Nicoletta Russo - Head of Investor Relations Louis Camilleri - Chairman and Chief Executive Officer Antonio Picca Piccon - Chief Financial Officer

John Murphy - Bank of America Michael Binetti - Credit Suisse Adam Jones - Morgan Stanley Martino De Ambroggi - Equita Thomas Besson - Kepler Stephen Reitman - Societe Generale Giulio Pescatore - HSBC George Galliers - Evercore

Good day, and welcome to the Ferrari N.V. 2018 Second Quarter Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Nicoletta Russo, Head of IR. Please go ahead.

Thank you, Tani, and welcome to everyone who is joining us. Today's call will be hosted by the Group's CEO, Louis Camilleri; and Antonio Picca Piccon, Group’s CFO. All relevant materials are available in the Investors section of the Ferrari corporate website. And at the end of the presentation, we will be available to answer your questions. Before we begin, let me remind you that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the Safe Harbor statement included on Page 2 of today's presentation, and the call will be governed by this language. With that, I'd like to turn the call over to Mr. Camilleri.

Thanks very much, Nicoletta. Good afternoon or good morning to everyone joining Antonio and me on our inaugural earnings call and what can only be described as difficult emotional circumstances. We were all deeply saddened by the loss of Sergio Marchionne. He was a man of immense talent blessed with a razor-sharp brain, an unparallel level of energy and a generous heart; clearly an inspirational and formidable leader for all those who have the privilege to work with and alongside him. On a personal note, Sergio was a dear friend. Beyond our friendship, he sat on the Philip Morris International board, where he served as an exemplary director for the last 10 years; and I sat on the Ferrari board since its ever so successful spinoff from the FCA Group. This allowed us to be in frequent contact and gave us ample opportunity to discuss and debate our respective business strategies in a fast moving world. I can very humbly claim that we shared a deep mutual respect for each other, and I will pursue with vigor and discipline the ambitions the Board, he and the entire team here had for this legendary and great company. I had the privilege of interacting with this management for close to two decades as a lead sponsor and customer, and more recently board member. I can tell you that all I've seen to-date has confirmed to me that we are blessed with a fabulously talented, committed and determined senior leadership team and organization at every level, all proud to be part of this company and all excited to bring it to ever greater heights with integrity and passion. We have a product portfolio in place for the next few years that is quite frankly stunning from every perspective, one that truly gives me confidence in our future growth and expansion. It is a true privilege to serve as Chief Executive of this jewel of a company and I take this opportunity to thank our new Chairman, John Elkann, and the entire Ferrari Board for entrusting me with this responsibility to lead our company to the next level while mindful of the opportunities and risks that we will confront going forward, rest assured that I will give my all in the best interest of all our stakeholders - our clients, colleagues, business partners, and of course our shareholders. I look forward to meeting you at our forthcoming Capital Market days, when we will review the plans and initiatives we have in place to deliver our aspirations. For now, we are pleased to report a very solid quarter and to confirm our previously disclosed projections for the year, underpinned by a very strong order book that takes us well into next year. It is my pleasure to now hand over the call to Antonio, our Chief Financial Officer, with whom I have already established a great relationship and who will undoubtedly make an invaluable contribution to this great company as we move forward in the coming months and years. Antonio?

