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 approved its financial results
for the first quarter of 2011.
- Total Net Sales were €121.0 million,
down 4.3% as compared to first quarter 2010
- Industrial Margin was €42.8 million as
compared to €48.7 million in first quarter 2010
- Negative EBIT of €2.5 million, vs. a
positive EBIT of €0.5 million in first quarter 2010
- Net Group Loss of €3.0 million vs. a
Net Group Loss of €1.3 million in first quarter 2010
- Positive Net Financial Position of
€74.9 with a considerable improvement as compared to December 31,
2010.
Total Net Sales (including raw materials and
semi-finished products sold to third parties) were €121.0 million,
decreasing by 4.3% with respect to 2010.Total upholstery sales
totalled € 105.4 million with a decline of 5.3% over the same
period in 2010.
The break-down of upholstery net sales by geographic area was as
follows: Europe (excluding Italy) 49.5%, the Americas 26.1%, Italy
14.1% and Rest of the World 10.3%.The best commercial performances
were reported in the Rest of the World area with an encouraging
increase of 16.1%. In particular evidence, China has nearly tripled
its sales of Natuzzi branded products. A return to a positive
performance in Europe with 3.6% was noted. In particular, a
recovery of sales of the Natuzzi branded products in Germany
(+11.0%) and in Great Britain (+12.0%) was recorded. By contrast,
Sales in North America still suffer from the persistent non
favourable economic environment.
Industrial margin, 35.4% of sales compared to 38.5% in
the first quarter of 2010, mainly reflects the considerable
increase in the prices of raw materials.
Further rationalization of the selling and administrative costs
(SG&A) allowed an improvement on net sales from 22.1% in first
quarter 2010 to 21.4% in first quarter 2011.
EBITDA amounted to € 2.6 million in the first quarter of
2011 versus € 6.8 million in the first quarter of 2010 as a result
of deterioration in EBIT margin, which ended with a loss of € 2.5
million in the first quarter of 2011 compared to a positive margin
of € 0.5 million in the same period of last year.
Finally, the net result of the Group for the first
quarter of 2011 recorded a loss of € 3.0 million compared to a loss
of € 1.3 million in the first quarter of 2010.
Balance Sheet
A strong improvement of net financial position was recorded at
31 March 2011 which rose from € 45.6 million at 31 December 2010 to
€ 74.9 million largely due to a compensation by Chinese
governmental authorities, as a result of the Shanghai factory
relocation in a new industrial area.
Pasquale Natuzzi, Chairman and CEO of the Natuzzi S.p.A.,
stated: "In the first quarter of 2011 we recorded a slight decrease
in sales as a consequence of the U.S. market, which suffered from
the decline in production in China due to the shift of production
facilities.In recent weeks the level of production capacity has
already been fully restored, which is necessary in order to ensure
an adequate level of service which is fundamental in a market like
the U.S., already characterized by weak demand for home decor
products.We are aware of the difficulties we are still facing,
given the uncertain economic situation, and for this reason we
continue to work on simplification and integration of brands,
markets, distribution channels and facilities to better serve
customers that represent a core value for our company.The strong
financial position enables us to give continuity to the specific
investments in terms of product and process innovation, development
and valorization of the brand, expansion within the emerging
markets like India, China and Brazil, while maintaining our
presence in our historical markets”.
The Company will host a conference call on May 24th, 2011 at
10:00 a.m. Eastern Time (4.00 pm European Continental time) to
discuss first quarter 2011 financial results. To participate, dial
in toll-free 1-888-329-8889 and toll international 1-719-457-2714.
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 June 24th 2011. 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: 9102020.
