Financial Data and Key Metrics Changes - The company reported a revenue of $78.1 million for the first quarter, a decrease of 7.6% compared to the previous year [8] - Gross margin fell to 34.1% from 36.9% in the previous quarter, attributed to a transition phase in production [8][10] - The company experienced an operating loss of €800,000 for the quarter, with net financial costs increasing to $2.9 million from $2.2 million due to currency volatility [10] Business Line Data and Key Metrics Changes - The transition of Natuzzi Edition production from China to Italy impacted gross margins, leading to a temporary decrease in profitability [9][10] - Significant investments of approximately $2 million were made primarily on factory improvements during the quarter [10] Market Data and Key Metrics Changes - Consumer confidence in the US has declined to levels not seen since early 2023, with European confidence down by 3.1 percentage points [11] - The market environment remains challenging, with consumers postponing durable purchases [12] Company Strategy and Development Direction - The company is focusing on enhancing its brand commercial strategy, integrating collection, marketing, and customer experience [16] - Natuzzi plans to strengthen its retail and wholesale channels, with a particular emphasis on the North American market [21] - The company is exploring sustainable production locations for Natuzzi Editions to mitigate tariff impacts [33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the difficult business environment, exacerbated by US trade duties and geopolitical tensions [16] - The company is committed to protecting margins and is actively reviewing pricing strategies in response to tariffs [33][36] - There is a focus on improving operational efficiency and brand strength to deliver sustainable value to stakeholders [24] Other Important Information - The company has returned to the Salon del Mobile Fair in Milan, unveiling new collections that reflect its evolution as a global lifestyle brand [17] - The introduction of a new software platform for retail performance assessment is showing early signs of improvement [45] Q&A Session Summary Question: Impact of production shift on gross margin - The production shift from China to Italy has caused disruptions, leading to a decrease in gross margin [31] Question: Future gross margin expectations - Management is reviewing pricing strategies and production allocations to protect margins, but specific guidance on future margins was not provided [36] Question: Sustainability of operating expenses - Operating expenses were reduced to $27.4 million, and management expressed confidence in maintaining this level with ongoing cost reviews [39] Question: Early signs of improvement in retail technology - The new performance assessment platform is enabling data-driven decisions and improving store performance [45] Question: Potential of the commercial division - The trade and contract division is seeing growth, with a focus on B2B relationships and bespoke solutions for hospitality and residential sectors [62]

Financial Data and Key Metrics Changes - The company reported a revenue of $78.1 million for the first quarter, a decrease of 7.6% compared to the previous year [8] - Gross margin fell to 34.1% from 36.9% in the previous quarter, attributed to a planned transition of production from China to Italy [8] - The operating loss for the quarter was €800,000, with net financial costs increasing to €2.9 million from €2.2 million due to currency volatility [9][10] - Cash position improved to $222.2 million, up from $20 million at the end of the previous year [9] Business Line Data and Key Metrics Changes - The company is focusing on enhancing its retail, wholesale, and contract channels, with significant investments in analytics and performance monitoring [17][20] - The new gallery format introduced last year has started to show positive impacts in the U.S. market [18] - The contract division is seen as having significant growth potential, with early signs of interest following the launch of Natuzzi Admony Residence in Dubai [19] Market Data and Key Metrics Changes - Consumer confidence in the U.S. has returned to levels seen in early 2023, while confidence in Europe has decreased by 3.1 percentage points [10] - The business environment remains challenging due to U.S. trade duties and geopolitical tensions, impacting consumer purchasing behavior [15] Company Strategy and Development Direction - The company is implementing a brand commercial strategy that integrates collection, marketing, and customer experience [15] - There is a focus on strengthening sales and engagement across all regions, particularly in North America [20] - The company is considering sustainable production locations for Natuzzi Editions for North America to protect margins [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging market conditions and the need for consumers to postpone durable purchases [10] - The company is determined to adjust pricing strategies to protect margins in light of new tariffs [35] - Future performance will depend on market conditions, consumer sentiment, and effective execution of strategies [23] Other Important Information - The company has completed the transition of production facilities, which is expected to yield long-term benefits [9][77] - The company has closed three non-performing stores, resulting in savings of $700,000 in selling expenses [78] Q&A Session Summary Question: Impact of production shift on gross margin - Management confirmed that the shift of production from China to Italy caused a decrease in gross margin, but they are reviewing pricing strategies to improve margins moving forward [30][35] Question: Sustainability of operating expenses - Management expressed confidence that operating expenses can be maintained at the current level, supported by ongoing cost reviews and contingency measures [37][39] Question: Early signs of improvement in retail technology - The company has implemented a new performance assessment process that is showing early signs of improvement in retail operations [44][46] Question: Potential of the commercial division - The commercial division is expected to grow, leveraging relationships with design professionals and focusing on bespoke solutions for hospitality and residential projects [59][63] Question: Update on e-commerce partnership - Discussions with a major home furnishings e-commerce company are ongoing, with optimism about concluding negotiations positively [68][69]

International Operations and Regulatory Risks - The company faces significant risks from international operations, including potential changes in governmental regulations and tariffs, which could adversely affect results [76]. - The company has benefited from government incentive programs, such as tax credits and grants, particularly in Italy, but future availability of these benefits is uncertain [78]. - Compliance with evolving regulations, particularly in the EU regarding sustainability, may require substantial R&D efforts and could impact material choices [86]. - The Italian financial transaction tax (IFTT) applies to trades involving shares or equity-like financial instruments issued by companies resident in Italy, including Ordinary Shares and ADSs [100]. - Companies with an average market capitalization lower than €500 million in November of the preceding year are exempt from the IFTT; the company qualifies for this exemption for transfers made in 2025 [100]. Corporate Governance and Shareholder Rights - The founder, Mr. Pasquale Natuzzi, holds a controlling stake of 56.2% of the company's ordinary shares, which allows him significant influence over corporate affairs [95]. - The company may face challenges in protecting shareholder rights under Italian law, which differs from U.S. corporate governance standards [94]. Environmental, Social, and Governance (ESG) Factors - Increased focus on environmental, social, and governance (ESG) factors may lead to new regulatory requirements that could impact operational costs and brand reputation [80]. - Climate change poses risks to operations, including potential disruptions from extreme weather and increased costs for raw materials [83]. Technology and Cybersecurity - The company has migrated core business applications to the cloud, enhancing efficiency but increasing reliance on third-party service providers [92]. - The company is exposed to cybersecurity risks, particularly due to remote work arrangements, which could disrupt operations and harm financial results [90]. - The company is in the early phases of developing and integrating artificial intelligence (AI) technology to enhance productivity and data analytics [100]. - There are inherent risks associated with the use of AI, including accuracy issues, cybersecurity risks, and unintended biases, which could adversely affect the company's business and financial position [100]. - The company cannot predict future developments in AI and their potential impacts on its business and industry [100]. - If AI applications produce deficient, inaccurate, or biased content, the company's reputation and financial condition may be materially adversely affected [100]. Stock Options and Share Issuance - The company has adopted a stock option plan allowing for the issuance of up to 5,485,304 ordinary shares, with 2,812,560 shares already granted as of March 31, 2025 [98].

