Ferretti S.p.A. (9638.HK): BCG Matrix [Dec-2025 Updated]

Ferretti's portfolio shows a clear tilt toward high-margin bespoke yachting-Made-to-Measure, Superyachts and Riva are the growth engines commanding heavy investment and driving a record backlog-while mature Composite, European operations and after-sales act as cash cows funding dividends, maintenance CAPEX and selective expansion; emerging bets like Wally, APAC and the Ferretti Security Division require capital and market proof to become stars, whereas entry-level boats, pre-owned sales and ancillary licensing are low-return dogs the group is deprioritizing to preserve margins and upside.

Ferretti S.p.A. (9638.HK) - BCG Matrix Analysis: Stars

Stars

The Made-to-Measure Yachts segment functions as a clear 'Star' for Ferretti, demonstrating rapid market growth and high relative market share. Order intake surged 185% in Q3 2025 versus the prior-year quarter, underpinning strong momentum in bespoke and larger-yacht demand. In H1 2025 the segment accounted for 40.8% of total net revenue from new yachts, generating €253.1 million compared with €233.1 million in H1 2024. Ferretti's strategic pivot to vessels >80 feet has shifted the portfolio mix: boats over 80' now represent more than 50% of new orders. Operational leverage is visible in profitability, with an adjusted EBITDA margin of 16.0% for the segment, contributing materially to the group's overall 2.5% year-on-year revenue growth to €887.2 million by September 2025. Investment to sustain growth remains significant, with approximately €39.6 million allocated to business expansion initiatives supporting production capacity, R&D for larger/composite builds, and customization capabilities.

Key drivers and strategic levers for the Made-to-Measure Star segment include:

• Product mix shift to larger vessels (>80'), increasing average selling price and margin.
• High-margin customization and upgrade options boosting per-unit profitability.
• Targeted capital expenditure (~€39.6m) for capacity expansion, tooling and composite expertise.
• Accelerated order intake momentum (185% Q3 surge) improving short- to medium-term revenue visibility.

The Superyacht division similarly qualifies as a Star, with a record backlog expansion and rising share of the total order book: by mid-2025 superyachts represented 47.6% of the group's order book. Revenue from the Superyacht segment reached €104.4 million in H1 2025, up 26.5% from €82.5 million in H1 2024. Contribution to total net revenue grew to 16.8% from 13.5% year-on-year, reflecting sustained demand from ultra-high-net-worth clients. Although order intake for the first nine months of 2025 was €64.2 million - lower than the bespoke-heavy 2024 comparator - backlog expansion and strategic focus on alloy-hull launches and vessels >50m position the division for continued high-margin performance and market share gains in the ultra-luxury flagship market.

Superyacht strategic priorities and strengths:

• Backlog concentration (47.6%) provides multi-year revenue visibility and capacity utilization.
• High average transaction value and margins supported by alloy-hull and >50m launches.
• Customer resilience in ultra-high-net-worth segment insulating revenues from broader cyclical swings.
• Product roadmap emphasizing flagship models that reinforce brand prestige and pricing power.

Riva represents a third Star within Ferretti's portfolio, combining brand strength with robust commercial results and a clean balance sheet that supports aggressive growth. Riva delivered nine world premieres and strong Mediterranean showings in 2025, contributing materially to traffic increases - +35% at the Monaco Yacht Show and +12% at the Genoa Boat Show. Riva's new models (e.g., 112' Dolcevita Super, Aquariva Special) underpin the €1.77 billion record order backlog of the group. The Riva brand extension into 'Riva Volare' private aviation with Flexjet exemplifies high-growth, high-visibility brand extension. Financially, the group reports Riva-supported performance with zero net debt at brand level and a group net cash position of €65.2 million, enabling continued investment in high-composite and custom flagship models.

Riva tactical advantages and initiatives:

• High-composite and custom flagship development increasing ASP and margin.
• Brand-extension partnerships (Riva Volare with Flexjet) enhancing cross-segment demand and customer lifetime value.
• Showcase-driven demand: multiple premieres and show attendance driving leads and conversion.
• Strong balance-sheet position (net cash €65.2m) enabling capex and product investment without leverage strain.

