Natuzzi S.p.A(US:NTZ)2022-11-28 18:41Financial Data and Key Metrics Changes - The company reported revenue of EUR 160 million for Q3 2022, an increase of almost 50% compared to 2021, which was already a strong year with a 30% increase versus 2020 and a 32% increase versus 2019 [9] - The profit for Q3 2022 was EUR 4.1 million, compared to a loss of EUR 0.4 million in Q3 2021 and a loss of EUR 8.7 million in Q3 2019, indicating significant improvement [12] - The profit per American Depositary Receipt (ADR) was EUR 0.50, compared to a loss of EUR 0.35 in 2021 and EUR 1.05 in 2019 [14] - The company closed the quarter with a margin of 37.7%, up from 36.6% in 2021 and 28.7% in 2019, reflecting improved profitability despite rising costs [11] Business Line Data and Key Metrics Changes - Revenue from the branded business (Natuzzi Italia and Natuzzi Edition) was EUR 103 million, representing a 22.5% increase versus 2021 and a 57.6% increase versus 2019, indicating faster growth than overall revenue [10] Market Data and Key Metrics Changes - The company noted a slowdown in new orders since April, with both retail and client business experiencing lower-than-expected order volumes, a trend observed across the industry [16][18] Company Strategy and Development Direction - The company is focused on enhancing marginality and extracting more value for investors, with a commitment to a five-year growth plan despite challenging market conditions [11][18] - Management is implementing cost reduction measures, including a review of organizational structure and streamlining operations to improve efficiency and reduce G&A costs [47][50] Management Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing headwinds affecting the business and emphasized the importance of maintaining operational efficiency and cash management during this period [16][49] - The company remains committed to its long-term strategy of becoming a leading high-end European brand globally, despite current challenges [50] Other Important Information - The company reported an additional EUR 2.8 million in energy costs due to spikes in energy prices, while transportation costs are normalizing but have not yet returned to pre-2019 levels [19][20] Q&A Session Summary Question: Can you speak specifically to what's going on in terms of lowering the cost of G&A? - Management is applying a methodology developed with McKinsey to tightly manage costs across all categories, including G&A, with a potential impact of EUR 3 million to EUR 4 million for the quarter [26][31] Question: What was the dollar amount of the impairment of a trade receivable? - The impairment of trade receivables for the third quarter was EUR 0.1 million [35] Question: How did North American direct-owned stores perform like-for-like? - Year-to-date, North American direct-owned stores are trending down 8% compared to 2021 but up 50% compared to 2019 [36] Question: Can you provide an update on the Factory 4.0 rollout? - The plan is to roll out Factory 4.0 in most Italian factories by next year, with potential relocations in China and expansions to Romania and Brazil [41][42]