We're buying Ferrari Group

No, not THAT Ferrari 🏎️

Last Friday, we released our Ferrari Group analysis for our members. If you clicked on this article hoping to read something about red and fancy cars, we have to disappoint you. Or perhaps you have discovered a hidden pearl that went public in January 2025. We are genuinely impressed by the company’s numbers and would like to share some key insights in this report.

No sports cars, what is Ferrari Group?

Ferrari Group is a global leader in luxury logistics. The company serves more than 100 luxury clients worldwide and achieved a retention rate of 100% in 2023. Most customer contracts run between three and five years, which makes revenue streams stable and reliable. The company specializes in “hard luxury”, such as jewels, watches and jewelry.

But the company is not simply moving goods from one place to another. It manages significant parts of the supply chain for its clients. From transporting goods with both armored and non-armored vehicles, to handling packaging, to offering customs services: Ferrari Group covers it all. As a result, it acts as a “one stop” service provider, as they describe themselves.

Beyond this core area, Ferrari Group also manages so-called “red carpet events”, such as luxury auctions and exhibitions. Here, global luxury brands like Chanel, Tiffany & Co., Rolex and LVMH present their finest products. Ferrari Group handles the safety and security of these luxury items during transport as well as throughout the event itself.

Here is a snapshot of all services Ferrari Group offers to its customers:

So… What is there to like?

Switching costs are working heavily in Ferrari Group’s favor. Ferrari Group was built to master the art of luxury logistics. The company must integrate with the ERP systems of its customers in one way or another. Ferrari Group knows where luxury goods are at any moment, when they are delivered to boutiques or warehouses, and how long they have been stored. This information is essential for Ferrari Group’s customers. The company also operates worldwide and has customs specialists in many countries where bureaucracy for luxury imports is high. Brazil is a perfect example of this. It can take weeks to get products through customs with the right certifications and approvals.

Ferrari Group focuses exclusively on luxury. This allows the company to align with the luxury perception that customers from renowned brands expect. Global logistics players like UPS and DHL operate in high-volume, low-fare logistics; a completely different market with its own transportation dynamics. As long as Ferrari Group keeps customers satisfied and avoids missteps, there seems to be little reason for anyone to walk away.

But, why can’t luxury companies do it themselves?

They can, but most of the time they do not. Pure luxury companies focus on building their brand and designing/creating the best pieces of art. Outsourcing logistics to players with global scale, like Ferrari Group, allows them to do exactly that. It makes little sense for luxury companies to invest in a large fleet of vehicles, drivers, and customs personnel to handle logistics. It is simply not financially viable.

1. Some things we like from an investment perspective

   Ferrari Group has a very low free float, and the founding family still owns 70 percent of the company. The result? The business is too small for large financial institutions, and management’s interests are perfectly aligned with those of shareholders. To be honest, it is a boring company as well, which makes it unattractive for retail investors chasing the next big thing.

2. Ferrari Group has a huge net cash position
   With no debt and only minor lease liabilities, combined with more than €100 million in cash (on a market cap of ~€750 million), the company is able to act with flexibility. Making opportunistic acquisitions in this market makes sense. By doing so, the company can buy its way into strategic locations and secure personnel with experience across multiple countries.

3. Free cash flow yield is fantastic
   Free cash flow conversion is high, yes. But more important: the company also outperforms the broader market by a wide margin in terms of free cash flow yield. The free cash flow yield for shareholders is almost 8 percent, while the S&P 500 averages around 3.6 percent. This tells us one thing: the company is generating far more real money for shareholders than the average business.
   
   Oh yes, about that other Ferrari we talked about in the introduction; here is a comparison in FCF yield between the two. Just so you know.

   

Want to know more?

We published a deep dive article and stock pitch about Ferrari Group last week. There, all ins and outs are being discussed. Also, you’ll get a better understanding of why our analyst Mathijs has bought shares in Ferrari Group.

If you are interested in reading all of our analyses about listed companies, consider joining TDI-premium and join 150+ other like-minded investors.

Whether you decide to join us or not, we hope to have introduced you to a new great company.

The Dutch Investors