Overview of the European Office Furniture market with implications

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Overview of the European Office Furnituremarket with implications of the economicslowdown

CSIL Centre for Industrial StudiesCorso Monforte 15, 20122 Milano, Italytel.+39 02 796630 - fax +39 02 780703

[email protected] - www.csilmilano.com

FEMB Congress - Stresa, 10 September 2009

Mauro Spinelli

Business Consulting Unit

Overview of the European Office Furniture market with implicationsof the economic slowdown

CSIL – Centre for Industrial StudiesCSIL – Centre for Industrial Studies

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WHO WE ARE:

• Supporting the decision-making. The ultimate goal of our activity is providing the most up to date, valuable and practical knowledge base for an effective strategic decision. Our applied economic research support private and public investment choices. Our reports and studies are key information tools for a better decision making.

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MAIN AREAS OF CSIL’S ANALYSISMAIN AREAS OF CSIL’S ANALYSIS

HomeHome

KitchenKitchen

Upholstered furnitureand mattresses

Upholstered furnitureand mattresses

OfficeOffice Lighting fixturesLighting fixtures

Household appliancesHousehold appliances

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• CSIL reports cover 60 countries for the FURNITURE INDUSTRY, selected on the basis of size of the economy, importance of the furniture sector and contribution to world furniture trade.

Western Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, United Kingdom plus Norway and Switzerland. Central and Eastern Europe Czech Republic, Hungary, Poland and Romania.Eastern Europe outside the EU: Russia and Turkey.Asia and Pacific : China, Hong Kong, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.Middle East: United Arab Emirates.North America :United States.

COUNTRIES COVEREDCOUNTRIES COVERED

• Specific OFFICE FURNITURE expertise in:

• Forthcoming reports on OFFICE FURNITURE:

…Ukraine & Russia, Japan, Libya and Morocco

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SANTA MARGHERITA LIGURE - 1988

LONGSTANDING COOPERATION WITH FEMBLONGSTANDING COOPERATION WITH FEMB

…. STRESA - 2009

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WORLD ECONOMY: where markets are goingWORLD ECONOMY: where markets are going

Source: IMF

GDP, 2008 and projections 2009-2010. Percentage (%) change

EURO AREA

Germany

France

Italy

Spain

2008

0.8

1.3

0.3

-1.0

1.2

2009

-4.8

-6.2

-3.0

-5.1

-4.0

2010

-0.3

-0.6

0.4

-0.1

-0.8

UNITED STATES

JAPAN

UK

CANADA

1.1

-0.7

0.7

0.4

-2.6

-6.0

-4.2

-3.0

0.8

1.7

0.2

1.6

RUSSIA

BRAZIL

2008

5.6

5.1

2009

-6.5

-2.3

2010

1.5

2.5

CHINA

INDIA

MIDDLE EAST

9.0

7.3

5.2

7.5

5.4

2.0

8.5

6.5

3.7

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Source: Eurostat, OECD

Selected indicators, forecasts 2009-2010. Percentage (%) change

EUROPE: where markets are goingEUROPE: where markets are going

Germany

France

Italy

United Kingdom

Spain

Poland

Czech Republic

2009

-0.5

0.2

-1.7

-3.4

-3.1

0.6

0.2

2010

-0.7

0.3

0.2

-1.5

-1.1

0.2

0.3

PRIVATE CONSUMPTION

TOTAL INVESTMENTS

NON RESIDENTIAL INVESTMENTS

2009

-2.8

-3.6

-4.6

-9.0

-9.2

4.0

5.0

2010

1.2

2.1

2.1

-0.5

-2.7

3.2

5.3

2009

-4.3

-3.9

-5.9

-8.8

-5.8

n.a.

n.a.

2010

1.0

3.0

2.6

0.4

-0.4

n.a.

n.a.

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Office furniture: Europe & selected countriesOffice furniture: Europe & selected countriesMAIN EUROPEAN EXPORTERS

Exports (Bil.€):

Germany

Italy

Sweden

UK

Austria

Source: CSIL processing

2004 2008

2.2 3.0

% shares

2004 2008

22 24

22 22

9 10

8 6

4 6

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Trade: Trade: Europe. Office furniture. Exports by destination 2003-2008. Percentage (%) values

0

10

20

30

40

50

60

70

European Union(15)

New EU Members(12)

Norway &Switzerland

OtherEurope+Russia

North America Middle East Asia-Pacific Other Countries

2003 2004 2005 2006 2007 2008

Source: CSIL processing Eurostat figures

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Trade: Trade: Europe. Office furniture. Exports outside EU 15 area 2004-2008. Million Euro


0

20

40

60

80

100

120

140

160

Russia UnitedStates

United ArabEmirates

Poland CzechRepublic

SaudiArabia

Angola Romania Qatar Hungary

2004 2005 2006 2007 2008

The Gulf Countries becomea prominent exporting area outside EU 15

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Office furniture: Europe & selected countriesOffice furniture: Europe & selected countriesMAIN EUROPEAN IMPORTERS

Imports (Bil.€):

France

UK

Germany

Belgium

Netherlands


2004 2008

7.6 9.4

% shares

2004 2008

15 15

17 13

13 12

10 10

7 8

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Imports from Asia-PacificImports from Asia-PacificEurope. Office furniture. Imports from Asia-Pacific 2004-2008. Mil Eur

0

50

100

150

200

250

2004 2005 2006 2007 2008

Office Furniture

Office Seating

Over the last 5 years China became the first office seating supplier for: UnitedKingdom, Germany, Italy, Spain and Greece.


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Effects of the economic recession: Effects of the economic recession:

Source: CSIL processing Eurostat figures - Note: EU 15

Europe. Office furniture. Imports and Exports monthly figures, January 2008 – April 2009. Million Eur

120

140

160

180

200

220

240

260

280

300

Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09

Exports Imports

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Main exporting countries. Office furniture. Exports January – April 2009, compared to the same period of 2008. Percentage (%) change



-8Austria

-31United Kingdom

-26Sweden

-25Italy

-22Germany

COUNTRY % change 09/08

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Effects of the economic recession: Effects of the economic recession: Main importing countries. Office furniture. Imports January – April 2009, compared to the same period of 2008. Percentage (%) change

COUNTRY % change 09/08

-20Netherlands

-25Belgium

2Germany

-39United Kingdom

-19France

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Combined performance of 4 leading players in the office furniture industry. First Quarter 2009 -vs- First Quarter 2008



Turnover

Gross Profit

EBTDA

-31%

2008 2009

-27%

-93%

Pressure on company marginsdue to reduction ofrevenues…

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Product tendencies: Product tendencies:


Europe. Office furniture. Breakdown of production by segment, 2008.Percentage (%) shares

40.0

27.3

15.5

6.0 5.6 5.5

operative desking seating filing/storage communal areas wall to wall units executive furniture

FILING and COMMUNAL AREAS, the best performing segments

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ConclusionsConclusions

• MARKET: financial conditions improved more than expected, but recoveryremain discontinuous and unequal among markets.

• SECTOR: for office furniture a “delayed reaction to crisis” does not mean“delayed reaction to recovery”.

• COMPANIES:

Geographical diversification (still remain foundamental)

Product developement (pedestals….towers…..caddies….?)

Sector expansion (office is just furniture?)

Distribution, different solutions for different targets

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Overview of the European Office Furniture market with implications

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