Ferrari IPO 2015 Guide questions 1. What is going on at Ferrari? At what price do you think the shares should be sold? 2. Tell me more about your market-multiples approach. How does it work? What are the strengths and weaknesses of using a market multiples approach in valuation? 3. Tell me more about DCF approach. How does it work? with the excel calculation for DCF using exhibit 8

Exhibit 8
FERRARI: THE 2015 INITIAL PUBLIC OFFERING
Ferrari Forecast (Millions of Euro, except as noted)
Assumptions	2014	2015	2016	2017	2018	2019
	Growth in Cars Shipped	3.6%	7.0%	5.0%	4.0%	4.0%	3.0%
	Growth in Revenue/Car		5.0%	5.0%	5.0%	5.0%	5.0%
	Growth in Engine Revenue		3.0%	3.0%	3.0%	3.0%	3.0%
	Growth in Other Revenue		3.0%	6.0%	6.0%	6.0%	6.0%
	Operating Margin - Cars	12.5%	13.0%	13.5%	14.0%	14.0%	14.0%
	Operating Margin - Engines	9.1%	10.0%	10.0%	10.0%	10.0%	10.0%
	Operating Margin - All Other Revenue	24.9%	25.0%	27.0%	28.0%	30.0%	30.0%
	Net Working Capital Turnover	1.9	2.0	2.1	2.2	2.2	2.2
	Net Fixed Asset Turnover	3.2	3.2	3.3	3.5	3.7	3.8
	Deprec&Amort/PPE	34%	34%	34%	34%	34%	34%
Financial Forecast
	Car Shipments (000s)	7.26	7.76	8.15	8.48	8.82	9.08
	Avg Revenue per Car (Euro 000s)	268	281	295	310	326	342
	Car Revenue	1,944	2,184	2,408	2,629	2,871	3,105
	Engine Revenue	311	320	330	340	350	361
	All other Revenue	507	523	554	587	623	660
	Total Revenue	2,762	3,027	3,292	3,556	3,844	4,126
	Operating Profit-Cars	243	284	325	368	402	435
	Operating Profit-Engines	28	32	33	34	35	36
	Operating Profit-All Other Revenue	126	131	150	164	187	198
	Total Operating Profit	398	447	508	567	624	669
	Net Working Capital	1,425	1,513	1,568	1,617	1,747	1,875
	Net PP&E and Int. Assets	851	932	998	1,016	1,039	1,086
	Dep & Amort	289	317	339	345	353	369
	Total Revenue Growth	18%	10%	9%	8%	8%	7%
	EBITDA Margin	25%	25%	26%	26%	25%	25%
Source: Case Writer Estimates