Natuzzi reports Q3 net sales EUR 74.4M, down 0.8% from last year

Reports Q3 operating profit EUR (1.7M) vs. (3.8M) last year. Pasquale Natuzzi (NTZ), Chairman and Chief Executive Officer ad interim of the Group, commented: “The business environment remains highly challenging, marked by persistent geopolitical uncertainty and macroeconomic headwinds that continued to discourage consumer demand and, consequently, sales. On the other hand, I should emphasize the improvement of 4.1% in the gross margin, exceeding the levels recorded in the first two quarters of the year, mainly due to a sales mix with better margins and savings from the rightsizing of our Chinese operations. Gross margin expansion, however, remains limited by higher industrial labor costs. However, the current level of gross result does not allow for an efficient absorption of selling and administrative expenses. While salaries and transportation costs overall decreased in the period, we are aware that they are still too high compared to the size of revenue. Consequently, the management’s challenge is to increase sales and optimize the costs structure at Group level. Fully aware of these challenges, management is advancing its discussions with the Company’s Board of Directors and Italian governmental institutions to address Company-specific issues and aimed at restoring efficiency and profitability across the Group. We are currently defining the details of a restructuring plan, whose preliminary guidelines include a significant reduction in fixed costs, a more flexible production capacity, the divesting of certain non-strategic Italian assets, and the outsourcing of selected low value-added activities. In this regard, management has recently received a binding offer for the sale of one of its non-strategic assets. In parallel, we continue to invest in product innovation, design and marketing to enhance customer experience and drive new business opportunities, including through the Trade & Contract Division. The Company remains firmly committed to developing new projects and collections and engaging in promotional events-including international trade fairs and design shows, Natuzzi Congresses and targeted initiatives with real estate developers and designers-to consolidate the Natuzzi brand’s positioning and support commercial performance. Finally, the search for a new CEO is progressing. We are carefully assessing a shortlist of candidates capable of leading the Company through its restructuring phase with the objective of working towards long-term sustainability. “