The Furniture Industry

Prof. Alessandro Sinatra a.a. 2010/2011

What does “Life quality” means?

0,00%

20,00%

40,00%

60,00%

80,00%

Have a nice and comfortablehouse

live in a safe and healthyenvironment

eat well

live in a warm and sunnyplace

life style

none of these

total indication

second indication

first indication

Have a nice and comfortable house is the first factor for a good quality of life for international consumers

Source: Centro Studi Cosmit/FederlegnoArredo

Italy: the first European exporter of

furniture

Italy with 9.6 billion € of export is the leader in Europe.

Germany follows with 8.5 billion.

Source: Centro Studi Cosmit/FederlegnoArredo

Lombardia first in export, Veneto first in employees

25% of total exports of LegnoArredo comes from Lombardia

Veneto and Lombardia represent about 40% of total system LegnoArredo

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

emplyees

companies

export

Source: Centro Studi Cosmit/FederlegnoArredo

FEDERLEGNO

The Italian system of “LegnoArredamento” is characterized by a complex of productions that are very open towards the export, an high intensity of innovation and design; these productions are largely located in the industrial districts.

The system is characterized by a strong link with the world's forest resources, with the world of the projects, architecture and design and with the huge universe of constructions.

The development model of the Italian system of “LegnoArredamento” relies on the ability to create products that are global icons of quality, style and uniqueness. A development model that is able to put in the foreground of the international consumers perception the cultural and the aesthetic content of indoor and outdoor furnished spaces, such as essential sources of quality of life. Population and furnished spaces that become more and more laboratories for experimentation and innovation throughout the production system of Italian Life Style.

FEDERLEGNO: numbers

2nd italian manufacturing sector for number of companies.75,000 entrepreneurs

3rd sector for positive contribution to the balance of trade. The positive balance is about 7 billion €

2007 2008 Var % 08/07

Turnover in manufacturing (a)

39.798 37.533 - 5,6%

exports (b) 13.714 13.438 - 2,0%Imports (c) 7.475 6.833 - 8.6%balance (b-c) 6.239 6.605 5,9%Apparent domestic consumption (a+b+c)

33.530 30.928 - 7,8%

Export/turnover (% b/a)

34,5% 35,8% 3,8%

Employees 810.876

408.464

- 0,6%

Companies 77.471 75.299 - 2,8%Source: Centro Studi Cosmit/FederlegnoArredo

Key Sectors

Furniture and wooden Products for construction: the two key sectors

of the LegnoArredo system.

TOTAL FURNITURE

WOODEN PRODUCTSFOR CONSTRUCTION

LIGHTING

OTHER LEGNOARREDO

The furniture sector employs the 50% of the employees of the system LegnoArredo

The wood products industry for the construction sector employs about the 25% of the workforce system LegnoArredo

Source: Centro Studi Cosmit/FederlegnoArredo

Furniture: numbers

Macro Furniture Sector: it includes all types of furniture (any material) for domestic and collective use, lighting fittings and an aggregate of various furnishing complements.

12 billion of exports, more than 50% of the total turnover

231,000 people to produce furniture and lamps made in Italy

Source: Centro Studi Cosmit/FederlegnoArredo

2007 2008 Var. % 08/07

Turnover in manufacturing (a)

23.693 22.668 - 4,3%

exports (b) 12.054 11.896 - 1,3%

Imports (c) 2.735 2.740 0,2%

balance (b-c)

9.319 9.156 - 1,7%

Apparent domestic consumption (a+b+c)

14.374 13.512 - 6,0%

Export/turnover (% b/a)

50,9% 52,5% 3,2%

Employees 231.853 230.694 - 0,5%

Companies 34.429 33.584 - 2,6%

Wood: numbers

2007 2008 Var % 08/07

Turnover in manufacturing (a)

16.076 14.865 - 7,5%

exports (b) 1.660 1.542 - 7,1%Imports (c) 4.740 4.093 - 13,6%balance (b-c)

- 3.080 - 2.551 17,2%

Apparent domestic consumption (a+b+c)

19.156 17.416 - 9,1%

Export/turnover (% b/a)

10,3% 10,4% 0,5%

Employees 179.023

177.770

- 0,7%

Companies 43.042 41.751 - 3,0%Source: Centro Studi Cosmit/FederlegnoArredo

Macro Wood Industry: it includes the first working phases, all the productions connected to construction and interior finishing (doors, windows, parquet, etc.), all materials (plywood, panels, etc.), all the semi-finished products and components for the furniture industry.