Thank you, Louis, for this kind introduction. Good afternoon to everyone, and thank you for listening the call. I am also among the once who owe to Sergio Marchionne for all those that he taught to us both as a CEO and as a man during the incredible days of CF and FCA. The simple fact of being here today, as to a number of reasons why I am grateful, his loss makes me feel even stronger to personal determination and commitment to contribute to the further development of Ferrari at the level this company, all of its stakeholders, our colleagues and you, Louis, deserves. With that said, let me begin with Page 4. Our shipments reached approximately 2.5k units, which is plus 5.6% versus prior year. Results were driven by a 22.6% increase in V12 models, while the D81s grew 1%. 12-cylinder model’s strong performance was led by the A12 superfast, partially offset by the F12berlinetta phase-out as well as the F12tdf that completed lifecycle in 2017. LaFerrari Aperta is also finishing its limited series brand. 8-cylinders models were up versus prior year, mostly thank to the 488 family, along with the first deliveries of the newly launched Ferrari Portofino expected to ramp up over the next quarters. This was partially offset by the California T’s phase-out. Group net revenues for Q2 were €906 million, down a few million but up 1.4% at constant currency. Our adjusted EBITDA improved by 7% reaching $290 million and 31.9% margin. Adjusted EBIT for the group showed 7.5% increase, reaching €117 million quarterly record with the margin of sanction 200 basis points to 23.9%. Industrial fleet has slowed for the quarter came in at €93 million. Net industrial debt at the end of June, after €30 million of share buyback and a €136 million dividend distribution, reached €472 million, substantially in line with the level of December 2017. Moving to shipments on Page 5. The 812 Superfast as well as the 488 and the GTC4Lusso families performed solidly. Shipments for the group were up 5.6%. EMEA grew 7.2% with Middle East rebounding. Americas showed a 6.6% increase. And combined delivers in China, Hong Kong and Taiwan were up 26.4%. Rest of APAC decreased a few units due to designing of the newly launched Ferrari Portofino yet to arrive in the market. Moving to Page 6 on Group net revenues. We see how they decreased from a €920 million in Q2 to a 906 -- sorry, in Q2 2017 to €906 million in Q2 ‘18. Therefore, down €14 million, but up 1.4% in constant currencies. Car and spare parts revenues totaling €670 million were slightly positive, thanks to higher volumes already commented, as well as mix and price. This was partially offset by negative effects. Engines revenues were €80 million, forcing a decrease in the sales to Maserati due to lower engine volumes. Sponsorship commercial and brand were € 126 million. Thanks to an increasing sponsorship and higher championship ranking, partially offset by lower sales generated by brand related activities and by effects. On Page 7, you can see the year-over-year changes in the main items of the adjusted EBIT, as mentioned, the LaFerrari was up 7.5% to €270 million, with adjusted EBIT margin of 200 basis points and adjusted EBITDA reaching 32.9% margin. Volume was up €12 million, thanks to the 812 Superfast, the 488 and the GTC4Lusso families as well as first deliveries of the Ferrari Portofino. Mix and price were positively impacted by strong performance of V12 models. Pricing increases together with the first deliveries of the strictly limited edition Ferrari J50. This was partially offset by lower sales of LaFerrari Aperta that is finishing its limited series run. Industrial costs and R&D decreased €2 million, mainly due to lower spending in F1 activities. SG&A costs were almost in line with prior year and foreign exchange, including hedges, had a negative impact mainly due to the U.S. dollar, the yen and the British pound depreciation versus euro. Other increase mainly to higher sponsorship revenues and higher championship ranking, partially offset by lower sales to Maserati and brand-related activities. Moving to Page 8. Industrial free cash flow for the quarter was €93 million compared to $92 million in Q2 2017, driven by strong adjusted EBITDA. This was partially offset by CapEx to support broadening and hybridization of our product in line with expected volume growth over the 2019-2022 period. In addition, during the second quarter, we paid taxes which were lowered by the fact of increased capital deductions related to eligible research and development. Net industrial debt at the end of June, after we already mentioned, share buyback and dividend, reached €472 million, substantially in line with the year end. The last couple of slides finally show Formula 1 ranking as well as our client relationship activities. With that I would like to turn the call over to Nicoletta Russo.

Thank you, Antonio. We are now ready to start the Q&A session. Please note that inconsideration of our Capital Markets Day, today we’ll focus on Q2 2018 and full-year 2018 question only.

[Operator Instructions] We will take our first question now from John Murphy of Bank of America. Please go ahead.

