New assurances and increasing energy prices to face at a time during which demand is decreasing. Natuzzi’s financial release for the 3rd quarter of 2022 and the first 9 months of the year show positive increments. Yet, it also shows the persistency of the tendency by consumers (already visible in April 2022), to postpone the purchase of sofas and other interior items. A combination – says Pasquale Natuzzi, president of the group he founded -, of inflation and economic uncertainty caused by the current geopolitical situation.
Consolidated revenue for Natuzzi’s third quarter 2022 was equal to 116.6 million euro, up 14.5% from the 101.8 million of the same period of 2021 and +32.4% on the 3rd quarter of 2019 (88.1 million euro). It’s worth mentioning that, during the June – September 2022 period, the Group’s Shanghai site was able to conduct its activities without Covid restrictions, as on the other hand had happened in March 2022. During the first 9 months of 2022, overall revenue touched 352.0 million euro (+12.9% on yearly base and +22.2% on 2019). Operating profits also showed improvements: 6.7 million euro compare to the 4.3 million of the same period of 2021. The number was positively impacted, especially in Italy, by government measures aimed at temporarily reducing the cost of labor. The aid was provided as a part of the relief for Covid impacts.
Energy crisis and materials
Natuzzi points out that production costs have risen. “The cost of energy to manage our industrial operations all over the world has gone up by 2.8 million euro – explains CEO Antonio Achille – compared to the first 9 months of 2021, mainly in our European manufacturing sites. If we consider our sites in Italy, representing nearly half of our consolidated sales, the energy price increase has been 140% during the first 9 months of 2022.
As far as the remaining production costs go, we are seeing a trend of decreasing prices for leather, considering that costs for textiles and other materials is still growing due to their high energy-intensive manufacturing processes”. The only manufacturing cost that is decreasing, according to Natuzzi, is the one for long-shipping routes, especially Asia to the US.
Business choices and cost optimization
Even with the adverse market conditions – explain representatives from Santeramo in Colle – Natuzzi continued to open stores with a franchise formula throughout these last few months: 55 in total, 43 of which in China. These openings bring the total number of stores to 708. With regards to labor costs, on the other hand, Natuzzi explains how it started taking actions to reduce the related costs. How? By optimizing the number of third-party employees, reducing staff at a group level and through the revision of fixed industrial costs.
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