for the
foreign currency exchange rate at the acquisition
period. Translation differences resulting from the
date. These balances are translated at subsequent
application of this method are classified as currency
balance sheet dates at the relevant foreign currency
translation differences within other comprehensive
exchange rate.
income/(loss) until the disposal of the investment.
The principal foreign currency exchange rates used to translate other currencies into Euro were as follows:
2021
2020
2019
Average At December 31,
Average At December 31,
Average At December 31,
1.1827
0.8596
1.0811
1.1326
0.8403
1.0331
1.1422
0.8897
1.0705
1.2271
0.8990
1.0802
1.1195
0.8778
1.1124
1.1234
0.8508
1.0854
129.8767
130.3800
121.8458
126.4900
122.0058
121.9400
7.6282
1.5749
1.4826
1.5891
9.1932
7.1947
1.5615
1.4393
1.5279
8.8333
7.8747
1.6549
1.5300
1.5742
8.8587
8.0225
1.5896
1.5633
1.6218
9.5142
7.7355
1.6109
1.4855
1.5273
8.7715
7.8205
1.5995
1.4598
1.5111
8.7473
U.S. Dollar
Pound Sterling
Swiss Franc
Japanese Yen
Chinese Yuan
Australian Dollar
Canadian Dollar
Singapore Dollar
Hong Kong Dollar
INTANGIBLE ASSETS
GOODWILL
Goodwill is not amortized, but is tested for impairment annually or more frequently if events or changes in
circumstances indicate that it might be impaired. After initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
DEVELOPMENT COSTS
Development costs for car project production and related components, engines and systems are recognized as
an asset if, and only if, both of the following conditions under IAS 38 — Intangible Assets are met: that development
costs can be measured reliably and that the technical feasibility of the product, volumes and pricing support the
view that the development expenditure will generate future economic benefits. Capitalized development costs
include all direct and indirect costs that may be directly attributed to the development process. All other research
and development costs are expensed as incurred, net of any government grants received.
Capitalized development costs are amortized on a straight-line basis from the start of production over the
estimated lifecycle of the model or the useful life of the related components or other assets (generally between
four and eight years).
The Group incurs significant research and development costs through the Formula 1 racing activities. These
costs are considered fundamental to the development of the range and track car models and prototypes.
Technological developments and changes in the regulations of the Formula 1 World Championship generally
require the Group to design, develop and construct a new racing car to be used for one year only. The costs
incurred for the design, development and construction of a new racing car are generally expensed as incurred
unless the technology will be used for more than one year and the costs meet the capitalization criteria in IAS 38.
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PATENTS, CONCESSIONS AND LICENSES
PROPERTY, PLANT AND EQUIPMENT
Separately acquired patents, concessions and
COST
licenses are initially recognized at cost. Patents,
Property, plant and equipment is initially recognized
concessions and licenses acquired in a business
at cost which comprises the purchase price, any
combination are initially recognized at fair value.
costs directly attributable to bringing the assets to
Patents, concessions and licenses are amortized on
the location and condition necessary to be capable of
a straight-line basis over their useful economic lives,
operating in the manner intended by management,
which is generally between three and five years.
capitalized borrowing costs and any initial estimate
of the costs of dismantling and removing the
OTHER INTANGIBLE ASSETS
item and restoring the site on which it is located.
Other intangible assets mainly relate to the
Self-constructed assets are initially recognized at
registration of trademarks and have been recognized
production cost. Subsequent expenditures and the
in accordance with IAS 38 — Intangible Assets, where
cost of replacing parts of an asset are capitalized
it is probable that the use of the asset will generate
only if they increase the future economic benefits
future economic benefits for the Group and where
embodied in that asset. All other expenditures are
the cost of the asset can be measured reliably. Other
expensed as incurred. When such replacement costs
intangible assets are measured at cost less any
are capitalized, the carrying amount of the parts that
impairment losses and amortized on a straight-line
are replaced is recognized as a loss in the period of
basis over their estimated life, which is generally
replacement in the consolidated income statement.
between three and five years.
DEPRECIATION
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:
Industrial buildings
Plant, machinery and equipment
Other assets
Land is not depreciated.
Depreciation rates
3% - 20%
5% - 22%
12% - 25%
If the asset being depreciated consists of separately identifiable components whose useful lives differ from that of
the other parts making up the asset, depreciation is charged separately for each of its component parts through
application of the ‘component approach’.
LEASES
Lease liabilities are measured at the net present value
With the adoption of IFRS 16, the Group recognizes a
of the following: (i) fixed lease payments, (ii) variable
right-of-use asset and a corresponding lease liability
lease payments that are based on an index or a rate
at the date at which the leased asset is available for
and, if applicable, (iii) amounts expected to be payable
use. Each lease payment is allocated between the
by the lessee under residual value guarantees, and (iv)
principal liability and finance costs. Finance costs
the exercise price of a purchase option if the lessee
are charged to the income statement over the lease
is reasonably certain to exercise that option. Lease
period using the effective interest rate method. The
liabilities do not include any non-lease components
right-of-use asset is depreciated on a straight-line
that may be included in the related contracts.
basis over the lease term.
Lease payments are discounted using the interest
Right-of-use assets are measured at cost comprising
rate implicit in the lease. If that rate cannot be
the following: (i) the amount of the initial measurement
determined, the Group’s incremental borrowing rate
of lease liability; (ii) any lease payments made at
is used, being the rate that the Group would have to
or before the commencement date less any lease
pay to borrow the funds necessary to obtain an asset
incentives received; (iii) any initial direct costs and, if
of similar value in a similar economic environment
applicable, (iv) restoration costs. Payments associated
with similar terms and conditions.
with short-term leases and leases of low-value
assets are recognized as an expense in the income
Some lease contracts contain variable payment terms
statement on a straight-line basis.
that are linked to sales generated from Ferrari stores.
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FERRARI N.V.AR 2021 Variable lease payments that depend on sales are
using a discount rate that reflects current market
recognized in the income statement in the period in
assessments of the time value of money and the risks
which the condition that triggers those payments
specific to the asset or CGU. An impairment loss is
occurs.
recognized if the recoverable amount is lower than
the carrying amount.
Extension and termination options are included
in a number of leases related to Ferrari stores,
Where an impairment loss for assets other than
warehouses and machinery and equipment of the
goodwill, subsequently no longer exists or has
Group. In determining the lease term, management
decreased, the carrying amount of the asset or CGU
considers all facts and circumstances that create an
is increased to the revised estimate of its recoverable
economic incentive to exercise an extension option,
amount, but not in excess of the carrying amount that
or not exercise a termination option. Extension
would have been recorded had no impairment loss
options (or periods after termination options) are only
been recognized. The reversal of an impairment loss
included in the lease term if the lease is reasonably
is recognized in the consolidated income statement
certain to be extended (or not terminated).
immediately.
BORROWING COSTS
FINANCIAL INSTRUMENTS
General and specific borrowing costs directly
PRESENTATION
attributable to the acquisition, construction or
Current financial assets include trade receivables,
production of qualifying assets, which are assets
receivables from financing activities, derivative
that necessarily take a substantial period of time to
financial instruments, other current financial assets
get ready for their intended use, are added to the
and cash and cash equivalents.
cost of those assets, until such time as the assets are
substantially ready for their intended use.
Investments and other financial assets include
All other borrowing costs are expensed in net
as well as other securities and non-current financial
investments accounted for using the equity method
financial expenses if related to the Group’s industrial
assets.
activities or cost of sales if related to the Group’s
financial services activities in the consolidated income
Financial liabilities include debt (which primarily
statement, as incurred.
includes bonds, notes, asset-backed financing
IMPAIRMENT OF ASSETS
(securitizations) and borrowings from banks), trade
payables and other financial liabilities, which mainly
The Group continuously monitors its operations
include derivative financial instruments.
to assess whether there is any indication that its
intangible assets (including development costs) and
MEASUREMENT
its property, plant and equipment may be impaired.
Financial assets, other than investments accounted
Goodwill is tested for impairment annually or more
for using the equity method, and financial liabilities
frequently, if there is an indication that an asset may
are measured in accordance with IFRS 9 - Financial
be impaired.
Instruments.
If indications of impairment are present, the carrying
Except for investments accounted for using the
amount of the asset is reduced to its recoverable
equity method, the Group initially measures financial
amount, which is the higher of fair value less costs of
assets at fair value plus, in the case of financial assets
disposal and its value in use. The recoverable amount
not measured at fair value through profit or loss,
is determined for the individual asset, unless the
transaction costs.
asset does not generate cash inflows that are largely
independent of the cash inflows from other assets
Equity instruments held by the Group are recognized
or groups of assets, in which case the asset is tested
at fair value through profit or loss. When market
as part of the cash-generating unit (“CGU”) to which
prices are not directly available, the fair value is
the asset belongs. A CGU is the smallest identifiable
measured using appropriate valuation techniques
group of assets that generates cash inflows that
(e.g. discounted cash flow analysis based on market
are largely independent of the cash inflows from
information available at the balance sheet date). As
other assets or groups of assets. In assessing the
permitted by IFRS 9, equity investments for which
value in use of an asset or CGU, the estimated future
there is no quoted market price in an active market
cash flows are discounted to their present value
and there is insufficient financial information in order
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / 2. SIGNIFICANT ACCOUNTING POLICIES
to determine fair value may be measured at cost as an
DERIVATIVE FINANCIAL INSTRUMENTS
estimate of fair value.
Derivative financial instruments are used for
economic hedging purposes only in order to reduce
Trade receivables and receivables from financing
financial risks and in particular, foreign currency
activities are originated in the ordinary course of
risks. Derivative financial instruments qualify for
business and held within a business model with
hedge accounting only when at the inception of the
the objective to hold the receivables in order to
hedge there is formal designation and documentation
collect contractual cash flows that meet the ‘solely
of the hedging relationship, the hedge is expected to
payments of principal and interest’ criterion under
be highly effective, its effectiveness can be reliably
IFRS 9, therefore they are measured at amortized
measured and it is highly effective throughout the
cost using the effective interest rate method.
financial reporting periods for which it is designated.
Receivables with maturities greater than one year
are discounted to present value. Assessments are
All derivative financial instruments are measured at
made regularly as to whether there is any objective
fair value.
evidence that a financial asset or group of financial
assets may be impaired and, if any such evidence
When derivative financial instruments qualify
exists, an impairment loss is recognized within
for hedge accounting, the following accounting
financial expenses. Under IFRS 9, a forward-looking
treatments apply:
expected credit loss model must be applied when
assessing impairment. In making impairment
Cash flow hedges — Where a derivative financial
assessments, the Group applies the standard
instrument is designated as a hedge of the exposure
simplified approach to estimate the lifetime expected
to variability in future cash flows of a recognized asset
credit losses and considers its historical credit loss
or liability or a highly probable forecasted transaction
experience, adjusted for forward-looking factors
and could affect the consolidated income statement,
specific to the nature of the Group’s receivables
the effective portion of any gain or loss on the
and economic environment, which may be different
derivative financial instrument is recognized directly
for the Group’s trade receivables compared to
in other comprehensive income/(loss). The cumulative
receivables from financing activities. If any such
gain or loss is reclassified from other comprehensive
evidence exists, an impairment loss is recognized
income/(loss) to the consolidated income statement
within financial expenses.
at the same time as the economic effect arising from
the hedged item affects the consolidated income
The Group considers a default to occur and a
statement. The gain or loss associated with a hedge
significant increase in credit risk to occur when the
or part of a hedge that has become ineffective is
counterparty fails to make contractual payments
recognized in the consolidated income statement
within a certain number of days of when they fall
immediately within net financial income/expenses.
due. For example, for receivables from financing
When a hedging instrument or hedge relationship
activities this typically occurs when the counterparty
is terminated but the hedged transaction is still
fails to make contractual payments within 60 days of
expected to occur, the cumulative gain or loss
when the related receivables fall due, while for trade
realized to the point of termination remains in other
receivables this is assessed on a case by case basis.
comprehensive income/(loss) and is recognized in
the consolidated income statement at the same time
Financial assets and trade receivable are written
as the underlying transaction occurs. If the hedged
off when the counterparty fails to make contractual
transaction is no longer probable, the cumulative
payments and there is no reasonable expectation
unrealized gain or loss held in other comprehensive
of recovery, and in any circumstance no later than
income/(loss) is recognized in the consolidated
360 days. When trade receivables or receivables
income statement immediately.
from financing activities have been written off, the
Company may continue to engage in enforcement
The Group does not use fair value hedges or hedges
actions to attempt to recover the receivables.
of a net investment.
Financial liabilities, with the exception of derivative
If hedge accounting cannot be applied, the gains or
financial instruments, are measured at amortized
losses from the fair value measurement of derivative
cost using the effective interest rate method.
financial instruments are recognized immediately
within financial expenses.
252
FERRARI N.V.AR 2021 TRANSFERS OF FINANCIAL ASSETS
ordinary course of business less the estimated costs
The Group sells certain of its receivables from
of completion and the estimated costs for sale and
financing activities under securitization programs.
distribution.
Securitization transactions involve the sale of a
financial receivables portfolio to a special purpose
CASH AND CASH EQUIVALENTS
vehicle, which in turn finances the purchase of
Cash and cash equivalents includes cash in hand,
such financial receivables by issuing asset-backed
deposits held at call with banks and other short-term
securities in the form of notes whose repayment
highly liquid investments with original maturities of
of principal and interest depends on the cash flows
three months or less.
generated by the related financial receivables. The
receivables sold as part of securitization programs
EMPLOYEE BENEFITS
are consolidated until collection from the customer as
DEFINED CONTRIBUTION PLANS
they do not meet the requirements for derecognition
Costs arising from defined contribution plans are
in accordance with IFRS 9.
expensed as incurred.
The Group may also sell certain of its trade
DEFINED BENEFIT PLANS
receivables through factoring transactions without
The Group’s net obligations are determined
recourse. The Group derecognizes the financial
separately for each plan by estimating the present
assets when, and only when, the contractual rights
value of future benefits that employees have earned
and risks to the cash flows arising from the related
in the current and prior periods, and deducting the
financial assets are no longer held or the Group
fair value of any plan assets. The present value of
has transferred the financial assets. In the case of
the defined benefit obligation is measured using
a transfer of financial assets, if the Group transfers
actuarial techniques and actuarial assumptions that
substantially all the risks and rewards of ownership of
are unbiased and mutually compatible and attributes
the financial assets, it derecognizes such assets and
benefits to periods in which the obligation to provide
separately recognizes as assets or liabilities any rights
post-employment benefits arise by using the
and obligations created or retained in the transfer.
Projected Unit Credit Method.
On derecognition of financial assets, the difference
between the carrying amount of the assets and the
The components of the defined benefit cost are
consideration received or receivable for the transfer
recognized as follows:
of the assets is recognized within cost of sales in the
consolidated income statement.
• the service costs are recognized in the consolidated
TRADE RECEIVABLES
income statement by function and presented in the
relevant line items (cost of sales, selling, general and
Trade receivables are amounts due from clients
administrative costs, research and development
for goods sold or services provided in the ordinary
costs, etc.);
course of business. Trade receivables are recognized
initially at fair value and subsequently measured
• the net interest on the defined benefit liability is
at amortized cost using the effective interest rate
recognized in the consolidated income statement as
method, less any provision for allowances.
net financial income /(expenses), and is determined
INVENTORIES
by multiplying the net liability/(asset) by the discount
rate used to discount obligations taking into account
Inventories of raw materials, semi-finished products
the effect of contributions and benefit payments
and finished goods are stated at the lower of cost
made during the year; and
and net realizable value, cost being determined on
a first-in first-out (FIFO) basis. The measurement of
• the remeasurement components of the net
inventories includes the direct costs of materials,
obligations, which comprise actuarial gains
labor and indirect costs (variable and fixed).
and losses and any change in the effect of
Purchase costs include ancillary costs. Prototypes
the asset ceiling are recognized immediately
are recognized at their estimated realizable value,
in other comprehensive income/(loss). These
if lower than production cost. Provision is made for
remeasurement components are not reclassified
obsolete and slow-moving raw materials, finished
in the consolidated income statement in a
goods, spare parts and other supplies based on
subsequent period.
their expected future use and realizable value. Net
realizable value is the estimated selling price in the
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OTHER LONG-TERM EMPLOYEE BENEFITS
resources embodying economic benefits will be
The Group’s obligations represent the present value
required to settle the obligation and a reliable estimate
of future benefits that employees have earned in
of the amount of the obligation can be made.
return for their service during the current and prior
periods. Remeasurement components on other
WARRANTY AND RECALL CAMPAIGNS PROVISION
long-term employee benefits are recognized in the
All cars are sold with warranty coverage. The
consolidated income statement in the period in which
warranty coverage generally applies to defects that
they arise.
may become apparent within a certain period from
the purchase of the car.
SHARE-BASED COMPENSATION
The Group has implemented equity incentive
The warranty provision is recognized at the time
plans that provide for the granting of share-based
of the sale of the car, based on the present value
compensation to the Chairman, the Chief Executive
of management’s estimate of the expected cost to
Officer, all other members of the Ferrari Leadership
fulfill the obligations over the contractual warranty
Team and other key employees of the Group. The
period. Estimates are principally based on the Group’s
Group also provides share-based compensation
historical claims or costs experience and the cost
as part of commercial agreements with certain
of parts and services to be incurred in the activities.
suppliers. The share-based compensation
The costs related to these provisions are recognized
arrangements are accounted for in accordance with
within cost of sales at the time when they are
IFRS 2 — Share-based Payment, which requires the
probable and reasonably estimable.
Company to recognize share-based compensation
expense based on fair value of awards granted.
See “Use of estimates” below for further details.
Compensation expense for the equity-settled awards
containing market performance conditions is
DEFERRED INCOME
measured at the grant date fair value of the award
Deferred income relates to amounts received by the
using a Monte Carlo simulation model, which requires
Group under various agreements, which are reliant
the input of subjective assumptions, including the
on the future performance of a service or other act
expected volatility of the Company’s common stock,
of the Group. Deferred income is recognized as net
the dividend yield, interest rates and a correlation
revenues when the Group has fulfilled its obligations
coefficient between the common stock and the
under the terms of the various agreements.
relevant market index. The fair value of the awards
which are conditional only on a recipient’s continued
Range models (models belonging to the Ferrari
service to the Company is measured using the share
product portfolio, excluding special series, Icona,
price at the grant date adjusted for the present value
limited edition hypercars and one-off models) are
of future distributions which employees will not
sold with a scheduled maintenance program to
receive during the vesting period.
ensure that the cars are maintained to the highest
standards to meet the Group’s strict requirements for
Share-based compensation expense relating to the
performance and safety. Amounts attributable to the
equity incentive plans is recognized over the service
maintenance program are not recognized as income
period within selling, general and administrative
immediately, but are deferred over the maintenance
costs or cost of sales in the consolidated income
program term. The amount of the deferred income
statement depending on the function of the
related to this program, is based on the estimated fair
employee, with an offsetting increase to equity.
value of the service to be provided.
Share-based compensation expense relating to
commercial agreements with certain suppliers is
ADVANCES
recognized over the period in which the supplier’s
Advances relate to amounts received from or billed to
services are received and classified within the
customers in advance of having delivered the related
consolidated income statement depending on the
cars or provided the related services.
function of the supplier’s services, with an offsetting
increase to equity.
PROVISIONS
REVENUE RECOGNITION
Revenue is recognized when control over a product
or service is transferred to a customer. Revenue is
Provisions are recognized when the Group has a
measured at the transaction price which is based
present obligation, legal or constructive, as a result
on the amount of consideration that the Group
of a past event, it is probable that an outflow of
expects to receive in exchange for transferring
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FERRARI N.V.AR 2021 the promised goods or services to the customer
Revenues for the sale of cars, spare parts and
and excludes any sales incentives as well as taxes
engines are recognized at a point in time when control
collected from customers that are remitted to
of the cars, spare parts or engines is transferred
government authorities. The transaction price will
to the customer based on shipping terms, which
include estimates of variable consideration to the
generally corresponds to the date when the cars,
extent it is probable that a significant reversal of
spare parts and engines are released to the carrier
revenue recognized will not occur. The Group enters
responsible for transportation to dealers or Maserati.
into contracts that may include both products and
Revenues relating to the maintenance program are
services, which are generally capable of being
recognized over time based on the input method of
distinct and accounted for as separate performance
measuring progress towards complete satisfaction
obligations.
of the related performance obligation, calculated as
a proportion of overall revenues expected during
The Group generates revenue from the sale of cars,
the maintenance period equal to the ratio of costs
spare parts and engines as well as from sponsorship,
incurred in the reporting period compared to the
commercial and brand activities. The Group accounts
overall costs to be incurred during the maintenance
for a contract with a customer when there is a legally
period. Revenues relating to the extended warranties
enforceable contract between the Group and the
are recognized on a straight-line basis over the
customer, the rights of the parties are identified, the
extended warranty period. Revenues from the supply
contract has commercial substance, and collectability
of engines and related services to other Formula 1
of the contract consideration is probable. Payments
racing teams are recognized over time on a time and
from customers are typically due within 30 and 40
materials basis when the services are provided.
days of invoicing.
The Group does not recognize any assets associated
performance obligations, variable consideration,
with the incremental costs of obtaining a contract
allocation of transaction price and the timing of
Management has exercised judgment in determining
with a customer that are expected to be recovered.
revenue recognition.
The majority of revenue is recognized at a point-in-
time or over a period of one year or less, and the
SPONSORSHIP, COMMERCIAL AND BRAND
Group applies the practical expedient to recognize
ACTIVITIES
the incremental costs of obtaining a contract as an
Revenues from sponsorship agreements are
expense when incurred if the amortization period of
generally recognized ratably over the contract
the asset that would otherwise be recognized is one
term as the customer benefits from the service
year or less.
throughout the service period. For sponsorship
agreements that contain variable consideration
CARS, SPARE PARTS AND ENGINES
based on performance of the racing team, the related
The sales of cars, spare parts and engines have
revenues are estimated and recognized over the
multiple performance obligations that include
relevant period to the extent that it is highly probable
products, services, or a combination of products
that a significant reversal in the amount of the
and services as contracts may include maintenance
cumulative revenue recognized will not occur, which
programs and extended warranties that are
is typically when it is considered highly probable that
separately priced or not separately priced. Contracts
the related conditions associated with the variable
may also include variable consideration for discounts
consideration will be achieved.
such as sales incentives and performance based
bonuses and product returns. The cost of incentives
Revenues from commercial activities primarily
is estimated at the inception of a contract at the
relate to the revenues from participating in the
expected amount that will ultimately be paid and is
Formula 1 World Championship. The revenues
recognized as a reduction to revenue at the time
attributable to each racing team are governed by a
of the sale. Revenues recognized are limited to
specific agreement and depend upon, among other
the amount of consideration the Group expects to
factors, the prior year ranking of each of the racing
receive. The Group allocates the transaction price to
teams. Revenues of the commercial activities are
the performance obligations based on the stand alone
recognized ratably over the contract term.
selling prices (SSP) for each obligation. When the SSP
does not exist, the Group estimates the SSP based on
Revenues from brand licensing agreements where
the adjusted market approach.
the customer has a right to access the Group’s
brands or the contract includes minimum guaranteed
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payments are recognized on a straight-line basis over
except tax arising from (i) a transaction or event
the contract term. Licensing revenues in excess of the
which is recognized, in the same or a different period,
minimum guaranteed payments are recognized when
either in other comprehensive income/(loss) or
the related conditions are satisfied. Revenues from
directly in equity, or (ii) a business combination.
sales-based licensing agreements are recognized
when the sales occur.
Deferred taxes are accounted using the full liability
method. Deferred tax liabilities are recognized for all
Management has exercised judgment in determining
taxable temporary differences between the carrying
variable consideration.
OTHER REVENUES
amounts of assets or liabilities and their tax base,
except to the extent that the deferred tax liabilities
arise from the initial recognition of goodwill or the
Interest income generated by our financial service
initial recognition of an asset or liability in a transaction
activities from the provision of client and dealer
which is not a business combination and at the time
financing is reported within revenues using the
of the transaction, affects neither accounting profit
effective interest rate method and not within net
nor taxable profit. Deferred tax assets are recognized
financial income/expenses.
for all deductible temporary differences to the extent
COST OF SALES
that it is probable that taxable profit will be available
against which the deductible temporary differences
Cost of sales comprises expenses incurred in the
can be utilized, unless the deferred tax assets arise
manufacturing and distribution of cars and parts,
from the initial recognition of an asset or liability in a
including the engines rented to other Formula 1
transaction that is not a business combination and at
racing teams, of which, cost of materials, components
the time of the transaction, affects neither accounting
and labor costs are the most significant portion. The
profit nor taxable profit.
remaining costs principally include depreciation,
amortization, insurance and transportation costs.
Deferred tax assets and liabilities are measured at
Cost of sales also includes warranty and product-
the substantively enacted tax rates in the respective
related costs, which are estimated and recorded at
jurisdictions in which the Group operates that are
the time of sale of the car.
expected to apply to the period when the asset is
realized or liability is settled. Any remeasurements
Expenses which are directly attributable to the
to deferred tax assets and liabilities as a result
financial services companies, including the interest
of changes in substantially enacted tax rates are
expenses related to their financing as a whole and
recognized in the income statement.
provisions for risks and write-downs of assets, are
also reported in cost of sales.
The recoverability of deferred tax assets is dependent
on the Group’s ability to generate sufficient future
OTHER EXPENSES AND OTHER INCOME
taxable income in the period in which it is assumed
Other expenses consist of miscellaneous costs
that the deductible temporary differences reverse
which cannot be allocated to specific functional
and tax losses carried forward can be utilized. In
areas, such as indirect taxes, accruals for provisions
making this assessment, the Group considers future
not attributable to cost of sales or selling, general
taxable income arising on the most recent budgets
and administrative costs, and other miscellaneous
and plans, prepared by using the same criteria
expenses.
described for testing the impairment of assets
and goodwill, moreover, it estimates the impact of
Other income consists of miscellaneous income that
the reversal of taxable temporary differences on
is not directly attributable to the sale of goods or
earnings and it also considers the period over which
services, such as gains on the disposal of property
these assets could be recovered. The carrying
plant and equipment, the release of certain provisions
amount of deferred tax assets is reduced to the
originally recognized as other expenses, rental
extent that it is not probable that sufficient taxable
income and other miscellaneous income.
profit will be available to allow the benefit of part or all
TAXES
of the deferred tax assets to be utilized. The carrying
amount of deferred tax assets is reviewed at each
Income taxes include all taxes based upon the taxable
reporting date.
profits of the Group. Current and deferred taxes are
recognized as income or expense and are included
The Group recognizes deferred tax liabilities
in the consolidated income statement for the period,
associated with the existence of a subsidiary’s
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FERRARI N.V.AR 2021 undistributed profits, except when it is able to control
in IFRS 8 — Operating Segments) in making decisions
the timing of the reversal of the temporary difference
regarding the allocation of resources and to assess
and it is probable that this temporary difference will
performance.
not reverse in the foreseeable future. The Group
recognizes deferred tax assets associated with the
USE OF ESTIMATES
deductible temporary differences on investments
The Consolidated Financial Statements are prepared
in subsidiaries only to the extent that it is probable
in accordance with IFRS which require the use of
that the temporary differences will reverse in the
estimates, judgments and assumptions that affect
foreseeable future and taxable profit will be available
the carrying amount of assets and liabilities, the
against which the temporary difference can be utilized.
disclosure of contingent assets and liabilities and the
Deferred tax assets relating to the carry-forward of
estimates and associated assumptions are based
unused tax losses and tax credits, as well as those
on elements that are known when the financial
arising from deductible temporary differences, are
statements are prepared, on historical experience
recognized to the extent that it is probable that future
and on any other factors that are considered to be
amounts of income and expenses recognized. The
profits will be available against which they can be
relevant.
utilized.
The estimates and underlying assumptions are
Current income taxes and deferred taxes are offset
reviewed periodically and continuously by the Group.
when they relate to the same taxation authority and
If the items subject to estimates do not perform as
there is a legally enforceable right of offset.
assumed, then the actual results could differ from
the estimates, which would require adjustment
Italian Regional Income Tax (“IRAP”) is recognized
accordingly. The effects of any changes in estimate
within income tax expense. IRAP is calculated on a
are recognized in the consolidated income statement
measure of income defined by the Italian Civil Code as
in the period in which the adjustment is made, or
the difference between operating revenues and costs,
prospectively in future periods.
before financial income and expense, and in particular
before the cost of fixed-term employees, credit losses
The items requiring estimates for which there is a risk
and any interest included in lease payments. IRAP is
that a material difference may arise in respect of the
applied on the tax base at 3.9 percent for the years
carrying amounts of assets and liabilities in the future
ended December 31, 2021, 2020 and 2019.
are discussed below.
Tax uncertainties are accounted for in accordance
RECOVERABILITY OF NON-CURRENT ASSETS WITH
with IFRIC 23.
DEFINITE USEFUL LIVES
Other taxes not based on income, such as property
property, plant and equipment and intangible assets.
taxes and capital taxes, are included in other
Intangible assets with definite useful lives mainly
Non-current assets with definite useful lives include
expenses, net.
DIVIDENDS
consist of capitalized development costs.
