Improving Trend Confirmed
- Total Net Sales up 12.6% over Fourth
Quarter 2013
- Other SG&A as Percentage of Net
Sales Down by 3.8 P.P. against Fourth Quarter 2013
- Quarterly Operating Loss Fell by
7.6%
- Quarterly Net Loss Almost Halved
(-48.1%)
- Positive Net Financial Position at €2.8
Million (from +€0.2 Million as of September 30, 2014), after €11
Million of Extraordinary Cash-out Following the Lay–off of 429
Italian Workers in 2014 Fourth Quarter
- Trend Confirmed in the First Months of
2015
The Board of Directors of Natuzzi S.p.A. (NYSE:NTZ) (“Natuzzi”
or the “Company”) has approved its consolidated financial results
for the fourth quarter and full year 2014.
After the meeting of the Board of Directors, the Chief Executive
Officer, Pasquale Natuzzi, commented: “Our fourth quarter 2014
results confirm the improving trend in the Group’s main
indicators.
Total net sales during the quarter were equal to €138.6 million,
up 12.6% from fourth quarter 2013.
The corrective measures introduced in the second half of 2014 as
a means to recover efficiency in our industrial plants have allowed
the Group to gradually improve quarterly industrial margins.
We have also been successful in lowering our fixed (other)
SG&A expenses, which fell to 17.7% of net sales in the fourth
quarter 2014 from 21.5% of net sales in the fourth quarter
2013.
As a result of higher net sales and the cost-cutting measures
described above, quarterly operating results (-€8.7 million)
recorded a 7.6% improvement over fourth quarter 2013.
This improvement in our overall financial results is even more
significant if we consider the progression of the above-mentioned
items over the last four quarters, as set forth in the following
table:
1Q2014
2Q2014 3Q2014
4Q2014 Total net sales* -11.2%
-1.2% +8.2% +12.6%
COGS** -71.5% -74.2%
-72.1% -71.2%
Other SG&A**
-21.8% -20.9% -18.2%
-17.7%
EBIT** -9.6%
-9.7% -7.0% -6.3%
* quarterly percentage change in net sales
over same quarter in 2013
** percentage of net sales
In 2014, turnover increased by 2.7% (to €461.4 million), yet
EBITDA was equal to -€22.7 million from -€15.8 million. These
results were mainly the consequence of two main factors:
1.
inefficiencies experienced during the
first part of last year within our Chinese plant following the
introduction of radical changes to our manufacturing process. While
these changes have led to steadily improving production trends
through the first months of 2015, they contributed to an additional
€5.2 million in cost of sales in 2014. This was due to the adoption
of what we believe were certain one-off extraordinary measures that
were necessary in order to meet agreed delivery times and not
compromise our customer service.
2.
low productivity in our Italian plants,
due to the staffing of workers on a rotational basis as required by
the October 2013 agreement. In March 2015, we entered into a new
agreement, which has allowed us to stabilize our workforce, and
that should result in improvements in productivity.
In the meantime, we have been carrying on with the innovation
program as envisaged by the Group’s transformation plan:
i)
the re-engineering of our best-selling
models, was completed by the year end;
ii)
we have reduced the number of models by
25% and the number of coverings by 38%;
iii)
as for innovations in industrial
processes, we have developed and tested in our experimental plant
located in Matera a new integrated production cycle and production
planning software. First tests results are very encouraging.
In 2014 sales activity was characterized by a positive
development in late spring, as a result of the overall review of
our product collections and their presentations in the main world
fairs (Milan, Guangzhou, High Point).
2014 overall order intake was up +6.8% (€436.5 million in 2014
vs €408.8 million in 2013), thanks to the renewed product
collection. It is quite important to notice that we have been able
to consistently improve our average sell-in price.
From a geographical standpoint, whilst the North American market
showed positive sales growth, European sales continued to slowdown.
Asia Pacific presented mixed results with positive and consistent
growth in China, also due to the opening of 49 new stores.
