The Board of directors of Natuzzi S.p.A., a leading manufacturer of leather-upholstered furniture, announced financial results for the second quarter and first six months of 2009.
Second Quarter 2009 Summary: Net Sales were €133,6 million as compared to €168,8 million in 2Q 2008 Gross profit was € 50,5 million, an increase of 4,7% as compared to €48,2 million for the same quarter last yearOperating income was €1,1 million, an increase of 121,5% as compared to an operating loss of €5,1 million in 2Q 2008 Net group loss was € 3,9 million as compared to a loss of € 2,4 million for the same period of 2008
Second Quarter Results
Natuzzi Group net sales during the second quarter of 2009 decreased by 20,8% to €133,6 million as compared to the same quarter last year. The decline was primarily due to the general downturn of the international economy that has had a deep impact on the consumer sector mainly in USA. Second quarter sales improved by 20,1% over the first quarter net sales 2009 of €111,3 million.
Upholstery net sales were € 116,9 million or 87,5% of total net sales, compared to €147,9 million or 87,6% of total net sales in the second quarter of 2008. The contribution to upholstery net sales by geographic area was as follows:
Europe for 61,8%; Americas 28,2% and rest of the world 10,0%. Cost of goods sold totaled € 83,2 million or 62,2% of net sales for the second quarter 2009 as compared to € 120,6 million or 71,4% of net sales in 2008. This important reduction in COGS was due to the restructuring of internal processes that began at the end of 2008.
Operating income in the second quarter 2009 was €1,1 million, rising 121,5% as compared to an operating loss of € 5,1 million in the same period of 2008. Net group result for the second quarter 2009 was a loss of € 3,9 million as compared to a loss of € 2,4 million for the same period of 2008.
Pasquale Natuzzi, Chairman and CEO, commented: “We are very pleased to have met a break even in term of 3 months Operating Income, despite the net sales decrease due to the adverse economic environment. The hard work of restructuring and rationalization process has brought its first positive result. During these first 6 months of the year we put in place many initiatives that will help the company to be profitable again including:
- Product standardization and innovation to reduce development costs and to improve the production process ( i.e. visual prototyping technologies)
- Improvement of the raw material acquisition process to reduce costs of products and to improve manufacturing efficiency, particularly in leather waste;
- Moving towards reducing lead time in a range of 20-30% in each market, with the objective of increasing the client service level.
Mr. Natuzzi continued, “My goal is to lead the Company into a process that will strengthen our organization credibility and set the stage of competitiveness for sustained long term growth. We are increasing our orders flow and so we are confident for the year end target of breakeven in terms of EBIT. Last we have an extremely skilled and committed management team that is focused and dedicated to achieve our goal of 15% operating margin in 2011.” Six months Results 2009 For the first six months 2009, net sales were €244,9 million, a decrease of 28,3% as compared to €341,6 million in the first six months of 2008. Upholstery sales were € 213,8 million or 87,3% of net sales, as compared to €301,6 million or 88,3% of total net sales in the first six months 2008.
The contribution of six months upholstery net sales by geographic area was as follows: Europe for 61,4%; Americas 29,2% and rest of the world 9,4%.
The Group reported a gross profit of €78,9 M for the first six months of 2009 down 14,5% over the same period of 2008. In the first six months 2009 operating loss was €15,5 million down 10,4% as compared to a loss of € 17,3 million in 2008.
Net Group result for the first six months 2009 was a loss of € 14,3 million down to 46,0% as compared to a loss of € 26,5 million for the same period of 2008.
Balance Sheet Highlights
The Natuzzi Group ended the first six months of 2009 with cash of €72,9 million. The increase of € 25,6 million of net cash respect 31 December 2008 was mainly due to a reduction in working capital. Long term debt was € 6,3 million. Total Inventory declined 16% to €77,0 million as compare to €92,0 million of 31 December 2008. Shareholder’s equity was €329,3 million.
About Natuzzi Founded in 1959 by Pasquale Natuzzi, Natuzzi S.p.A. designs and manufactures a broad collection of residential upholstered furniture. With 2008 consolidated revenues of EUR 666,0 million on, Natuzzi is Italy's largest furniture manufacturer. The Natuzzi group exports its innovative high-quality sofas and armchairs to 123 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 certified.