The Group periodically reviews the carrying amount
Dividends payable by the Group are reported as
of non-current assets with definite useful lives when
a change in equity in the period in which they are
events and circumstances indicate that an asset may
approved by shareholders or the Board of Directors
be impaired. Impairment tests are performed by
as applicable under local rules and regulations.
comparing the carrying amount and the recoverable
ROUNDING OF AMOUNTS
amount of the cash-generating unit (“CGU”). The
recoverable amount is the higher of the CGU’s fair
All amounts disclosed in the financial statements and
value less costs of disposal and its value in use. In
notes have been rounded off to the nearest thousand
assessing the value in use, the estimated future cash
Euro unless otherwise stated.
flows are discounted to their present value using a
SEGMENT REPORTING
pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
The Group has determined that it has one operating
specific to the CGU.
and one reportable segment based on the
information reviewed by the Board of Directors (the
For the period covered by these Consolidated
Group’s “Chief Operating Decision Maker” as defined
Financial Statements, the Group has not recognized
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any impairment charges for non-current assets with
appropriateness and recoverability. The lives are
definite useful lives.
based on historical experience with similar assets
as well as anticipation of future events which may
RECOVERABILITY OF GOODWILL
impact their life such as changes in technology.
In accordance with IAS 36 — Impairment of Assets,
Historically changes in useful lives and residual values
goodwill is not amortized and is tested for impairment
have not resulted in material changes to the Group’s
annually or more frequently if facts or circumstances
amortization charge or estimated recoverability of the
indicate that the asset may be impaired.
related assets.
As the Group is composed of one operating segment,
PRODUCT WARRANTY LIABILITIES
goodwill is tested at the Group level, which represents
The Group establishes reserves for product
the lowest level within the Group at which goodwill
warranties at the time the sale is recognized. The
is monitored for internal management purposes
Group issues various types of product warranties
in accordance with IAS 36. The impairment test is
under which the performance of products delivered
performed by comparing the carrying amount (which
is generally guaranteed for a certain period or term,
mainly comprises property, plant and equipment,
which is generally defined by the legislation in the
goodwill and capitalized development costs) and the
country where the car is sold. The reserve for product
recoverable amount of the CGU. The recoverable
warranties includes the expected costs of warranty
amount of the CGU is the higher of its fair value less
obligations imposed by law or contract, as well as the
costs of disposal and its value in use.
expected costs for policy coverage. The estimated
For the period covered by these Consolidated
on assumptions regarding the lifetime warranty
Financial Statements, the Group has not recognized
costs of each car line and each model year of that car
any impairment charges for goodwill.
line, as well as historical claims experience for the
future costs of these actions are principally based
DEVELOPMENT COSTS
Group’s cars. In addition, the number and magnitude
of additional service actions expected to be approved,
Development costs are capitalized if the conditions
and policies related to additional service actions, are
under IAS 38 — Intangible Assets have been met.
taken into consideration. Due to the uncertainty and
The starting point for capitalization is based upon
potential volatility of these estimated factors, changes
the technological and commercial feasibility of the
in the assumptions used could materially affect the
project, which is usually when a product development
results of operations.
project has reached a defined milestone according to
the Group’s established product development model.
The Group periodically initiates voluntary service
Feasibility is based on management’s judgment which
actions to address various client satisfaction, safety
is formed on the basis of estimated future cash flows.
and emissions issues related to cars sold. Included
Capitalization ceases and amortization of capitalized
in the reserve is the estimated cost of these services
development costs begins on start of production of
and recall actions. The estimated future costs of
the relevant project.
these actions are based primarily on historical claims
experience for the Group’s cars and the cost of
The amortization of development costs requires
parts and services to be incurred in the specified
management to estimate the lifecycle of the related
activities, and are recognized at the time when they
model or assets. Any changes in such assumptions
are probable and reasonably estimable. Estimates
would impact the amortization charge recorded
of the future costs of these actions are inevitably
and the carrying amount of capitalized development
imprecise due to several uncertainties, including
costs. The periodic amortization charge is derived
the number of cars affected by a service or recall
after determining the expected lifecycle of the related
action. It is reasonably possible that the ultimate cost
model or assets and, if applicable any expected
of these service and recall actions may require the
residual value at the end of its life. Increasing an
Group to make expenditures in excess of (or less
asset’s expected lifecycle or its residual value would
than) established reserves over an extended period of
result in a reduced amortization charge in the
time. The estimate of warranty and additional service
consolidated income statement.
obligations is periodically reviewed during the year.
The useful lives and residual values of the Group’s
In addition, the Group makes provisions for estimated
models are determined by management at the
product liability costs arising from property damage
time of capitalization and reviewed annually for
and personal injuries including wrongful death, and
258
FERRARI N.V.AR 2021 potential exemplary or punitive damages alleged to
circumstances, and the jurisdiction and the different
be the result of product defects. By nature, these
laws involved. The Group monitors the status of
costs can be infrequent, difficult to predict, and have
pending legal proceedings and consults with experts
the potential to vary significantly in amount. Costs
on legal and tax matters on a regular basis. It is
associated with these provisions are recorded in the
therefore possible that the provisions for the Group’s
consolidated income statement and any subsequent
legal proceedings and litigation may vary as the result
adjustments are recorded in the period in which the
of future developments in pending matters.
adjustment is determined.
LITIGATION
SHARE-BASED COMPENSATION
Various legal proceedings, claims and governmental
The Group accounts for share-based compensation
investigations are pending against the Group on a
relating to its equity incentive plans and commercial
wide range of topics, including car safety, emissions
agreements with certain suppliers in accordance
and fuel economy, early warning reporting, dealer,
with IFRS 2 — Share-based Payment, which requires
supplier and other contractual relationships,
the recognition of share-based compensation
intellectual property rights and product warranties
expense based on the fair value of the awards
matters. Some of these proceedings allege defects
granted. Share-based compensation for equity-
in specific component parts or systems (including
settled awards containing market performance
airbags, seatbelts, brakes, transmissions, engines
conditions is measured at the grant date of the
and fuel systems) in various car models or allege
awards using a Monte Carlo simulation model,
general design defects relating to car handling
which requires the input of subjective assumptions,
and stability, sudden unintended movement or
including the expected volatility of our common stock,
crashworthiness. These proceedings seek recovery
the dividend yield, interest rates and the correlation
for damage to property, personal injuries or
coefficient between our common stock and the
wrongful death and in some cases could include a
relevant market index. The probability that the Group
claim for exemplary or punitive damages. Adverse
will achieve a certain level of Total Shareholder Return
decisions in one or more of these proceedings could
performance compared to the defined peer group
require the Group to pay substantial damages, or
(“Peer Group”) is also considered. As a result, at the
undertake service actions, recall campaigns or other
grant date management is required to make key
costly actions.
assumptions and estimates regarding conditions
that will occur in the future, which inherently involves
Litigation is subject to many uncertainties, and the
uncertainty. Therefore, the amount of share-based
outcome of individual matters is not predictable with
compensation recognized has been affected by the
assurance. An accrual is established in connection
significant assumptions and estimates used.
with pending or threatened litigation if a loss is
probable and a reliable estimate can be made. Since
OTHER CONTINGENT LIABILITIES
these accruals represent estimates, it is reasonably
The Group makes provisions in connection with
possible that the resolution of some of these matters
pending or threatened disputes or legal proceedings
could require the Group to make payments in excess
when it is considered probable that there will be
of the amounts accrued. It is also reasonably possible
an outflow of funds and when the amount can be
that the resolution of some of the matters for which
reasonably estimated. If an outflow of funds becomes
accruals could not be made may require the Group
possible but the amount cannot be estimated, the
to make payments in an amount or range of amounts
matter is disclosed in the notes to the Consolidated
that could not be reasonably estimated.
Financial Statements. The Group is the subject of
legal and tax proceedings covering a wide range
The term “reasonably possible” is used herein to
of matters in various jurisdictions. Due to the
mean that the chance of a future transaction or
uncertainty inherent in such matters, it is difficult
event occurring is more than remote but less than
to predict the outflow of funds that could result
probable. Although the final resolution of any such
from such disputes with any certainty. Moreover,
matters could have a material effect on the Group’s
the cases and claims against the Group often derive
operating results for the particular reporting period
from complex legal issues which are subject to
in which an adjustment of the estimated reserve is
a differing degree of uncertainty, including the
recorded, it is believed that any resulting adjustment
facts and circumstances of each particular case
would not materially affect the consolidated financial
and the manner in which applicable law is likely
position of the Group.
to be interpreted and applied to such fact and
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CURRENT AND DEFERRED TAXES
judgments that are periodically reviewed for any
The calculation of current and deferred income
changes in facts and circumstances or changes in
taxes, including various tax benefits, exemptions
tax regulations and interpretations. Such judgments
or credits (such as patent box tax benefits, asset
are primarily related to the recoverability of deferred
revaluations and research and development credits),
long-term tax assets, which involves the assessment
involves the interpretation of applicable tax laws
of the ability to generate sufficient future taxable
and regulations that could be subject to changes
profit over the period in which the deductible
or application directives from tax authorities. As a
temporary differences or unused tax losses are
result, the calculation of current and deferred taxes,
expected to be utilized, as well as to the calculation of
including those related to uncertain tax positions,
certain tax benefits and liabilities.
may require complex management estimates and
3. SCOPE OF CONSOLIDATION
Ferrari N.V. is the parent company of the Group and it holds, directly and indirectly, interests in the Group’s main
operating companies. The Group’s scope of consolidation at December 31, 2021 and 2020 was as follows:
Country
Nature of
business
At December 31, 2021 At December 31, 2020
Shares
Shares
Shares
Shares
held by the
held by
held by the
held by
Group
NCI
Group
NCI
Italy
Manufacturing
100%
—%
100%
—%
Name
Directly held interests
Ferrari S.p.A.
Indirectly held through Ferrari S.p.A.
Ferrari North America Inc.
Ferrari Japan KK
USA
Japan
Ferrari Australasia Pty Limited
Australia
Ferrari International Cars Trading
(Shanghai) Co. L.t.d.
Ferrari (HK) Limited
Ferrari Far East Pte Limited
Ferrari Management Consulting
(Shanghai) Co. L.t.d.
Ferrari South West Europe S.a.r.l.
China
Hong Kong
Singapore
China
France
Ferrari Central Europe GmbH
Germany
G.S.A. S.A. in liquidation
Switzerland
Importer and
distributor
Importer and
distributor
Importer and
distributor
Importer and
distributor
Importer and
distributor
Service
company
Service
company
Service
company
Service
company
Service
company
Mugello Circuit S.p.A.
Ferrari Financial Services, Inc.
Italy
USA
Racetrack
management
Financial
services
Indirectly held through other Group entities
Ferrari Auto Securitization Transaction LLC (1)
USA
Ferrari Auto Securitization Transaction - Lease, LLC (1) USA
Ferrari Auto Securitization Transaction - Select, LLC (1) USA
Ferrari Financial Services Titling Trust (1)
410 Park Display, Inc. (2)
USA
USA
(1) Shareholding held by Ferrari Financial Services Inc.
(2) Shareholding held by Ferrari North America Inc.
Financial
services
Financial
services
Financial
services
Financial
services
Retail
260
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
80%
20%
80%
20%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
—%
100%
100%
—%
—%
100%
100%
—%
—%
FERRARI N.V.AR 2021 NON-CONTROLLING INTERESTS
The non-controlling interests at December 31, 2021 and 2020 and the net profit attributable to non-controlling
interests for the years ended December 31, 2021, 2020 and 2019 relate to Ferrari International Cars Trading
(Shanghai) Co. L.t.d. (“FICTS”), in which the Group holds an 80 percent interest.
(€ thousand)
Equity attributable to non-controlling interests
(€ thousand)
Net profit attributable to non-controlling interests
At December 31,
2021
5,518
2020
4,018
For the years ended December 31,
2021
2,369
2020
1,063
2019
2,890
The non-controlling interests in FICTS are not considered to be significant to the Group for the periods presented
in these Consolidated Financial Statements.
RESTRICTIONS
The Group may be subject to restrictions which limit its ability to use cash in relation to its interest in FICTS. In
particular, cash held in China is subject to certain repatriation restrictions and may only be repatriated as a
repayment of payables or debt, or through a payment of dividends or capital distributions. The Group does not
believe that such transfer restrictions have any adverse impacts on its ability to meet liquidity requirements. Cash
held in China at December 31, 2021 amounted to €89,611 thousand (€55,566 thousand at December 31, 2020).
Cash collected from the settlement of receivables under securitization programs is subject to certain restrictions
regarding its use and is principally applied to repay principal and interest of the related funding. Such cash
amounted to €47,742 thousand at December 31, 2021 (€36,935 thousand at December 31, 2020).
4. NET REVENUES
Net revenues are as follows:
(€ thousand)
Cars and spare parts
Engines
Sponsorship, commercial and brand
Other
Total net revenues
For the years ended December 31,
2021
2020
2019
3,573,119
2,835,170
2,925,721
189,432
430,579
77,764
150,655
390,002
83,963
198,308
538,238
104,348
4,270,894
3,459,790
3,766,615
Other net revenues primarily relate to financial services activities, management of the Mugello racetrack and
other sports-related activities.
Interest and other financial income from financial services activities included within net revenues in 2021, 2020
and 2019 amounted to €55,043 thousand, €65,878 thousand and €66,386 thousand, respectively.
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Cost of sales in 2021, 2020 and 2019 amounted to
6. SELLING, GENERAL AND
ADMINISTRATIVE COSTS
€2,080,613 thousand, €1,686,324 thousand and
Selling costs in 2021, 2020 and 2019 amounted to
€1,805,310 thousand, respectively, consisting mainly
€168,466 thousand, €171,900 thousand and €173,512
of the cost of materials, components and labor
thousand, respectively, consisting mainly of costs
related to the manufacturing and distribution of cars
for sales personnel, marketing and events, and retail
and spare parts and, to a lesser extent, engines sold
stores. Costs for marketing and events primarily
to Maserati and engines rented to other Formula 1
relate to trade shows and media and client events
racing teams. The remaining costs mainly include
for the launch of new models, including the use of
depreciation, insurance and transportation costs, as
digital solutions, as well as sponsorship and indirect
well as warranty and product-related costs, which are
marketing costs incurred through the Formula 1
estimated and recorded at the time of shipment.
racing team, Scuderia Ferrari.
General and administrative costs in 2021, 2020 and
Interest and other financial expenses from financial
2019 amounted to €179,558 thousand, €164,226
services activities included within cost of sales
thousand and €169,667 thousand, respectively,
in 2021, 2020 and 2019 amounted to €16,639
consisting mainly of administrative and other general
thousand, €36,628 thousand and €45,083 thousand,
expenses, including for personnel, that are not directly
respectively.
attributable to manufacturing, sales or research and
development activities.
7. RESEARCH AND DEVELOPMENT COSTS
Research and development costs are as follows:
(€ thousand)
Research and development costs expensed during the year
Amortization of capitalized development costs
Total research and development costs
For the years ended December 31,
2021
573,632
194,472
768,104
2020
526,831
180,554
707,385
2019
559,582
139,629
699,211
Research and development costs expensed during the period primarily relate to Formula 1 activities and research
and development activities to support the innovation of our product range and components, in particular, in
relation to hybrid and electric technology. Amortization of capitalized development costs have increased in recent
years as a result of our strategy to update and broaden our product range and significantly increase our efforts
relating to hybrid and other advanced technologies.
Research and development costs for the year ended December 31, 2020 and, to a lesser extent, for the year
December 31, 2021 are recognized net of technology-related government incentives.
8. OTHER EXPENSES/(INCOME), NET
Other expenses, net are as follows:
(€ thousand)
Other expenses
Other income
Other expenses, net
For the years ended December 31,
2021
13,666
(8,105)
5,561
2020
25,067
(6,592)
18,475
2019
14,288
(9,297)
4,991
Other expenses primarily include indirect taxes, provisions and other miscellaneous expenses. Other income
primarily includes rental income, gains on the disposal of property plant and equipment and other miscellaneous
income. Other expenses, net in 2021 and 2019 include releases of provisions relating to legal disputes following
developments favorable to Ferrari.
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FERRARI N.V.AR 2021 9. NET FINANCIAL EXPENSES
The following table sets out details of financial income and expenses, including the amounts reported in the
consolidated income statement within the net financial expenses line item, as well as interest income from
financial services activities, recognized under net revenues, and interest expenses and other financial charges
from financial services activities, recognized under cost of sales.
(€ thousand)
Financial income:
Interest income from bank deposits
Other interest income and financial income
Interest income and other financial income
Finance income from financial services activities
Total financial income
Total financial income relating to:
Industrial activities (A)
Financial services activities (reported in net revenues)
Financial expenses:
Capitalized borrowing costs
Other interest and financial expenses
Interest expenses and other financial expenses
Interest expenses from banks and other financial institutions
Interest and other finance costs on bonds and notes
Write-downs of financial receivables
Other financial expenses
Total financial expenses
Net expenses from derivative financial instruments and foreign currency
exchange rate differences
Total financial expenses and net expenses from derivative financial
instruments and foreign currency exchange rate differences
Total financial expenses and net expenses from derivative financial
instruments and foreign currency exchange rate differences relating to:
For the years ended December 31,
2021
2020
2019
399
4,741
5,140
55,043
60,183
5,140
55,043
1,874
(3,315)
(1,441)
(11,310)
(22,947)
(1,467)
(5,991)
610
517
1,127
65,878
67,005
1,127
65,878
2,591
(3,258)
(667)
(14,330)
(20,116)
(9,502)
(14,580)
1,690
4,116
5,806
66,386
72,192
5,806
66,386
2,671
(2,427)
244
(27,432)
(20,703)
(4,739)
(13,949)
(43,156)
(59,195)
(66,579)
(11,880)
(27,652)
(26,392)
(55,036)
(86,847)
(92,971)
Industrial activities (B)
Financial services activities (reported in cost of sales)
(38,397)
(16,639)
(50,219)
(36,628)
(47,888)
(45,083)
Net financial expenses relating to industrial activities (A+B)
(33,257)
(49,092)
(42,082)
Interest and other finance costs on bonds and notes for the year ended December 31, 2019 includes costs of
€8,142 thousand for the partial repurchase of bonds following a cash tender offer in July 2019 (in particular the
repurchase price and premium incurred, as well as previously unamortized issuance costs).
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Income tax expense is as follows:
(€ thousand)
Current tax expense
Deferred tax (benefit)/expense
Taxes relating to prior periods
Total income tax expense
For the years ended December 31,
2021
218,540
(12,001)
2,556
2020
120,115
(62,474)
514
2019
137,303
32,145
7,208
209,095
58,155
176,656
The Italian Group’s entities participate in a group
regimes. The Decree and related amendments should
Italian tax consolidation under Ferrari N.V.
not have any impact on income taxes of the Group for
Income tax expense amounted to €209,095 thousand,
will continue to follow updates in the legislation as they
€58,155 thousand and €176,656 thousand for the
become known.
the years ended December 31, 2021 and management
years ended December 31, 2021, 2020 and 2019,
respectively.
In the fourth quarter of 2020, Ferrari benefited from
the measures introduced in Italy by the art. 110 of
Income taxes for the years ended December 31, 2021,
the Law Decree n. 104/2020, converted in the Law
2020 and 2019 benefited from the application of the
n. 126/2020, enacting “Urgent measures to support
Patent Box tax regime, which provides tax benefits
and relaunch the economy”, which reopened the
for companies that generate income through the use,
voluntary step up of tangible and intangible assets,
both direct and indirect, of intangible assets. Starting
with the application of a substitute tax at a rate of 3
in 2020 the Group has applied the Patent Box tax
percent. In particular, Ferrari S.p.A. benefited from
regime for the period from 2020 to 2024, in line with
the one-time partial step-up of its trademark for
the tax regulations applicable in Italy, and determined
tax purposes, which resulted in the recognition in
the income eligible for the Patent Box regime with
2020 of deferred tax assets for €83,700 thousand
recognition of the Patent Box tax benefit in three equal
and a substitute tax liability for €9,000 thousand,
annual installments.
resulting in a net tax benefit of €74,700 thousand.
There was no cash effect in 2020 from the step-up of
The Law Decree (Decree) n. 146 enacted by the Italian
the trademark. The deferred tax asset will be utilized
authorities, effective from October 22, 2021 and as
over a 50-year period (following the introduction of
amended by the 2022 Italian budget law, introduces
the 2022 Italian budget law (Law 234/2021) which
a series of urgent economic and tax measures and
provides for an extension from 18 years to 50 years
will replace the current Patent Box tax regime with a
of the amortization period for tax purposes for any
110% “super tax deduction” for certain costs related
trademarks and goodwill that benefited from the
to eligible intangible assets. The Decree provides for
step-up regime) and the substitute tax will be paid in
a specific transitional procedure between the two
three equal annual installments starting in 2021.
264
FERRARI N.V.AR 2021 The table below provides a reconciliation between actual income tax expense and the theoretical income tax
expense, calculated on the basis of the applicable corporate tax rate in effect in Italy, which was 24.0 percent for
each of the years ended December 31, 2021, 2020 and 2019.
(€ thousand)
Theoretical income tax expense
Tax effect on:
Permanent and other differences
Italian Regional Income Tax (IRAP)
Effect of changes in tax rates and tax regulations
Differences between foreign tax rates and the theoretical Italian tax rate and
tax holidays
Taxes relating to prior years
Withholding tax on earnings
Income tax expense
Effective tax rate
For the years ended December 31,
2021
2020
2019
250,136
160,088
210,088
(79,267)
(129,016)
(76,187)
32,422
633
2,077
2,556
539
22,662
800
1,734
514
1,373
27,997
733
3,457
7,208
3,360
209,095
58,155
176,656
20.1%
8.7%
20.2%
The increase in the effective tax rate from 8.7
and 2019 is included within “permanent and other
percent in 2020 to 20.1 percent in 2021 was primarily
differences” in the tax rate reconciliation above.
attributable to the tax benefits from the measures
introduced in Italy by the art. 110 of the Law Decree
The Italian Regional Income Tax (“IRAP”) is only
No. 104/2020, converted in the Law n. 126/2020,
applicable to Italian entities and is calculated on a
enacting “Urgent measures to support and relaunch
measure of income defined by the Italian Civil Code
the economy”, which allowed Ferrari a one-time
as the difference between operating revenues
partial step-up of its trademark for tax purposes
and costs, before financial income and expense,
resulting in a net tax benefit of €74,700 thousand in
and in particular before the cost of fixed-term
2020 (as further described above) and to a lesser
employees, credit losses and any interest included
extent, the effects of deductions for eligible research
in lease payments. IRAP is calculated using financial
and development costs. The net benefit from the
information prepared under Italian accounting
step up is included within “permanent and other
standards. IRAP is applied on the tax base at 3.9
differences” for 2020 in the tax rate reconciliation
percent for each of the years ended December 31,
above. The Patent Box benefit relating to 2021, 2020
2021, 2020 and 2019.
The analysis of deferred tax assets and deferred tax liabilities at December 31, 2021 and 2020, is as follows:
(€ thousand)
Deferred tax assets:
To be recovered after 12 months
To be recovered within 12 months
Deferred tax liabilities:
To be realized after 12 months
To be realized within 12 months
Net deferred tax assets/(liabilities)
At December 31,
2021
2020
94,808
73,949
95,209
57,012
168,757
152,221
(78,496)
(17,477)
(96,179)
(17,295)
(95,973)
(113,474)
72,784
38,747
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The movements in deferred income tax assets and liabilities during the year, without taking into consideration the
offsetting of balances within the same tax jurisdiction, are as follows:
(€ thousand)
At December
31, 2020
Recognized in
consolidated
income
statement
Charged to
equity
Translation
differences
and other
changes
At December
31, 2021
Deferred tax assets arising on:
Provisions
Deferred income
Employee benefits
Foreign currency exchange rate differences
Cash flow hedge reserve
Inventory obsolescence
Allowances for doubtful accounts
Depreciation
Trademark step-up
Patent box
Other
90,663
52,241
2,931
516
—
61,726
5,643
17,551
83,700
27,902
6,027
12,712
(606)
—
95
—
7,131
(474)
7
837
37,791
3,927
—
—
110
—
8,455
—
—
—
—
—
—
Total deferred tax assets
348,900
61,420
8,565
606
103,981
—
—
(1)
—
250
9
(3)
—
—
4,374
5,235
51,635
3,041
610
8,455
69,107
5,178
17,555
84,537
65,693
14,328
424,120
Deferred tax liabilities arising on:
Depreciation
(7,550)
1,217
Capitalization of development costs
(264,087)
(47,349)
Employee benefits
Foreign currency exchange rate differences
Cash flow hedge reserve
Tax on undistributed earnings
Other
(844)
(559)
(9,505)
(15,861)
(11,747)
(209)
33
—
(1,543)
(1,568)
Total deferred tax liabilities
(310,153)
(49,419)
Total net deferred tax assets/(liabilities)
38,747
12,001
—
—
—
—
9,505
—
—
9,505
18,070
(448)
(6,781)
(2)
—
—
—
—
(819)
(311,438)
(1,053)
(526)
—
(17,404)
(14,134)
(1,269)
(351,336)
3,966
72,784
266
FERRARI N.V.AR 2021 (€ thousand)
At December
31, 2019
Recognized in
consolidated
income
statement
Charged
to equity
Translation
differences
and other
changes
At December
31, 2020
Deferred tax assets arising on:
Provisions
Deferred income
Employee benefits
Foreign currency exchange rate differences
Cash flow hedge reserve
Inventory obsolescence
Allowances for doubtful accounts
Depreciation
Trademark step-up
Patent box
Other
100,298
53,843
2,930
1,437
1,786
51,972
5,407
17,564
—
—
17,695
(8,748)
(1,602)
—
(920)
—
10,032
239
(10)
83,700
27,902
(8,298)
—
—
1
—
(1,786)
—
—
—
—
—
—
Total deferred tax assets
252,932
102,295
(1,785)
Deferred tax liabilities arising on:
Depreciation
(8,881)
764
Capitalization of development costs
(224,851)
(39,238)
Employee benefits
Foreign currency exchange rate differences
Cash flow hedge reserve
Tax on undistributed earnings
Other
(750)
(399)
—
(13,983)
(12,593)
(94)
(160)
—
(1,878)
785
—
—
—
—
(9,505)
—
—
Total deferred tax liabilities
(261,457)
(39,821)
(9,505)
(887)
—
—
(1)
—
(278)
(3)
(3)
—
—
(3,370)
(4,542)
90,663
52,241
2,931
516
—
61,726
5,643
17,551
83,700
27,902
6,027
348,900
567
(7,550)
2
—
—
—
—
61
630
(264,087)
(844)
(559)
(9,505)
(15,861)
(11,747)
(310,153)
Total net deferred tax assets/(liabilities)
(8,525)
62,474
(11,290)
(3,912)
38,747
The decision to recognize deferred tax assets is made for each company in the Group by assessing whether the
conditions exist for the future recoverability of such assets by taking into account the basis of the most recent
forecasts from budgets and business plans.
Deferred taxes on the undistributed earnings of subsidiaries have not been recognized, except in cases where it
is probable the distribution will occur in the foreseeable future. At December 31, 2021, the aggregate amount of
temporary differences related to remaining distributable earnings of the Group’s subsidiaries where deferred tax
liabilities have not been recognized amounted to €186,806 thousand (€164,803 thousand at December 31, 2020).
267
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respectively, and amortization amounted to €225,892
thousand, €208,685 thousand and €160,464 thousand
Personnel costs in 2021, 2020 and 2019 amounted to
for the years ended December 31, 2021, 2020 and
€483,747 thousand, €389,927 thousand and €385,182
2019, respectively.
thousand, respectively. These amounts include costs
that were capitalized in connection with product
12. EARNINGS PER SHARE
development activities. In 2021, 2020 and 2019 the
Group had an average number of employees of 4,571,
BASIC EARNINGS PER SHARE
4,428 and 4,164, respectively.
Basic earnings per share is calculated by dividing the
profit attributable to equity holders of Ferrari by the
Depreciation amounted to €230,097 thousand,
weighted average number of common shares issued
€217,952 thousand and €191,482 thousand for the
and outstanding during the period.
years ended December 31, 2021, 2020 and 2019,
The following table provides the amounts used in the calculation of basic earnings per share for the years ended
December 31, 2021, 2020 and 2019:
Profit attributable to owners of the Company
€ thousand
830,767
607,817
695,818
Weighted average number of common shares for basic
earnings per common share
thousand
184,446
184,806
186,767
Basic earnings per common share
€
4.50
3.29
3.73
For the years ended December 31,
2021
2020
2019
DILUTED EARNINGS PER SHARE
common shares that would be issued for the Group’s
For the years ended December 31, 2021, 2020 and
equity incentive plans (assuming 100 percent of the
2019, the weighted average number of shares for
target awards vested). See Note 21 “Share-Based
diluted earnings per share was increased to take into
Compensation” for additional details related to the
consideration the theoretical effect of the potential
Group’s equity incentive plans.
The following table provides the amounts used in the calculation of diluted earnings per share for the years ended
December 31, 2021, 2020 and 2019:
Profit attributable to owners of the Company
€ thousand
830,767
607,817
695,818
Weighted average number of common shares for diluted
earnings per common share
thousand
184,722
185,379
187,535
Diluted earnings per common share
€
4.50
3.28
3.71
For the years ended December 31,
2021
2020
2019
13. GOODWILL
The assumptions used in this process represent
management’s best estimate for the period under
At December 31, 2021 and 2020 goodwill amounted to
consideration. The estimate of the value in use of
€785,182 thousand.
the CGU for purposes of performing the annual
impairment test was based on the following
In accordance with IAS 36, goodwill is not amortized
assumptions:
and is tested for impairment annually, or more
• The expected future cash flows covering the period
frequently if facts or circumstances indicate that
from 2022 through 2025 have been derived from
the asset may be impaired. Impairment testing is
the Ferrari business plan. In particular the estimate
performed by comparing the carrying amount and
considers expected EBITDA adjusted to reflect the
the recoverable amount of the CGU. The recoverable
expected capital expenditure. These cash flows
amount of the CGU is the higher of its fair value less
relate to the CGU in its condition when preparing
costs of disposal and its value in use.
the financial statements and exclude the estimated
268
FERRARI N.V.AR 2021 cash flows that might arise from restructuring plans
tax discount rate appropriate for that currency,
or other structural changes. Volumes and sales mix
determined by using a base WACC of 6.84 percent
used for estimating the future cash flows are based
in 2021 (6.83 percent in 2020 and 6.80 percent in
on assumptions that are considered reasonable
2019). The WACC used reflects the current market
and sustainable and represent the best estimate of
assessment of the time value of money for the
expected conditions regarding market trends for
period being considered and the risks specific to the
the CGU over the period considered.
