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[September 2007]
Marazzi Group Announces First Half Results
The Board of Directors of Marazzi Group SpA (Modena, Italy), has approved the Directors' Report and company consolidated financial statements for the first half of 2007 (to 30 June 2007).
The first half of 2007 saw a further growth in turnover and operating profit compared to the excellent results reported in 2006. The solid performance in the European markets, led by the further acceleration of growth in the Russian business unit (BU), which showed turnover growth of 35% compared to the first half of the previous year, more than compensated for the slowdown in the USA, where despite a strong reduction in demand, the group recorded a significant increase in market share in the residential segment (up 3.5% compared to the first half of the previous year).
The revenues from sales in the first half amounted to €508.5 million, with a growth of 3.7% compared to the same period in 2006 (+5.3% at parity of exchange rates). The increased activity was particularly dynamic in Russia, with growth of 35% (+37.6% at parity of exchange rates), well ahead of the market. Sales in Europe recorded good progress: the Italian and Spanish BUs recorded revenue growth of 7% and 7.8% respectively, increasing penetration in both the domestic markets and in the principal central and eastern European markets. The turnover of the French BU declined, with a decrease of 6.7% compared to the previous period, caused by a three-week strike which blocked production and delivery activities in June.
The slowdown of the construction sector in the USA caused a reduction in the ceramics market of 16% (value terms) in the first half, considerably above expectations. Within these difficult market conditions, the sales of the US BU recorded a reduction of only 7.9% in US$ terms (down 14.8% in €), thanks to increased market share gained from the greater competitiveness of the domestic production compared to imports. The EBITDA amounted to €91.9 million, an increase of 0.7% on the same period in 2006 (+2.6% excluding the exchange effect).
As far as the second half 2007 is concerned, the difficult market conditions in the construction segment in the USA, which also involved the credit market, have led to worries of a slowdown in the global economy. Despite the deterioration in the macroeconomic prospects, Marazzi Group believes that, in the absence of a significant slowdown of the real economy, further improvement may be made in the second half of the year on the results achieved to date.
The Russian BU, which already has seasonal variations favouring the second half of the year, continues with growth rates close to 30%. The improved performance of sales in the United States in July and August provide the foundations for the belief that, in the absence of a worsening in the construction sector, the gap compared to the results of the previous year may be reduced.
The European BUs are expected to produce results at least in line with the first half of the year, overcoming the negative effects related to the problems in France. Surmounting these problems in France will also permit the utilisation of the losses carried forward, contributing to a reduction in the level of taxes on the consolidated profit.
ENDS