THE BOARD OF DIRECTORS OF NATUZZI S.P.A. (NYSE:NTZ) (“NATUZZI” OR THE “COMPANY”) HAS APPROVED ITS CONSOLIDATED FINANCIAL RESULTS FOR THE FIRST HALF OF 2015.
Following the board meeting, the Chairman and CEO Pasquale Natuzzi stated:
“The 1H 2015 results consolidate the development seen over the previous quarters. The efficiency in production and fixed costs and the improved quality of sales were the major factors contributing to the 83.4% boost in EBITDA.
The actions taken at the Italian and Chinese production plant lifted the industrial indicators. As a result, cost of sales improved form 72.9% to 69.8%.
In May 2015 - under the Agreement with the Trade Unions of March 3, 2015 - we began to upgrade the Italian plant according to a “lean enterprise” methodology, adopting the process innovations tested at the beginning of 2015 in the Iesce 1 experimental facility. The full extent of benefits of the new industrial structure will be seen starting from next year.
SG&A expenses reduced by 5.1% from Euro 45 million in 1H2014 to Euro 42.7 million in 1H 2015, thanks to the rationalization measures implemented in previous quarters.
The business development strategy continues. Since the beginning of 2015, 11 new sales points have been opened, principally in ASIA and the USA. We highlight in particular those in Hong Kong, Colombo in Sri Lanka and Busan in Korea.
Period turnover amounted to Euro 241.7 million, up 14.5% and featuring a significantly improved mix compared to 1H 2014, while benefitting also from exchange rate movements.
Natuzzi Brand represented 70% of upholstery sales and, in terms of regional performance, Asia (+22,4%) and Americas (+20,2%) delivered the strongest results, in EMEA (-1,8%) it’s worth to highlight the good performance of UK and Italy.
Private Label represented 30% of upholstery revenues in 1H 2015, Americas (+22,3%) and EMEA (+46.9%) showed the most significant results.
The significant improvement in our overall financial results over the last five quarters is illustrated in the following table:
| 1Q 2014 | 2Q 2014 | 3Q 2014 | 4Q 2014 | 1Q 2015 | 2Q 2015 | ||||||||
| Total Net Sales* | -11.2% | -1.2% | +8.2% | +12.6% | +24.6% | +6% | |||||||
| COGS** | -71.5% | -74.2% | -72.1% | -71.2% | -70.6% | -69.3% | |||||||
| Other SG&A** | -21.8% | -20.9% | -18.2% | -17.7% | -17.3% | -17.7% | |||||||
| EBITDA** | -6.0% | -7.1% | -3.3% | -3.7% | -1.2% | -0.8% |
* change in 2015 quarterly sales on corresponding quarter of 2014, with the 2014 figures compared with 2013
** percentage of net sales
The results for the first half of 2015 are a major milestone in our Development Plan, both in terms of cost reduction and improvement of sales mix. In the coming months we will implement our new industrial production processes in all our plants, starting from Italy.”
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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 €461.4 million in 2014, 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 1,100 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 six months of 2015 & 2014 on the basis of Italian GAAP | |||||||||||||
| (expressed in millions Euro) | |||||||||||||
Six months ended on | Change | Percentage of Sales | |||||||||||
| 30-Jun-15 | 30-Jun-14 | % | 30-Jun-15 | 30-Jun-14 | |||||||||
| Upholstery net sales | 216,2 | 188,2 | 14,9% | 89,4% | 89,2% | ||||||||