We are very sorry to hear about Sergio and his passing, but it's also very good to hear about your determination being much higher. [Indiscernible] he is gone. That’s a driving force, so that's a very good thing to hear for investors. Maybe the first question I have -- and Nicoletta, I apologize. I'm going a little bit out of balance here, but when we think about the targets for 2022 and when they were set in front of, there are some people they believes that it was really something was written on the back of an envelope by Sergio, but my understanding is these plans were formed at least a year ago if not sort of hatched even further back. Is that a correct characterization? Or were they really just sort of Chairman's goals? It’s seems like you are a lot more than that and there is a lot more than those plan is that correct.

This is Louis. I would say that clearly those targets were reviewed with the board. They were aspirational and clearly there were plans behind them now in the Capital Markets day, we’ll craft and talk the eyes and how we think we will get. But we also have to disclose potential risk to that but also significant opportunities that we see going forward.

Okay, I appreciate that. And then just a second question on the Superfast. It sounds like demand is obviously far out stripping expectation and wait times for the Superfast are very high before rumors of 3 to 4 years in the UK. Is that correct? And is there any way that you would ameliorate sort of that risk of losing customer in anyway?

Clearly the waiting lists are long. That's a good thing in a way. And was stepping up production. We’ll see. But clearly, I think having a very strong order book should give everyone confidence in our growth going forward.

Okay, and then just lastly. Antonio, as you look at those second half of the year, there is some risk as Portofino ramps up that makes my turn a little bit negative, but then there’ll also another swing factor being FX that might actually turn positive in your favor. How do you think those two forces will balance out in the second half of the year? And are there are other big swing factors we should be thinking about as we March through the second half

Well, I’ll pass it on to Antonio, but I would say that while one can focus on currency and mix, the important thing is to look at the margin, and we anticipate continued increase in the margin versus prior year.

John, I think the way we look at the guidance for the year is that mix should be substantially neutral compared to 2017, and that means the last quarter [indiscernible] is the comparison with the last quarter of 2017. In terms of the FX we compare the impact of what we have seen so far up to the end of June. And the second half of the year should bring up to a range of negative impacts of the FX for the full year in the range of €80 million to €100 million that I think that have been already communicating in the past and based on the visibility we have so far there is no significant reason to change that view.

I am sorry. Just one last follow-up. If we adjust the revenue and the EBITDA for the swings in ForEx or the headwinds in the second quarter, it appears that the EBITDA margin will be closer at 34.5%. I am just looking at slide 6 and 7 and literally just backing out the year-over-year headwinds from ForEx. Is that any incorrect calculation? Itt seems like the margins may have been a lot better than they are printed?

The sense that we have is that margins will not be significantly different because we have -- there’re number of items that are contributing to the average margin of this quarter and the previous one, and including of course the positive mix and that is partly compensated by the FX impact. Not expect that at constant currency this should bring to a significantly better margin. This is not to a level that may allow you to project much better for the rest of the year.

Our next question comes from Michael Binetti of Credit Suisse. Please go ahead.

Can I just ask you - and since you’ve already violated Nicoletta’s request [Indiscernible] from 2022, now I think Louis it won’t be lost on you that a quite a bit of the stock move lately has been related to some uncertainty related to the changeover after Sergio has left. Is there -- we’ve talked a lot about what is a target of 2 billion in EBITDA. Is that still where you think this brand can go at a high level through 2022? And I know we’ll go through a lot of the details at the analyst day, but I do think it was important to ask that?

I understand your question and I understand that there’s been some pressure on the stock, given that everybody was shocked by Sergio’s sudden and very unexpected disappearance. I don’t want to cut your question, but I do want to sort of reiterate that the targets are set, we will cover those and considerable detail in September. There are aspirational targets. We are looking at the plans in great detail now, and I'll be able to tell you with much more confidence in September. But I think I believe although there are some risks out there, there are also opportunities. So that number is certainly an aspirational target and we will do everything we can in terms of our plans to get there. Beyond that, I can't tell you much.