CGU under consideration.
• The expected future cash flows include a normalized
terminal period used to estimate the future results
The recoverable amount of the CGU was significantly
beyond the time period explicitly considered, which
higher than its carrying amount. Furthermore, the
were calculated by using the specific medium/long-
exclusivity of the business, its historical profitability
term growth rate for the sector equal to 2.0 percent
and its future earnings prospects indicate that the
in 2021 (2.0 percent in 2020 and 2019).
carrying amount of the goodwill will continue to be
• The expected future cash flows have been
recoverable, even in the event of difficult economic
estimated in Euro, and discounted using a post-
and market conditions.
14. INTANGIBLE ASSETS
(€ thousand)
Gross carrying amount
at January 1, 2020
Additions
Reclassifications
Translation differences and other
movements
Externally
acquired
development
costs
Development
costs
internally
generated
Patents,
concessions
and licenses
Other
intangible
assets
Total
1,567,080
678,989
207,491
48,603
2,502,163
236,913
83,190
—
26,867
3,337
5,008
(3,337)
351,978
—
(1,846)
(98)
2
(1,942)
—
—
Balance at December 31, 2020
1,803,993
760,333
237,597
50,276
2,852,199
Additions
Reclassifications
Translation differences and other
movements
261,457
101,682
—
—
—
—
17,151
3,200
(59)
4,537
(3,200)
7
384,827
—
(52)
Balance at December 31, 2021
2,065,450
862,015
257,889
51,620
3,236,974
Accumulated amortization
at January 1, 2020
1,034,368
410,930
176,301
42,626
1,664,225
Amortization
139,546
41,008
26,048
2,083
208,685
Translation differences and other
movements
—
—
(2)
1
(1)
Balance at December 31, 2020
1,173,914
451,938
202,347
44,710
1,872,909
Amortization
146,664
47,808
29,495
1,925
225,892
Balance at December 31, 2021
1,320,578
499,746
231,842
46,635
2,098,801
Carrying amount at:
January 1, 2020
December 31, 2020
December 31, 2021
532,712
268,059
630,079
308,395
744,872
362,269
31,190
35,250
26,047
5,977
5,566
4,985
837,938
979,290
1,138,173
Additions primarily related to externally acquired and internally generated development costs for new and existing
models.
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Divestitures
Reclassifications
15. PROPERTY, PLANT AND EQUIPMENT
(€ thousand)
Land
Industrial
buildings
Plant,
machinery and
equipment
Other
assets
Advances
and assets
under
construction
Total
Gross carrying amount at January 1, 2020
23,609
408,658
2,361,520
192,528
201,396
3,187,711
Additions
Divestitures
Reclassifications
5,805
22,210
114,839
24,445
214,706
382,005
—
—
(791)
2,795
(11,423)
(5,048)
(127)
(17,389)
79,937
3,500
(86,232)
—
Translation differences and other movements
(23)
(2,417)
(36)
(1,881)
—
(4,357)
Balance at December 31, 2020
29,391
430,455
2,544,837
213,544
329,743
3,547,970
16,936
17,852
122,893
20,930
186,846
365,457
(13)
(3,412)
(46,067)
(5,586)
(135)
(55,213)
Translation differences and other movements
20
1,736
376
3,722
40,046
144,684
2,573
1,633
(197,599)
(6,574)
45
3,810
Balance at December 31, 2021
50,056
486,677
2,766,723
233,094
318,900 3,855,450
Accumulated amortization at January 1, 2020
Depreciation
Divestitures
Translation differences and other movements
Balance at December 31, 2020
Depreciation
Divestitures
Reclassifications
Translation differences and other movements
Balance at December 31, 2021
Carrying amount at:
January 1, 2020
—
—
—
—
—
—
—
—
—
—
167,132
1,823,839
127,088
— 2,118,059
17,778
(602)
(138)
180,868
19,306
(10,654)
(2,713)
1,426
(1,990)
—
—
—
217,952
(13,969)
(702)
184,170
1,995,479
141,691
— 2,321,340
17,875
191,247
20,975
(608)
(284)
692
(43,991)
(4,892)
(1,123)
12
284
758
—
—
—
—
230,097
(49,491)
(1,123)
1,462
201,845
2,141,624
158,816
— 2,502,285
23,609
241,526
537,681
65,440
201,396
1,069,652
of which right-of use assets under IFRS 16
—
15,834
7,612
34,319
—
57,765
December 31, 2020
29,391
246,285
549,358
71,853
329,743
1,226,630
of which right-of use assets under IFRS 16
—
25,574
5,041
29,127
—
59,742
December 31, 2021
50,056
284,832
625,099
74,278
318,900
1,353,165
of which right-of use assets under IFRS 16
—
21,613
3,484
28,661
—
53,758
Additions mainly related to advances and assets under construction, including tracts of land adjacent to our
facilities in Maranello as part of our expansion plans, as well as plant, machinery and equipment, primarily related
to car production and engine assembly lines (including those for models to be launched in future years), industrial
tools used for the production of cars and personalization programs.
270
FERRARI N.V.AR 2021 The following table summarizes the changes in the carrying amount of right-of-use assets for the year ended
December 31, 2021 and 2020:
(€ thousand)
Balance at January 1, 2020
Additions
Disposals
Depreciation
Translation differences and other movements
Balance at January 1, 2021
Additions
Disposals
Depreciation
Translation differences and other movements
Balance at December 31, 2021
Industrial
buildings
Plant,
machinery and
equipment
15,834
16,214
—
7,612
2,578
(24)
(6,564)
(5,159)
90
25,574
3,987
(2,780)
(5,753)
585
21,613
34
5,041
1,409
—
(1,348)
(1,618)
3,484
Other assets
Total
34,319
6,194
(2,303)
(8,436)
(647)
29,127
7,745
(473)
(8,247)
509
28,661
57,765
24,986
(2,327)
(20,159)
(523)
59,742
13,141
(3,253)
(15,348)
(524)
53,758
Amounts recognized in the income statement in relation to leases for the year ended December 31, 2021 and 2020
were as follows:
(€ thousand)
Depreciation of right-of-use assets
Interest expense on lease liabilities
Variable lease payments not included in the measurement of lease liabilities
Expenses relating to short-term leases and leases of low-value assets
For the year ended December 31,
2021
15,348
868
1,622
3,671
2020
20,159
943
1,190
4,312
Total expenses recognized
21,509
26,604
For the year ended December 31, 2021 depreciation
At December 31, 2021, the Group had contractual
of right-of-use assets amounted to €15,348 thousand
commitments for the purchase of property, plant and
and interest expense on lease liabilities amounted to
equipment amounting to €73,681 thousand (€101,361
€868 thousand (€20,159 thousand and €943 thousand,
thousand at December 31, 2020).
respectively, for the year ended December 31, 2020).
16. INVESTMENTS AND OTHER FINANCIAL ASSETS
The composition of investments and other financial assets is as follows:
(€ thousand)
Investments accounted for using the equity method
Other securities and financial assets
Total investments and other financial assets
At December 31,
2021
42,927
11,582
54,509
2020
34,663
8,178
42,841
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INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Changes in the carrying amount of investments accounted for using the equity method during the period were as
follows:
Balance at January 1, 2020
Proportionate share of net profit for the year ended December 31, 2020
Proportionate share of remeasurement of defined benefit plans
Balance at December 31, 2020
Additions
Proportionate share of net profit for the year ended December 31, 2021
Proportionate share of remeasurement of defined benefit plans
Balance at December 31, 2021
(€ thousand)
30,012
4,647
4
34,663
1,285
6,896
83
42,927
Investments accounted for using the equity method
Additions relate to FS China Limited, a new joint
mainly relate to the Group’s investment in Ferrari
venture formed in China in 2021 to manage certain
Financial Services GmbH, a German entity that
brand activities in the local market, which had not yet
offers retail client financing in certain markets in
commenced operations as of December 31, 2021.
EMEA (primarily the UK, Germany and Switzerland).
Summarized financial information relating to FFS GmbH at and for the years ended December 31, 2021 and 2020
is presented below:
(€ thousand)
Assets
Non-current assets
Receivables from financing activities
Other current assets
Cash and cash equivalents
Total assets
Equity and liabilities
Equity
Debt
Other liabilities
Total equity and liabilities
(€ thousand)
Net revenues
Cost of sales
Selling, general and administrative costs
Other expenses/(income), net
Profit before taxes
Income tax expense
Net profit
At December 31,
2021
2020
4,037
3,390
908,362
782,880
5,096
14,046
4,130
5,406
931,541
795,806
81,156
763,563
86,822
67,352
653,748
74,706
931,541
795,806
For the year ended December 31,
2021
46,103
16,971
8,565
2,730
17,837
4,045
13,792
2020
37,764
14,864
8,494
1,213
2019
34,680
15,655
8,892
(963)
13,193
11,096
3,898
9,295
3,010
8,086
272
FERRARI N.V.AR 2021 OTHER SECURITIES AND FINANCIAL ASSETS
group responsible for the promotion of the Formula
Other securities and financial assets primarily include
1 World Championship), which are measured at fair
Series C Liberty Formula One shares (the “Liberty
value and amounted to €10,559 thousand at December
Media Shares”) of Liberty Media Corporation (the
31, 2021 (€7,163 thousand at December 31, 2020).
17. INVENTORIES
(€ thousand)
Raw materials
Semi-finished goods
Finished goods
Total inventories
At December 31,
2021
99,382
121,201
319,992
2020
96,900
94,619
269,098
540,575
460,617
The increase in inventories is mainly due to higher car
The amount of inventory write-downs recognized
volumes.
as an expense within cost of sales during 2021 was
€9,392 thousand (€21,155 thousand in 2020 and
€14,512 thousand in 2019).
Changes in the provision for slow moving and obsolete inventories were as follows:
(€ thousand)
At January 1,
Provision
Use and other changes
At December 31,
18. CURRENT RECEIVABLES AND OTHER CURRENT ASSETS
(€ thousand)
Trade receivables
Receivables from financing activities
Current tax receivables
Other current assets
Total
2021
96,707
9,392
(4,001)
102,098
2020
83,673
21,155
(8,121)
96,707
At December 31,
2021
185,000
1,143,968
14,306
122,224
2020
184,260
939,607
12,438
76,471
1,465,498
1,212,776
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TRADE RECEIVABLES
The following table sets forth a breakdown of trade receivables by nature:
(€ thousand)
Trade receivables due from:
Dealers
Stellantis Group (*) companies
Sponsorship and commercial activities
Brand activities
Other
Total
At December 31,
2021
2020
58,446
23,737
29,666
23,902
49,249
62,301
37,906
31,917
21,886
30,250
185,000
184,260
(*) Previously referred to as Fiat Chrysler Automobiles N.V. or FCA prior to the merger between FCA and Peugeot S.A. completed on January 16, 2021,
which resulted in the creation of Stellantis N.V.
Trade receivables due from dealers relate to
controlled by the Stellantis Group. For additional
receivables for the sale of cars across the dealer
information, see Note 28, “Related Party Transactions”.
network and are generally settled within 30 to 40
days from the date of invoice.
Trade receivables due from sponsorship and
Trade receivables due from Stellantis Group
participation in the Formula 1 World Championship.
companies mainly relate to the sale of engines and
Trade receivables due from brand activities relate to
car bodies to Maserati S.p.A. and Officine Maserati
amounts receivable for licensing and merchandising
Grugliasco S.p.A. (together “Maserati”) which are
activities. The Group is not exposed to significant
commercial activities mainly relate to the Group’s
concentration of third party credit risk.
The following table sets forth a breakdown of trade receivables by currency:
(€ thousand)
Trade receivables denominated in:
Euro
U.S. Dollar
Pound Sterling
Chinese Yuan
Japanese Yen
Other currencies
Total
At December 31,
2021
2020
78,286
84,590
3,908
2,478
11,348
4,390
111,191
51,295
6,560
1,398
8,921
4,895
185,000
184,260
Trade receivables are shown net of an allowance for doubtful accounts determined on the basis of insolvency
risk and historical experience, adjusted for forward-looking factors specific to the receivables and the economic
environment. Additional provisions to the allowance for doubtful accounts are recorded within selling, general and
administrative costs in the consolidated income statement.
274
FERRARI N.V.AR 2021 Changes in the allowance for doubtful accounts of trade receivables during the year were as follows:
(€ thousand)
At January 1,
Additional provisions
Utilizations
Releases
Other changes
At December 31,
RECEIVABLES FROM FINANCING ACTIVITIES
Receivables from financing activities are as follows:
(€ thousand)
Client financing
Dealer financing
Total receivables from financing activities
2021
28,312
2,094
(1,835)
(2,741)
154
25,984
2020
27,171
5,743
(2,860)
(1,595)
(147)
28,312
At December 31,
2021
2020
1,132,979
925,878
10,989
13,729
1,143,968
939,607
Receivables from financing activities relate to the financial services portfolio in the United States and are generally
secured on the title of cars or other guarantees.
Receivables from financing activities are shown net of an allowance for doubtful accounts determined on the
basis of insolvency risks, adjusted for forward-looking factors specific to the receivables and the economic
environment.
Additional provisions to the allowance for doubtful accounts are recorded within cost of sales in the consolidated
income statement.
Changes in the allowance for doubtful accounts of receivables from financing activities during the year are as
follows:
(€ thousand)
At January 1,
Additional provisions
Utilizations
Releases
Other changes
At December 31,
2021
13,195
2,737
(4,507)
(1,270)
1,049
11,204
2020
7,480
9,502
(3,078)
—
(709)
13,195
CLIENT FINANCING
Receivables for client financing are generally secured
Client financing relates to financing provided by
on the titles of the related cars or other personal
the Group to Ferrari clients to finance their car
guarantees.
acquisitions. During 2021 the average contractual
duration at inception of such contracts was
Client financing relates entirely to financial services
approximately 66 months (67 months in 2020) and the
activities in the United States and is denominated in
weighted average interest rate was approximately 5.2
U.S. Dollars.
percent (approximately 5.5 percent in 2020).
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DEALER FINANCING
In 2021 the Group discontinued dealer financing secured by the titles of the cars sold through the dealer network.
The Group still carries one existing longer term loan bearing a rate based on LIBOR plus a variable spread based
on dealer’s performance.
OTHER CURRENT ASSETS
Other current assets are detailed as follows:
(€ thousand)
Italian and foreign VAT credits
Prepayments
Other
Total other current assets
At December 31,
2021
61,278
36,084
24,862
122,224
2020
31,620
38,826
6,025
76,471
Other includes security deposits, amounts due from personnel and other receivables.
At December 31, 2021, the Group had provided guarantees through third parties amounting to €226,878 thousand
(€169,186 thousand at December 31, 2020), principally to (i) banks for a U.S. Dollar denominated credit facility of
FFS Inc., (ii) tax authorities for VAT reimbursements according to Italian legislation and (iii) customs authorities for
duties on import and export activities.
The analysis of receivables and other current assets by due date (excluding prepayments) is as follows:
(€ thousand)
Trade receivables
Receivables from financing activities
Client financing
Dealer financing
Current tax receivables
Other current assets
Total
(€ thousand)
Trade receivables
Receivables from financing activities
Client financing
Dealer financing
Current tax receivables
Other current assets
Total
At December 31, 2021
Due within one
year
137,694
197,207
196,018
1,189
14,306
84,417
Due between
one and five
years
70
820,363
810,563
9,800
—
998
Due beyond
five years
Overdue
Total
—
73,665
73,665
—
—
155
47,237
52,733
52,733
—
—
570
185,000
1,143,968
1,132,979
10,989
14,306
86,140
433,624
821,431
73,820
100,540
1,429,414
At December 31, 2020
Due within one
year
137,564
159,778
156,154
3,624
10,314
36,971
Due between
one and five
years
69
657,073
646,968
10,105
2,124
247
Due beyond
five years
Overdue
Total
—
57,202
57,202
—
—
180
46,627
65,554
65,554
—
—
247
184,260
939,607
925,878
13,729
12,438
37,645
344,627
659,513
57,382
112,428
1,173,950
Overdue amounts represent receivables and other current assets where payments are past their due date.
276
FERRARI N.V.AR 2021 19. CURRENT FINANCIAL ASSETS AND OTHER FINANCIAL LIABILITIES
(€ thousand)
Financial derivatives
Other financial assets
Current financial assets
At December 31,
2021
11,565
1,935
2020
38,636
1,448
13,500
40,084
Current financial assets and other financial liabilities mainly relate to foreign exchange derivatives.
The following table sets forth a breakdown of derivative assets and liabilities at December 31, 2021 and 2020.
(€ thousand)
Cash flow hedges:
Foreign currency derivatives
Commodities
Interest rate caps
Total cash flow hedges
At December 31,
2021
2020
Positive
fair value
Negative
fair value
Positive
fair value
Negative
fair value
4,437
182
6,053
(34,973)
(1,162)
—
37,214
(2,060)
271
497
—
—
10,672
(36,135)
37,982
(2,060)
Other foreign currency derivatives
893
(385)
654
(80)
Total
11,565
(36,520)
38,636
(2,140)
Foreign currency derivatives that do not meet the requirements to be recognized as cash flow hedges are
presented as other foreign currency derivatives. Interest rate caps relate to derivative instruments required as
part of certain securitization agreements.
The following tables provide an analysis of outstanding derivative financial instruments by foreign currency based
on their fair value and notional amounts:
(€ thousand)
Currencies:
U.S. Dollar
Pound Sterling
Japanese Yen
Swiss Franc
Chinese Yuan
Other(1)
Total amount
At December 31, 2021
At December 31, 2020
Fair Value
Notional
Amount
Fair Value
Notional
Amount
(17,588)
1,773,022
31,474
1,363,667
(2,343)
116
(2,754)
(1,125)
(1,261)
154,353
282,482
76,953
91,248
108,822
450
3,533
535
490
14
118,795
197,170
76,282
37,644
105,159
(24,955)
2,486,880
36,496
1,898,717
(1) Other mainly includes the Australian Dollar, the Hong Kong Dollar and the Canadian Dollar.
At December 31, 2021 and 2020, substantially all derivative financial instruments had a maturity of twelve months
or less.
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CASH FLOW HEDGES
risk management are treated as cash flow hedges
The effects recognized in the consolidated income
where the derivative qualifies for hedge accounting.
statement mainly relate to currency risk management
The amounts recorded in the cash flow hedge
and in particular the exposure to fluctuations in the
reserve within other comprehensive income will be
Euro/U.S. Dollar exchange rate for sales in U.S. Dollars.
recognized in the consolidated income statement
according to the timing of the flows of the underlying
The policy of the Group for managing foreign
transactions. Management believes that substantially
currency risk normally requires hedging of a portion
all of the hedging effects arising from these derivative
of projected future cash flows from trading activities
contracts and recorded in the cash flow hedge
and orders acquired (or contracts in progress) in
reserve will be recognized in the consolidated income
foreign currencies that will occur within the following
statement within the following 12 months from the
12 months. Derivatives relating to foreign currency
reporting date.
The Group reclassified gains and losses, net of the related tax effects, from other comprehensive income/(loss) to
the consolidated income statement as follows:
(€ thousand)
Net revenues/(costs)
Income tax (expense)/benefit
Total recognized in the consolidated income statement
For the years ended December 31,
2021
7,275
(2,030)
5,245
2020
19,557
(5,456)
2019
(22,055)
6,153
14,101
(15,902)
The ineffectiveness of cash flow hedges was not material for the years 2021, 2020 and 2019.
20. EQUITY
SHARE CAPITAL
based on the transaction trade date. The increase in
common shares held in treasury primarily reflects
the repurchase of shares by the Company through its
At December 31, 2021 and 2020 the fully paid up
share repurchase program, partially offset by shares
share capital of the Company was €2,573 thousand,
assigned under the Group’s equity incentive plans. The
consisting of 193,923,499 common shares and
Company restarted its multi-year share repurchase
63,349,112 special voting shares, all with a nominal
program on March 12, 2021 following its temporary
value of €0.01. At December 31, 2021, the Company
suspension from March 30, 2020 as part of actions
had 10,080,103 common shares and 4,190 special
implemented by management to prudently manage
voting shares held in treasury, while at December 31,
liquidity as a result of the COVID-19 pandemic. At
2020, the Company had 9,175,609 common shares
December 31, 2021 and 2020 the Company held in
and 2,190 special voting shares. Shares in treasury
treasury 3.92 percent and 3.57 percent of the total
include shares repurchased under the Group’s share
issued share capital of the Company, respectively.(1)
repurchase program, which are recorded
(1) The percentage of shares held in treasury compared to total issued share capital remains substantially the same if calculated considering only
common shares held in treasury or if calculated considering common shares and special voting shares held in treasury.
278
FERRARI N.V.AR 2021 The following table summarizes the changes in the number of outstanding common shares and outstanding
special voting shares of the Company for the years ended December 31, 2021 and 2020:
Common
Shares
Special Voting
Shares
Total
Outstanding shares at December 31, 2019
185,283,323
63,346,921
248,630,244
Common shares repurchased under share repurchase program(1)
Common shares assigned under equity incentive plans(2)
Other changes
(819,483)
284,050
—
—
—
1
(819,483)
284,050
1
Outstanding shares at December 31, 2020
184,747,890
63,346,922
248,094,812
Common shares repurchased under share repurchase program(3)
Common shares assigned under equity incentive plans(4)
Other changes(5)
(1,167,592)
263,098
—
—
—
(2,000)
(1,167,592)
263,098
(2,000)
Outstanding shares at December 31, 2021
183,843,396
63,344,922
247,188,318
(1)
Includes shares repurchased between January 1, 2020 and December 31, 2020 based on the transaction trade date, for a total consideration of
€119,771 thousand including transaction costs.
(2) On March 16, 2020, 366,199 common shares, which were previously held in treasury, were assigned to participants of the equity incentive plans as a
result of the vesting of certain performance share unit and retention restricted share unit awards. On March 17, 2020, the Company purchased 82,149
common shares, for a total consideration of €10,022 thousand, from a group of those employees who were assigned shares in order to cover the
individual’s taxable income as is standard practice (Sell to Cover) in an over-the-counter transaction. See Note 21 “Share-Based Compensation” for
additional details relating to the Group’s equity incentive plans.
(3) Includes shares repurchased under the share repurchase program between January 1, 2021 and December 31, 2021 based on the transaction trade
date, for a total consideration of €231,024 thousand, including transaction costs.
(4) On March 16, 2021, 356,571 common shares, which were previously held in treasury, were assigned to participants of the equity incentive plans as a
result of the vesting of certain performance share unit and retention restricted share unit awards. On March 17, 2021, the Company purchased 93,473
common shares, for a total consideration of €15,432 thousand, from a group of those employees who were assigned shares in order to cover the
individual’s taxable income as is standard practice (Sell to Cover) in an over-the-counter transaction. See Note 21 “Share-Based Compensation” for
additional details relating to the Group’s equity incentive plans.
(5) Relates to the deregistration of certain special voting shares under the Company’s special voting shares term and conditions.
THE LOYALTY VOTING STRUCTURE
shares have only immaterial economic entitlements
The purpose of the loyalty voting structure is to
and, as a result, do not impact the Company’s
reward ownership of the Company’s common
earnings per share calculation.
shares and to promote stability of the Company’s
shareholder base by granting long-term shareholders
RETAINED EARNINGS AND OTHER RESERVES
of the Company with special voting shares. Following
Retained earnings and other reserves includes:
the separation of Ferrari from the Stellantis Group
• a share premium reserve of €5,768,544 thousand
(previously referred to as Fiat Chrysler Automobiles
at December 31, 2021 (€5,768,544 thousand at
N.V. or FCA prior to the merger between FCA and
December 31, 2020);
Peugeot S.A. completed on January 16, 2021, which
• a legal reserve of €93 thousand at December 31,
resulted in the creation of Stellantis N.V.) in 2016,
2021 and €19 thousand at December 31, 2020,
Exor N.V. (“Exor”) and Piero Ferrari participate in the
determined in accordance with Dutch law;
Company’s loyalty voting program and, therefore,
• a treasury reserve of €847,525 thousand at
effectively hold two votes for each of the common
December 31, 2021 and €616,629 thousand at
shares they hold. Investors who purchase common
December 31, 2020;
shares may elect to participate in the loyalty voting
• a share-based compensation reserve of €28,379
program by registering their common shares in the
thousand at December 31, 2021 and €43,482
loyalty share register and holding them for three
thousand at December 31, 2020.
years. The loyalty voting program will be affected
by means of the issue of special voting shares to
Following approval of the annual accounts by the
eligible holders of common shares. Each special
shareholders at the Annual General Meeting of the
voting share entitles the holder to exercise one vote
Shareholders on April 15, 2021, a dividend distribution
at the Company’s shareholder meetings. Only a
of €0.867 per common share was approved,
minimal dividend accrues to the special voting shares
corresponding to a total distribution of €160,272
allocated to a separate special dividend reserve, and
thousand (of which €160,101 thousand was paid in
the special voting shares do not carry any entitlement
2021). The distribution was made from the retained
to any other reserve of the Group. The special voting
earnings reserve.
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Following approval of the annual accounts by the
Following approval of the annual accounts by the
shareholders at the Annual General Meeting of the
shareholders at the Annual General Meeting of the
Shareholders on April 16, 2020, a dividend distribution
Shareholders on April 12, 2019, a dividend distribution
of €1.13 per common share was approved,
of €1.03 per common share was approved,
corresponding to a total distribution of €208,765
corresponding to a total distribution of €193,328
thousand (of which €208,100 thousand was paid in
thousand (of which €192,664 thousand was paid in
2020). The distribution was made from the retained
2019). The distribution was made from the retained
earnings reserve.
earnings reserve.
OTHER COMPREHENSIVE INCOME/(LOSS)
The following table presents other comprehensive income/(loss):
(€ thousand)
Items that will not be reclassified to the consolidated income statement
in subsequent periods:
Gains/(Losses) on remeasurement of defined benefit plans (1)
Total items that will not be reclassified to the consolidated income statement
in subsequent periods
Items that may be reclassified to the consolidated income statement
in subsequent periods:
For the years ended December 31,
2021
2020
2019
(463)
(463)
34
34
(2,078)
(2,078)
Gains/(Losses) on cash flow hedging instruments arising during the period
(56,855)
59,666
(24,327)
(Gains)/Losses on cash flow hedging instruments reclassified to the
consolidated income statement
Gains/(Losses) on cash flow hedging instruments
Exchange differences on translating foreign operations
Total items that may be reclassified to the consolidated income statement
in subsequent periods
Total other comprehensive income/(loss)
Related tax impact
Total other comprehensive income/(loss), net of tax
(7,275)
(19,557)
22,055
(64,130)
14,229
40,109
(11,731)
(2,272)
2,652
(49,901)
28,378
380
(50,364)
18,070
(32,294)
28,412
(11,290)
17,122
(1,698)
1,066
(632)
(1)
Includes a gain of €83 thousand, a gain of €4 thousand, and a loss of €3 thousand for the years ended December 31, 2021, 2020 and 2019, respectively,
related to the Group’s proportionate share of the remeasurement of defined benefit plans of FFS GmbH, for which the Group holds a 49.9 percent
interest.
Gains and losses on the remeasurement of defined benefit plans include actuarial gains and losses arising during
the period and are offset against the related net defined benefit liabilities.
280
FERRARI N.V.AR 2021 The tax effects relating to other comprehensive income/(loss) are summarized in the following table:
(€ thousand)
Gains/(Losses) on remeasurement
of defined benefit plans
Gains/(Losses) on cash flow
hedging instruments
Exchange (losses)/gains on
translating foreign operations
Total other comprehensive
(loss)/income
For the years ended December 31,
2021
Related
tax
impact
Pre-tax
balance
Net
Pre-tax
balance
balance
2020
Related
tax
impact
Net
Pre-tax
balance
balance
2019
Related
tax
impact
Net
balance
(463)
110
(353)
34
1
35
(2,078)
456
(1,622)
(64,130)
17,960
(46,170)
40,109
(11,291)
28,818
(2,272)
610
(1,662)
14,229
—
14,229
(11,731)
—
(11,731)
2,652
—
2,652
(50,364)
18,070
(32,294)
28,412
(11,290)
17,122
(1,698)
1,066
(632)
TRANSACTIONS WITH NON-CONTROLLING
INTERESTS
upon achievement of the related service conditions.
As a result, 243,363 common shares, which were
With the exception of dividends paid to non-
previously held in treasury, were assigned to
controlling interests, there were no transactions
participants of the plan in the first quarter of 2021.
with non-controlling interests for the years ended
There are no further awards outstanding for the
December 31, 2021, 2020 or 2019.
Equity Incentive Plan 2016-2020.
