The Board of Directors of Natuzzi S.p.A., Italy's largest furniture manufacturer and a leading manufacturer of leather-upholstered furniture, announced its financial results for the second quarter and first six months of 2010.
SECOND QUARTER 2010 SUMMARY:
Upholstery Net Sales were EUR130.9 million ($176 million), up 12.0% as compared to the second quarter of 2009 Total Net Sales were EUR145.2 million ($195 million), up 8.7% as compared to the same period of 2009 Industrial margin was EUR54.6 million ($73 million), versus EUR50.5 million ($68 million) recorded in the second quarter of 2009 Operating Income was EUR2.2 million, as compared to EUR1.1 million for the same period of 2009 Net group loss was EUR2.8 million versus a loss of EUR3.9 million recorded in the same quarter of 2009 Positive net cash position of EUR49.0 million
Second Quarter Results 2010
Total Net Sales (including raw materials and semi-finished products sold to third parties) were EUR145.2 million, an increase of 8.7% as compared to corresponding period of 2009.
Upholstery net sales were EUR130.9 million, up 12.0% as compared to the same period of 2009.
The contribution to upholstery net sales by geographic area was as follows: Europe (excluding Italy) 40.1%, Americas 37.4%, Italy 10.0% and Rest of the World 12.5%.
The major commercial performances came from North America (+38%), Asia-Oceania (+42%) and Great Britain (+49%).
Industrial margin was EUR54.6 million, showing an increase of 8.1% versus the same quarter of 2009. The increase of volumes sold and the major internal efficiencies enabled the group to offset the consequences of significant increases in raw material costs, in particular leather.
Transportation costs were negatively influenced by a significant increase in freight fares.
At the same time, an increase in terms of sales commissions was recorded due to the better performance in terms of sales in those geographical areas operated by some sales agents who are compensated through commissions on turnover
In order to reduce the impact generated by the above mentioned increases, the Group has implemented a further containment plan to its cost structure.
The EBITDA of the Group recorded an improvement to EUR8.2 million as compared to EUR7.9 over the corresponding period of 2009.
Operating income also improved to EUR2.2 million with respect to EUR1.1 million recorded at the corresponding period of 2009.
Net Group Result shows a loss of EUR2.8 million recovering from the loss of EUR3.9 million recorded in the same period of last year despite the effects of a higher tax burden.
First Six Months Results 2010
Total net sales for the first six months of 2010 were EUR271.7 million up 10.9% as compared to the same period of 2009.
Upholstery net sales were EUR242.2 million, an increase of 13.3% with respect to the same period of 2009.
The contribution to upholstery net sales by geographic area was as follows: Europe (excluding Italy) 41.2%, Americas 35.1%, Italy 11.8% and Rest of the World 11.9%.
Industrial margin considerably improved to 38.0% on net sales compared to 32.2% thanks to some intense activities initiated in 2009 aimed at obtaining an industrial rationalization.
EBITDA recorded a profit of EUR15.0 million versus a loss of EUR1.5 million in the same period of 2009.
Operating income was EUR2.7 million as compared to a loss of EUR15.4 million reported in the first six months of 2009.
Net Group Result recorded a loss of EUR4.1 million, an appreciable improvement as compared to the EUR14.2 million loss reported in the same period of last year despite the increase of extraordinary costs tax burden.
Net Financial Position as of June 30, 2010 remains positive at EUR49.0 million although it decreased compared to December 31, 2009 mainly due to some major investments in working capital as a consequence of the increase in volumes of sales.
Pasquale Natuzzi, Chairman and Chief Executive Officer of Natuzzi S.p.A., commented: "Having recorded an operating income for the fifth consecutive quarter, despite a general situation which continues to be very uncertain, is a confirmation of the effectiveness of the work done so far.
Net sales for the first six months of the year went up compared to 2009 although the market recovery seems to be slower and below than originally expected. The strong financial position confirms the solidity of the Group and its ability to invest in strategic projects. Our focus remains on product and process innovation, cost reduction in all areas of business management, with the objective of improving the quality of our offer and service, recovering competitiveness, returning to profitability and maintaining the leadership in the field".
The Company will host a conference call on Tuesday September 28, 2010 at 10:00 a.m. Eastern Time to discuss second quarter and first half 2010 financial results. To participate, dial toll-free 1-877-591-4959 and dial international 1-719-325-4863. A live web cast of the conference call will be available online at http://www.natuzzi.com/ under the Investor Relations section.
A replay of the call will be available shortly after the completion of the conference call through October 28, 2010. To access the telephone replay, participants should dial 1-877-870-5176 for domestic calls and 1-858-384-5517 for international calls. The access code for the replay is: 2145933
About Natuzzi: Founded in 1959 by Pasquale Natuzzi, Natuzzi S.p.A. designs and manufactures a broad collection of residential upholstered furniture. With consolidated revenues of EUR 515.4 million in 2009, Natuzzi is Italy's largest furniture manufacturer. Natuzzi Group exports its innovative high-quality sofas and armchairs to 130 markets on five continents under two brands, Natuzzi and Italsofa. Cutting-edge design, superior Italian craftsmanship and advanced, vertically integrated manufacturing operations underpin the Company's market leadership. Natuzzi S.p.A. has been listed on the New York Stock Exchange since May 1993. The Company is ISO 9001 and 14001