Nicoletta Russo - Head of IR Sergio Marchionne - Chairman Alessandro Gili - Group CFO

John Murphy - Bank of America Ryan Brinkman - JPMorgan Richard Hilgert - Morningstar Stuart Pearson - BNP Paribas Martino De Ambroggi - Equita Neel Mehta - Morgan Stanley Thomas Besson - Kepler Cheuvreux Stephen Reitman - Societe Generale Michael Binetti - UBS George Galliers - Evercore Alexis Albert - Barclays Lello Della Ragione - Intermonte

Good day and welcome to the Ferrari N.V. 2015 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Nicoletta Russo, Head of IR. Please go ahead.

Thank you, Sheila and good day to everyone on the call. There are two topics that we plan to cover today. First, the Group's full year 2016 operating results and then our full year 2016 guidance. In light of these, the duration of the call is expected to be around 60 minutes. All relevant materials are available on the Ferrari Investor Relations website. Today's call will be hosted by the Group's Chairman, Sergio Marchionne and Mr. Alessandro Gili, Group Chief Financial Officer. At the end of the presentation, they will be available to answer your questions. Before we begin, let me remind you that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the Safe Harbor statement included on Page 2 of today's full year 2015 results presentation and the call will be governed by this language. With that I'd like to turn the call over to Mr. Marchionne.

Thanks very much, Nicoletta. I'm going to keep my comments relatively short, do the opening here and then pass it on to Alessandro who will take you through the details of 2015 and the guidance for the current year. The best way to describe 2015 is that it was, in our view, it was a phenomenal year, with the best results in the history of Ferrari. We fired on all cylinders, pardon the expression, but I think we were able to deliver certainly in terms of operating performance exactly what we had said in I think our roadshow back in the fall of last year and the forecast for 2016 is a confirmation on what we told you when we're presenting the Ferrari case with these up to face. The order backlog continues to be strong, with every indication stat that we will achieve in all likelihood. Keep on listening we will provide you here with the guidance, a really important objective for us remains as I mentioned last year what we meant that we will be targeting at the earliest possible time the production of roughly a €1 billion in EBITDA from the house. So our efforts are in the direction of Formula 1 team is doing well and I think we’re getting ready now for the trial of the cars in the month of February and ultimately to start racing on March 20th in Australia. A new indication is the performance will be in line with the expectations that we laid out last year. And so on that note, I will pass it on to Alessandro and I’ll be more than glad to take questions.

