25.03.2004 Ferrari Maserati Group Annual Report 2003: In a year of heavy investment, Ferrari consolidates its position on the markets and its success on the tracks

The Ferrari Spa Board of Directors, chaired by Luca di Montezemolo, met on Tuesday to review the Ferrari Maserati Group annual report for the financial year ended December 31st 2003.

The results of the day-to-day running of the business confirmed that the Group has consolidated its growth and attained important goals, both on the markets and on the track, despite the fact that 2003 was a year strongly influenced by the slowdown in the world economy and the considerable drop in the value of the dollar against the euro.

The recorded growth was even more significant given the fact that the Group also invested heavily in the on-going development of Maserati.

In the racing sector, the Scuderia Ferrari once again dominated the Formula 1 World Championship, winning the World Constructors’ title for the fifth year in succession and the World Drivers’ title for the fourth consecutive season, with Michael Schumacher: results never before achieved in the history of Formula 1.

On the commercial side of the business, 7,077 cars were delivered to end clients by the Group in 2003 with respect to 7,536 in 2002. Ferrari’s delivery figure was in line with the previous year’s (4,238 as against 4,236 in 2002). Maserati’s financial year, on the other hand, was heavily influenced by the downturn in its reference Coupé and Spyder segments, which shrank by 10.2% and 50% respectively in certain countries.

Despite this, however, Maserati still managed to improve its market penetration, bringing its share of the coupé market up to 8.2% (+2 percentage points) and its share of the spider market up to 3.5% (+0.4 percentage points). In total, the Trident marque sold 2,839 cars to end clients in 2003 compared to 3,300 in 2002.

With regard to the main financial and economic results of 2003, the Ferrari Maserati Group’s consolidated turnover reached €1,261 million, with an increase of 4.4% over 2002. The operating result was positive for €31.6 million, but lower than that of 2002 (€70.5 million), principally due to high research and development costs and the severe negative impact of the exchange rates which absorbed the improvement in the price mix obtained on Ferrari models.

The Group recorded pre-tax profits of €25.9 million with respect to €41.7 million in the previous financial year. Net profits fell to €1.7 million, compared to €21.6 million in 2002.

A total of €336.5 million was poured into investments, both tangible and intangible, and into research and development, in the course of the financial year. This was a significant increase on the €283.4 million invested in 2002. These funds, which represent approximately 27% of total turnover (compared to the 23% of the previous year) are, however, consistent with plans to develop and improve the competitiveness of Ferrari and, most particularly, Maserati. In fact, in terms of investment, 2003 was one of Maserati’s most challenging years. However, considerable funds were also invested in developing the Ferrari range over the course of the year: the new models unveiled included, in fact, the Ferrari Challenge Stradale and the 612 Scaglietti.

The process of renovating the production facilities at Maranello continued with the completion of the new Product Development Centre which will house all of the technical offices, laboratories and support activities relating to the car development process. The new Paintshop was also completed and is now one of the most advanced facilities of its kind in Europe, in terms of technologies and environmental protection conditions. Both facilities will be fully operational from the Spring of 2004. In-house financing of €111 million, a decrease of around €15.5 million on 2002, was allocated to investments, giving a negative net financial position to the tune of €40.5 million at the end of the year.

At the end of the Board meeting, Luca di Montezemolo declared: '2003 has been a difficult year, but surely not only for us. We benefited from an increase in the turnover, great success in the motor sport activities and on the worldwide markets. Despite of the global economy’s slowdown, Ferrari has reached sales of 4,238 units. Maserati was able to increase its market share in a negative market trend.

'The year 2004 had a positive start both in the racing and the commercial sectors. The massive investments dedicated to the development and to the expansion of the model range, in particular for Maserati, allow us to look at the future with confidence, even if the weakness of the dollar had an impact on the Group’s net result.'

Summary of the main data relating to the financial year 2003:

• Consolidated sales: 7,077 cars (4,238 Ferraris, 2,839 Maseratis), -6% with respect to the 7,536 sold in 2002

• Turnover: €1,261 million, with respect to €1,208 million in 2002 (+4.4%)

• Operating result: €31.6 million, with respect to €70.5 million in 2002 (-55.2%)

• Net result: €1.7 million, with respect to €21.6 million in 2002

• Net financial position: negative to the tune of €40.5 million, compared to a positive financial position to the tune of €50.2 million in 2002.

• Self- financing: €111 million, compared to €126 million in 2002 (-12%)

• Investments and Research and Development: €336.5 million, equal to 26.7 % of turnover (€283.4 million euro in 2002, equal to 23.5% of turnover)

• Employees: 2,968 on December 31st 2003, compared to 2,896 in 2002 (+2.5%)