In 2014 we acquired a significant number of European key
customers.
Following the recent trend in currency dynamics, and thanks to
the Group’s industrial presence in Romania, Natuzzi can take
further advantage within the European market versus Asian
exporters.
We expect the improving trend in our industrial operations that
has started during the second part of 2014 to continue into
2015.”
----------------------------------------------
The Company will host a conference call
on Monday March 30, 2015 at 10:00 a.m. U.S. Eastern Time
(4.00 p.m. Italian time, or 3.00 p.m. UK time) to discuss financial
results.
The dial-in phone numbers for the live conference call are
1-888-437-9445 (toll-free) for persons calling from the U.S. or
Canada, and 1-719-325-2315 for those calling from other
countries.
----------------------------------------------
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
STATEMENTS
Certain statements set forth in this press release constitute
forward-looking statements within the meaning of the safe harbor
provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements involve risks and uncertainties that
could cause Natuzzi’s actual results to differ materially from
those stated or implied by such forward-looking statements. More
information about the potential factors that could affect the
Company’s business and financial results is included in Natuzzi’s
filings with the Securities and Exchange Commission, including the
Company’s Annual Report on Form 20-F for the year ended December
31, 2013. Natuzzi undertakes no obligation to update any of the
forward-looking statements after the date of this press
release.
----------------------------------------------
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 fourth quarter 2014 &
2013 on the basis of Italian GAAP (expressed in millions Euro,
except per share amounts)
Three months ended on Change Percentage of
Sales 31-Dec-14
31-Dec-13 % 31-Dec-14
31-Dec-13 Upholstery net sales 120.9 108.6
11.3% 87.2% 88.2% Other sales 17.8 14.6
22.0% 12.8% 11.8%
Total Net Sales
138.6 123.2 12.6%
100.0% 100.0%
Cost of Sales (98.7)
(85.0) 16.1%
-71.2% -69.0% of which: Depreciation,
Amortization (2.3) (2.7) -16.0%
-1.6% -2.2%
Industrial
Margin 40.0 38.2
4.7% 28.8% 31.0%
Selling Expenses (24.2) (21.1) 14.4%
-17.4% -17.2% Transportation (14.5) (12.2) 19.0%
-10.5% -9.9% Commissions (2.4) (2.4) 1.6% -1.8% -2.0% Advertising
(7.2) (6.5) 10.5% -5.2% -5.3%
Other Selling and
G&A (24.5) (26.5) -7.4% -17.7%
-21.5% of which: Depreciation, Amortization
(1.3) (1.6) -16.0% -1.0% -1.3%
EBITDA (5.1) (5.2)
-0.7% -3.7% -4.2%
EBIT (8.7)
(9.4) -7.6% -6.3%
-7.6% Interest Income/(Costs), Net (0.9) (0.2)
Foreign Exchange, Net (2.0) (1.1) Other Income/(Cost), Net
(3.2) (18.2)
Earning before Income Taxes
(14.8) (29.0)
-10.7% -23.5% Current taxes (0.6) (0.7)
-0.4% -0.6%
Net Result
(15.4) (29.7)
