C-Meeting for Natuzzi S.p.A.
Fourth Quarter 2025 Financial Results
May 19, 2026
CORPORATE PAR TICIPANTS
Piero Direnzo, Investor Relations
Pasquale Natuzzi, Executive Chairman and Chief Executive Officer
Carlo Silvestri, Chief Financial Officer
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PRESENTATION
Operator
Welcome to the Natuzzi S.p.A Fourth Quarter 2025 Financial Results Conference Calling Webcast.
As a reminder, if you'd like to join the conference call via telephone, please dial 1-412-717-9633, then
passcode 39252103#. In addition to the link already provided. Once again, to join via telephone, please dial
1-412-717-9633, then passcode 39252103#.
At this time, all participants are in listening only mode. Following the introduction, we'll conduct a questionand-answer session. Instructions will be provided at that time. Feel free to join the queue for questions.
Joining us on today's call, as usual, are Pasquale Natuzzi, Executive Chairman and Chief Executive Officer,
Carlo Silvestri, Chief Financial Officer, and Piero Direnzo, Investor Relations.
As a reminder, today's call is being recorded.
I will now turn the conference call over to Piero. Please go ahead.
Piero Direnzo
Thank you, Kevin, and good day to everyone.
Thank you for joining the Natuzzi's conference call for the 2025 fourth quarter financial results.
After a brief introduction, we will give room for the Q&A session.
Before proceeding, we would like to advise our listeners that our discussion today could contain certain
statements that constitute forward-looking statements under the United States Securities Laws. Obviously,
actual results might differ materially from those in the forward-looking statements because of risks and
uncertainties that can affect our results of operations and financial condition. Please refer to our most recent
annual report on Form 20-F filed with the SEC for a complete review of those risks. The Company assumes
no obligation to update or revise any forward-looking matters discussed during this call.
Now, I would like to turn the call over to the Company's Chief Executive Officer. Please, Mr. Natuzzi.
Pasquale Natuzzi
Thank you.
Good morning, everyone, and thank you for joining us in today's conference call.
Our fourth-quarter and full-year 2025 results reflect a persistent and unfavorable macroeconomic
environment. The market conditions we face require responsible, timely, and structural decisions.
Consequently, we are implementing a reorganization plan designed to restore the Company to a stronger
economic, capital, and financial foundation over the medium term.
A core pillar of this strategy involves the reallocation of our low-margin Italian production capacity because
it is no longer sustainable under the current Italian cost structure. Therefore, we are shifting this volume to
other manufacturing facilities within the group, like in Romania, for example, or it could be China, it could
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be Brazil, or it could be Vietnam, where we still have our manufacturing company. This shift will involve the
rationalization of our Italian footprint factories, including our tannery and logistic center.
That's primarily the plan we are working on and to go forward. I ask Carlo, our CFO, eventually, to comment
something. Then, obviously, I'm available for any questions. Thank you.
Carlo Silvestri
Thank you, Mr. Natuzzi.
Good morning, everybody.
Let me provide more color on the figures we presented, followed by an overview of our strategic plan and
how we intend to execute it.
First, I would like to address our gross margin, which declined from 38.1% in the fourth quarter of last year
to 30.2% this quarter. This reduction was primarily driven by our decision to shift certain Natuzzi Editions
production for the U.S. market from our Chinese factory to our Italian facilities. As you may recall, we
initiated this shift to mitigate U.S. trade tariffs on Asian-manufactured goods. However, subsequent U.S.
tariff expansions also to European Union production offset these anticipated benefits. Additionally, expected
government grants did not materialize. Ultimately, this production shift negatively impacted on our margins.
Additionally, during the fourth quarter, we recorded a $2.3 million impairment charge on machinery and
equipment at certain Italian facilities. This impairment reflects a prudent outlook on our current operating
environment, which impacts the recoverability of these non-financial assets. Excluding this charge, our
adjusted gross margin would have been 33.2%, compared to 38.1% in the prior-year period. Beyond the
Natuzzi Editions production shift, this remaining year-over-year variance was driven by lower sales volume
in our direct retail channel and an unfavorable product mix, characterized by fewer Natuzzi Italia and more
Natuzzi Editions sales during the quarter.
As Mr. Natuzzi mentioned, we are executing a restructuring plan aimed at securing medium- and long-term
sustainability. On the top line, we continue to review our pricing structure to mitigate the negative impacts
of U.S. trade duties and a strengthening euro. Operationally, we focused on reducing industrial labor costs
during the fourth quarter. Specifically, within the $17.1 million reported in fourth-quarter labor costs, we
recorded a $700,000 accrual for cost-reduction initiatives.
