Sales of Italian tiles reach 563 million sq.m in 2007

According to the preliminary figures unveiled this morning at the annual end-of-year press conference by Confindustria Ceramica, the Italian ceramic tile industry is expected to close 2007 with a national production of around 563 million sq.m (1.1% down on 2006).
Total sales amount to 560 million sq.m, also down slightly (-1.1%), consisting of 390 million sq.m of exports (down 1.6%) and the remaining 170 million sq.m of domestic sales.
Besides the volumes produced inside Italy, more than 115 million sq.m was manufactured by Italian companies in factories abroad.

The export figures show that Eastern Europe is continuing to perform strongly with sales in the new EU member countries up by 7.4% and in the other countries in the region up by 5.7%. Difficulties continue in North America, where the 13.1% fall was attenuated by sales made by Italian-owned local factories. Considering exclusively exports from Italy, the fall amounts to 22%.

As Confindustria Ceramica chairman Alfonso Panzani confirmed, average prices continue to increase.
The forecasts are cautious for 2008 with stagnation anticipated for all the main indicators. “Production will certainly not increase, although our industry is further strengthening its position as one of the most prestigious of all Italian sectors,” argued Panzani.

Sales to the European Union are expected to increase by 0.6% and Mr Panzani expressed his hope that the German market would recover. His optimism is in any case justified by the fact that this increase represents a trend reversal after years of contraction.
The same applies to the recovery in the Middle East and North Africa (expected 2.8% growth) and new EU member countries (+3.9%). The swings in the dollar will continue to play an essential role in the United States, where sales of Italian ceramic tiles are expected to suffer a further decrease (-2.6%). The domestic market will remain stationary at the sales volumes of 2007.

According to these figures, severe difficulties remain in terms of industrial costs with a 1.92% increase in the first six months of 2007 compounded by the record fall in the dollar, squeezing the profit margins of Italian companies. As regards costs, while the increases in energy supplies have remained fairly limited over the last twelve months (electricity up 1.81% and thermal energy unchanged), the recent hikes in oil prices will have a significant impact over the next few months. Additionally, manufacturing costs have been strongly affected by the increases in prices of glazes and colours (up 6.24%) and of packaging (up 10.29%). The Balance Sheet Analysis produced annually by Banca Popolare dell’Emilia Romagna demonstrates that membership of a group and having a company organisation structure are crucial elements for ceramic companies in terms of profitability.
The 2006 operating margins for groups reached almost 9% of net profits (8.09% in 2005) compared to 6.82% in medium-sized companies (6.24% in 2005). Figures for smaller companies are even lower.