Ferrari N.V.: Completion of the Fourth Tranche and Announcement of the Fifth Tranche of the Multi-Year Share Repurchase Program
Ferrari N.V. (NYSE/EXM: RACE) has completed the fourth tranche of its multi-year share buyback program, buying a total of 971,899 common shares for approximately Euro 349.99 million. This tranche is part of a larger Euro 2 billion buyback initiative expected to be completed by 2026.
The company has announced a fifth tranche, set to start on July 1, 2024, with a maximum value of Euro 250 million. This includes a Euro 200 million non-discretionary buyback agreement on the EXM and a Euro 50 million additional mandate on the NYSE.
As of June 27, 2024, Ferrari holds 14,165,666 treasury shares, representing 5.51% of total issued share capital. Details of these transactions are available on Ferrari's corporate website.
- Completion of fourth tranche totaling Euro 349.99 million enhances shareholder value.
- Start of fifth tranche worth up to Euro 250 million indicates ongoing confidence in the company’s future.
- Current treasury shares represent 5.51% of total issued share capital.
- High buyback expenses may impact cash reserves and financial flexibility.
Insights
Ferrari's continuation of its multi-year share buyback program indicates a bullish sentiment from the company's management about its future performance and underlying value. A share buyback can be interpreted as a signal that the company believes its shares are undervalued, intending to increase the earnings per share (EPS) by reducing the number of outstanding shares. This can also enhance shareholder value as it often leads to a higher stock price.
For retail investors, this is generally a positive sign, suggesting confidence from management. However, it's essential to consider the opportunity cost of the buyback. Funds used for repurchasing shares are not available for other potential investments, such as expanding operations or paying down debt. It's also worth noting that the current buyback is part of a larger Euro 2 billion plan, indicating a significant commitment to this strategy over several years.
Ferrari has repurchased a substantial number of shares and plans to continue this trend. The company's ability to consistently deploy such vast sums without impacting its operational liquidity highlights its strong financial health. However, investors should remain aware of macroeconomic conditions that could affect Ferrari's ability to sustain this program without adverse effects.
The continuation of Ferrari's share buyback program, particularly the commencement of the fifth tranche, reflects positively on the market's perception of the company. Share buyback programs can often lead to an increase in shareholder confidence and a subsequent rise in share price. This strategic move, especially with a structured approach using non-discretionary agreements, secures a consistent return of capital to shareholders even during closed periods.
Retail investors should note that this program is a clear indication of Ferrari's ongoing commitment to managing shareholder value. The scheduled repurchases on both the EXM and NYSE allow for flexibility and international market presence, leveraging different market conditions to optimize buyback efficiency.
Moreover, the significant allocation of up to Euro 250 million in the fifth tranche shows Ferrari's strategic foresight in capturing value in both European and American markets. Investors should keep an eye on these repurchase activities, as they may drive demand and consequently impact the stock's liquidity and valuation.
Maranello (Italy), June 28, 2024 – Ferrari N.V. (NYSE/EXM: RACE) (“Ferrari” or the “Company”) informs that the Company has purchased, under the
| EXM | NYSE | Total | ||||||||
| Trading | Number of common shares purchased | Average price per share | Consideration excluding fees | Number of common shares purchased | Average price per share | Consideration excluding fees | Consideration excluding fees | Number of common shares purchased | Average price per share | Consideration excluding fees |
| Date | excluding fees | excluding fees | excluding fees | |||||||
| (d/m/y) | (€) | (€) | ($) | ($) | (€)* | (€)* | (€)* | |||
| 24/06/2024 | 3,799 | 392.3641 | 1,490,591.22 | - | - | - | - | 3,799 | 392.3641 | 1,490,591.22 |
| 25/06/2024 | 3,740 | 395.2239 | 1,478,137.39 | 1,632 | 424.3437 | 692,528.92 | 646,377.56 | 5,372 | 395.4793 | 2,124,514.95 |
| 26/06/2024 | 3,865 | 392.6272 | 1,517,504.13 | - | - | - | - | 3,865 | 392.6272 | 1,517,504.13 |
| 11,404 | 393.3912 | 4,486,232.74 | 1,632 | 424.3437 | 692,528.92 | 646,377.56 | 13,036 | 393.7259 | 5,132,610.30 | |
| Total | ||||||||||
(*) translated at the European Central Bank EUR/USD exchange reference rate as of the date of each purchase
With the purchases described above the Company has completed the Fourth Tranche of the Program.