Thank you, Sergio and good morning, good afternoon, and good evening to everybody. In the deck that is supporting the call on Page 3 we are discussing our full year results which I am very proud to present as the [indiscernible] Mr. Marchionne mentioned before. Our shipments grew to 7,664 units for the full year 2015, showing an increase of 6%. This was led by V8 models, up 17% thanks to the success with California T, 458 Speciale A and the newly launched 488 GTB, , which more than offset the end of life-cycle of 458 Italia and 458 Spider. On the other hand, V12 models were down 24% due to the F12berlinetta and the FF being at their fourth and fifth year of commercialization respectively. Please let me remind you that we started shipping the F12tdf to the [indiscernible] in December. Group net revenues reached €2.85 billion, up 3%, which is highlighted in the guidance we provided in October. Adjusted EBITDA reached €748 million with a margin increase of 110 basis points, which was better than the guidance. Our net profit for the Group was €290 million, the highest we’ve achieved in this year of Ferrari up 9% which is the highest level ever reached. Our net debt position as of December 31st was around €1.938 billion better than guidance which included obviously the self liquidating portfolio of our financial receivables and net of debt it was €797 million. Free cash flow generation for full year 2015 was €390 million. And let me remind you that we commence our financial results using non-GAAP measures as defined on Page 22 of the deck that we compiled to describe our financial performance. During the fourth quarter of 2015, we unveiled the F12 super class which we began shipping in December as I mentioned before, new units for 2016 by the relevant contribution for 2016. The results of Scuderia Ferrari in 2015 were positive and we are targeting on the [indiscernible] ranking for 2016 season. Finally Ferrari completed its spin off from FCA on January 3, 2016 and commence trading at the Milan Stock Exchange on January 4th this year. Our targets for 2016 are in line with our guidance, shipments including limited edition supercars to reach approximately 7,900 units. This would result and would support net revenues in excess of €2.9 billion, assuming the effects of current market conditions. Adjusted EBITDA is expected to gear up €770 million. Net debt is expected be lower than €1.95 billion, excluding the self-liquidating financial receivables portfolio of below €750 million. And that includes the distributions we showed -- that we’ve highlighted in our press release, which is subject to the approval of the 2015 annual accounts and review of other relevant financial statements by the Board of Directors. If we move to Page 4, we are showing our operating highlights for 2016. Net revenues were up 3% mainly due to cars and spare parts that posted an increase of 7% driven by volumes, FX and personalization, which contributed to the cars and spare parts was 16%, and were partially offset by engines which were down 30%. Adjusted EBIT for the Group increased by €69 million to €473 million resulting in a 200 basis point margin growth. The adjusted EBIT improvement benefits from various variables and a more detailed explanation could be given as we come on Page 7. EBIT also were €444 million versus €389 million last year resulting in 150 basis points margin improvement. Our adjusted EBITDA improved by 8% achieving €748 million, the result was driven by strong operating performance partially offset by lower G&A as a result of the phase-out 458 family. EBITDA included €719 million showing an increase of €41 million versus last year. Full year 2015 free cash flow generation was primarily driven by the strong increase in cash flow from operating activities, which included the following one-time cash inflow: the sale of certain investment properties; the reimbursement of the financing of inventory related to the establishment of the Maserati standalone business in China; the sale of the financial assets portfolios of FFS S.p.A. and FFS KK, which are global comes through the [80] subsidiaries also in the Financial Services area; partially offset by the one-time extra bonus payment in December in short made to all the Ferrari employees, the per unit amount was €5,000 each. Net debt was €1.98 billion at the end of December from €566 million net cash as of the end of December 31, 2014 and this was primarily due to the capital organization in connection with our IPO, partially offset by the strong free cash flow generation. If we move on to Page 5 for the slide on shipment; at the end of December, we have Americas, which represent 34% of our total shipments was up 7%, USA performance was primarily driven by California T and continued contribution of LaFerrari. EMEA is representing 44% of our total shipments, increased by 2% and U.K. was the Ferrari largest market in EMEA which had a 5% increase in shipments supported by 458 Speciale A and the California T. A strong performance was recorded in Italy plus 17%, thanks to 458 Speciale A and California T. Germany and Middle East, there is a slowdown, the first is company decision to reduce allocations and to cut this effect and the latter due to F12berlinetta being at its fourth year of commercialization. Greater China representing 8% of total shipments, increased by 10% or 8% of total shipment for the Group. Hong Kong and Taiwan shipments increased by 22%, thanks to California T and 458 Speciale A. China mainland shipments dropped by 22% due to the 458 family phase out and the F12berlinetta being at its fourth year of commercialization. Please keep in mind that China represents less than 5% of our total shipments. Rest of Asia-Pacific representing 14% of total shipments, increased by 26% and Australia shipments increased by 44% driven by California T and 458 Speciale A. Japan which had a lateral increase of 33% mainly driven by favorable market conditions and the growth in Japan was primarily driven by California T and 458 Speciale. Moving to Page 6, we are providing the bridge of our net revenues which reached €2.854 billion, up 3% versus last year and mainly due to higher volumes. At constant currency net revenues would have declined by 3% [indiscernible]. During the fourth quarter of 2015 we benefited from deliveries of the 488 GTB which completed its distribution rollout and the commencement of shipment of 488 Spider and F12tdf. Cars and spare parts were also changed €136 million improved from that line in revenues. America's increased by 40%, thanks to mix strictly due to higher sales of LaFerrari, higher volumes and FX impact. Rest of Asia-Pacific showed an increase of 23% mostly related to higher volumes versus last year in Japan. Partially offset by EMEA down 12% mostly due to FX and lower shipments in Middle East. Greater China down 11% due to lower shipments and mix. The proportion of the equivalent models shipped fell from 27% from 12 months ended 31st December, 2014 to 19% for 12 months ended December 31, 2015 and was finally driven by 34% decrease in shipments of the F12berlinetta attributable to the fact that the car is at its fourth year of commercialization. Shipments for V8 increased as a result of achieving full production of the California T, 458 Speciale A and 488 GTB, partially offset by decrease in shipments of the 458 Italia and 458 Spider and 458 Speciale. On engine revenues, net revenues generated €219 million for the full year 2015 a decrease of €92 million or 30% from €311 million for the full year 2014. The €92 million decrease was almost attributable to decrease in net revenues generated by 31% decrease in the volumes of engines sold to Maserati. Sponsorship, commercial and brand net revenues reached €541 million for 2015, an increase of €24 million or 6% from €517 million for 2014. Other net revenues amounted to €114 million for 2015 versus €90 million for 2014 primarily driven by the performance of other [indiscernible]. Moving to Page 7, where we have our adjusted EBIT bridge. We can see the year-over-year changes in adjusted EBIT remain heightened. Volumes were up €45 million thanks to higher volume of 383 cars, excluding LaFerrari, mainly due to higher sales of California T, 458 Speciale A and the newly launched 488 GTB, positive contribution also came from personalization. Mix was slightly negative amounting to €6 million mainly due to growth of V8 versus V12, partially offset by higher sales of LaFerrari and special car FXX K. Industrial costs and R&D were down €3 million attributable to the 2016 development of the power unit for F1 racing activity, partially offset by lower R&D on road cars, primarily R&D and product D&A of the 458 family due to the [trade off] and efficiencies on production costs. SG&A costs were down by €15 million mainly due to our focus on directly operated retail stores, corporate costs as a result of [dual leasing] in Italy and F1 racing activities. Positive impact on transaction exchange rate net of hedging resulted in an increase of €41 million mainly due to U.S. dollar and GBP, that was partially offset by Yen. Other as the final item was up by €7 million, includes better results from brand and commercial activities and to a lesser extent supporting activities, including Ferrari Financial Services. On Page 8, we're providing the bridge of our net cash and we show the evolution on the €566 million positive as at the start of the year with a net debt of €1.938 billion at the end of the year. These were driven by capital reorganization in connection with our IPO and spin-off partially offset by the strong free cash flow generation as well the dividend payments related to our minority shareholders in China. The positive free cash flow generation was primarily attributable to strong operating performance of €748 million and that increasing the financial receivables portfolio of €121 million. Partially offset by taxes paid, negative working capital performance of €39 million mainly attributable to increase in payables finally driven by the full production of LaFerrari in 2014 while at the end of '15 the product lifecycle was nearing completion and shipments are planned to be completed in Q1 2016. Partially offset by collection in the company as party receivables. CapEx was €317 million driven primarily by investments to sustain our product offerings net of the one-time cash inflow from the sale of the investment properties. On page 15 -- sorry on Page 9, we're providing the details of the net debt analysis made of the following elements, the capital reorganization in connection with the U.S. IPO is also mainly of €2.8 billion as well as the completion of a credit agreement that took place in November with third party banks comprising of €1.5 billion mid long-term facilities and €0.5 billion with short-term facilities. The finalization of the $100 million credit line from third party banks on a portion of our Financial Services portfolio in the U.S. and the repayment of the FCA Note which took place at the end of December and the settlement of the FCA debt for €411 million. Dividend payment related to our minority shareholders in China and the acquisition of NCI all offset by free cash flow generation of €390 million [indiscernible]. On Page 10, we're providing the detail of our debt maturity schedule which is shown as a result of the credit agreements and the refinancing transactions which were finalized at the end of the year plus the new credit agreement facilities that were finalized in the U.S. for the Financial Services portfolio. On Page 18 -- sorry Page 11, we're providing the details of our guidance. We're providing the outlook shipment including limited edition supercars will reach approximately 7,900 units which will support net revenues in excess of €2.9 billion assuming effects of current market conditions. Adjusted EBITDA is expected to be above €770 million and net debt is expected to be lower than €1.95 billion excluding the self-liquidating financial receivables portfolio of €750 million which includes a distribution to our shareholders subject to the approval of 2015 annual accounts and a review of the other relevant financial statements by the Board of Directors. In Page 12 to the end of the deck we're providing an overview of the main activities that were done in 2015. Page 12 has the overview of the launches of our vehicles. Just to summarize them for you 488 GTB, 488 Spider and F12tdf. On Page 13, we're providing the summary of 2015 results in Formula 1 and getting ready and looking forward for the March 18 starting of the new season for some excitement for this year. On Page 14, we're providing all the client relation activities which are relevant for 2015 and that have been completed and fill in our performance and our support from a client relation period. Page 15 is providing the overview of the brand and our store presence. We're operating now 12 directly operated stores and 23 in franchising and now we've planning to support the growth from these perspectives. And Page 16 is providing the overview of the corporate structure as regards to the IPO and the spin off which took place at the beginning of the year with a listing at the Milan Stock Exchange in January 4th of this year. Having said that, I hand it over to Mr. Marchionne for any closing remarks before we open the call for questions.