| Other sales | 25,5 | 22,9 | 11,6% | 10,6% | 10,8% | ||||||||
| Total Net Sales | 241,7 | 211,1 | 14,5% | 100,0% | 100,0% | ||||||||
| Consumption (*) | (113,4) | (96,5) | 17,4% | -46,9% | -45,7% | ||||||||
| Labor | (39,9) | (44,0) | -9,2% | -16,5% | -20,8% | ||||||||
| Industrial Costs | (15,5) | (13,4) | 15,3% | -6,4% | -6,4% | ||||||||
| of which: Depreciation, Amortization | (5,0) | (4,5) | 11,8% | -2,1% | -2,1% | ||||||||
| Cost of Sales | (168,8) | (153,9) | 9,6% | -69,8% | -72,9% | ||||||||
| Industrial Margin | 72,9 | 57,1 | 27,7% | 30,2% | 27,1% | ||||||||
| Selling Expenses | (39,6) | (32,5) | 21,6% | -16,4% | -15,4% | ||||||||
| Transportation | (26,6) | (21,2) | 25,2% | -11,0% | -10,1% | ||||||||
| Commissions | (5,0) | (4,4) | 13,5% | -2,1% | -2,1% | ||||||||
| Advertising | (7,9) | (6,9) | 15,6% | -3,3% | -3,2% | ||||||||
| Other Selling and G&A | (42,7) | (45,0) | -5,1% | -17,7% | -21,3% | ||||||||
| of which: Depreciation, Amortization | (2,0) | (2,0) | -0,8% | -0,8% | -0,9% | ||||||||
| EBITDA | (2,3) | (13,9) | -1,0% | -6,6% | |||||||||
| EBIT | (9,4) | (20,4) | -3,9% | -9,7% | |||||||||
| Interest Income/(Costs), Net | (1,1) | (0,5) | |||||||||||
| Foreign Exchange, Net | (2,0) | 1,1 | |||||||||||
| Other Income/(Cost), Net | (0,5) | (3,9) | |||||||||||
| Earning before Income Taxes | (12,9) | (23,7) | -5,3% | -11,2% | |||||||||
| Current taxes | (0,3) | (0,8) | -0,1% | -0,4% | |||||||||
| Net result | (13,3) | (24,5) | -5,5% | -11,6% | |||||||||
| Minority interest | 0,0 | 0,0 | |||||||||||
| Net Group Result | (13,3) | (24,5) | -5,5% | -11,6% | |||||||||
| (*) 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) | |||||||||||||||||||||||
| Six months ended on | Six months ended on | |||||||||||||||||||||||
| AREA | 30-Jun-15 | % | 30-Jun-14 | % | delta | 30-Jun-15 | % | 30-Jun-14 | % | delta | ||||||||||||||
| Americas | 88,4 | 40,9% | 73,0 | 38,8% | 21,0% | 347.263 | 45,8% | 368.559 | 47,2% | -5,8% | ||||||||||||||
| Natuzzi | 51,8 | 24,0% | 43,1 | 22,9% | 20,2% | 165.693 | 21,8% | 173.501 | 22,2% | -4,5% | ||||||||||||||
| Private label | 36,6 | 16,9% | 29,9 | 15,9% | 22,3% | 181.570 | 23,9% | 195.058 | 25,0% | -6,9% | ||||||||||||||
| EMEA | 100,0 | 46,3% | 92,6 | 49,2% | 8,0% | 344.313 | 45,4% | 330.599 | 42,3% | 4,1% | ||||||||||||||
| Natuzzi | 72,6 | 33,6% | 73,9 | 39,3% | -1,8% | 195.699 | 25,8% | 211.892 | 27,1% | -7,6% | ||||||||||||||
| Private label | 27,4 | 12,7% | 18,7 | 9,9% | 46,9% | 148.614 | 19,6% | 118.707 | 15,2% | 25,2% | ||||||||||||||
| Asia-Pacific | 27,8 | 12,9% | 22,6 | 12,0% | 23,0% | 67.434 | 8,9% | 81.530 | 10,4% | -17,3% | ||||||||||||||
| Natuzzi | 26,1 | 12,1% | 21,3 | 11,3% | 22,4% | 58.679 | 7,7% | 71.793 | 9,2% | -18,3% | ||||||||||||||
| Private label | 1,7 | 0,8% | 1,3 | 0,7% | 31,6% | 8.755 | 1,2% | 9.737 | 1,2% | -10,1% | ||||||||||||||
| TOTAL | 216,2 | 100,0% | 188,2 | 100,0% | 14,9% | 759.010 | 100,0% | 780.688 | 100,0% | -2,8% | ||||||||||||||
| BREAKDOWN BY BRAND | ||||||||||||||||||||||||
| NET SALES (in €, million) | NET SALES (in seats sold) | |||||||||||||||||||||||
| Six months ended on | Six months ended on | |||||||||||||||||||||||
| BRAND | 30-Jun-15 | % | 30-Jun-14 | % | delta | 30-Jun-15 | % | 30-Jun-14 | % | delta | ||||||||||||||
| Natuzzi | 150,5 | 69,6% | 138,3 | 73,5% | 8,8% | 420.071 | 55,3% | 457.186 | 58,6% | -8,1% | ||||||||||||||
