Natuzzi S.p.A. First Quarter 2013 Financial Results

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Natuzzi S.p.A. First Quarter 2013 Financial Results

SANTERAMO IN COLLE (BA), Italy--(BUSINESS WIRE)-- The Board of Directors ofNatuzzi S.p.A. (NYS: NTZ) ("Natuzzi" or "the Company"), a leading company in the furnishings industry, today approved its consolidated financial results for the first quarter of 2013.


  • Total Upholstery Net Sales up 3.4% (+5.1% in terms of seats sold) over 2012 first quarter;
  • Total Net Sales at €110.7 million, flat over 2012 first quarter;
  • Industrial Margin at 29.0% on total net sales, down from 32.1% reported in the same period last year;
  • Negative EBIT of €6.9 million, improving from an operating loss of €7.4 million reported for the first quarter of 2012;
  • Group's net result improving by €2.4 million (from a net loss of €8.4 million reported in 2012 first quarter to a net loss of €6.0 million for the first three months 2013).
  • Positive Net Financial Position at €28.6 million as of March 31, 2013.


During the quarter ended March 31, 2013, total net sales (including raw materials and semi-finished products sold to third parties) amounted to €110.7 million, almost flat (+0.3%) over the same period last year.

Total upholstery net sales during the first quarter of 2013 were €99.0 million, up 3.4% from €95.8 million reported in the prior year comparable period, notwithstanding the modest performance of the high-end Natuzzi Italia branded products (a 9.8% decrease over 2012 first quarter). Such negative result of the made-in-Italy products was mainly due to the 20.5% decrease reported in Europe (Italy included) that more than offset the positive performance in the Americas (+27.4%) and Rest of the World regions (+10.4%). On the contrary, sales of the "Other Brands" products reported a generalized increase across the macro-regions (+12.3% on average), and, namely, +12.9% in the Americas, +14.1% in Europe, and +3.4% in the Rest of the World region.

The breakdown by geographic area of total upholstery net sales during the first quarter of 2013 and 2012 was the following:

        1 quarter 2013       1 quarter 2012
Americas 40.2% 36.3%
Europe (ex Italy) 37.1% 39.0%
Italy 8.0%


Rest of the World 14.7% 14.2%

The above table confirms the decreasing trend of sales in Europe (Italy included), from 49.5% in the first quarter of 2012 to 45.1% during the first three months of 2013), mainly as consequence of the extreme weakness of consumption, further burdened by fiscal measures still in place in some Euro-area Countries that affected the purchasing power of consumers. The Americas region confirms its positive trend in terms of percentage on the Group's total net sales.

The Industrial Margin during the first quarter of 2013 was equal to 29.0% on total net sales, down from 32.1% reported one year ago. The industrial margin was negatively affected by the different sales mix, with consumers that keep on preferring lower-priced products, but also by the shift of part of the production of the Romanian plant to the Italian plants, which was necessary in order to maintain the appropriate service level to clients following the temporary full utilization of the Romanian plant.

During the first quarter of 2013, the incidence of selling expenses (transportation, commissions to agents and advertising) on total net sales decreased slightly, passing from 15.7% reported one year ago to 15.5% in the first quarter of 2013. More specifically, the incidence of transportation costs on net sales passed from 9.7% in the first quarter of 2012 to 10.1% in the first quarter of 2013, due to relatively more shipments towards North America and more sales of medium/low-end products; the incidence of commissions to agents was basically the same as one year ago (2.2%). Advertising costs as a percentage of total net sales passed from 3.8% in 2012 first quarter to 3.1% in the first quarter of 2013.

Other Selling, General & Administrative expenses decreased over 2012 first quarter both as percentage on total net sales (from 23.0% in 2012 first quarter to 19.7% in 2013 first quarter) and in Euro terms (a €3.6 million decrease, from €25.4 million reported one year ago to €21.8 million in 2013 first quarter), thanks in particular to the rationalization measures implemented at the Group level.

For the reasons highlighted above, during the first quarter of 2013 the Group reported a negative EBITDA of €3.0 million (substantially in line with same quarter last year), and an operating loss of €6.9 million, versus a negative EBIT of €7.4 million reported one year ago.

For the three months ended March 31, 2013 the Group reported a net loss of €6.0 million, recovering from a net loss of €8.4 million reported for the first three months of 2012.


The Group's Net Financial Position as of March 31, 2013 was positive and equal to €28.6 million.

Pasquale Natuzzi, Chairman and CEO of the Natuzzi Group, commented: "First quarter results started to show a positive trend reversal compared to the same period last year, notwithstanding persisting weak real-economy conditions in the Euro area that negatively affected consumptions.

As a matter of fact, during the quarter we reported an increase in the upholstery net sales as well as a recovery in the EBIT, the latter deriving from the cost control measures implemented by the Group over the past quarters.

However, we are far from being satisfied with the overall performance of the Group. In fact, also in this quarter we reported a net loss, but recovering with respect to first quarter last year.

Therefore, we intend to further accelerate the implementation of all the actions already undertaken and necessary to the improvement of the efficiency and to the reduction of the cost structure. We think these measures will be able to improve the Group results in the following quarters.

At the same time, we are developing our Business Plan 2014-2018 by redrawing on a Lean-logic basis the whole process ruling our value chain. We will face the challenges of future years by leveraging on product and manufacturing process innovation, to further improve the efficiency of the overall organization.