POLICIES AND PROCESSES FOR MANAGING
CAPITAL
EQUITY INCENTIVE PLAN 2019-2021
Under the Equity Incentive Plan 2019-2021 the
The Group’s objectives when managing capital are to
Company awarded approximately 174 thousand 2019-
create value for shareholders as a whole, safeguard
2021 PSUs and approximately 111 thousand 2019-
business continuity and support the sustainable
2021 RSUs to the Executive Chairman, the former
growth of the Group. As a result, the Group endeavors
CEO, members of the FLT and other key employees of
to maintain a satisfactory economic return for its
the Group. The PSUs and RSUs cover the three-year
shareholders and guarantee economic access to
performance and service periods from 2019 to 2021.
external sources of funds.
2019-2021 PSU AWARDS
21. SHARE-BASED COMPENSATION
The vesting of the awards is based on the
achievement of defined key performance indicators
The Group has several equity incentive plans under
as follows:
which a combination of performance share units
(i) TSR Target - 50 percent vest based on the
(“PSUs”) and retention restricted share units (“RSUs”),
achievement of the TSR ranking of Ferrari
which each represent the right to receive one Ferrari
compared to an industry specific Peer Group of
common share, have been awarded to the Executive
eight;
Chairman, the Chief Executive Officer (“CEO”),
(ii) EBITDA Target - 30 percent vest based on the
members of the Ferrari Leadership Team (hereinafter
achievement of an EBITDA target determined
also the “FLT”, formerly Senior Management Team, and
by comparing Adjusted EBITDA to the Adjusted
so renamed as a result of the organizational changes
EBITDA targets derived from the business plan;
executed in January 2022) and other key employees of
(iii)
Innovation Target - 20 percent vest based on
the Group.
the achievement of defined objectives for
technological innovation and the development
EQUITY INCENTIVE PLAN 2016-2020
of the new model pipeline over the performance
In the first quarter of 2021, 212,243 PSU awards
period.
vested (representing 100 percent of the target
PSU awards) as a result of Ferrari’s third place
Each target is settled independently of the others
ranking in Total Shareholder Return (“TSR”) within
targets. The total number of shares assigned upon
the defined Peer Group for the performance period
vesting of the PSU awards depends on the level of
from 2016 to 2020, and 31,120 RSU awards vested
achievement of the targets.
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Ferrari ranked third in the TSR ranking within the
2020-2022 PSU AWARDS
defined Peer Group for the TSR Target and met the
The vesting of the awards is based on the
EBITDA Target and the Innovation Target for the
achievement of defined key performance indicators
performance period covering 2019, resulting in the
as follows:
vesting of 100 percent of the target awards. As a
(i) TSR Target - 50 percent vest based on the
result 17,572 awards vested and an equal number
achievement of the TSR ranking of Ferrari
of common shares, which were previously held in
compared to an industry specific Peer Group of
treasury, were assigned to participants of the plan
eight;
in the first quarter of 2020. For the performance
(ii) EBITDA Target - 30 percent vest based on the
period covering 2019 to 2020, Ferrari ranked third
achievement of an EBITDA target determined
in the TSR ranking within the defined Peer Group
by comparing Adjusted EBITDA to the Adjusted
for the TSR Target and achieved the EBITDA Target
EBITDA targets derived from the business plan;
and the Innovation Target, resulting in the vesting
(iii) Innovation Target - 20 percent vest based on
of 100 percent of the target awards. As a result
the achievement of defined objectives for
80,510 awards vested in the first quarter of 2021
technological innovation and the development
and an equal number of common shares, which
of the new model pipeline over the performance
were previously held in treasury, were assigned to
period.
participants of the plan in the first quarter of 2021.
Each target is settled independently of the other
For the performance period covering 2019 to 2021,
targets. The awards vest in 2023 and the total number
Ferrari ranked third in the TSR ranking within the
of shares assigned upon vesting depends on the level
defined Peer Group for the TSR Target and achieved
of achievement of the targets.
the EBITDA Target and the Innovation Target, resulting
in the vesting of 100 percent of the target awards. As
2020-2022 RSU AWARDS
a result 86,331 awards vested in the first quarter of
The awards vest in 2023, subject to the recipient’s
2022 and an equal number of common shares held in
continued employment with the Company at the time
treasury will be assigned to participants of the plan in
of vesting.
the first quarter of 2022.
EQUITY INCENTIVE PLAN 2021-2023
2019-2021 RSU AWARDS
Under the Equity Incentive Plan 2021-2023 approved
The remaining awards vest in 2022, subject to the
in 2021, the Company awarded approximately 50
recipient’s continued employment with the Company
thousand 2021-2023 PSUs and approximately 41
at the time of vesting.
thousand 2021-2023 RSUs to the Executive Chairman,
members of the FLT and other key employees of
During 2020, 18,892 awards vested and an equal
the Group. The PSUs and RSUs cover the three-year
number of common shares, which were previously
performance and service periods from 2021 to 2023.
held in treasury, were assigned under the plan. For the
service period covering 2019 to 2020, 32,694 awards
2021-2023 PSU AWARDS
vested in the first quarter of 2021 and an equal
The vesting of the awards is based on the
number of common shares, which were previously
achievement of defined key performance indicators
held in treasury, were assigned to participants of
as follows:
the plan in the first quarter of 2021. For the service
(i) TSR Target - 50 percent vest based on the
period covering 2019 to 2021, 75,857 awards vested
achievement of the TSR ranking of Ferrari
in the first quarter of 2022 and an equal number of
compared to an industry specific Peer Group of
common shares held in treasury will be assigned to
eight;
participants of the plan in the first quarter of 2022.
(ii)
ii) EBITDA Target - 30 percent vest based on the
INCENTIVE PLAN 2020-2022
achievement of an EBITDA target determined
by comparing Adjusted EBITDA to the Adjusted
Under the Equity Incentive Plan 2020-2022 the
EBITDA targets derived from the Group’s
Company awarded approximately 60 thousand 2020-
business plan;
2022 PSUs and approximately 48 thousand 2020-2022
(iii)
Innovation Target - 20 percent vest based on
RSUs to the Executive Chairman, members of the FLT
the achievement of defined objectives for
and other key employees of the Group. The PSUs and
technological innovation and the development
RSUs cover the three-year performance and service
of the new model pipeline over the performance
periods from 2020 to 2022.
period.
282
FERRARI N.V.AR 2021 Each target is settled independently of the other targets. The awards vest in 2024 and the total number of shares
assigned upon vesting depends on the level of achievement of the targets.
2021-2023 RSU AWARDS
The awards vest in 2024, subject to the recipient’s continued employment with the Company at the time of vesting.
Supplemental information relating to the Equity Incentive Plan 2021-2023 is summarized below.
TSR TARGET
The number of PSUs with a TSR Target that vest under the Equity Incentive Plan 2021-2023 is based on the
Company’s TSR performance over the relevant performance period compared to an industry-specific Peer
Group as summarized below.
Ferrari TSR Ranking
% of Target Awards that Vest
1
2
3
4
5
>5
150%
120%
100%
75%
50%
0%
The defined Peer Group (including the Company) for the TSR Target is presented below.
Ferrari
Kering
Aston Martin
LVMH
Burberry
Moncler
Hermes
Richemont
EBITDA TARGET
The number of PSUs with an EBITDA Target that vest under the Equity Incentive Plan 2021-2023 is determined
by comparing Adjusted EBITDA to the Adjusted EBITDA targets derived from the Group’s business plan, as
summarized below.
Actual Adjusted EBITDA Compared to Business Plan
% of Awards that Vest
+10%
+5%
Business Plan Target
-5%
<-5%
140%
120%
100%
80%
0%
FAIR VALUES AND KEY ASSUMPTIONS
The fair value of the PSU awards used for accounting purposes was measured at the grant date using a Monte
Carlo Simulation model. The fair value of the RSU awards was measured using the share price at the grant date
adjusted for the present value of future distributions which employees will not receive during the vesting period.
The fair value of the PSUs and RSUs that were awarded under the equity incentive plans, which is determined
based on actuarial calculations that apply certain assumptions and take into consideration the specific
characteristics of the awards granted, is summarized in the following table.
Equity Incentive Plan
2019-2021
2020-2022
2021-2023
PSUs
RSUs
€110.57 - €111.64
€119.54 - €120.56
€136.06
€139.39
€130.42
€171.86
283
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The key assumptions utilized to calculate the grant-date fair values of the PSUs that were awarded under the
equity incentive plans are summarized below:
Equity Incentive Plan
Grant date share price
Expected volatility
Dividend yield
Risk-free rate
2019-2021
2020-2022
2021-2023
€122.60
€142.95
€175.80
26.5%
0.83%
0%
26.6%
0.80%
0%
27.0%
0.75%
0%
The expected volatility was based on the observed volatility of the defined Peer Group. The risk-free rate was
based on the iBoxx sovereign Eurozone yield.
OUTSTANDING SHARE AWARDS
Changes to the outstanding number of PSU and RSU awards under all equity incentive plans of the Group are as
follows:
(number of awards)
Balance at January 1, 2019
Granted(1)
Forfeited
Vested
Balance at December 31, 2019
Granted(2)
Forfeited
Vested
Balance at December 31, 2020
Granted(3)
Forfeited
Vested
Balance at December 31, 2021
(1) Granted under the Equity Incentive Plan 2019-2021.
(2) Granted under the Equity Incentive Plan 2020-2022.
(3) Grander under the Equity Incentive Plan 2021-2023.
Outstanding PSU Awards
Outstanding RSU Awards
686,526
175,307
(32,832)
(230,282)
598,719
48,173
(1,461)
(230,592)
414,839
49,861
(19,775)
(292,753)
152,172
118,264
110,968
(18,000)
(40,087)
171,145
39,780
(1,460)
(50,402)
159,063
41,460
(13,048)
(63,814)
123,661
SHARE-BASED COMPENSATION EXPENSE
For the years ended December 31, 2021, 2020 and 2019, the Group recognized €11,689 thousand, €17,401
thousand and €17,480 thousand, respectively, as share-based compensation expense and an increase to
other reserves in equity in relation to the PSU awards and RSU awards of the Group’s equity incentive plans. At
December 31, 2021, unrecognized compensation expense relating to the Group’s equity incentive plans amounted
to €11,082 thousand and is expected to be recognized over the remaining vesting periods through 2023.
In 2021 the Group also recognized share-based compensation expense of €2,206 thousand as part of commercial
agreements with certain suppliers.
284
FERRARI N.V.AR 2021 22. EMPLOYEE BENEFITS
The Group’s provisions for employee benefits are as follows:
(€ thousand)
Present value of defined benefit obligations:
Italian employee severance indemnity (TFR)
Pension plans
Total present value of defined benefit obligations
Other provisions for employees
Total provisions for employee benefits
At December 31,
2021
2020
18,430
—
18,430
82,770
101,200
19,825
105
19,930
40,055
59,985
DEFINED CONTRIBUTION PLANS
amendments, accruing TFR for employees of all
The Group recognizes the cost for defined
Italian companies could be managed by the company
contribution plans over the period in which the
itself. Consequently, the Italian companies’ obligation
employee renders service and classifies this
to INPS and the contributions to supplementary
by function in cost of sales, selling, general and
pension funds take the form, under IAS 19 revised, of
administrative costs and research and development
“Defined contribution plans” whereas the amounts
costs. The total income statement expense for defined
recorded in the provision for employee severance
contributions plans in the years ended December 31,
pay retain the nature of “Defined benefit plans”.
2021, 2020 and 2019 was €15,729 thousand, €15,727
Accordingly, the provision for employee severance
thousand and €13,650 thousand, respectively.
indemnity in Italy consists of the residual obligation
for TFR until December 31, 2006. This is an unfunded
DEFINED BENEFIT OBLIGATIONS
defined benefit plan as the benefits have already
ITALIAN EMPLOYEE SEVERANCE INDEMNITY (TFR)
been almost entirely earned, with the sole exception
Trattamento di fine rapporto or “TFR” relates to the
of future revaluations. Since 2007 the scheme has
amounts that employees in Italy are entitled to receive
been classified as a defined contribution plan, and
when they leave the company and is calculated based
the Group recognizes the associated cost, being the
on the period of employment and the taxable earnings
required contributions to the pension funds, over the
of each employee. Under certain conditions the
period in which the employee renders service.
entitlement may be partially advanced to an employee
during the employee’s working life.
PENSION PLANS
Certain Group companies previously sponsored non-
The Italian legislation regarding this scheme was
contributory defined benefit pension plans, for which
amended by Law 296 of 27 December 2006 and
the Group met the benefit payment obligations when
subsequent decrees and regulations issued in
they became due. Benefits provided under the plans
the first part of 2007. Under these amendments,
varied based on the employee’s length of service and
companies with at least 50 employees are obliged to
their salary in the final years leading up to retirement,
transfer the TFR to the “Treasury fund” managed by
among other variables. At December 31, 2021 the
the Italian state-owned social security body (“INPS”)
Group no longer sponsored any defined benefit
or to supplementary pension funds. Prior to the
pension plans.
285
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The following table summarizes the changes in the defined benefit obligations:
(€ thousand)
Amounts at December 31, 2019
Recognized in the consolidated income statement
Recognized in other comprehensive loss/(income) (*)
Other
Benefits paid
Other changes
Amounts at December 31, 2020
Recognized in the consolidated income statement
Recognized in other comprehensive income/(loss)(*)
Other
Benefits paid
Other changes
Amounts at December 31, 2021
TFR liability
Pension plans
21,795
25
2
(1,997)
(1,842)
(155)
19,825
6
463
(1,864)
(2,127)
263
18,430
134
—
(32)
3
—
3
Total
21,929
25
(30)
(1,994)
(1,842)
(152)
105
19,930
—
—
(105)
(105)
—
—
6
463
(1,969)
(2,232)
263
18,430
(*) Relates to actuarial losses/(gains) from financial assumptions.
Amounts recognized in the consolidated income statement are as follows:
(€ thousand)
For the years ended December 31,
2021
TFR
Pension
plans
6
—
6
—
—
—
—
Total
TFR
6
—
—
6
—
25
—
25
2020
Pension
plans
—
—
—
—
Total
TFR
—
25
—
25
—
—
—
—
2019
Pension
plans
26
—
Total
26
—
(518)
(518)
(492)
(492)
Current service cost
Interest expense
Past service adjustments
Total recognized in the consolidated
income statement
Past service adjustments relate to gains recognized
scheme future benefit payments for 2021 is equal
in the consolidated income statement due to plan
to 0.9 percent (0.4 percent in 2020 and 0.7 percent
amendments and curtailments.
in 2019). The average duration of the Italian TFR is
approximately 8 years. Retirement or employee
The discount rates used for the measurement of the
leaving rates are developed to reflect actual and
Italian TFR obligation are based on yields of high-
projected Group experience and legal requirements
quality (AA- rated) fixed income securities for which
for retirement in Italy.
the timing and amounts of payments match the timing
and amounts of the projected benefit payments. For
Current service cost is recognized by function in cost
this plan, the single weighted average discount rate
of sales, selling, general and administrative costs or
that reflects the estimated timing and amount of the
research and development costs.
286
FERRARI N.V.AR 2021 The expected future benefit payments for the defined benefit obligations as of December 31, 2021 are as follows:
(€ thousand)
2022
2023
2024
2025
2026
2027 - 2031
Total
TFR
1,466
1,660
1,359
1,329
1,084
5,688
12,586
The sensitivity of the defined benefit obligations to changes in the weighted principal assumptions is:
(€ thousand)
At December 31,
2021
2020
Changes in
Changes in
Changes in
Changes in
assumption of +1%
assumption of -1%
assumption of +1%
assumption of -1%
discount rate
discount rate
discount rate
discount rate
Impact on defined benefit obligation
(1,321)
1,507
(1,446)
1,656
The above sensitivity analysis is based on an assumed
connection with other remuneration schemes, which
change in the discount rate while holding all other
are not subject to actuarial valuation, including long-
assumptions constant. In practice, this is unlikely to
term bonus plans.
occur, and changes in some of the assumptions may
be correlated. When calculating the sensitivity of
At December 31, 2021, other provisions for employees
the defined benefit obligation to significant actuarial
comprised short-term bonus benefits amounting to
assumptions the same method has been applied
€79,273 thousand (€36,723 thousand at December
as when calculating the defined benefit liability
31, 2020) and jubilee benefits granted to certain
recognized in the statement of the financial position.
employees by the Group in the event of achieving
OTHER PROVISIONS FOR EMPLOYEES
(€3,332 thousand at December 31, 2020).
30 years of service amounting to €3,497 thousand
Other provisions for employees consist of the
expected future amounts payable to employees in
23. PROVISIONS
The provision for other risks primarily relates to disputes and matters which are not subject to legal proceedings,
including contract-related disputes with suppliers, employees and other parties, as well as environmental risks.
Movements in provisions are as follows:
(€ thousand)
Warranty and recall
campaigns
Legal proceedings and
disputes
Other risks
At
December
31, 2020
Additional
provisions
Utilization
Releases
Translation
differences
Reclassification
and other
movements
At
December
31, 2021
106,942
45,047
(33,695)
(9,868)
26,349
3,643
(596)
(16,111)
22,044
12,306
(2,067)
(4,733)
341
326
822
—
108,767
90
28
13,701
28,400
Total provisions
155,335
60,996
(36,358)
(30,712)
1,489
118
150,868
287
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WARRANTY AND RECALL CAMPAIGNS
expenditures expected to be required to settle
The provision for warranty and recall campaigns
or otherwise resolve legal proceedings and
represents the best estimate of commitments given
disputes. This class of claims relates to allegations
by the Group for contractual, legal, or constructive
by contractual counterparties that the Group has
obligations arising from product warranties given
violated the terms of the arrangements, including by
for a specified period of time. Warranty and recall
terminating the applicable relationships. Judgments in
campaigns provisions are recognized upon shipment
these proceedings may be issued in 2022 or beyond,
and estimated on the basis of the Group’s past
although any such judgments may remain subject
experience and contractual terms. Related costs are
to ongoing judicial review. While the outcome of
recognized within cost of sales.
these proceedings is uncertain, any losses in excess
Following an industry-wide recall in 2016, the Group
material to the Group’s financial condition or results
initiated a global recall campaign on cars mounted
of operations. Additions to the provision for legal
with Takata airbags manufactured using non-
proceedings and disputes are recognized within
of the provisions recorded are not expected to be
desiccated phase stabilized ammonium nitrate. Due
other expenses, net.
to the uncertainty of recoverability of the costs from
Takata, the Group recognized an aggregate provision
Releases during 2021 primarily relate to a legal
of €36,994 thousand in 2016 within cost of sales. At
dispute following developments favorable to Ferrari
December 31, 2021, the provision amounted to €3,011
during the fourth quarter of the year.
thousand (€6,831 thousand at December 31, 2020).
The gradual decrease in the provision reflects the
OTHER RISKS
performance of recall activities by the Group.
The provision for other risks are related to
LEGAL PROCEEDINGS AND DISPUTES
proceedings, including disputes with suppliers,
The provision for legal proceedings and disputes
distributors, employees and other parties, as well as
represents management’s best estimate of the
environmental risks.
disputes and matters which are not subject to legal
The following table presents where the additional provisions to other risks recognized for the years ended
December 31, 2021, 2020 and 2019 were recorded within the consolidated income statement.
(€ thousand)
Recorded in the consolidated income statement within:
Cost of sales
Selling, general and administrative costs
Total
24. DEBT
(€ thousand)
For the years ended December 31,
2021
2020
2019
10,562
1,744
12,306
6,352
1,174
7,526
9,563
2,830
12,393
Balance at
December
31, 2020
Proceeds
from
borrowings
Repayments
of
borrowings
Bonds and notes
1,835,022
149,495
(500,000)
Asset-backed financing (Securitizations)
761,164
248,714
(177,270)
Interest
accrued/
(paid) and
other (*)
Translation
differences
Balance at
December
31, 2021
2,593
49
—
1,487,110
67,556
900,213
Lease liabilities
62,290
—
(21,605)
14,421
1,104
56,210
Borrowings from banks and other
financial institutions
Other debt
Total debt
28,553
142,344
(20,959)
37,716
17,265
(25,302)
88
—
4,393
154,419
2,380
32,059
2,724,745
557,818
(745,136)
17,151
75,433
2,630,011
(*) Other changes in lease liabilities relates entirely to non-cash movements for the recognition of additional lease liabilities in accordance with IFRS 16.
288
FERRARI N.V.AR 2021 The breakdown of debt by nature and by maturity is as follows:
(€ thousand)
At December 31,
2021
Due
Due within
between
one year
one and
five years
Due
beyond
Total
five years
2020
Due
Due within
between
one year
one and
five years
Due
beyond
Total
five years
Bonds and notes
9,239
1,028,686
449,185
1,487,110
500,417
1,034,605
300,000
1,835,022
Asset-backed financing
(Securitizations)
343,119
499,280
57,814
900,213
306,169
454,995
—
761,164
Lease liabilities
14,783
29,732
11,695
56,210
16,373
29,932
15,985
62,290
Borrowings from banks
and other financial
116,919
37,500
institutions
Other debt
Total debt
32,059
—
—
—
154,419
28,553
32,059
37,716
—
—
—
—
28,553
37,716
516,119
1,595,198
518,694
2,630,011
889,228
1,519,532
315,985
2,724,745
BONDS AND NOTES
2021 BOND
2025 BOND
On May 27, 2020 the Company issued 1.5 percent
On January 18, 2021 the Company fully repaid the
coupon notes due May 2025 (“2025 Bond”), having a
2021 Bond for a total consideration of €501,250
principal of €650 million. The notes were issued at a
thousand (including accrued interest). The bond was
discount for an issue price of 98.898 percent, resulting
previously issued in November 2017 on the regulated
in net proceeds of €640,073 thousand, after related
market of the Euronext Dublin (formerly the Irish
expenses, and a yield to maturity of 1.732 percent.
Stock Exchange) for a principal amount of €700
The bond was admitted to trading on the regulated
million at a coupon of 0.25 and due in January 2021.
market of Euronext Dublin. The amount outstanding
In July 2019 the Company repurchased an aggregate
of the 2025 Bond at December 31, 2021 was €648,984
nominal amount of €200,000 thousand following
thousand, including accrued interest of €5,850
a cash tender offer. The amount outstanding at
thousand (€647,042 thousand, including accrued
December 31, 2020 was €501,151 thousand, including
interest of €5,850 thousand at December 31, 2020).
accrued interest of €1,199 thousand.
2029 AND 2031 NOTES
2023 BOND
On July 31, 2019, the Company issued 1.12 percent
On March 16, 2016, the Company issued 1.5 percent
senior notes due August 2029 (“2029 Notes”) and 1.27
coupon notes due March 2023, having a principal
percent senior notes due August 2031 (“2031 Notes”)
of €500 million. The bond was issued at a discount
through a private placement to certain US institutional
for an issue price of 98.977 percent, resulting in
investors, each having a principal of €150 million.
net proceeds of €490,729 thousand, after the debt
The net proceeds from the issuances amounted
discount and issuance costs, and a yield to maturity of
to €298,316 thousand and the yields to maturity on
1.656 percent. The net proceeds were used, together
an annual basis equal the nominal coupon rates of
with additional cash held by the Company, to fully
the Notes. The Notes are primarily used for general
repay a €500 million bank loan. The bond is unrated
corporate purposes, including the funding of capital
and was admitted to trading on the regulated market
expenditures.
of the Euronext Dublin (formerly the Irish Stock
Exchange). Following a cash tender offer, on July 16,
The amount outstanding of the 2029 Notes at
2019 the Company executed the repurchase of these
December 31, 2021 was €150,052 thousand, including
notes for an aggregate nominal amount of €115,395
accrued interest of €700 thousand (€149,971
thousand. The amount outstanding at December 31,
thousand, including accrued interest of €700 thousand
2021 was €387,872 thousand and includes accrued
at December 31, 2020). The amount outstanding of
interest of €4,567 thousand (€386,814 thousand
the 2031 Notes at December 31, 2021 was €150,111
including accrued interest of €4,567 thousand at
thousand, including accrued interest of €794 thousand
December 31, 2020).
(€150,044 thousand including accrued interest of
€794 thousand at December 31, 2020).
289
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2032 NOTES
receivables in the United States as collateral. The
On July 29, 2021, the Company issued 0.91 percent
notes bear interest at a rate per annum equal to
senior notes due January 2032 (“2032 Notes”) through
the aggregate of a synthetic base rate substantially
a private placement to certain US institutional
replicating the LIBOR plus a margin of 75 basis
investors having a principal of €150 million. The net
points. At December 31, 2021 total proceeds net of
proceeds from the issuance amounted to €149,495
repayments from the sales of financial receivables
thousand and the yield to maturity on an annual basis
under the program amounted to $775 million ($629
equals the nominal coupon rates of the Notes. The
million at December 31, 2020). The securitization
Notes are used for general corporate purposes. The
agreement requires the maintenance of an interest
amount outstanding of the 2032 Notes at December
rate cap.
31, 2021 was €150,091 thousand, including accrued
interest of €576 thousand.
• revolving securitization program for funding of up
to $285 million, which was renewed in November
The abovementioned bonds and notes impose
2021 for a tenor of 24 months, by pledging leasing
covenants on Ferrari including: (i) negative pledge
financial receivables in the United States as
clauses which require that, in case any security
collateral. The notes bear interest at a rate per
interest upon assets of Ferrari is granted in
annum equal to the aggregate of LIBOR plus a
connection with other notes or debt securities with
margin of 65 basis points. At December 31, 2021
the consent of Ferrari are, or are intended to be,
total proceeds net of repayments from the sales of
listed, such security should be equally and ratably
financial receivables under the program amounted
extended to the outstanding notes, subject to certain
to $245 million ($244 million at December 31,
permitted exceptions; (ii) pari passu clauses, under
2020). The securitization agreement requires the
which the notes rank and will rank pari passu with
maintenance of an interest rate cap.
all other present and future unsubordinated and
unsecured obligations of Ferrari; (iii) events of default
• the revolving securitization program for funding of
for failure to pay principal or interest or comply with
up to $110 million by pledging credit lines to Ferrari
other obligations under the notes with specified
customers secured by personal vehicle collections
cure periods or in the event of a payment default or
and personal guarantees in the United States as
acceleration of indebtedness or in the case of certain
collateral terminated in April 2021. The notes bore
bankruptcy events; and (iv) other clauses that are
interest at a rate per annum equal to the aggregate
customarily applicable to debt securities of issuers
of LIBOR plus a margin of 115 basis points.
with a similar credit standing. A breach of these
covenants may require the early repayment of the
The consolidated total amount of the revolving
notes. At December 31, 2021 and 2020, Ferrari was in
securitization programs has been progressively
compliance with the covenants of the notes.
increased since inception as the underlying
ASSET-BACKED FINANCING
(SECURITIZATIONS)
receivables portfolios have increased.
Cash collected from the settlement of receivables
As a means of diversifying its sources of funds, the
under securitization programs is subject to certain
Group sells certain of its receivables originated by
restrictions regarding its use and is primarily
its financial services activities in the United States
applied to repay principal and interest of the related
through asset-backed financing or securitization
funding. Such cash amounted to €47,742 thousand at
programs (the terms asset-backed financing and
December 31, 2021 (€36,935 thousand at December
securitization programs are used synonymously
31, 2020).
throughout this document), without transferring the
risks typically associated with the related receivables.
LEASE LIABILITIES
As a result, the receivables sold through securitization
The Group recognizes lease liabilities in relation
programs are still consolidated until collection from
to right-of-use assets in accordance with IFRS
the customer. During 2021, the following revolving
16 — Leases. At December 31, 2021 lease liabilities
securitization programs were in place:
amounted to €56,210 thousand (€62,290 thousand at
December 31, 2020).
• revolving securitization program for funding of up to
$750 million, which was renewed in December 2020
for a tenor of 24 months and increased up to $800
million in December 2021, by pledging retail financial
290
FERRARI N.V.AR 2021 BORROWINGS FROM BANKS AND OTHER
FINANCIAL INSTITUTIONS
down by the Group. The new credit line replaces the
funding previously provided by one of securitization
Borrowings from banks at December 31, 2021 include
programs in the US for funding of up to $110 million
(i) an amortized term loan of €63 million borrowed
that expired in April 2021 and was interest-bearing
in June by Ferrari S.p.A. for a tenor of 36 months and
at LIBOR plus 115 basis points, as noted above. In
bearing fixed interest at 0.118 percent and (ii) financial
October 2021 an undrawn committed credit line
liabilities of FFS Inc to support financial services
previously negotiated in April 2020 for €100 million
activities, and in particular €61,919 thousand (€28,553
expired. At December 31, 2021 the Group had total
thousand at December 31, 2020) relating to a U.S.
committed credit lines available and undrawn
Dollar committed credit facility for up to $100 million,
amounted to €676 million (€700 million at December
(drawn down for $70 million at December 31, 2021)
31, 2020).
for a tenor of 24 months and bearing interest at LIBOR
plus 75 basis points.
In December 2019, the Company negotiated a €350
million unsecured committed revolving credit facility
In April 2020, additional committed credit lines of
(the “RCF”), which is intended for general corporate
€350 million were secured with tenors ranging
and working capital purposes. The RCF has a 5 year-
from 18 to 24 months, doubling total committed
tenor with two further one-year extension options,
credit lines available to €700 million. In March 2021
exercisable on the first and second anniversary of
the Group cancelled a credit line of €100 million
the signing date on the Company’s request and the
and simultaneously replaced it with a new credit line
approval of each participating bank. In December
for €150 million with a tenor of 23 months. In April
2020 and in December 2021 the first and the second
2021, the Group replaced an uncommitted credit
one-year extension option were exercised by the
line of $50 million, which was terminated, with a new
Company and approved by all participating banks. At
committed credit line for $100 million with a tenor
December 31, 2021 the RCF was undrawn.
of 24 months bearing interest at LIBOR plus 75 basis
points. At December 31, 2021 the line had been drawn
OTHER DEBT
down for $70 million (€62 million), representing
Other debt mainly relates to funding for operating and
the only committed credit line that has been drawn
financing activities of the Group.
