At this time all participants are in a listen-only mode. [Operator Instructions] I must advise you that the call is being recorded today on Monday, the 4 of May, 2020. I would now like to hand the conference over to your speaker for today, Ms. Nicoletta Russo. Thank you. Please go ahead.

Thank you, Maria. And welcome to everyone who is joining us. As you can imagine, today the team is connecting from different countries, so please forgive us any moment of silence during this call. Today’s call will be hosted by the Group CEO, Louis Camilleri; and Group CFO, Antonio Picca Piccon. 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 said, I’d like to turn the call over to Louis. Thank you.

Thank you very much Nicoletta. Welcome everyone. I very much trust that you and yours are well and safe and that you are all taking the necessary precautions to protect yourselves and your loved ones. I will focus my introductory remarks on the current situation and provide you with as complete a picture as is possible in these unprecedented and unpredictable times. All in all, I would state upfront that we are in relatively good shape, particularly as it relates to our core business. And that’s how we are able to withstand a prolonged downturn. I also believe that we have taken and are taking the appropriate measures to deal with these crises in a manner that will ultimately make us stronger. We have often claimed that while we are not immune to economic or other brutal shocks, we are significantly more resilient than most. This crisis will serve to hopefully underscore this claim. Our faith rests on the strength of our iconic brand equity, the skills, determination and fortitude of our organization, our technological innovation and design superiority, our close and vigorous relationship with our suppliers, and the quality of our dealer network, and ultimately the loyalty of our customers which translates into our strong order book. Before I touch upon our first quarter results and shed more color on our revised guidance for the year, I will address the key actions we have take to date, the challenges that lie ahead, and the impact that this pandemic is likely to have on our results in 2020. Our first and foremost priority has been and remains the wellbeing and welfare of our employees. While full compliance with national or regional prescriptions to combat the spread of this virulent disease has been a key factor in all decisions taken, we…

Thank you, Louis; and good morning or afternoon to everyone who is joining us today. Starting on Page 9, as Louis said, Q1 2020 results represent a good start of the year for our core business, just partly offset by the performance of all other and particularly of the Formula 1 activities. Our shipments grew 4.9% or by 128 units, mainly driven by the robust deliveries of the 488 Pista and the 488 Pista Spider. Group net revenues were almost in line with prior year to €932 million. Adjusted EBITDA increased to €317 million improving by €6 million or 1.9%. Adjusted EBITDA margin was 34%, up 90 basis points versus prior year. Adjusted EBIT was down €12 million to €220 million embedding higher D&A. Adjusted diluted EPS was down 5.3% to €0.90. Industrial free cash flow for the quarter was €73 million. As a reminder, prior year free cash flow was boosted by the collection of the advances for the Ferrari Monza SP1 and SP2 equal to roughly €170 million, a portion of which is evidently missing against the deliveries of this year. Moving to Page 10. You can see the details of Q1 2020 shipments. Volumes rose despite delivery is being suspended earlier than expected due to the COVID-19 pandemic. Nevertheless, total shipments for the quarter increased 4.9% supported by a 5.7% increase in V8 models and a 2.4% increase in V12 models. This growth mainly reflected the robust deliveries for the 488 Pista and the 488 Pista Spider along with the ramp up of the F8 Tributo. This more than offset the 488 GTB and the 488 Spider which concluded their lifecycles in 2019. Deliveries of the Ferrari Monza SP1 and SP2 were in line with our expectations. In terms of geographic performance, EMEA grew 25.4%, Rest of…

Thank you very much, Antonio. We are now ready to start the Q&A session. Please, Maria, I hand over to you for the instruction. Thank you.

Thank you. [Operator Instructions] Your first question comes from the line of John Murphy from Bank of America. Please go ahead. Your line is now open.