About NatuzziFounded in 1959 by Pasquale Natuzzi, Natuzzi
S.p.A. designs and manufactures a broad collection of residential
upholstered furniture. With consolidated revenues of EUR 518.6
million in 2010. 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 March 31, 2011 on the basis of Italian GAAP (expressed in
millions Euro except for share data)
Three months ended on
Change Percent of Sales March 31, 2011
March 31, 2010 % March 31, 2011
March 31, 2010 Upholstery net sales 105.4 111.3 -5.3%
87.1% 88.0% Other sales 15.6 15.2 2.6% 12.9% 12.0%
Total
Net Sales 121.0 126.5 -4.3%
100.0% 100.0% Consumption (*) (51.0) (49.7)
2.6% -42.1% -39.3% Labor (19.6) (19.6) 0.0% -16.2% -15.5%
Industrial Costs (7.6) (8.5) -10.6% -6.3% -6.7% of which
Depreciation, Amortization (2.6) (3.1)
Cost of Sales (78.2) (77.8) 0.5%
-64.6% -61.5%
Industrial Margin 42.8 48.7
-12.1% 35.4% 38.5% Selling
Expenses Transportation (11.3) (11.5) 9.3% 9.1% Commissions
(2.2) (2.4) 1.8% 2.0% Advertising (5.9) (6.3) 4.9% 5.0%
Other Selling and G&A (25.9) (28.0) 21.4% 22.1% of which
Depreciation, Amortization (2.5) (3.2)
EBITDA 2.6 6.8
2.1% 5.4%
EBIT (2.5) 0.5
-2.1% 0.4% Interest Income/(Costs), Net (0.1)
(0.4) Foreign Exchange, Net 0.7 0.9 Other Income/(Cost), Net (0.5)
0.3
Earning
before Income Taxes (2.3) 1.3
-1.9% 1.0% Current taxes (0.7) (2.6) -0.6%
-2.1%
Net
result (3.0) (1.3) -2.5%
-1.0% Minority interest 0.0 0.0
Net Group Result (3.0)
(1.3) -2.5% -1.0%
Net Group Result per
Share (0.06) (0.02)
Key
Figures in U.S. dollars Three months ended on
Change Percent of Sales (millions)
March 31,
2011 March 31, 2010 % March 31,
2011 March 31, 2010 Total Net Sales
165.7 173.2
-4.3% 100.0% 100.0%
Industrial Profit 58.6 66.7
-12.1%
35.4% 38.5% EBIT (3.4) 0.7
-600.0% -2.1% 0.4% Net Group Result
(4.2) (1.8)
-134.6% -2.5% -1.0% Net
Group Result per Share (0.1) (0.0)
Average
exchange rate (U.S.$ per €) 1.3694
(*) Purchases plus beginning
stock minus final stock and leather processing
UPHOLSTERY NET SALES BREAKDOWN
Geographic breakdown Net sales million euro Net
sales seats
three months ended on three months ended on
March 31,
2011 March 31, 2010 Change %
March 31, 2011 March 31, 2010 Change %
Americas 27.5 26.1% 36.0 32.3%
-23.6% 151,928 35.7% 197,694
42.4% -23.2% Natuzzi 4.3 4.1% 4.4 4.0% -2.3% 12,516
2.9% 11,547 2.5% 8.4% All brands (*) 23.2 22.0% 31.6 28.4% -26.6%
139,412 32.8% 186,147 39.9% -25.1%
Europe 52.2
49.5% 50.4 45.3% 3.6% 187,321
44.1% 187,564 40.2% -0.1% Natuzzi 26.6
25.2% 26.6 23.9% 0.0% 61,768 14.5% 65,144 14.0% -5.2% All brands
(*) 25.6 24.3% 23.8 21.4% 7.6% 125,553 29.5% 122,420 26.3% 2.6%
Italy (Natuzzi) 14.9 14.1% 15.6
14.0% -4.5% 48,040 11.3% 46,494
10.0% 3.3% Rest of the world
10.8 10.3% 9.3 8.4% 16.1%
37,895 8.9% 34,561 7.4% 9.6%
Natuzzi 6.7 6.4% 5.9 5.3% 13.6% 15,224 3.6% 13,352 10.0%
14.0% All brands (*) 4.1 3.9% 3.4 3.1% 20.6% 22,671 5.3%
21,209 4.5% 6.9%
Total 105.4 100.0% 111.3 100.0%
-5.3% 425,184 100.0% 466,313
100.0% -8.8%
Brands breakdown Net sales million
euro Net sales seats
three months ended on three months ended
on
March 31, 2011 March 31, 2010 Change %
March 31, 2011 March 31, 2010 Change %
Natuzzi 52.5 49.8% 52.5
47.2% 0.0% 137,547 32.4% 136,537
29.3% 0.7% All brands (*) 52.9
50.2% 58.8 52.8% -10.0% 287,636
67.6% 329,776 70.7% -12.8%
Total 105.4