1 cubic meter of wood used by the construction industry avoids the emission of 2 tonnes of CO2 into the atmosphere

The 85% of the wood waste is recovered. Waste wood is a renewable energy source and low cost

Industry trends and the effects of the crisis

In 2008, export LegnoArredo system : -2% of decrease .

Contraction of 5.6% of total turnover.

Decrease of 10% of exports in the fourth quarter of 2008.

The EU markets are the first with a decline of 15%.

Source: Centro Studi Cosmit/FederlegnoArredo

The depth of the crisis in the first quarter of 2009

In January the exports of furniture to countries outside the European Union have collapsed: -40%.

In Q1 2009 contraction: -16% of the production of furniture.

Contraction: -26% of production in the wood industry.

Source: Centro Studi Cosmit/FederlegnoArredo

2008: crisis in all sectors of the Furniture

The most declined marked is the “upholstered ” (imbottiti) compartment: -7.8%.

The lighting industry: indicators still positive + 1.3%.

rooms andaccommodation

upholstered

kitchen

office

chair

lighting

complements andaccessories

other

The events: “Salone del Mobile”Milan, April 12th-17th 2011

The “Salone del Mobile” in Milan was held in April each year since 1961, and represents a unique meeting point for designers and companies in which it is possible to discover and introduce new products and many innovative projects to a wide audience, and the media all over the world.

The edition of last year, attended by 1326 exhibiting companies, registered a turnout of about 298,000 visitors.

The events: “Fuori Salone”

A set of events during the week of the “Salone del Mobile” enliven the entire city of Milan. It’s been created since the beginning of the 1990s, with the collaboration of the “interni” magazine that published a guide attached to the April issue, entitled "Guide to FuoriSalone".

The Fuorisalone events are usually divided into: exhibitions open to the public even in evening hours; events (cocktails, conferences).

The FuoriSalone design, over the years, has become a symbol for everyone from professionals to curious.

“Salone del Mobile”: a watershed

Bending orders in Q1 to 85.3% of companies in the furnishing sector.

After “Salone del Mobile” the balances of opinion improve by 50% , but they still remain in the negative quadrant.

The upholstered and chair sectors

Setback particularly accentuated for the upholstered and the furniture sectors.

The upholstered sector lose approximately 900 million turnover compared to 2002

Chairs sector lose over 220 million turnover compared to 2002

The lighting and kitchen sectors

Still expanding the exports for kitchen and lighting secotrs.

Lighting sector has exported 30% more than in 2003.

The kitchen sector has exported 60% more than in 2003.

Sales on the domestic market in general decline

Sales of Italian domestic market decreased in 2007 by 7% compared to 2002.

Imports from abroad increased by

102 % compared to 2002

Some infos about the foreign markets

Brighter foreign markets for the LegnoArredo system The destination that grows is the Qatar: + 128% Second place for the United Arab Emirates: + 38%

Larger foreign markets for the Furniture Industry macro The largest purchaser of furniture Made in Italy:

France with 1.7 billion € The first destination outside the EU: Russia with 1.1

billion €

The wood industry

2008: larger foreign markets for the Wood Industry

11%

11%

10%

7%

7%6%5%

4%

4%

3%

2%

30%

Germany

France

United States

Russia

United kingdom

Switzerland

Spain

Austria

Greece

Slovenia

Romania

Other Countries

12% of Italian wood has been sold in Germany

In 2008 exports to Russia of “made in Italy” wood products have grown

Main countries for the Italian LegnoArredo imports

The Italy imported Wood and furniture for about 6.8 billion €.

The two main suppliers of Italy are Austria for sawn timber, 555 million €, and China for furniture, 393 million €.

Italian LegnoArredo system. Global shares

The shares of Italy in a given geographical area are calculated as a ratio between the value of imports from Italy and the total value of imports purchased from the area.

Italy holds about 10% of the world furniture market.

Italian share rises to 25% in the high-value furniture, in which Italy is the world leader

Furniture: China and Germany main

competitor

China is the first player with a market share of 25% of the world market for furniture

Italy and Germany follow

each with a share of about 10%

Global market shares for kitchens and Upholstered

The italian shares in a particular type of product are calculated as the percentage ratio between the value of imports of that type of italian product and the total value of imports of the same type purchased globally.

Italian kitchens have exceeded the 18% of the world market of kitchens

The Upholstered provided by Italy fell below the 15% of the world market