25. OTHER LIABILITIES
An analysis of other liabilities is as follows:
(€ thousand)
Deferred income
Advances and security deposits
Accrued expenses
Payables to personnel
Social security payables
Other
Total other liabilities
At December 31,
2021
256,206
240,696
80,787
53,712
24,660
70,714
2020
270,826
253,442
60,788
33,127
23,261
46,018
726,775
687,462
Deferred income primarily includes amounts
expects to recognize in net revenues approximately
received under maintenance and power warranty
€53 million in 2022, €50 million in 2023, €38 million
programs of €218,982 thousand at December 31,
in 2024 and €78 million in periods subsequent to
2021 and €214,153 thousand at December 31, 2020,
2024. Deferred income also includes amounts
which are deferred and recognized as net revenues
collected under various other agreements, which are
over the length of the maintenance program. Of
dependent upon the future performance of a service
the total liability related to maintenance and power
or other act of the Group.
warranty programs at December 31, 2021, the Group
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Advances and security deposits primarily include advances received from clients for the purchase of Icona
models and limited edition models. Upon shipment of the cars, the advances are recognized as revenue.
Changes in the Group’s contract liabilities for maintenance and power warranties, and advances from customers,
were as follows:
(€ thousand)
At January 1,
2021
Additional
amounts
arising during
the period
Amounts
recognized
within revenue
Other changes
At December
31, 2021
Maintenance and power warranty programs
Advances from customers
214,153
249,506
77,713
(72,884)
605,730
(618,739)
—
19
218,982
236,516
An analysis of other liabilities (excluding accrued expenses and deferred income) by due date is as follows:
(€ thousand)
At December 31,
2021
Due
Due
between
within
one and
one year
five
years
Due
beyond
five
years
2020
Due
Due
between
Total
within
one and
one year
five
years
Due
beyond
five
years
Total
Total other liabilities (excluding accrued
expenses and deferred income)
377,176
7,553
5,053
389,782
315,026
35,251
5,571
355,848
26. TRADE PAYABLES
Trade payables of €797,832 thousand at December 31,
be categorized within different levels of the fair value
2021 (€713,807 thousand at December 31, 2020) are
hierarchy. In those cases, the fair value measurement
entirely due within one year. The carrying amount of
is categorized in its entirety in the same level of the
trade payables is considered to be equivalent to their
fair value hierarchy at the lowest level input that is
fair value.
significant to the entire measurement.
27. FAIR VALUE MEASUREMENT
Levels used in the hierarchy are as follows:
IFRS 13 — Fair Value Measurement establishes a
• Level 1 inputs are quoted prices (unadjusted) in
three level hierarchy for the inputs to the valuation
active markets for identical assets and liabilities that
techniques used to measure fair value by giving the
the Group can access at the measurement date.
highest priority to quoted prices (unadjusted) in active
markets for identical assets and liabilities (level 1
• Level 2 inputs are inputs other than quoted prices
inputs) and the lowest priority to unobservable inputs
included within level 1 that are observable for the
(level 3 inputs). In some cases, the inputs used to
assets or liabilities, either directly or indirectly.
measure the fair value of an asset or a liability might
• Level 3 inputs are unobservable inputs for the assets
and liabilities.
292
FERRARI N.V.AR 2021 ASSETS AND LIABILITIES THAT ARE MEASURED AT FAIR VALUE ON A RECURRING BASIS
The following table shows the fair value hierarchy for financial assets and liabilities that are measured at fair value
on a recurring basis at December 31, 2021 and 2020:
(€ thousand)
Investments and other financial assets - Liberty Media Shares
Current financial assets
Total assets
Other financial liabilities
Total liabilities
(€ thousand)
Investments and other financial assets - Liberty Media Shares
Current financial assets
Total assets
Other financial liabilities
Total liabilities
Note
Level 1
Level 2
Level 3
Total
At December 31, 2021
16
19
19
10,559
—
—
11,565
10,559
11,565
—
—
36,520
36,520
—
—
—
—
—
At December 31, 2020
Note
Level 1
Level 2
Level 3
16
19
19
7,163
—
—
38,636
7,163
38,636
—
—
2,140
2,140
—
—
—
—
—
10,559
11,565
22,124
36,520
36,520
Total
7,163
38,636
45,799
2,140
2,140
There were no transfers between fair value hierarchy
The par value of cash and cash equivalents usually
levels for the periods presented.
approximates fair value due to the short maturity of
these instruments, which consist primarily of current
The fair value of current financial assets and other
bank accounts.
financial liabilities relates to derivative financial
instruments and is measured by taking into
consideration market parameters at the balance
ASSETS AND LIABILITIES NOT MEASURED AT
FAIR VALUE ON A RECURRING BASIS
sheet date, using widely accepted valuation
For financial instruments represented by short-term
techniques. In particular, the fair value of foreign
receivables and payables, for which the present value
currency derivatives (forward contracts, currency
of future cash flows does not differ significantly from
swaps and options) and interest rate caps is
carrying value, the Group assumes that carrying value
determined by taking the prevailing foreign currency
is a reasonable approximation of the fair value. In
exchange rates and interest rates, as applicable, at the
particular, the carrying amount of current receivables
balance sheet date.
and other current assets and of trade payables and
other liabilities approximates their fair value.
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The following table presents the carrying amount and fair value for the most relevant categories of financial
assets and financial liabilities not measured at fair value on a recurring basis:
(€ thousand)
At December 31,
2021
2020
Note
Carrying
amount
Fair value
Carrying
amount
Fair value
Receivables from financing activities
18
1,143,968
1,143,968
939,607
939,607
Client financing
Dealer financing
Total
Debt
1,132,979
1,132,979
925,878
925,878
10,989
10,989
13,729
13,729
1,143,968
1,143,968
939,607
939,607
24
2,630,011
2,656,159
2,724,745
2,755,516
28. RELATED PARTY TRANSACTIONS
TRANSACTIONS WITH STELLANTIS GROUP
COMPANIES
Pursuant to IAS 24, the related parties of Ferrari
• the sale of engines to Maserati S.p.A. (“Maserati”);
include Exor N.V., and together with its subsidiaries
• the purchase of engine components for the use in
the Exor Group, as well as all entities and individuals
the production of Maserati engines from FCA US
capable of exercising control, joint control or
LLC;
significant influence over the Group and its
• a technical cooperation between the Group and
subsidiaries. Related parties also include companies
Stellantis Group with the aim to enhance the quality
over which the Exor Group is capable of exercising
and competitiveness of their respective products,
control, joint control or significant influence, including
while reducing costs and investments;
Stellantis N.V., and together with its subsidiaries
• transactions with Stellantis Group companies,
the Stellantis Group, (previously referred to as
mainly relating to the services provided by Stellantis
Fiat Chrysler Automobiles N.V. or FCA prior to the
Group companies, including human resources,
merger between FCA and Peugeot S.A. completed
payroll, tax, procurement of insurance coverage and
on January 16, 2021, which resulted in the creation
sponsorship revenues.
of Stellantis), CNH Industrial N.V. and its subsidiaries
(“CNH Industrial Group”) and Iveco Group N.V. and its
subsidiaries (“Iveco Group”, which resulted from the
recent demerger from CNH Industrial Group), as well
TRANSACTIONS WITH EXOR GROUP
COMPANIES (EXCLUDING STELLANTIS
GROUP COMPANIES)
as joint ventures and associates of Ferrari. In addition,
• the Group incurs rental costs from Iveco S.p.A., a
members of the Ferrari Board of Directors and
company belonging to Iveco Group, related to the
executives with strategic responsibilities and their
rental of trucks used by the Formula 1 racing team;
families are also considered related parties.
• the Group earns sponsorship revenue from Iveco
S.p.A.
The Group carries out transactions with related
parties on commercial terms that are normal in the
respective markets, considering the characteristics
TRANSACTIONS WITH OTHER RELATED
PARTIES
of the goods or services involved. Transactions
• the purchase of components for Formula 1 racing
carried out by the Group with these related parties
cars from COXA S.p.A.;
are primarily of a commercial nature and, in
• consultancy services provided by HPE S.r.l.;
particular, these transactions relate to:
• sponsorship agreement relating to Formula 1
activities with Ferretti S.p.A.;
• sale of cars to certain members of the Board of
Directors of Ferrari N.V. and Exor.
In accordance with IAS 24, transactions with related
parties also include compensation to Directors and
managers with strategic responsibilities.
294
FERRARI N.V.AR 2021 The amounts of transactions with related parties recognized in the consolidated income statement are as follows:
(€ thousand)
For the years ended December 31,
2021
2020
2019
Net
revenues
Net
Costs(1)
financial
expenses
Net
revenues
Net
Costs (1)
financial
expenses
Net
revenues
Net
Costs (1)
financial
expenses
Stellantis Group
companies
Maserati
119,083
2,428
—
—
18,465
—
—
—
—
100,389
2,981
—
—
13,323
—
—
—
—
143,091
6,275
—
352
17,954
10,444
—
—
—
11,799
6,238
2,103
9,102
6,057
2,207
8,637
8,028
1,965
130,882
27,131
2,103
109,491
22,361
2,207
152,080
42,701
1,965
281
1,014
795
15,143
1
2
150
1,665
2
281
368
4
549
12,977
10
610
13,906
31
FCA US LLC
Magneti Marelli (2)
Other Stellantis
Group companies
Total Stellantis
Group companies
Exor Group
companies
(excluding the
Stellantis Group)
Other related
parties
Total transactions
with related
131,958
43,288
2,106
110,190
37,003
2,219
152,971
56,975
2,000
parties
Total for the
Group
4,270,894
2,434,198
33,257
3,459,790 2,040,925
49,092
3,766,615
2,153,480
42,082
(1) Costs include cost of sales, selling, general and administrative costs and other expenses/(income), net.
(2) Stellantis completed the sale of Magneti Marelli on May 2, 2019, following which Magneti Marelli (which subsequently operates under the name “Marelli”)
is no longer a related party.
Non-financial assets and liabilities originating from related party transactions are as follows:
(€ thousand)
Stellantis Group companies
Maserati
FCA US LLC
Other Stellantis Group
companies
Total Stellantis Group
companies
Exor Group companies
(excluding the Stellantis Group)
At December 31,
2021
2020
Trade
Trade
receivables
payables
Other
current
assets
Other
Trade
Trade
liabilities
receivables
payables
Other
current
assets
Other
liabilities
23,267
3,994
—
3,275
—
—
6,454
37,662
—
—
4,555
1,893
—
—
470
3,075
121
1,074
244
2,512
104
16,955
—
94
23,737
10,344
121
7,528
37,906
8,960
104
17,049
382
1
8
5
183
396
108
139
Other related parties
144
3,276
998
1,065
643
3,558
1,496
1,759
Total transactions with related
parties
24,263
13,621
1,127
8,598
38,732
12,914
1,708
18,947
Total for the Group
185,000
797,832
122,224
726,775
184,260
713,807
76,471
687,462
There were no other financial assets or financial liabilities originating from related party transactions at December
31, 2021 and 2020.
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EMOLUMENTS TO DIRECTORS AND KEY MANAGEMENT
The fees of the Directors of Ferrari N.V. are as follows:
(€ thousand)
Directors of Ferrari N.V.
For the years ended December 31,
2021
6,668
2020
8,151
2019
10,260
The aggregate compensation to Directors of Ferrari
plans (€5,270 thousand in 2020 and €5,168 thousand
N.V. for year ended December 31, 2021 was €6,668
in 2019); and
thousand (€8,151 thousand in 2020 and €10,260
thousand in 2019), inclusive of the following:
• €399 thousand for pension contributions (€222
thousand in 2020).
• €5,445 thousand for salary and other short-term
benefits (€624 thousand in 2020 and €1,786
In response to the healthcare crisis caused by the
thousand in 2019); and
COVID-19 pandemic, the Board of Directors pledged
their full cash compensation from April 2020 to
• €1,223 thousand for share-based compensation
the end of 2020 to help fund Company initiatives to
awarded under the Company’s equity incentive plans,
support the communities in which Ferrari operates,
(€7,527 thousand in 2020 and €15,963 thousand in
with the Ferrari Leadership Team donating 25 percent
2019, including an acceleration of the costs relating
of their salaries for the same period.
to the equity incentive plan of the former Chairman
and Chief Executive Officer (Mr. Sergio Marchionne)).
29. COMMITMENTS
See Note 21 “Share-based compensation” for
additional information related to the Company’s
ARRANGEMENTS WITH KEY SUPPLIERS
equity incentive plans. There was no equity-settled
From time to time, in the ordinary course of business,
compensation for Non-Executive Directors for the
the Group enters into various arrangements with key
years ended December 31, 2021, 2020 and 2019.
third party suppliers in order to establish strategic
and technological advantages. A limited number of
The aggregate compensation for members of the
these arrangements contain unconditional purchase
FLT (excluding the CEO) in 2021 was €18,728 thousand
obligations to purchase a fixed or minimum quantity
(€14,199 thousand in 2020 and €19,839 thousand in
of goods and/or services with fixed and determinable
2019), inclusive of the following:
price provisions.
• €14,088 thousand for salary and short-term
ARRANGEMENTS WITH SPONSORS
incentives (€8,707 thousand in 2020 and €14,671
Certain of the Group’s sponsorship contracts include
thousand in 2019);
terms whereby the Group is obligated to purchase a
minimum quantity of goods and/or services from its
• €4,241 thousand for share-based compensation
sponsors.
awarded under the Company’s equity incentive
Future minimum purchase obligations under these supplier and sponsorship arrangements at December 31,
2021 were as follows:
(€ thousand)
Minimum purchase obligations
At December 31, 2021
Due within one
year
79,986
Due between
Due between
one and three
three and five
years
60,597
years
15,225
Due beyond
five years
Total
500
156,308
296
FERRARI N.V.AR 2021 NON-CANCELLABLE LEASE AGREEMENTS
The future aggregate minimum lease payments under non-cancellable leases, primarily relating to the lease of
stores and industrial buildings, are as follows:
(€ thousand)
At December 31, 2021
Due within one
year
Due between
Due between
one and three
three and five
years
years
Due beyond
five years
Total
Future minimum lease payments under
lease agreements
14,629
19,275
12,433
11,260
57,597
30. QUALITATIVE AND QUANTITATIVE
INFORMATION ON FINANCIAL RISKS
the Group’s shipments, as the Group generally sells
its models in the currencies of the various markets
in which the Group operates, while the Group’s
The Group is exposed to the following financial risks
industrial activities are all based in Italy, and primarily
connected with its operations:
denominated in Euro.
• financial market risk (principally relating to foreign
currency exchange rates and to a lesser extent,
The Group’s exposure to interest rate risk arises from
interest rates and commodity prices), as the Group
the need to fund certain activities and the necessity
operates internationally in different currencies;
to deploy surplus funds. Changes in market interest
• liquidity risk, with particular reference to the
rates may have the effect of either increasing or
availability of funds and access to the credit markets,
decreasing the Group’s net profit/(loss), thereby
should the Group require them, and to financial
indirectly affecting the costs and returns of financing
instruments in general;
and investing transactions.
• credit risk, arising from normal commercial
relations with final clients and dealers, as well as the
The Group has in place various risk management
Group’s financing activities.
policies, which primarily relate to foreign exchange and
commodity price, interest rate and liquidity risks. The
These risks could significantly affect the Group’s
Group’s risk management policies permit derivatives
financial position, results of operations and cash
to be used for managing such risk exposures at risk.
flows, and for this reason the Group identifies and
Counterparties to these agreements are major financial
monitors these risks, in order to detect potential
institutions. Derivative financial instruments can only be
negative effects in advance and take the necessary
executed for hedging purposes.
action to mitigate them, primarily through the Group’s
operating and financing activities and if required,
In particular, the Group used derivative financial
through the use of derivative financial instruments.
instruments as cash flow hedges primarily for the
purpose of limiting the negative impact of foreign
The following section provides qualitative and
currency exchange rate fluctuations on forecasted
quantitative disclosures on the effect that these risks
transactions denominated in foreign currencies.
may have upon the Group. The quantitative data
Accordingly, as a result of applying risk management
reported in the following section does not have any
policies with respect to foreign currency exchange
predictive value. In particular, the sensitivity analysis on
exposure, the Group’s results of operations have
financial market risks does not reflect the complexity
not been fully exposed to fluctuations in foreign
of the market or the reaction which may result from
currency exchange rates. However, despite these
any changes that are assumed to take place.
risk management policies and hedging transactions,
FINANCIAL MARKET RISKS
sudden adverse movements in foreign currency
exchange rates could have a significant effect on the
Due to the nature of the Group’s business, the Group
Group’s earnings and cash flows.
is exposed to a variety of market risks, including
foreign currency exchange rate risk and to a lesser
The Group also enters into interest rate caps as
extent, interest rate risk and commodity price risk.
required by certain of its securitization agreements.
The Group’s exposure to foreign currency exchange
Information on the fair value of derivative financial
rate risk arises from the geographic distribution of
instruments held is provided in Note 19.
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INFORMATION ON FOREIGN CURRENCY
EXCHANGE RATE RISK
changes are recognized directly in equity as a
component of other comprehensive income/(loss)
The Group is exposed to risks resulting from changes
under gains/(losses) from currency translation
in foreign currency exchange rates, which can affect
differences.
its earnings and equity. In particular:
• Where a Group company incurs costs in a currency
The Group monitors its principal exposure to
different from that of its revenues, any change in
translation exchange risk, although the Group did not
foreign currency exchange rates can affect the
engage in any specific hedging activities in relation to
operating results of that company. In 2021, the total
translation exchange risk for the periods presented.
trade flows exposed to foreign currency exchange
rate risk amounted to the equivalent of 58 percent of
Exchange differences arising on the settlement of
the Group’s net revenues (58 percent in 2020 and 53
monetary items or on reporting monetary items at
percent in 2019).
rates different from those at which they were initially
• The main foreign currency exchange rate to which
recorded during the period or in previous financial
the Group is exposed is the Euro/U.S. Dollar for sales
statements, are recognized in the consolidated
in U.S. Dollar in the United States and other markets
income statement within the net financial income/
where the U.S. Dollar is the reference currency. In
(expenses) line item or as cost of sales for charges
2021, the value of commercial activities exposed to
arising from financial services companies. The Group
fluctuations in the Euro/U.S. Dollar exchange rate
uses specific financial derivatives to hedge these
accounted for approximately 51 percent (53 percent
exposures.
in 2020 and 53 percent in 2019) of the total currency
risk from commercial activities. In 2021 and 2020,
The impact of foreign currency exchange rate
the commercial activities exposed to the Euro/
differences recorded within financial income/
Japanese Yen exchange rate and to the Euro/Pound
(expenses) for the year ended December 31, 2021,
Sterling exchange rate exceeded 10 percent (in 2019
including the costs of hedging foreign currency
the Euro/Japanese Yen and Euro/Pound Sterling
exchange rate risk, amounted to net losses of €11,407
exceeded 10 percent) of the total currency risk from
thousand (net losses of €27,029 thousand and €24,237
commercial activities. Other significant exposures
thousand for the years ended December 31, 2020 and
included the exchange rate between the Euro and
2019, respectively).
the following currencies: Chinese Renminbi, Swiss
Franc, Canadian Dollar and Australian Dollar. None
All of the Group’s financial services activities are
of these exposures, taken individually, exceeded
conducted in the functional currencies of the related
10 percent of the Group’s total foreign currency
financial services companies, therefore the impact of
exchange rate exposure for commercial activities
foreign currency exchange rate differences arising
in 2021, 2020 and 2019. It is the Group’s policy to
from financial services activities was zero in all
use derivative financial instruments (primarily
periods presented.
forward currency contracts and currency options)
to hedge up to 90 percent of the principal exposures
Except as noted above, there have been no substantial
to foreign currency exchange risk, typically for a
changes in 2021 in the nature or structure of
period of up to twelve months.
exposure to foreign currency exchange rate risks or
• Several subsidiaries are located in countries that
in the Group’s hedging policies.
are outside the Eurozone, in particular the United
States, the United Kingdom (branch), Switzerland,
The potential decrease in fair value of derivative
Mainland China, Hong Kong, Japan, Australia and
financial instruments held by the Group at December
Singapore. As the Group’s reporting currency is the
31, 2021 to hedge against foreign currency exchange
Euro, the income statements of those companies
rate risks, which would arise in the case of a
are translated into Euro using the average exchange
hypothetical, immediate and adverse change of 10
rate for the period and, even if revenues and
percent in the exchange rates of the major foreign
margins are unchanged in local currency, changes
currencies with the Euro, would be approximately
in exchange rates can impact the amount of
€98,165 thousand (€102,674 thousand at December
revenues, costs and profit as translated into Euro.
31, 2020). Receivables, payables and future trade
• The amount of assets and liabilities of consolidated
flows for which hedges have been put in place were
companies that report in a currency other than the
not included in the analysis. It is reasonable to assume
Euro may vary from period to period as a result of
that changes in foreign currency exchange rates will
changes in exchange rates. The effects of these
produce the opposite effect, of an equal or greater
298
FERRARI N.V.AR 2021 amount, on the underlying transactions that have
an adequate level of funds readily available. The main
been hedged. The sensitivity analysis is based on
funding operations and investments in cash and
currency hedging in place at the end of the period,
marketable securities of the Group are centrally
which can vary during the period and assumes
managed or supervised by the treasury department
unchanged market conditions other than exchange
with the aim of ensuring effective and efficient
rates, such as volatility and interest rates. For this
management of the Group’s liquidity. The Group has
reason, it is purely indicative.
established various policies which are managed or
supervised centrally by the treasury department with
INFORMATION ON INTEREST RATE RISK
the purpose of optimizing the management of funds
The Group’s exposure to interest rate risk, though
and reducing liquidity risk which include:
less significant, arises from the need to fund financial
• centralizing liquidity management through the use
services activities and the necessity to deploy surplus
of cash pooling arrangements
funds. Changes in market interest rates may have the
• maintaining a conservative level of available liquidity
effect of either increasing or decreasing the Group’s
• diversifying sources of funding
net profit/(loss), thereby indirectly affecting the costs
• obtaining adequate credit lines
and returns of financing and investing transactions.
• monitoring future liquidity requirements on the
basis of business planning
The Group’s most significant floating rate financial
assets at December 31, 2021 were cash and cash
Intercompany financing between Group entities is
equivalents and certain receivables from financing
not restricted other than through the application of
activities (related to client and dealer financing), while
covenants requiring that transactions with related
37 percent of the Group’s gross debt bears floating
parties be conducted at arm’s length terms.
rates of interest. At December 31, 2021, a decrease
of 10 basis points in interest rates on floating rate
Details on the maturity profile of the Group’s financial
financial assets and debt, with all other variables
assets and liabilities and on the structure of derivative
held constant, would have resulted in a decrease in
financial instruments are provided in Notes 19 and
profit before taxes of €486 thousand on an annual
24. Details of the repayment of derivative financial
basis (a decrease of €652 thousand at December 31,
instruments are provided in Note 19.
2020). The analysis is based on the assumption that
floating rate financial assets and debt which expire
To preventively and prudently manage potential
during the projected 12-month period will be renewed
liquidity or refinancing risks in the foreseeable future,
or reinvested in similar instruments, bearing the
the Group has available undrawn committed credit
hypothetical short-term interest rates.
lines of €676 million which amounted to €700 million
INFORMATION ON COMMODITY PRICE RISK
at December 31, 2020.
The Group’s exposure to commodity price risk,
The Group believes that its total available liquidity
though much less significant than foreign exchange
(defined as cash and cash equivalents plus undrawn
rate risk and interest rate risk, arises from the need
committed credit lines), in addition to funds that
to use a variety of raw materials in the Group’s
will be generated from operating activities, will
operations, including aluminum and precious metals
enable Ferrari to satisfy the requirements of its
such as palladium and rhodium. The Group monitors
investing activities and working capital needs
its exposure to commodity price risk and may hedge
fulfill its obligations to repay its debt and ensure an
a portion of such exposure through derivative
appropriate level of operating and strategic flexibility.
financial instruments (primarily commodity swaps).
The Group therefore believes there is no significant
LIQUIDITY RISK
Liquidity risk arises if the Group is unable to obtain the
CREDIT RISK
risk of a lack of liquidity.
funds needed to carry out its operations and meet
Credit risk is the risk of economic loss arising from
its obligations. The main determinant of the Group’s
the failure to fully collect receivables. Credit risk
liquidity position is the cash generated by or used in
encompasses the direct risk of default and the risk
operating and investing activities.
of a deterioration of the creditworthiness of the
From an operating point of view, the Group manages
liquidity risk by monitoring cash flows and keeping
counterparty.
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The maximum credit risk to which the Group is
overdue (€65,554 thousand at December 31, 2020).
theoretically exposed at December 31, 2021 is
Therefore, overdue receivables represent a minor
represented by the carrying amounts of the financial
portion of receivables from financing activities.
assets presented in the consolidated statement of
financial position sheet and the nominal value of the
Receivables from financing activities relate entirely
guarantees provided.
to the financial services portfolio in the United States
and such receivables are generally secured on the
Dealers and clients are subject to a specific evaluation
titles of cars or other guarantees.
of their creditworthiness. Additionally, it is Group
practice to obtain financial guarantees against risks
Trade receivables amounting to €185,000 thousand at
associated with credit granted for the purchase
December 31, 2021 (€184,260 thousand at December
of cars and parts. These guarantees are further
31, 2020) are shown net of the allowance for doubtful
strengthened, where possible, by retaining title on
accounts amounting to €25,984 thousand (€28,312
cars subject to financing agreements.
thousand at December 31, 2020). After considering
the allowance for doubtful accounts, €47,237
Credit positions of material significance are evaluated
thousand of receivables were overdue (€46,627
on an individual basis. Where objective evidence
thousand at December 31, 2020).
exists that they are uncollectible, in whole or in part,
specific write-downs are recognized. The amount
31. ENTITY-WIDE DISCLOSURES
of the write-down is based on an estimate of the
recoverable cash flows, the timing of those cash
The following table presents an analysis of net
flows, the cost of recovery and the fair value of any
revenues by geographic location of the Group’s
guarantees received.
customers for the years ended December 31, 2021
and 2020, including the effects of foreign currency
Receivables from financing activities amounting to
hedge transactions. Revenues by geography
€1,143,968 thousand at December 31, 2021 (€939,607
presented for material individual countries are
thousand at December 31, 2020) are shown net of
not necessarily correlated to shipments of cars
the allowance for doubtful accounts amounting to
as certain countries include revenues from
€11,204 thousand (€13,195 thousand at December 31,
sponsorship and commercial activities relating
2020). After considering the allowance for doubtful
to Ferrari’s participation in the Formula 1 World
accounts, €52,733 thousand of receivables were
Championship.
(€ thousand)
Italy
Rest of EMEA
of which UK
Americas (1)
of which United States of America
Mainland China, Hong Kong and Taiwan
Rest of APAC (2)
Total net revenues
For the years ended December 31,
2021
2020
2019
409,992
322,573
391,156
1,869,864
1,634,515
1,628,496
457,060
484,701
531,088
1,097,904
883,228
1,001,946
930,316
332,971
560,163
747,373
191,907
427,567
867,376
350,851
394,166
4,270,894
3,459,790
3,766,615
(1) Americas includes the United States of America, Canada, Mexico, the Caribbean and of Central and South America.
(2) Rest of APAC mainly includes Japan, Australia, Singapore, Indonesia, South Korea, Thailand, India and Malaysia.
300
FERRARI N.V.AR 2021 The following table presents an analysis of non-current assets other than financial instruments and deferred tax
assets by geographic location:
(€ thousand)
At December 31,
2021
Property,
plant and
equipment
Goodwill
Intangible
assets
Property,
plant and
equipment
Goodwill
2020
Intangible
assets
Italy
Rest of EMEA
Americas (1)
Mainland China, Hong Kong and Taiwan
Rest of APAC (2)
Total
1,322,257
785,182
1,137,910
1,199,325
785,182
979,022
5,597
16,003
5,898
3,410
—
—
—
—
—
—
—
263
5,809
14,497
4,120
2,879
—
—
—
—
—
—
—
268
1,353,165
785,182
1,138,173
1,226,630
785,182
979,290
(1) Americas includes the United States of America, Canada, Mexico, the Caribbean and of Central and South America.
(2) Rest of APAC mainly includes Japan, Australia, Singapore, Indonesia, South Korea, Thailand, India and Malaysia.
32. SUBSEQUENT EVENTS
The Group has evaluated subsequent events through February 25, 2022, which is the date the Consolidated
Financial Statements were authorized for issuance, and identified the following matters:
On January 26, 2022 Ferrari announced that CEVA Logistics will be a new Scuderia Ferrari team partner starting
from the 2022 Formula 1 season. The multi-year agreement will also see CEVA involved in Ferrari’s other racing
activities in GT racing and the Ferrari Challenge, with the Marseille-based company taking on the role of Official
Logistics Partner for those series.
On February 8, 2022 Ferrari announced a new partnership with Qualcomm Technologies, Inc. The San Diego,
California-based company will be a Scuderia Ferrari Premium Partner through Snapdragon, Qualcomm’s
premium product and experience brand leveraged across multiple platforms and categories, including
automotive. The agreement with Qualcomm Technologies will have a strong technological impact aimed at
accelerating the digital transformation process for Ferrari and its road cars. Starting from the first common
projects already identified, such as the digital cockpit, the two companies will bring together ideas and expertise
to explore new opportunities and a range of technological solutions.
