Natuzzi provides update on impact of coronavirus on its operations

Italy
Published:  26 February, 2020

In response to the evolving situation related to the coronavirus outbreak in China, the Company says it is following the guidelines of local authorities, prioritising the health and safety of its employees, suppliers and retail partners, with the full extent of the impact unpredictable at this stage. 

In a statement Natuzzi said it continues to closely cooperate with local health experts. Its Chinese plant, located in Shanghai, currently serves both the Asian and the North American markets and represents approximately one-fourth of its production capacity planned for 2020. In accordance with safety guidelines, the Chinese plant was closed for two weeks in addition to the Chinese New Year holiday period, with operations having recently re-started. The company expects a gradual return to normal operating conditions by April.

Based on this assumption, Natuzzi expects for the first quarter of 2020 a disruptive impact on revenues between €10 million and €15 million at consolidated level which could be recovered starting from May 2020, though it warns that these are just “best estimates” amid the continuously evolving health crisis and that this forecast could materially change if there is a significant deterioration in the current situation. A number of components of Natuzzi’s production are provided by third-party Chinese suppliers which are experiencing the same production delays. The Company has been activating a series of alternative solutions to reduce the impact of these delays, which could result in extra-costs.

As yet, it is also too early to estimate the impact on consumer demand in China, since the magnitude of the impact will depend on the evolution of the coronavirus outbreak, with all efforts being made to mitigate the impact on business. In fiscal year 2019, the Chinese market represented less than 10% of Natuzzi’s consolidated sales.