NATUZZI:SIGNS OF IMPROVEMENT
- NET SALES UP BY 8.2%
- SIGNIFICANT REDUCTION (-12.2%) IN FIXED
SG&A COSTS
- 10.9% REDUCTION IN QUARTERLY OPERATING
LOSS
The Board of Directors of Natuzzi S.p.A. (NYSE:NTZ) (“Natuzzi”
or the “Company”) has approved its consolidated financial results
for third quarter 2014.
After the meeting of the Board of Directors, the Chief Executive
Officer, Pasquale Natuzzi, commented:
“Third quarter financial results highlight the first benefits
from those measures announced and implemented during the course of
the year: both order flow and turnover increased compared to the
same period of the prior year.
The brand and distribution strategy upon which we have built our
business plan confirms its validity. Among the factors that have
contributed to this result we highlight:
- the new Natuzzi Italia and Natuzzi
Editions collections presented during the Milan and High Point
fairs and Retail Spring Congress
- the launch of our Re-Vive armchair
within the recliner segment
- the broadening of our product offering
to include living room and bedroom furnishings, as well as
beds
The industrial efficiency recovery measures announced in recent
quarters and aimed at solving production delays in China and Italy
that affected our turnover during the prior two quarters have
started to generate the expected benefits. Third quarter turnover
was €111.7 million, up 8.2% compared to the same period of 2013.
This increase in turnover is meaningful in relative terms if we
consider its progression over each of the first three quarters of
the year compared to each of the first three quarters of 2013: –
11,2% in the first quarter; -1,2% in the second quarter; and +
8,2%% in the third quarter.
The gradual improvement in productivity within our manufacturing
plants over the last few months has positively affected our gross
margin, which increased from 25.8% in the second quarter of 2014 to
27.9% in the third quarter of 2014 (a 2.1% improvement),
notwithstanding an increase in raw materials.
Furthermore, fixed selling, general and administrative costs
fell by 12.2% compared to the third quarter of 2013, both in
absolute terms (a €2.8 million reduction), and as a percentage of
net sales (a 4.2% reduction on net sales), decreasing from 22.5% of
net sales in the third quarter of 2013 to 18.2% of net sales in the
third quarter of 2014, which decrease was attributable, in part, to
the introduction of rationalization measures designed to optimize
our commercial structure.
The actions implemented thus far have allowed Natuzzi to reduce
its quarterly operating loss by 10.9% and improve its quarterly
EBITDA by 18.9%, as compared to the third quarter of 2013.
We intend to continue implementing our “lean-enterprise”
program, designed to improve efficiencies, reduce costs and
generate higher operating cash flow.
----------------------------------------------
Mr. Antonio Cavallera has been appointed Chief HR, IT and
Organization Officer of the Natuzzi Group. Antonio holds a degree
in Law and has been with the Company since 2006 within the Human
Resources department managing the HR Dos Retail, Training &
Change program, and HR Commercial activities. In October 2012,
Antonio took on the role of Chief Planning, Organization and
Corporate Communications Officer, directly reporting to the CEO,
and became a member of the Senior Executive Team.
Mr. Umberto Bedini has resigned as Chief Operations Officer of
the Natuzzi Group, for personal reasons. The Chief Executive
Officer of the Group takes on this responsibility ad interim.
----------------------------------------------
The Company will host a conference call on Monday December 1,
2014 at 10:00 a.m. U.S. Eastern Time (4.00 p.m. Italian time, or
3.00 p.m. UK time) to discuss financial results.
The dial-in phone numbers for the live conference call are
1-888-359-3624 (toll-free) for persons calling from the U.S. or
Canada, and 1-719-785-1753 for those calling from other
countries.
A live web cast of the conference call will be available on line
at http://www.natuzzi.com/ under the “Investor Relations”
section.
