The Board of Directors of Natuzzi S.p.A. (NYSE:NTZ), Italy’s
largest furniture manufacturer and world’s leading manufacturer of
leather-upholstered furniture, today 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”.
The Company will host a conference call on November 29, 2010 at
10:00 a.m. Eastern Time to discuss third quarter and nine months
2010 financial results. To participate, dial toll-free
1-888-378-0337 and dial international 1-719-325-2241. 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 December 29, 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:
6449777.
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
Natuzzi S.p.A. and Subsidiaries Unaudited Consolidated
Profit & Loss for the quarter ended on September 30, 2010 on
the basis of Italian GAAP (expressed in millions Euro except
for share data)
Three months ended
on Change Percent of Sales
30-Sep-10 30-Sep-09 % 30-sep-10
30-sep-09 Upholstery net sales 102.6 102.9 -0.3%
89.2% 87.0% Other sales 12.4 15.4 -19.5% 10.8% 13.0%
Total Net Sales 115.0 118.3 -2.8%
100.0% 100.0% Consumption (*) (46.4)
(42.8) 8.4% -40.3% -36.2% Labor (16.7) (17.5) -4.6% -14.5% -14.8%
Industrial Costs (**) (9.3) (10.5) -11.4% -8.1% -8.9% of which
Depreciation, Amortization (2.9) (3.6) -2.5% -3.0%
Cost of Sales (72.4) (70.8) 2.3%
-63.0% -59.8%
Industrial Margin 42.6 47.5
-10.3% 37.0% 40.2% Selling
Expenses (35.5) (33.6) 5.7% -30.9% -28.4% of which Transportation
(12.3) (8.9) of which Advertising (5.7) (5.2) of which
Depreciation, Amortization (1.9) (2.0) G&A Expenses (9.6)
(11.1) -13.5% -8.3% -9.4% of which Depreciation, Amortization (1.1)
(1.1)
EBITDA 3.4 9.5 -64.2%
3.0% 8.0%
EBIT (2.5) 2.8 -189.3%
-2.2% 2.4% Interest Income/(Costs), Net (0.3)
(0.3) Foreign Exchange, Net (1.6) 0.1 Other Income/(Cost), Net
(0.8) (0.7)
Earning before Income Taxes (5.2) 1.9
-4.5% 1.6% Current taxes (0.4) (2.7)
-0.3% -2.3%
Net
result (5.6) (0.8) -600.0%
-4.9% -0.7% Minority interest 0.1 (0.1)
Net Group Result
(5.5) (0.9) -511.1% -4.8%
-0.8%
Net Group Result per Share (0.10) (0.02)
Key Figures in U.S. dollars Three
months ended on Change Percent of Sales
(millions)
30-Sep-10 30-Sep-09 %
30-sep-10 30-sep-09 Total Net Sales
148.7 152.9
-2.8% 100.0% 100.0%
Gross Profit 55.1 61.4
-10.3% 37.0%
40.2% Operating Income (Loss) (3.2) 3.6
-189.3% -2.2% 2.4% Net Group Result
(7.1) (1.2)
-511.1% -4.8% -0.8% Net
Group Result per Share (0.1) (0.0)
Average
exchange rate (U.S.$ per €) 1.2928
(*) Purchases plus beginning
stock minus final stock (**) Including Third-party manufacturers
UPHOLSTERY NET SALES BREAKDOWN Geographic
breakdown Net sales million euro
Net sales seats
three months ended on three
months ended on
30 September 2010 30 September 2009
Change % 30 September 2010 30 September
2009 Change % Americas 42.5
41.4% 33.5 32.6% 26.9% 222,078
50.1% 197,506 43.3% 12.4% Natuzzi 4.4
2.5% 3.9 3.8% 12.8% 10,953 2.5% 14,227 3.1% -23.0% All brands (*)
38.1 37.1% 29.6 28.8% 28.7% 211,125 47.6% 183,279 40.2% 15.2%
Europe 36.7 35.8% 44.1
42.9% -16.8% 137,319 31.0%
165,832 36.4% -17.2% Natuzzi 17.5 17.1% 23.0
22.4% -23.9% 36,528 8.2% 56,937 12.5% -35.8% All brands (*) 19.2
18.7% 21.1 20.5% -9.0% 100,791 24.1% 108,895 23.9% -7.4%
Italy (Natuzzi) 9.9 9.6% 11.9
11.6% -16.8% 30,930 7.0% 38,863
8.5% -20.4% Rest of the world
13.5 13.2% 13.4 13.0% 0.7%
52,825 11.9% 53,861 11.8% -1.9%
Natuzzi 6.6 6.4% 8.2 8.0% -19.5% 14,508 3.3% 20,522 8.5%
-29.3% All brands (*) 6.9 6.7% 5.2 5.1% 32.7% 38,317 8.6%
33,339 7.3% 14.9%
Total 102.6 100.0% 102.9 100.0%
-0.3% 443,152 100.0% 456,062
100.0% -2.8%
Brands breakdown Net sales million
euro Net sales seats
three months ended on three months ended
on
30 September 2010 30 September 2009 Change %
30 September 2010 30 September 2009 Change