Good morning and good afternoon everybody. It’s great to hear from all of you. I have a number of questions. But, Louis, I just wanted to start first on how you’re managing sort of the makeup of these 2,000 units of production you’ve lost sort of in the downtime. You’ve got real discretion given the order backlog as we know it right now as to how you have to make up with these deliveries over time? And I’m just curious, it sounds like you may make up 50% in the second half of this year. But as we think about 2021 and maybe the remainder being made up in 2021 or maybe all of those being made up in 2021, depending on how the world shapes up for all of us in the second half of the year. Just curious, could you or would you be willing to have a big spike in what would look like year-over-year growth in unit volume in 2021 to catch up? Or would you more conservatively kind of have a normal growth rate or a lower growth rate and not try to make up that unit volume? I’m just trying to understand how you’re going to manage this volume growth going forward. And if 2021 will still kind of look like you expected it before plus the catch-up or will you just kind of try to keep it at what you look – what it was going to be previously in absolute terms. Do you understand that?

Yes. Very clear question. I would say, John that very much hinges, as I mentioned in my opening remarks and Antonio referred to it as well, the key is ultimately the order book. So we want to end the year with a very strong order book, and that will somehow dictate the deliveries in 2020, which in turn basically predicates the range we have on the low end and the high end. So to have a strong order book has always been a key ingredient of our business model and growth model. And therefore, depending on the size of that order book, that will dictate the amount of deliveries in 2021. Clearly, we don’t want a waiting list specifically on certain models that it’s too long, especially for those models in which we want to attract new customers. So I can’t really give you a specific answer. I don’t want to skirt the answer, but it really depends on the order book. We will do our utmost if the order book and the level of cancellations are going to be in line with our expectations. As Antonio mentioned, we can work on Saturdays, we can reduce the summer holiday by a week, so we can catch up some of the volume production, always with a cautionary eye to our supply chain. So there are a lot of parameters involved in this year. And ultimately, the order book will dictate very much the tempo and cadence of our deliveries in 2021. Is that clear?

Yes. That’s helpful. And maybe if I could follow-up. If we think about the Monza and your higher-line vehicles having a much sticky – stickier and stronger order book, I’m just curious if in the interim for financial strength, cash flow build and to some extent, smoothing the financials in a healthy way, does it make sense in the near term as you’re going through the weakness in the second quarter and maybe even in a little bit in the third quarter to pull forward some of these deliveries to drive the strength – the financial strength of the company in the near term in a way that you might have a few more deliveries incrementally here in the near term than you would have otherwise?

Well, clearly, that’s something we look at, however, it is somewhat constrained. I.e., if I take the Monza out, which is the highest-margin model, both the SP1 and SP2, we do have capacity limitation. As you know, we put in a new line just for the Monza. We can’t suddenly increase the production in a dramatic manner or even an added manner. So there is a capacity constraint on the Monza. On the other high-margin cars, as Antonio said, the SF90 is only coming after the summer, so the impact relative to 2020 will be quite limited.

Okay. That’s helpful. And then just secondly...

And that, we’ll take into account in our guidance.

Yes. Okay. Thank you. And then the acceleration of the brand activities, obviously, there’s a lot of stuff that’s obviously going down here. Could this be a period where you accelerate some of the rationalization of those activities where things just don’t go back up and you just focus on a narrower sort of higher-line, higher-profit, higher-brand-supporting activity and really take it as an opportunity to run that rationalization potentially faster than before?

Well, I think we’ve executed against the strategy quite rapidly. As you can imagine, we do have certain contracts with a certain duration. So to early terminate would not necessarily be in the best interest of the P&L. So we have that constraint. To the extent that we have opportunities to accelerate the termination without any termination fees, that’s certainly something we would follow up. But I would say that in terms of cleaning up the portfolio, the team has really executed extremely well and very rapidly.

Okay. And then just lastly, real quick on the share repo program. Given the sort of suspension here, what metrics are you looking at to reinstate the share repo program? And it seems like it’s a bit of an overabundance of caution on the balance sheet because you have – seem to have tons of room to potentially continue to go after it. Just curious when and how you think about that share repo program being reinstated and maybe getting more aggressive in the market?