| Private label | 65,7 | 30,4% | 49,9 | 26,5% | 31,7% | 338.939 | 44,7% | 323.502 | 41,4% | 4,8% | ||||||||||||||
| TOTAL | 216,2 | 100,0% | 188,2 | 100,0% | 14,9% | 759.010 | 100,0% | 780.688 | 100,0% | -2,8% | ||||||||||||||
The "Natuzzi" brand includes the Group's three lines of product: Natuzzi Italia, Natuzzi Editions and Natuzzi Re-Vive | ||||||||||||||||||||||||
| Natuzzi S.p.A. and Subsidiaries | |||||||||||||
| Unaudited Consolidated Profit & Loss for the second quarter 2015 & 2013 on the basis of Italian GAAP | |||||||||||||
| (expressed in millions Euro) | |||||||||||||
| Three months ended on | Change | Percentage of Sales | |||||||||||
| 30-Jun-15 | 30-Jun-14 | % | 30-Jun-15 | 30-Jun-14 | |||||||||
| Upholstery net sales | 106,6 | 100,3 | 6,3% | 89,5% | 89,0% | ||||||||
| Other sales | 12,5 | 12,4 | 0,6% | 10,5% | 11,0% | ||||||||
| Total Net Sales | 119,1 | 112,7 | 5,7% | 100,0% | 100,0% | ||||||||
| Consumption (*) | (55,6) | (52,0) | 7,0% | -46,7% | -46,2% | ||||||||
| Labor | (19,1) | (24,9) | -23,4% | -16,0% | -22,1% | ||||||||
| Industrial Costs | (7,5) | (6,6) | 12,9% | -6,3% | -5,9% | ||||||||
| of which: Depreciation, Amortization | (2,5) | (2,0) | 23,2% | -2,1% | -1,8% | ||||||||
| Cost of Sales | (82,2) | (83,6) | -1,6% | -69,0% | -74,2% | ||||||||
| Industrial Margin | 36,9 | 29,1 | 26,6% | 31,0% | 25,8% | ||||||||
| Selling Expenses | (19,8) | (16,6) | 19,5% | -16,6% | -14,7% | ||||||||
| Transportation | (13,6) | (11,0) | 23,6% | -11,4% | -9,8% | ||||||||
| Commissions | (2,5) | (2,1) | 17,1% | -2,1% | -1,9% | ||||||||
| Advertising | (3,6) | (3,4) | 7,4% | -3,1% | -3,0% | ||||||||
| Other Selling and G&A | (21,5) | (23,5) | -8,7% | -18,0% | -20,9% | ||||||||
| of which: Depreciation, Amortization | (1,0) | (0,9) | 9,1% | -0,8% | -0,8% | ||||||||
| EBITDA | (0,9) | (8,0) | -0,8% | -7,1% | |||||||||
| EBIT | (4,4) | (11,0) | -3,7% | -9,7% | |||||||||
| Interest Income/(Costs), Net | (0,6) | (0,2) | |||||||||||
| Foreign Exchange, Net | 2,1 | 0,3 | |||||||||||
| Other Income/(Cost), Net | (0,3) | (3,6) | |||||||||||
| Earning before Income Taxes | (3,2) | (14,5) | -2,7% | -12,8% | |||||||||
| Current taxes | (0,2) | (0,3) | -0,2% | -0,3% | |||||||||
| Net Result | (3,5) | (14,8) | -2,9% | -13,1% | |||||||||
| Minority interest | (0,0) | (0,0) | |||||||||||
| Net Group Result | (3,5) | (14,8) | -2,9% | -13,1% | |||||||||
| (*) 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) | ||||||||||||||||||||||||
| AREA | 2Q 2015 | % | 2Q 2014 | % | delta | 2Q 2015 | % | 2Q 2014 | % | delta | |||||||||||||||
| Americas | 43,3 | 40,6% | 39,7 | 39,6% | 9,1% | 169.566 | 46,0% | 196.369 | 48,1% | -13,6% | |||||||||||||||
| Natuzzi | 24,0 | 22,5% | 24,9 | 24,8% | -3,5% | 73.958,4 | 20,1% | 97.814,0 | 24,0% | -24,4% | |||||||||||||||
| Private label | 19,3 | 18,1% | 14,9 | 14,8% | 30,2% | 95.607,5 | 25,9% | 98.554,7 | 24,1% | -3,0% | |||||||||||||||
| EMEA | 49,2 | 46,1% | 48,3 | 48,2% | 1,8% | 163.808 | 44,4% | 168.624 | 41,3% | -2,9% | |||||||||||||||
| Natuzzi | 36,0 | 33,7% | 38,5 | 38,4% | -6,6% | 94.534,4 | 25,6% | 105.667,8 | 25,9% | -10,5% | |||||||||||||||
| Private label | 13,2 | 12,4% | 9,8 | 9,8% | 35,0% | 69.273,2 | 18,8% | 62.956,5 | 15,4% | 10,0% | |||||||||||||||
| Asia-Pacific | 14,1 | 13,2% | 12,3 | 12,2% | 15,1% | 35.494 | 9,6% | 43.213 | 10,6% | -17,9% | |||||||||||||||