-11.1% -24.1% Minority interest (0.0)
(0.0)
Net Group Result
(15.4) (29.7)
-11.1% -24.1%
Net Group Result per Share
(0.28) (0.54)
Key
Figures in U.S. dollars Three months ended on
Change Percentage of Sales (millions)
31-Dec-14 31-Dec-13 %
31-Dec-14 31-Dec-13 Total Net
Sales 173.1 153.8
12.6% 100.0%
100.0% Industrial Margin 49.9 47.7
4.7%
28.8% 31.0% EBIT (10.9) (11.8)
-6.3% -7.6% Net Group Result (19.2)
(37.1)
-11.1% -24.1% Net Group Result per
Share (0.35) (0.68)
Average exchange rate
(U.S.$ per 1€) 1.2488
UPHOLSTERY NET SALES BREAKDOWN GEOGRAPHIC BREAKDOWN
NET
SALES (in €, million) NET SALES (in seats
sold) Three months ended on Three months ended on
AREA
31-Dec-14 % 31-Dec-13 %
delta 31-Dec-14 % 31-Dec-13
% delta Americas 54.6
45.2% 39.4 36.3% 38.5%
266,182 54.9% 200,557
45.1% 32.7% Natuzzi 27.3 22.6% 25.2 23.2% 8.6%
101,079 20.8% 107,196 24.1% -5.7% Private label 27.2 22.5%
14.2 13.1% 91.5% 165,103 34.0% 93,361 21.0%
76.8%
EMEA 50.1 41.5%
54.4 50.1% -7.8% 170,312
35.1% 196,273 44.2% -13.2%
Natuzzi 34.1 28.3% 42.9 39.5% -20.4% 87,873 18.1% 125,531 28.2%
-30.0% Private label 16.0 13.2% 11.5 10.6% 39.5%
82,439 17.0% 70,743 15.9% 16.5%
Asia-Pacific 16.1 13.4% 14.8
13.7% 8.9% 48,585 10.0%
47,655 10.7% 2.0% Natuzzi 12.8 10.6%
13.9 12.8% -7.6% 25,471 5.3% 40,767 9.2% -37.5% Private label 3.3
2.7% 0.9 0.9% 252.8% 23,114 4.8% 6,888
1.5% 235.6%
TOTAL
120.9 100.0% 108.6 100.0%
11.3% 485,079 100.0% 444,485
100.0% 9.1% BREAKDOWN BY BRAND
NET SALES (in €, million) NET SALES (in seats sold)
Three months ended on Three months ended on
BRAND 31-Dec-14 % 31-Dec-13
% delta 31-Dec-14 %
31-Dec-13 % delta Natuzzi 74.3 61.5%
82.0 75.5% -9.4% 214,423 44.2% 273,494 61.5% -21.6% Private label
46.6 38.5% 26.6 24.5% 74.9% 270,656 55.8%
170,991 38.5% 58.3%
TOTAL 120.9
100.0% 108.6 100.0% 11.3%
485,079 100.0% 444,485
100.0% 9.1% The "
Natuzzi" brand
includes the Group's three lines of product: Natuzzi Italia,
Natuzzi Editions and Natuzi Re-Vive
Natuzzi S.p.A.
and Subsidiaries Unaudited Consolidated Profit & Loss
for 2014 & 2013 on the basis of Italian GAAP (expressed in
millions Euro, except per share amounts)
Twelve months ended on
Change Percentage of Sales
31-Dec-14 31-Dec-13 %
31-Dec-14 31-Dec-13 Upholstery
net sales 409.1 402.8 1.6% 88.7% 89.7% Other sales
52.3 46.3 13.0% 11.3% 10.3%
Total Net Sales 461.4
449.1 2.7% 100.0%
100.0% Consumption (*) (218.0) (209.3) 4.1% -47.2%
-46.6% Labor (85.0) (79.1) 7.4% -18.4% -17.6% Industrial Costs
(30.2) (28.9) 4.6% -6.6% -6.4% of which: Depreciation, Amortization
(9.7) (10.3) -5.9% -2.1%
-2.3%
Cost of Sales (333.2)
(317.3) 5.0%
-72.2% -70.7%
Industrial Margin 128.2
131.8 -2.7% 27.8%
29.3% Selling Expenses (75.3)
(70.8) 6.4% -16.3% -15.8%
Transportation (48.3) (45.6) 5.8% -10.5% -10.2% Commissions (9.1)
(9.0) 1.2% -2.0% -2.0% Advertising (17.9) (16.2) 11.1% -3.9% -3.6%
Other Selling and G&A (89.9) (93.4)
-3.7% -19.5% -20.8% of which: Depreciation,
