Nice is on air on Radio 24! Interview with Lauro Buoro on the Group’s key success factors
On Sunday 10th January Lauro Buoro was special guest during the Fabbrica 2.4 program, broadcast on Radio 24: the weekly show by “Il Sole 24 Ore” dedicated to the world of Italian industry, its evolutions and its points of excellence.
Journalist Filippo Astone, who visited our Headquarters and TheNicePlace last December, said: “We often hear that beauty represents Italy’s most important assets. But Italian taste for beauty stands out not only in typical sectors such as fashion and luxury; it stands out in mechanics, for instance, or in the sector of gates and garage doors automation… and this is clearly demonstrated by Nice’s story, based in Oderzo. When I visited its Headquarters, I found myself lost in beauty”.
During the interview, Lauro Buoro recalls our business model's key elements: design as a distinguishing feature, the ability to act on an international scale and the strong attitude towards technology, in addition to hard work and a dynamic and lean organization.
The podcast of the program (in Italian) is available online: Nice: il bello che fa guadagnare.
Below is the transcript in English.
Journey through a changing industry
by Filippo Astone
I chase the dream of a living space,
which is variable and open.
I want to wear, I want to share phenomena
by opening the windows because here come,
in their turn, the sun and moon and the other stars…
Filippo Astone: Good morning! We often hear that beauty is Italy's greatest asset, and we immediately think of tourism, hotels, museums, chefs, cuisines... all these are mediatically profitable and can generate money, but also lend themselves to clichés. But often people forget or do not know that Italy's charm, savoir vivre, and penchant for beauty emerge also in the products of industries that are not as typical, such as mechanical engineering. If you add a splash of beauty to Italian products, including those of a mature sector such as that of automation systems for gates, doors and garages, you not only keep such an industry going, but you can also compete and make a lot of money. For evidence, look at Nice. Based in Oderzo, province of Treviso, the company specialises in automation systems for gates, doors and garages, and has managed to grow at a fast pace and make very sizeable profits by adding a splash of aesthetics. Born in the 1990s – we will soon connect with Mr Lauro Buoro, who will tell us more – the company has literally exploded, reporting 264 million euros in revenue, an EBITDA at times amounting to almost a fifth of revenue, and a net profit of 6%. These are outstanding figures for such a mature industry. Good morning, Mr Buoro.
Lauro Buoro: Good morning, Mr Astone.
F.A.: Thus, beauty is beautiful per se – but it also generates money.
L.B.: Well, if you put it that way, absolutely. But there is also the hard work of several people and employees, as well as – besides the insight, which seems trivial today, of using design as a differentiator – an organisation and a very strong international vocation, which led us to the results you mentioned.
F.A.: But how did you manage to reach such a level of revenue in just 20-25 years of existence?
L.B.: It all started by looking carefully and comparing – or, as economists would say today, carrying out a “thorough market analysis” – and then consciously selecting the market shares of our competitors. At the time, we were a nobody, and our competitors were already established companies. We immediately identified three strengths they did not have: design and ergonomics, internationalisation, and strong technological vocation. This combination is what makes Nice a dynamic, fast and, above all, international company – 85% of our business is outside Italy. Therefore, we are, by definition, international.
F.A.: We are going to take a break for a word from our sponsors and traffic reports. Stay with us.
F.A.: The song you are hearing is “Our world is magic, our world is Nice”. It was written by Stefania Paterniani for Nice, and I must say that I like it a lot. When I visited Nice's headquarters, which are completely unlike what you would expect from a manufacturer of gate motors and automation systems for doors, I entered into a world of beauty, and this music is fitting. Mr Buoro, you have been working with architects and designers – can you tell us more about it?
L.B.: Sure. Ever since Nice's inception, design has been a key part of our DNA. Thus, we identified right away a designer, Roberto Gherlenda, who is still with us and is the person that introduced me to this world, giving me an opportunity also for cultural and personal growth. Besides this, which has been, and is, our strength, there is an aspect other than gate automation systems, which represent our traditional business: FontanaArte...
F.A.: We are talking about lamps.
F.A.: But have you worked also with famous external designers on certain products?
L.B.: As Nice, no, because we have always worked with Roberto Gherlenda, our designer. He has designed all our collections and is the person behind the graphic design and strategy of our brand...
F.A.: Which is very fun indeed. I must confess that when I was looking to buy a motor to automate my garage door – well, I eventually bought it, but it was such a bore to have to deal with these motors, that I had been postponing the purchase indefinitely.
L.B.: [Laughs]. This is fairly common among all users. And then you bump into it. At Nice, we are often asked what it is that we do, exactly – they say “it cannot be too fancy”.
F.A.: Too fancy for gate motors, after all.
F.A.: You said that you have FontanaArte, which makes lamps, and that this unit has worked with external designers, including famous ones, correct?
L.B.: Absolutely. First of all, Gio Ponti – who was our Art Director several years ago. Today, we work with several other important architects. Just to name a few: Shigeru Ban, now we are working with Paola Navone, and then there are all the young talents that are working with us – it is definitely a stage for us, a permanent training ground…
F.A.: But why did you acquire FontanaArte? What does it have to do with gates and doors?
L.B.: FontanaArte is the result of two intertwined projects. The first is the Italian identity of such an important company and brand, which had significant strategic and financial problems. The second point was: with our automation systems, we make motors not only for garages, gates, etc., but also for awnings, blinds and screens.
L.B.: This is all connected, because we shut out the light and then turn it on with our lamps. Our intention is to integrate electronics, that is the technology that drives our products, our sensors, with the lights. This is what we are doing.
F.A.: Can you tell us about some of your products with a particularly striking aesthetic or that has met with considerable success?
L.B.: Yes. Certainly, the product that has made a name for the company is NiceWay, which won an award by ADI (the Italian association for industrial design), and is a radio control, a remote...