Well, there isn’t any specific timing. Time will tell clearly at the higher range with the order book a strong – a relatively low level of cancellations and stronger order intake that would drive our cash flow. The – somewhat, there is a question, as you know, on share repurchases in the post-COVID-19 environment with more and more political calls to sort of ban share repurchases. So we’ve got to keep our eye on that. But clearly, this company will generate excess cash flow. And we, in one way or another, will find the best way to get that cash to shareholders.

Great. Thank you very much.

Thank you, John.

Thank you. Your next question comes from the line of Giulio Pescatore from HSBC. Please ask your question.

Hi. Hi, everyone. Thank you for picking my questions.

Hi, Giulio.

And congratulations on reopening the plant today. So I was – to start with, I would like to ask a question about your comment on the lack of liquidity in the secondhand markets. I think it’s very interesting. I mean are you worried about the longer-term implications of these impacts? Are you seeing any pockets of weakness as a result of this? Or you think it’s just – everything will go back to normal as the dealerships reopen?

Well, clearly, the market now is essentially dead because there’s no trading. Most of that is because a lot of the dealerships are closed. And I think people are cautious as to the pre-owned markets for the time being. If you go back to the financial crisis, there was a reduction in residual values. But here, we’re looking at a very different situation. So I think we need to wait to see when the market really opens up as to what will happen. We monitor it very closely. But my sense is if and when normality resumes, the pre-owned market, certainly relative to our luxury competitors, should continue to be strong.

Okay. Very clear. And then, second one, if I can. Then on the bottlenecks on – at the dealer level, do you expect to see – is there a problem with the dealers in terms of catching up in new orders as these orders come in? Are they constrained in terms of the process of personalizing the car, even getting the delivery of the car? Is there any issue in terms of how quickly they can scale back up?

No. I don’t think so. I mean they’re clearly dependent on our deliveries. But I think we’ve done everything to work very closely with them and ultimate clients. I mean there was a reference earlier to a number of digital activities with ultimate clients and that’s going on. Orders are starting to trickle in. Week by week, they’re increasing. The last week was actually quite favorable. So things are slowly but surely coming back. And as I said, the cancellations are not something, so far anyway, that we would deem alarming. But the cautionary note is that when there was the last financial crisis, it took a few months for the cancellations to essentially flow through to the order book. So we are looking at it very carefully. But so far, no red lights are flashing in any real geography.

Okay. And maybe one last one, I think more for Antonio. I was just wondering if you can share some more color around the cost of the Back on Track program. And how big is that of an impact on margins? And maybe you can quantify maybe even the reduction in gross margin as a result of all the things you have to put in place to ensure a smooth ramp-up in production?

Giulio, Antonio will answer.

Yes. Giulio, it’s not materially impacting our margins. It’s a self-contained cost.

Okay. Okay, thank you very much.

Thank you, Giulio.

Thank you. Your next question comes from the line of Martino De Ambroggi from Equita. Please ask your question.

Yeah. Good morning, good afternoon everybody.

Good afternoon, Martino.

Yes. Thank you. The first question is on the cancellations, because you referred to the previous crisis, but could you quantify what was the rough amount of cancellation and delays, just to figure out what could be the worst-case scenario in the crisis scenario? And the second – yes?

Okay, go ahead.

No, the second is on the order intake. Just if you could share with us a quantification of the order intake year to date or the change versus last year, just a rough indication. Because if I understand correctly, if you adjust downward the production this year is – to preserve this – the order book as strong as it used to be in the past, so probably 12, 18-month deliveries, and I derive there is a reduction in orders there, which is inevitable, I suppose in such an environment?

