Natuzzi Sales Up 24.6% For Quarter

Furniture World News Desk on 5/18/2015

• Consolidated net sales for the quarter equal to 122.6 million euros ($139 million), up 24.6% versus 98.4 million euros ($111 million) reported in the first quarter of 2014.

• Gross margin improvement mainly related to growth of volume, the positive effect of the product mix and production efficiencies.

• Other Selling, General and Adminstrative Expenses as a percentage of net sales down by 4.8% compared to the same period of the previous year.

• Negative ebit of €4.9 million ($5.56 million), compared to a negative ebit of €9.4 million in the first quarter of 2014, improving by approximately 50%, partially thanks to the positive impact of a favourable exchange rate.

The Board of Directors of Natuzzi S.p.A. reported that it has approved its consolidated financial results for the first quarter of 2015.

After the meeting of the Board of Directors, The Chairman and CEO Pasquale Natuzzi commented:

“The first quarter results show a significant improvement on revenues and margins confirming the positive trend of the previous quarters.

In the first quarter of 2015 the turnover increased by 24.6% to 122.6mln Euros, compared to the same period of the previous year, with a significant growth of the furnishings sector, consistent with the Natuzzi Italia’s "Total Home" offer.

From a geographical standpoint, we registered a growth of revenues in all of our main markets. We also confirmed the positive trend of our directly owned stores which posted a 26.9% growth in the first quarter of the year.

Gross margin improvement to 29.4% on sales (+ 0.9% compared to the first quarter of 2014) was primarily related to the gradual increase in efficiencies and productivity in our plants (Italy and abroad) over recent months, growth of volumes and a better product mix.

The actions we have taken to improve efficiency were aimed at reducing production complexity (-25% of models and -38% of upholstery in production), and re-engineering the production of the 120 best-selling models according to the logic of the new production process. Since April 1 2015, 80% of the product portfolio is manufactured through the moving line in all of our plants, representing an important step for the full recovery of competitiveness.

Other SG&A as a percentage of net sales were down to 17.3% in the first quarter of 2015 compared to 21.8% of the same period of the previous year.

The EBIT of -4.9mln Euros has improved by approximately 50% compared to the first quarter of 2014.

The first quarter numbers testify the great work carried out over recent months aimed at improving operating efficiency. Our energy is now focused on capitalizing on this effort to create the foundations for a return to a sustainable and long-lasting revenue growth.

The economic environment currently shows some recovery signs in several countries, but it is still premature to talk about short term increase in consumption. Our manufacturing presence in three continents, the capillary distribution and retail network, the product range and, above all, the high awareness of the Natuzzi brand globally, will be the trigger points to continue to leverage growth”.

About Natuzzi S.p.A.: Founded in 1959 by Pasquale Natuzzi, Natuzzi S.p.A. designs, manufactures and sells a broad collection of couches, armchairs, home furniture and home accessories. With consolidated revenues of €461.4 million in 2014, Natuzzi is Italy’s largest furniture house and the player with the greatest global reach in its sector, with eight manufacturing plants, twelve commercial offices and more than 1,100 points of sale worldwide. Ethics and social responsibility, innovation, industrial know-how and integrated management of its value chain represent the points of strength that have made the Natuzzi Group a market leader and established Natuzzi as the most recognized furniture brand in the world among consumers of luxury goods. Natuzzi S.p.A. has been listed on the New York Stock Exchange since May 1993. The Company is ISO 9001 and 14001 certified.