Exhibit 99.1
	Ferrari N.V.

Interim Report

At and for the three and nine months ended September 30,2019

____________________________________________________________________________________________________

CONTENTS

	Page
BOARD OF DIRECTORS	1
INDEPENDENT AUDITORS	1
CERTAIN DEFINED TERMS	1
INTRODUCTION	2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Highlights	3
Forward-Looking Statements	5
Non-GAAP Financial Measures	7
Results of Operations	12
Liquidity and Capital Resources	20
Outlook	28
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AT AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019
Interim Consolidated Income Statement	F-1
Interim Consolidated Statement of Comprehensive Income	F-2
Interim Consolidated Statement of Financial Position	F-3
Interim Consolidated Statement of Cash Flows	F-4
Interim Consolidated Statement of Changes in Equity	F-5
Notes to the Interim Condensed Consolidated Financial Statements	F-6

BOARD OF DIRECTORS

Executive Chairman

John Elkann

Chief Executive Officer

Louis C. Camilleri

Vice Chairman

Piero Ferrari

Directors

Delphine Arnault

Giuseppina Capaldo

Eddy Cue

Sergio Duca

Maria Patrizia Grieco

Adam Keswick

Elena Zambon

INDEPENDENT AUDITORS

EY S.p.A.

CERTAIN DEFINED TERMS

In this report (the “Interim Report”), unless otherwise specified, the terms “we,” “our,” “us,” the “Group,” the “Company” and “Ferrari” refer to Ferrari N.V., individually or together with its subsidiaries, as the context may require.

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INTRODUCTION

The Interim Condensed Consolidated Financial Statements at and for the three and nine months ended September 30, 2019 (the “Interim Condensed Consolidated Financial Statements”) included in this Interim Report have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and in accordance with IFRS as endorsed by the European Union, and in particular, in compliance with IAS 34 - Interim Financial Reporting. There is no effect on these Interim Condensed Consolidated Financial Statements resulting from differences between IFRS as issued by the IASB and IFRS as adopted by the European Union. The accounting principles applied are consistent with those used for the preparation of the annual consolidated financial statements at and for the year ended December 31, 2018 (the “Annual Consolidated Financial Statements”), except as otherwise stated in “New standards and amendments effective from January 1, 2019” in the notes to the Interim Condensed Consolidated Financial Statements.

The Group’s financial information in this Interim Report is presented in Euro except that, in some instances, information is presented in U.S. Dollars. All references in this report to “Euro” and “€” refer to the currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty on the Functioning of the European Union, as amended, and all references to “U.S. Dollars,” “U.S.$” and “$” refer to the currency of the United States of America (or “United States”).

Certain totals in the tables included in this Interim Report may not add due to rounding.

The financial data in “Results of Operations” is presented in millions of Euro, while the percentages presented are calculated using the underlying figures in thousands of Euro.

This Interim Report is unaudited.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Highlights

Consolidated Income Statement Data

	For the three months ended September 30,		For the nine months ended September 30,
	2019	2018	2019	2018
	(€ million, except per share data)
Net revenues	915	838	2,839	2,575
EBIT	227	203	698	631
Profit before taxes	211	197	666	616
Net profit	169	287	533	596
Net profit attributable to:
Owners of the parent	168	287	529	595
Non-controlling interests	1	—	4	1
Basic earnings per common share (in Euro) (1)	0.90	1.52	2.82	3.15
Diluted earnings per common share (in Euro) (1)	0.90	1.51	2.81	3.14
Dividend approved per common share (in Euro) (2) (3)	—	—	1.03	0.71

_____________________________

(1) See Note 13 “Earnings per Share” to the Interim Condensed Consolidated Financial Statements for the calculation of basic and diluted earnings per common share. The weighted average number of shares for diluted earnings per share was increased to take into consideration the theoretical effect of the potential common shares that would be issued under the Company’s equity incentive plans (assuming 100 percent of the related awards vested).

(2) Following approval of the annual accounts by the shareholders at the Annual General Meeting of the Shareholders on April 12, 2019, a dividend distribution of €1.03 per outstanding common share was approved, corresponding to a total distribution of €193 million. The distribution was made from the retained earnings reserve. In May 2019 the Company paid €181 million of the distribution to owners of the parent and the remaining balance, which relates to withholdings taxes, was paid in the third quarter of 2019.

(3) Following approval of the annual accounts by the shareholders at the Annual General Meeting of the Shareholders on April 13, 2018, a dividend distribution of €0.71 per outstanding common share was approved, corresponding to a total distribution of €134 million. The distribution was made from the retained earnings reserve. In May 2018 the Company paid €129 million of the distribution to owners of the parent and the remaining balance, which relates to withholding taxes, was paid in the third quarter of 2018.

Consolidated Statement of Financial Position Data

	At September 30,	At December 31,
	2019	2018
	(€ million, except share data)
Cash and cash equivalents	871	794
Total assets	5,340	4,852
Debt	2,108	1,927
Total equity	1,394	1,354
Equity attributable to owners of the parent	1,387	1,349
Non-controlling interests	7	5
Share capital	3	3
Common shares issued and outstanding (in thousands of shares)	185,866	187,921

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Other Statistical Information

Shipments ⁽¹⁾ 

(Number of cars and % of total cars)	For the three months ended September 30,						For the nine months ended  September 30,
	2019	%		2018	%		2019	%		2018	%
EMEA
UK	202	8.2	%	178	7.9	%	782	10.1	%	714	10.4	%
Germany	262	10.6	%	218	9.6	%	709	9.1	%	601	8.8	%
Italy	128	5.2	%	115	5.1	%	431	5.6	%	374	5.5	%
France	118	4.8	%	108	4.8	%	334	4.3	%	306	4.5	%
Switzerland	109	4.4	%	95	4.2	%	320	4.1	%	295	4.3	%
Middle East (2)	80	3.2	%	90	4.0	%	193	2.5	%	203	3.0	%
Other EMEA (3)	244	9.8	%	201	8.8	%	778	10.0	%	688	10.0	%
Total EMEA	1,143	46.2	%	1,005	44.4	%	3,547	45.7	%	3,181	46.5	%
Americas (4)	772	31.2	%	770	34.0	%	2,295	29.6	%	2,189	31.9	%
Mainland China, Hong Kong and Taiwan	159	6.4	%	162	7.2	%	776	10.0	%	522	7.6	%
Rest of APAC (5)	400	16.2	%	325	14.4	%	1,137	14.7	%	961	14.0	%
Total	2,474	100.0	%	2,262	100.0	%	7,755	100.0	%	6,853	100.0	%

_____________________________

(1)    Excluding the XX Programme, racing cars, Fuori Serie, pre-owned and one-off cars.

(2)     Middle East mainly includes the United Arab Emirates, Saudi Arabia, Bahrain, Lebanon, Qatar, Oman and Kuwait.

(3)     Other EMEA includes Africa and the other European markets not separately identified.

(4)    Americas includes the United States of America, Canada, Mexico, the Caribbean and Central and South America.

(5)    Rest of APAC mainly includes Japan, Australia, Singapore, Indonesia, South Korea, Thailand and Malaysia.

Average number of employees for the period

	For the three months ended September 30,		For the nine months ended  September 30,
	2019	2018	2019	2018
Average number of employees for the period	4,195	3,735	4,130	3,587

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Forward-Looking Statements

Statements contained in this report, particularly those regarding our possible or assumed future performance are “forward-looking statements” that contain risks and uncertainties. In some cases, words 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 are used to identify forward-looking statements. These forward-looking statements reflect the respective current views of Ferrari with respect to future events and involve significant risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Such risks and uncertainties include, without limitation:

• our ability to preserve and enhance the value of the Ferrari brand;

• the success of our Formula 1 racing team and the expenses we incur for our Formula 1 activities, as well as the popularity of Formula 1 more broadly;

• our ability to keep up with advances in high performance car technology and to make appealing designs for our new models;

• our ability to preserve our relationship with the automobile collector and enthusiast community;

• changes in client preferences and automotive trends;

• changes in the general economic environment, including changes in some of the markets in which we operate, and changes in demand for luxury goods, including high performance luxury cars, which is highly volatile;

• competition in the luxury performance automobile industry;

• our ability to successfully carry out our growth strategy and, particularly, our ability to grow our presence in growth and emerging market countries;

• our low volume strategy;

• reliance upon a number of key members of executive management and employees, and the ability of our current management team to operate and manage effectively;

• the performance of our dealer network on which we depend for sales and services;

• increases in costs, disruptions of supply or shortages of components and raw materials;