All the above to get closer and closer to clients, to offer an even more competitive product, both in terms of quality, price and customer service, and, at the end, to regain volumes and market shares."


The Company will host a conference call on Tuesday May 28th, 2013 at 10:00 a.m. U.S. Eastern time (4.00 p.m. Italian time, or 3.00 p.m. UK time) to discuss first quarter financial results.

The dial-in phone numbers for the live conference call will be 1-888-395-3227 (toll-free) for persons calling from the U.S. or Canada, and 1-719-325-2376 for those calling from other Countries.

A live web cast of the conference call will be available on line at under the "About Us/Investor Relations" section.

A replay of the call will be available shortly after the end of the conference call starting from May 28th, 2013 (at 1:00 pm US Eastern time), to June 28th, 2013 (at 11:59 pm Eastern Time). 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: 8102687.


About Natuzzi S.p.A.

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 468.8 million in 2012, Natuzzi is Italy's largest furniture manufacturer. The Natuzzi Group exports its innovative high-quality sofas and armchairs in five continents under separate brand names, Natuzzi Italia, Natuzzi Editions (only for the North American market) /Leather Editions and Softaly. 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 first quarter 2013 and 2012 on the basis of Italian GAAP
(expressed in millions Euro except for per-share data)
Three months ended on Change Percentage of Sales
    31-Mar-13   31-Mar-12   %   31-Mar-13   31-Mar-12
Upholstery net sales 99.0 95.8 3.4% 89.4% 86.8%
Other sales   11.7   14.6   -19.8%   10.6%   13.2%
Total Net Sales   110.7   110.4   0.3%   100.0%   100.0%
Consumption (*) (50.3) (49.0) 2.7% -45.4% -44.4%
Labor (21.1) (18.6) 13.2% -19.0% -16.8%
Industrial Costs (7.3) (7.3) -1.1% -6.6% -6.7%
of which: Depreciation, Amortization   (2.3)   (2.4)   -3.1%   -2.1%   -2.2%
Cost of Sales   (78.6)   (74.9)   4.9%   -71.0%   -67.9%
Industrial Margin   32.1   35.4   -9.4%   29.0%   32.1%
Selling Expenses (17.2) (17.4) -1.2% -15.5% -15.7%
Transportation (11.2) (10.7) 5.2% -10.1% -9.7%
Commissions (2.5) (2.5) -0.1% -2.2% -2.2%
Advertising (3.5) (4.2) -17.9% -3.1% -3.8%
Other Selling and G&A (21.8) (25.4) -14.2% -19.7% -23.0%
of which: Depreciation, Amortization   (1.6)   (2.0)   -23.0%   -1.4%   -1.8%
EBITDA   (3.0)   (2.9)       -2.7%   -2.6%
EBIT   (6.9)   (7.4)       -6.2%   -6.7%
Interest Income/(Costs), Net (0.1) (0.4)
Foreign Exchange, Net 1.5 (0.3)
Other Income/(Cost), Net   0.5   0.4            
Earning before Income Taxes   (5.0)   (7.6)       -4.5%   -6.9%
Current taxes (1.0) (0.8) -0.9% -0.7%
Net Result   (6.0)   (8.4)       -5.4%   -7.6%
Minority interest 0.0 (0.0)
Net Group Result   (6.0)   (8.4)       -5.4%   -7.6%
Net Group Result per Share   (0.11)   (0.15)            
Key Figures in U.S. dollars Three months ended on Change Percentage of Sales
(millions)   31-Mar-13   31-Mar-12   %   31-Mar-13   31-Mar-12
Total Net Sales 146.2 145.7 0.3% 100.0% 100.0%
Industrial Margin 42.4 46.8 -9.4% 29.0% 32.1%
EBIT (9.1) (9.7) -6.2% -6.7%
Net Group Result (7.9) (11.1) -5.4% -7.6%
Net Group Result per Share (0.14) (0.20)
Average exchange rate (U.S.$ per 1€) 1.3203
(*) Purchases plus beginning stock minus final stock and leather processing



NET SALES (million euro) NET SALES (in seats sold)
Three months ended on Three months ended on
    31-Mar-13       31-Mar-12       Change 31-Mar-13       31-Mar-12       Change
Americas 39.8 40.2% 34.7 36.3% 14.6% 194,703 47.1% 174,770 44.4% 11.4%
Natuzzi Italia 5.0 5.1% 4.0 4.1% 27.4% 11,247 2.7% 10,266 2.6% 9.6%
Other brands (*) 34.8 35.1% 30.8 32.2% 12.9% 183,456 44.4% 164,505 41.8% 11.5%
Europe (ex Italy) 36.7 37.1% 37.4 39.0% -1.8% 141,536 34.2% 139,890 35.6% 1.2%
Natuzzi Italia 13.9 14.0% 17.3 18.1% -20.0% 31,458 7.6% 39,018 9.9% -19.4%
Other brands (*) 22.8 23.1% 20.0 20.9% 14.1% 110,078 26.6% 100,872 25.6% 9.1%
Italy (Natuzzi Italia) 7.9 8.0% 10.1 10.5% -21.2% 26,823 6.5% 32,167 8.2% -16.6%
Rest of the World 14.6 14.7% 13.6 14.2% 7.1% 50,360 12.2% 46,559 11.8%
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