And I guess maybe any initial observations you had. I know you haven't been in headquarters for long, but I know you the brand well. Any initial observations on some of those things that the company has talked about more in the near term as far as investment levels related to some of the changes coming on over the next few years on the drive train. I know we've spoken recently about a plan to convert to selling cars in Euros globally to take FX risk off. You feel confident in what you see early on that those kinds of strategies can still go forward in the more near term.

In terms of the product portfolio, I feel very confident we have a great line-up coming up. In terms of Euro pricing, our business subject that's being sort of analyzed by virtually every angle for the last 12 months, and I have to tell you we've come for the conclusion to such an action pricing in Euros worldwide would have adverse consequences on our clients, on our dealers and generally our market dynamics. So ultimately it would be a negative adverse consequence on us. Having said that, I do recognize that currency affects our results and clearly affects the predictability of our results. All I can assure is that we’ll do everything we can going forward to offset or to mitigate the volatility of this component of our P&L. And I believe this house has [considers] leaders to try to achieve that.

Our next question Adam Jones of Morgan Stanley. Please go ahead.

I wanted to echo my condolences and extremely sorry for your loss, and I want to thank you for your very kind worlds Louis at the beginning, and you Antonio as well for this great man, great human being we lost. A couple of questions. Do look forward to meeting you in next month or in September. Louis, just a couple of you and then other one for Antonio. Sergio was an incredible enigmatic leader and have the great-great qualities as you highlighted. With total respect for that, I'm wondering - everyone does bring their own unique strengths and experiences to a CEO leadership role and just a high level not violating the September CMD covenant. What high-level things do you envision doing differently or otherwise executing in a different way you could share?

Listen, everyone is different. I can tell you that Sergio and I shared the same ambitions for the company. I have a different style, but that’s natural. None of us are the same. I think my record a CEO sort of speaks for itself in terms of my ability to manage complex and highly regulated industries. I think I am a team builder. And Sergio had a lot of other things on his plate. I have a singular focus on Ferrari, and I will be here permanently. And I would hope that that would make a difference.

Louis, another one for you. I am sorry if this across a strange. But some cities, very important, very wealthy cities where there are many Ferrari owners and repeat owners and multi Ferrari owners, cities like London or communities like Hong Kong, those kinds of places are according to their local governments, let’s say, are talking about an eventual potential elimination of license plates for cars that have tailpipes. The results without politicizing that or getting caught up in time horizons and things, just that contemplation is something that's interesting and by our reckoning it’s been taking seriously at some point. Do you think of Ferrari that makes no internal combustion engine noise or would have a no tailpipe can be a Ferrari?

That’s a very valid question.

That's why I asked.

Yes. I - listen, I was beeped in the history of Ferrari. I think I understand Ferrari’s DNA and I am surrounded by a senior management team that certainly understands the importance of this brand equity. So Ferrari will always remain a Ferrari, and if I can quote our founder, the next car will be better than the previous one. I think we have the technological skills and the know-how within the company that can respond to any regulatory issues that will arise. The one you mentioned I think is a longer term one, and we can do it whilst it will remain a Ferrari, a unique exclusive car, one that’s at the pinnacle of the automotive industry. So I'm pretty confident we can get there if necessary, but I think your question is a much longer time one. I think that was the chaos.

Understood. Louis. Antonio, just one final one for you on the kind of remainder of the year horizon. The change in the sponsorship revenue and the championship ranking on the EBITDA bridge was significant. It's strikes me at something that you should have a very good visibility and doing in some part because there is a lagging nature to it and a bit more predictable nature. So with that in mind, could you provide a bit of either rest of year-end on sense of what that delta could be in the remaining quarters? Thank you very much, everybody.

I think you're addressing the point of the other contributing to be EBIT change in positive for the quarter. The way we look at the rest of the year is that the positive that are coming from the first and the second quarter would be absorbed in the third and the fourth. So we think of other being rather neutral at year end on a full-year basis. And in terms of the ranking, do not forgot that for the time being we assume to be rank number one in the championship. So that -- I gave is based on that redemption.

