Panariagroup's 2012 results: Eurozone down, good performance in the United States and Asian markets

Panariagroup's 2012 financial results were hit by the recession in the Eurozone periphery countries, the slowdown in the more solid European economies such as Germany and France, and the slackening of the growth cycle of the major emerging economies. The difficult economic situation was further compounded by last May's earthquake, which damaged equipment and buildings at the facility in Finale Emilia resulting in a more than two-month stoppage of production and a consequent fall in turnover.

But in spite of the unfavourable situation, strong sales in North America and the Asian markets in 2012 enabled the Group to limit the negative impact on its economic and financial results, which suffered only a small decrease in turnover and operating margins with respect to 2011.

Net sales revenues in 2012 totalled 280.8 million euro compared to the 291.4 million euro generated to 31 December 2011, a decline of 3.6%.

The United States, currently the Group's top market with sales of 80.4 million euro, saw an increase in turnover of 24% (accounting for 28% of total turnover). Sales through both the Florida Tile chain of direct stores and other distribution channels remain buoyant.  But while North America has resumed growth, the situation remains difficult in the European market (36% of total turnover) where the Group experienced a total contraction of 13.7% relative to 2011. The biggest falls were in Portugal, France, Holland and Belgium, whereas sales in Eastern Europe remained essentially stable. In the Italian market (26% of total turnover) the Group experienced a 15.5% fall in turnover, essentially in line with the sector-wide figure. Overseas markets (Asia, Oceania and Africa) performed well with total growth in turnover of more than 9% with respect to 2011. The highest growth was reported in Saudi Arabia, Japan, Qatar and the United Arab Emirates. These markets account for 10% of total turnover.

The fall in operating margin (gross and net) was exacerbated by the effects of the earthquake in the Emilia region. The Group reported an EBITDA of 21.1 million euro (compared to 25.6 million euro in 2011), a negative EBIT of 5.5 million euro (largely due to the depreciation of goodwill of Gres Panaria Portugal and Montanari Francesco S.r.l. to a total of 4.7 million euro) and consolidated net profits of 1.6 million euro, substantially in line with 2011.

However, the 2012 performance has not impacted on the group's development strategies. These have included investments in the United States, where a second porcelain tile line has been installed at the Florida Tile facility, and in India where the Joint Venture Company (JVC) has been formed. This company is owned 50% by Panariagroup and 50% by Asian Granito India Ltd., one of the leading producers in the Indian market.

The economic climate has remained highly uncertain during the first few months of 2013 in the developed economies, especially in the eurozone, where difficulties continue in terms of economic growth. However, the Group will continue to pursue its internationalisation programme with a view to further spreading risk, expanding its commercial presence and increasing its turnover in emerging areas (Asia, Africa and South America).