Ferrari’s Camilleri will be a hard act to follow

Ferrari was facing a fresh challenge of finding a new leader of the same standing as Louis Camilleri on Friday, just as the Italian luxury carmaker is rolling out new hybrid models and getting ready for its first ever SUV.

Chief Executive Officer Louis Camilleri, 65, retired with immediate effect citing personal reasons late on Thursday, after being in the role for nearly two and a half years.

Chairman John Elkann, the scion of Italy’s Agnelli family, will lead the company on an interim basis while a permanent successor is found.

It was not long before names of possible candidates emerged.

A spokesman for F1 dismissed rumours that the former head of Ferrari’s racing team and ex-Lamborghini chief Stefano Domenicali could take Camilleri’s role, saying he was looking forward to starting his new job as F1 CEO on Jan. 1 as planned.

A source close to former Vodafone CEO Vittorio Colao also said media reports about him as a candidate for Ferrari’s top job were groundless.

Besides Domenicali and Colao, Italian media cited other names including Apple CFO Luca Maestri and Apple former Chief Design Officer Jonathan Paul Ive as possible candidates.

Although Camilleri’s sudden departure comes at an unfortunate time for the carmaker, the appointment of a replacement was unlikely to be rushed.

“It will take the appropriate time,” a source close to the matter said.

Like Camilleri, who had years of experience in the tobacco and food industries before taking the helm at Ferrari, a new CEO need not necessarily be an automotive expert.

Ferrari is often seen by analysts and investors as a luxury goods maker rather than an automotive specialist, and as well as leading Ferrari’s ongoing effort to expand its vehicle line-up to hybrid technology, last year Camilleri launched a plan to widen the brand to apparel, accessories, entertainment offers, luxury products and services.

Intesa Sanpaolo analyst Monica Bosio said finding a successor “capable of managing Ferrari’s peculiar business model, facing at the same time Ferrari’s current issues in F1,” was no easy task given Camilleri’s retirement also occurs “in a technological transition phase”.

In the F1 championship, Ferrari haven’t won a race all year and with only one left to go, the team’s current 6th place could leave the Prancing Horse nursing its worst result for 40 years.

SHARES PERFORM
Camilleri was appointed to lead Ferrari in July 2018, after the sudden death of former CEO Sergio Marchionne. During his tenure Ferrari has been one of the best performing auto stocks, as demand for its high performance cars remained strong, even through the coronavirus pandemic.

Under his leadership, Ferrari shares rose around 50% and have hit record levels, with those listed on Milan’s bourse touching an all-time high of 182.95 euros ($221.70) last month.

The shares closed up 0.3% on Friday compared with a 1% fall in Milan’s blue-chip index.

A Milan-based trader said Ferrari was a well functioning machine.

“With 200 million millionaires around the world, demand is not missing, it’s not a CEO retiring that can unsettle the company,” he said.

Citi analysts said whoever replaces Camilleri would inherit a “significant legacy”.

“At the same time, Ferrari faces perhaps the biggest upheaval in its history with a number of questions around the deliverability of 2022 profit targets and more pertinently navigating the launch of the PuroSangue SUV and negotiating the transition to zero carbon emissions,” Citi added.

Ferrari has pledged that 60% of its vehicle sales will be hybrid by 2022, but has ruled out a fully-electric model.

As customers love Ferrari for its roar and high performance, analysts say there is a risk it will struggle in the long term, when silent fully electric engines rule the market and traditional powertrains are progressively phased out.

In its plan to 2022 Ferrari aimed at nearly doubling its adjusted core earnings to 1.8 billion-2.0 billion euros from 1 billion euros in 2017. For this year Ferrari has targeted adjusted core earnings at around 1.125 billion euros ($1.36 billion).

According to a company source, Camilleri – who also resigned as executive chairman of Philip Morris International (PMI) – had been hospitalised for COVID-19 in recent weeks.

He is now recovering at home but his illness was not said to be the cause of his decision to retire.

($1 = 0.8252 euros)