Correct. I’m not – regretfully, I’m not going to quantify either the level of cancellations or the order intake. All I would say is that if you look at the low end of the range, those are where we have, obviously, the higher level of cancellations and the lower level of order intakes. And at the high end of the range is what we feel is possible within this environment. I think it’s very difficult to compare today’s situation to the financial crisis for numerous reasons, which I think I referred to in my opening remarks. But one is that the portfolio was completely different, Martino. I mean a number of models were ending their life cycle; there was the launch of the California, which obviously helped. And here, we have a much broader portfolio across the whole board. And as I said, the models that have the highest margins have the highest order book and, in our sense, are the models that are the less vulnerable. So we’ll see how things evolve over the next few months, but I would hate to give you a number, just look at the range, and that gives you a sense of the numbers.

Okay, thank you. And just a follow-up on the mix effect, very strong in Ql, could you manage it for the rest of the year?

Well, as Antonio mentioned, the mix was very strong, driven by Monza as well as the Pista. So Monza will be there, at least for the second and third quarter in terms of mix. As you know, we started in the fourth quarter of last year, so that will equalize itself, but the mix should be favorable in Q2 and Q3, driven by the Monza and the remaining volume of the Pista, which is now sold out – well, has been sold out for some time, but there’s still deliveries to be made, and that affects also the personalization.

Okay, thank you.

Thank you.

Thank you. Your next question comes from the line of Massimiliano Vecchio from UBI Banca.

Good afternoon everybody.

Good afternoon.

Louis you said in your remarks that obviously, five new models were launched last year and will be sold this year, and two new mysterious models will be sold this year. And this is obviously a big difference within now and 2009. I was trying to understand how are you changing your launch and commercial activities, specifically related to those seven models in the new COVID world? Will you be concentrating the activities then during the summertime? Or will you be delaying as much as possible into 2021? I was just trying – I’m curious to understand how it is changing your launch activity.

Well, clearly, the situation has delayed a number of activities in terms of the events we had planned, the driving events, particularly the presentation of the specific models to clients. We intend to resume that at a rather fast clip essentially in the second half when things are open, and we’ve started in those markets that are Back on Track at 100%. So the timing will evolve geographically as things open up, and Antonio mentioned exactly when we foresee the first deliveries of the models that we presented in 2019. I would say, on average, things have been delayed by three or four months, and we will try our utmost to catch up in terms of order intake and deliveries.

Okay. And can you also detail what you are seeing on that front in China? And can we use it as a guide for what will happen in Europe or U.S.? Or are completely different behaviors in terms of customers and dealers?

I think, first of all, you’re right. It’s completely different behavior. As you know, China is a very important market for us going forward, especially with regard to the hybrid model, the SF90, and hybridization going forward. All our distributors’ showroom and workshops are now open. So 100% we’re back in business. We are getting orders. The numbers are rather distorted by the actions we took last year in 2019 given all the uncertainty on the emissions regulations. You may recall that we delivered to clients in the first half a significant amount. So that comparison will continue to be difficult until the second half. But we are seeing movement in China. But as we’ve always said that ultimately, the solution to China is hybridization and eventually the Purosangue.

Okay, thank you. Thank you very much.

Thank you.

Thank you. Your next question comes from the line of Thomas Besson from Kepler. Please ask your question.

Thank you very much. It’s Thomas Besson with Kepler Cheuvreux. I have two questions please. First, could you come back to the supply chain comments you’ve made? I mean you mentioned that a majority of your suppliers come from the most affected regions in Italy and that you do everything you can to help them. But how much – is that included in the guidance that you would be able to catch up between zero and half of the units lost in – during the lockdown? And is that effectively a large portion of the supply shock you’re going through? And the second question, may I ask, I don’t know if you want to share that, but the number of units you have shipped so far of Monza between Q4 last year and Q1 this year, please?