Ferretti S.p.A. (9638.HK) - BCG Matrix Analysis: Cash Cows

Cash Cows

The Composite Yachts segment continues to operate as a cash cow for Ferretti, delivering stable operating cash flow despite near-term pressure. Revenue for the segment declined by 9.5% year-over-year to 131.2 million euros in early 2025, yet it accounted for 37.8% of total net revenue from new yachts, equivalent to 234.4 million euros in the first half of 2025. Backlog decreased by 13.3%, reflecting prior order erosion, but a strong quarterly recovery was recorded with a 23.6% increase in order intake during Q2 2025. Adjusted EBITDA margin for the segment stands at 16.0%, aligned with group profitability targets. Maintenance CAPEX allocated to existing production operations and this portfolio totaled approximately 24.8 million euros as of September 2025.

European market operations represent the largest and most stable geographic cash cow within Ferretti's portfolio. Europe generated 42.1% of total net revenue from new yachts, amounting to 373.9 million euros in the first nine months of 2025, down from a 50.7% share in 2024. The region remains the primary revenue engine for established brands and supports considerable net profitability: regional operations underpin a 61.0 million euro net profit and provided the liquidity enabling a 34 million euro dividend payout. Demand in Europe is particularly strong for high-composite yachts over 24 meters, which recorded a 72.8% year-on-year increase in order intake during Q2 2025. Ferretti's Italian shipyard network sustains high operational efficiency, consistent production throughput and reliable cash generation from this mature market.

After-sales and Refitting services, classified within the group's 'Other businesses' segment, act as a high-margin, recurring-revenue stabilizer that smooths cyclical fluctuations in new yacht production. This segment contributed 28.5 million euros to net revenue in H1 2025, representing 4.6% of total revenue but delivering above-average margins. The global service network supports refit, maintenance and warranty work across a fleet exceeding 10,000 craft. Ferretti is expanding brokerage, chartering and management services to capture more lifecycle value from existing customers. The resiliency of these services contributes to the group's overall adjusted EBITDA of 141.7 million euros through September 2025.

Key characteristics that define Ferretti's cash cows and their role in portfolio management:

• Stable cash generation: Composite Yachts and European operations produce predictable cash flows supporting dividends and corporate liquidity (net profit 61.0 million euros; dividend 34 million euros).
• High-margin recurring services: After-sales and refit deliver steady margins and revenue diversification (28.5 million euros in H1 2025).
• Mature market positions: European share remains significant (42.1% of new yachts revenue, 373.9 million euros Jan-Sep 2025) despite share dilution versus 2024.
• Operational efficiency and targeted maintenance CAPEX: Maintenance CAPEX of 24.8 million euros preserves production capability and margin integrity.
• Order intake recovery potential: Composite segment's +23.6% order intake in Q2 2025 and strong >24m demand (+72.8% YoY) indicate sustained cash conversion prospects.

Ferretti S.p.A. (9638.HK) - BCG Matrix Analysis: Question Marks

Dogs - Question Marks: Wally brand sailing yachts sit squarely in the Question Marks quadrant: high market potential within a niche premium sailing segment but low relative market share within the Ferretti group. The wallywind110 debut at the 2025 Cannes Yachting Festival and the group's full acquisition of Sea Lion (now 100% owned) underpin a concerted push into performance sailing and racing with the wallyrocket51 program aimed at penetrating the competitive racing market. Wally remains innovation-led, yet achieving scale comparable to Ferretti's motor-yacht divisions will require disproportionate R&D and marketing spend relative to near-term revenues.

The 'Other businesses' category, which includes Wally, recorded a modest order intake of €4.1 million in the first nine months of 2025 out of a total group order intake of €770.9 million (i.e., ~0.53%). Success of the new Wally models in the upcoming American season is a critical inflection point that could enable a transition from Question Mark to Star; failure to scale would likely relegate Wally to a persistent Dog within the group portfolio.