Financial Data and Key Metrics Changes - The company reported total sales of €318.8 million for the year, a decrease of 3% compared to the previous year [6] - Gross margin improved to 36.3% in 2024, up from 34.3% in 2023 and 29.7% in 2019, indicating a significant enhancement in profitability [15][16] - The operational loss for the year was €6.3 million, a notable improvement from a loss of €22.5 million in 2019 with higher sales [16][17] Business Line Data and Key Metrics Changes - Branded sales accounted for €289 million, representing approximately 93% of total sales, an increase from 80% in 2019 [7][9] - Direct-to-operator store sales reached €70.1 million, up 4% from 2023 and 18% from 2019, driven primarily by growth in the U.S. market [11] - The company closed two underperforming Natuzzi Italia stores and one Divani Divani store, reflecting a strategic move to optimize retail locations [12] Market Data and Key Metrics Changes - The company noted a challenging and volatile market environment, impacting overall sales performance [6][7] - The U.S. market showed resilience with the opening of a new store in Denver, contributing to the growth in direct-to-operator sales [11] Company Strategy and Development Direction - The company is focused on transforming from a manufacturer to a brand retailer, emphasizing the importance of retail presence and customer experience [10][24] - A significant restructuring effort was undertaken, including the relocation of production from Shanghai to Qinzhou, aimed at improving cost efficiency [14][21] - The company is committed to organic growth and enhancing profitability through improved sales per store and effective marketing strategies [98] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current market challenges, highlighting the flexibility of its production capabilities across various regions [61][66] - The management acknowledged the uncertainty in the market due to potential tariff increases but emphasized the company's preparedness to protect margins [62][64] - The focus remains on improving consumer confidence and sales across all geographies, supported by new product launches and marketing initiatives [81][82] Other Important Information - The company has made significant investments in developing new marketing and retail competencies, aiming to enhance customer experience and operational efficiency [24][32] - A strategic divestment of non-core assets is ongoing, with the completion of a transaction involving High Point expected in March 2025 [19][20] Q&A Session Summary Question: How will increased tariffs impact pricing and margins? - Management indicated that they are proactively protecting margins through discussions with partners and implementing surcharges where necessary to mitigate tariff impacts [62][63] Question: What is the company's strategy for increasing revenue? - The focus is on organic growth, improving sales per store, and leveraging new collections and marketing strategies to drive traffic [98] Question: What tools and systems are in place to support the retail transition? - The company has developed analytical tools to diagnose store performance and improve merchandising strategies, enabling faster decision-making [90] Question: What is the outlook for profitability and potential retail expansion in the U.S.? - Management believes that breakeven can be achieved at lower sales levels than in the past, with a focus on nurturing new stores opened in the U.S. [99][100]

Financial Data and Key Metrics Changes - The company reported sales of EUR 243.9 million for the first nine months of 2024, consistent with the previous year, despite the sector facing strong headwinds [9] - The gross margin for the first nine months was 35.8%, unchanged from 2023, but improved from 29% in 2019 [14] - Excluding one-off severance costs, the operating profit would have been EUR 1.2 million, compared to an operating loss of EUR 0.7 million in 2023 [16] - Total financial costs increased to EUR 7.4 million from EUR 5.6 million in 2023, reflecting higher interest rates [17] Business Line Data and Key Metrics Changes - The branded business grew by 6.3% compared to 2023 and 20.8% compared to 2019, indicating a strong performance relative to the sector [10] - The company let go of 538 employees in the first nine months, reducing the workforce by 26% since 2021 [13] - The branded business now represents 93% of total sales, contributing to improved sales quality [15] Market Data and Key Metrics Changes - The third quarter sales were reported to be 0.1% above last year, with branded sales performing better [24] - The company is focusing on expanding its presence in the US, having opened five new stores in 2023 and one in Denver [28] Company Strategy and Development Direction - The company aims to become a branded retail company, focusing on retail and wholesale channels to improve brand representation [12][29] - A new division has been established to grow trade and contract business, with a focus on partnerships with real estate developers [36][98] - The company is divesting non-strategic assets to free up resources, including the sale of a tannery and land in Romania [19][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating potential tariff changes by diversifying production sources, including plans to open a facility in Vietnam [70][71] - There is optimism regarding order flow improvements in Q4, with a positive trend reported in the last 10 weeks [84] - The