Okay. On the supply chain, the – our range sort of assumes an essential alignment with the supply chain. We are, you can imagine, in daily contact with all of them. They are ramping up. A lot of them started today. We have witnessed some absenteeism, which means that their ability to get up to full capacity will take some time. But I don’t envisage, at this stage, huge issues on the supply chain. Again, if you take the low end and the high end, it gives you a sense you a sense of what we think is likely on the supply chain. The one thing we have done is to increase our inventories in terms of both materials and components, and we will continue to increase our inventories to ensure that we have that flexibility. So that in a nutshell, we are also monitoring one or two of those suppliers that have issues. They’re not new. They’ve had issues pre-COVID. We’re just ensuring that they will continue to produce. I would say that in terms of personalization, that’s the one aspect that will probably be a bit more difficult, but nothing that we can’t surmount. The second one you said in terms of unit shipped of the Monza, roughly last – the last quarter of 2019, it was around 40 units, and it was about the same in the first quarter.

Thank you very much.

Thank you.

Thank you. Your next question comes from the line of Susy Tibaldi from UBS. Please ask your question.

Hi, good afternoon. Thanks for taking my question.

Good afternoon.

Good afternoon. Hi. So just to go back on the guidance for 2020. So of course, the lines most significantly impacted will be the engines and sponsorship, Formula 1, et cetera. So is it reasonable to assume that for the full year, we should look at a decline similar to what we have seen in Q1? So is Q1 quite representative of how the year should be at least in your assumptions to get to this sort of guidance? Secondly, related to the Q1 results, I was a little bit surprised to see that you had a very strong contribution from the mix in your EBIT bridge. However, looking at the contribution to the revenues, it seems that for the cars and spare parts, it seems to come fully from volumes. So I was trying to understand the mechanics behind that, because clearly, last year, you had strong volumes of Portofino and this year, very strong volumes of specials. So just trying to understand the difference on contribution on the revenues versus the EBIT. And then one last question on the R&D also in Q1. I think there was maybe a little bit of an expectation that in Q1, you were still spending – like a lot of the cost still went ahead because, of course, the cancellation of the opening of the racing was very last minute. So how did you manage to actually have the R&D costs down year-over-year? And does it mean that maybe the reduction for the full year is even more significant than previously expected? Thank you.

Antonio do you want to address those questions?

Yes, I’d start from the last two. In terms of volumes and versus mix, I think I’m not sure how you may detect from our revenues bridge the impact of volumes and price/mix. But basically, what the EBIT bridge gives you in the mix/price column is the result of product mix, country mix and price increase year-over-year. And clearly, the presence in our deliveries of the Monza explains very well how the product mix is going to improve on a year-over-year basis. And that’s the driver. In terms of volumes, we are not growing that much. You see in terms of shipment how much we have been growing in terms of delivery. So at constant contribution margin, it should be an easy computation I guess. In terms of the R&D, there is a calendar effect even there. In the R&D column, first of all, you need to take into account that we have both the R&D expenses to the P&L by the Formula 1 activity, the one for innovation, then we have industrial costs. So there are a number of elements. The one that have a calendar or a seasonal effect, if you wish, depending on what you want to call, is Formula 1 where a portion of this cost also depends on the calendar of the races. And this is what basically contain the growth on a year-over-year basis. a year-over-year basis. I do not recall your first question.

It was related to the full year. I can address that.

Yes, the one in respect to the full year, you are right. Yes. No. It’s not exactly a mathematical computation, but you are not far from there, obviously absent any news on the development of Formula 1 during the rest of the year.

Okay great, thanks.

Thank you. Your next question comes from the line of Ryan Brinkman from JPMorgan. Please ask your question.

Thanks for taking my question. In the past, you’ve discussed your sales increasing over time commensurate with the global increase in high net worth individuals so as to preserve exclusivity. Do you have any thoughts on how the trend in high net worth individuals may be now different? Or if there’s anything within the trend in global wealth that might have a disproportionate impact on your customer base? So for example, the decline in oil and gas wealth over the past quarter or the relative resilience in technology company shares, anything in particular on the macro or wealth side that you’re watching or investors might be able to watch for insight into demand?