A replay of the call will be available shortly after the end of
the conference call starting from December 1, 2014 (from 1:00 pm US
Eastern time), to January 1, 2015. To access the replay of the
conference call, interested persons need to dial 1-877-870-5176
(toll-free) for calls from U.S. and Canada, and 1-858-384-5517 for
calls from other countries. The access code for the replay is:
2152906.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
STATEMENTS
Certain statements set forth in this press release constitute
forward-looking statements within the meaning of the safe harbor
provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements involve risks and uncertainties that
could cause Natuzzi’s actual results to differ materially from
those stated or implied by such forward-looking statements. More
information about the potential factors that could affect the
Company’s business and financial results is included in Natuzzi’s
filings with the Securities and Exchange Commission, including the
Company’s Annual Report on Form 20-F for the year ended December
31, 2013. Natuzzi undertakes no obligation to update any of the
forward-looking statements after the date of this press
release.
----------------------------------------------
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
€449.1 million in 2013, 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
1,200 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.
Natuzzi S.p.A. and Subsidiaries Unaudited
Consolidated Profit & Loss for the third quarter 2014 &
2013 on the basis of Italian GAAP (expressed in millions Euro,
except per share amounts)
Three months ended on
Change Percentage of Sales
30-Sep-14 30-Sep-13 %
30-Sep-14 30-Sep-13
Upholstery net sales 100.1 92.5 8.2 % 89.6 % 89.6 %
Other sales 11.6 10.7 8.3 %
10.4 % 10.4 %
Total Net Sales 111.7
103.3 8.2 %
100.0 % 100.0 %
Consumption (*) (52.6 ) (48.1 ) 9.5 % -47.1 % -46.5 % Labor (20.4 )
(17.4 ) 17.0 % -18.3 % -16.9 % Industrial Costs (7.5 ) (7.2 ) 4.5 %
-6.7 % -7.0 % of which: Depreciation, Amortization (2.9 )
(2.5 ) 17.5 % -2.6 % -2.4 %
Cost of
Sales (80.6 ) (72.7 )
10.8 % -72.1 %
-70.4 %
Industrial Margin
31.1 30.6 1.9
% 27.9 % 29.6
% Selling Expenses (18.6 )
(16.2 ) 15.2 % -16.7 %
-15.6 % Transportation (12.5 ) (10.7 ) 16.4 % -11.2 %
-10.4 % Commissions (2.2 ) (1.6 ) 36.9 % -2.0 % -1.6 % Advertising
(3.9 ) (3.8 ) 2.4 % -3.5 % -3.7 %
Other Selling and
G&A (20.4 ) (23.2 )
-12.2 % -18.2 % -22.5 %
of which: Depreciation, Amortization (1.2 ) (1.8 )
-30.4 % -1.1 % -1.7 %
EBITDA
(3.7 ) (4.5 )
-18.9 % -3.3 %
-4.4 %
EBIT (7.8 )
(8.8 ) -10.9 %
-7.0 % -8.5 %
Interest Income/(Costs), Net (0.5 ) (0.2 ) Foreign Exchange, Net
(1.5 ) (0.4 ) Other Income/(Cost), Net 0.9 (8.9 )
Earning before
Income Taxes (9.0 ) (18.3 )
-8.1 %
-17.8 % Current taxes (0.4 ) (0.4 ) -0.4 %
-0.4 %
Net Result (9.4 )
(18.7 ) -8.4
% -18.1 % Minority interest (0.0
) 0.0
Net Group Result (9.4 )
(18.7 )
-8.4 % -18.1 %
Net Group Result per Share (0.17 )
(0.34 )
Key Figures in U.S. dollars
Three months ended on Change Percentage of
Sales (millions)
30-Sep-14 30-Sep-13
% 30-Sep-14
30-Sep-13 Total Net Sales 148.0 136.8
8.2 % 100.0 % 100.0 %
Industrial Margin 41.3 40.5
1.9 %
27.9 % 29.6 % EBIT (10.4
) (11.7 )
-7.0 % -8.5 % Net
Group Result (12.5 ) (24.8 )