Key operational and financial metrics relevant to these Question Marks:

• Group total order intake 9M 2025: €770.9 million.
• Middle East & Africa new yachts revenue (reference): €219.9 million.
• 'Other businesses' order intake 9M 2025 (includes Wally, FSD, other): €4.1 million.
• APAC share of total order intake: ~3%.
• Estimated incremental R&D + marketing required for Wally scale-up: €8-25 million over 24-36 months (management estimate range).
• Estimated infrastructure/CapEx to materially grow APAC presence: €10-50 million phased over 3-5 years.

Strategic considerations and near-term milestones that will determine whether these Question Marks become Stars or persist as Dogs:

• Wally: commercial traction of wallywind110 and wallyrocket51 during the 2025-2026 American season, dealer uptake, charter utilization rates, and margin profile on new builds.
• APAC: growth in order conversions from increased presence at Singapore and Sydney boat shows, expansion of local sales/charter partnerships, and progress in building brand awareness among Asia's UHNWIs.
• FSD: ability to secure multi-year government procurement contracts for platforms like the N800, certification milestones for "zero emissions" propulsion, and establishment of after-sales and maintenance capabilities in defense channels.

Risks and bottlenecks specific to these Dogs/Question Marks:

• High upfront investment with uncertain payback timelines; negative EBITDA drag in near term if scale not achieved.
• Channel mismatch: luxury yacht sales/playbook differs from naval/government procurement, requiring different commercial capabilities and longer sales cycles.
• Competitive pressure from established local APAC players and niche sailing marques; required marketing spend to achieve parity in brand recognition.
• Execution risk around certification, reliability and operational readiness for FSD platforms to win sizable contracts.

Performance triggers and suggested KPIs to monitor:

• Wally: annual unit sales, orderbook value for sailing models, average selling price (ASP) and gross margin per hull, charter utilization rate in target regions.
• APAC: year-on-year order intake growth rate in APAC, local revenue as % of group new yacht revenue, number of active local dealers/charter partners.
• FSD: number and value of government tenders won, time-to-certification for new platforms, service contract backlog value.

Ferretti S.p.A. (9638.HK) - BCG Matrix Analysis: Dogs

Question Marks - Dogs: Entry-level yachts under 24 meters have moved into a low-growth, low-share position within Ferretti's portfolio, exhibiting characteristics of 'Dogs' in the BCG framework. Market pressures from a slowing luxury segment, macroeconomic volatility and higher financing costs drove a 9.2% decrease in total order intake for 1H 2025. Management's tactical decision to compete on price to retain share has compressed gross margins on these models, contributing to margin dilution across the small-craft sub-segment.

Risks specific to sub-24m yachts:

• Higher sensitivity to U.S. tariff exposure and trade-policy shifts relative to custom superyachts.
• Lower price elasticity cushioning: discounting to defend units leads to direct margin erosion.
• Inventory and working-capital drag when pre-owned/resale activity increases.

Pre-owned yacht sales and brokerage are treated as non-core relative to 'Net Revenue from New Yachts.' These activities are excluded from core revenue reporting and are maintained primarily as a sales-support channel rather than a profit center. The group's strategic emphasis on internalizing high value-added activities further deprioritizes low-margin resale operations, which can tie up capital: the Q3 2025 net cash decrease of €36.4m was partially attributable to working capital absorption linked to pre-owned inventory and transactional flows.

Non-core brand extension and licensing (e.g., Riva Volare) provide prestige but minimal financial return. For 1H 2025, ancillary activities generated €3.8m in order intake, representing under 1% of total order intake and contributing to just 4.6% of net revenue by mid-2025 (down from 5.0%). Such projects require marketing and management bandwidth that could be redeployed to the €1.446bn primary backlog and the higher-margin Made-to-Measure and Superyacht segments, which are the strategic focus.

• Non-core order intake 1H 2025: €3.8m (≈<1% of total)
• Share of Group Net Revenue (mid-2025): 4.6% (previously 5.0%)
• Primary backlog (Sep 2025): €1,446m - prioritized for CAPEX and sales effort

Strategic response: progressively reallocate marketing, R&D and CAPEX away from entry-level <24m models and ancillary licensing projects toward Made-to-Measure and Superyacht production, where relative market share and margins are stronger. Continued price competitiveness on smaller models is a defensive tactic, accepted by management at the cost of compressed margins until the portfolio shift is complete.