company is focused on maintaining profitability and reducing the breakeven point to EUR 75-85 million per quarter [110] Other Important Information - The company reported a significant reduction in cash position, from EUR 33.6 million at the beginning of the year to EUR 17.1 million by the end of September [21] - The restructuring efforts are aimed at improving operational efficiency and reducing costs [37] Q&A Session Summary Question: Impact of potential US tariffs - Management is preparing for potential tariff changes and is diversifying production to mitigate risks, including plans to utilize Vietnam as a production base [70][71] Question: Order flow improvements in Q4 - Management reported a positive trend in order flow since week 14, with better performance than previous weeks, but cautioned about the volatile external environment [84][85] Question: Cost savings from moving production from Shanghai - The Shanghai plant officially closed at the end of September, with expected efficiency improvements from the new Quanjiao facility materializing in 2025 [88][89] Question: Expected improvement in gross margin from China - Management anticipates a gross margin improvement of 200 to 300 basis points from the production shift [91] Question: Size of the new commercial division opportunity - The new division is expected to contribute significantly to revenue, with a five-year business plan in place, although specific numbers were not disclosed [100][101] Question: Profitability expectations above EUR 75 million - Management confirmed that the breakeven point has been lowered, and profitability is expected to improve with revenues above EUR 75 million [110][111]

Financial Data and Key Metrics Changes - The company reported a slight increase in sales compared to the same period in 2023, which is considered a sign of resilience in a soft sector where most competitors reported negative comparisons [4][5] - Gross margin increased by 1.7 percentage points to 38.1% compared to 36.4% a year ago, and an 11 percentage point increase in gross margin has been achieved since 2019 [24][25][23] Business Line Data and Key Metrics Changes - Directly operated stores in the U.S. grew by approximately 33% year-over-year, while overall sales for the brand were 3% above last year [8][5] - The company opened 47 new stores in 2024, with a focus on organic growth and potential new openings [16][9] Market Data and Key Metrics Changes - The U.S. market remains central to the company's strategy, with significant growth in directly operated stores [8][9] - The Chinese market is currently soft, but the company is preparing for a potential rebound due to government stimulus efforts [45][46] Company Strategy and Development Direction - The company is transitioning from a manufacturer to a brand retailer, focusing on improving customer experience and retail capabilities [6][7] - A new business unit has been established to manage trade and contract opportunities, emphasizing design capabilities and project management [22][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment, particularly in the furniture sector, but expressed optimism about future growth as market conditions stabilize [4][45] - The company is committed to using proceeds from asset sales for restructuring and retail expansion, with a structured approach to new store openings [39][65] Other Important Information - The company has reduced its workforce by approximately 20% over three years, focusing on evolving from a volume to a value company [26][27] - A strategic asset, the High Point building, was sold for $12.1 million, with plans to reinvest the proceeds into the business [34][36] Q&A Session Summary Question: Capital deployment from High Point sale - Management indicated that proceeds will be used for restructuring and retail expansion, with a structured approach to new openings [38][39] Question: Observations on the Chinese market - Management noted the softness in the Chinese market but expressed hope for improvement due to government stimulus [45][46] Question: Performance of U.S. retail stores - Management reported variability in store performance, influenced by location and team quality, with top-performing stores generating significantly higher sales [57][60] Question: Net cash from High Point sale - The sale will result in $12.1 million in net cash, which will be fully available for the company [63] Question: Future growth in U.S. openings - Management confirmed a commitment to expanding Natuzzi Italia presence in the U.S., with a cautious approach to new openings [65] Question: Sale leaseback details - The High Point sale is a dry sale, meaning no long-term lease obligations will be incurred [66] Question: Share buyback considerations - Management acknowledged the potential for a share buyback but emphasized the importance of operational investments [69]