-8.4 %
-18.1 % Net Group Result per Share
(0.23 ) (0.45 )
Average exchange rate
(U.S.$ per 1€) 1.3253
(*) Purchases plus
beginning stock minus final stock and leather processing
UPHOLSTERY NET SALES BREAKDOWN GEOGRAPHIC BREAKDOWN
NET SALES (in €, million) NET SALES
(in seats sold) Three months ended on Three
months ended on AREA 30-Sep-14
% 30-Sep-13 % delta
30-Sep-14 % 30-Sep-13 %
delta Americas 43.4 43.4 %
38.6 41.7 % 12.4 %
207,517 52.4 % 192,939 48.8
% 7.6 % Natuzzi 26.0 26.0 % 23.3 25.2 % 11.6 %
100,202 25.3 % 95,764 24.2 % 4.6 % Private label 17.4 17.3 % 15.3
16.5 % 13.7 % 107,316 27.1 % 97,175 24.6 % 10.4 %
EMEA 42.1 42.1 % 40.1
43.4 % 4.8 % 143,703 36.3
% 154,514 39.1 % -7.0 %
Natuzzi 34.1 34.1 % 28.3 30.6 % 20.3 % 96,495 24.3 % 80,771 20.4 %
19.5 % Private label 8.0 8.0 % 11.8 12.8 % -32.3 % 47,208 11.9 %
73,743 18.6 % -36.0 %
Asia-Pacific 14.6
14.6 % 13.8 14.9 % 6.0
% 45,161 11.4 % 47,991
12.1 % -5.9 % Natuzzi 14.2 14.2 % 12.6
13.6 % 12.6 % 42,627 10.8 % 40,103 10.1 % 6.3 % Private label 0.4
0.4 % 1.1 1.2 % -67.3 % 2,534 0.6 % 7,888 2.0 % -67.9 %
TOTAL 100.1 100.0 % 92.5
100.0 % 8.2 % 396,381
100.0 % 395,443 100.0 %
0.2 % BREAKDOWN BY BRAND NET
SALES (in €, million) NET SALES (in seats sold) Three
months ended on Three months ended on
BRAND 30-Sep-14 % 30-Sep-13
% delta 30-Sep-14 %
30-Sep-13 % delta Natuzzi 74.3 74.3 %
64.3 69.5 % 15.6 % 239,324 60.4 % 216,638 54.8 % 10.5 % Private
label 25.7 25.7 % 28.2 30.5 % -8.8 % 157,057 39.6 % 178,805 45.2 %
-12.2 %
TOTAL 100.1 100.0 % 92.5
100.0 % 8.2 % 396,381
100.0 % 395,443 100.0 %
0.2 % The "
Natuzzi" brand includes the
Group's three lines of product: Natuzzi Italia, Natuzzi Editions
and Natuzi Re-Vive
Natuzzi S.p.A. and
Subsidiaries Unaudited Consolidated Profit & Loss for
the first nine months 2014 & 2013 on the basis of Italian
GAAP (expressed in millions Euro, except per share amounts)
Nine months ended on Change
Percentage of Sales 30-Sep-14
30-Sep-13 % 30-Sep-14
30-Sep-13 Upholstery net sales 288.3 294.2 -2.0 %
89.3 % 89.7 % Other sales 34.5 33.8 2.0 %
10.7 % 10.3 %
Total Net Sales 322.8
328.1 -1.6 % 100.0
% 100.0 % Consumption (*) (149.2 )
(152.1 ) -1.9 % -46.2 % -46.3 % Labor (64.4 ) (58.8 ) 9.5 % -20.0 %
-17.9 % Industrial Costs (20.9 ) (21.0 ) -0.4 % -6.5 % -6.4 % of
which: Depreciation, Amortization (7.4 ) (7.1 ) 3.8 %
-2.3 % -2.2 %
Cost of Sales (234.5 )
(231.8 ) 1.1 % -72.7
% -70.7 %
Industrial Margin 88.3
96.2 -8.3 % 27.3
% 29.3 % Selling Expenses
(51.1 ) (49.4 ) 3.5 %
-15.8 % -15.1 % Transportation (33.7 )
(33.4 ) 1.0 % -10.4 % -10.2 % Commissions (6.7 ) (6.4 ) 4.4 % -2.1
% -1.9 % Advertising (10.8 ) (9.7 ) 11.5 % -3.3 % -2.9 %
Other Selling and G&A (65.4 ) (69.8
) -6.4 % -20.3 % -21.3
% of which: Depreciation, Amortization (3.2 ) (5.2 )
-37.1 % -1.0 % -1.6 %
EBITDA (17.6
) (10.8 ) -5.5 %
-3.3 %
EBIT (28.3 ) (23.1
) -8.8 % -7.0 %
Interest Income/(Costs), Net (1.0 ) (0.3 ) Foreign Exchange,
Net (0.4 ) (1.6 ) Other Income/(Cost), Net (3.0 ) (10.2 )
Earning before Income Taxes
(32.7 ) (35.2 )
-10.1 % -10.7 % Current taxes
(1.2 ) (3.4 ) -0.4 % -1.0 %
Net Result (33.9 )
(38.7 ) -10.5 %
-11.8 % Minority interest (0.0 ) (0.2 )
Net Group
Result (33.9 ) (38.9 )
-10.5 % -11.8 %
Net Group
Result per Share (0.62 ) (0.71
)
Key Figures in U.S.