• disruptions at our manufacturing facilities in Maranello and Modena;

• the performance of our licensees for Ferrari-branded products;

• our ability to protect our intellectual property rights and to avoid infringing on the intellectual property rights of others;

• the ability of Maserati, our engine customer, to sell its planned volume of cars;

• our continued compliance with customs regulations of various jurisdictions;

• the impact of increasingly stringent fuel economy, emission and safety standards, including the cost of compliance, and any required changes to our products;

• the challenges and costs of integrating hybrid and electric technology more broadly into our car portfolio over time;

• product recalls, liability claims and product warranties;

• the adequacy of our insurance coverage to protect us against potential losses;

• our ability to ensure that our employees, agents and representatives comply with applicable law and regulations;

• our ability to maintain the functional and efficient operation of our information technology systems, including our ability to defend from the risk of cyberattacks, including on our in-vehicle technology;

• our ability to service and refinance our debt;

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• our ability to provide or arrange for adequate access to financing for our dealers and clients, and associated risks;

• labor relations and collective bargaining agreements;

• exchange rate fluctuations, interest rate changes, credit risk and other market risks;

• changes in tax, tariff or fiscal policies and regulatory, political and labor conditions in the jurisdictions in which we operate, including possible future bans of combustion engine cars in cities and the potential advent of self-driving technology;

• potential conflicts of interest due to director and officer overlaps with our largest shareholders; and

• other factors discussed elsewhere in this document.

We expressly disclaim and do not assume any liability in connection with any inaccuracies in any of the forward-looking statements in this document or in connection with any use by any third party of such forward-looking statements. Actual results could differ materially from those anticipated in such forward-looking statements. We do not undertake an obligation to update or revise publicly any forward-looking statements.

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Non-GAAP Financial Measures

We monitor and evaluate our operating and financial performance using several non-GAAP financial measures including: EBITDA, Adjusted EBITDA, Adjusted EBIT, Adjusted Net Profit, Adjusted Basic and Diluted Earnings per Common Share, Net Debt, Net Industrial Debt, Free Cash Flow and Free Cash Flow from Industrial Activities, as well as a number of financial metrics measured on a constant currency basis. We believe that these non-GAAP financial measures provide useful and relevant information regarding our performance and our ability to assess our financial performance and financial position. They also provide us with comparable measures that facilitate management’s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions. While similar measures are widely used in the industry in which we operate, the financial measures we use may not be comparable to other similarly titled measures used by other companies nor are they intended to be substitutes for measures of financial performance or financial position as prepared in accordance with IFRS.

EBITDA and Adjusted EBITDA

EBITDA is defined as net profit before income tax expense, net financial expenses and amortization and depreciation. Adjusted EBITDA is defined as EBITDA as adjusted for certain income and costs which are significant in nature, expected to occur infrequently, and that management considers not reflective of ongoing operational activities. EBITDA is presented by management to aid investors in their analysis of the performance of the Group and to assist investors in the comparison of the Group’s performance with that of other companies. Adjusted EBITDA is presented to demonstrate how the underlying business has performed prior to the impact of the adjustments, which may obscure the underlying performance and impair comparability of results between periods.

The following table sets forth the calculation of EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2019 and 2018, and provides a reconciliation of these non-GAAP measures to net profit.

	For the three months ended September 30,			For the nine months ended September 30,
	2019	2018		2019	2018
	(€ million)
Net profit	169	287		533	596
Income tax expense/(benefit)	42	(90	)	133	20
Net financial expenses	16	6		32	15
Amortization and depreciation	84	75		238	210
EBITDA	311	278		936	841
Release of charges for Takata airbag inflator recalls	—	—		—	(1	)
Adjusted EBITDA	311	278		936	840

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Adjusted EBIT

Adjusted EBIT represents EBIT as adjusted for certain income and costs which are significant in nature, expected to occur infrequently, and that management considers not reflective of ongoing operational activities. We provide such information in order to present how the underlying business has performed prior to the impact of such items, which may obscure the underlying performance and impair comparability of results between the periods.

The following table sets forth the calculation of Adjusted EBIT for the three and nine months ended September 30, 2019 and 2018.

	For the three months ended September 30,		For the nine months ended September 30,
	2019	2018	2019	2018
	(€ million)
EBIT	227	203	698	631
Release of charges for Takata airbag inflator recalls	—	—	—	(1	)
Adjusted EBIT	227	203	698	630

Adjusted Net Profit

Adjusted Net Profit represents net profit as adjusted for certain income and costs (net of tax effect) which are significant in nature, expected to occur infrequently, and that management considers not reflective of ongoing operational activities. We provide such information in order to present how the underlying business has performed prior to the impact of such items, which may obscure the underlying performance and impair comparability of results between the periods.

The following table sets forth the calculation of Adjusted Net Profit for the three and nine months ended September 30, 2019 and 2018.

	For the three months ended September 30,			For the nine months ended September 30,
	2019	2018		2019	2018
	(€ million)
Net profit	169	287		533	596
Patent box benefit for the period 2015-2017	—	(141	)	—	(141	)
Release of charges for Takata airbag inflator recalls (net of tax effect)	—	—		—	(1	)
Adjusted Net Profit	169	146		533	454

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Adjusted Basic and Diluted Earnings per Common Share

Adjusted Basic and Diluted Earnings per Common Share represents earnings per share, as adjusted for certain income and costs (net of tax effect) which are significant in nature, expected to occur infrequently, and that management considers not reflective of ongoing operational activities. We provide such information in order to present how the underlying business has performed prior to the impact of such items, which may obscure the underlying performance and impair comparability of results between the periods.

The following table sets forth the calculation of Adjusted Basic and Diluted Earnings per Common Share for the three and nine months ended September 30, 2019 and 2018.

		For the three months ended September 30,			For the nine months ended September 30,
		2019	2018		2019	2018
Net profit attributable to owners of the parent	€ million	168	287		529	595
Patent box benefit for the period 2015-2017	€ million	—	(141	)	—	(141	)
Release of charges for Takata airbag inflator recalls (net of tax effect)	€ million	—	—		—	(1	)
Adjusted net profit attributable to owners of the Company	€ million	168	146		529	453
Weighted average number of common shares	thousand	186,504	188,646		187,196	188,712
Adjusted basic earnings per common share	€	0.90	0.78		2.82	2.40
Weighted average number of common shares for diluted earnings per common share	thousand	187,302	189,434		187,994	189,500
Adjusted diluted earnings per common share (1)	€	0.90	0.77		2.81	2.39

(1) For the three and nine months ended September 30, 2019 and 2018 the weighted average number of common shares for diluted earnings per share was increased to take into consideration the theoretical effect of the potential common shares that would be issued under the Company’s equity incentive plans.

See Note 13 “Earnings per Share” to the Interim Condensed Consolidated Financial Statements for the calculation of basic and diluted earnings per common share.

Net Debt and Net Industrial Debt

Due to different sources of cash flows used for the repayment of Debt between industrial activities and financial services activities, and the different business structure and leverage implications, Net Industrial Debt, together with Net Debt, are the primary measures used by us to analyze our capital structure and financial leverage. We believe the presentation of Net Industrial Debt aids management and investors in their analysis of the Group’s financial position and financial performance and to compare with other companies. Net Industrial Debt is defined as total Debt less Cash and cash equivalents (Net Debt), further adjusted to exclude the debt and cash and cash equivalents related to our financial services activities (Net Debt of Financial Services Activities). Prior to the first quarter of 2019, we defined Net Industrial Debt as Net Debt adjusted to exclude (a) the funded portion of the self-liquidating financial receivables portfolio, which is the portion of our receivables from financing activities that we fund with external debt or intercompany loans but not (b) the cash and cash equivalents of the financial activities, since such cash was considered also available for use in our industrial activities. We believe the current definition provides a more comprehensive disclosure of our underlying financial leverage from industrial activities. Net Industrial Debt for the comparative period has been restated to conform to the current presentation.

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The following table sets forth a reconciliation of Net Debt and Net Industrial Debt at September 30,2019 and December 31,2018 (for information purposes, Net Industrial Debt at September 30, 2018 was €409 million according to the current definition).

