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v3.20.1

Revenue | 12 Months Ended
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Dec. 31, 2019
Text block [abstract] |
Revenue |
31 | Revenue
(i) Revenue streams The Group generates revenue primarily from the sale of leather and fabric upholstered furniture and home furnishing accessories to its customers. Other sources of revenue include sale of polyurethane foam, sale of leather-by products, sale of Natuzzi Display System and sale of Service Type Warranty. Therefore, all the Group’s revenue is related to revenue from contracts with customers. (ii) Disaggregation of revenue from contracts with customers In the following tables, revenue from contracts with customers are disaggregated by types of goods, primary geographical markets, geographical location of customers, distribution channels, brands and timing of revenue recognition.
Types of goods |  | 2019 |  |  | 2018 |  |  | 2017 |
Sale of upholstery furniture |  |  | 329,162 |  |  |  | 365,346 |  |  |  | 389,528 |
Sale of home furnishing accessories |  |  | 39,623 |  |  |  | 41,733 |  |  |  | 33,560 |
Sale of polyurethane foam |  |  | 9,665 |  |  |  | 14,958 |  |  |  | 15,501 |
Sale of other goods |  |  | 8,512 |  |  |  | 6,502 |  |  |  | 10,291 |
Total |  |  | 386,962 |  |  |  | 428,539 |  |  |  | 448,880 |
The sale of upholstery furniture includes the following categories: stationary furniture (sofas, loveseats and armchairs), sectional furniture, motion furniture, sofa beds and occasional chairs, including recliners and massage chairs.
Geographical markets |  | 2019 |  |  | 2018 |  |  | 2017 |
Europe, Middle East and Africa |  |  | 183,794 |  |  |  | 212,481 |  |  |  | 218,896 |
Americas |  |  | 137,665 |  |  |  | 137,452 |  |  |  | 153,647 |
Asia-Pacific |  |  | 65,503 |  |  |  | 78,606 |  |  |  | 76,337 |
Total |  |  | 386,962 |  |  |  | 428,539 |  |  |  | 448,880 |
Geographical location of customers |  | 2019 |  |  | 2018 |  |  | 2017 |
United States of America |  |  | 97,723 |  |  |  | 94,393 |  |  |  | 107,262 |
Italy |  |  | 48,557 |  |  |  | 53,261 |  |  |  | 55,379 |
United Kingdom |  |  | 39,416 |  |  |  | 43,501 |  |  |  | 48,266 |
China |  |  | 39,258 |  |  |  | 47,099 |  |  |  | 41,369 |
Canada |  |  | 18,355 |  |  |  | 17,371 |  |  |  | 20,030 |
Spain |  |  | 14,846 |  |  |  | 17,334 |  |  |  | 17,077 |
Brazil |  |  | 12,120 |  |  |  | 16,332 |  |  |  | 16,182 |
Australia |  |  | 8,668 |  |  |  | 9,903 |  |  |  | 9,738 |
France |  |  | 8,493 |  |  |  | 11,179 |  |  |  | 9,999 |
Belgium |  |  | 7,809 |  |  |  | 8,682 |  |  |  | 8,214 |
Germany |  |  | 7,234 |  |  |  | 11,455 |  |  |  | 12,462 |
Korea |  |  | 5,626 |  |  |  | 8,232 |  |  |  | 9,847 |
Other countries (none greater than 5%) |  |  | 78,857 |  |  |  | 89,797 |  |  |  | 93,055 |
Total |  |  | 386,962 |  |  |  | 428,539 |  |  |  | 448,880 |
Distribution channels |  | 2019 |  |  | 2018 |  |  | 2017 |
Wholesale (distributors and retailers) |  |  | 320,263 |  |  |  | 365,499 |  |  |  | 392,332 |
Directly operated stores (end c onsu mers) |  |  | 66,699 |  |  |  | 63,040 |  |  |  | 56,548 |
Total |  |  | 386,962 |  |  |  | 428,539 |  |  |  | 448,880 |
Brands |  | 2019 |  |  | 2018 |  |  | 2017 |
Natuzzi Editions |  |  | 160,136 |  |  |  | 167,925 |  |  |  | 183,838 |
Natuzzi Italia |  |  | 135,500 |  |  |  | 144,953 |  |  |  | 134,740 |
Private label |  |  | 73,149 |  |  |  | 94,201 |  |  |  | 104,509 |
Other |  |  | 18,177 |  |  |  | 21,460 |  |  |  | 25,793 |
Total |  |  | 386,962 |  |  |  | 428,539 |  |  |  | 448,880 |
Timing of revenue recognition |  | 2019 |  |  | 2018 |  |  | 2017 |
Goods transferred at a point in time |  |  | 385,510 |  |  |  | 427,493 |  |  |  | 448,206 |
Goods and services transferred over time |  |  | 1,452 |  |  |  | 1,046 |  |  |  | 674 |
Subtotal |  |  | 386,962 |  |  |  | 428,539 |  |  |  | 448,880 |
(iii) Contract balances The following table provides information about receivables and contract liabilities from contracts with customers.