% Natuzzi 38.4 37.4% 47.0
45.7% -18.3% 92,919 21.0%
130,549 28.6% -28.8% All brands
(*) 64.2 62.6% 55.9 54.3%
14.8% 350,233 79.0% 325,513
71.4% 7.6%
Total 102.6 100.0% 102.9
100.0% -0.3% 443,152 100.0%
456,062 100.0% -2.8%
(*) Italsofa, Natuzzi Editions,
Editions and unbranded
Natuzzi S.p.A. and Subsidiaries
Unaudited Consolidated Profit & Loss for nine months ended
on September 30, 2010 on the basis of Italian GAAP (expressed
in millions Euro except for share data)
Nine months ended on Change Percent of
Sales 30-Sep-10 30-Sep-09 %
30-sep-10 30-sep-09 Upholstery net sales 344.8
316.7 8.9% 89.2% 87.2% Other sales 41.9 46.5 -9.9% 10.8%
12.8%
Total Net Sales 386.7 363.2 6.5%
100.0% 100.0% Consumption (*) (152.2)
(147.8) 3.0% -39.4% -40.7% Labor (56.9) (57.7) -1.4% -14.7% -15.9%
Industrial Costs (**) (31.7) (31.4) -1.0% -8.2% -8.6% of which
Depreciation, Amortization (8.8) (11.0)
Cost of Sales (240.8) (236.9) 1.6%
-62.3% -65.2%
Industrial Margin 145.9
126.3 15.5% 37.7% 34.8%
Selling Expenses (114.3) (104.8) 9.1% -29.6% -28.9% of which
Transportation (37.4) (28.7) of which Advertising (18.5) (19.8) of
which Depreciation, Amortization (6.0) (6.4) G&A Expenses
(31.4) (34.1) -7.9% -8.1% -9.4% of which Depreciation, Amortization
(3.3) (3.2)
EBITDA 18.3 8.0 128.8%
4.7% 2.2%
Operating Income/(Loss) (EBIT) 0.2
(12.6) 101.6% 0.1% -3.5%
Interest Income/(Costs), Net (0.9) (0.8) Foreign Exchange, Net 0.4
5.7 Other Income/(Cost), Net (3.1) (0.6)
Earning before Income Taxes
(3.4) (8.3) 59.0% -0.9%
-2.3% Current taxes (6.1) (6.6) -1.6% -1.8%
Net result
(9.5) (14.9) 36.2% -2.5%
-4.1% Minority interest 0.1 0.3
Net Group Result (9.6)
(15.2) 37.1% -2.5% -4.2%
Net Group Result per
Share (0.17) (0.28)
Key
Figures in U.S. dollars Nine months ended on
Change Percent of Sales (millions)
30-Sep-10
30-Sep-09 % 30-sep-10 30-sep-09
Total Net Sales 509.0 478.1
6.5%
100.0% 100.0% Gross Profit 192.0 166.2
15.5% 37.7% 34.8% Operating Income
(Loss) 0.3 (16.6)
101.6% 0.1% -3.5%
Net Group Result (12.6) (20.0)
37.1%
-2.5% -4.2% Net Group Result per Share
(0.2) (0.4)
Average exchange rate (U.S.$ per
€) 1.3163
(*) Purchases plus beginning stock minus final stock
(**) Including Third-party manufacturers
UPHOLSTERY NET SALES
BREAKDOWN Geographic breakdown Net
sales million euro Net
sales seats
Nine months
ended on Nine months ended on
30 September 2010 30 September
2009 Change % 30 September 2010 30 September
2009 Change % Americas 127.4
37.0% 96.0 30.3% 32.7% 679,201
46.7% 539,578 39.8% 25.9% Natuzzi 12.0
3.5% 11.7 3.7% 2.6% 30,734 2.1% 36,569 2.7% -16.0% All brands (*)
115.4 33.5% 84.3 26.6% 36.9% 648,467 44.5% 503,009 37.1% 28.9%
Europe 136.3 39.5% 149.2
47.2% -8.6% 498,128 34.2%
559,288 41.2% -10.9% Natuzzi 68.6 19.9% 76.5
24.2% -10.3% 150,513 10.3% 185,620 13.7% -18.9% All brands (*) 67.7
19.6% 72.7 23.0% -6.9% 347,615 23.9% 373,668 27.5% -7.0%
Italy (Natuzzi) 38.6 11.2% 38.1
12.0% 1.3% 117,887 8.1% 119,625
8.8% -1.5% Rest of the world
42.5 12.3% 33.4 10.5% 27.2%
160,698 11.0% 137,871 10.2%
16.6% Natuzzi 23.3 6.8% 19.8 6.3% 17.7% 53,691 3.7% 50,723
8.8% -55.1% All brands (*) 19.2 5.6% 13.6 4.3% 41.2% 107,007 7.3%
87,148 6.4% 22.8%
Total
344.8 100.0% 316.7 100.1% 8.9%
1,455,914 100.0% 1,356,362 100.0%
7.3%
Brands
breakdown Net sales million euro Net sales seats
Nine months ended on
Nine months ended on
30 September 2010 30 September 2009 Change
% 30 September 2010 30 September 2009 Change
% Natuzzi 142.5 41.3% 146.1
46.1% -2.5% 352,825 24.2%
392,537 28.9% -10.1% All brands
(*) 202.3 58.7% 170.6 53.9%
18.6% 1,103,089 75.8% 963,825
71.1% 14.4%
Total 344.8 100.0% 316.7 100.0%
8.9% 1,455,914 100.0% 1,356,362
100.0% 7.3%
(*)
Italsofa, Natuzzi Editions, Editions and unbranded Natuzzi S.p.A.