	At September 30,		At December 31,
	2019		2018
	(€ million, except share data)
Cash and cash equivalents	871		794
Debt	(2,108	)	(1,927	)
Net Debt (A)	(1,237	)	(1,133	)
Net Debt of Financial Services Activities (B)	(868	)	(763	)
Net Industrial Debt (A-B)	(369	)	(370	)

Free Cash Flow and Free Cash Flow from Industrial Activities

Free Cash Flow and Free Cash Flow from Industrial Activities are two of our primary performance indicators to measure the Group’s performance. These measures are presented by management to aid investors in their analysis of the Group’s financial performance and to compare the Group’s financial performance with that of other companies. Free Cash Flow is defined as cash flows from operating activities less investments in property, plant and equipment and intangible assets. Free Cash Flow from Industrial Activities is defined as Free Cash Flow adjusted to exclude the operating cash flow from our financial services activities (Free Cash Flow from Financial Services Activities). Prior to the first quarter of 2019, we defined Free Cash Flow as cash flows from operating activities less cash flows used in investing activities, and we defined Free Cash Flow from Industrial Activities as Free Cash Flow adjusted for the change in the self-liquidating financial receivables portfolio (which is the change in our receivables from financing activities). In order to align our definition of Free Cash Flow to other more common definitions and to allow the definition of Free Cash Flow from Industrial Activities to exclude all cash flows from operating activities not attributable to the industrial activities, even if such cash flows were available for industrial activities, we determined it was appropriate to redefine Free Cash Flow and Free Cash Flow from Industrial Activities starting in 2019. Free Cash Flow and Free Cash Flow from Industrial Activities for the comparative periods have been restated to conform to the current presentation.

The following table sets forth our Free Cash Flow and Free Cash Flow from Industrial Activities for the nine months ended September 30, 2019 and 2018.

	For the nine months ended September 30,
	2019		2018
	(€ million)
Cash flows from operating activities	949		619
Investments in property, plant and equipment and intangible assets	(453	)	(403	)
Free Cash Flow	496		216
Free Cash Flow from Financial Services Activities	(63	)	(48	)
Free Cash Flow from Industrial Activities	559		264

For further information on Free Cash Flow and Free Cash Flow from Industrial Activities see “Liquidity and Capital Resources—Free Cash Flow and Free Cash Flow from Industrial Activities” below.

Constant Currency Information

The “Results of Operations” discussion below includes information about our net revenues on a constant currency basis, which eliminates the effects of foreign currency translation from our subsidiaries with functional currencies other than Euro, as well as the effects of foreign currency transaction impact and foreign currency hedging. We use this information to assess how the underlying revenues changed independent of fluctuations in foreign currency exchange rates and hedging. We calculate constant currency by (i) applying the prior-period average foreign currency exchange rates to translate current period revenues of foreign subsidiaries expressed in local functional currency other than Euro, (ii) applying the prior-period average

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foreign currency exchange rates to current period revenues originated in a currency other than the functional currency of the applicable entity, and (iii) eliminating the variances of any foreign currency hedging (see Note 5 “Other Information” to the Interim Condensed Consolidated Financial Statements, included in this Interim Report, for information on the foreign currency exchange rates applied). Although we do not believe that these measures are a substitute for GAAP measures, we do believe that revenues excluding the impact of currency fluctuations and the impacts of hedging provide additional useful information to investors regarding the operating performance on a local currency basis.

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Results of Operations

Three months ended September 30, 2019 compared to three months ended September 30, 2018

The following is a discussion of the results of operations for the three months ended September 30,2019 compared to the three months ended September 30,2018. The presentation includes line items as a percentage of net revenues for the respective periods presented to facilitate period-to-period comparisons.

	For the three months ended September 30,
	2019	Percentage of net revenues		2018		Percentage of net revenues
	(€ million, except percentages)
Net revenues	915	100.0	%	838		100.0	%
Cost of sales	425	46.5	%	402		47.9	%
Selling, general and administrative costs	96	10.5	%	87		10.4	%
Research and development costs	162	17.7	%	143		17.1	%
Other expenses, net	6	0.6	%	4		0.5	%
Result from investments	1	0.1	%	1		0.1	%
EBIT	227	24.8	%	203		24.2	%
Net financial expenses	16	1.7	%	6		0.7	%
Profit before taxes	211	23.1	%	197		23.5	%
Income tax expense/(benefit)	42	4.6	%	(90	)	(10.8	)%
Net profit	169	18.5	%	287		34.3	%

Net revenues

	For the three months ended September 30,						Increase/(Decrease)
	2019	Percentage of net revenues		2018	Percentage of net revenues		2019 vs. 2018
	(€ million, except percentages)
Cars and spare parts (1)	708	77.3	%	616	73.5	%	92		14.8	%
Engines (2)	46	5.0	%	70	8.4	%	(24	)	(34.3	)%
Sponsorship, commercial and brand (3)	135	14.8	%	128	15.2	%	7		5.8	%
Other (4)	26	2.9	%	24	2.9	%	2		10.3	%
Total net revenues	915	100.0	%	838	100.0	%	77		9.2	%

_____________________________

(1) Includes the net revenues generated from shipments of our cars, including any personalization revenue generated on these cars and sales of spare parts.

(2) Includes the net revenues generated from the sale of engines to Maserati for use in their cars, and the revenues generated from the rental of engines to other Formula 1 racing teams.

(3) Includes the net revenues earned by our Formula 1 racing team through sponsorship agreements and our share of the Formula 1 World Championship commercial revenues and net revenues generated through the Ferrari brand, including merchandising, licensing and royalty income.

(4) Primarily relates to financial services activities and management of the Mugello racetrack.

Net revenues for the three months ended September 30,2019 were €915 million, an increase of €77 million, or 9.2 percent (an increase of 7.1 percent on a constant currency basis), from €838 millionfor the three months ended September 30,2018.

The increase in net revenues was attributable to the combination of (i) a €92 million increase in cars and spare parts, (ii) a €7 million increase in sponsorship, commercial and brand, and (iii) a €2 million increase in other net revenues, partially offset by (iv) a €24 million decrease in engines.

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Cars and spare parts

Net revenues generated from cars and spare parts were €708 millionfor the three months ended September 30,2019, an increase of €92 million, or 14.8 percent, from €616 millionfor the three months ended September 30,2018.

The €92 million increase in net revenues was composed of increases in all four of our main geographical regions, including: (i) a €45 million increase in EMEA, (ii) a €36 million increase in Americas (including positive foreign currency translation impact driven by the strengthening of the U.S. Dollar compared to the Euro), (iii) a €7 million increase in the Rest of APAC, and (iv) a €4 million increase in Mainland China, Hong Kong and Taiwan.

The increase in net revenues was primarily attributable to positive volume impact and greater contribution from our personalization programs, as well as positive foreign currency impact. In particular, total shipments increased by 212 cars compared to the prior year (or 9.4 percent), including a 9.5 percent increase in V8 models and an 8.9 percent increase in V12 models, as well as the initial deliveries of the Ferrari Monza SP1 and SP2 towards the end of September. The increase in shipments was mainly driven by deliveries of the Ferrari Portofino, the 488 Pista, the 812 Superfast and the ramp up of the 488 Pista Spider, partially offset by lower shipments of the 488 GTB and 488 Spider, which concluded their lifecycles, as well as deliveries of the strictly limited edition Ferrari J50 in 2018. Shipments during the quarter were lower to Mainland China as a result of the decision to accelerate client deliveries in the first half of the year, in advance of new emissions regulations.

Engines

Net revenues generated from engines were €46 millionfor the three months ended September 30,2019, a decrease of €24 million, or 34.3 percent, from €70 millionfor the three months ended September 30,2018. The €24 million decrease was attributable to a decrease in net revenues generated from the sale of engines to Maserati.

Sponsorship, commercial and brand

Net revenues generated from sponsorship, commercial agreements and brand management activities were €135 millionfor the three months ended September 30,2019, an increase of €7 million, or 5.8 percent, from €128 millionfor the three months ended September 30,2018. The increase was primarily attributable to higher revenues from Formula 1 racing activities and, to a lesser extent, positive foreign currency exchange impact.

Other

Othernet revenues, which primarily relate to our financial services activities and management of the Mugello racetrack, amounted to €26 million and €24 millionfor the three months ended September 30,2019 and 2018, respectively.

Cost of sales

	For the three months ended September 30,						Increase/(Decrease)
	2019	Percentage of net revenues		2018	Percentage of net revenues		2019 vs. 2018
	(€ million, except percentages)
Cost of sales	425	46.5	%	402	47.9	%	23	6.1	%

Cost of sales for the three months ended September 30,2019 was €425 million, an increase of €23 million, or 6.1 percent, from €402 millionfor the three months ended September 30,2018. As a percentage of net revenues, cost of sales was 46.5 percent for the three months ended September 30,2019 compared to 47.9 percent for the three months ended September 30,2018.

