Ferrari looks to boost profit margin through 2022 with special edition supercar
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Ferrari looks to boost profit margin through 2022 with special edition supercar

In what is being widely touted as a test for its new CEO, Ferrari has announced a strategic focus on a new special edition supercar that, it hopes, will boost profits through to 2022. Louis Camilleri, the man who took the helm at the iconic supercar maker following the unexpected death of Sergio Marchionne, has released his highly-anticipated five-year strategy plan. And at its heart sits what has been known as the “Icona” project, which was revealed yesterday as the “closest thing to a Formula 1 racer ever built for the public market.”

Ferrari’s share price has risen by 12% over the past 30 days

graph 1909 ferrari

SOURCE: Yahoo Finance

Ferrari revealed the carbon-fibre 810-horsepower Monza, a special edition supercar, yesterday. Coming in both one- and two-seat options, the 12-cylinder machines will be able to reach 100 kilometres per hour in less than three seconds. And Ferrari will only make 500 of them.

The announcement amounts to a significant expansion of the company’s limited edition model offerings – a category that tends to come with multimillion dollar price tags and provides the company’s profit margins a significant boost. The move was teased last month with a special invitation to customers.

Camilleri told investors yesterday that the company now expects earnings before interest, tax, depreciation and amortisation to be in the range of 1.8 billion to 2 billion euros in 2022. That’s a modest pullback from Marchionne’s stated goal of dead-on 2 billion euros by 2022. Camilleri, however, did keep plans for the Ferrari SUV, called the “Purosangue”, which he says will hit the market by 2020.

Marchionne’s exit from the top job came as a surprise to investors, as well as company officials. Widely seen as a ‘superstar CEO’ he’s a tough act to follow. So it’s unsurprising that the company’s share price took a hit on his passing. However, the market has signalled a cautious faith in his replacement, and the last month has been kind to Ferrari’s market cap. Whether or not that trend continues over the near future is, in large part, down to investors’ response to Camilleri’s highly anticipated strategic plan.

Disclosure

Dominion holds Ferrari in its Global Trends Luxury Fund.


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