Natuzzi: Margins Continue to Improve
By Business Wire News
By Business Wire News
SANTERAMO IN COLLE, Bari, Italy
The Board of Directors of Natuzzi S.p.A. (NYSE:NTZ) has approved the Q1 2016 consolidated results.
Following the Board meeting, the Chairman and CEO Pasquale Natuzzi stated:
“The first quarter 2016 results have continued to build upon the improving margins of previous quarters.
In the first three months of 2016, with revenue slightly contracting (-1.5%), Natuzzi brand sales accounted for 71% of core Group revenue.
The Retail expansion of the Natuzzi brand continued, with the opening of 10 new sales points, of which 5 in China – a key market with growth of 11.5% in the first quarter of the year.
The UK market grew by 7.2% and now is the second largest for Natuzzi after the United States.
Leveraging on the existing distribution network and brand awareness, we saw positive performance for Germany, Belgium and Spain, confirming Western Europe – together with China and the United States – as key markets for the development of the Retail business.The American market still presents significant potential for expansion, where we have invested in hiring three new managers with proven Retail experience.
Softaly (Private Label) represented 29% of core Group sales in the first three months of 2016, seeing growth in the EMEA region (+15.1%), in particular in the UK and Germany.
The lower retail sales of one of our major customers are negatively affecting our Q2 2016 private label order flow.However the strategy of the Group is to recover in the second half of the year.We will do this by focusing on new key accounts which have already been identified during the last fairs.
Natuzzi brand order flow is growing versus prior year, confirming the effectiveness of the actions put in place to support the Retail development.
The gross margin on sales improved by 4.9pp.This is due primarily to plants streamlining and the reduction of raw material costs, in particular leather.
Due to what is discussed above as well as stabilized G&A costs, EBITDA reported a profit of Euro 4.3 million, compared to a loss of Euro 1.4 million in Q1 2015.
EBIT also performed in a positive way, improving from a loss of Euro 4.9 million in Q1 2015 to a profit of Euro 1.1 million in Q1 2016, with the group Net Result therefore also improving to a loss of Euro 0.2 million, from Euro -9.8 million in Q1 2015.
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 €488.5 million in 2015, 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 three months of 2016 & 2015 on the basis of Italian GAAP|
|(expressed in millions Euro)|
|Upholstery net sales||108,1||108,9||-0,7%||89,6%||88,9%|
|Furnishings net sales||5,8||6,1||-5,2%||4,8%||5,0%|
|Total Net Sales||120,7||122,6||-1,5%||100,0%||100,0%|
|of which: Depreciation, Amortization||(2,4)||(2,5)||-5,5%||-2,0%||-2,1%|
|Cost of Sales||(79,3)||(86,5)||-8,4%||-65,7%||-70,6%|
|Other Selling and G&A||(20,7)||(21,2)||-2,2%||-17,2%||-17,3%|
|Interest Income/(Costs), Net||(1,2)||(0,5)|
|Foreign Exchange, Net||0,1||(4,0)|
|Other Income/(Cost), Net||0,0||(0,2)|
|Earning before Income Taxes||(0,0)||(9,7)||0,0%||-7,9%|
|Net Group Result||(0,2)||(9,8)||-0,2%||-8,0%|
|(*) Purchases plus beginning stock minus final stock and leather processing|
Natuzzi S.p.A. and Subsidiaries
Unaudited Consolidated Balance Sheets at March 31, 2016 on the basis of Italian
|Cash and cash equivalents||50,7||52,5|
|Marketable debt securities||0,0||0,0|
|Trade receivables, net||67,5||63,2|
|Unrealized foreign exchange gains||0,7||0,2|
|Prepaid expenses and accrued income||1,1||1,4|
|Deferred income taxes||0,4||0,5|
|Total current assets||228,1||220,8|
|Net property, plant and equipment||114,7||121,1|
|Total non-current assets||121,7||128,6|
|LIABILITIES AND SHAREHOLDERS’ EQUITY|
|Current portion of long-term debt||4,3||3,4|
|Accounts payable-shareholders for dividends||0,0||0,0|
|Unrealized foreign exchange losses||0,0||0,3|
|Deferred income taxes||1,0||1,0|
|Salaries, wages and related liabilities||14,5||14,0|
|Total current liabilities||130,2||124,9|
|Employees’ leaving entitlement||20,5||20,5|
|Deferred income taxes – long term||0,0||0,0|
|Deferred income for capital grants||7,5||7,7|
|Total long-term liabilities||64,1||63,9|
|Additional paid-in capital||0,0||0,0|
|Total shareholders’ equity||152,5||157,3|
|TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY||349,8||349,4|
Natuzzi S.p.A. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
|Cash flows from operating activities:|
|Net earnings (loss)||-219||-16.485|
|Adjustments to reconcile net income to net cash|
|provided by operating activities:|
|Depreciation and amortization||3.190||13.729|
|Deferred income taxes||81||-23|
|(Gain) loss on disposal of assets||-40||115|
|Unrealized foreign exchange losses (gains)||-782||-177|
|Extraordinary items, net||0||3.537|
|Deferred income for capital grants||-116||-466|
|Non monetary operating items||2.334||16.747|
|Change in assets and liabilities:|
|Prepaid expenses and accrued income||352||-123|
|Salaries, wages and related liabilities||482||-1.277|
|Employees’ leaving entitlement||0||0|
|Net working capital||-8.090||14.077|
|Net cash generated/(used) by operating activities||-5.975||14.339|
|Cash flows from investing/restructuring activities:|
|Property, plant and equipment:|
|One time termination benefits||-1.905||-4.067|
|Net cash generated/(used) by in investing activities||-2.267||-4.086|
|Cash flows from financing activities:|
|Net cash generated/(used) by financing activities||7.601||7.998|
|Effect of translation adjustments on cash||-1.144||1.370|
|Increase (decrease) in cash and cash equivalents||-1.785||19.622|
|Cash and cash equivalents, beginning of the year||52.474||32.852|
|Cash and cash equivalents, end of the period||50.689||52.474|