And just to be clear that we really want to win this championship, and if we do because of the way the incentive programs are set up, that's a negative on the year but clearly a positive into next year.

We will now take our next question from Martino De Ambroggi of Equita. Please go ahead.

The first question, as Nicoletta suggested, is on the quarterly results on the EBIT bridge, looking at the price mix 8 million positive contribution, I suppose I assume this is entirely price it's not even more considering the mix probably was negative in this quarter. Am I right in take these assumption?

Certainly price is contributing. And in terms of the overall impact of this is rather, if I take everything out, it's rather neutral we should say. So price is basically amounting to close to the full amount of the positive price and mix?

Okay and this is the value we should expect for the rest of the year, also for the second half.

As we've said on recent price we expect to rather to be rather neutral as of year on a full-year basis.

Okay, including prices.

They are quarter-by-quarter when you look at that, particularly in 2018, you see the Ferrari Aperta contributing negatively. And instead depending on the quarter, we might have the -- which was more of the contributing positive and the mix initially and then the strength be as likely reduce we are entering.

Okay and the other two questions are on more long-term related issues for Louis. What's your personal view on the rollout to retain the exclusivity of the brand that going forward? First question. And the second, what's your personal view on the Formula 1 ongoing negotiations? I know there has been a long time before the expiry of the exiting concept, but as Sergio had a clear view, showed in the past. I don’t know if you have a different view?

Could you repeat your first question? I am not -- I understood their this…

Yes, what are the basic rules to retain the exclusivity? So it means that obviously more than single digit growth going forward. I don’t know if they reach that threshold you consider something that cannot be exceeded. What could happen after exceeding the 10,000 cars losing the smaller vehicle producers starters and you will be obliged to pay some penalties in some regions. So just overview on the exclusivity?

I think as has been said before. We’re very focused on revenues, less on volumes. We will surpass the 10,000 threshold at some point. But I don't think that will adversely affect our brand equity and the exclusivity of the brand. That’s something we’re all very, very focused on. I view my job in part as being the guardian of that brand equity, and I can assure you that Ferrari will remain Ferrari. As to crossing the 10,000 threshold, I think -- again that's been debated at length and discussed in the past, and given the hybridization of the powertrains, we do not believe that that's an issue on hybrids going to come and going to stay longer term. So that's what I would say in terms of the Formula 1. Yes, there’ve been a number of discussions in terms of the next Concorde Agreement. I believe there's been some progress on the technical side. There's less progress on the budget caps and economics and the governments’ aspects. So I Sergio and I saw eye to eye on Formula 1 going forward.

We’ll now take our next question from Thomas Besson of Kepler. Please go ahead.

I had a few questions as well. I’ll start with the impact you may see on the Chinese business from the tax change and what is your view is on the potential impact of overall tariff on your business outside Europe?

Well, as you know the tariffs were reduced and I think the commercial team should be complemented as to how they handle that because others have suffered and we did actually very well within those conditions and prepared ourselves well for that decline. Obviously the price has come down as it has across the board, but we see a pretty bright future in China and we expect our business there to continue to grow.

Second question. You talked about a very large order books and whole good days. Can you tell us what's your view of [Indiscernible] order books? Don’t you think that three, four years is too much, maybe 12 to 18 months is the maximum you should have?

I think I've mentioned of three and four years is long, but I don’t think that that’s across the board. It's for maybe one or two specific models and one or two specific geographies. So the way I look at it is that some of our models have about a two-year waiting period, between 18 months and two years. That's the general thing. And some of them are slightly less than 12 months. So I wouldn’t look at the extreme of just three or four years. Those are rather exceptional.

I have a last one please for you, Louis. You have said I think three or four times in your initial comments about the 2022 targets were aspirational. Can you say whether that is the general expectation of [Indiscernible] meaning that their ambitions, small necessarily they have to motivate employees as much as investors? Or whether you meant that is aspiration is probably a something which is to ambitious to be at least.

