Ferrari N.V.: Periodic Report on the Buyback Program

Rhea-AI Summary

Ferrari N.V. (NYSE/EXM: RACE) has announced the purchase of Euro 350 million worth of common shares as part of a multi-year share buyback program expected to be executed by 2026. The company has bought a total of 35,165 common shares on the Euronext Milan (EXM) at an average price of 310.5251 euros per share, totaling 10,919,616.34 euros. The total invested consideration since the announcement of the fourth tranche has been Euro 64,504,920.99 for 198,094 common shares purchased on the EXM and USD 30,295,782.71 (Euro 27,798,654.09*) for 83,738 common shares purchased on the NYSE. As of January 10, 2024, the Company held in treasury 13,540,574 common shares equal to 5.27% of the total issued share capital. Since the start of the multi-year share buyback program, the Company has purchased a total of 2,616,116 own common shares on EXM and NYSE, including transactions for Sell to Cover, for a total consideration of Euro 651,500,336.22.

Financial Analyst

Ferrari's announcement of share buybacks under its substantial Euro 2 billion program indicates a strategic move to enhance shareholder value and potentially signal confidence in the company's future prospects. Share buybacks often lead to an increase in earnings per share (EPS) by reducing the number of shares outstanding, which can be attractive to investors seeking capital appreciation.

From a financial perspective, the allocation of Euro 64.5 million towards the repurchase of shares on the EXM and USD 30.3 million on the NYSE, translating to a considerable number of shares bought back, reflects a significant cash outflow from the company's reserves. This could suggest that Ferrari's balance sheet is robust enough to support such a large capital return to shareholders without compromising its operational needs or growth investments.

However, it's crucial to consider the opportunity cost of this buyback. The funds used could have been allocated to other initiatives like research and development (R&D) or expansion. Investors should weigh the immediate EPS benefit against potential long-term growth opportunities that may have been foregone.

Market Research Analyst

Ferrari's buyback program is a reflection of its market positioning and the luxury automotive industry's dynamics. The company's ability to initiate such a program could be indicative of strong brand equity and pricing power, which enable it to generate substantial free cash flow. This move might be interpreted as a positive signal by the market, leading to bullish sentiment among investors.

Additionally, the buyback's impact on share price can be significant. By reducing the supply of shares in the market, Ferrari's share price could experience upward pressure. This action also serves as a tool to manage market expectations and can be seen as management's commitment to delivering shareholder returns in the absence of other investment opportunities that meet the company's strategic criteria.

It is important for stakeholders to monitor the long-term effects of the buyback, including how it impacts the company's capital structure and its ability to maintain a competitive edge through innovation and strategic investments.

Economist

The execution of a share buyback program of this magnitude may also have broader economic implications. For instance, it could reflect underlying economic conditions that favor financial engineering over capital investments in the current market environment. Such strategic financial decisions are often made in the context of low interest rates, where companies can finance buybacks through debt at a relatively low cost.

Moreover, this repurchase program could be a response to macroeconomic factors, such as currency fluctuations, particularly the EUR/USD exchange rate, which can affect the repatriation of profits and the relative cost of buybacks on different exchanges. Ferrari's decision to conduct buybacks on both the EXM and NYSE allows for flexibility in capitalizing on these currency movements.

It is essential to analyze the timing of the buyback within the economic cycle, as repurchasing shares during a market peak could lead to suboptimal allocation of capital, whereas buying back shares when the market undervalues the company could be beneficial in the long run.

Maranello (Italy),  January 11, 2024 – Ferrari N.V. (NYSE/EXM: RACE) (“Ferrari” or the “Company”) informs that the Company has purchased, under the Euro 350 million share buyback program announced on November 7, 2023, as the fourth tranche of the multi-year share buyback program of approximately Euro 2 billion expected to be executed by 2026 in line with the disclosure made during the 2022 Capital Markets Day (the “Fourth Tranche”), the additional common shares - reported in aggregate form, on a daily basis - on the Euronext Milan (EXM) as follows:

Trading Date (dd/mm/yyyy)	Stock Exchange	Number of common shares purchased	Average price per share excluding fees (€)	Consideration excluding fees   (€)
04/01/2024	EXM	7,070	307.6082	2,174,789.97
05/01/2024	EXM	7,198	305.2166	2,196,949.09
08/01/2024	EXM	7,119	308.9362	2,199,316.81
09/01/2024	EXM	6,882	314.4993	2,164,384.18
10/01/2024	EXM	6,896	316.7309	2,184,176.29
Total	-	35,165	310.5251	10,919,616.34

(*) translated at the European Central Bank EUR/USD exchange reference rate as of the date of each purchase

Since the announcement of such Fourth Tranche till January 10, 2024, the total invested consideration has been:

• Euro 64,504,920.99 for No. 198,094 common shares purchased on the EXM
• USD 30,295,782.71 (Euro 27,798,654.09*) for No. 83,738 common shares purchased on the NYSE.

As of January 10, 2024, the Company held in treasury No. 13,540,574 common shares equal to 5.27% of the total issued share capital including the common shares and the special voting shares, net of shares assigned under the Company’s equity incentive plan.

Since the start of the multi-year share buyback program of approximately Euro 2 billion announced during the 2022 Capital Markets Day, on July 1, 2022, until January 10, 2024, the Company has purchased a total of 2,616,116 own common shares on EXM and NYSE, including transactions for Sell to Cover, for a total consideration of Euro 651,500,336.22.

A comprehensive overview of the transactions carried out under the buyback program, as well as the details of the above transactions, are available on Ferrari’s corporate website under the Buyback Programs section (https://www.ferrari.com/en-EN/corporate/buyback-programs).

For further information:
Media Relations
tel.: +39 0536 949337
Email: media@ferrari.com

Attachment

• FNV BB PR 11 January 2024 ENG

FAQ

How many common shares has Ferrari N.V. purchased as part of the multi-year share buyback program?

Ferrari N.V. has purchased a total of 35,165 common shares on the Euronext Milan (EXM) and 83,738 common shares on the NYSE as part of the multi-year share buyback program.

What is the average price per share of the common shares purchased by Ferrari N.V.?

The average price per share of the common shares purchased by Ferrari N.V. is 310.5251 euros on the Euronext Milan (EXM).

What percentage of the total issued share capital does Ferrari N.V. hold in treasury?

As of January 10, 2024, Ferrari N.V. holds 13,540,574 common shares in treasury, equal to 5.27% of the total issued share capital.

Where can I find more information about Ferrari N.V.'s buyback programs?

More information about Ferrari N.V.'s buyback programs, as well as a comprehensive overview of the transactions carried out, can be found on Ferrari's corporate website under the Buyback Programs section.