Financial Data and Key Metrics Changes - The company reported an operating profit of EUR0.6 million, a significant improvement compared to a loss of EUR0.9 million in 2023 and a loss of EUR3 million versus pre-COVID levels in 2019 [1] - Gross margin reached almost 37%, which is 1.5 percentage points above 2023 and 7 percentage points above 2019 [80] - The company has improved its gross margin by 7 percentage points since 2019, with a potential normalized improvement of around 10 percentage points [4][5] Business Line Data and Key Metrics Changes - Sales from directly operated stores grew to EUR20 million, representing a 13% increase compared to the same period last year [79] - The retail segment has been growing nearly 4% in the quarter, with the weight of freestanding stores increasing by 25 percentage points since 2019 [11][12] - The trading contract sales for Natuzzi Italia were included in the overall sales figures, indicating a focus on this segment for future growth [83] Market Data and Key Metrics Changes - The US and China markets reported sales above last year, while Southern Europe and emerging markets saw lower sales [78] - The company operates in over 100 markets, with a strategic focus on strengthening local positions in key geographies like the US and China [21][22] Company Strategy and Development Direction - The company is focusing on eight strategic pillars, including expanding margins, leveraging brand strength, and enhancing retail operations [6][21] - A new retail format was introduced, emphasizing sustainability and creating immersive brand experiences in over 200 stores [14][15] - The company is actively restructuring and optimizing its operations to improve efficiency and reduce costs [28][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the markets are not yet recovering due to persistent high interest rates, particularly affecting the real estate sector [3] - There is optimism regarding future growth opportunities, especially in the US and China, despite current market challenges [22][24] - The management emphasized the importance of cash management while maintaining a focus on mid-term value creation [32] Other Important Information - The company is exploring the sale of non-strategic assets to improve cash flow, although high interest rates currently hinder these efforts [31] - The company is integrating IT systems in China to enhance operational efficiency and brand management [24] Q&A Session Summary Question: Can you provide more detail on the gallery business in North America and Europe? - Management confirmed that the gallery business is expected to grow year-over-year, with some galleries being a restart of previous accounts and others representing new opportunities [38][39] Question: Will gross margin exceed 40% with the measures taken? - Management indicated that they are progressing towards a gross margin of 40% through improved pricing discipline and retail margin integration [41][42] Question: Can you discuss the joint venture in China and its expected growth? - Management clarified that while governance remains unchanged, they have gained more influence in driving key decisions, which is expected to positively impact growth [44] Question: Are raw material costs alleviating or softening? - Management noted that most raw material costs have stabilized, with a more normalized environment expected to support margin expansion [48][88] Question: What percentage of sales is from Natuzzi Italia versus the new contract business? - Management confirmed that contract sales are included in Natuzzi Italia's overall sales figures, indicating a focus on this segment for future growth [83]

Financial Reporting - Natuzzi S.p.A. filed its annual report on Form 20-F for the fiscal year ended December 31, 2023, with the SEC[2] Retail Operations - As of December 31, 2023, Natuzzi operates a global retail network of 678 mono-brand stores and over 600 galleries[4] Corporate Responsibility - Natuzzi is committed to social responsibility and environmental sustainability, holding ISO 9001, 14001, and 45001 certifications[4]

Risks and Challenges - The company is exposed to various risks including country risk, credit risk, and legal risk, which could materially affect its operations [79] - The company faces potential increases in operational costs due to climate change regulations and extreme weather conditions affecting its supply chain [85] - The Group's sales performance was negatively impacted by macroeconomic challenges, including high inflation and rising interest rates, affecting consumer spending [215] - The Group's insurance coverage does not cover 100% of risks but is deemed adequate based on past experience [270] Government Incentives and Financial Support - The company has received government incentives in the past, including grants and tax credits, which may not be available in the future [82] - The Company received €3.1 million in capital grants and €5.7 million in subsidized loans from the Italian Ministry for investments in 2023 [251] - The Ministry approved a total investment amount of €31.3 million in March 2023, with grants covering about 70% of this amount [249] - The Company formally requested an extension of the investment program deadline to December 31, 2024, due to challenges in the furniture sector [253] Corporate Structure and Governance - The founder, Mr. Pasquale Natuzzi, holds a controlling stake of 56.2% of the company's ordinary shares, influencing corporate affairs significantly [96] - The company operates under Italian law, which may complicate shareholder rights compared to U.S. corporations [94] Retail and Market Expansion - As of December 31, 2023, Natuzzi operates a global retail network comprising 678 mono-brand stores and 611 galleries, distributing products in 110 countries across five continents [103] - Natuzzi is focusing on expanding its retail network in key markets, particularly in the U.S., Greater China, and select European countries, to enhance brand awareness [118] - The Group plans to open approximately 50 Natuzzi franchises worldwide