The increase in cost of sales was primarily attributable to an increase in volumes and industrial costs and, to a lesser extent, higher amortization and depreciation, partially offset by a decrease in costs related to lower engine volumes and a release of provisions related to favorable developments in emissions regulations that occurred in the third quarter of 2019.

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Selling, general and administrative costs

	For the three months ended September 30,						Increase/(Decrease)
	2019	Percentage of net revenues		2018	Percentage of net revenues		2019 vs. 2018
	(€ million, except percentages)
Selling, general and administrative costs	96	10.5	%	87	10.4	%	9	10.7	%

Selling, general and administrative costs for the three months ended September 30,2019 were €96 million, an increase of €9 million, or 10.7 percent, from €87 millionfor the three months ended September 30,2018. As a percentage of net revenues, selling, general and administrative costs were 10.5 percentfor the three months ended September 30,2019 compared to 10.4 percentfor the three months ended September 30,2018.

The increase in selling, general and administrative costs was primarily attributable to product launches for new cars in our product offering and to support the organic growth of the business.

Research and development costs

	For the three months ended September 30,						Increase/(Decrease)
	2019	Percentage of net revenues		2018	Percentage of net revenues		2019 vs. 2018
	(€ million, except percentages)
Research and development costs expensed during the period	129	14.1	%	113	13.5	%	16	14.6	%
Amortization of capitalized development costs	33	3.6	%	30	3.6	%	3	7.4	%
Research and development costs	162	17.7	%	143	17.1	%	19	13.0	%

Research and development costs for the three months ended September 30,2019 were €162 million, an increase of €19 million, or 13.0 percent, from €143 millionfor the three months ended September 30,2018. As a percentage of net revenues, research and development costs were 17.7 percentfor the three months ended September 30,2019 compared to 17.1 percentfor the three months ended September 30,2018.

The increase of €19 million in research and development costs during the period was primarily to support innovation activities on our product range and components, as well as higher spending for Formula 1 racing activities.

Other expenses, net

	For the three months ended September 30,		Increase/(Decrease)
	2019	2018	2019 vs. 2018
	(€ million, except percentages)
Other expenses, net	6	4	2	32.6	%

Other expenses, net for the three months ended September 30,2019 included other expenses of €7million, mainly related to indirect taxes and other miscellaneous expenses, partially offset by other income of €1million, mainly related to rental income and other miscellaneous income.

Other expenses, net for the three months ended September 30,2018 included other expenses of €5 million, mainly related to provisions, indirect taxes and other miscellaneous expenses, partially offset by other income of €1 million, mainly related to rental income and other miscellaneous income.

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EBIT

	For the three months ended September 30,						Increase/(Decrease)
	2019	Percentage of net revenues		2018	Percentage of net revenues		2019 vs. 2018
	(€ million, except percentages)
EBIT	227	24.8	%	203	24.2	%	24	11.7	%

EBIT for the three months ended September 30,2019 was €227 million, an increase of €24 million, or 11.7 percent, from €203 millionfor the three months ended September 30,2018.

The increase in EBIT was attributable to the combined effects of (i) positive volume impact of €20million, (ii) positive product mix and price impact of €23million, (iii) an increase in research and development costs of €19million, (iv) an increase in selling, general and administrative costs of €9million, (v) negative contribution from other supporting activities of €6 million, and (vi) positive foreign currency exchange impact of €15 million (including foreign currency hedging instruments) primarily driven by the strengthening of the U.S. Dollar compared to the Euro.

The positive product mix and price impact was primarily attributable to the combined positive effects from our personalization programs and the first deliveries of the Ferrari Monza SP1 and SP2.

Net financial expenses

	For the three months ended September 30,		Increase/(Decrease)
	2019	2018	2019 vs. 2018
	(€ million, except percentages)
Net financial expenses	16	6	10	148.6	%

Net financial expenses for the three months ended September 30,2019 increased to €16 million compared to €6 millionfor the three months ended September 30,2018, primarily driven by the partial repurchase of bonds following a cash tender offer in July, which resulted in €8 million of costs relating to the combined impact of the repurchase price and premium incurred, as well as previously unamortized issuance costs.

Income tax expense/(benefit)

	For the three months ended September 30,			Increase/(Decrease)
	2019	2018		2019 vs. 2018
	(€ million, except percentages)
Income tax expense/(benefit)	42	(90	)	132	n.m.

Income tax expense for the three months ended September 30,2019 was €42 million compared to income tax benefit of €90 millionfor the three months ended September 30,2018.

In September 2018, the Group signed an agreement with the Italian Revenue Agency in relation to the Patent Box tax regime, which provides a tax benefit for companies that generate income through the use, both direct and indirect, of copyrights, patents, trademarks, designs and know-how. The agreement relates to the five-year period from 2015 to 2019. The Group applied the Patent Box tax regime for the calculation of income taxes starting in the third quarter of 2018.

The effective tax rate net of IRAP was 17.9 percent for the three months ended September 30,2019, (total effective tax rate of 20.0 percent) and benefited from the positive impact of the Patent Box benefit. The income tax benefit of €90 million for the three months ended September 30, 2018 included the positive impact of the Patent Box benefit relating to the years 2015 to 2017 of €141 million.

15

Nine months ended September 30, 2019 compared to nine months ended September 30, 2018

The following is a discussion of the results of operations for the nine months ended September 30,2019 compared to the nine months ended September 30,2018. The presentation includes line items as a percentage of net revenues for the respective periods presented to facilitate period-to-period comparisons.

	For the nine months ended September 30,
	2019	Percentage of net revenues		2018	Percentage of net revenues
	(€ million, except percentages)
Net revenues	2,839	100.0	%	2,575	100.0	%
Cost of sales	1,367	48.2	%	1,224	47.6	%
Selling, general and administrative costs	255	9.0	%	240	9.3	%
Research and development costs	517	18.2	%	482	18.7	%
Other expenses, net	4	0.1	%	—	—	%
Result from investments	2	0.1	%	2	0.1	%
EBIT	698	24.6	%	631	24.5	%
Net financial expenses	32	1.1	%	15	0.6	%
Profit before taxes	666	23.5	%	616	23.9	%
Income tax expense	133	4.7	%	20	0.7	%
Net profit	533	18.8	%	596	23.2	%

Net revenues

	For the nine months ended September 30,						Increase/(Decrease)
	2019	Percentage of net revenues		2018	Percentage of net revenues		2019 vs. 2018
	(€ million, except percentages)
Cars and spare parts (1)	2,209	77.8	%	1,898	73.7	%	311		16.4	%
Engines (2)	157	5.5	%	227	8.8	%	(70	)	(30.8	)%
Sponsorship, commercial and brand (3)	394	13.9	%	380	14.7	%	14		3.8	%
Other (4)	79	2.8	%	70	2.8	%	9		12.7	%
Total net revenues	2,839	100.0	%	2,575	100.0	%	264		10.3	%

_____________________________

(1) Includes the net revenues generated from shipments of our cars, including any personalization revenue generated on these cars and sales of spare parts.

(2) Includes the net revenues generated from the sale of engines to Maserati for use in their cars, and the revenues generated from the rental of engines to other Formula 1 racing teams.

(3) Includes the net revenues earned by our Formula 1 racing team through sponsorship agreements and our share of the Formula 1 World Championship commercial revenues and net revenues generated through the Ferrari brand, including merchandising, licensing and royalty income.

(4) Primarily relates to financial services activities and management of the Mugello racetrack.

Net revenues for the nine months ended September 30, 2019 were €2,839 million, an increase of €264 million, or 10.3 percent (an increase of 8.3 percent on a constant currency basis), from €2,575 million for the nine months ended September 30, 2018.

The increase in net revenues was attributable to the combination of (i) a €311 million increase in cars and spare parts, (ii) a €14 million increase in sponsorship, commercial and brand, and (iii) a €9 million increase in other net revenues, partially offset by (iv) a €70 million decrease in engines.

Cars and spare parts

Net revenues generated from cars and spare parts were €2,209 million for the nine months ended September 30, 2019 an increase of €311 million, or 16.4 percent, from €1,898 million for the nine months ended September 30,2018.

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The €311 million increase in net revenues was composed of increases in all four of our main geographical regions, including: (i) a €125 million increase in EMEA, (ii) a €103 million increase in Mainland China, Hong Kong and Taiwan, (iii) a €59 million increase in Americas (including positive foreign currency translation impact driven by the strengthening of the U.S. Dollar compared to the Euro), and (iv) a €24 million increase in the Rest of APAC.