Amortization (4.6) (6.3) -27.3%
-1.0% -1.4%
EBITDA (22.7)
(15.8) -4.9%
-3.5%
EBIT
(37.0) (32.3)
-8.0% -7.2% Interest
Income/(Costs), Net (1.9) (0.5) Foreign Exchange, Net (2.4) (2.8)
Other Income/(Cost), Net (6.3) (28.6)
Earning before Income
Taxes (47.5) (64.2)
-10.3% -14.3%
Current taxes (1.8) (4.1) -0.4% -0.9%
Net Result (49.3) (68.4)
-10.7% -15.2%
Minority interest (0.0) (0.2)
Net Group Result (49.4)
(68.6) -10.7%
-15.3%
Net Group Result per
Share (0.90) (1.25)
Key
Figures in U.S. dollars Twelve months ended on
Change Percentage of Sales (millions)
31-Dec-14 31-Dec-13 %
31-Dec-14 31-Dec-13 Total Net
Sales 613.0 596.6
2.7% 100.0% 100.0%
Industrial Margin 170.3 175.1
-2.7%
27.8% 29.3%
EBIT (49.1) (42.9)
-8.0%
-7.2%
Net Group Result (65.6) (91.1)
-10.7%
-15.3%
Net Group Result per Share (1.20) (1.66)
Average exchange rate (U.S.$ per 1€)
1.3285
(*) 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) Twelve months
ended on Twelve months ended on
AREA 31-Dec-14
% 31-Dec-13 % delta
31-Dec-14 % 31-Dec-13 %
delta Americas 171.0 41.8%
162.5 40.3% 5.2% 842,263
50.7% 809,310 48.0% 4.1% Natuzzi
96.5 23.6% 101.0 25.1% -4.4% 374,787 22.5% 425,502 25.2% -11.9%
Private label 74.5 18.2% 61.5 15.3% 21.1% 467,476
28.1% 383,808 22.8% 21.8%
EMEA
184.8 45.2% 189.7 47.1%
-2.6% 644,681 38.8% 703,368
41.7% -8.3% Natuzzi 142.1 34.7% 145.4 36.1%
-2.3% 396,327 23.8% 430,367 25.5% -7.9% Private label 42.6
10.4% 44.3 11.0% -3.7% 248,354 14.9% 273,001
16.2% -9.0%
Asia-Pacific 53.3
13.0% 50.6 12.6% 5.3%
175,351 10.5% 173,669
10.3% 1.0% Natuzzi 48.4 11.8% 46.4 11.5% 4.2% 139,966
8.4% 143,548 8.5% -2.5% Private label 5.0 1.2% 4.2
1.1% 17.9% 35,385 2.1% 30,121 1.8% 17.5%
TOTAL 409.1
100.0% 402.8 100.0% 1.6%
1,662,295 100.0% 1,686,347
100.0% -1.4% BREAKDOWN BY BRAND NET
SALES (in €, million) NET SALES (in seats sold)
Twelve months ended on Twelve months ended on
BRAND 31-Dec-14 % 31-Dec-13
% delta 31-Dec-14 %
31-Dec-13 % delta Natuzzi 287.0 70.1%
292.8 72.7% -2.0% 911,080 54.8% 999,417 59.3% -8.8% Private label
122.1 29.9% 110.0 27.3% 11.0% 751,215 45.2%
686,930 40.7% 9.4%
TOTAL 409.1
100.0% 402.8 100.0% 1.6%
1,662,295 100.0% 1,686,347
100.0% -1.4%
The "Natuzzi" brand includes the Group's
three lines of product: Natuzzi Italia, Natuzzi Editions and Natuzi
Re-Vive
Natuzzi S.p.A. and Subsidiaries Unaudited
Consolidated Balance Sheets on the basis of Italian GAAP
(Expressed in millions of Euro)
ASSETS 31-Dec-14
31-Dec-13 Current assets: Cash
and cash equivalents 32.8 61.0 Marketable debt securities 0.0 0.0
Trade receivables, net 99.4 78.9 Other receivables 19.4 48.5
Inventories 90.2 79.0 Unrealized foreign exchange gains 0.3 0.6
Prepaid expenses and accrued income 1.3 1.9 Deferred income taxes
0.5 0.3
Total current
assets 243.9
270.2 Non-current assets: Net property, plant
and equipment 130.8 143.6 Other assets
5.3 8.1
Total non-current assets
136.1 151.7