dollars Nine months ended on Change Percentage
of Sales (millions)
30-Sep-14 30-Sep-13
% 30-Sep-14 30-Sep-13
Total Net Sales 437.5 444.7
-1.6 %
100.0 % 100.0 % Industrial
Margin 119.6 130.4
-8.3 % 27.3
% 29.3 % EBIT (38.3 )
(31.3 )
-8.8 % -7.0 % Net Group
Result (46.0 ) (52.7 )
-10.5 %
-11.8 % Net Group Result per Share
(0.84 ) (0.96 )
Average exchange rate
(U.S.$ per 1€) 1.3555
(*) Purchases plus beginning stock
minus final stock and leather processing
UPHOLSTERY NET SALES BREAKDOWN GEOGRAPHIC BREAKDOWN
NET SALES (in €, million) NET SALES (in
seats sold) Nine months ended on Nine months
ended on AREA 30-Sep-14 %
30-Sep-13 % delta
30-Sep-14 % 30-Sep-13 %
delta Americas 116.4 40.4 %
123.1 41.8 % -5.4 %
576,076 48.9 % 608,753 49.0
% -5.4 % Natuzzi 69.1 24.0 % 75.8 25.8 % -8.7
% 273,703 23.3 % 318,306 25.6 % -14.0 % Private label 47.3 16.4 %
47.3 16.1 % -0.1 % 302,373 25.7 % 290,447 23.4 % 4.1 %
EMEA 134.6 46.7 % 135.3
46.0 % -0.5 % 474,302
40.3 % 507,095 40.8 %
-6.5 % Natuzzi 108.0 37.5 % 102.5 34.8 % 5.3 %
308,387 26.2 % 304,837 24.5 % 1.2 % Private label 26.7 9.2 % 32.8
11.2 % -18.8 % 165,915 14.1 % 202,259 16.3 % -18.0 %
Asia-Pacific 37.2 12.9 % 35.8
12.2 % 3.9 % 126,691 10.8
% 126,014 10.1 % 0.5 %
Natuzzi 35.5 12.3 % 32.5 11.1 % 9.3 % 114,420 9.7 % 102,781 8.3 %
11.3 % Private label
1.7
0.6 % 3.3 1.1 % -49.3 % 12,271 1.0 % 23,233 1.9 % -47.2 %
TOTAL 288.3 100.0 % 294.2
100.0 % -2.0 % 1,177,069
100.0 % 1,241,862 100.0 %
-5.2 % BREAKDOWN BY BRAND NET
SALES (in €, million) NET SALES (in seats sold) Nine
months ended on Nine months ended on BRAND
30-Sep-14 % 30-Sep-13 %
delta 30-Sep-14 % 30-Sep-13
% delta Natuzzi 212.7 73.8 % 210.8 71.6 % 0.9
% 696,510 59.2 % 725,923 58.5 % -4.1 % Private label 75.6 26.2 %
83.4 28.4 % -9.4 % 480,559 40.8 % 515,939 41.5 % -6.9 %
TOTAL 288.3 100.0 % 294.2
100.0 % -2.0 % 1,177,069
100.0 % 1,241,862 100.0 %
-5.2 % The "
Natuzzi" brand includes the
Group's three lines of product: Natuzzi Italia, Natuzzi Editions
and Natuzi Re-Vive
Natuzzi S.p.A. and
Subsidiaries Unaudited Consolidated Balance Sheets on the
basis of Italian GAAP (Expressed in millions of Euro)
ASSETS 30-Sep-14 31-Dec-13
Current assets: Cash and cash equivalents 33.4 61.0
Marketable debt securities 0.0 0.0 Trade receivables, net 91.4 78.9
Other receivables 28.9 48.5 Inventories 94.4 79.0 Unrealized
foreign exchange gains 0.0 0.6 Prepaid expenses and accrued income
1.4 1.9 Deferred income taxes 0.4 0.3
Total current
assets 249.9 270.2 Non-current
assets: Net property, plant and equipment 133.8 143.6 Other
assets 7.6 8.1
Total non-current assets 141.4
151.7 TOTAL ASSETS 391.3
421.9 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Short-term
borrowings 23.3 25.0 Current portion of long-term debt 3.4 3.3