The total consideration for such Fourth Tranche of the Program was:
Euro 249,999,659.04 for No. 701,266 common shares purchased on the EXM- USD 108,575,956.06 (
Euro 99,999,887.55 *) for No. 270,823 common shares purchased on the NYSE.
As of June 27, 2024, the Company held in treasury No. 14,165,666 common shares equal to
Since the start of the multi-year share buyback program of approximately
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).
The Company intends to continue its multi-year share buyback program with a fifth tranche of up to
- Firstly, Ferrari has entered into a non-discretionary buyback agreement for an amount up to
Euro 200 million to be executed on the EXM market through a primary financial institution (the “Bank”). The Bank will make its trading decisions concerning the timing of the purchases of Ferrari’s common shares independently of and uninfluenced by Ferrari and it will act in compliance with applicable rules and regulations, including the provisions of the Market Abuse Regulation 596/2014 and the Commission Delegated Regulation (EU) 2016/1052 (the “Regulations”). Under this agreement, once executed, purchases may continue during any closed periods of Ferrari in accordance with the Regulations.
- Secondly, Ferrari has entered into an additional mandate with a primary financial institution for up to
Euro 50 million to be executed on the NYSE. Pursuant to such mandate Ferrari would provide the financial institution with purchase instructions from time to time in compliance with applicable rules, regulations and legal requirements. The actual timing, number and value of common shares repurchased on the NYSE will depend on a number of factors, including market and general business conditions.
The Fifth Tranche implements the resolution adopted by the Shareholders’ Meeting (held on April 17, 2024) and duly communicated to the market, which authorized the purchase of up to
Details of the repurchase transactions carried out under the Fifth Tranche shall be disclosed to the market as required by applicable regulation.
About Ferrari
Ferrari is among the world’s leading luxury brands focused on the design, engineering, production and sale of the world’s most recognizable luxury performance sports cars. Ferrari brand symbolizes exclusivity, innovation, state-of-the-art sporting performance and Italian design. Its history and the image enjoyed by its cars are closely associated with its Formula 1 racing team, Scuderia Ferrari, the most successful team in Formula 1 history. From the inaugural year of Formula 1 World Championship in 1950 through the present, Scuderia Ferrari has won 245 Grand Prix races, 16 Constructors’ World titles and 15 Drivers’ World titles. Ferrari designs, engineers and produces its cars in Maranello, Italy, and sells them in over 60 markets worldwide.
Forward Looking Statements
This document contains forward-looking statements. These statements may include terms such as “may”, “will”, “expect”, “could”, “should”, “intend”, “estimate”, “anticipate”, “believe”, “remain”, “continue”, “on track”, “successful”, “grow”, “design”, “target”, “objective”, “goal”, “forecast”, “projection”, “outlook”, “prospects”, “plan”, “guidance” and similar expressions. Forward-looking statements are not guarantees of future performance. Rather, they are based on the Ferrari Group’s (hereinafter, the “Group”) current expectations and projections about future events and, by their nature, are subject to inherent risks and uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future and, as such, undue reliance should not be placed on them. Actual results may differ materially from those expressed in such statements as a result of a variety of factors described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Group” in the Company’s annual and quarterly reports filed with the U.S. Securities and Exchange Commission, which are available on Ferrari’s website (https://www.ferrari.com/en-EN/corporate). Any forward-looking statements contained in this document speak only as of the date of this document and the Company does not undertake any obligation to update or revise publicly forward-looking statements. Further information concerning the Group and its businesses, including factors that could materially affect the Company’s financial results, is included in the Company’s reports and filings with the U.S. Securities and Exchange Commission, the AFM and CONSOB.
For further information:
Media Relations
tel.: +39 0536 949337
Email: media@ferrari.com
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FAQ
What is the value of Ferrari's fourth tranche buyback?
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