Under the common share repurchase program, from January 1, 2022 to February 18, 2022 the Company
purchased an additional 390,819 common shares for total consideration of €80.1 million. At February 18, 2022 the
Company held in treasury an aggregate of 10,470,922 common shares.
On February 25, 2022, the Board of Directors of Ferrari N.V. recommended to the Company’s shareholders that
the Company declare a dividend of €1.362 per common share, totaling approximately €250 million. The proposal is
subject to the approval of the Company’s shareholders at the Annual General Meeting to be held on April 13, 2022.
301
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FERRARI N.V.AR 2021 INDEX
TO COMPANY
FINANCIAL STATEMENTS
Income Statement / Statement
of Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Equity
304
305
306
307
Notes to the Company Financial Statements
308
303
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS INCOME STATEMENT/
STATEMENT OF
COMPREHENSIVE
INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(€ thousand)
Net revenues
Other income
Dividend income
Cost of sales
Selling, general and administrative costs
Net financial expenses
Profit/(Loss) before taxes
Income tax benefit
Net and comprehensive income/(loss)
Note
3
3
4
5
6
7
For the years ended
December 31,
2021
329
2020
180
13,463
10,040
200,000
1,974
35,087
26,084
—
1,759
27,437
26,771
150,647
(45,747)
9,239
10,748
159,886
(34,999)
The accompanying notes are an integral part of the Company Financial Statements.
304
FERRARI N.V.AR 2021 STATEMENT
OF FINANCIAL
POSITION
AT DECEMBER 31, 2021 AND 2020
(€ thousand)
Assets
Property, plant and equipment
Investments in subsidiaries
Financial receivables
Deferred tax assets
Total non-current assets
Trade receivables
Tax receivables
Other current assets
Ferrari Group cash management pools
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Share capital
Share premium
Other reserves
Retained earnings
Total equity
Debt (Non-Current)
Employee benefits
Total non-current liabilities
Debt (Current)
Trade payables
Tax payables
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
At December 31,
Note
2021
2020
8
9
10
7
10
7
10
11
12
13
15
15
16
7
17
2,343
2,218
8,778,143
8,778,123
22,084
2,637
22,905
1,094
8,805,207
8,804,340
14,733
76,462
56,649
5,366
94,530
12,084
8,309
26,402
5,976
194,191
247,740
246,962
9,052,947
9,051,302
2,573
2,573
5,768,544
5,768,544
(767,646)
(550,717)
284,924
285,310
5,288,395
5,505,710
1,479,713
1,336,792
2,700
1,389
1,482,413
1,338,181
2,149,879
2,180,773
11,397
81,557
39,306
11,337
1,024
14,277
2,282,139
2,207,411
3,764,552
3,545,592
9,052,947
9,051,302
The accompanying notes are an integral part of the Company Financial Statements.
305
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS STATEMENT OF
CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(€ thousand)
Cash and cash equivalents at the beginning of the year
Cash flows from operating activities:
Profit/(Loss) before taxes
Depreciation
Net financial expenses
Other non-cash income and expenses
Change in trade receivables
Change in trade payables
Change in other operating assets and liabilities
Interest paid
Total cash flows from operating activities
Cash flows used in investing activities:
Investments in property, plant and equipment
Investments in subsidiaries
Total cash flows used in investing activities
Cash flows (used in)/from financing activities:
Proceeds from bonds and notes
Repayment of bonds and notes
Net proceeds/(repayments) from financial liabilities with related parties
Change in Ferrari Group cash management pools
Repayment of lease liabilities
Dividends paid to owners
Share repurchases
Total cash flows (used in)/from financing activities
Total change in cash and cash equivalents
Cash and cash equivalents at the end of the year
For the years ended
December 31,
Note
2021
194,191
2020
56,542
150,647
(45,747)
8
6
15
15
15
11
15
434
26,084
12,439
(2,420)
407
17,016
(23,163)
181,444
(340)
(20)
(360)
373
26,771
24,205
(6,338)
1,663
38,431
(24,225)
15,133
(111)
—
(111)
149,495
640,073
(500,000)
—
460,000
(178,000)
1,004
(244)
(1,405)
(148)
(160,101)
(208,100)
(230,899)
(129,793)
(280,745)
(99,661)
122,627
137,649
94,530
194,191
The accompanying notes are an integral part of the Company Financial Statements.
306
FERRARI N.V.AR 2021 STATEMENT OF
CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(€ thousand)
At December 31, 2019
2,573
5,768,544
(438,277)
529,074
5,861,914
Share capital
Share
premium
Other
reserves
Retained
earnings
Total equity
Comprehensive loss
Dividends to owners
Share repurchases
Share-based compensation
Other changes
At December 31, 2020
Comprehensive income
Dividends to owners
Share repurchases
Share-based compensation
Other changes
—
—
—
—
—
—
—
—
—
—
—
—
(129,793)
17,401
(48)
(34,999)
(34,999)
(208,765)
(208,765)
—
—
—
(129,793)
17,401
(48)
2,573
5,768,544
(550,717)
285,310
5,505,710
—
—
—
—
—
—
—
—
—
—
—
—
159,886
159,886
(160,272)
(160,272)
(230,899)
13,895
75
—
—
—
(230,899)
13,895
75
At December 31, 2021
2,573
5,768,544
(767,646)
284,924
5,288,395
The accompanying notes are an integral part of the Company Financial Statements.
307
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1. CORPORATE INFORMATION
AND PRINCIPAL ACTIVITIES
Management considers the primary focus of these
Company Financial Statements to be the legal entity
perspective and considers that these Company
Ferrari N.V. (the “Company” or “Ferrari” and together
Financial Statements should reflect the cost of the
with its subsidiaries the “Ferrari Group” or the
subsidiaries as well as the amounts that are eligible
“Group”) was incorporated as a public limited
for distribution to the Company’s shareholders.
company (naamloze vennootschap) under the laws of
Management believes that the measurement of its
the Netherlands on September 4, 2015. The Company
subsidiaries at cost, as permitted under EU IFRS,
was formed to ultimately act as a holding company for
provides the best insight into the Company’s financial
Ferrari S.p.A., which, together with its subsidiaries, is
position and results, in addition to the information
focused on the design, engineering, production and
provided in the Consolidated Financial Statements.
sale of luxury performance sports cars.
The Company is listed under the ticker symbol
all periods presented with the exception of the new
RACE on the New York Stock Exchange and on the
standards and amendments effective from January 1,
Euronext Milan (previously named Mercato Telematico
2021 as noted below.
The accounting policies were consistently applied to
Azionario).
The Company’s official seat (statutaire zetel ) is in
are presented in thousands of Euro (€), except where
Amsterdam, the Netherlands, and the Company’s
otherwise indicated.
The amounts in the Company Financial Statements
corporate address is in Maranello, Italy at Via Abetone
Inferiore 4. The Company is registered with the Dutch
trade register under number 64060977.
2. BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES
DATE OF AUTHORIZATION FOR ISSUANCE
FORMAT OF THE COMPANY FINANCIAL
STATEMENTS
The Company presents the income statement
by function and uses a current/non-current
classification for assets and liabilities in the statement
of financial position.
The separate financial statements of the Company
STATEMENT OF CASH FLOWS
(the “Company Financial Statements”) as of and for
The statement of cash flows is prepared using the
the years ended December 31, 2021 and 2020 were
indirect method with a breakdown into cash flows
authorized for issuance on February 25, 2022.
from or used in operating, investing and financing
BASIS OF PREPARATION
activities. Cash inflows or outflows related to taxes
are reported as changes in other operating assets
The Company Financial Statements are prepared on a
and liabilities as they are primarily settled through
going concern basis using the historical cost method,
transactions with related parties as a result of the
modified as required for the measurement of certain
Ferrari Group Italian tax consolidation. Dividends
financial instruments.
received are included as part of operating activities.
STATEMENT OF COMPLIANCE
The Company Financial Statements have been
NEW STANDARDS AND AMENDMENTS
EFFECTIVE FROM JANUARY 1, 2021
prepared in accordance with International Financial
The following new standards, interpretations and
Reporting Standards as adopted by the European
amendments were effective on or subsequent to
Union (“EU IFRS”) and with Part 9 of Book 2 of the
January 1, 2021 and were adopted by the Company
Dutch Civil Code.
for the purpose of the preparation of the Company
Financial Statements:
MEASUREMENT BASIS
• Amendments to IFRS 9 — Financial Instruments,
The Company Financial Statements were prepared
IAS 39 — Financial Instruments: Recognition and
using the same accounting policies as set out in
Measurement, IFRS 7 — Financial Instruments:
the notes to the consolidated financial statements
Disclosures, IFRS 4 — Insurance Contracts and IFRS
at December 31, 2021 (the “Consolidated Financial
16 — Leases;
Statements”), except for the measurement of the
• Amendments to IFRS 4 — Insurance Contracts;
investments as presented under “Investments in
• Amendments to IFRS 16 for COVID-19-related rent
subsidiaries” in the Company Financial Statements.
concessions beyond 30 June 2021.
308
FERRARI N.V.AR 2021 There was no effect from the adoption of these
In May 2020 the IASB issued Annual Improvements
amendments. Further information on these standards
to IFRSs 2018 - 2020 Cycle. The improvements have
is provided in Note 2 of the Consolidated Financial
amended four standards with effective date January
Statements.
NEW STANDARDS ISSUED BY THE
INTERNATIONAL ACCOUNTING STANDARDS
BOARD (“IASB”) AND ENDORSED BY THE
EUROPEAN UNION (“EU”) BUT NOT YET
EFFECTIVE
1, 2022: i) IFRS 1 — First-time Adoption of International
Financial Reporting Standards in relation to allowing
a subsidiary to measure cumulative translation
differences using amounts reported by its parent,
ii) IFRS 9 — Financial Instruments in relation to
which fees an entity includes when applying the ‘10
percent’ test for derecognition of financial liabilities,
The standards, amendments and interpretations
iii) IAS 41 — Agriculture in relation to the exclusion of
issued by the IASB that will have mandatory application
taxation cash flows when measuring the fair value
in 2022 or subsequent years are listed below:
of a biological asset, and iv) IFRS 16 — Leases in
relation to an illustrative example of reimbursement
In May 2017 the IASB issued IFRS 17 — Insurance
for leasehold improvements. The Company does
Contracts, which establishes principles for the
not expect any material impact from the adoption of
recognition, measurement, presentation and
these amendments.
disclosure of insurance contracts issued as well as
guidance relating to reinsurance contracts held and
investment contracts with discretionary participation
features issued. In June 2020 the IASB issued
amendments to IFRS 17 aimed at helping companies
NEW STANDARDS, AMENDMENTS,
CLARIFICATIONS AND INTERPRETATIONS
ISSUED BY IASB BUT NOT YET ENDORSED BY
THE EU
implement IFRS 17 and make it easier for companies
In January 2020 the IASB issued amendments
to explain their financial performance. The new
to IAS 1 — Presentation of Financial Statements:
standard and amendments are effective on or after
Classification of Liabilities as Current or Non-Current
January 1, 2023.
to clarify how to classify debt and other liabilities
as current or non-current, and in particular how to
In May 2020 the IASB issued amendments to IFRS 3 —
classify liabilities with an uncertain settlement rate
Business combinations to update a reference in IFRS 3
and liabilities that may be settled by converting to
to the Conceptual Framework for Financial Reporting
equity. These amendments are effective on or after
without changing the accounting requirements for
January 1, 2023. The Company does not expect
business combinations. These amendments are
any material impact from the adoption of these
effective on or after January 1, 2022. The Company
amendments.
does not expect any material impact from the
adoption of these amendments.
In February 2021 the IASB issued amendments to
IAS 1 — Presentation of Financial Statements and
In May 2020 the IASB issued amendments to IAS 16
IFRS Practice Statement 2: Disclosure of Accounting
— Property, Plant and Equipment. The amendments
policies which require companies to disclose their
prohibit a company from deducting from the cost
material accounting policy information rather than
of property, plant and equipment amounts received
their significant accounting policies and provide
from selling items produced while the company is
guidance on how to apply the concept of materiality
preparing the asset for its intended use. Instead, a
to accounting policy disclosures. These amendments
company should recognize such sales proceeds
are effective on or after January 1, 2023. The
and the related cost in the income statement. These
Company does not expect any material impact from
amendments are effective on or after January 1, 2022.
the adoption of these amendments.
The Company does not expect any material impact
from the adoption of these amendments.
In February 2021 the IASB issued amendments to
IAS 8 — Accounting Policies, Changes in Accounting
In May 2020 the IASB issued amendments to IAS 37 —
Estimates and Errors: Definition of Accounting
Provisions, Contingent Liabilities and Contingent Assets,
Estimates which clarify how companies should
which specify which costs a company includes when
distinguish changes in accounting policies
assessing whether a contract will be loss-making.
from changes in accounting estimates. These
These amendments are effective on or after January
amendments are effective on or after January 1,
1, 2022. The Company does not expect any material
2023. The Company does not expect any material
impact from the adoption of these amendments.
impact from the adoption of these amendments.
309
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In May 2021 the IASB issued amendments to IAS
the investment less costs of disposal and its value in
12 — Income Taxes: Deferred Tax related to Assets
use. Where the carrying amount of an asset exceeds
and Liabilities Arising From a Single Transaction that
its recoverable amount, the asset is considered
clarify how companies account for deferred tax on
impaired and is written down to its recoverable
transactions such as leases and decommissioning
amount. Any resulting impairment is recognized in the
obligations. These amendments are effective on or
income statement. An assessment is made at each
after January 1, 2023. The Company does not expect
reporting date as to whether there is any indication
any material impact from the adoption of these
that previously recognized impairment losses may
amendments.
no longer exist or may have decreased. If such an
indication exists, the Company makes an estimate
In December 2021 the IASB issued an amendment to
of the recoverable amount. A previously recognized
IFRS 17 — Insurance Contracts: Initial Application of
impairment loss is reversed only if there has been
IFRS 17 and IFRS 9 - Comparative Information, which
a change in the estimates used to determine the
provides a transition option relating to comparative
asset’s recoverable amount since the last impairment
information about financial assets presented on
loss was recognized. If that is the case, the carrying
initial application of IFRS 17. The amendment is aimed
amount of the asset is increased to its recoverable
at helping entities to avoid temporary accounting
amount, up to a maximum of the carrying amount
mismatches between financial assets and insurance
that would have been determined if no impairment
contract liabilities, and therefore improve the
loss had been recognized for the asset in prior
usefulness of comparative information for users of
periods. Such a reversal is recognized in the income
financial statements. The amendment is effective
statement. There was no impairment of investments
on or after January 1, 2023. The Company does not
in subsidiaries for the periods presented in these
expect any material impact from the adoption of this
Company Financial Statements.
amendment.
INVESTMENTS IN SUBSIDIARIES
FOREIGN CURRENCY TRANSACTIONS
The financial statements are prepared in Euro,
Investments in subsidiaries are stated at cost, less
which is the Company’s functional and presentation
impairment (if any). Dividend income from the
currency. Transactions in foreign currencies are
Company’s subsidiaries is recognized in the income
recorded at the exchange rate prevailing at the date
statement when the right to receive payment is
of the transaction.
established.
IMPAIRMENT OF INVESTMENTS IN
SUBSIDIARIES
Monetary assets and liabilities denominated in foreign
currencies at the balance sheet date are translated at
the foreign currency exchange rate prevailing at that
At each reporting date, the Company assesses
date. Exchange differences arising on the settlement
whether there is an indication that investments in
of monetary items or on reporting monetary items at
subsidiaries may be impaired. If any such indication
rates different from those at which they were initially
exists, the Company makes an estimate of the
recorded during the period or in previous financial
asset’s recoverable amount. The recoverable
statements are recognized in the income statement.
amount is defined as the higher of the fair value of
310
FERRARI N.V.AR 2021 FOREIGN CURRENCY TRANSLATION
The Company has a branch in the United Kingdom (UK) that operates in Pound Sterling. At each reporting period,
the assets and liabilities within the UK branch are translated to Euro using the exchange rate at the balance
sheet date and the income statement is translated using the average exchange rate for the period. Translation
differences resulting from the application of this method are classified as translation differences within
other comprehensive income/(loss) until the disposal of the branch. The cumulative translation differences at
December 31, 2021 amounted to gains of €75 thousand (losses of €47 thousand at December 31, 2020).
The principal foreign currency exchange rates used to translate other currencies into Euro were as follows:
U.S. Dollar
Pound Sterling
2021
2020
Average At December 31,
Average At December 31,
1.1827
0.8596
1.1326
0.8403
1.1422
0.8897
1.2271
0.8990
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is recognized at cost net of accumulated depreciation and, if applicable,
impairment. Depreciation is calculated on a straight line basis over the useful lives of the assets as follows:
Asset Category
Buildings
Office equipment
Other assets
Depreciation Rates
10%
20% - 22%
20% - 25%
LEASES
Lease payments are discounted using the interest
The Company recognizes a right-of-use asset and
rate implicit in the lease. If that rate cannot be
a corresponding lease liability at the date at which
determined, the Company’s incremental borrowing
the leased asset is available for use. Each lease
rate is used, being the rate that the Company would
payment is allocated between the principal liability
have to pay to borrow the funds necessary to obtain
and finance costs. Finance costs are charged to the
an asset of similar value in a similar economic
income statement over the lease period using the
environment with similar terms and conditions.
effective interest rate method. The right-of use asset is
depreciated on a straight-line basis over the lease term.
In determining the lease term, management
Right-of-use assets are measured at cost comprising
economic incentive to exercise an extension option,
the following: (i) the amount of the initial measurement
or not exercise a termination option. Extension
of lease liability, (ii) any lease payments made at or
options (or periods after termination options) are only
before the commencement date less any lease
included in the lease term if the lease is reasonably
incentives received, (iii) any initial direct costs and, if
certain to be extended (or not terminated).
considers all facts and circumstances that create an
applicable, (iv) restoration costs. Payments associated
with short-term leases and leases of low-value
TRADE RECEIVABLES
assets are recognized as an expense in the income
Trade receivables are amounts due for goods sold or
statement on a straight-line basis.
services provided in the ordinary course of business.
Trade receivables are initially recognized at fair value
Lease liabilities are measured at the net present
and subsequently measured at amortized cost using
value of the following: (i) fixed lease payments, (ii)
the effective interest rate method, less any provision
variable lease payments that are based on an index
for allowances.
or a rate and, if applicable, (iii) amounts expected
to be payable by the lessee under residual value
CASH AND CASH EQUIVALENTS
guarantees, and (iv) the exercise price of a purchase
Cash and cash equivalents include cash on hand,
option if the lessee is reasonably certain to exercise
deposits held at call with banks and other short-term,
that option. Lease liabilities do not include any
highly liquid investments with original maturities of
non-lease components that may be included in the
three months or less. There are no liens, pledges,
related contracts.
collateral or restrictions on cash and cash equivalents.
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Cash and cash equivalents do not include amounts in
OTHER INCOME
Ferrari Group cash management pools.
Other income primarily relates to services performed
DEBT
Debt is measured at amortized cost using the
by the Company on behalf of its subsidiaries for certain
corporate services rendered and other recharge fees.
effective interest rate method.
INCOME TAXES
TRADE PAYABLES
Current and deferred taxes are recognized as
income tax benefit or income tax expense and are
Trade payables are amounts payable for services,
included in the income statement for the period,
legal and professional fees and other expenses
except tax arising from a transaction or event which
incurred. Trade payables are all due within one year.
is recognized, in the same or a different period, either
DEFERRED INCOME
in other comprehensive income/(loss) or directly
in equity. Tax uncertainties are accounted for in
Deferred income relates to amounts received in
accordance with IFRIC 23.
advance under certain agreements, primarily relating
to marketing-related events hosted for third party
DIVIDENDS
dealers, which are reliant on the future performance
Dividends payable by the Company are reported as
of a service or other act of the Company. Deferred
a change in equity in the period in which they are
income is recognized as net revenues or other
approved by the shareholders as applicable under
income when the Company has fulfilled its obligations
local rules and regulations. Dividend income is
under the terms of the various agreements. Deferred
recognised in the income statement on the date that
income is recorded on the statement of financial
the right to receive payment is established.
position within “other liabilities”.
NET REVENUES
SHARE-BASED COMPENSATION
The Company has implemented equity incentive
Net revenues relate to the sale of demo vehicles and
plans that provide for the granting of share-based
spare parts to third party dealers as well as revenues
compensation to the Chairman, the Chief Executive
generated for marketing-related events hosted by
Officer, all other members of the Ferrari Leadership
the Company on behalf of third party dealers, such
Team and other key employees of the Group. The
as new car launches. Revenue is recognized when
Company also provides share-based compensation
control over a product or service is transferred to the
as part of commercial agreements with certain
customer. Revenue is measured at the transaction
suppliers. The share-based compensation
price which is based on the amount of consideration
arrangements are accounted for in accordance with
that the Company expects to receive in exchange
IFRS 2 — Share-based Payments, which requires the
for transferring the promised goods or services
Company to recognize share-based compensation
to the customer and excludes any sales incentives
based on fair value of awards granted. Share-
as well as taxes collected from customers that are
based compensation for the equity-settled awards
remitted to government authorities. The transaction
containing market performance conditions is
price includes estimates of variable consideration
measured at the grant date fair value of the award
to the extent it is probable that a significant reversal
using a Monte Carlo simulation model, which requires
of revenue recognized will not occur. The Company
the input of subjective assumptions, including the
enters into contracts that may include both products
expected volatility of the Company’s common stock,
and services, which are generally capable of being
the dividend yield, interest rates and a correlation
distinct and accounted for as separate performance
coefficient between the common stock and the
obligations where appropriate. The Company
relevant market index. The fair value of the awards
accounts for a contract with a customer when
which are conditional only on a recipient’s continued
there is a legally enforceable contract between
service to the Company is measured using the share
the Company and the customer, the rights of the
price at the grant date adjusted for the present value
parties are identified, the contract has commercial
of future distributions which employees will not
substance, and collectability of the contract
receive during the vesting period.
consideration is probable.
312
FERRARI N.V.AR 2021 Share based compensation is recognized over the service period. Pursuant to an agreement between the
Company and various subsidiaries of the Group, the Company recharges subsidiaries for share-based
compensation relating to equity instruments awarded to employees of the subsidiaries under the equity incentive
plans. The Company’s portion of the share-based compensation for the equity incentive plans is recognized as
an expense within selling, general and administrative costs or cost of sales in the income statement depending
on the function of the employee with an offsetting amount recorded as an increase to equity, whilst share-based
compensation recharged to the subsidiaries of the Group is recognized as a financial receivable (until payment
is received) with an offsetting amount recorded as an increase to equity. Share-based compensation expense
relating to commercial agreements with certain suppliers is recognized over the period in which the supplier’s
services are received and classified within the consolidated income statement depending on the function of the
supplier’s services, with an offsetting increase to equity.
SEGMENT REPORTING
As disclosed in the Consolidated Financial Statements, the Group has determined that it has one operating and
one reportable segment based on the information reviewed by its Chief Operating Decision Maker in making
decisions regarding the allocation of resources and to assess performance.
USE OF ESTIMATES
The Company Financial Statements are prepared in accordance with EU IFRS, which requires the use of
estimates, judgments, and assumptions that affect the carrying amount of assets and liabilities, the disclosure
of contingent assets and liabilities and the amounts of income and expenses recognized. The estimates and
associated assumptions are based on elements that are known when the financial statements are prepared, on
historical experience and on any other factors that are considered to be relevant. The estimates and underlying
assumptions are reviewed periodically and continuously by the Company. If the items subject to estimates
do not perform as assumed, then the actual results could differ from the estimates, which would require
adjustment accordingly. The effects of any changes in estimate are recognized in the income statement in the
period in which the adjustment is made, or prospectively in future periods. The estimates and assumptions that
management considers most critical for the Company Financial Statements relate to investments in subsidiaries
and in particular, relating to impairment indicators. See Note 9 for further details.
3. NET REVENUES AND OTHER INCOME
Net revenues for the year ended December 31, 2021 amounted to €329 thousand (€180 thousand for the year
ended December 31, 2020) and primarily related to marketing-related events hosted on behalf of third party
dealers and other customers.
Other income for the year ended December 31, 2021 amounted to €13,463 thousand (€10,040 thousand for the
year ended December 31, 2020) and primarily related to costs recharged to Ferrari S.p.A.
In 2020, net revenues were impacted by a reduced number of events hosted caused by the COVID-19 pandemic.
For further information on the impacts of the COVID-19 pandemic, see “COVID-19 Pandemic Update” and “Result of
Operations” included in the Annual Report.
4. DIVIDEND INCOME
Dividend income for the year ended December 31, 2021 amounted to €200,000 thousand and related entirely to a
dividend from Ferrari S.p.A, approved on April 9, 2021 and received on May 4, 2021.
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Selling, general and administrative costs consisted of the following:
(€ thousand)
Personnel expenses
Shared services provided by Ferrari S.p.A.
Legal and professional services
Insurance
Other expenses
For the years ended
December 31,
2021
14,822
4,414
4,850
9,606
1,395
2020
11,783
4,494
4,530
6,046
584
Total selling, general and administrative costs
35,087
27,437
Personnel expenses include costs related to the
Branch and 10 of which relate to the Italian Branch).
equity incentive plans (see Note 14), compensation
All employees work outside of the Netherlands.
for directors and employees. Detailed information
on Board of Directors and key management
Shared service costs mainly relate to services
compensation is included in the “Corporate
provided by Ferrari S.p.A. for human resources,
Governance” and “Remuneration of Directors”
payroll, tax, legal, accounting and treasury.
sections to the Annual Report.
At December 31, 2021 the Company had 26 full time
listing fees and expenses for legal, financial and other
Legal and professional services mainly relate to
equivalent employees, 15 of which relate to the UK
consulting services.
Branch and 11 of which relate to the Italian Branch
(at December 31, 2020 the Company had 24 full time
The increase in insurance costs in 2021 compared to
equivalent employees, 14 of which relate to the UK
2020 is primarily related to insurance costs incurred
on behalf of and recharged to subsidiaries.
6. NET FINANCIAL EXPENSES
Net financial expenses consisted of the following:
(€ thousand)
Interest expenses:
of which:
Interest and other finance costs on bonds and notes
Interest on intercompany borrowings
Interest on leases
Foreign exchange rate differences
Other financial expenses
Other financial income
Net financial expenses
For the years ended
December 31,
2021
25,262
22,947
2,216
99
(256)
1,098
(20)
26,084
2020
25,689
20,116
5,406
167
247
971
(136)
26,771
Other financial expenses primarily include bank fees and charges and other financial income primarily includes
interest income on cash and cash equivalents held with banks.
314
FERRARI N.V.AR 2021 7. INCOME TAXES
Income taxes for the years ended December 31, 2021 and 2020 are summarised below:
(€ thousand)
Current income tax benefit
Deferred income tax benefit/(expense)
Total income tax benefit
For the years ended
December 31,
2021
7,702
1,537
9,239
2020
11,023
(275)
10,748
The table below provides a reconciliation between actual income tax benefit and the theoretical income tax
expense, calculated on the basis of the applicable corporate tax rate in effect in Italy, which was 24.0 percent for
each of the years ended December 31, 2021 and 2020:
(€ thousand)
Profit/(Loss) before tax
Theoretical income tax (expense)/benefit
Tax effect on:
Non-taxable dividends
Non-deductible costs
Other permanent differences
Total income tax benefit
For the years ended
December 31,
2021
150,647
(36,155)
45,600
(130)
(76)
9,239
2020
(45,747)
10,979
—
(155)
(76)
10,748
The following table provides a summary of tax receivables and tax payables for the years ended December 31,
2021 and 2020:
(€ thousand)
Tax receivables
Tax payables
Net tax (payables)/receivables
At December 31,
2021
76,462
81,557
(5,095)
2020
8,309
1,024
7,285
Tax receivables of €76,462 thousand at December
The increase in tax payables was primarily
31, 2021 (€8,309 thousand at December 31, 2020)
attributable to an increase in taxable profit in 2021
primarily relate to amounts due from related parties
compared to 2020 and the effects of a net tax
for the Group tax consolidation in Italy.
benefit recognized in 2020 from the partial step up
of trademarks for tax purposes amounting to €75
Tax payables of €81,557 thousand at December
million. The increase in tax receivables was primarily
31, 2021 (€1,024 thousand at December 31, 2020)
attributable to amounts due from related parties in
primarily relate to amounts due to the tax authorities
relation to the Group tax consolidation in Italy driven
for the Group tax consolidation in Italy.
by the aforementioned increase in tax payables.
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The following table summarises deferred tax assets at December 31, 2021 and 2020:
(€ thousand)
Deferred tax assets
To be recovered after 12 months
To be recovered within 12 months
Total deferred tax assets
8. PROPERTY, PLANT AND EQUIPMENT
(€ thousand)
Cost
Accumulated depreciation
Total income tax expense
At December 31,
2021
2020
1,312
1,325
2,637
600
494
1,094
At December 31,
2021
4,612
(2,269)
2,343
2020
3,924
(1,706)
2,218
Property, plant and equipment relates to office furniture and equipment in the UK Branch, as well as buildings
recognised as right-of-use assets in 2021 of €1,940 thousand (€2,073 thousand at December 31, 2020). There are
no liens, pledges, collateral or restrictions on use over property, plant and equipment. Depreciation charges of
€434 thousand for the year ended December 31, 2021 (€373 thousand for the year ended December 31, 2020)
were recorded within selling, general and administrative costs, of which €317 thousand related to right-of-use
assets (€306 thousand in 2020). See Note 15 “Debt” for information related to the related lease liabilities.