All right. I don’t have anything to say.

Before we start the Q&A session, please let me remind you that we are a one segment company. Certain other activities are ancillary to support the car business. For example, Formula 1 is our marketing tool and that's why we don’t have advertising costs on our P&L. Hence profitability is provided at Group level as we don't have business units or segments. With that I'm going to turn it back to the operator and we'll begin the Q&A session.

Thank you. [Operator Instructions] We will now take our first question from John Murphy from Bank of America. Please go ahead. Your line is open.

Good morning and good afternoon everybody. Just a first question, it may be Alessandro, if you go to Appendix 21. I'm just curious if you can give us the adjustments for the profit before taxes, the tax rate and the net income, because I think people are a little bit confused with the adjusted EBIT and adjusted EBITDA? You have very strong growth with the expectations but I think there was some confusion about what the adjusted net income is for the €24 million that you're incurring for the IPO process?

Excuse me they are not adjusted income that's net income, there are no adjustments for that, while adjusted EBIT and adjusted EBITDA are reflecting the items related to the IPO and spin off costs. Obviously adding 2015 as one-time costs as well as the extraordinary payments of acquiring to EBIT by [indiscernible] as I mentioned before, as well as partially offset for a gain that we had in connection with the sale of investment properties. So all these amounts combined sum up to €29 million for 2015 but we're not adjusting our net income so that is the pure net income of the company.