TOTAL ASSETS 380.0
421.9 LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities: Short-term borrowings 20.8 25.0
Current portion of long-term debt 3.1 3.3 Accounts payable-trade
75.0 67.4 Accounts payable-other 30.0 25.8 Unrealized foreign
exchange losses 0.5 0.2 Income taxes 1.1 7.1 Deferred income taxes
1.0 1.0 Salaries, wages and related liabilities
18.3 8.3
Total current
liabilities 149.8
138.2 Long-term liabilities: Employees'
leaving entitlement 20.9 24.8 Long-term debt 6.0 4.2 Deferred
income for capital grants 8.0 8.6 Other liabilities
21.2 34.4
Total long-term
liabilities 56.2
72.1
Minority interest
3.0 2.7 Shareholders'
equity: Share capital 54.9 54.9 Reserves 42.8 42.8 Additional
paid-in capital 8.4 8.4 Retained earnings
64.9 102.8
Total shareholders' equity
171.0 208.9
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
380.0 421.9
Natuzzi S.p.A. and Subsidiaries Unaudited
Consolidated Statements of Cash Flows
Twelve months ended on (Expressed in million of Euro)
31-Dec-14
31-Dec-13 Cash flows from operating activities:
Net earnings (loss) (49.4)
(68.6) Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 14.2 16.6
Write-off of fixed assets
- 0.4 Impairment of long lived assets 2.5 8.6 One-time termination
benefit - 20.0 Deferred income taxes (0.2) 0.1 Minority interest
0.0 0.2 (Gain) loss on disposal of assets 0.8 0.1 Unrealized
foreign exchange losses (gains) 0.7 0.5 Extraordinary items, net
(0.8) - Deferred income for capital grants
(0.5) (0.6)
Non monetary operating
items 16.7
45.8 Change in assets and liabilities:
Receivables, net (20.5) 14.2 Inventories (11.2) 3.3 Prepaid
expenses and accrued income 0.6 0.1 Accounts payable 8.7 4.1 Income
taxes (6.1) (2.1) Salaries, wages and related liabilities 7.3 0.4
Other assets/liabilities, net 31.9
1.5
Net working capital
10.7 21.5
One-time outflow from
restructuring activities
(14.3) (0.9)
Net cash
generated/(used) by operating activities
(36.2) (2.2) Cash
flows from investing activities: Property, plant and equipment:
Additions (7.5) (7.1) Disposals 7.1 0.2 Other Assets - (1.1)
Dividends distribution - (0.2) Minority interest acquisition -
(0.0)
Government grants received
5.2 -
Net cash
generated/(used) by investing activities
4.8 (8.2) Cash flows
from financing activities: Long-term debt: Proceeds 5.0 -
Repayments (3.3) (3.3) Short-term borrowings
(4.2) (1.9)
Net cash generated/(used) by
financing activities (2.5)
(5.2)
Effect of translation adjustments on
cash 5.7
(1.0)
Increase (decrease) in cash and cash
equivalents (28.2)
(16.7)
Cash and cash equivalents, beginning of the
year 61.0
77.7
Cash and cash equivalents, end of the period
32.9 61.0
NATUZZI INVESTOR RELATIONSPiero Direnzo,
+39.080.8820.812pdirenzo@natuzzi.comorNATUZZI CORPORATE
COMMUNICATIONVito Basile (Press Office),
+39.080.8820.676vbasile@natuzzi.com
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