Ferrari’s (NYSE:RACE) CEO has Plans to Revive Ferrari’s F1 Fortunes

Ferrari’s (NYSE:RACE) CEO has Plans to Revive Ferrari’s F1 Fortunes

$RACE

Ferrari (NYSE:RACE) has had few changes of it’s CEO over its 70-year history.

After the death of founder Enzo Ferrari in Y 1988, there was Luca di Montezemolo, Sergio Marchionne and now Louis Camilleri, 64 anni.

The task ahead for CEO Camilleri is growing the now listed Ferrari automotive business, expanding it globally as a luxury brand and working to get the Scuderia’s iconic F1 team back to its winning ways.

His approach is different from that those of Marchionne days. Ferrari was then synonymous with a revolving door policy for Top engineers, the fear of failure and of reprisals.

Today’s Scuderia is “serene” by comparison, according to CEO Camilleri. He aims to build a culture of stability like that which brought Ferrari’s most sustained period of F1 success in the early 2000’s under team boss Jean Todt, driver Michael Schumacher and engineer Ross Brawn.

Today, that kind of achievement is embodied by the MercedesAMG F1 team under Toto Wolff.

Mr. Camilleri is a lot of things that Mr. Marchionne was not. He is open, approachable, funny and, although he is highly demanding of his management team, he prefers the carrot to the stick. You get further that way, he says. “Talking to the young engineers, they value the change.” He notes that in particular they can focus on what they are doing, “rather than looking over their shoulders all the time”.

The strength of Ferrari is its work ethic

“That is amazing. I’ve never seen anywhere else in the world such work ethic and such loyalty.” The F1 team is always under pressure from the expectations of its fans and the Italian media. “The words passion and Ferrari are intimately connected,” he says, highlighting an event in Milan’s Piazza Duomo before the Italian Grand Prix in September. It drew a crowd of 30,000 fans and many former drivers.

Recommended Sport Ferrari’s new F1 team principal aims to restore winning ways “That gives you a sense of the power of what Ferrari means,” he says. “It’s this ongoing family. I would hazard a guess that every single driver on the F1 grid today would love to drive for Ferrari. Why? Because it is so meaningful.”

He had plenty of exposure to F1 in his time as an executive at Philip Morris, which has pumped huge amounts of money into the sport over the decades.

Mr. Camilleri developed a deep understanding of Ferrari including the decisions about the team that worked and those that failed to make it competitive. When CEO Marchionne died suddenly in July last year, The Agnelli Family turned to director Mr. Camilleri and he came in at short notice. Thought he was an architect of the fabled 5 yr plan.

His target is to ensure that we have a clear strategic plan longer term and we execute. Part of that is culture: ensuring a real team spirit.

The stock is up 25% under his watch and Ferrari is now valued at $31-B.

On the F1 track, things are going less smoothly. Ferrari has lost the last 2 F1 world championship campaigns to MercedesAMG, despite having a faster car for much of that time.

Poor execution, lack of consistency and mistakes by the drivers, not least team leader Sebastian Vettel, have cost them dearly. I would hazard a guess that every single driver on the F1 grid today would love to drive for Ferrari

The good news has been the arrival as a strong force this season of Charles Leclerc. 22 anni, who was nurtured by the Ferrari driver academy. He won the Italian Grand Prix, catapulting him straight into Ferrari folklore.

“Drivers like Charles come up every 10 years or so,” says CEO Camilleri. “He’s incredibly talented, focused and mature for his age. He’s very grounded, he’s improving. He has learnt from Seb and he would admit that. He has everything it takes, incredible talent.”

Mr. Camilleri is satisfied that Ferrari has the right people in place. They just need some more investment in what is called “performance dynamics” factors that include, a better understanding of tire behaviour.

CEO Camilleri checks in regularly with Ferrari’s team principal Mattia Binotto on such matters, but otherwise lets him get on with running the team.

F1 has demanded a significant amount of Mr. Camilleri’s time in other ways recently, in particular negotiating the new commercial and regulatory agreements between the teams and those in charge of the sport.

Under Mr. Marchionne, this was shaping up to be a bitter battle. But Mr. Camilleri has played his cards closer to his chest and not made threats or bombastic media statements about Ferrari’s importance to the sport.

Everyone, including our direct competitors, realises that Ferrari is Key to F1 and F1 is Key to Ferrari.

Ferrari has managed to retain its veto right over regulations and has managed to fight off proposals from F1’s owner Liberty Media, to allow standardisation of many parts on the cars. Ferrari felt this would “dumb down” the sport and diminish the constructor’s technological individuality.

Mr. Camilleri notes that the change in distribution of commercial revenues to the 10 F1 teams will now be more equitable. Under former F1 chief executive Bernie Ecclestone, it was very lopsided towards the Top 3 teams. “That was Bernie’s way,” he says. “There’s a much fairer allocation now . . . in terms of the economic sustainability of F1, it’s much better.

Ferrari is the Aristocrat of the automotive sector.

Enzo Ferrari’s iconic Italian Supercar manufacturer claimed the title according to the latest Brand Finance Global 500 2019 report launched at the World Economic Forum in Davos.

HeffX-LTN overall technical outlook for RACE is Very Bullish, overhead resistance is 168.16, and Key support at 164.48, as all Key indicators are Bullish and the stock has established long term support ahead of this breakout.

Ferrari finished at 164.94, -0.68 Thursday in NY.

Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I see it at 200+/share in that frame.

Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I see it at 200+/share in that frame.

Have a terrific weekend

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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