Turning to the other charges recorded in the fourth quarter of 2025, namely, impairment losses, we are
continuously evaluating the performance of our Directly Operated Stores (DOS) to ensure a realistic
projection for the future. While our retail strategy remains the core of our business, we recognized a $4.4
million impairment loss on financial assets related to our retail operations, primarily in Europe and the U.S.
Additionally, we recorded a $1.9 million impairment charge on non-financial assets within administrative
expenses, compared to $500,000 in the prior-year period. Management remains fully committed to
optimizing our cost structure in Italy and across select commercial subsidiaries, and these efficiency
strategies will remain a primary focus throughout 2026.
From a cash flow perspective, I would like to highlight two key points. First, operating activities resulted in
a cash outflow of $4.5 million. Second, we benefited from a $2.5 million improvement in working capital,
primarily driven by a $13 million reduction in inventory levels. We continue to focus on inventory optimization
to generate cash and drive company value, reducing safety stock. In the period we also decreased our
trade payroll and other liabilities.
Within investing activities, a key driver was the receipt of $9.9 million in cash proceeds from the disposal of
two non-strategic assets: the sale of land in Romania for $2.4 million and the divestiture of iPoint for $7.5
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reporting of the substance of the conference call. This transcript is being made available for information purposes only.
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million. As Mr. Natuzzi noted, our industrial restructuring will continue to free up non-core assets for
monetization, providing additional capital to fund our transformation initiatives.
Moving to the regulatory framework supporting our restructuring, our press release outlines the legal
mechanisms we are utilizing to drive operational efficiency. To provide further clarity on this process, the
Board of Directors has authorized Mr. Natuzzi to initiate a specific procedure under Italian corporate law
known as the Composizione Negoziata della Crisi (CNC). We expect to finalize our official submission in
the coming weeks.
What is the CNC? It is a voluntary out-of-court restructuring procedure specific to Italian companies only
and designated to facilitate an early and orderly management of the group position, while preserving
business continuity, industrial value, and the interest of all the stakeholders. It's extremely important to
underline that under this procedure, the Company is able to continue its normal daily operation under the
guidance of the current Management team, and the shareholders continue to exercise their ordinary rights
as equity holders of the Company, so there will be no change. There will be the presence of an independent
expert appointed by the Competent Chamber of Commerce, and this procedure aims to reach a mutually
agreed solution with all the stakeholders to facilitate the process of turnaround.
In summary, this voluntary, out-of-court procedure is designed to protect our industrial and commercial
value, strengthen our financial structure, and enhance operational efficiency and cash generation. Crucially,
the Company will maintain normal business operations. We assure full continuity in our manufacturing and
commercial activities, as well as our relationships with clients, suppliers, and employees.
Now I will leave the floor for questions.
Operator
Thank you. If you'd like to be placed into the question queue at this time, open up the Q&A function. You
could do so by using the Q&A pod on your screen. Once again, if you do have any questions, please use
the Ask a Question feature that's appearing on your screen now. One moment, please, while we poll for
questions. Once again, ladies and gentlemen, if you do have any questions today, you're going to see the
Ask a Question feature on your screen. You may press that to ask a question, if so. One moment, please,
while we poll for questions. We'll just stand by and see if anybody does have any questions, okay?
If there are no questions at this time, I'm just going to say, I'm going to poll one more time and say, if you
do have any questions, please use the Ask a Question feature on your screen. If there are no questions at
this time, I'd like to turn the floor back over for any further closing comments. If there are no questions at
this time, so do you have any further closing comments?
Carlo Silvestri
No, from our aside, we don't have any. I don't know if Mr. Natuzzi wants to have final comments, but I want
just to underline that we're always available for questions. You can reach out to us, we can arrange a phone
call, and we can reply to email. It's important that if there is any question, we are ready here to reply from
our side.
Pasquale Natuzzi
I agree with you, Carlo. Thank you very much.
I mean, I would expect some questions just to have the opportunity to clarify what we are doing and why
we are acting in that direction. But certainly, we are working here as always and more than ever, really to
address the current challenges in the best possible way. This Company has 67 years history, and we are
planning to write down the next 67 years of history. That's certainly our intention and the determination that
the Management and myself have in this Company.
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reporting of the substance of the conference call. This transcript is being made available for information purposes only.
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Thank you very much for listening to us. Thank you again. Let's be confident because this is a horrible
situation around the world. We all hope that we will change and we'll really improve. Thank you again.
Thanks a lot for everyone.
Operator
Thank you. That does conclude today's webcast. You may disconnect your line at this time and have a
wonderful day. We thank you for your participation today.
Pasquale Natuzzi
Thank you.
ViaVid has made considerable efforts to provide an accurate transcription. There may be material errors, omissions, or inaccuracies in the
reporting of the substance of the conference call. This transcript is being made available for information purposes only.
1-888-562-0262 1-604-929-1352 https://viavid.com/