But those costs they presumably are one-time included or expense to get in this income statement so they are not backed out for the net income is what you're saying?

No, no. They are not. That's why I say this the pure net income including those costs and our stock trading is at the end of the 2015, 33%, there was a slight increase compared to last year which is primarily driven by the fact that we have reflected the change the future tax rate on the balance perspective which is impacting the net [DTA and DTL] of the year which is one-time, 1% negative contributing to the net income of the year.

If we wanted to back those numbers out, that means that would be the €24 million that you’re adjusting for on the adjusted EBIT, would go to the pretax profit and then when you apply the same the tax rate would be applied, correct?

Yes.

So the EPS looks like it's more like €0.36 as opposed to €0.28 when we back those numbers out. Does that sound about right?

Yes, if you have to back out €29 million adjustment that would be €319 million. So if you’re recalculating that, you can do the math, I believe it is correct.

Okay, so it's about that rate, okay. And also if we look at Page 8 and look to €390 million of free cash flow. If we took out the one-time items, I apologize I didn’t follow that on Page 8, what were the one-time positives and negatives, what do they amount to, if we look at the free cash flow?

The free cash flow is going to be all positive amounts related to the one-times that I mentioned, so the sale of the investment properties, the reimbursements on the Maserati loans and the sale of the financial receivables portfolio. There is one negative item, the sale of extraordinary for the sales results that we gave in December.

So the total of those would be the positive or negative one-time free cash flow numbers?

Yes.

I am sorry, I missed what was the total?

He wants to know how much the amounts are in total.

Yes. We just want to understand the ongoing free cash flow power as we’re modeling this forward, so we know what we’re walking off of in 2015.

Excluding one-times it's close to €100 million.

And then just secondly as we think about the ongoing product launches and roll off, how much of the LaFerrari is left to be delivered and recognized in 2016? And if we think about that relative to the F12tdf ramp, how much of the 799 of F12tdfs are going to be delivered in 2016 according to your plan?

So, we’re not delivering all of them in 2016 and the effect of the F12tdf is substantially offsetting also the negative effects of the turnout to the LaFerrari.

So you’re basically in your forecast assuming that the LaFerrari and the F12tdf will be a relative neutral on mix?

Yes, correct.

And then as we think about the engine business and the Levante launch, at what point in 2016 will the Levante launch and presumably the engine to go along with that product really hit and help the engine business?

That’s second half of '16.

And then just lastly on FX you have nothing assumed for your guidance for 2016, it basically at current spots with no benefit from hedging or any shifts we would have in the market?

There is a partial off as we think we said certain number of times during the roadshow which is coming 2016 in the second half of the year. As far as the [dry fall] is expected to roll off completely by the first half.

We will now take our next question from Ryan Brinkman from JPMorgan. Please go ahead. Your line is open.

Thanks for taking my question. First one is really just on the R&D assumptions, if you can provide that color that are embedded in the 2016 guidance. And then more generally if you could comment on how the larger project is going to moderate R&D over the medium term?

So, our total R&D in terms of the capital expenditures is this larger project combined and [indiscernible] is going to be close to €350 million in total for CapEx or it should lead to the total amount in terms of spending to that also be the impact on the P&L which is primarily driven by R&D for the innovation which is expense plus the R&D for the racing activity which is going to be lower than what we had in 2015.

In terms of the [gross] statement on the take down of CapEx there is a significant work that’s being going on at Formula 1 that will now define really restrained spending on racing activities for the duration of the coming quarter going out to 2020. And I think about the [indiscernible] with the efforts that have been made over the last six months on the spend allocation of the [indiscernible] and there is additional work down that’s going on [indiscernible]. The revision to the 2017 will rather we expect the result of distortion in the R&D profile of racing. So I see a relatively comparable '16 is in line. I think we have done absent the regular amount of money in '15 to get ready for the '16 season. I think we’re going to see these numbers on the Formula 1 side come down relatively quickly [1/17] as we’ve nailed down as being sort of definite structures to run Formula 1 for 2020.

Okay.

I think both Alessandro and I agree relatively fair on the CapEx so far going forward. I think most of the large investments have been made in terms of the architectural and [indiscernible] choices that we've made here. But we expect it somewhat to taper down as we want to walk our way through '18 and '19 until the next cycle starts.

And then just last question it sounded like an answer to one of John's questions that you are guiding mix to be roughly a push next year. Can you just talk about the other drivers; firstly if that's correct, but also the other drivers in the walk from adjusted EBITDA of €748 million in '15 to €770 in '16? Any sort of directional color about volume or currency hedges, you provided some color on R&D just now but some of the other components of the bridge please?

We'll begin with the [indiscernible] '15, '16 and that's taking again a contribution in there.