The increase in net revenues was primarily attributable to positive volume impact, greater contribution from our personalization programs and positive foreign currency impact, as well as deliveries of the FXX K EVO. In particular, total shipments increased by 902 cars compared to the prior year (or 13.2 percent), primarily attributable to a 16.7 percent increase in V8 models, and a 2.9 percent increase in V12 models. The increase in shipments was mainly driven by deliveries of the Ferrari Portofino, the 488 Pista, the 812 Superfast and the ramp up of the 488 Pista Spider, as well as the initial deliveries of the Ferrari Monza SP1 and SP2 towards the end of September. These effects were partially offset by lower shipments of the 488 Spider and 488 GTB, which concluded their lifecycles, as well as the effects of the LaFerrari Aperta, which finished its limited series run in 2018. Shipments during the period were impacted by a shift in geographical mix in favor of Mainland China as a result of the decision to accelerate deliveries in the first half of the year in advance of the early implementation of new emissions regulations.

Engines

Net revenues generated from engines were €157 million for the nine months ended September 30,2019, a decrease of €70 million, or 30.8 percent, from €227 million for the nine months ended September 30,2018. The €70 million decrease was attributable to a decrease in net revenues generated from the sale of engines to Maserati.

Sponsorship, commercial and brand

Net revenues generated from sponsorship, commercial agreements and brand management activities were €394 million for the nine months ended September 30,2019, an increase of €14 million, or 3.8 percent, from €380 million for the nine months ended September 30,2018. The increase was primarily attributable to higher revenues from Formula 1 racing activities and positive foreign currency exchange impact.

Other

Othernet revenues, which primarily relate to our financial services activities and management of the Mugello racetrack, amounted to €79 million and €70 million for the nine months ended September 30,2019 and 2018, respectively.

Cost of sales

	For the nine months ended September 30,						Increase/(Decrease)
	2019	Percentage of net revenues		2018	Percentage of net revenues		2019 vs. 2018
	(€ million, except percentages)
Cost of sales	1,367	48.2	%	1,224	47.6	%	143	11.8	%

Cost of sales for nine months ended September 30,2019 was €1,367 million, an increase of €143 million, or 11.8 percent, from €1,224 million for the nine months ended September 30,2018. As a percentage of net revenues, cost of sales was 48.2 percent, for the nine months ended September 30,2019 compared to 47.6 percent for the nine months ended September 30,2018.

The increase in cost of sales was primarily attributable to an increase in volumes and industrial costs and, to a lesser extent, negative foreign currency exchange impact and higher amortization and depreciation, partially offset by a decrease in costs related to lower engine volumes and a release of provisions related to favorable developments in emissions regulations that occurred in the third quarter of 2019.

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Selling, general and administrative costs

	For the nine months ended September 30,						Increase/(Decrease)
	2019	Percentage of net revenues		2018	Percentage of net revenues		2019 vs. 2018
	(€ million, except percentages)
Selling, general and administrative costs	255	9.0	%	240	9.3	%	15	6.3	%

Selling, general and administrative costs for the nine months ended September 30,2019 were €255 million, an increase of €15 million, or 6.3 percent, from €240 million for the nine months ended September 30,2018. As a percentage of net revenues, selling, general and administrative costs were 9.0 percent for the nine months ended September 30,2019 compared to 9.3 percent for the nine months ended September 30,2018.

The increase in selling, general and administrative costs was primarily attributable to product launches for new cars in our product offering as well as costs incurred to support the organic growth of the business.

Research and development costs

	For the nine months ended September 30,						Increase/(Decrease)
	2019	Percentage of net revenues		2018	Percentage of net revenues		2019 vs. 2018
	(€ million, except percentages)
Research and development costs expensed during the period	423	14.9	%	397	15.4	%	26	6.5	%
Amortization of capitalized development costs	94	3.3	%	85	3.3	%	9	10.5	%
Research and development costs	517	18.2	%	482	18.7	%	35	7.2	%

Research and development costs for the nine months ended September 30,2019 were €517 million, an increase of €35 million, or 7.2 percent, from €482 million for the nine months ended September 30,2018. As a percentage of net revenues, research and development costs were 18.2 percent for the nine months ended September 30,2019 compared to 18.7 percent for the nine months ended September 30,2018.

The increase of €35 million in research and development costs during the period was primarily to support innovation activities on our product range and components, as well as higher spending for Formula 1 racing activities.

Other expenses, net

	For the nine months ended September 30,		Increase/(Decrease)
	2019	2018	2019 vs. 2018
	(€ million, except percentages)
Other expenses, net	4	—	4	n.m.

Other expenses, net for the nine months ended September 30,2019 included other expenses of €17 million, mainly related to indirect taxes, provisions and other miscellaneous expenses, partially offset by income of €13 million, mainly related to a change in estimate of the risk and related provision associated with a legal dispute, based on developments that occurred in the first quarter of 2019, as well as other miscellaneous income.

Other expenses, net for the nine months ended September 30,2018 included other income of €13 million, mainly due to a pronouncement on a prior year’s legal dispute, and to a lesser extent rental income and miscellaneous income, partially offset by other expenses of €13 million, mainly related to indirect taxes, accruals for provisions and other miscellaneous expenses.

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EBIT

	For the nine months ended September 30,				Increase/(Decrease)
	2019	Percentage of net revenues	2018	Percentage of net revenues	2019 vs. 2018
	(€ million, except percentages)
EBIT	698	24.6%	631	24.5%	67	10.5%

EBIT for the nine months ended September 30,2019 was €698 million, an increase of €67 million, or 10.5 percent, from €631 million for the nine months ended September 30,2018.

The increase in EBIT was attributable to the combined effects of (i) positive volume impact of €107million, (ii) positive product mix and price impact of €6million, (iii) an increase in research and development costs of €35million, (iv) an increase in selling, general and administrative costs of €15million, (v) negative contribution from other supporting activities of €37 million, and (vi) positive foreign currency exchange impact of €41 million (including foreign currency hedging instruments) primarily driven by the strengthening of the U.S. Dollar compared to the Euro.

The positive product mix and price impact was primarily attributable to the combined positive effects from our personalization programs and deliveries of the FXX K EVO, partially offset by the negative range models product mix.

Net financial expenses

	For the nine months ended September 30,		Increase/(Decrease)
	2019	2018	2019 vs. 2018
	(€ million, except percentages)
Net financial expenses	32	15	17	112.9	%

Net financial expenses for the nine months ended September 30,2019 increased to €32 million compared to €15 million for the nine months ended September 30,2018, primarily attributable to the net costs of hedging and foreign exchange losses of €9 million and the partial repurchase of bonds following a cash tender offer in July, which resulted in €8 million of costs relating to the combined impact of the repurchase price and premium incurred, as well as previously unamortized issuance costs.

Income tax expense

	For the nine months ended September 30,		Increase/(Decrease)
	2019	2018	2019 vs. 2018
	(€ million, except percentages)
Income tax expense	133	20	113	n.m.

Income tax expense for the nine months ended September 30,2019 was €133 million compared to €20 million for the nine months ended September 30,2018.

In September 2018, the Group signed an agreement with the Italian Revenue Agency in relation to the Patent Box tax regime, which provides a tax benefit for companies that generate income through the use, both direct and indirect, of copyrights, patents, trademarks, designs and know-how. The agreement relates to the five-year period from 2015 to 2019. The Group applied the Patent Box tax regime for the calculation of income taxes starting in the third quarter of 2018.

The effective tax rate (net of IRAP) was 17.4 percent for the nine months ended September 30, 2019 compared to 0.3 percent for the nine months ended September 30, 2018 (total effective tax rate of 20.0 percent and 3.2 percent for the nine months ended September 30, 2019 and 2018, respectively). Income taxes for the nine months ended September 30, 2018 included the positive impact of the Patent Box benefit relating to the years 2015 to 2017 of €141 million.

Excluding the impact of the Patent Box benefit relating to the years 2015 to 2017, the adjusted effective tax rate (net of IRAP) for the nine months ended September 30, 2018 would have been 23.3 percent. The decrease in adjusted effective tax rate

19

(net of IRAP) from 23.3 percent for the nine months ended September 30, 2018 to 17.4 percent for the nine months ended September 30, 2019 was primarily attributable to an increase in the Patent Box benefit for 2019 compared to 2018, as well as deductions related to eligible depreciation of fixed assets in accordance with tax regulations in Italy.