Ryan, as I mentioned in my opening remarks, the commercial team did a phenomenal job at analyzing geographies, industrial sectors and ultimately, our customers and clients and who is participating in what industrial sector, which in turn gave us a sense of the vulnerabilities as well as the opportunities. So we have really drilled down considerably, and they’ve done a phenomenal job. And obviously, those clients who are in the sectors that you’ve mentioned, the obvious ones that are suffering today and the ones that are doing okay, that gives you the opportunities as well as the vulnerabilities. So all that is built into the range and our volume expectations for the year at the low end and the high end.

Okay. I see. And then just lastly, have you done any dimensioning that you’re able to share at least to estimate the net financial impact this year from changes to Formula 1? It sounds like you should be able to ratch it down R&D, I don’t know, maybe SG&A, but not commensurate with the decline in sponsorship, commercial, brand revenue. Is that the way to think about it? Or can you help us sort of think about the degree to which the lower EBITDA and the updated outlook is driven by changes to the Formula 1 dynamic versus the car and parts business?

If you look at the first quarter, it should give you a sense. I mean there is no way we can offset through cost reductions, although we have reduced cost in Formula 1, but there is no way we can offset the hit to the revenues on sponsorship fees and especially on the revenues that are generated by the commercial rights holder. So the hit to revenue essentially goes down to the bottom line with some minor offsets, but it’s a big hit. And as I said, the good news is it’s confined to this year, hopefully.

Okay. Helpful. Thank you.

Thank you. Your next question comes from the line of George Galliers from Goldman Sachs. Please ask your question.

Yes. Hello and thank you for taking my question.

Hi, George.

First question I just had is just at the low end of your guidance. If we were to assume that in the second half, you see small earnings growth of 1% to 2%, it would suggest it will be touch and go whether Q2 will be breakeven at the EBIT line. Is your expectation for Q2 to be profitable at the EBIT line?

Yes, Q2 will be very weak, as we’ve said. I’m not going to give you a specific number, but it will be weak. You’re right.

Okay. And then with respect to the order book, you’ve mentioned several times about managing the order book, Could you perhaps just give us some insight into when you manage it, are you thinking about total orders at a company level versus your total production? Are you thinking about it in terms of managing V8 orders to V8 production and similar to V12? Or do you think about it on a model line basis?

All of the above. I mean it’s not one simple rule, George. I mean we take a holistic view of the whole order book. I can add geographic mix to that model mix. So obviously – and the waiting lists our strength of the order book for each specific model and each specific geography. So it’s a rather complex equation, but one that I think the team has dealt with very well and clearly will continue to do so. But there isn’t just one simple formula as how to we look at the order book or how we treat it.

Understood. And then one final question, if I may. You did mention the potential for Saturday working in the second half of the year to catch up if deemed appropriate. Can you just confirm, would that involve bringing on incremental workers that would need training and associated costs? Or is Saturday working something you could manage with your existing employee base?

The latter, we manage with existing. Having said that, over the last couple of years, we have hired and trained a number of people. And especially, the production team has done a phenomenal job at transferring those employees that were focused on the Maserati engines back to our core Ferrari business. So that included – that entails quite a lot of training and absorption in the core business. So that, given the Maserati engine business, will continue apace.

Great. Thank you.

Thank you.

Thank you. Your next question comes from the line of Angus Tweedie from Citi. Please ask your question.

Thank you also for that extra color on F1. I was going to ask on Formula 1. Have your views on the potential revenue pool there in the midterm and thinking about 2021 changed at all as a result of what’s happened? And then secondly, just thinking about the order book, could you perhaps discuss how you think deposits might move given it sounds like it’s more a production issue at the moment than demand? Thank you.