So, the mix side I think you call it, volume is going to be greater than [indiscernible] and the other one element as I said is the FX contribution in the second half of the year and then we will still lower slightly the amount of SG&A as a result of key -- some costs as being on our balance for productivity for the brand side. So, those are the main drivers for the walk and G&A is slightly [organic] for 2016, again as a result of just of the natural lifecycle of our product.

We will now take our next question from Richard Hilgert from Morningstar. Please go ahead, your line is open.

Just looking at the individual country changes in volume, China being down little more than 9% I guess almost 10%, given the environment over in that market and that it seems like that environment was something that was all throughout 2015. Does it make sense to think of China directionally as having reached a trough and that 2016 we should see maybe some slight improvement in volume from that region?

So, I think the best -- the most intelligent view of China is to hold volumes of €50 million.

So, unchanged for 2016 versus 2015?

Yes.

And did I hear correctly, I'm sorry I'm having some difficulty hearing the call, 23% effective tax rate for 2015 full year?

33%.

33% okay. And was curious just taking a look at the guidance next year versus this year, maybe implying a slight increase in volume from one year to the next, but I'm trying to square that with the longer term target of 9,000 vehicles shipped in 2019. If I'm looking at the ramp, it seems like the shipments might be a little bit off of what I might have expected in order to eventually get to that 9,000 if we're expecting somewhat of an even ramp is there. Can you talk a little bit about how you get from here to the 9,000 and where that ramp goes? Is it more of an increase later on or is it in the middle, where does the change happen year-over-year in the shipments?

Look, we said 9,000 cars as what we mean would have been the natural level for the volume and shipment for Ferrari. It is not an issue -- the lumpiness of the increase is not an issue from a production side for Ferrari, this is the minimal number of cars that we make. We expect to see there -- probably see that we will never build a car in excess of the market demand. So the modulation of that increase is based on market verification and the model they want. We have not talked specifically about which models we have launched and what year and I think you are just going to have to bear with us because we will launch the product portfolio between now and 2018 to justify the volume of 9,000. I can't tell you when.

We will now take our next question from Stuart Pearson from BNP Paribas. Please go ahead, your line is open.

Just a couple of questions. Firstly just to clarify on the net debt position of the guidance, I think for FCA, quite a number I think €963 million for your net industrial debt if you like or ex the financial receivables. Wanted you to confirm that number and that compares to the €750 million or below €750 million you are guiding for, could I guess that implies roughly €300 million of free cash flow you're guiding for this year? I just wanted to check that number. And the second question is just, really coming back to this margin because maybe just slightly disagreeing with the initial question, I would have thought the 14.7% margin in Q4 was quite a disappointment in a way giving where we were in Q3 around 500 basis point sequential contraction. Now I know that's the seasonality and work of payments. So I wondered, if you can just talk about the differences there, the drives there, especially in respect to personalization. I understand that may have been a bit weaker in Q4, so just how you expect that to trend in 2016 and why? Thank you.

So you called it the net debt, as we said in the press release that we issued in connections to FCA within our preliminary results on a consolidated basis which variably, there is a difference in definition of the net debt and the net industrial debt. So the difference that you're looking for is just a difference in definition. We are considering our net debt as per our definition just as a simple difference between our cash position and our net debt position, which is made of all the credit agreements that we finalized by the other [indiscernible] to fund the Financial Services company. So if we take that out, so we take out the self liquidating portfolio we have about €800 million or maybe more. For the -- and there is confusion to the number we provided during the IPO and for the provision numbers we just gave.

Sure. I missed the numbers. You take out the self liquidating receivables, the number would be sort of €1.938 billion would be just to compare to your €750 million guidance.

€797 million for 2015 actual and €750 million for our 2016 guidance.

€797 million.

We've just -- listen, we just gave you feedback on the market about the fact that the market [is understand] the whole debt of €1 billion now. The debt -- the net industrial debt position of the company is under €800 million.

€800 million.

Nobody would ever show a number of €1.9 billion under normal circumstances. We got to segregate Financial Services from the rest of operations tables, probably we would have a greater number. The difference between the €790 million number that Alessandro did reference to on the total debt is the self liquidating financial receivables portfolio.

I understand the difference but then that implies that after the dividend you are only guiding for €140 million or something as free cash flow this year then, is that correct?

For '16, we put the upper limit of debt to €750 million.

Okay. Thank you.

Which includes a dividend of €87 million for the year or a distribution on €87 million, which is what we declared.

Okay. Then the question on the margin and the personalization, thank you.

I see if I can go down on Q4, we've explained the part of the reason is a relatively new area of expenses in particular for R&D. So I think we need to prepare for the new season. We've had a higher spending on R&D in Q4 and beginning of Q1, in order to prepare for the season. That's why the Q4 numbers are lower than the Q3 numbers which were from higher [indiscernible]. So in terms of how 2016 is going to perform, only we had negative contribution of the product LaFerrari which is still of the partially in Q1 of the year but then we'll roll off and as I mentioned before in terms of mix that is going to be offset by the [indiscernible]. But with [regard] distributed through all the different quarters of the year. But here the first half is different from the second half also because of the FX which I mentioned so that's providing a different geography to our financial result. So you in 2016, you will see the FX positive contribution done in the second half of the year.