| Natuzzi | 12,7 | 11,9% | 11,7 | 11,6% | 9,2% | 28.572,1 | 7,7% | 38.534,5 | 9,4% | -25,9% | |||||||||||||||
| Private label | 1,4 | 1,3% | 0,6 | 0,6% | 130,0% | 6.922,0 | 1,9% | 4.678,0 | 1,1% | 48,0% | |||||||||||||||
| TOTAL | 106,6 | 100,0% | 100,3 | 100,0% | 6,3% | 368.868 | 100,0% | 408.205 | 100,0% | -9,6% | |||||||||||||||
| BREAKDOWN BY BRAND | |||||||||||||||||||||||||
| NET SALES (in €, million) | NET SALES (in seats sold) | ||||||||||||||||||||||||
| BRAND | 2Q 2015 | % | 2Q 2014 | % | delta | 2Q 2015 | % | 2Q 2014 | % | delta | |||||||||||||||
| Natuzzi | 72,7 | 68,1% | 75,0 | 74,8% | -3,1% | 197.065 | 53,4% | 242.016 | 59,3% | -18,6% | |||||||||||||||
| Private label | 34,0 | 31,9% | 25,3 | 25,2% | 34,5% | 171.803 | 46,6% | 166.189 | 40,7% | 3,4% | |||||||||||||||
| TOTAL | 106,6 | 100,0% | 100,3 | 100,0% | 6,3% | 368.868 | 100,0% | 408.205 | 100,0% | -9,6% | |||||||||||||||
The "Natuzzi" brand includes the Group's three lines of product: Natuzzi Italia, Natuzzi Editions and Natuzzi Re-Vive | |||||||||||||||||||||||||
| Natuzzi S.p.A. and Subsidiaries | ||||||||||||||||||||||
Unaudited Consolidated Balance Sheets at June 30, 2015 on the
basis of Italian GAAP | ||||||||||||||||||||||
| ASSETS | 30-Jun-15 | 31-Dec-14 | ||||||||||||||||||||
| Current assets: | ||||||||||||||||||||||
| Cash and cash equivalents | 23,7 | 32,8 | ||||||||||||||||||||
| Marketable debt securities | 0,0 | 0,0 | ||||||||||||||||||||
| Trade receivables, net | 85,8 | 96,0 | ||||||||||||||||||||
| Other receivables | 21,8 | 18,1 | ||||||||||||||||||||
| Inventories | 96,1 | 90,2 | ||||||||||||||||||||
| Unrealized foreign exchange gains | 0,2 | 0,3 | ||||||||||||||||||||
| Prepaid expenses and accrued income | 1,2 | 1,3 | ||||||||||||||||||||
| Deferred income taxes | 0,5 | 0,5 | ||||||||||||||||||||
| Total current assets | 229,2 | 239,3 | ||||||||||||||||||||
| Non-current assets: | ||||||||||||||||||||||
| Net property, plant and equipment | 127,3 | 130,8 | ||||||||||||||||||||
| Other assets | 8,7 | 10,0 | ||||||||||||||||||||
| Total non-current assets | 136,0 | 140,8 | ||||||||||||||||||||
| TOTAL ASSETS | 365,2 | 380,1 | ||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||||
| Short-term borrowings | 27,6 | 20,7 | ||||||||||||||||||||
| Current portion of long-term debt | 2,1 | 3,1 | ||||||||||||||||||||
| Accounts payable-trade | 64,9 | 75,2 | ||||||||||||||||||||
| Accounts payable-other | 25,0 | 29,7 | ||||||||||||||||||||
| Accounts payable-shareholders for dividends | 0,0 | 0,0 | ||||||||||||||||||||
| Unrealized foreign exchange losses | 0,4 | 0,6 | ||||||||||||||||||||
| Income taxes | 1,3 | 1,1 | ||||||||||||||||||||
| Deferred income taxes | 1,0 | 1,0 | ||||||||||||||||||||
| Salaries, wages and related liabilities | 18,4 | 18,3 | ||||||||||||||||||||
| Total current liabilities | 140,8 | 149,7 | ||||||||||||||||||||
| Long-term liabilities: | ||||||||||||||||||||||
| Employees' leaving entitlement | 20,9 | 20,9 | ||||||||||||||||||||
| Long-term debt | 5,1 | 6,2 | ||||||||||||||||||||
| Deferred income taxes - long term | 0,0 | 0,0 | ||||||||||||||||||||
| Deferred income for capital grants | 7,8 | 8,1 | ||||||||||||||||||||
| Other liabilities | 20,0 | 21,2 | ||||||||||||||||||||
| Total long-term liabilities | 53,7 | 56,3 | ||||||||||||||||||||
| Minority interest | 3,3 | 3,0 | ||||||||||||||||||||