No I didn’t say that. I think I said that both Sergio and I had the same ambitions. And I was rather differ to the Capital Markets Day to give you the plans and initiatives we have in place and that are being developed to ensure that we meet until as those targets.

Our next question comes from Monica Bosio of Banca IMI. Please go ahead.

I would like to know -- I would limit two housekeeping question as if we will meet in September. But the first one is on the level of personalization, if you can just indicate up the current level of personalizations on cars. The second question is one the product effect. Sorry to come back to these issue once again, but I had seen that impact on the first half has been in the range of 70, of which 32 a fair number in the second quarter. I remember that the previous guidance was a totally impact on the EBITDA between 80 and 100 million. I was just wondering if you can confirm this target, because I lost the previous answer. And the first question is on Maserati. I know maybe it’s not the right moment to speak about this, but Maserati going down I am just wondering if we should expect the same slowdown for the next quarter. And if you’re a commenter on Maserati for the future, also on the back of the second quarter results of FCA?

In terms of the FX I think I already answered before, I mean we confirmed the guidance $8,200 million for the full year. With respect to Maserati, I the volumes that we’ve seen so far reflected the volume reduction that they reported. In terms of the rest of the year, we are talking about change with respect to 2017. We’re waiting to see what the final number they would require to us to produce. In terms of the impact on EBIT in any event, given the take-or-pay nature of the agreement in place, we should not expect a material impact there.

Okay, sorry. Another follow-up. Any views from the back-end buffer?

Let’s say -- we expect to be in a position to be a better indication during the next quarter.

Thank you. I am sorry -- the personalization?

The question is. The year-over-year in Q2 they are neutral. There’s no significant impact.

Our next question comes from Stephen Reitman of Societe Generale. Please go ahead.

I’ve two questions. You partially answered about LaFerrari Aperta, which has been none its -- finishing it’s series on to quite time. I just wanted to get an idea of sort of volume impact in the second quarter and the first half and I mean is this over now or will this -- there’ll be some cars sold in the second half of this year. And also if you comment maybe on the impact of J50, how many of the [indiscernible] cars are delivered in the second quarter? And my second question is about the sort of the role of special hyper class the limited edition vehicles. If you feel that soon the number of vehicles feel there’s scope to increase the number of those vehicles that form parts of your model range and against your series cars because we see this has a very big impact on your whole margins?

First of all in terms of the -- no we do not communicate in terms of the units. We expect the LaFerrari Aperta basically to come to conclusion of its life cycle by the end of the year and in terms of the J50 and we expect to have some few units to be sold for the rest of the year and a few units were sold even in Q1 and Q2. So the impact of the phase-out of the LaFerrari Aperta is partly compensating the positive that we have during the quarter and then we extended this way. I answered before saying that mix is rather neutral. In terms of what we expect going forward is that this is going to impact the free phase-out of LaFerrari Aperta is going to impact negatively Q3 and Q4. And the ramp-up of the Portofino that respected is not compensating full. And that reinforce our expectation to have mix on a full-year basis neutral.

And I would say we were very focused on the importance of hyper cars, that it's been of sort of 10 year cycle and whether we can shorten that cycle and something clearly that we have to look at carefully.

Our next question comes from Giulio Pescatore of HSBC. Please go ahead.

Can you for taking my question. The first one would be on the Pista. Can you give us an update on when the Pista will start shipping this year or perhaps next year? And what sort of volumes are expecting for 2018 and 2019? And could those shipments of Pista offset to a certain extent the negative mix into the perhaps the last quarter when this model ramps up so that's your first question.

The Pista is expected to -- would be first introduced in Q3 and grow in Q4, ramping up that is one of the positive contributor to the mix for the second half of the year. But I don’t think we have communicated ever any volume target for other half.

Okay, the second question would be on the engine segments. Could you still accelerate a little bit more on how this [Indiscernible] work so well in the bridge, would you see the payments coming from -- to compensate for the lower sales. Is that in the other line? Is that contributing to the strong other performance that you are seeing in the first two quarters?