Just to go back to Q3 and trying to comparing Q3 with Q4, we were crystal clear on the roadshow and every call that we have made in connection with the IPO, that Q3 is an unusual operating performance quarter and that we will not be repeating it in Q4. Having said that, 2015 is the highest operating margin that this [staff] has ever achieved.

That's clear. Thank you.

We will now take our next question from Martino De Ambroggi from Equita. Please go ahead. Your line is open.

Thank you and good afternoon and good morning everybody. I am from Equita. My first question is on the guidance for the current year. I'm sorry about the line was not particularly good. I was wondering, if you could recap the CapEx for the current year and D&A? And also if for the current year we should expect positive impact on tax rate because of the [patent box] under the fiscal system in Italy?

Total CapEx of the year is expected to be lower than €350 million and the balance of the remaining tax rate is just under that we haven't reflected and it's not going to provide a relevant amount in deals of these expected. And until we exactly know how much is the contribution and is subject to approval for a specific ruling that has not been passed yet and we [pass] for the ruling of the credit. And the total amount which is going to be true, this was accompanied in -- this is for the companies that we're operating legally under the [indiscernible] regime. So it's not a fixed amount that we can define at the moment. It's going to be more relevant, if we have to get it will be [during '17].

Okay. And the second is on the adjusted EBITDA guidance, a robust €770 million, based on the note I have my estimates basically it is generated by the ForEx effect for the current year and by the way consensus is above €800 million. So can't understand, if you could elaborate on the real potential for the EBITDA margin for the current year or on the other side, without the negative items offsetting the positive ones?

I think the EBITDA is totally in line with what we had highlighted in the past in terms of the progressive performance that volumes are growing as we see from our preliminary numbers to the 7,900 units. So that's the positive contribution in terms of volumes and mix is going to be very slightly negatively. I think we are going to be totally offset in the phase out of [indiscernible]. So you need to consider that LaFerrari contribution was same that on both 2015 and in '14, so we are substantially offsetting all the effects of LaFerrari and our guidance is higher than the 2015 EBITDA and the 2015 adjusted EBITDA which will be highest one achieved by the Company. So that is in line with our expectation and totally in line with our plan.

And very last on the net debt drivers, could you remind us what is the impact of non-recurring line items for this year?

As we said the distribution to the shareholders which is included in the guidance and is to be approved by the Board as regard to the review of the financial payments of 2015. Thus there is the €87 million which we have in our press release today.

Okay, so nothing else. Okay, thank you.

We will now take our next question from Neel Mehta from Morgan Stanley. Please go ahead, your line is open.

Thanks, and good afternoon. Just a couple of questions from my end. First, I know that greater personalization has been highlighted as a opportunity to expand margins, maybe a long term opportunity. But could you elaborate more on that, and maybe give us color or just the order of magnitude on the margins that are associated with cars, which have been customized through maybe your tailor-made or special equipment programs? And then my second question is just on spare parts. Could you give us a sense of how much of the revenue is spare parts within the car and spare parts segment? And any color on margins within that category, and the type of growth you’ve seen over the last few years with specifically relating to spare parts? Thank you.

I am amazed you’re asking questions about spare parts, there is not anybody who makes a deal for anyone in the world that they would view even remotely the number of spare parts, not one. But, maybe that’s a benign answer. It is by definition one of the most profitable part of the business, unfortunately the only way you can make money in spare parts is by [wrecking] the cars. You want to make a car with no spare parts well that's where the vehicle stops. But it is a significant profit contributor. In the case of Ferrari when you compare it to the others those people that make vehicles, it probably plays a less relevant part in other automakers, because of the substantial margins that we can generate on new part sales. The question about personalization and we cannot be [indiscernible] on the margin in terms of stability. It's substantially higher as you move up the personalization cost and so when you get the tailor made those margins are significantly higher than a standard product. But they’re in varying degree very expensive and I think will be relatively successful in pushing the personalization options with our customer with the margin increase [indiscernible]. I can’t give you numbers.

We will now take our next question from Thomas Besson from Kepler Cheuvreux. Please go ahead, your line is open.

I have a few questions relative. Could you have a sense as to where gross is going to come from in European in 2016 as we are certain it's not from China?

So please repeat the question because we didn’t hear very well.

Sorry I am not sure I understood what you said.

If you can please repeat the question, because we didn’t get it.

Sorry for that. Could you please help us understand that where volume growth will come from in 2016 please as it's not going to come from China?

