Natuzzi S.p.A. First Quarter 2013 Financial Results
SANTERAMO IN COLLE (BA), Italy--(BUSINESS WIRE)-- The Board of Directors of Natuzzi S.p.A (NTZ). (NYSE: NTZ) (Natuzzi or the Company), a leading company in the furnishings industry, today approved its consolidated financial results for the first quarter of 2013.
FIRST QUARTER 2013 HIGHLIGHTS
- 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;
- Groups 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.
FIRST QUARTER 2013 FINANCIAL RESULTS
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|
|Europe (ex Italy)||37.1%||39.0%|
|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 Groups 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 Groups 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 www.natuzzi.com/ 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|
|Upholstery net sales||99.0||95.8||3.4%||89.4%||86.8%|
|Total Net Sales||110.7||110.4||0.3%||100.0%||100.0%|
|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%|
|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%|
|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%|
|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|
|Total Net Sales||146.2||145.7||0.3%||100.0%||100.0%|
|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|
|UPHOLSTERY NET SALES BREAKDOWN|
|NET SALES (million euro)||NET SALES (in seats sold)|
|Three months ended on||Three months ended on|
|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%|
|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%||8.2%|
|Other brands (*)||6.7||6.8%||6.5||6.8%||3.4%||33,374||8.1%||30,551||7.8%||9.2%|
BREAKDOWN BY BRAND
|Net Sales (million euro)||Net Sales (in seats)|
|Three months ended on||Three months ended on|
|Other brands (*)||64.3||64.9%||57.3||59.8%||12.3%||326,908||79.1%||295,928||75.2%||10.5%|
(*) Italsofa, Natuzzi Editions/Leather Editions and unbranded
|Natuzzi S.p.A. and Subsidiaries|
Unaudited Consolidated Balance Sheets at March 31, 2013 on the basis of Italian GAAP
(Expressed in millions of Euro)
|Cash and cash equivalents||72.0||77.7|
|Marketable debt securities||0.0||0.0|
|Trade receivables, net||97.3||93.1|
|Unrealized foreign exchange gains||0.3||0.9|
|Prepaid expenses and accrued income||1.6||2.0|
|Deferred income taxes||0.5||0.5|
|Total current assets||312.9||307.5|
|Net property, plant and equipment||161.4||161.5|
|Total non-current assets||168.6||168.5|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Current portion of long-term debt||3.5||3.5|
|Accounts payable-shareholders for dividends||0.0||0.1|
|Unrealized foreign exchange losses||0.1||0.0|
|Deferred income taxes||0.0||1.1|
|Salaries, wages and related liabilities||8.8||8.0|
|Total current liabilities||141.3||133.2|
|Employees' leaving entitlement||25.3||25.7|
|Deferred income for capital grants||9.2||9.2|
|Total long-term liabilities||57.6||59.2|
|Additional paid-in capital||8.4||8.4|
|Total shareholders' equity||280.0||281.1|
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY||481.6||476.1|
|Natuzzi S.p.A. and Subsidiaries|
|Consolidated Statements of Cash Flows||Three months ended on|
|(Expressed in million of Euro)||31-Mar-13||31-Mar-12|
|Cash flows from operating activities:|
|Net earnings (loss)||(6.0)||(8.4)|
|Adjustments to reconcile net income to net cash|
|provided by operating activities:|
|Depreciation and amortization||3.9||4.4|
|Write-off of fixed asstes||-||-|
|Impairment of long lived assets||-||-|
|One time termination benefits||-||-|
|Deferred income taxes||0.1||0.5|
|(Gain) loss on disposal of assets||(0.0)||(0.3)|
|Unrealized foreign exchange losses and gains||0.7||(0.5)|
|Deferred income for capital grants||(0.1)||(0.2)|
|Non monetary operating costs||4.5||3.9|
|Change in assets and liabilities:|
|Prepaid expenses and accrued income||0.5||1.0|
|Salaries, wages and related liabilities||0.8||(0.3)|
|Employees' leaving entitlement||-||-|
|Net working capital||(10.6)||(4.3)|
|Net cash used by operating activities||(12.0)||(8.8)|
|Cash flows from investing activities:|
|Property, plant and equipment:|
|Marketable debt securities||-||-|
|Purchase of business, net of cash acquired||-||(0.2)|
|Disposal of business||-||-|
|Net cash used in investing activities||(1.3)||(0.6)|
|Cash flows from financing activities:|
|Dividends paid to minority interests||-||-|
|Net cash used in financing activities||5.6||(3.7)|
|Effect of translation adjustments on cash||2.0||(2.2)|
|Increase (decrease) in cash and cash equivalents||(5.7)||(15.3)|
|Cash and cash equivalents, beginning of the year||77.7||94.0|
|Cash and cash equivalents, end of the period||72.0||78.7|
NATUZZI INVESTOR RELATIONS
Piero Direnzo; tel. +39.080.8820.812; cell. +39.331.1943329
NATUZZI CORPORATE COMMUNICATION
Vito Basile (Press Office); tel. +39.080.8820.676
Source: Natuzzi S.p.A.Copyright Business Wire 2013