F.A.: The one with the smiles?
F.A.: Besides FontanaArte, you have made several other acquisitions.
L.B.: Sure, sure.
F.A.: Can you tell us more about them? And also if you are considering new ones.
L.B.: Of course. We were born in 2006 after the Group's IPO. Why did we list on the stock market? Because we wanted to grow significantly over the following years, and we needed financing.
F.A.: How much did you raise through the IPO?
L.B.: Approximately 200 million euros.
F.A.: That is a lot!
F.A.: And did you spend all of it?
L.B.: We have spent a large share, but not all of it. A fairly large share.
F.A.: I see that the company has very low leverage.
L.B.: We do not have any debts.
F.A.: Exactly. The net financial position is positive.
L.B.: Absolutely. In business and strategic terms, I have always wanted us to be a low-leverage company, i.e. have no debts and fund all our projects ourselves. This is why in 2005, when we launched the project, I said: let's raise money from the market. The market is an opportunity, and we raise funds through the sale of shares in the company by going public.
F.A.: And since 2006, with the money raised through the IPO, you have made several acquisitions. Can you talk about them?
L.B.: I will mention the most important ones. The first was in the US. We wanted to enter the US market, and in 2008 we did it through a small, but significant, acquisition – we started laying the foundations not just for sales, but also manufacturing operations, in the United States. This was a crucial acquisition for us, because it completely changed Nice's identity – making it not just a European, but also an American company. Then, we made two significant acquisitions in 2011. The first was elero, a competitor in motors for awnings and blinds, where we certainly had a significant presence, but not a large market share – especially in the DACH area, that is Germany, Austria and Switzerland. We took over this competitor, and thus became the world's second largest player in automation systems for awnings and blinds.
F.A.: And then?
L.B.: There was the one in Brazil, always in 2011. Also in this case, we bought a small local manufacturing firm to overcome import tariffs. We overhauled the plant, and today, after four years of rapid growth, we have become the leader in Brazil. Finally, in early 2015 we bought another company in South Africa, specifically in Cape Town. Once again, we wanted to enter this market and establish a direct presence in that area of the world.
F.A.: In a minute, you will tell us about the acquisitions you are looking to make in the future, but now let's listen to this brief profile of Nice:
Nice's history shows how aesthetics can add significant economic value even to mature products that were previously undifferentiated, such as motors for gates and retractable awnings. In short, not only is beauty attractive, but it can also generate a lot of money. Nice S.p.A. is based in Oderzo, province of Treviso, and in 2014 it reported 270.9 million euros in revenue, with an EBITDA of 15.3% and net profits totalling 5.7%. Founded and headed by Lauro Buoro, Nice designs, manufactures and sells home automation systems, that is motorised gates, doors and garage door openers, wireless remote controls, alarm systems, and motorised window fixtures. Nice does not manufacture anything directly, but outsources production to a network of suppliers in a 150 km radius from its headquarters. A sort of decentralised meta-company that supplies Nice as well as other competitors and companies in related industries. This approach is common to several success stories in the Veneto region. In less than a quarter century – the company was founded in 1993 – Nice has grown rapidly and generated considerable profits thanks to a brilliant insight that eventually turned into a strategy: applying the research of designs and shapes to the electromechanical industry, seeking to convey emotions through the product and the corporate image. Before Nice, the sector was essentially anonymous and undifferentiated. Then, it underwent a radical change. In practice, making automated gates and garage door motors that are also beautiful allows selling them at a higher price, fuelling the company's considerable growth. This proves that Italian aesthetics can translate into economic growth, even in a very mature industry which was used to extremely low margins. In 2006, Nice listed on the Star segment of the Italian stock exchange, raising funds crucial for its growth. In 2010, Nice acquired a controlling interest in FontanaArte, a company established by the legendary Gio Ponti in 1932. Industry experts believe that FontanaArte has made history in the lighting industry in Italy and abroad under the artistic leadership of architects such as Gae Aulenti and professionals such as Piero Castiglioni and Renzo Piano.
F.A.: Here we are again after the company profile. We were talking with Lauro Buoro, Nice's founder, about potential future acquisitions – also because the company still has cash to spend. Is that right?
L.B.: Sure. We certainly intend to grow also inorganically, that is through acquisitions, and we are considering a series of opportunities. We are a listed company, and therefore price sensitive. I cannot give you more details, but certainly we are looking to grow inorganically through acquisitions in our core sectors, that is gates, gate automation systems...
F.A.: Acquisitions in Italy or abroad?
L.B.: Certainly abroad – but I wanted to stress that our growth is also organic; this year we are growing, not only through the acquisition of the South African company in February, but also organically.
F.A.: Therefore, organic growth. But you outsource all your production. You design, make the moulds and dies and commission them – but, as several companies in this and other related industries in the Veneto region, you outsource everything to a network of suppliers, which also work with other firms, so as to remain as flexible as possible.
L.B.: Sure. Our model is completely based on outsourcing – specifically, for Nice in Italy and our entire Italian operations, and therefore also in Europe. Our suppliers are all local, and are at most 100 km away from us. Throughout our history, we have never offshored our operations: we have always remained close to our community, most importantly to secure the flexibility that allowed us to grow over the years.
F.A.: Ironically, you are a factory without factories.
L.B.: Exactly. Even though...
F.A.: Even though actually there are plants, because if you visit the area where you are based, it almost feels like a giant extended company. Rather than a business district, it seems like a single entity – you can tell by looking at the suppliers, you just have to go around there and you understand.
F.A.: We have run out of time and must wrap up, but I think I will invite you again. In the meantime, thank you.
L.B.: Thank you for the opportunity.
F.A.: Goodbye until next time, next Saturday at 2:00 pm.