The growth is primarily coming from the Americas, the U.S. is the main contributor there and EMEA, which as I already told our two largest regions. I think we’ve covered always in the past that China in general is less than 5% of our total shipments, so I think someone else mentioned before that's going to be -- expected to be stable, so we feel it's not going to be the relevant as in terms of growth and even if not, it's never been. Also we need to [strive] our strategy for during the IPO. So the two main contributors are the Americas with the U.S. and the EMEA.

Can you give us the number of TDFs that have been shipped in 2015 and also the number of LaFerrari that have been shipped in 2015 please?

On LaFerrari, we're not providing the number but as we've said in the past, 2015 was slightly higher than 2014 and the other small cadence we won this year. TDF was really at the very beginning for the period not relevant for 2015 at all.

But a range just for your information, if you're trying to work the numbers off, LaFerrari was a limited edition car, we sold 500 and [stocked 499] and I think they are evenly split between '14 and '15 they are about 415 a year. Even if you're [indiscernible] a calendar of adjusting one year for the other not much sure we're off on that number.

Lastly actually two small questions, can you explain the dividend policy please from here?

Sorry, but we couldn't hear again the question.

Sorry, can you comment on the dividend policy of Ferrari please?

25% to 40% of net.

Last question, at what date do you expect to publish the full accounts list?

I'm sorry again the line is a bit unclear, could you kindly repeat this?

Sure. When and what date should we get the full accounts for Ferrari please?

I'm sorry can you kindly speak closer to the microphone? Thank you.

Yes. I am right on the microphone, I'm sorry if the line is bad, could you please tell us when you will give the accounts of the company, the full accounts of the company please?

Full accounts, well sorry. So, the approval is expected to come from the Board of Directors, later in February. So, close to the end of February and that is when we'll be publishing our 20-F and our annual report which is required for that, under that requirement.

We will now take our next question from Stephen Reitman from Societe Generale. Please go ahead, your line is open.

Could you tell me if you have any more clarity on negotiations with the relevant authorities on the Tier 2 targets you will be meeting for in the relevant regions for Europe and United States for 2020 and 2021?

No, we will not have any additional comments to give you other than that this comment that the discussions are ongoing. I don't expect to have any specific reactions from those discussions. I think we understand from the product portfolio that that will happen. I have said this probably I don't think that ultimately the international [high business] Ferrari is in available. We're making much, much but still [not achieving].

And can you give me your average CO2 score across your fleet in 2015?

If you are requesting on onsite, I don’t know. And obviously it depends on jurisdiction. We make sure the [indiscernible].

And is roughly is the -- a figure I have in mind for 2014 is about 270 grams. Does that sound reasonably in the ballpark?

It does not sound unreasonable but I -- you and I are [now] asking it, so I don't have an official information, they give it to -- but it doesn't sound unreasonable given what I know.

We will now take our next question from Michael Binetti from UBS. Please go ahead, your line is open.

I want to back up a little bit some ways and ask quite a bit about some of the details here, but if we just try to connect the story for 2016 to some of the longer range thinking that you guys talked about during the IPO. The revenue guidance for 2016 will put you right at what we thought was about the top of where the guidance was initially going to be for revenues for 2017. But as I look at the incremental margins next year they're going to be a little bit lower here and I know I'm trying to get a little bit of color on the walk on EBITDA margins but if we -- the unit targets are kind of are what they are but the revenues they are maybe running a little bit ahead of what you saw in the original 2017 plan. A lot of the story was some of the cost items starting running to lever in 2016, it sounds like that maybe some of those might have shifted out to 2017. I know certainly when we're talking through the roadshow process you thought maybe some of the Formula 1 cost reductions. It seemed to me like some of the Formula 1 cost reductions you're talking about were going to be occurring more in 2016, it sounds like some of those have now moved to 2017. Maybe just some directional guidance on each of the lines in the P&L to help us connect what you're saying about 2016 to what we originally think about 2017?

The best plan that I will give you in '16 is that the number that I understand is put in the guidance is greater than the number that we thought so. And I think that there is a view out there that we have never -- we have historically [gotten] these numbers, I think the numbers that we're giving you will measure against actual performances going forward. I confirm everything that I've told you on the roadshow about the reduction in our core costs and the fact that this half will be presently very [indiscernible] in getting ready to leverage off the investments that's made in the architecture, the cars are falling off the field. Then we have the launch of a new car, there is at least new cars that are coming off the portfolio on a majority basis. We have a better [substitute] to go out there and produce the numbers on a quarterly basis. We will then be seeing clearly guided that these were the lowest number of what’s possible for the ranges [indiscernible]. I think we'll be better than what we generally state. And taken into the D&A has declined this whole guidance is going to be on top of [indiscernible].

Okay. Then could you comment on -- there is obviously, probably more than a pressure of turmoil around the world right now and volatility in some of the different market. Would you mind commenting on what you're seeing related to the wait list for the product in some of the different regions given what we're seeing with the Chinese economy, the U.S. stock market volatility and then obviously some of the oil markets are under pressure [indiscernible] as well?

