Natuzzi S.p.A(US:NTZ)2023-04-20 01:07Financial Data and Key Metrics Changes - Total revenue for 2022 was €468.5 million, an increase of 9.6% compared to 2021 and 21.1% compared to 2019 [41] - EBITDA was reported at €8.4 million, with potential to reach €12.9 million if excluding one-off items [7][46] - Cash position remained stable at €54 million, significantly higher than operational needs, with a positive cash flow from operations of €18.7 million [8][30] Business Line Data and Key Metrics Changes - 92% of total sales came from branded products, up from 89% in the previous year, indicating a significant transformation towards branded offerings [22] - The gross margin for 2022 was 35.1%, slightly down from 36% in 2021, but improved to 37% in the last quarter of 2022 [43] - Operating expenses decreased to 33.3% of revenues from 34.8% in 2021, reflecting improved efficiency [45] Market Data and Key Metrics Changes - The company noted a weaker demand environment, particularly in the US and Europe, with traffic in stores remaining below expectations [15][75] - In China, the Natuzzi Editions business showed signs of recovery, while Natuzzi Italia faced challenges [34] Company Strategy and Development Direction - The company is focused on transforming into a brand retailer, with long-term targets set for retail expansion and brand strength [9][10] - Plans to open six new stores in North America in 2023, emphasizing flagship locations to enhance brand visibility [37][79] - The strategy includes improving the performance of existing stores to increase sales per square meter and overall profitability [25][59] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand recovery, particularly in the US and China, while acknowledging ongoing economic challenges [28][54] - The company is actively seeking to sell non-strategic assets to improve cash flow and fund growth initiatives [16][57] - The focus remains on maintaining cash reserves and navigating the current economic landscape without compromising long-term goals [110] Other Important Information - The company has no long-term debt, which is viewed positively in the current uncertain market environment [8] - The joint venture in China reported a profit of €400,000, down from €3.6 million in 2021, but still provided dividends [49] Q&A Session Summary Question: What is the current backlog status? - The backlog has returned to a physiological level of approximately €60 million, which is necessary for proper factory planning [74] Question: How is the company addressing the economic slowdown? - Management is focusing on improving same-store sales and enhancing the productivity of existing stores while planning new openings [59][107] Question: What are the expectations for gross margin post Factory 4.0? - The company anticipates that full deployment of Factory 4.0 could lead to significant improvements in gross margin, potentially reaching the low 40s in the future [102][106]