Our current thinking is that in terms of revenues, although it’s somewhat unpredictable in 2021, they should come back certainly in terms of the races, which is a big part of it. And obviously, also in terms of sponsoring, we know that the Formula 1 group has worked a lot on trying to attract new sponsors. Obviously, this situation has delayed certain things. But hopefully, by 2021, that will come back. So at this stage, we don’t really foresee a major reduction or continued reduction in commercial rights holder revenues in terms of Formula 1 for next year, all things being equal. The second question related to deposits, I think. Well, the main change, as Antonio highlighted, in terms of the deposits was really Monza, which flattered 2019 considerably. And obviously, some of the sales of the Monza today are lacking the deposit that we got received in 2019. With regard to all the other cars, we don’t foresee any changes in terms of the policies that we have in place with dealer deposits primarily. I don’t know if that answers your question or even touched upon your question.

No. That’s very helpful. Thank you.

Thank you.

Thank you. Your next question comes from the line of Michael Binetti from Credit Suisse. Please ask your question.

Hey, guys. Let me thank you quickly for all the help. We haven’t had a lot of companies try to give any guidance. So very appreciative of all the detail here and the outlook for the year. Just two quick ones there. I want to know if – I think you had one or two presentations on new cars planned for 2020, and I apologize if I missed it, but is there any delay in the launching of those new cars, or is that still the right way to think about this year? I was curious if I could hear a little more detail on the cancellations you mentioned in Australia and the U.S. I know you said nothing alarming. I was just curious why you called out those two markets at all. And then most importantly, I want to ask you about a comment on Slide 4 about re-prioritizing projects and ensuring long-term success. I know it’s too early to have ultimate clarity on 2020. I’m assuming there’s also reduced visibility on the longer-term plan you talked to at the Capital Markets Day, but I know it’s a complex plan, big investment projects each year like Formula 1 this year and then 2020, I think was going to be a big ramp in Purosangue investments. As you think about the targets for 2022, can you speak to what you think you need to do to realign the phasing of those investment projects? And then if any of those projects could extend beyond 2022, given the disruption this year?

I’ll try. First of all, the two new models are still slated for presentation in 2020, clearly a few months later than we had originally anticipated. But they will still be presented this year. So that remains an activity that we foresee. But clearly, as you can realize the presentation of those models, they really only started being delivered in 2021. With regard to the United States and Australia, we specifically mentioned, I specifically mentioned the United States and Australia, because that’s where we saw a little bit more cancellations and elsewhere. And the only reason I said Australia and the United States was to give you a sense that this was not a very wide geographic thing that was happening. It was sort of contained at this stage anyway to those two markets. But again, they weren’t very alarming. But it was to give you a bit more color as to the cancellations. In terms of – changing the priorities of our projects, clearly, with the reduction in the capital expenditures that Antonio mentioned, and some cost reductions, we have delayed certain models and the investments behind them. However, we have retained total flexibility to sort of switchback on depending on how things evolve. But at this stage, we felt it was prudent to delay what we felt could be delayed between three months and nine months, which obviously will have an impact longer-term. But we’ve been very careful as to ensuring that whatever is delayed will not adversely affect our competitiveness or our ability to grow. So I can’t really go into detail model by model, but some will be delayed, others will be on time.

Okay. Thank you so much.

Thank you.

Thank you. And your last question comes from the line of Billy from Morgan Stanley. Please ask your question.

Hey, it’s Adam Jonas in place of Billy. I hope everyone is well and thanks for the call. And I do offer my best sympathies to the Ferrari community and your families as well.

Thank you, Adam. Adam, we’re having difficulty hearing you.

Is this a little better?

There’s a huge echo. Go ahead. Speak very slowly, because there’s a huge echo.

We’ll take it offline, I want to ask the question. Have a good day everybody.

Okay, sorry. Thank you.

Thanks.

Are there any further questions? Operator All right. There are no further questions at this time. Please continue, Nicoletta. Thank you.

Thank you, Maria, and thank you, everyone, who has joined us today. The IR team will be soon available to answer your questions. And we all wish you a lovely rest of the day. Bye-bye.