Accounts payable-trade 60.5 67.4 Accounts payable-other 26.8 25.8
Unrealized foreign exchange losses 0.5 0.2 Income taxes 1.0 7.1
Deferred income taxes 1.0 1.0 Salaries, wages and related
liabilities 15.6 8.3
Total current liabilities
132.0 138.2 Long-term
liabilities: Employees' leaving entitlement 23.9 24.8 Long-term
debt 6.5 4.2 Deferred income for capital grants 8.3 8.6 Other
liabilities 33.4 34.4
Total long-term liabilities
72.1 72.1
Minority interest 2.9 2.7
Shareholders' equity: Share capital 54.9 54.9 Reserves 42.8
42.8 Additional paid-in capital 8.4 8.4 Retained earnings 78.2
102.8
Total shareholders' equity 184.3
208.9 TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY 391.3 421.9
Natuzzi S.p.A. and Subsidiaries Consolidated Statements
of Cash Flows Nine months ended on (Expressed in million
of Euro)
30-Sep-14 30-Sep-13 Cash flows
from operating activities: Net earnings (loss)
(33.9) (38.9) Adjustments to reconcile net
income to net cash provided by operating activities:
Depreciation and amortization 10.7 12.3 Impairment of long lived
assets 2.0 - Deferred income taxes (0.1) (0.5) Minority interest
0.0 0.2 (Gain) loss on disposal of assets 0.1 (0.1) Unrealized
foreign exchange losses (gains) 0.9 0.8 Extraordinary items, net
1.8 11.4 Deferred income for capital grants (0.3) (0.3)
Non monetary operating items 15.0 23.8
Change in assets and liabilities: Receivables, net
(12.8) 10.0 Inventories (15.4) (1.3) Prepaid expenses and accrued
income 0.6 0.4 Accounts payable (6.3) (8.8) Income taxes (6.2) 1.6
Salaries, wages and related liabilities 7.2 2.7 Other
assets/liabilities, net 21.6 3.9 Employees' leaving entitlement -
-
Net working capital (11.2) 8.6
Net cash generated/(used) by
operating activities (30.1) (6.5)
Cash flows from investing/restructuring activities:
Property, plant and equipment: Additions (6.8) (6.0) Disposals 6.9
0.1 Goverment grants received 0.5 - One time termination benefits
(2.1) - Lay-off/Rent penalty dos closure (0.8) -
Net cash
generated/(used) by investing/restructuring activities
(2.4) (5.8) Cash flows from
financing activities: Long-term debt: Proceeds 5.0 - Repayments
(2.6) (2.9) Short-term borrowings (1.7) 1.6 Dividends paid to
minority interests - (0.2)
Net cash generated/(used) by
financing activities 0.7 (1.5)
Effect of translation adjustments on
cash 4.3 (0.4)
Increase (decrease) in cash and cash equivalents
(27.6) (14.2)
Cash and cash equivalents, beginning of the year 61.0
77.7 Cash and cash
equivalents, end of the period 33.4 63.5
NATUZZIINVESTOR RELATIONSPiero Direnzo,
+39.080.8820.812pdirenzo@natuzzi.comorCORPORATE
COMMUNICATIONVito Basile, +39.080.8820.676(Press
Office)vbasile@natuzzi.com
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