“Stimulating” figures have emerged from the report, which we have already featured in our online pages and we are now transferring also to our “analog” audience. In line with our tradition, we start the new year with articles to give a picture of the situation, to provide useful elements to “sum up” what’s happened and the current status, and to read short-term fortunes looking at tea leaves.
Let’s start with the global production of interior decorations (wood-furniture-lighting), estimated at 481 billion euro in the report. Italy shares the fourth place in the global ranking with Germany, at 22.8 billion, after China, the United States and India. On a global scale, Italy is the third-largest exporter of furniture and lighting, with a 6.2 percent market share behind China (36.4 percent) and Germany (7.5 percent).
Summing up all the links of the wood-furniture-lighting supply chain – from raw materials processes to retailers selling to end consumers – the top-five European manufacturers are Germany (73.8 billion euro), Italy (42 billion) and France (33.5 billion). Italy takes the second place in Europe by export volume of furniture and lighting, with a 16.5 percent share (11.3 billion euro) on total UE export (68.4 percent), after Germany with 19 percent and 13 billion euro, and before Poland with 15.7 percent and 10.7 billion. Italy is the top European exporter to extra-EU countries with a 27.9 percent share on total export, followed by Germany with 21.5 percent.
In the lighting and furniture manufacturing industry, Italy includes 428 companies with revenues above 10 million euro, generating sales for 18.6 billion euro with less than 73 thousand employees. In terms of dimensions, mid-sized companies with Italian owners are predominant, with a sales volume of 7.3 billion (39.1 percent), as well as medium-large ones, also under Italian control, generating additional revenues for 7.4 billion (39.8 percent). “High-end” production accounted for 3.8-billion-euro sales (20.4 percent of total sales). Small businesses with Italian owners generated 2.7-billion-euro sales, equal to 14.6 percent of total sales.
As to specialization, raw material processing and semifinished material production generate 3.9-billion-euro sales. Looking at furniture production, the most significant segment is chairs, tables and accessories, with 3.7 billion euro. Then come contractors (2.8 billion), producers of lighting (2.1 billion), kitchen sets and upholstered furniture, both at two billion. The category of living room and bedroom products, including children bedrooms, is just below 1.9 billion, while the turnover of bathroom furniture is much smaller with 256 million.
The report presents some preliminary figures for 2020 and an outlook on a global scale: “Assuming that the wood-furniture-lighting value chain suffers from a 10 percent reduction in 2020 on a global scale, this means approximately 430-billion-euro turnover, more or less the industry size in the 2015-2016 period. The following recovery in 2021 and the realignment of long-term growth rates in the following years would drive revenues back up to 485 billion in 2022 (close to 2019 levels) and to 555 billion in 2026, almost sixty billion below the levels expected before the pandemic. In a less pessimistic scenario, with a 5 percent reduction of global furniture production in 2020, the final value in 2026 would be in the range of 570 billion euro, 15 billion better than the worst-case scenario, but still 40 billion short of the level expected before Covid-19.”
Figures are very clear for Italy as well: “In Italy, in 2020, a 9.4 percent reduction of production is expected, mostly due to decreasing export (60 percent). To drive recovery, industry companies have launched initiatives related to innovation, environmental sustainability, new corporate image and plans to approach new markets and segments. With adequate tools and clear priorities, the wood-furniture-lighting industry will manage to overcome this crisis, reaffirming its international competitiveness. Actually, market recovery forecasts for 2021 might be driven by foreign sales, achieving a 5.3 percent growth rate.”
WOOD-FURNITURE-LIGHTING REPORT
The report analyses the balance sheets of listed and unlisted companies for the past five years: figures and tables are commented by the analysts of Mediobanca’s Area Studi and integrated by a quality survey carried out by the Italian financial newspaper Il Sole 24 Ore, based on contributions from industry leaders. There is also an industry outlook, curated by Strategic Management Partners and combined with a Ceo’S Agenda. The report, starting from a concise overview of global business, identifies the major manufacturing countries and illustrates the role of Italian companies on the global markets, measuring their performance. The focus is on topics including import/export, governance, M&A, delocalization, trade trends and credit worthiness. The key evaluation parameters are also analyzed: margins, value generation or destruction, capital profitability, investments, productivity, labor cost.
