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 third quarter and first nine months of 2010.
FIRST NINE MONTHS 2010 SUMMARY:
- Total Net Sales were €386.7 million, up 6.5% as compared to the first nine months of 2009
- Industrial Margin was €145.9 million as compared to €126.3 million of the first nine months of 2009
- Positive EBIT of €0.2 million, as compared to a negative EBIT of €12.6 million of the first nine months of 2009
THIRD QUARTER 2010 SUMMARY:
- Total Net Sales were €115.0 million, down 2.8% as compared to the third quarter of 2009
- Industrial Margin was €42.6 million as compared to €47.5 million of the third quarter of 2009
- Negative EBIT of €2.5 million, as compared to a positive EBIT of €2.8 million of the third quarter of 2009
- Positive Net Financial Position of €38.6 million
Third Quarter 2010 Consolidated Results
Total Net Sales (including raw materials and semi-finished products sold to third parties) were €115.0 million.
Upholstery net sales were €102.6 million, in line with the same period of 2009 (€102.9 million).
The break-down of upholstery net sales by geographic area was as follows: Europe (excluding Italy) 35.8%, Americas 41.4%, Italy 9.6% and Rest of the World 13.2%.
The best commercial performances came from North America (historical Group market) with a performance of +26.9%. The Rest of the World registered an increase of 0.7%. In particular, China was up 72.3% on Natuzzi brand, and up 179.7% on all other brands. Instead, Europe recorded a slowdown of 16.8% versus the third quarter of 2009.
Industrial Margin, amounted €42.6 million, represented 37.0% on sales versus 40.2% reported in the same period of last year. This performance was due to a strong increase in raw material costs (in particular leather).
The incidence of Selling Expenses on sales passed from 28.4% in the third quarter of 2009 to 30.9% in third quarter of 2010 due to a dramatic increase of shipping costs. .
General & Administrative Expenses as a percentage on sales, on the contrary, recorded an improvement versus the third quarter of 2009, passing from 9.4% to 8.3%, thanks to the rationalisation and reorganisation actions carried out by the Group.
EBITDA was €3.4 million as compared to €9.5 million of the third quarter of 2009 .
The EBIT contraction, that went from positive €2.8 million in the third quarter of 2009 to a negative €2.5 million in 2010, basically is the result, as already mentioned, of the increase of raw material prices and shipping costs boost, partially balanced by efficiency realized on both operations and administrative costs.
Net Group Result recorded a loss of €5.5 million as compared to €0.9 million loss reported in the same period of last year .
First Nine Months 2010 Consolidated Results
Total Net Sales were €386.7 million up 6.5% as compared to the same period of 2009.
Upholstery net sales were €344.8 million, an increase of 8.9% with respect to the same period of 2009.
The break-down of upholstery net sales by geographic area was as follows: Europe (excluding Italy) 39.5%, Americas 37.0%, Italy 11.2% and Rest of the World 12.3%.
The best performances were in North America market (+32.7%) and in the Rest of the World (+27,2%). In particular, Australia +28.4% on Natuzzi Brand and +40.9% on all other brands, China +92.7% on Natuzzi brand and +91.6% on all other brands. In Europe, despite the total negative performance of -8.6%, we highlight Great Britain (+21.1% on Natuzzi brand and +29.0% on all other brands), and Spain (+10.9 on Natuzzi brand).
Industrial Margin had a marked improvement reaching 37.7% on sales as compared to 34.8% of 2009, thanks to important industrial rationalisation started in 2009.
EBITDA, with an improvement of about €10 million, passed from positive €8.0 million in the first nine months of 2009 to positive €18.3 million in the first nine months of 2010.
EBIT of the first nine months of 2010 was positive by €0,2 million versus a loss of €12,6 million recorded in the first nine months of 2009 .
Net Group Result recorded a loss of €9.6 million, with a strong improvement from the €15.2 million loss reported in the same period of last year, despite the increase of extraordinary costs and the lower contribution from hedging activities.
Net Financial Position as of September 30, 2010 remains positive at €38.6 million although the reduction of € 19.9 million versus December 31, 2009 mainly due to major investments in working capital and fixed assets.
Pasquale Natuzzi, Chairman and CEO of Natuzzi S.p.A., commented: “The results of the first nine months of 2010 recorded a positive trend in American and Asiatic markets, where we carried out an important reorganization and improved client service level.
In the European market, still strongly influenced by consumer crisis, we have already identified the areas and the actions to push our brands, and, similarly to what we have done in the American and the Asiatic markets, the European markets are today our first priority.
Even considering the strong volatility of the market, that make necessary prudent forecasts, we think to be on the right track to regain profitability. We started a reduction costs plan that already gave an evident positive result in the first nine months of 2010, and we are committed to improve the level of quality and of services. The Natuzzi Group will leverage on the innovation and its brands to keep on competing and maintaining market leadership”.
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