I mean, for me to try and make sense of the reaction of equity markets of what's going on is an impossible fact. I don't understand the reaction of Ferrari's share price for the announcing and we have the best increase in our history and the stocks [grandeur]. But we're not seeing the internal U.S. customer interested in any impacts on what we are discussing here in terms of volume or expectations of the order book. We are not seeing cancellation. The order book continues to be as strong as ever and you understand we make less than 8,000 cars a year. We're dealing with the price and distribution in that market is not an issue and we remain conscious of the fact of the other things we are dealing with in terms of the affluent customer base. Based on what we face today there is no holding off the rate bump off and from the events that you described. Having said that, China has never been a significant portion of our portfolio nor do we expect it to be a significant portion of our portfolio it's to see. The rest of the world is actually doing well. Notwithstanding what capital market followers are saying and we're okay. You are seeing numbers on Ferrari just for the company this morning, I mean, 17 months of uninterrupted sales growth. The market is actually doing a lot better than people are assuming. So, it's all right.

Okay and if I may just add one last question. Under what -- as far as personalization, I think you talked about that being about 15% lift to average prices for the vehicle. Where does that -- what percentage of that end out in 2015, and what's your thought baked into the 2016 outlook? Thank you.

We commented before its 16% in the actual in 2015 but we're getting back into the in line with 2016 and we will get a benefit of high volumes.

We can move to the next question. Thank you.

We'll now take our next question from George Galliers from Evercore. Please go ahead. Your line is open.

Hello and thank you for taking my questions. First question, I know you don’t comment on future products but conceptually given a significant number of upcoming products from peers in the crossover space, would you ever consider a crossover for Ferrari and if we assess platform and drivetrain something which could be adapted for crossover at some point in the future if you did decide to take that path?

The answer to your second question is yes and the answer to your first question is you will have to shoot me first.

Okay. Thank you and then secondly on the policy that you have already visited, but the line wasn't perfect, just coming back to FX and the change and what you hedge, very simply given what you have hedged in today's spot to the unhedged part, do you expect FX to be a similar tailwind in '16 to the €45 million last year or should be a greater or smaller tailwind?

Yes.

So yes, you expect it to be a greater tailwind, is that correct?

Correct. It is in line in 2016.

Okay. Very clear, thanks.

We will now take our next question from Alexis Albert from Barclays. Please go ahead. Your line is open.

Hi, good afternoon. Thank you for taking my questions. Two questions, the first one is regarding the order intake. I know, you don't communicate on the wait list in the order intake but considering the lack of visibility in the automotive sector, we try to have an idea of when we talk about order intake at Ferrari, are we talking about six months, are we talking about 18 months integrated? If you could give us some color on that, that is my first question. Second question is regarding the financing what would you see is the share of Ferrari being financed?

The answer to your first question is in between the two numbers and you are right.

Okay, great. Thank you, that's helpful. And regarding financing?

Regarding financing on the new car sizes, on the new vehicles we've penetration rate of 32% on average.

Okay so 32% is the Ferrari's being financed by yourself, right?

No, that's the financing that we are -- yes, I'm sorry the financing is from our Financial Services company side, 32% of our new cars.

Okay, including all sources of financing?

We just do retail financing basically, we don't do any other financing.

Okay. Do you have any other financing of -- but do you have assumptions internally of if this is 32% for you what is the total?

The financing coming from the dealer in general is not a number that we know exactly, so we know how much we are financing directly.

It's one out of three cars.

We will now take our next question from Lello Della Ragione from Intermonte. Please go ahead, your line is open.

Thank you for taking my question, probably you answered it before but the line is terrible here. But it's about personalization. You gave the number for 2016 during the presentation but unfortunately I couldn’t hear and can you repeat what’s your target for '16 and should we see the personalization in terms of percentage moving forward a big evolution of it even beyond 2016? Thank you.

I am sorry but, can you just repeat personalization.

The personalization we call it the cost of 15% was the actual that we had in terms of contribution on top line in 2014, 2015 was 16% and we are expecting the same level in 2016. Last as I mentioned the additional factors we will have higher volumes in '16.

Okay, 50% on top of the average selling price, right?

1-6, so 16%.

Okay, 1-6 on top of the average selling price. And can you just, probably you answered even to this one, but the line is terrible. Can you please give us an indication on what should we expect on gross margin level for 2016, so with positive trend up there in terms of raw materials and employees? Thank you.

So we are expecting obviously to keep on realizing efficiencies on our guided materials in line with what we had in 2015.

There are no further questions at this time. I would like to turn the call back to your host for any additional or closing remarks.

Thanks everyone for attending today’s call. Thank you. Bye.

That will conclude today’s conference call. Thank you for participating. Ladies and gentlemen, you may now disconnect.