Liquidity and Capital Resources

Liquidity Overview

We require liquidity in order to fund our business operations and meet our obligations. Short-term liquidity is required to purchase raw materials, parts and components for car production, as well as to fund selling, general, administrative, research and development, and other expenses. In addition to our general working capital and operational needs, we expect to use cash for capital expenditures to support our existing product range and broaden our future product portfolio. We make capital investments to support continuous product range renewal and expansion, as well as for initiatives to enhance manufacturing efficiency, improve capacity, and for maintenance and environmental compliance. We have increasingly incurred research and development expenditure to transition our product portfolio to hybrid technology. We fund our capital expenditure primarily with cash generated from our operating activities.

We centrally manage our operating cash management, liquidity and cash flow requirements with the objective of ensuring efficient and effective management of our funds. We believe that our cash generation together with our current liquidity will be sufficient to meet our obligations and fund our business and capital expenditures.

See the “Net Debt and Net Industrial Debt” section below for further details relating to our liquidity.    

Cyclical Nature of Our Cash Flows

Our working capital is subject to month to month fluctuations due to, among other things, production and sales volumes, our financial services activities, as well as the timing of capital expenditure and tax payments. In particular, our inventory levels increase in the periods leading up to launches of new models, during the phase out of existing models and at the end of the second quarter when our inventory levels are generally higher to support the summer plant shutdown.

We generally receive payment for cars between 30 and 40 days after the car is shipped (except when we provide dealer financing or sell invoices to a factor) while we generally pay most suppliers between 60 and 90 days after we receive the raw materials or components. Additionally, we also receive advance payments from our customers, mainly for our hypercars and limited edition cars (and starting in the first quarter of 2019, our Icona cars). We maintain sufficient inventory of raw materials and components to ensure continuity of our production lines but delivery of most raw materials and components takes place monthly or more frequently in order to minimize inventories. The manufacture of one of our cars typically takes between 30 and 45 days, depending on the level of automation of the relevant production line, and the car is generally shipped to our dealers three to six days following the completion of production, although to ensure prompt deliveries in certain regions we may warehouse cars in local markets for longer periods of time. As a result of the above, including the advances received from customers for certain models, we generally receive payment for cars shipped before we are required to make payment for the raw materials and components used in manufacturing the cars.

Our investments for capital expenditure and research and development are, among other factors, influenced by the timing and number of new models launches. Our development costs, as well as our other investments in capital expenditure, generally peak in periods when we develop a significant number of new models to renew or expand our product range. Our research and development costs are also influenced by the timing of research costs for our Formula 1 activities, for which expenditure is generally higher in the first and last quarters of the year. We significantly increased our capital expenditure in 2018 and we expect our capital expenditure will continue to increase in 2019 to further our investments in hybrid technology and to support the expansion of our product range.

The payment of income taxes also affects our working capital. We have typically paid our income taxes in two advances. As a result of signing an agreement in September 2018 with the Italian Revenue Agency in relation to the Patent Box tax regime for the years 2015 to 2019, our income tax expense was significantly reduced in 2018 and we did not pay the first advance in relation to 2019 income taxes in the first nine months of 2019. The Group has applied for a new ruling with the Italian Revenue Agency in relation to the Patent Box tax regime for the period from 2020 to 2024, which provides a tax benefit for companies that generate income through the direct use of copyrights, patents, designs and know-how during that period. See Note 12 “Income Tax Expense/(Benefit)” to the Interim Condensed Consolidated Financial Statements for additional details related to the Patent Box.

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Cash Flows

The following table summarizes the cash flows from/(used in) operating, investing and financing activities for the nine months ended September 30, 2019 and 2018. For additional details of our cash flows, see our Interim Condensed Consolidated Financial Statements included elsewhere in this Interim Report.

	For the nine months ended September 30,
	2019		2018
	(€ million, except share data)
Cash and cash equivalents at beginning of the period	794		648
Cash flows from operating activities	949		619
Cash flows used in investing activities	(451	)	(403	)
Cash flows used in financing activities	(423	)	(110	)
Translation exchange differences	2		(1	)
Total change in cash and cash equivalents	77		105
Cash and cash equivalents at end of the period	871		753

Operating Activities - Nine Months Ended September 30, 2019

Our cash flows from operating activities for the nine months ended September 30, 2019 were €949 million, primarily the result of:

(i) profit before taxes of €666 million adjusted to add back €238 million for depreciation and amortization expense, €32 million of net finance costs and €27 million of other non-cash expenses and income (including net gains on disposals of property, plant and equipment and intangible assets as well as non-cash result from investments) and €3 million in provisions accrued; and

(ii) €188 million of cash related to the net change in other operating assets and liabilities, primarily attributable to advances received for the Ferrari Monza SP1 and SP2.

These cash inflows were partially offset by:

(i) €96 million related to cash absorbed from the net change in inventories, trade receivables and trade payables, driven by cash absorbed by trade payables of €53 million, trade receivables of €36 million and inventories of €7 million, respectively;

(ii) €58 million related to cash absorbed from receivables from financing activities, primarily attributable to an increase in the financial receivables portfolio;

(iii) €27 million of net finance costs paid; and

(iv) €24 million of income taxes paid.

Operating Activities - Nine Months Ended September 30, 2018

Our cash flows from operating activities for the nine months ended September 30, 2018 were €619 million, primarily the result of:

(i) profit before taxes of €616 million adjusted for €210 million for depreciation and amortization expense, €26 million related to other non-cash expenses and income (including net gains on disposals of property, plant and equipment and intangible assets as well as non-cash result from investments), €15 million related to net finance costs and €6 million in provisions accrued.

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These cash inflows were partially offset by:

(i) €71 million related to cash absorbed from receivables from financing activities, primarily attributable to an increase in

the financial receivables portfolio;

(ii) €59 million relating to cash absorbed by the change in other operating assets and liabilities, primarily attributable to the release of advances on the LaFerrari Aperta and the payment of employee bonuses;

(iii) €25 million related to cash absorbed from the net change in inventories, trade receivables and trade payables, driven by

cash absorbed by trade payables of €63 million, mainly due to seasonality and the scheduled summer shutdown, partially offset by cash generated from trade receivables of €33 million and cash generated from inventories of €5 million;

(iv) €10 million of net finance costs paid; and

(v) €89 million of income taxes paid.

Investing Activities - Nine Months Ended September 30, 2019

For the nine months ended September 30, 2019 our net cash used in investing activities was €451 million, primarily the result of

(i) €238 million for additions to intangible assets, mainly related to externally acquired and internally generated development costs, and (ii) €215 million of capital expenditures additions to property, plant and equipment, mainly related to plant and machinery for new models. These cash flows were partially offset by proceeds of €2 million from the disposal of property, plant and equipment. For a detailed analysis of additions to property, plant and equipment and intangible assets see “Capital Expenditures.”

Investing Activities - Nine Months Ended September 30, 2018

For the nine months ended September 30, 2018 our net cash used in investing activities was €248 million, primarily the result of

(i) €223 million for additions to intangible assets, mainly related to externally acquired and internally generated development costs, and (ii) €180 million of capital expenditures for additions to property, plant and equipment, mainly related to plant and machinery for new models. For a detailed analysis of additions to property, plant and equipment and intangible assets see “Capital Expenditures.”

Financing Activities - Nine Months Ended September 30, 2019

For the nine months ended September 30, 2019, net cash used in financing activities was €423 million, primarily the result of:

(i) €315 million related to the cash tender offer to repurchase an aggregate nominal amount of €200 million of the 2021 Bond and an aggregate nominal amount of €115 million of the 2023 Bond;

(ii) €303 million paid to repurchase common shares under the Company’s share repurchase program;

(iii) €195 million of dividends paid, of which €2 million was to non-controlling interests; and

(iv) €4 million related to the net change in bank borrowings and lease liabilities.

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These cash outflows were partially offset by:

(i) €298 million of net proceeds from the Company’s issuance of 1.12 percent senior notes due August 2029 and 1.27 percent senior notes due August 2031, each having a principal of €150 million; and

(ii) €89 million of proceeds net of repayments related to our revolving securitization programs in the U.S.;

(iii) €7 million related to the net change in other debt.

Financing Activities - Nine Months Ended September 30, 2018

For the nine months ended September 30, 2018 net cash used in financing activities was €132 million, primarily the result of:

(i) €135 million of dividends paid, of which €2 million was to non-controlling interests;

(ii) €30 million paid to repurchase common shares under the Company’s share repurchase program;

(iii) €12 million related to the net change in other debt; and

(iv) €2 million related to the net change in bank borrowings.