|  | 31/12/19 |  |  | 31/12/18 |  |  | 31/12/17 |
Trade receivables |  |  | 29,187 |  |  |  | 40,967 |  |  |  | 37,549 |
Contract liabilities |  |  | 23,103 |  |  |  | 22,099 |  |  |  | 15,533 |
Reference should be made to note 15 “Trade receivables” and note 22 “Contract liabilities” (non-current and current) for details about such contract balances.
(iv) Performance obligations and revenue recognition policies Revenue is measured based on the consideration specified in the customer contract. The Group recognises revenue when it transfers control over a good or service to a customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for goods or services. The Group has generally concluded that it is the principal in its revenue arrangements, because it controls the goods or services before transferring them to the customer. In determining the transaction price for its contracts with customers, the Group considers the effects of variable consideration and the existence of significant financing components. The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. The allocation of the transaction price to the Group’s performance obligations is performed using the relative stand-alone selling price method. For detailed information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies see note 4(t). The transaction price allocated to the remaining performance obligations (partially unsatisfied) as at December 31, 2019, 2018 and 2017 is as follows:
|  | 31/12/19 |  |  | 31/12/18 |  |  | 31/12/17 |
Sale of Natuzzi Display System |  |  |  |  |  |  |  |  |  |  |  |
Within a year |  |  | 1,416 |  |  |  | 1,138 |  |  |  | 758 |
More than a year |  |  | 1,953 |  |  |  | 2,261 |  |  |  | 1,878 |
Total |  |  | 3,369 |  |  |  | 3,399 |  |  |  | 2,636 |
Sale of Service-Type Warranties |  |  |  |  |  |  |  |  |  |  |  |
Within a year |  |  | 394 |  |  |  | 332 |  |  |  | 278 |
More than a year |  |  | 411 |  |  |  | 565 |  |  |  | 682 |
Total |  |  | 805 |  |  |  | 897 |  |  |  | 960 |
Sale of the licence-for Natuzzi trademarks |  |  |  |  |  |  |  |  |  |  |  |
Within a year |  |  | 383 |  |  |  | 383 |  |  |  | — |
More than a year |  |  | 6,725 |  |  |  | 7,108 |  |  |  | — |
Total |  |  | 7,108 |  |  |  | 7,491 |  |  |  | — |
(v) Variable considerations If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Some contracts for the sale of furniture provide customers with volume rebates, which give rise to variable consideration. In particular, the Group provides retrospective volume rebates to certain customers once the quantity of products purchased during the period exceeds a threshold specified in the contract. Rebates are offset against amounts payable by the customer. Accumulated experience is used to estimate and provide for the rebates, using the expected value method. A refund liability is recognised for expected volume discounts payable to customers in relation to sales made until the end of the reporting period. (vi) Financing components For information about financing components, reference should be made to note 4(t)(vi). (vii) Warranty obligations The Group typically provides warranties for general repairs of defects that existed at the time of sale, as required by law. These assurance-type warranties are accounted for under IAS 37. Refer to the accounting policy on warranty provisions in note 4(r). Customers who purchase the Group’s upholstered furniture may require a service type warranty. As disclosed in note 4(t)(v), the Group allocates a portion of the consideration received to the service type warranty, based on the relative stand-alone selling price. The amount allocated to the service type warranty is deferred, and is recognised as revenue over the time based on the validity period of such warranty. (viii) Cost to obtain a contract The Group pays sales commission to its agents for each contract that they obtain. For information about the accounting policy elected by the Group on sales commissions, reference should be made to note 4(x).

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