in 2024, focusing on the U.S., China, and Europe [206] - The joint venture with Kuka Furniture aims to expand the retail network in Mainland China, Hong Kong, and Macau, with Kuka holding a 51% stake [239][240] Digital Transformation and E-commerce - The Group's digital transformation includes an improved global website and an e-commerce platform for U.S. consumers, with plans to extend this to other key markets by 2025 [120] - The digital platform and e-commerce strategy are being improved to enhance customer experience and drive traffic to both online and physical stores [198][202] Product Development and Innovation - The Group introduced approximately 70 new sofa models annually, reflecting a commitment to product innovation and customer preferences [175] - The Group holds approximately 650 design registrations and two patents to protect its product innovations [257] - R&D expenses were €3.8 million in 2023, up from €3.5 million in 2022 and €3.3 million in 2021, indicating a focus on innovation [192] Sustainability and Environmental Responsibility - Natuzzi's commitment to sustainability is reflected in its ISO certifications, including ISO 9001, 14001, and 45001, ensuring quality and environmental responsibility [105] - The Group's environmental management system is certified ISO 14001, demonstrating its commitment to environmental sustainability [266] - The Group prioritizes waste recovery and recycling, aiming to protect the environment and promote sustainability [267] - The Group received The Responsibility Award in 2023, recognizing its commitment to quality, environment, and corporate social responsibility [268] Financial Performance and Sales - In 2023, net sales of upholstered sofas, beds, and home furnishings amounted to €319.8 million, a decrease of 29.4% compared to 2022, driven by a 27.0% decline in Natuzzi branded sales and a 50.3% drop in unbranded products [214] - The number of upholstered seats sold in 2023 was 636,655, down 22.5% from 2022, with significant declines in the Americas (down 12.3%) and EMEAI (down 26.1%) regions [214] - In the Americas, net sales were €122.8 million, a decrease of 25.4% compared to 2022, with Natuzzi branded products at €109.9 million (down 24.7%) and unbranded products at €12.9 million (down 30.9%) [217] - EMEAI net sales were €150.8 million, down 25.3% from 2022, with Natuzzi branded sales at €141.4 million (down 19.4%) and unbranded products at €9.4 million (down 64.5%) [229] Manufacturing and Production - The Group's manufacturing facilities are located in Italy, China, Romania, Brazil, and Vietnam, with ongoing revisions to its industrial footprint due to global competition and tariffs [139] - The Group plans to establish a new industrial facility in Vietnam by the end of 2024 to further reduce costs and improve competitiveness [143] - The Factory 4.0 operational model has been implemented in three Italian plants, with plans to extend to other locations in 2024, enhancing production efficiency [192] - The Group's production facilities include a total of 1,000 seats capacity in Romania and 588 seats capacity in China, among others [272] Cost Management and Efficiency - The Group's strategy includes cost control measures to streamline operations and reduce headquarters-related costs [115] - The Group continues to focus on capital efficiency through rigorous cash and working-capital management, including the disposal of non-strategic assets [123] - The total amount of investments and expenses incurred under the investment program in 2023 was €20.0 million, with €14.8 million allocated for plant upgrades [250] - The Group's capital expenditures have been primarily directed towards improvements in property, plant, equipment, and software development [274]

[Report of Foreign Issuer (Form 6-K)](index=1&type=section&id=Form%206-K%20Report%20of%20Foreign%20Issuer) [Announcement of Annual Report Filing](index=2&type=section&id=Announcement%20of%20Annual%20Report%20Filing) Natuzzi S.p.A. filed its FY2022 Form 20-F with the SEC, available online and via hard copy request - Natuzzi S.p.A. filed its annual report on Form 20-F for the fiscal year ended December 31, 2022[2](index=2&type=chunk) - The Annual Report is available on the company's website, and shareholders can request a free hard copy, which includes audited consolidated financial statements[2](index=2&type=chunk)[3](index=3&type=chunk) [Company Overview](index=2&type=section&id=About%20Natuzzi%20S.p.A.) Natuzzi S.p.A., a luxury furniture brand founded in 1959 and NYSE-listed, operates a global retail network and holds multiple certifications - Founded by Pasquale Natuzzi in 1959, the company has been listed on the New York Stock Exchange since May 13, 1993[4](index=4&type=chunk) Global Retail Network as of December 31, 2022 | Store Type | Count | | :--- | :--- | | Mono-brand stores | 703 | | Galleries | 508 | - The company is certified for ISO 9001 (Quality), ISO 14001 (Environment), ISO 45001 (Safety on the Workplace), and FSC® Chain of Custody[4](index=4&type=chunk) [Administrative Information](index=2&type=section&id=Administrative%20Information) This section provides contact details for investor relations and corporate communications, formally signed by Pasquale Natuzzi - Contact information is provided for Investor Relations (Piero Direnzo) and Corporate Communication (Giacomo Ventolone)[5](index=5&type=chunk) - The report was duly signed by Pasquale Natuzzi on May 1, 2023[7](index=7&type=chunk)