These cash outflows were partially offset by:

(i) €69 million of proceeds net of repayments related to our revolving securitization programs in the U.S..

Capital Expenditures

Capital expenditures are defined as cash outflows that result in additions to property, plant and equipment and intangible assets. Capital expenditures for the nine months ended September 30, 2019 and 2018 were €453 million and €403 million, respectively.

The following table sets forth a breakdown of capital expenditures by category for each of the nine months ended September 30, 2019 and 2018:

	For the nine months ended September 30,
	2019	2018
	(€ million, except share data)
Intangible assets
Externally acquired and internally generated development costs	228	216
Patents, concessions and licenses	8	6
Other intangible assets	2	1
Total intangible assets	238	223
Property, plant and equipment
Industrial buildings	11	12
Plant, machinery and equipment	58	50
Other assets	13	5
Advances and assets under construction	133	113
Total property, plant and equipment	215	180
Total capital expenditures	453	403

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Intangible assets

Our total capital expenditures in intangible assets were €238 million and €223 million for the nine months ended September 30, 2019 and 2018, respectively.

The most significant investments relate to externally acquired and internally generated development costs. In particular, we make such investments to support the development of our current and future product offering. The capitalized development costs primarily include materials and personnel costs relating to engineering, design and development activities focused on content enhancement of existing cars and new models, including to transition our product portfolio to hybrid technology. We constantly invest in product development to ensure we can quickly and efficiently respond to market demand and/or technological breakthroughs and in order to maintain our position at the top of the luxury performance sports cars market.

The increase in externally acquired and internally generated development costs reflects the gradual introduction of hybrid technology into our product portfolio. We believe hybrid technology is relevant to providing continuing performance upgrades to our sports car customers, and will also help us capture the preferences of the urban, affluent purchasers of GT cars whom we are increasingly targeting.

For the nine months ended September 30, 2019 we invested €228 million in externally acquired and internally generated development costs, of which €122million related to the development of models to be launched in future years and €106 million primarily related to the development of our current product portfolio and car components.

For the nine months ended September 30, 2018 we invested €216 million in externally acquired and internally generated development costs, of which €163 million related to the development of models to be launched in future years and €53 million related to the development of models in our current product portfolio and car components.

Property, plant and equipment

Our total capital expenditures in property, plant and equipment were €215 million and €180 million for the nine months ended September 30, 2019 and 2018, respectively.

Our most significant investments primarily related to industrial tools needed for the production of cars and investments in car production lines (including those for models to be launched in future years), as well as expenditures related to our personalization programs and engine assembly lines. The increase in capital expenditures in advances and assets under construction reflects our focus on the hybridization and broadening of our product range and supporting future model launches.

At September 30, 2019, the Group had contractual commitments for the purchase of property, plant and equipment amounting to €110 million.

Net Debt and Net Industrial Debt

Due to different sources of cash flows used for the repayment of debt between industrial activities and financial services activities, and the different business structure and leverage implications, Net Industrial Debt, together with Net Debt, are the primary measures used by us to analyze our capital structure and financial leverage. We believe the presentation of Net Industrial Debt aids management and investors in their analysis of the Group’s financial position and financial performance and to compare with other companies. Net Industrial Debt is defined as total debt less cash and cash equivalents (Net Debt), further adjusted to exclude the debt and cash and cash equivalents related to our financial services activities (Net Debt of Financial Services Activities). Starting in 2019 we changed the definition of Net Industrial Debt. See “Non-GAAP Financial Measures” above for further information.

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The following table sets forth a reconciliation of Net Debt and Net Industrial Debt at September 30,2019 and December 31,2018.

	At September 30,		At December 31,
	2019		2018
	(€ million, except share data)
Cash and cash equivalents	871		794
Total liquidity	871		794
Bonds	(883	)	(1,198	)
Asset-backed financing (Securitizations)	(810	)	(683	)
Notes	(299	)	—
Lease liabilities(1)	(62	)	—
Borrowings from banks	(36	)	(36	)
Other Debt	(18	)	(10	)
Total Debt	(2,108	)	(1,927	)
Net Debt (A)	(1,237	)	(1,133	)
Net Debt of Financial Services Activities (B)	(868	)	(763	)
Net Industrial Debt (A-B)	(369	)	(370	)

(1) As a result of adopting IFRS 16 - Leases on January 1, 2019, the Group recognized right-of-use assets and related lease liabilities of €63 million in relation to leases which had previously been classified as operating leases under IAS 17. For further details please refer to Note 3 in the Interim Condensed Consolidated Financial Statements.

Following a cash tender offer, on July 16, 2019 the Company executed a partial repurchase of the 2023 Bond and 2021 Bond for aggregate nominal amounts of €115 million and €200 million respectively. On July 31, 2019, the Company issued 1.12 percent senior notes due August 2029 (“2029 Notes”) and 1.27 percent senior notes due August 2031 (“2031 Notes”) through a private placement to certain US institutional investors, each having a principal of €150 million. The net proceeds from the issuances amounted to €298 million.

For further details on total debt, see Note 23 “Debt” to the Interim Condensed Consolidated Financial Statements included elsewhere in this document.

Cash and cash equivalents

Cash and cash equivalents amounted to €871 millionat September 30,2019 compared to €794 millionat December 31,2018. See “Free Cash Flow and Free Cash Flow from Industrial Activities” and “Cash Flows” for further details.

Approximately 73 percent of our cash and cash equivalents were denominated in Euro at September 30, 2019 (approximately 78 percent at December 31, 2018). Our cash and cash equivalents denominated in currencies other than the Euro are available mostly to Ferrari S.p.A. and certain subsidiaries which operate in areas other than Europe. Cash held in such countries may be subject to transfer restrictions depending on the jurisdictions in which these subsidiaries operate. In particular, cash held in China (including in foreign currencies), which amounted to €113 million at September 30, 2019 (€78 million at December 31, 2018), is subject to certain repatriation restrictions and may only be repatriated as dividends or capital distributions. We do not currently believe that such transfer restrictions have an adverse impact on our ability to meet our liquidity requirements.

25

The following table sets forth an analysis of the currencies in which our cash and cash equivalents were denominated at the dates presented.

	At September 30,	At December 31,
	2019	2018
	(€ million, except share data)
Euro	634	616
Chinese Yuan	108	73
U.S. Dollar	89	50
Japanese Yen	13	24
Other currencies	27	31
Total	871	794

Cash collected from the settlement of receivables or credit lines pledged as collateral under securitization programs is subject to certain restrictions regarding its use and is primarily applied to repay principal and interest of the related funding. Such cash amounted to €36 million at September 30, 2019 (€26 million at December 31, 2018).

Total available liquidity

Total available liquidity (defined as cash and cash equivalents plus undrawn committed credit lines) at September 30,2019 was €1,371 million (€1,294 millionat December 31,2018).

The following table summarizes our total available liquidity:

	At September 30,	At December 31,
	2019	2018
	(€ million, except share data)
Cash and cash equivalents	871	794
Undrawn committed credit lines	500	500
Total available liquidity	1,371	1,294

The undrawn committed credit lines relates to a revolving credit facility. For further details, see Note 23 “Debt” in the Interim Condensed Consolidated Financial Statements included elsewhere in this document.

26

Free Cash Flow and Free Cash Flow from Industrial Activities

Free Cash Flow and Free Cash Flow from Industrial Activities are two of our primary performance indicators to measure the Group’s performance. These measures are presented by management to aid investors in their analysis of the Group’s financial performance and to compare the Group’s financial performance with that of other companies. Free Cash Flow is defined as cash flows from operating activities less investments in property, plant and equipment and intangible assets. Free Cash Flow from Industrial Activities is defined as Free Cash Flow adjusted to exclude the operating cash flow from our financial services activities (Free Cash Flow from Financial Services Activities). Starting in 2019 we changed the definition of Free Cash Flow and Free Cash Flow from Industrial Activities. See “Non-GAAP Financial Measures” above for further information.

The following table sets forth our Free Cash Flow and Free Cash Flow from Industrial Activities for the nine months ended September 30,2019 and 2018.

	For the nine months ended September 30,
	2019		2018
	(€ million, except share data)
Cash flows from operating activities	949		619
Investments in property, plant and equipment and intangible assets	(453	)	(403	)
Free Cash Flow	496		216
Free Cash Flow from Financial Services Activities	(63	)	(48	)
Free Cash Flow from Industrial Activities	559		264

Free Cash Flow from Industrial Activities for the nine months ended September 30,2019 was €559 million, an increase of €295 million compared to €264 million for the nine months ended September 30, 2018. The increase in Free Cash Flow from Industrial Activities was primarily attributable to an increase in Adjusted EBITDA, a positive change in other operating assets and liabilities driven by advances received for the Ferrari Monza SP1 and SP2, as well as a decrease in taxes paid, partially offset by an increase in capital expenditures.