| Shareholders' equity: | ||||||||||||||||||||||
| Share capital | 54,9 | 54,9 | ||||||||||||||||||||
| Reserves | 4,3 | 40,9 | ||||||||||||||||||||
| Additional paid-in capital | 0,0 | 8,4 | ||||||||||||||||||||
| Retained earnings | 108,3 | 66,8 | ||||||||||||||||||||
| Total shareholders' equity | 167,4 | 171,0 | ||||||||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 365,2 | 380,1 | ||||||||||||||||||||
| Natuzzi S.p.A. and Subsidiaries | ||||||||||||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||||||||||||
| (expressed in million of Euro) | 30-Jun-15 | 30-Jun-14 | ||||||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||||
| Net earnings (loss) | (13.256) | (24.532) | ||||||||||||||||||||
| Adjustments to reconcile net income to net cash | ||||||||||||||||||||||
| provided by operating activities: | ||||||||||||||||||||||
| Depreciation and amortization | 7.013 | 6.497 | ||||||||||||||||||||
| (Gain) loss on disposal of assets | 15 | -11 | ||||||||||||||||||||
| Unrealized foreign exchange losses (gains) | 3 | 1.064 | ||||||||||||||||||||
Deferred income for capital grants | -306 | -231 | ||||||||||||||||||||
| Non monetary operating items | 6.725 | 10.482 | ||||||||||||||||||||
| Change in assets and liabilities: | ||||||||||||||||||||||
| Receivables, net | 10.189 | -3.794 | ||||||||||||||||||||
| Inventories | -5.856 | -6.135 | ||||||||||||||||||||
| Prepaid expenses and accrued income | 113 | 44 | ||||||||||||||||||||
| Other assets | -3.726 | 12.776 | ||||||||||||||||||||
| Accounts payable | -10.289 | 4.914 | ||||||||||||||||||||
| Income taxes | 251 | -5.803 | ||||||||||||||||||||
| Salaries, wages and related liabilities | 1.747 | 8.602 | ||||||||||||||||||||
| Other liabilities | 1.836 | -3.401 | ||||||||||||||||||||
| Net working capital | (5.735) | 7.204 | ||||||||||||||||||||
| Net cash generated/(used) by operating activities | (12.266) | (6.846) | ||||||||||||||||||||
| Cash flows from investing/restructuring activities: | ||||||||||||||||||||||
| Property, plant and equipment: | ||||||||||||||||||||||
| Additions | -792 | -4.982 | ||||||||||||||||||||
| Disposals | 79 | 124 | ||||||||||||||||||||
| One time termination benefits | -2.770 | -1.115 | ||||||||||||||||||||
| Net cash generated/(used) by in investing activities | (3.483) | (5.696) | ||||||||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||||
| Long-term debt: | ||||||||||||||||||||||
| Proceeds | 0 | 0 | ||||||||||||||||||||
| Repayments | -2.104 | -1.931 | ||||||||||||||||||||
| Short-term borrowings | 6.871 | -3.960 | ||||||||||||||||||||
| Dividends paid to minority interests | ||||||||||||||||||||||
| Net cash generated/(used) by financing activities | 4.766 | (5.891) | ||||||||||||||||||||
| Effect of translation adjustments on cash | 1.799 | (748) | ||||||||||||||||||||
| Increase (decrease) in cash and cash equivalents | (9.185) | (19.180) | ||||||||||||||||||||
| Cash and cash equivalents, beginning of the year | 32.852 | 61.037 | ||||||||||||||||||||
| Cash and cash equivalents, end of the period | 23.668 | 41.858 | ||||||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20150925005843/en/
Contacts:
Francesca Cocco; tel.
+39.080.8820.676; fcocco@natuzzi.com
or
NATUZZI
CORPORATE COMMUNICATION
Vito Basile (Press Office); tel.
+39.080.8820.676 – vbasile@natuzzi.com
