Italian furniture manufacturer Natuzzi has reported an increase in second quarter sales.
According to its latest trading for the second quarter and first half ended 30 June 2024, total group sales rose 1% to €84.4m from €83.5m in 2023.
Branded sales, which account for 93.2% of total revenues, were up 2.5% to €76.4m. Natuzzi Italia invoiced sales amounted to €32.6m, compared to €31m, while Natuzzi Editions invoiced sales (including invoiced sales from Divani&Divani by Natuzzi) amounted to €43.8m, compared to €43.5m.
West & South Europe sales fell 7.9% to €24.6m from €26.7m, while North America sales rose 15.5% to €28.5m from €24.7m. Greater China revenues were down 3.1% to €6.4m, while Emerging Markets sales fell 9.9% to €10.2m. Rest of the world revenues rose 4.6% to €12.3m.
“The performance in West & South Europe reflects a generalised difficult macroeconomic condition, especially for some European mature markets, as well as the loss of disposable income by consumers as a result of prior different quarters of high interest rates and inflation,” Natuzzi said.
“The emerging markets, and in particular East Europe and the Middle East, are still curbed by the worsening of international relations and the associated conflicts.”
Gross margin increased from 36.4% to 38.1%, its highest since 2010 when the company benefitted from a higher operating leveraging. Pre-tax losses amounted to €2.2m, compared to a profit of €0.1m.
During the period, Natuzzi continued its restructuring with a reduction of 168 persons exiting the Group, partially offset by hires in strategic areas such as retail, advertising and merchandising. These reductions primarily involved factory workers in Romania, China, and Italy, as well as employees at the Group level.
Looking at a longer timeframe, Natuzzi has achieved so far, a total net reduction of 860 positions since 2021, representing a 20% decrease. “As a result, we improved the revenue per employee ratio by approximately 30%, even in the context of lower revenue,” the group said. “As the restructuring continues, we expect our operating model to enable us to extract more value when sales return to historical levels.”
Furthermore, Natuzzi has announced the appointment of Nicola Internullo as Commercial HR Director, bringing a wealth of expertise from leading global brands. Nicola will play a crucial role in supporting us as we accelerate our transformation into a brand-focused retail group.
As for the half year performance, total sales fell 0.4% to €168.9m, while losses stood at €4.1m after tax.
Pasquale Natuzzi, Chairman of the Group, commented: “The market we operate in remains challenging, as confirmed by industry data on our sector and more broadly on the consumer industry globally.
“Our leadership team and the whole organization are working very diligently to protect our marginality and reduce the impact of these challenging market conditions on our business. We remain focused and committed to pursuing our strategic direction, with a strong emphasis on further strengthening our brand, merchandising, marketing retail capabilities and operations.
“The journey from being a manufacturer to becoming a globally recognized and respected brand, which I began around 20 years ago, is well underway. I am proud of how far we have come and excited about the results that lie ahead. I am confident that we will overcome this challenging market phase and achieve the success that our clients, partners, employees, and shareholders deserve.”