9. INVESTMENTS IN SUBSIDIARIES
Investment in subsidiaries amounted to €8,778,143 thousand at December 31, 2021 (€8,778,123 thousand at
December 31, 2020), and included investments in Ferrari S.p.A. amounting to €8,778,000 thousand and New
Business 33 S.p.A. amounting to €143 thousand.
IMPAIRMENT TESTING
At December 31, 2021, the market capitalization of Ferrari N.V. amounted to approximately €41.8 billion (€34.9
billion at December 31, 2020). Considering the share price of the Company at December 31, 2021 and at the date of
authorization of the Company Financial Statements, no impairment indicators were identified.
10. TRADE RECEIVABLES, FINANCIAL RECEIVABLES AND OTHER CURRENT ASSETS
TRADE RECEIVABLES
(€ thousand)
Trade receivables
Financial receivables
Other current assets
Total
At December 31,
2021
14,733
22,084
56,649
93,466
2020
12,084
22,905
26,402
61,391
Trade receivables at December 31, 2021 included €14,013 thousand due from related parties (primarily Ferrari S.p.A.)
for corporate services rendered and fees charged and €720 thousand due from third parties for marketing-related
events (€9,983 thousand and €2,101 thousand respectively at December 31, 2020).
316
FERRARI N.V.AR 2021 The carrying amount of trade receivables is deemed to approximate their fair value. There are no overdue
balances and no allowance for expected credit losses has been recorded for trade receivables.
The following sets forth a breakdown of trade receivables by currency:
(€ thousand)
Trade receivables denominated in:
Euro
Pound Sterling
Total
FINANCIAL RECEIVABLES
At December 31,
2021
2020
12,158
2,575
14,733
8,343
3,741
12,084
At December 31, 2021, non-current financial receivables of €22,084 thousand (€22,905 thousand at December 31,
2020) related to receivables from subsidiaries, mainly Ferrari S.p.A. and primarily for recharges of share-based
compensation relating to equity instruments awarded to employees of the subsidiaries of the Group under the
Group’s equity incentive plans, pursuant to an intercompany agreement.
OTHER CURRENT ASSETS
Other current assets of €56,649 thousand at December 31, 2021 (€26,402 thousand at December 31, 2020)
primarily include VAT credits and prepaid expenses. The increase in 2021 primarily related to VAT.
11. FERRARI GROUP CASH MANAGEMENT POOLS
Ferrari Group cash management pools relate to the Company’s participation in a group-wide cash management
system that is managed centrally by Ferrari S.p.A. and amounted to €5,366 thousand at December 31, 2021 (€5,976
thousand at December 31, 2020). Amounts in cash management pools at December 31, 2021 and 2020 were
entirely denominated in Pound Sterling.
Ferrari Group cash management pools
5,976
(1,004)
394
5,366
Balance at
January 1,
2021
Net proceeds
received
Translation
differences
Balance at
December 31,
2021
12. CASH AND CASH EQUIVALENTS
Cash and cash equivalents amounted to €94,530 thousand at December 31, 2021 (€194,191 thousand at
December 31, 2020) and were primarily denominated in Euro.
The carrying amount of cash and cash equivalents is deemed to be in line with their fair value. There was no
restricted cash at December 31, 2021 and 2020.
Credit risk associated with cash and cash equivalents is considered limited as the counterparties are leading
national and international banks.
13. EQUITY
SHARE CAPITAL
At December 31, 2021 and 2020 the fully paid up share capital of the Company was €2,573 thousand, consisting of
193,923,499 common shares and 63,349,112 special voting shares, all with a nominal value of €0.01. At December
31, 2021, the Company had 10,080,103 common shares and 4,190 special voting shares held in treasury, while
at December 31, 2020, the Company had 9,175,609 common shares and 2,190 special voting shares held in
treasury. Shares in treasury include shares repurchased under the Group’s share repurchase program, which
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are recorded based on the transaction trade date.
12, 2021 following its temporary suspension from
The increase in common shares held in treasury
March 30, 2020 as part of actions implemented by
primarily reflects the repurchase of shares by the
management to prudently manage liquidity as a result
Company through its share repurchase program,
of the COVID-19 pandemic. At December 31, 2021 and
partially offset by shares assigned under the Group’s
2020 the Company held in treasury 3.92 percent and
equity incentive plans. The Company restarted its
3.57 percent of the total issued share capital of the
multi-year share repurchase program on March
Company, respectively.(2)
The following table summarizes the changes in the number of outstanding common shares and outstanding
special voting shares of the Company for the year ended December 31, 2021:
Common
shares
Special voting
shares
Total
Outstanding shares at December 31, 2019
185,283,323
63,346,921
248,630,244
Common shares repurchased under share repurchase program(1)
Common shares assigned under equity incentive plans(2)
Other changes
(819,483)
284,050
—
—
—
1
(819,483)
284,050
1
Outstanding shares at December 31, 2020
184,747,890
63,346,922
248,094,812
Common shares repurchased under share repurchase program(3)
Common shares assigned under equity incentive plans(4)
Other changes(5)
(1,167,592)
263,098
—
—
—
(2,000)
(1,167,592)
263,098
(2,000)
Outstanding shares at December 31, 2021
183,843,396
63,344,922
247,188,318
(1)
Includes shares repurchased between January 1, 2020 and December 31, 2020 based on the transaction trade date, for a total consideration of
€119,771 thousand including transaction costs.
(2) On March 16, 2020, 366,199 common shares, which were previously held in treasury, were assigned to participants of the equity incentive plans as a
result of the vesting of certain performance share unit and retention restricted share unit awards. On March 17, 2020, the Company purchased 82,149
common shares, for a total consideration of €10,022 thousand, from a group of those employees who were assigned shares in order to cover the
individual’s taxable income as is standard practice (“Sell to Cover”) in an over-the-counter transaction. See Note 21 “Share-Based Compensation” for
additional details relating to the Group’s equity incentive plans.
(3) Includes shares repurchased under the share repurchase program between January 1, 2021 and December 31, 2021 based on the transaction trade
date, for a total consideration of €231,024, including transaction costs.
(4) On March 16, 2021, 356,571 common shares, which were previously held in treasury, were assigned to participants of the equity incentive plans as a
result of the vesting of certain performance share unit and retention restricted share unit awards. On March 17, 2021, the Company purchased 93,473
common shares, for a total consideration of €15,432 thousand, from a group of those employees who were assigned shares in order to cover the
individual’s taxable income as is standard practice (“Sell to Cover”) in an over-the-counter transaction. See Note 21 “Share-Based Compensation” for
additional details relating to the Group’s equity incentive plans.
(5) Relates to the deregistration of certain special voting shares under the Company’s special voting shares term and conditions.
THE LOYALTY VOTING STRUCTURE
in the loyalty voting program by registering their
The purpose of the loyalty voting structure is to
common shares in the loyalty share register and
reward ownership of the Company’s common
holding them for three years. The loyalty voting
shares and to promote stability of the Company’s
program will be affected by means of the issue of
shareholder base by granting long-term
special voting shares to eligible holders of common
shareholders of the Company with special voting
shares. Each special voting share entitles the holder
shares. Following the separation of Ferrari from
to exercise one vote at the Company’s shareholder
the Stellantis Group (previously referred to as Fiat
meetings. Only a minimal dividend accrues to the
Chrysler Automobiles N.V. or FCA prior to the merger
special voting shares allocated to a separate special
between FCA and Peugeot S.A. completed on January
dividend reserve, and the special voting shares
16, 2021, which resulted in the creation of Stellantis
do not carry any entitlement to any other reserve
N.V.) in 2016, Exor N.V. (“Exor”) and Piero Ferrari
of the Group. The special voting shares have only
participate in the Company’s loyalty voting program
immaterial economic entitlements and, as a result,
and, therefore, effectively hold two votes for each
do not impact the Company’s earnings per share
of the common shares they hold. Investors who
calculation.
purchase common shares may elect to participate
(2) The percentage of shares held in treasury compared to total issued share capital remains substantially the same if calculated considering only
common shares held in treasury or if calculated considering common shares and special voting shares held in treasury.
318
FERRARI N.V.AR 2021 SHARE PREMIUM
The share premium reserve amounted to €5,768,544 thousand at both December 31, 2021 and December 31,
2020.
RETAINED EARNINGS
Following approval of the annual accounts by the shareholders at the Annual General Meeting of the Shareholders
on April 15, 2021, a dividend distribution of €0.867 per common share was approved, corresponding to a total
distribution of €160,272 thousand (of which €160,101 thousand was paid in 2021). The distribution was made from
the retained earnings reserve.
Following approval of the annual accounts by the shareholders at the Annual General Meeting of the Shareholders
on April 16, 2020, a dividend distribution of €1.13 per common share was approved, corresponding to a total
distribution of €208,765 thousand (of which €208,100 thousand was paid in 2020). The distribution was made
from the retained earnings reserve.
OTHER RESERVES
Other reserves includes, among others:
• a treasury reserve of €847,525 thousand at December 31, 2021 and €616,629 thousand at December 31, 2020.
• a share-based compensation reserve of €28,379 thousand at December 31, 2021 and €43,482 thousand at
December 31, 2020.
• a legal reserve of €93 thousand at December 31, 2021 and €19 thousand at December 31, 2020, determined in
accordance with Dutch law.
Pursuant to Dutch law, limitations exist relating to the distribution of shareholders’ equity up to at least the total
amount of the legal reserve, as well as other reserves mandated per the Company Articles of Association. At
December 31, 2021, the legal and non-distributable reserves of the Company amounted to €93 thousand (€19
thousand at December 31, 2020) and included the following:
• The UK Branch operates in the Pound Sterling. At each reporting period end, the assets and liabilities within
the UK branch are translated to Euro and the respective foreign currency translation gain or loss is recorded
in other comprehensive income. At December 31, 2021, the cumulative translation reserve amounted to €87
thousand (€13 thousand at December 31, 2020).
• The Company records a statutory non-distributable reserve equal to 1 percent of the nominal value of the special
voting shares. At December 31, 2021 and 2020, this reserve amounted to €6 thousand.
RECONCILIATION OF EQUITY AND NET PROFIT/(LOSS)
The reconciliation of equity as per the Consolidated Financial Statements to equity as per the Company Financial
Statements is provided below:
(€ thousand)
At December 31,
2021
2020
Equity attributable to owners of the parent in the Consolidated Financial Statements of Ferrari N.V.
2,205,898
1,785,186
Intra-group restructuring
OCI reserves in the Consolidated Financial Statements
5,969,427
5,969,427
(10,872)
(43,233)
Cumulative results of prior years of subsidiaries in the Consolidated Financial Statements
(3,219,128)
(2,576,312)
Results of subsidiaries in the Consolidated Financial Statements
Cumulative dividends in prior years
Other changes
Dividends
Equity in the Company Financial Statements of Ferrari N.V.
(870,881)
(642,816)
1,016,700
1,016,700
(2,749)
(3,242)
200,000
—
5,288,395
5,505,710
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The reconciliation of net profit as per the Consolidated Financial Statements to net profit/(loss) as per the
Company Financial Statements is provided below:
(€ thousand)
Net profit attributable to owners of the parent in the Consolidated Financial Statements of Ferrari N.V.
830,767
607,817
Results of subsidiaries in the Consolidated Financial Statements
Dividends
Net profit/(loss) in the Company Financial Statements of Ferrari N.V.
(870,881)
(642,816)
200,000
—
159,886
(34,999)
2021
2020
14. SHARE-BASED COMPENSATION
In the first quarter of 2021, 80,510 PSU awards
vested (representing 100 percent of the target
The Group has several equity incentive plans under
PSU awards) as a result of the achievement of the
which a combination of performance share units
related performance conditions and 32,694 RSU
(“PSUs”) and retention restricted share units (“RSUs”),
awards vested upon achievement of the related
which each represent the right to receive one Ferrari
service conditions. As a result, 113,204 common
common share, have been awarded to the Executive
shares, which were previously held in treasury,
Chairman, the Chief Executive Officer (“CEO”),
were assigned to participants of the plan in the first
members of the Ferrari Leadership Team (hereinafter
quarter of 2021. In the first quarter of 2022, 86,331
also the “FLT”, formerly Senior Management Team, and
PSU awards vested (representing 100 percent of the
so renamed as a result of the organizational changes
target PSU awards) and 75,857 RSU awards vested
executed in January 2022) and other key employees of
upon achievement of the related performance and
the Group.
service conditions for the period covering 2019 to
2021. As a result, 162,188 common shares held in
EQUITY INCENTIVE PLAN 2016-2020
treasury will be assigned to participants of the plan in
In the first quarter of 2021, 212,243 PSU awards
the first quarter of 2022.
vested (representing 100 percent of the target
PSU awards) as a result of Ferrari’s third place
EQUITY INCENTIVE PLAN 2020-2022
ranking in Total Shareholder Return (“TSR”) within
Under the Equity Incentive Plan 2020-2022 the
the defined Peer Group for the performance period
Company awarded approximately 60 thousand 2020-
from 2016 to 2020, and 31,120 RSU awards vested
2022 PSUs and approximately 48 thousand 2020-2022
upon achievement of the related service conditions.
RSUs to the Executive Chairman, members of the FLT
As a result, 243,363 common shares, which were
and other key employees of the Group. The PSUs and
previously held in treasury, were assigned to
RSUs cover the three-year performance and service
participants of the plan in the first quarter of 2021.
periods from 2020 to 2022 and vest in 2023 based on
There are no further awards outstanding for the
the level of achievement of the related performance
Equity Incentive Plan 2016-2020.
targets or service conditions.
EQUITY INCENTIVE PLAN 2019-2021
EQUITY INCENTIVE PLAN 2021-2023
Under the Equity Incentive Plan 2019-2021 the
Under the Equity Incentive Plan 2021-2023 approved
Company awarded approximately 174 thousand 2019-
in 2021, the Company awarded approximately 50
2021 PSUs and approximately 111 thousand 2019-
thousand 2021-2023 PSUs and approximately 41
2021 RSUs to the Executive Chairman, the former
thousand 2021-2023 RSUs to the Executive Chairman,
CEO, members of the FLT and other key employees of
members of the FLT and other key employees of
the Group. The PSUs and RSUs cover the three-year
the Group. The PSUs and RSUs cover the three-year
performance and service periods from 2019 to 2021.
performance and service periods from 2021 to 2023
and vest in 2024 based on the level of achievement
of the related performance targets or service
conditions.
320
FERRARI N.V.AR 2021 OUTSTANDING SHARE AWARDS
Changes to the outstanding number of PSU and RSU awards under all equity incentive plans of the Group are as follows:
(number of awards)
Balance at January 1, 2020
Granted(1)
Forfeited
Vested
Balance at December 31, 2020
Granted(2)
Forfeited
Vested
Balance at December 31, 2021
(1) Granted under the Equity Incentive Plan 2020-2022
(2) Grander under the Equity Incentive Plan 2021-2023
Outstanding PSU Awards Outstanding RSU Awards
598,719
48,173
(1,461)
(230,592)
414,839
49,861
(19,775)
(292,753)
152,172
171,145
39,780
(1,460)
(50,402)
159,063
41,460
(13,048)
(63,814)
123,661
SHARE-BASED COMPENSATION EXPENSE
in relation to share-based compensation recharged
For the years ended December 31, 2021 and 2020, the
to subsidiaries (€7,405 thousand and €9,996 thousand
Company recognized €11,689 thousand and €17,401
respectively for the year ended December 31, 2020).
thousand, respectively, as share-based compensation
expense and an increase to other reserves in equity
At December 31, 2021, unrecognized compensation
in relation to the PSU awards and RSU awards of the
expense relating to the Group’s equity incentive plans
Group’s equity incentive plans.
amounted to €11,082 thousand and is expected to
be recognized over the remaining vesting periods
Pursuant to an agreement between the Company
through 2023.
and various subsidiaries of the Group, the Company
recharges subsidiaries for share-based compensation
See Note 21 “Share-based Compensation” to the
relating to equity instruments awarded to employees of
Consolidated Financial Statements for additional
the subsidiaries under the equity incentive plans. Of the
details relating to the Group’s equity incentive plans.
share-based compensation recognized in 2021, €2,891
thousand was recognized as an expense in cost of
In 2021 the Company also recognized share-based
sales and selling, general and administrative costs, and
compensation expense of €2,206 thousand as part of
€8,798 thousand was recorded as financial receivables
commercial agreements with certain suppliers.
15. DEBT
(€ thousand)
Bonds and notes
1,835,022
149,495
(500,000)
2,593
1,487,110
Balance at
January 1,
2021
Proceeds
from
borrowings
Repayments
of borrowings
Net interest
accrued/ (paid)
and other
Balance at
December 31,
2021
Financial liabilities with related parties
1,680,236
2,390,000
(1,930,000)
2,307
—
(244)
105
78
2,140,341
2,141
3,517,565
2,539,495
(2,430,244)
2,776
3,629,592
Balance at
January 1,
2020
Proceeds
from
borrowings
Repayments
of borrowings
Net interest
accrued/ (paid)
and other
Balance at
December 31,
2020
Bonds and notes
1,185,470
640,073
—
9,479
1,835,022
Financial liabilities with related parties
1,858,478
1,770,000
(1,948,000)
2,590
—
(148)
(242)
(135)
1,680,236
2,307
Lease liabilities
Total
Lease liabilities
Total
3,046,538
2,410,073
(1,948,148)
9,102
3,517,565
321
AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS / 15. DEBT
The breakdown of debt at December 31, 2021 and 2020 by nature and by maturity is as follows:
(€ thousand)
At December 31,
2021
2020
Due
Due within
between
one year
two and
five years
Due
beyond
five years
Due
Total
Due within
between
one year
two and
five years
Due
beyond
five years
Total
Bonds and notes
9,239
1,028,686
449,185
1,487,110
500,417
1,034,605
300,000
1,835,022
Financial liabilities with
related parties
Lease liabilities
2,140,341
299
—
882
—
2,140,341
1,680,236
—
— 1,680,236
960
2,141
120
1,201
986
2,307
Total
2,149,879
1,029,568
450,145
3,629,592
2,180,773
1,035,806
300,986
3,517,565
BONDS AND NOTES
2021 BOND
discount for an issue price of 98.898 percent, resulting
in net proceeds of €640,073 thousand, after related
On January 18, 2021 the Company fully repaid the
expenses, and a yield to maturity of 1.732 percent.
2021 Bond for a total consideration of €501,250
The bond was admitted to trading on the regulated
thousand (including accrued interest). The bond was
market of Euronext Dublin. The amount outstanding
previously issued in November 2017 on the regulated
of the 2025 Bond at December 31, 2021 was €648,984
market of the Euronext Dublin (formerly the Irish
thousand, including accrued interest of €5,850
Stock Exchange) for a principal amount of €700
thousand (€647,042 thousand, including accrued
million at a coupon of 0.25 and due in January 2021.
interest of €5,850 thousand at December 31, 2020).
In July 2019 the Company repurchased an aggregate
nominal amount of €200,000 thousand following
2029 AND 2031 NOTES
a cash tender offer. The amount outstanding at
On July 31, 2019, the Company issued 1.12 percent
December 31, 2020 was €501,151 thousand, including
senior notes due August 2029 (“2029 Notes”) and 1.27
accrued interest of €1,199 thousand.
percent senior notes due August 2031 (“2031 Notes”)
2023 BOND
through a private placement to certain US institutional
investors, each having a principal of €150 million.
On March 16, 2016, the Company issued 1.5 percent
The net proceeds from the issuances amounted
coupon notes due March 2023, having a principal of
to €298,316 thousand and the yields to maturity on
€500 million. The bond was issued at a discount for an
an annual basis equal the nominal coupon rates of
issue price of 98.977 percent, resulting in net proceeds
the Notes. The Notes are primarily used for general
of €490,729 thousand, after the debt discount and
corporate purposes, including the funding of capital
issuance costs, and a yield to maturity of 1.656 percent.
expenditures.
The net proceeds were used, together with additional
cash held by the Company, to fully repay a €500 million
The amount outstanding of the 2029 Notes at
bank loan. The bond is unrated and was admitted to
December 31, 2021 was €150,052 thousand,
trading on the regulated market of the Euronext Dublin
including accrued interest of €700 thousand
(formerly the Irish Stock Exchange). Following a cash
(€149,971 thousand, including accrued interest of
tender offer, on July 16, 2019 the Company executed
€700 thousand at December 31, 2020). The amount
the repurchase of these notes for an aggregate
outstanding of the 2031 Notes at December 31, 2021
nominal amount of €115,395 thousand. The amount
was €150,111 thousand, including accrued interest
outstanding at December 31, 2021 was €387,872
of €794 thousand (€150,044 thousand including
thousand and includes accrued interest of €4,567
accrued interest of €794 thousand at December 31,
thousand (€386,814 thousand including accrued
2020).
interest of €4,567 thousand at December 31, 2020).
2032 NOTES
2025 BOND
On July 29, 2021, the Company issued 0.91 percent
On May 27, 2020 the Company issued 1.5 percent
senior notes due January 2032 (“2032 Notes”) through
coupon notes due May 2025 (“2025 Bond”), having a
a private placement to certain US institutional
principal of €650 million. The notes were issued at a
investors having a principal of €150 million. The net
322
FERRARI N.V.AR 2021 proceeds from the issuance amounted to €149,495
extended to the outstanding notes, subject to certain
thousand and the yield to maturity on an annual basis
permitted exceptions; (ii) pari passu clauses, under
equals the nominal coupon rates of the Notes. The
which the notes rank and will rank pari passu with
Notes are used for general corporate purposes. The
all other present and future unsubordinated and
amount outstanding of the 2032 Notes at December
unsecured obligations of Ferrari; (iii) events of default
31, 2021 was €150,091 thousand, including accrued
for failure to pay principal or interest or comply with
interest of €576 thousand.
other obligations under the notes with specified
cure periods or in the event of a payment default or
The abovementioned bonds and notes impose
acceleration of indebtedness or in the case of certain
covenants on Ferrari including: (i) negative pledge
bankruptcy events; and (iv) other clauses that are
clauses which require that, in case any security
customarily applicable to debt securities of issuers
interest upon assets of Ferrari is granted in
with a similar credit standing. A breach of these
connection with other notes or debt securities with
covenants may require the early repayment of the
the consent of Ferrari are, or are intended to be,
notes. At December 31, 2021 and 2020, Ferrari was in
listed, such security should be equally and ratably
compliance with the covenants of the notes.
FINANCIAL LIABILITIES WITH RELATED PARTIES
Financial liabilities with related parties at December 31, 2021 are broken down as follows:
(€ thousand)
Counterparty
Currency
Total amount
outstanding at
December 31, 2021
Due date
Interest Rate
Ferrari S.p.A.
Ferrari S.p.A.
Ferrari S.p.A.
Ferrari S.p.A.
Ferrari S.p.A.
Ferrari S.p.A.
Ferrari S.p.A.
Total
Euro
Euro
Euro
Euro
Euro
Euro
Euro
110,045
January 2022 (*)
EURIBOR 6M + 60bps
80,019
80,032
70,003
500,123
800,091
January 2022 (*)
EURIBOR 6M + 60bps
January 2022 (*)
EURIBOR 6M + 60bps
January 2022 (*)
EURIBOR 3M + 60bps
March 2022
EURIBOR 6M + 60bps
October 2022
EURIBOR 6M + 60bps
500,028
November 2022
EURIBOR 6M + 60bps
2,140,341
(*) The financial liabilities due in January 2022 were refinanced with Ferrari S.p.A. for €400 million due in January 2023 at interest rates similar to the
original liabilities.
Financial liabilities with related parties at December 31, 2020 are broken down as follows:
(€ thousand)
Counterparty
Currency
Total amount
outstanding at
December 31, 2020
Due date
Interest Rate
Ferrari S.p.A.
Ferrari S.p.A.
Ferrari S.p.A.
Ferrari S.p.A.
Ferrari S.p.A.
Total
Euro
Euro
Euro
Euro
Euro
70,002
150,028
160,027
800,146
March 2021
EURIBOR 3M + 60bps
March 2021
EURIBOR 6M + 60bps
March 2021
EURIBOR 6M + 60bps
October 2021
EURIBOR 6M + 60bps
500,033
November 2021
EURIBOR 3M + 60bps
1,680,236
During 2021, certain debt agreements with Ferrari
At December 31, 2021 a 10 basis point increase in
S.p.A. were renewed. Net proceeds from financial
interest rates on the floating rate financial liabilities,
liabilities with related parties amounted to €460,000
with all other variables held constant, would have
thousand in 2021 (net repayments of €178,000
resulted in a decrease in profit before tax of €2,140
thousand in 2020).
thousand on an annualized basis (decrease of €1,680
thousand at December 31, 2020).
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The carrying amount of the financial liabilities with related parties approximates fair value. Information on
covenants of the notes, fair value measurement and qualitative and quantitative information on financial risks
are provided in Note 24, Note 27 and Note 30, respectively, to the Consolidated Financial Statements. Further
information on the Group’s liquidity is provided in the “Liquidity and Capital Resources” section of this Annual
Report. Based on this information the Company deems the going concern assumption adequate.
LEASE LIABILITIES
At December 31, 2021 lease liabilities amounted to €2,141 thousand (€2,307 thousand at December 31, 2020).
REVOLVING CREDIT FACILITIES
In April 2020, additional committed credit lines of €350 million were secured with tenors ranging from 18 to 24
months, doubling total committed credit lines available to €700 million. In March 2021 the Company cancelled a
credit line of €100 million and simultaneously replaced it with a new credit line for €150 million with a tenor of 23
months. In October 2021 an undrawn committed credit line previously negotiated in April 2020 for €100 million
expired. At December 31, 2021 the Company had total committed credit lines available and undrawn amounted to
€650 million (€700 million at December 31, 2020).
In December 2019, the Company negotiated a €350 million unsecured committed revolving credit facility (the
“RCF”), which is intended for general corporate and working capital purposes. The RCF has a 5 year-tenor with
two further one-year extension options, exercisable on the first and second anniversary of the signing date on the
Company’s request and the approval of each participating bank. In December 2020 and in December 2021 the
first and the second one-year extension option were exercised by the Company and approved by all participating
banks. At December 31, 2021 the RCF was undrawn.
CONTRACTUAL OBLIGATIONS
The following table summarizes payments due under our significant commitments at December 31, 2021:
(€ million)
Long-term debt (1)
Interest on long-term debt (2)
Lease liabilities and other
Total contractual obligations
Payments due by period
Less than 1
year
1 to 3 years
3 to 5 years
—
20
—
20
385
31
1
417
650
14
1
665
After
5 years
450
20
—
470
Total
1,485
85
2
1,572
(1) Amounts presented relate to the principal amounts of long-term debt, excluding lease liabilities and the related interest expense that will be paid when
due. The table above does not include short-term debt obligations.
(2) Amounts include interest payments based on contractual terms and current interest rates on our long-term debt. Interest rates based on variable
rates included above were determined using the current rates in effect at December 31, 2021.
16. TRADE PAYABLES
(€ thousand)
Due to related parties
Due to third parties
Total trade payables
2021
8,963
2,434
2020
9,157
2,180
11,397
11,337
Due to related parties primarily relates to amounts payable to Ferrari S.p.A. for corporate services rendered and costs
recharged. Due to third parties relates to costs for marketing-related events and legal and professional services.
324
FERRARI N.V.AR 2021 The following sets for a breakdown of trade payables by currency:
(€ thousand)
Euro
Pound Sterling
Total trade payables
2021
6,352
5,045
2020
6,235
5,102
11,397
11,337
Trade payables are due within one year and their carrying amount at the reporting date is deemed to approximate
their fair value.
17. OTHER CURRENT LIABILITIES
Other current liabilities amounted to €39,306 thousand at December 31, 2021 (€14,277 thousand at December 31,
2020) and primarily relate to indirect tax payables, payables to personnel and deferred income.
Deferred income principally relates to advances received from dealers for marketing-related events, such as new
car launches.
18. EARNINGS PER SHARE
Earnings per share information is provided in Note 12 to the Consolidated Financial Statements.
19. NOTE TO THE STATEMENT OF CASH FLOWS
OPERATING ACTIVITIES
Other non-cash income and expenses primarily includes share-based compensation expense amounting to
€13,895 thousand in 2021 (€17,400 thousand in 2020).
20. AUDIT FEES
The fees for services provided by the Company’s independent auditors, Ernst & Young Accountants LLP, and its
member firms and/or affiliates, to the Company and its subsidiaries are broken down as follows:
(€ thousand)
Audit fees
Audit-related fees
All other fees
Total
2021
1,160
329
79
1,568
2020
1,160
321
—
1,481
Audit fees of Ernst & Young Accountants LLP amounted to €80 thousand in 2021 (€80 thousand in 2020) and are
included in the table above.
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AR 2021BOARD REPORTFINANCIAL STATEMENTSOTHER INFORMATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS 21. REMUNERATION
Detailed information on the remuneration of the Board of Directors and senior management is included in the
“Corporate Governance” and “Remuneration of Directors” sections to the Annual Report.
22. COMMITMENTS AND CONTINGENCIES
At December 31, 2021 and 2020, the Company provided guarantees over certain debt of its subsidiary Ferrari
Financial Services Inc. The book value of the related debt at December 31, 2021 and 2020 was €61,919 thousand
and €28,553 thousand, respectively.
For intercompany financial guarantees issued by the Company, there is no expected default and therefore the
financial guarantees are not recognized.
23. RELATED PARTY TRANSACTIONS
Pursuant to IAS 24, the related parties with which the Company has transactions are Ferrari S.p.A. and other
companies within the Ferrari Group. The Group carries out transactions with related parties on commercial
terms that are normal in their respective markets, considering the characteristics of the goods or services
involved.
