The business of Ferrari—the “World’s Most Powerful” brand

The Philippine Star

MANILA, Philippines - After 2012—its best ever year—the company decided to reduce the number of cars sold to maintain a high level of exclusivity and increasing their value over the time. The concept worked: there were reduced sales in 2013, but record turnover, profits and finances. This fact was highlighted during the meeting of the Ferrari Board of Directors held recently in Maranello under the chairmanship of Luca di Montezemolo to examine the end-of-year financial results.

While the number of cars delivered dropped to 6,922 cars (-5.4 percent) in 2013, revenues rose by 5 percent, eventually reaching an unprecedented 2.3 billion euro. End-of-year trading profits reached a record 363.5 million euro (+8.3 percent). Ferrari also delivered net profits in excess of 246 million euro (+5.4 percent). RoS (Return on Sales) leapt to 15.6 percent, on a par with the very best-performing companies in the luxury sector.

The finishing touch to this very positive scenario comes from the significant investments made by Ferrari over the last 12 months, which, including Research & Development, reached an overall figure of 337 million euro (up from 324 million in 2012), almost 15 percent of revenues. These investments were completely self-financed thanks in great part to the fact that the company’s excellent cash flow has been on the increase for some time now, jumping again in 2013 and resulting in a net financial position of 1.36 billion euro, the best ever in Ferrari’s history.

“This is a very important result that comes as a direct consequence of the huge effort made by everyone. We wanted to maintain a high level of exclusivity, designing amazing products such as the LaFerrari, the 458 Speciale and the just launched California T, the result of significant investment in product and technological innovation,” said president Luca di Montezemolo. “We have also taken important strategic decisions relating to Brand which will make an ever increasing contribution to the success of the company. A great source of satisfaction to us all is that we have been named the world’s Most Powerful Brand once again: confirmation we have succeeded in enhancing the value of this incredible brand.”

Today, 100 percent of the cars are personalised, with the Tailor Made program gaining in strength. The Classic Department is constantly increasing its activity and profitability.

The strategy regarding deliveries to the dealership network announced in the course of the year involved a planned overall reduction in volumes, but paying attention to those markets experiencing very strong demand to avoid excessively long waiting lists.

One example of this is the USA where there were a record 2,035 deliveries, an increase of 9 percent on the previous year.

The UK market grew slightly and, with 677 cars delivered, set a new record and became Europe’s leading market, overtaking Germany, where deliveries stood at 652, a drop of around 100 from the previous year. Sales in Italy were down once again. Italy has become a marginal market for the luxury car sector: with 205 orders it now represents less than 3 percent of Ferrari’s global sales.

In Greater China (People’s Republic of China, Hong Kong and Taiwan) sales were good, standing at 700, allowing it to retain its position as the second largest market worldwide.

The positive trend continues in the Middle East and Africa with an increase of 8 percent bringing to 599 the number of homologated cars delivered to the network.

In the Far East, Japan performed exceptionally well once again in 2013, ending the year on 380 cars, a leap of over 20 percent.

Ferrari also enjoys an excellent online and social network presence. The official Ferrari website attracted over 40 million visitors while the brand is one of the leading lights of the global social media scene with 12.5 million fans on Facebook, up 25 percent from 2012.

On the Formula 1 sponsorship front, Ferrari signed two major deals, one with leading logistics expert, UPS and the second with eyewear company Oakley. Aside from its logo appearing on the Scuderia drivers’ helmets, the latter will also develop a new range of eyewear.

In the meantime, leading London-based brand valuation experts, Brand Finance, have named Ferrari the world’s Most Powerful Brand for the second consecutive year, awarding it an AAA+ rating that puts it ahead of highly-respected and established multinational consumer companies. The brand rating not only takes into account financial metrics, such as average revenue per customer and investment, but also a complex array of other parameters, including brand affection and loyalty, client management and human resources. 

Lastly, on the anniversary of the birth of Enzo Ferrari, the company embraces a new challenge by taking over the management of the Museo Casa Natale Enzo Ferrari in Modena. Located in the heart of the city, the museum will complement the activities of the Ferrari Museum in Maranello which attracted a record 320,000 visitors in 2013, making it one of Italy’s most popular museums.

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