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From Home Furnishing Business

Natuzzi S.p.A. Second Quarter and First Half Results Released

October 1, 2023  by HFBusiness Staff in Business Strategy, Industry   

-- Overall 2Q 2023 invoiced sales amounted to €83.5 million, a decrease of 28.5% versus 2Q 2022, and of 9.4% versus 2Q 2019, as a result of perduring macroeconomic headwinds affecting the furnishings industry. 2Q 2023 branded invoiced sales, while being below 2Q 2022, are up 4.7% vs 2Q 2019.

-- Improved gross margin at 36.4% on revenue, compared to 31.4% in 2Q 2022 and 27.9% in 2Q 2019. The increase in gross margin stems from the advantages gained through improved price discipline and better cost management, which have offset the negative impact of reduced sales volume on industrial production costs.

-- In the second quarter of 2023, we achieved operating breakeven. This compares with an operating profit of €1.1 million, from €116.9 million sales in the 2Q of 2022, and an operating loss of (€7.8) million from €92.2 million sales in the 2Q of 2019.

-- As of June 30, we held €44.5 million in cash, compared to €54.5 million as of Dec 31. Operating activities generated €1.6 million in cash which was more than offset by €7.6 million in investments, primarily allocated to upgrading our Italian factories (€5.3 million) and opening new direct stores (€2.0 million). Additionally, €5.2 million of cash was used for lease payments.

-- In the current market context, cost and capital efficiency are crucial. We launched a set of initiatives to reduce costs and improve working capital discipline.

-- We continue to expect the overall economy and the furnishing sector to remain challenging throughout the rest of 2023 and the beginning of next year, with a potential negative impact on our business. We remain confident in the strength of our brands and in the company’s long-term growth plan.

Natuzzi, commented, “Our industry globally continues to be negatively affected by consumers’ decision to postpone their purchasing, as a result of eroding spending power and shift of spending in favor of travelling and dining out.”

“Real estate, which is a primary driver for the furnishing market, has been negatively affected by high interest rates. This has been one of the main causes of the weak store traffic we have been witnessing for more than 15 months.”

“I feel reassured by the work our Group is doing to weather this adverse market conditions, both on the commercial front, where we have launched multiple initiatives to regain growth, and on cost/efficiency front, where our team has intensified the effort to mitigate the impact on our P&L of this negative sales trend.”

Natuzzi concluded, “Our Group also worked on the innovation process with the objective of having “fewer and bolder” innovations, that are brought to the market according to a new global launch process, which leverages some of the best practices of the automotive and high-tech industry.”