and Subsidiaries
Unaudited Consolidated Balance Sheets as at
September 30, 2010 on the basis of Italian GAAP (Expressed in
millions of euro)
ASSETS 30 Sept 10
31 Dec 09 Current assets: Cash
and cash equivalents 49.9 66.3 Marketable debt securities 0.0 0.0
Trade receivables, net 86.1 97.1 Other receivables 59.0 54.5
Inventories 85.5 81.6 Unrealized foreign exchange gains 0.4 0.3
Prepaid expenses and accrued income 1.2 1.4 Deferred income taxes
0.7 0.7
Total current assets
282.8 301.9 Non current assets: Net
property, plant and equipment 191.7 193.9 Other assets 10.2 12.8
Total non current assets 201.9
206.7 TOTAL ASSETS 484.7 508.6
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Short-term borrowings 3.5 0.8
Current portion of long-term debt 1.3 1.1 Accounts payable-trade
52.2 66.5 Accounts payable-other 27.5 29.3 Unrealized foreign
exchange losses 0.2 0.4 Accounts payable-shareholders for dividends
0.0 0.0 Income taxes 1.9 3.7 Salaries, wages and related
liabilities 11.9 15.0
Total current
liabilities 98.5 116.8 Long-term
liabilities: Employees' leaving entitlement 28.7 29.6 Long-term
debt 6.5 5.9 Deferred income for capital grants 10.4 11.2 Other
liabilities 18.1 18.2
Total long-term
liabilities 63.7 64.9
Minority interest 2.0 1.9
Shareholders' equity: Share capital 54.9 54.9 Reserves 42.8
42.8 Additional paid-in capital 8.2 8.2 Retained earnings 214.6
219.1
Total shareholders' equity
320.5 325.0 TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 484.7 508.6 Natuzzi S.p.A.
and Subsidiaries
Consolidated Statements of Cash Flows
(Expressed in million of euro)
30
Sept 10 31 Dec 09 Cash flows from operating
activities: Net earnings (loss) (9.6)
(17.7) Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 18.1 26.8 Employees' leaving entitlement (0.9) (2.1)
Deferred income taxes - 3.7 Minority interest 0.1 0.4 (Gain) loss
on disposal of assets 0.4 (0.1) Unrealized foreign exchange losses
and gains (0.3) (4.4) Impairment of long lived assets - - Deferred
income for capital grants (0.6) (1.0)
Non monetary operating
costs 16.8 23.3 Change in assets and
liabilities: Receivables, net 11.0 25.7 Inventories (4.0) 10.5
Prepaid expenses and accrued income 0.3 (0.2) Other assets (4.4)
(8.3) Accounts payable (14.3) (2.1) Income taxes (1.8) 1.9
Salaries, wages and related liabilities (3.2) (1.8) Other
liabilities (2.5) 2.6
Net working capital
(18.9) 28.3 Net cash provided by operating
activities (11.7) 33.9 Cash flows from
investing activities: Property, plant and equipment: Additions
(10.4) (9.2) Disposals 0.1 0.2 Marketable debt securities: - -
Net cash used in investing activities (10.3)
(9.0) Cash flows from financing activities:
Long-term debt: Proceeds 1.9 3.9 Repayments (1.0) (0.7)
Short-term borrowings 2.7 (8.9) Capital injection - - Dividends
paid to minority interests - -
Net cash used in financing
activities 3.6 (5.7) Effect of translation
adjustments on cash 2.0 (0.2)
Increase (decrease) in cash
and cash equivalents (16.4) 19.0 Cash
and cash equivalents, beginning of the year 66.3
47.3 Cash and cash equivalents, end of the
year 49.9 66.3
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