Related party transactions include:
• Dividends received from Ferrari S.p.A. (Note 4)
• Corporate services and recharge of expenses to Ferrari S.p.A. (Note 5)
• Share services received from Ferrari S.p.A. mainly related to human resources, payroll, tax, legal, accounting
and treasury. (Note 5)
• Participation in a Ferrari Group-wide cash management system where the operating cash management, main
funding operations and liquidity investment of the Ferrari Group are centrally coordinated by Ferrari S.p.A.
Amounts recorded as Ferrari Group cash management pools represented the Company’s participation in such
pools. (Note 11)
• Financial liabilities and receivables with Ferrari S.p.A. or other subsidiaries of the Group. (Note 15 and Note 16)
• Key management compensation. (Note 21)
The impact of transactions with related parties on the Company Financial Statements is disclosed separately in the
relevant notes.
326
FERRARI N.V.AR 2021 24. ORGANIZATIONAL STRUCTURE
The following table sets forth the Company’s subsidiaries and associates at December 31, 2021. During 2021, no
changes occurred in the organizational structure.
Country
Nature of business
Shares held by the Group
100%
100%
100%
100%
100%
80%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
25%
Name
Directly held interests
Ferrari S.p.A.
New Business 33 S.p.A.
Indirectly held through Ferrari S.p.A.
Ferrari North America Inc.
Ferrari Japan KK
Italy
Italy
USA
Japan
Manufacturing
Holding company
Importer and distributor
Importer and distributor
Ferrari Australasia Pty Limited
Australia
Importer and distributor
Ferrari International Cars Trading (Shanghai) Co. L.t.d.
China
Importer and distributor
Ferrari (HK) Limited
Hong Kong
Importer and distributor
Ferrari Far East Pte Limited
Singapore
Service company
Ferrari Management Consulting (Shanghai) Co. L.t.d.
China
Service company
Ferrari South West Europe S.a.r.l.
France
Service company
Ferrari Central Europe GmbH
Germany
Service company
G.S.A. S.A. in liquidation
Mugello Circuit S.p.A.
Ferrari Financial Services, Inc.
Indirectly held through other Group entities
Switzerland
Service company
Italy
USA
Racetrack management
Financial services
Ferrari Auto Securitization Transaction, LLC(1)
USA
Financial services
Ferrari Auto Securitization Transaction - Lease, LLC(1)
USA
Financial services
Ferrari Auto Securitization Transaction - Select, LLC(1)
USA
Financial services
Ferrari Financial Services Titling Trust(1)
410 Park Display, Inc.(2)
Associated companies valued at cost
USA
USA
Financial services
Retail
Fondazione Casa di Enzo Ferrari
Italy
Service company
Branches
UK Branch
UK
Sales and after sales support
(1) Shareholding held by Ferrari Financial Services Inc.
(2) Shareholding held by Ferrari North America Inc.
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The Company has evaluated subsequent events through February 25, 2022, which is the date the Company
Financial Statements were authorized for issuance, and identified the following matters:
On January 26, 2022 Ferrari announced that CEVA Logistics will be a new Scuderia Ferrari team partner starting
from the 2022 Formula 1 season. The multi-year agreement will also see CEVA involved in Ferrari’s other racing
activities in GT racing and the Ferrari Challenge, with the Marseille-based company taking on the role of Official
Logistics Partner for those series.
On February 8, 2022 Ferrari announced a new partnership with Qualcomm Technologies, Inc. The San Diego,
California-based company will be a Scuderia Ferrari Premium Partner through Snapdragon, Qualcomm’s
premium product and experience brand leveraged across multiple platforms and categories, including
automotive. The agreement with Qualcomm Technologies will have a strong technological impact aimed at
accelerating the digital transformation process for Ferrari and its road cars. Starting from the first common
projects already identified, such as the digital cockpit, the two companies will bring together ideas and expertise
to explore new opportunities and a range of technological solutions.
Under the common share repurchase program, from January 1, 2022 to February 18, 2022 the Company
purchased an additional 390,819 common shares for total consideration of €80.1 million. At February 18, 2022 the
Company held in treasury an aggregate of 10,470,922 common shares.
On February 25, 2022, the Board of Directors of Ferrari N.V. recommended to the Company’s shareholders that
the Company declare a dividend of €1.362 per common share, totaling approximately €250 million. The proposal is
subject to the approval of the Company’s shareholders at the Annual General Meeting to be held on April 13, 2022.
February 25, 2022
Board of Directors
John Elkann
Benedetto Vigna
Piero Ferrari
Delphine Arnault
Francesca Bellettini
Eddy Cue
Sergio Duca
John Galantic
Maria Patrizia Grieco
Adam Keswick
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INFORMATION
OTHER INFORMATION
INDEPENDENT AUDITOR’S REPORT
The report of the Company’s independent auditor, Ernst & Young Accountants LLP, the Netherlands, is set forth at
the end of this Annual Report.
DIVIDENDS
Dividends will be determined in accordance with article 23 of the Articles of Association of Ferrari N.V. The
relevant provisions of the Articles of Association read as follows:
1. The Company shall maintain a special capital reserve to be credited against the share premium exclusively for
the purpose of facilitating any issuance or cancellation of special voting shares. The special voting shares shall not
carry any entitlement to the balance of the special capital reserve. The Board of Directors shall be authorized to
resolve upon (i) any distribution out of the special capital reserve to pay up special voting shares or (ii) re-allocation
of amounts to credit or debit the special capital reserve against or in favor of the share premium reserve.
2. The Company shall maintain a separate dividend reserve for the special voting shares. The special voting
shares shall not carry any entitlement to any other reserve of the Company. Any distribution out of the special
voting rights dividend reserve or the partial or full release of such reserve will require a prior proposal from
the Board of Directors and a subsequent resolution of the meeting of holders of special voting shares.
3. From the profits, shown in the annual accounts, as adopted, such amounts shall be reserved as the Board of
Directors may determine.
4. The profits remaining thereafter shall first be applied to allocate and add to the special voting shares dividend
reserve an amount equal to one percent (1%) of the aggregate nominal value of all outstanding special voting
shares. The calculation of the amount to be allocated and added to the special voting shares dividend reserve
shall occur on a time-proportionate basis. If special voting shares are issued during the financial year to which
the allocation and addition pertains, then the amount to be allocated and added to the special voting shares
dividend reserve in respect of these newly issued special voting shares shall be calculated as from the date
on which such special voting shares were issued until the last day of the financial year concerned. The special
voting shares shall not carry any other entitlement to the profits.
5. Any profits remaining thereafter shall be at the disposal of the general meeting of Shareholders for
distribution of profits on the common shares only, subject to the provision of paragraph 8 of this article.
6. Subject to a prior proposal of the Board of Directors, the general meeting of Shareholders may declare and
pay distribution of profits and other distributions in United States Dollars. Furthermore, subject to the approval
of the general meeting of Shareholders and the Board of Directors having been designated as the body
competent to pass a resolution for the issuance of shares in accordance with Article 6, the Board of Directors
may decide that a distribution shall be made in the form of shares or that Shareholders shall be given the
option to receive a distribution either in cash or in the form of shares.
7. The Company shall only have power to make distributions to Shareholders and other persons entitled to
distributable profits to the extent the Company’s equity exceeds the sum of the paid in and called up part of the
share capital and the reserves that must be maintained pursuant to Dutch law and the Company’s Articles of
Association. No distribution of profits or other distributions may be made to the Company itself for shares that
the Company holds in its own share capital.
332
FERRARI N.V.AR 2021 8. The distribution of profits shall be made after the adoption of the annual accounts, from which it appears that
the same is permitted.
9. The Board of Directors shall have power to declare one or more interim distributions of profits, provided that
the requirements of paragraph 7 hereof are duly observed as evidenced by an interim statement of assets
and liabilities as referred to in Section 2:105 paragraph 4 of the Dutch Civil Code and provided further that the
policy of the Company on additions to reserves and distributions of profits is duly observed. The provisions of
paragraphs 2 and 3 hereof shall apply mutatis mutandis.
10. The Board of Directors may determine that distributions are made from the Company’s share premium
reserve or from any other reserve, provided that payments from reserves may only be made to the
Shareholders that are entitled to the relevant reserve upon the dissolution of the Company.
11. Distributions of profits and other distributions shall be made payable in the manner and at such date(s) -
within four (4) weeks after declaration thereof - and notice thereof shall be given, as the general meeting of
Shareholders, or in the case of interim distributions of profits, the Board of Directors shall determine.
12. Distributions of profits and other distributions, which have not been collected within five (5) years and one (1)
day after the same have become payable, shall become the property of the Company.
BRANCH OFFICES
Please make reference to Note 24 of the Company Financial Statements included in this Annual Report.
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REPORT
TO: THE SHAREHOLDERS AND AUDIT COMMITTEE OF FERRARI N.V.
REPORT ON THE AUDIT OF THE FINANCIAL
STATEMENTS 2021 INCLUDED IN THE
ANNUAL REPORT
assurance-opdrachten (ViO, Code of Ethics for
Professional Accountants, a regulation with respect
to independence) and other relevant independence
OUR OPINION
regulations in the Netherlands. Furthermore we
have complied with the Verordening gedrags- en
We have audited the financial statements for the
beroepsregels accountants (VGBA, Dutch Code of
year ended December 31, 2021 of Ferrari N.V. (herein
Ethics).
referred to as the company and together with its
subsidiaries the group), based in Amsterdam.
We believe the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our
In our opinion the accompanying financial statements
opinion.
give a true and fair view of the financial position
of Ferrari N.V. as at December 31, 2021 and of its
INFORMATION IN SUPPORT OF OUR OPINION
result and its cash flows for the year then ended in
We designed our audit procedures in the context
accordance with International Financial Reporting
of our audit of the financial statements as a whole
Standards as adopted by the European Union (EU-
and in forming our opinion thereon. The following
IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.
information in support of our opinion and any findings
were addressed in this context, and we do not provide
The financial statements comprise:
a separate opinion or conclusion on these matters.
• the consolidated and company statement of
financial position as at December 31, 2021
OUR UNDERSTANDING OF THE BUSINESS
• the following statements for 2021: the
Ferrari N.V. is among the world’s leading luxury
consolidated and company income statement
brands. The activities of Ferrari N.V. comprise of
and the consolidated and company statements of
the design, engineering, production and sale of
comprehensive income, changes in equity and cash
luxury performance sports cars. The Ferrari group
flows
is structured in group entities and we tailored our
• the notes comprising a summary of the significant
group audit approach accordingly. We paid specific
accounting policies and other explanatory
attention in our audit to a number of areas driven by
information.
the operations of the group and our risk assessment.
BASIS FOR OUR OPINION
We start by determining materiality and identifying
We conducted our audit in accordance with Dutch
and assessing the risks of material misstatement of
law, including the Dutch Standards on Auditing. Our
the financial statements, whether due to fraud or
responsibilities under those standards are further
error in order to design audit procedures responsive
described in the Our responsibilities for the audit of
to those risks, and to obtain audit evidence that is
the financial statements section of our report.
sufficient and appropriate to provide a basis for
We are independent of Ferrari N.V. in accordance
misstatement resulting from fraud is higher
with the EU Regulation on specific requirements
than for one resulting from error, as fraud may
regarding statutory audit of public-interest entities,
involve collusion, forgery, intentional omissions,
the Wet toezicht accountantsorganisaties (Wta,
misrepresentations, or the override of internal
our opinion. The risk of not detecting a material
Audit firms supervision act), the Verordening
control.
inzake de onafhankelijkheid van accountants bij
334
FERRARI N.V.AR 2021 MATERIALITY
Materiality
€50 million (2020: €33 million).
Benchmark applied
5% of profit before taxes.
Explanation
determining our materiality because the users of the financial statements of profit-oriented entities like
We consider an earnings-based measure, particularly profit before taxes, an appropriate basis for
Ferrari tend to focus on the financial performance of the company.
We have also taken into account misstatements and/
North America Inc. as two group entities, which, in
or possible misstatements that in our opinion are
our view, required an audit of their complete financial
material for the users of the financial statements for
information. Specific scope audit procedures on
qualitative reasons.
certain balances and transactions were performed
We agreed with the audit committee that
procedures were performed on the remaining
on four other entities. Risk-based analytical
misstatements in excess of €2.5 million, which are
entities.
identified during the audit, would be reported to them,
as well as smaller misstatements that in our view must
In establishing the overall approach to the audit, we
be reported on qualitative grounds.
determined the work to be performed by us, as group
SCOPE OF THE GROUP AUDIT
Young Global member firms and operating under our
As Ferrari N.V. is the parent of a group of entities, the
coordination and supervision. We have performed
financial information of this group is included in the
the following procedures:
consolidated financial statements.
• We have had regular virtual team meetings with EY
auditors, and by component auditors from Ernst &
Italy, all component auditors and management and
Because we are ultimately responsible for the opinion,
reviewed the audit work performed on the group
we are also responsible for directing, supervising
consolidation, financial statements and related
and performing the group audit. In this respect we
disclosures, assessed the effect of COVID-19 and the
have determined the nature and extent of the audit
key audit matter related to Ferrari S.p.A.: warranty
procedures to be carried out for group entities.
and recall campaigns provision. We reviewed the
Decisive were the size and/or the risk profile of
audit files of the component auditor and determined
the group entities or operations. On this basis, we
the sufficiency and appropriateness of the work
selected group entities for which an audit or review
performed.
had to be carried out on the complete set of financial
• Other component auditors included in the group
information or on specific items.
audit scope received detailed instructions, including
key risks and audit focus areas, and we determined
All group entities were included in the scope of our
the sufficiency and appropriateness of the work
group audit. We identified Ferrari S.p.A. and Ferrari
performed.
In total these procedures represent 98% of the group’s total assets, 97% of net revenues and 100% of profit before
taxes.
19%
78%
ASSETS
3%
REVENUE
3%
1%
14%
PROFIT BEFORE TAX
6%
82%
94%
Full scope
Specific scope
Limited scope
Other procedures
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By performing the procedures mentioned above at
OUR AUDIT RESPONSE RELATED TO FRAUD RISKS
components of the group, together with additional
We identify and assess the risks of material
procedures at group level, we have been able to
misstatement of the financial statements due to fraud.
obtain sufficient and appropriate audit evidence about
During our audit we obtained an understanding of
the group’s financial information to provide an opinion
the entity and its environment and the components
on the consolidated financial statements.
of the system of internal control, including the risk
TEAMING AND USE OF SPECIALISTS
process for responding to the risks of fraud and
We ensured that the audit teams both at group
monitoring the system of internal control and how the
and at component levels included the appropriate
audit committee exercises oversight, as well as the
assessment process and the board of director’s
skills and competences which are needed for the
outcomes.
audit of a listed client in the automotive industry. We
included specialists in the areas of IT audit, forensics,
We refer to section Risk Management Process and
sustainability, treasury, share based payments and
Internal Control Systems of the board of directors
income tax and have made use of our own experts in
report for its (fraud) risk assessment.
the areas of valuations and actuaries.
OUR FOCUS ON CLIMATE RISKS
AND THE ENERGY TRANSITION
We evaluated the design and relevant aspects of the
system of internal control and in particular the fraud
risk assessment, as well as the code of conduct,
Climate objectives will be high on the public agenda
whistle blower procedures and incident registration.
in the next decades. Issues such as CO2 reduction
impact financial reporting, as these issues entail risks
We evaluated the design and the implementation and,
where considered appropriate, tested the operating
for the business operation, the valuation of assets
effectiveness, of internal controls designed to
(‘stranded assets’) and provisions or the sustainability
mitigate fraud risks.
of the business model and access to financial markets
of companies with a larger CO2 footprint.
As part of our process of identifying fraud risks,
we evaluated fraud risk factors with respect to
As part of our audit of the financial statements,
financial reporting fraud, misappropriation of assets
we evaluated the extent to which climate-related
and bribery and corruption in co-operation with
risks and the possible effects of the energy
our forensic and legal specialists. We evaluated
transition are taken into account in estimates and
whether these factors indicate that a risk of material
significant assumptions, as well as in the design
misstatement due to fraud is present.
of relevant internal control measures by Ferrari
N.V. Furthermore, we read the report of the board
We incorporated elements of unpredictability in our
of directors and considered whether there is any
audit. We also considered the outcome of our other
material inconsistency between the non-financial
audit procedures and evaluated whether any findings
information in section Risk Management Process
were indicative of fraud or non-compliance.
and Internal Control Systems and, the Non Financial
Statement and the financial statements.
As in all of our audits, we addressed the risks related
to management override of controls, however, when
Our audit procedures to address the assessed
identifying and assessing fraud risks, we rebutted the
climate-related risks and the possible effects of the
presumption that there are risks of fraud in revenue
energy transition did not result in a key audit matter.
recognition. For the risk related to management
OUR FOCUS ON FRAUD AND NON-
COMPLIANCE WITH LAWS AND
REGULATIONS
override of controls we have performed procedures
among others to evaluate key accounting estimates
for management bias that may represent a risk of
material misstatement due to fraud, in particular
OUR RESPONSIBILITY
relating to important judgment areas and significant
Although we are not responsible for preventing fraud
accounting estimates as disclosed in Note 2 and Note
or non-compliance and we cannot be expected to
23 to the financial statements. We have also used
detect non-compliance with all laws and regulations,
data analysis to identify and address high-risk journal
it is our responsibility to obtain reasonable assurance
entries.
that the financial statements, taken as a whole, are
free from material misstatement, whether caused by
fraud or error.
336
FERRARI N.V.AR 2021 These risks did however not require significant auditor’s attention in addition to the following fraud risk identified
during our audit.
Risks related to management override of controls
In our audit approach we considered that the risks related to management override of controls would
primarily impact the warranty and recall campaigns provision due to the complexity of the process and
assumptions involved in estimating the warranty liabilities for new models (and recall campaign) for which
Fraud Risk
management does not have sufficient historical data and for which management performs an estimation
of reasonably expected costs based on available data. We considered whether these assumptions in
the determination of the warranty and recall campaigns provision indicate a management bias that may
represent a risk of material misstatement due to fraud and determined this as key audit matter.
Our audit approach
We describe the audit procedures responsive to the risk of management override in the description of our
audit approach for the key audit matter ’Warranty and recall campaigns provision’.
We considered available information and made
to continue as a going concern and to continue its
enquiries of relevant executives, directors (including
operations for at least the next 12 months.
internal audit, legal, compliance, human resources
and regional directors) and the audit committee.
We discussed and evaluated the specific assessment
The fraud risk we identified, enquiries and other
judgment and maintaining professional skepticism.
with the board of directors exercising professional
available information did not lead to specific
indications for fraud or suspected fraud potentially
We considered whether the board of directors’ going
materially impacting the view of the financial
concern assessment, based on our knowledge and
statements.
understanding obtained through our audit of the
financial statements or otherwise, contains all events
OUR AUDIT RESPONSE RELATED TO RISKS OF
or conditions that may cast significant doubt on the
NON-COMPLIANCE WITH LAWS AND REGULATIONS
company’s ability to continue as a going concern. If
We assessed factors related to the risks of non-
we conclude that a material uncertainty exists, we
compliance with laws and regulations that could
are required to draw attention in our auditor’s report
reasonably be expected to have a material effect on
to the related disclosures in the financial statements
the financial statements from our general industry
or, if such disclosures are inadequate, to modify our
experience, through discussions with the board of
opinion.
directors, reading minutes, inspection of internal audit
and compliance reports, and performing substantive
Based on our procedures performed, we did not
tests of details of classes of transactions, account
identify serious doubts on the entity’s ability to
balances or disclosures.
continue as a going concern for the next 12 months.
We also inspected lawyers’ letters and
Our conclusions are based on the audit evidence
correspondence with regulatory authorities and
obtained up to the date of our auditor’s report.
remained alert to any indication of (suspected) non-
However, future events or conditions may cause a
compliance throughout the audit. Finally we obtained
company to cease to continue as a going concern.
written representations that all known instances of
non-compliance with laws and regulations have been
OUR KEY AUDIT MATTERS
disclosed to us.
Key audit matters are those matters that, in our
professional judgment, were of most significance
OUR AUDIT RESPONSE RELATED TO GOING CONCERN
in our audit of the financial statements. We
As disclosed in section ‘Going concern’ in Note 1
have communicated the key audit matter to the
to the financial statements, the board of directors
audit committee. The key audit matter is not a
made a specific assessment of the company’s ability
comprehensive reflection of all matters discussed.
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In comparison with previous year, our key audit matter did not change.
Risk
Warranty and recall campaigns provision
As more fully described in the notes 2 and 23 to the consolidated financial statements, the group establishes a
provision for product warranties at the time a sale is recognized to guarantee the performance of vehicles from
defects that may become apparent within a certain period or term. In addition, the group periodically initiates recall
campaigns to address various client satisfaction, safety and emissions issues related to cars sold. The provision
includes the management’s estimate of the expected cost to fulfill the obligations over the contractual warranty or
campaign period. Such estimate is developed using assumptions related to expected costs to be incurred based
on the group’s historical claims or costs experience, including the costs of parts and services. As part of our risk
assessment we considered the risk of management override of controls. As at December 31, 2021, the warranty
and recall campaigns provision amounts to €109 million.
Future costs of these actions are subject to numerous uncertainties, including the enactment of new laws and
regulations, the number of vehicles affected by warranty actions or recall campaigns and the nature of the
corrective action that may result in the reassessment of the established provision. The costs related to this
provision are recognized within cost of sales. Auditing the warranty and recall campaign provision was complex in
consideration of the judgment required to develop assumptions around future costs to be incurred for warranty
and recall campaigns, especially for newly launched models or vehicles, and the complexity of the calculation
involved.
The procedures performed to address the matter in our audit included, among others, obtaining an understanding
of the warranty and recall campaign provisioning process and evaluating the group’s accounting policy thereon.
We evaluated the design and tested operating effectiveness of internal controls relevant to this area, specifically
related to the management’s assumptions developed to estimate future costs to be incurred. We evaluated the
methodology, including calculation, and assumptions used by the management in estimating future costs for
Our audit
approach
warranty programs and recall campaigns, and assessed any changes, or the lack thereof, from the prior year. We
tested the completeness and accuracy of the underlying data and the journal entries recorded by the management.
We further completed analytical procedures over the accrued provision and retrospective analyses comparing
the provisions recorded by the group against actual spending for warranty and recall service costs to evaluate the
cost assumptions used by the management. Lastly, we evaluated the adequacy of the warranty and recall campaign
disclosures included in the notes to the consolidated financial statements, including significant judgements made
by the management.
Key observations
We concur with the assessment and recording of the warranty and recall campaigns provision and the related
disclosures as included in the notes to the consolidated financial statements.
REPORT ON OTHER INFORMATION
INCLUDED IN THE ANNUAL REPORT
less than the scope of those performed in our audit of
the financial statements.
The board of directors is responsible for the
The annual report contains other information in
preparation of the other information, including the
addition to the financial statements and our auditor’s
management report in accordance with Part 9 of
report thereon.
Book 2 of the Dutch Civil Code and other information
required by Part 9 of Book 2 of the Dutch Civil Code.
Based on the following procedures performed, we
The board of directors is responsible for ensuring
conclude that the other information:
that the remuneration report is drawn up and
• is consistent with the financial statements and does
published in accordance with Sections 2:135b and
not contain material misstatements
2:145 sub section 2 of the Dutch Civil Code.
• contains the information as required by Part 9 of
Book 2 for the management report and the other
information as required by Part 9 of Book 2 of the
REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS AND ESEF
Dutch Civil Code and as required by Sections 2:135b
and 2:145 sub section 2 of the Dutch Civil Code for
ENGAGEMENT
the remuneration report.
We were engaged by the audit committee as auditor
of Ferrari N.V. on September 29, 2015, as of the audit
We have read the other information. Based on our
for the year 2015 and have operated as statutory
knowledge and understanding obtained through
auditor ever since that date.
our audit of the financial statements or otherwise,
we have considered whether the other information
NO PROHIBITED NON-AUDIT SERVICES
contains material misstatements. By performing
We have not provided prohibited non-audit services
these procedures, we comply with the requirements
as referred to in Article 5(1) of the EU Regulation on
of Part 9 of Book 2 and Section 2:135b sub-Section 7 of
specific requirements regarding statutory audit of
the Dutch Civil Code and the Dutch Standard 720. The
public-interest entities.
scope of the procedures performed is substantially
338
FERRARI N.V.AR 2021 EUROPEAN SINGLE ELECTRONIC
REPORTING FORMAT (ESEF)
Ferrari N.V. has prepared the annual report in ESEF.
of the financial statements that are free from material
misstatement, whether due to fraud or error.
The requirements for this are set out in the Delegated
As part of the preparation of the financial statements,
Regulation (EU) 2019/815 with regard to regulatory
the board of directors is responsible for assessing
technical standards on the specification of a single
the company’s ability to continue as a going concern.
electronic reporting format (hereinafter: the RTS on
Based on the financial reporting frameworks
ESEF).
mentioned, the board of directors should prepare
the financial statements using the going concern
In our opinion, the annual report, prepared in the
basis of accounting unless the board of directors
XHTML format, including the partially marked-up
either intends to liquidate the company or to cease
consolidated financial statements, as included in the
operations, or has no realistic alternative but to do so.
reporting package by Ferrari N.V., complies in all
The board of directors should disclose events and
material respects with the RTS on ESEF.
circumstances that may cast significant doubt on the
company’s ability to continue as a going concern in
The board of directors is responsible for preparing
the financial statements.
the annual report, including the financial statements,
in accordance with the RTS on ESEF, whereby the
board of directors combines the various components
OUR RESPONSIBILITIES FOR THE AUDIT OF
THE FINANCIAL STATEMENTS
into a single reporting package.
Our objective is to plan and perform the audit
Our responsibility is to obtain reasonable assurance
sufficient and appropriate audit evidence for our
engagement in a manner that allows us to obtain
for our opinion whether the annual report in this
opinion.
reporting package complies with the RTS on ESEF.
Our procedures, taking into account Alert 43 of
absolute, level of assurance, which means we may not
the NBA (the Netherlands Institute of Chartered
detect all material errors and fraud during our audit.
Our audit has been performed with a high, but not
Accountants), included amongst others:
Misstatements can arise from fraud or error and are
• obtaining an understanding of the company’s
considered material if, individually or in the aggregate,
financial reporting process, including the
they could reasonably be expected to influence the
preparation of the reporting package
economic decisions of users taken on the basis of
• obtaining the reporting package and performing
these financial statements. The materiality affects
validations to determine whether the reporting
the nature, timing and extent of our audit procedures
package containing the Inline XBRL instance
and the evaluation of the effect of identified
document and the XBRL extension taxonomy files,
misstatements on our opinion.
has been prepared in accordance with the technical
specifications as included in the RTS on ESEF
We have exercised professional judgment and have
• examining the information related to the
maintained professional skepticism throughout
consolidated financial statements in the reporting
the audit, in accordance with Dutch Standards on
package to determine whether all required mark-
Auditing, ethical requirements and independence
ups have been applied and whether these are in
requirements. The ‘Information in support of our
accordance with the RTS on ESEF.
opinion’ section above includes an informative
DESCRIPTION OF RESPONSIBILITIES
REGARDING THE FINANCIAL STATEMENTS
summary of our responsibilities and the work
performed as the basis for our opinion.
Our audit further included among others:
RESPONSIBILITIES OF BOARD OF DIRECTORS
FOR THE FINANCIAL STATEMENTS
• performing audit procedures responsive to the
risks identified, and obtaining audit evidence that is
The board of directors is responsible for the
sufficient and appropriate to provide a basis for our
preparation and fair presentation of the financial
opinion
statements in accordance with EU-IFRS and Part 9 of
• obtaining an understanding of internal control
Book 2 of the Dutch Civil Code. Furthermore, the board
relevant to the audit in order to design audit
of directors is responsible for such internal control as
procedures that are appropriate in the
it determines is necessary to enable the preparation
circumstances, but not for the purpose of
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expressing an opinion on the effectiveness of the
The information included in this additional report is
company’s internal control
consistent with our audit opinion in this auditor’s report.
• evaluating the appropriateness of accounting
policies used and the reasonableness of accounting
We provide the audit committee with a statement that
estimates and related disclosures made by the
we have complied with relevant ethical requirements
board of directors
regarding independence, and to communicate with
• evaluating the overall presentation, structure and
them all relationships and other matters that may
content of the financial statements, including the
reasonably be thought to bear on our independence,
disclosures
and where applicable, related safeguards.
• evaluating whether the financial statements
represent the underlying transactions and events in
From the matters communicated with the audit
a manner that achieves fair presentation.
committee, we determine the key audit matters: those
COMMUNICATION
matters that were of most significance in the audit of
the financial statements. We describe these matters
We communicate with the audit committee
in our auditor’s report unless law or regulation
regarding, among other matters, the planned scope
precludes public disclosure about the matter or when,
and timing of the audit and significant audit findings,
in extremely rare circumstances, not communicating
including any significant findings in internal control
the matter is in the public interest.
that we identify during our audit.
In this respect we also submit an additional report to
the audit committee in accordance with Article 11 of
Ernst & Young Accountants LLP
the EU Regulation on specific requirements regarding
statutory audit of public-interest entities.
O.E.D. Jonker
Amsterdam, February 25, 2022
340
FERRARI N.V.AR 2021 Ferrari N.V.
Official Seat:
Amsterdam, The Netherlands
Dutch Trade Registration Number:
64060977
Administrative Offices:
Via Abetone Inferiore 4
I-41053, Maranello (MO)
Italy
INDEX TO CONSOLIDATED FINANCIAL STATEMENTSINDEX TO COMPANY FINANCIAL STATEMENTS