100.0% 111.3 100.0% -5.3%
425,184 100.0% 466,313 100.0%
-8.8%
(*) Italsofa, Natuzzi Editions, Editions and unbranded
Natuzzi S.p.A. and Subsidiaries Unaudited
Consolidated Balance Sheets at March 31, 2011 on the basis of
Italian GAAP (Expressed in millions of euro)
ASSETS 31-Mar-11 31-Dec-10 Current
assets: Cash and cash equivalents 95.2 61.1 Marketable debt
securities 0 0.0 Trade receivables, net 89.5 95.8 Other receivables
53.7 51.7 Inventories 88.5 87.4 Unrealized foreign exchange gains
1.3 0.2 Prepaid expenses and accrued income 1.7 1.3 Deferred income
taxes 0.9 1.1
Total current assets
330.8 298.6 Non current assets: Net
property, plant and equipment 195.5 196 Other assets 8.7 9.3
Total non current assets 204.2
205.3 TOTAL ASSETS 535.0 503.9
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Short-term borrowings 5.3 0.1
Current portion of long-term debt 2.6 2.6 Accounts payable-trade
57.6 64.3 Accounts payable-other 68.8 27.9 Unrealized foreign
exchange losses 0.2 1.1 Income taxes 2.5 2.9 Salaries, wages and
related liabilities 9.4 9.9
Total current
liabilities 146.4 108.8 Long-term
liabilities: Employees' leaving entitlement 28.2 28.4 Long-term
debt 12.4 12.8 Deferred income for capital grants 10.2 10.4 Other
liabilities 18.6 18.2
Total long-term
liabilities 69.4 69.8
Minority interest 2.0 2.1
Shareholders' equity: Share capital 54.9 54.9 Reserves 12.0
12.0 Additional paid-in capital 9.3 9.3 Retained earnings 241.0
247.0
Total shareholders' equity
317.2 323.2 TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 535.0 503.9 Natuzzi S.p.A.
and Subsidiaries
Consolidated Statements of Cash
Flows (Expressed in million of euro)
31 March 11
31 Dec 10 Cash flows from operating activities:
Net earnings (loss) (3.0) (11.1)
Adjustments to reconcile net income to net cash provided
by operating activities: Depreciation and amortization 5.2 23.4
Employees' leaving entitlement (0.3) (1.2) Deferred income taxes
0.2 (0.4) Minority interest - 0.1 (Gain) loss on disposal of assets
(0.3) 0.6 Unrealized foreign exchange losses and gains (2.0) 0.8
Impairment of long lived assets (0.1) (0.7) Deferred income for
capital grants
Non monetary operating costs 2.7
22.6 Change in assets and liabilities:
Receivables, net 6.3 1.2 Inventories (1.1) (5.8) Prepaid expenses
and accrued income (0.4) 0.1 Other assets (2.0) 2.8 Accounts
payable (6.7) (2.2) Income taxes (0.4) (0.7) Salaries, wages and
related liabilities (0.6) (5.1) Other liabilities (1.3) (0.2)
Net working capital (6.2) (9.9)
Net cash provided by operating activities (6.5)
1.6 Cash flows from investing activities:
Property, plant and equipment: Additions (6.7) (17.9) Disposals 0.1
0.2 Proceeds from sales 43.3 Marketable debt securities: -
Net cash used in investing activities 36.7
(17.7) Cash flows from financing activities:
Long-term debt: Proceeds 9.8 Repayments (0.4) (1.3)
Short-term borrowings 5.2 (0.7) Capital injection - - Dividends
paid to minority interests - -
Net cash used in financing
activities 4.8 7.8 Effect of translation
adjustments on cash (0.9) 3.1
Increase (decrease) in cash
and cash equivalents 34.1 (5.2) Cash
and cash equivalents, beginning of the year 61.1
66.3 Cash and cash equivalents, end of the
year 95.2 61.1
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