Natuzzi’s sales down 27% in first half

Worldwide
Published:  28 September, 2020
Credit: Natuzzi

Consolidated net sales for the premium leather furniture manufacturer totalled €144.1 million for the first half of 2020, down 27.4% compared with the same period in 2019. Operating loss deepened further to €12.7 million.

Considering Natuzzi’s core business only, net sales were €138.1 million in the first six months of the year, down 27.1% year-on-year, as a result of the 21.1% decrease in sales for the Natuzzi division and the 49.1% decrease in sales for the Private Label business. Non-core sales were €6 million. Gross margin was 30.8% compared with 29.1% in the same period of 2019. The Italian Group reported an operating loss of €12.7 million in the first half of 2020, against an operating loss of €10.8 million in the same period of 2019, including a €4.9 million of higher one-off costs related to the downsize of Natuzzi’s Chinese plant, to the goodwill impairment of the Group’s Mexican operations and to higher charges for trade receivables impairment. Net profit deriving from the 49% share of the Chinese vehicle was €0.9 million for the first six months of 2020. The Group reported a loss for the period of €16.9 million, compared with a loss of €15.2 million in the corresponding period of 2019.

For the second quarter of 2020, Natuzzi’s consolidated net sales were €61.6 million, down 33.1% from €92.2 million reported in the same quarter of 2019. Considering the Group’s core business only (upholstery, accessories and home furnishings), net sales were €59.7 million, down 32.5% year-on-year, as a result of the 56.6% decrease in Private Label sales and a 26.7% decrease in Natuzzi sales. Other sales were €1.9 million. Consolidated gross margin was 26.1%, compared with 27.9% in the same quarter of the prior year, attributed to lower volumes caused by the lockdown, partially offset by the adoption of measures to lower the labour costs (for a saving of €4.3 million) and to reduce other industrial costs in the Group’s plants. Natuzzi said it continued to benefit from a “favourable trend” in raw materials.

Natuzzi said it started to outsource production in Vietnam for the private label segment. “We plan to significantly increase the outsourced production from Vietnam with the aim to serve key accounts in the North American market. In addition, we are working to finalise another outsource agreement in Eastern Europe for the EMEA region”, said Pasquale Natuzzi, CEO, Natuzzi. “We will continue to focus on the priority markets such as the U.S., China, UK, Italy and Spain, to leverage on the brand awareness and existing commercial organization”, he added. “We are making progress in e-commerce in selected countries to offer an omni-channel approach to our customers. We are now working on expanding this channel also to other countries to further increase the offer.”

Credit: Natuzzi