Improved third quarter for Natuzzi

Worldwide
Published:  30 November, 2020

The Italian premium leather furniture maker said the third quarter of 2020 saw a gradual return to normality of the Group’s operations, with the exception of the Brazilian plant, which remained closed during the first two weeks of July.

Natuzzi said most of its plants were operating at almost pre-Covid levels in the third quarter. Consolidated net sales in the quarter totalled €84.4 million, down 4.2% from the €88.1 million reported in the third quarter of 2019. “While the order flow accelerated in the second part of the quarter, the duration of our order-product cycle, which requires for overseas deliveries about three months for manufacturing, shipping and then final delivering, has allowed us to transform only part of the increased order flow into revenues within the end of third quarter”, said Natuzzi. Considering the Group’s core business only (upholstery, accessories and home furnishings), net sales were €80 million, down 4.4% year-on-year. The Natuzzi branded revenues grew 4%, attributed to a 26.3% increase in the EMEAI region and 0.7% in the Asia-Pacific region, which was partly offset by the 17.5% decrease in the Americas. During the quarter, direct retail sales were €13.9 million, up 3.7% versus the same period of 2019. Consolidated gross margin was 32.5%, compared to 28.7% in the third quarter of 2019, while operating loss amounted to €0.4 million, compared with an operating loss of €8.7 million in 2019 third quarter.

Between January and September, Natuzzi’s consolidated sales totalled €228.4 million, down 20.2% year-on-year. Considering the Group’s core business only, net sales were €218.1 million (-20.1%), and gross margin was 31.4% versus 29% a year ago. The Group reported an operating loss of €13 million in the period compared with an operating loss of €19.5 million in the first nine months of 2019. Natuzzi said the operating loss also includes €4million of one-off costs related to the downsize of its 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 operation was €0.9 million. Reported a loss for the period was €21.3 million compared with €26.8 million in the first nine months of 2019.

“Because of the pandemic, we experienced supply chain imbalances, as some of our suppliers were not able to adjust their production capacity to our growing demand. These two factors, strong demand and supply chain challenges, are behind the current level of the backlog that has increased by 70% compared to the beginning of the year. While keeping our workplaces safe or working from remote, we are now focused on intensifying the industrial and shipping operations to recover the usual service level for our customers”, said Pasquale Natuzzi, Chairman and CEO, Natuzzi.