Free Cash Flow for the nine months ended September 30,2019 was €496 million, an increase of €280 million compared to €216 million for the nine months ended September 30, 2018. For an explanation of the drivers in Free Cash Flow see “Cash Flows” above.

27

Outlook

Upgraded 2019 Guidance:

• Net revenues: ~Euro 3.7 billion(from > Euro 3.5 billion)

• Adjusted EBITDA: ~Euro 1.27 billion(from Euro 1.2-1.25 billion)

• Adjusted EBIT: ~Euro 0.92 billion(from Euro 0.85-0.9 billion)

• Adjusted diluted EPS: Euro 3.70-3.75⁽¹⁾ per share(from Euro 3.50-3.70⁽²⁾ per share)

• Industrial free cash flow: > Euro 0.6 billion(from > Euro 0.55 billion)

(1) Calculated using the weighted average diluted number of common shares for 2019 as at October 25, 2019 of 187,864 thousand and excluding net profit attributable to non-controlling interests.

(2) Calculated using the weighted average diluted number of common shares for 2018 and excluding net profit attributable to non-controlling interests.

28

FERRARI N.V.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AT AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019

CONTENTS

	Page
Interim Consolidated Income Statement	F-1
Interim Consolidated Statement of Comprehensive Income	F-2
Interim Consolidated Statement of Financial Position	F-3
Interim Consolidated Statement of Cash Flows	F-4
Interim Consolidated Statements of Changes in Equity	F-5
Notes to the Interim Condensed Consolidated Financial Statements	F-6

FERRARI N.V.

INTERIM CONSOLIDATED INCOME STATEMENT

for the three and nine months ended September 30,2019 and 2018

(Unaudited)

		For the three months ended September 30,			For the nine months ended   September 30,
	Note	2019	2018		2019	2018
		(€ thousand)
Net revenues	6	915,314	838,180		2,838,974	2,574,836
Cost of sales	7	425,457	400,994		1,367,449	1,223,202
Selling, general and administrative costs	8	96,153	86,874		255,427	240,265
Research and development costs	9	162,374	143,634		517,282	482,435
Other expenses/(income), net	10	5,517	4,160		3,346	(421	)
Result from investments		1,011	604		2,401	1,950
EBIT		226,824	203,122		697,871	631,305
Net financial expenses	11	15,629	6,286		32,093	15,075
Profit before taxes		211,195	196,836		665,778	616,230
Income tax expense/(benefit)	12	42,240	(91,001	)	133,156	19,719
Net profit		168,955	287,837		532,622	596,511
Net profit attributable to:
Owners of the parent		167,851	286,922		528,246	594,827
Non-controlling interests		1,104	915		4,376	1,684
Basic earnings per common share (in €)	13	0.90	1.52		2.82	3.15
Diluted earnings per common share (in €)	13	0.90	1.51		2.81	3.14

The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

F-1

FERRARI N.V.

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the three and nine months ended September 30,2019 and 2018

(Unaudited)

		For the three months ended September 30,				For the nine months ended September 30,
	Note	2019		2018		2019		2018
		(€ thousand)
Net profit		168,955		287,837		532,622		596,511
Items that may be reclassified to the consolidated income statement in subsequent periods:
(Losses)/Gains on cash flow hedging instruments	20	(21,916	)	1,698		(20,442	)	(11,146	)
Exchange differences on translating foreign operations	20	7,210		281		8,061		4,213
Related tax impact	20	6,108		(473	)	5,680		3,110
Total items that may be reclassified to the consolidated income statement in subsequent periods		(8,598	)	1,506		(6,701	)	(3,823	)
Total other comprehensive (loss)/income, net of tax	20	(8,598	)	1,506		(6,701	)	(3,823	)
Total comprehensive income		160,357		289,343		525,921		592,688
Total comprehensive income attributable to:
Owners of the parent		159,211		288,566		521,424		591,112
Non-controlling interests		1,146		777		4,497		1,576

The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

F-2

FERRARI N.V.

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at September 30, 2019 and at December 31, 2018

(Unaudited)

	Note	At September 30, 2019	At December 31, 2018
		(€ thousand)
Assets
Goodwill		785,182	785,182
Intangible assets	14	778,651	645,797
Property, plant and equipment	15	996,116	850,550
Investments and other financial assets	16	36,910	32,134
Deferred tax assets		63,329	60,744
Total non-current assets		2,660,188	2,374,407
Inventories	17	390,848	391,064
Trade receivables	18	250,060	211,399
Receivables from financing activities	18	980,765	878,496
Current tax receivables	18	70,849	128,234
Other current assets	18	107,769	64,295
Current financial assets	19	8,202	10,174
Cash and cash equivalents		871,399	793,664
Total current assets		2,679,892	2,477,326
Total assets		5,340,080	4,851,733
Equity and liabilities
Equity attributable to owners of the parent		1,386,846	1,348,722
Non-controlling interests		7,494	5,117
Total equity	20	1,394,340	1,353,839
Employee benefits		76,883	86,575
Provisions	22	161,096	182,539
Deferred tax liabilities		62,815	39,142
Debt	23	2,108,141	1,927,167
Other liabilities	24	872,184	589,743
Other financial liabilities	19	30,366	11,342
Trade payables	25	607,794	653,751
Current tax payables		26,461	7,635
Total equity and liabilities		5,340,080	4,851,733

The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

F-3

FERRARI N.V.

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

for the nine months ended September 30,2019 and 2018

(Unaudited)

	For the nine months ended September 30,
	2019		2018
	(€ thousand)
Cash and cash equivalents at beginning of the period	793,664		647,706
Cash flows from operating activities:
Profit before taxes	665,778		616,230
Amortization and depreciation	237,727		210,142
Provision accruals	2,935		6,662
Result from investments	(2,401	)	(1,950	)
Net finance costs	32,093		15,075
Other non-cash expenses, net	30,044		28,261
Net gains on disposal of property, plant and equipment and intangible assets	(74	)	(138	)
Change in inventories	(7,430	)	5,200
Change in trade receivables	(35,962	)	32,670
Change in trade payables	(53,273	)	(62,769	)
Change in receivables from financing activities	(58,201	)	(71,748	)
Change in other operating assets and liabilities	188,460		(59,161	)
Finance income received	2,266		1,725
Finance costs paid	(28,886	)	(11,916	)
Income tax paid	(24,274	)	(89,109	)
Total	948,802		619,174
Cash flows used in investing activities:
Investments in property, plant and equipment	(214,446	)	(180,196	)
Investments in intangible assets	(238,456	)	(223,280	)
Proceeds from the sale of property, plant and equipment and intangible assets	2,333		654
Total	(450,569	)	(402,822	)
Cash flows used in financing activities:
Repayment of bonds	(315,395	)	—
Proceeds from the issuance of notes	298,316		—
Proceeds from securitizations net of repayments	89,385		69,321
Net change in other debt	6,844		(12,171	)
Net change in lease liabilities	(2,412	)	—
Net change in bank borrowings	(1,754	)	(2,009	)
Share repurchases	(303,285	)	(30,131	)
Dividends paid to owners of the parent	(192,664	)	(133,095	)
Dividends paid to non-controlling interest	(2,120	)	(2,040	)
Total	(423,085	)	(110,125	)
Translation exchange differences	2,585		(571	)
Total change in cash and cash equivalents	77,733		105,656
Cash and cash equivalents at end of the period	871,397		753,362

The accompanying notes are an integral part of the Interim Condensed Consolidated Financial Statements.

F-4

FERRARI N.V.

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

for the nine months ended September 30,2019 and 2018

(Unaudited)

	Share capital	Retained earnings and other reserves		Cash flow hedge reserve		Currency translation differences	Remeasurement of defined benefit plans		Equity attributable to owners of the parent		Non-controlling interests		Total
	(€ thousand)
At December 31, 2017	2,504	746,341		6,434		31,814	(8,415	)	778,678		5,258		783,936
Net profit	—	594,827		—		—	—		594,827		1,684		596,511
Other comprehensive (loss)/income	—	—		(8,036	)	4,321	—		(3,715	)	(108	)	(3,823	)
Dividends to owners of the parent	—	(133,939	)	—		—	—		(133,939	)			(133,939	)
Dividends to non-controlling interests	—	—		—		—