The take-or-pay act to the compensation for reduced absorption cost absorption, and the impact of that is going to be in the other.

And perhaps one last one. You mentioned that you don’t expect to go ahead with moving them the prices to Euro. In the past year, we've said quite clearly. That there was no reason why that should not happen given the strength of the [Indiscernible]. But you can elaborate a little bit more on why you are taking the step back, why you are taking this decision to give things as they are at the moment?

Because after considerable study we came to the conclusion that it would adversely affect market dynamics. And I can confirm to you that Sergio in the very recent past had strong reservations about it too.

It's market dynamics that includes everybody.

We will now take our next question from Fei Teng of Berenberg.

My first question would be to Louis. I’m happy to see you joining. Just going back to the topic of pricing, I mean given that you’ve previously been in an industry, that’s also been driven to a large degree by pricing. I just want to get your thoughts on whether you think there are parallels that could brought from back of it for the luxury car industry in terms of things like managing prices and demand. And I guess if there’s anything that you would tweak Ferrari does on pricing at the moment outside offsetting currency?

Well clearly, where I come from, we had quite a lot of pricing power, but it sort of pales in comparison to the pricing power that this house has. I would say that my experience has been in terms of pricing is close razor focus on price structures from the ex-factory price all the way down to the retail price. Tax structures per se, duty structures, things that can be changed to our advantage, and that’s something that I think I can bring to the table in terms of pricing going forward. I think that we will always have this delicate balance between price and mix and volume to achieve our margin and income objectives.

And my next question would be on the Formula 1 business. I guess first of all would you be looking to stay as involved as Mr. Marchionne was in the governance of sport? And I guess more broadly would that be ideas that you would like to bring to discussion that you haven’t been in focus so far?

Well, in all humility, yes, I will be involved. I am not sure that I can bring new ideas. I think that the focus has been on very much on slicing up the cake as it exists today, and I don't think enough focus has been given to increasing the size of the cake. So that's one aspect that I think I can bring value to.

And I guess in terms of the relationship with Philip Morris, are you happy with the existing relationship today in terms of sponsorship? Could there be scope for any changes that could benefit either side?

Well, we have a contract in place till 2020. And we've been -- Ferrari has had an agreement with Philip Morris for I believe it's now 45 years. It’s a long-term relationship that I believe has been mutually beneficial and will continue to be.

And is there any update on finding a replacement for Santander as the second sponsor?

I think that we’ve taken that over. When I say we, Philip Morris. So Santander has -- the impact of Santander has been more than offset by the Philip Morris sponsorship.

We’ll now take our next question from George Galliers of Evercore. Please go ahead.

Just follow up on the Formula 1 question, and I think you made it clear that when you see more focus on increasing the size of the pie rather than how it’s split. But in light of Force India being placed into administration last week, does it matter from Ferrari's perspective how many teams are executing in Formula 1? Or would you be comfortable it was just yourself that to other works teams and Red Bull rates next weekend?

No, I think that we want a number of teams out there that's hope nice Formula 1 what it is. Some portion of proceeding feel into administration as you say and we will see going forward. But clearly there are other examples of teams that are doing extremely well, who don’t necessarily have the kind of budgets that others maybe have. I think in principle budget caps are probably a good thing, but the devil is in the details as to how those caps are detainment and calculated.

And then the next question is just as we think about ramp-up to put keynote, just kind of looking at the California and then the orders you are seeing propose to [Indiscernible]. Are you seeing those step-up in personalization with the new vehicle, but it is what you saw historically with the California and how does personalization input compared for example with the 48K to our other vehicles in your model line.

I think for time being we are projecting to add they are inline no major difference is in terms of being around the personalization and the size of the value the personalization for such car compared to the California, as of now.

So that concludes today's question-and-answer session. At this time I will turn the conference back over to Nicoletta Russo for any additional or closing remarks.

Thank you, Tani. Thank you everyone for joining us today. The Investor Relations team will be soon available for any follow-up question you may have. Thank you.