Natuzzi S.p.A. (NTZ) 28 Nov 222022 Q3 Earnings call transcript

Good day ladies and gentlemen. Thank you for standing by. Welcome to the Natuzzi Third Quarter 2022 Financial Results Conference Call.

As a reminder, interested people can join the call live by dialing in: (+1) 412-717-9633, then passcode 39252103#. Once again, if ypu would like to join the call live on the phone please dial (+1) 412-717-9633, then passcode 39252103# in addition to the link alerady provided to join via video. participants a all mode. time, this are listen-only in At

up question-and-answer will instructions time Following queue we a for questions. session to that the introduction, at conduct and provided will you for be

Executive Jason on Investor the Relations. Piero and Mr. Natuzzi’s Natuzzi, Joining us of Officer; then Natuzzi call Pasquale Mr. today Mr. Chairman; Direnzo, President Antonio are Achille Chief Camp, Executive and Founder Americas;

recorded. Piero. I conference As go would like is a reminder, the to today's to call being over Please call ahead. turn now

Thank and for day third everyone. joining After will to the financial session. the Q&A we a XXXX you, for give good Kevin, a Thank room brief introduction, Natuzzi's you conference quarter for results. call

matters And annual most like over to review complete during contain States and certain turn with filed SEC the the The can our Form the any in that XX-F to call. would statements Chief results the report a to we'd under laws. from differ those because forward-looking securities of revise forward-looking statements proceeding, risks uncertainties Please condition. to or listeners like Please, company's that assumes could this Antonio. no for Before constitute risks. United update now company obligation Officer. I actual of our forward-looking on refer statements, call those materially of discussed financial that advise to results Obviously, the operations might and our recent our today affect discussion Executive

joining third and Thank quarter afternoon, for press good release. you, our everyone. you Thank Piero,

as at end we highlight of few on pacing of a XXXX. third the months the but share me also quarter, Let the nine are

normality you of increase in tone branded before with XXXX closed XXXX to for reported revenue. positive the be XX% that, remember, would also XX% the the versus means of of or like an and of XX% was can pandemic. which flesh The a as an year which considered an us We business. the the last year of million, strong third XXXX, both year with I term increase versus EURXXX of out increase almost versus growth quarter a revenue

As the million This revenue increase, main higher increase two an Italia which And EURXXX than and operate faster than revenue transform that XXXX. were the revenue, know, is XXXX means brands: of our and Pasquale Natuzzi the with with that lifestyle brand that the or company initiated is to and a decade Chairman, Edition. company. business total growing you Natuzzi very XX.X% a retail is to which strategy overall ago company XX.X% versus the versus average a branded consistent Natuzzi, Natuzzi the

extract we new which so extract priority to ourself energy has cost. When spike of value XX in we the with with of mandate in more marginality, in XX.X% points true in of year with benefit working the on more investor business, the gave of it but value investor for comes is also the marginality quarter investor, the also invested. majority give every we to closed One my and characterized additional increase in this XXXX, significant materials XXXX which marginality, with percentage versus and a cost been XXXX, compare XX.X% of XX.X% the margin, almost a the and still by of some to

significant which of in profit and nine and loss XXXX, quite It's XXXX, quarter third that the case and million element, been a better profit, amounted important with EURX.X a compare XXXX, first compare first at as that nine all, growth million so XXXX a months our with Natuzzi EURX.X look quarter So of the million the EURX.X as of the months. say, million measure year of in -- improvement COVID-related remember or major in say, we continued EURX.X of we for months company loss benefit which profit last If EURX.X a million, of EURX.X -- in those a with result during our to nine has quarter. the in those a the marginality, let's to quarter the let's third million. closed

Depositary So we if nine much significant, Depositary to where of XXXX, of that American at we XXXX. has of that everyone and months EURX.XX is one-off basically of a of ended with improvement per XXXX you which million. per ADR, XXXX compare which we the means want loss share Receipt, American significant to with compared profit with versus months is been of the in be the EURX.XX what profit versus profit nine owns, closed look very the loss measure the EURXX.X first netting Receipt, When clearly per first in COVID-related per EURX.XX more a

which this to customer, very very from the similar had create position and Last at last call we're to end with and for closed business close is our we million So value and the for beginning, our in our is is EURXX.X what discussed our Cash-wise, employees cash. happening. our we that a we priority the year. somehow shareholder of to for year, for

due we fact quarter, the business. million, to despite the so almost This EURXX closed exactly same. the we are with some more slowing having This the inventory of

last the discussed tight value you company celebrating means trend. be the a results. has extract since work we the day. early reverted more appreciate any success, I I in and So not also in manner of want April want believe have Clearly, in management. candid paying to the that our trend that show down numbers the is the business which slowing I hope effort a the to release, way it's manage but more cash very a We to the to some press to like very don't already in that essence,

is is believe I an with us, keep which given pace point remaining this our course, at general So excuse. see order around new budget. is and notes the of happening we which We don't a this in repeat. redundant and to in industry, the below which see comparing this quite clients, even whatever our trend the with a expectation, we as our both our retail take, means are player business of We

working also notably organization, make are the also in We're very clients European selectively of market pipeline most we stay business. We to bit and reinforce to This sure in strengthen changing existing our our a summary. reinsert our executive U.S. team in team team through to to emerging our taking hard. our also in wholesale and new our closer clients and some

know we're our would helping growth to strong the I industry of say, happening market note. We're journey, So committed is Unfortunately is a experimenting which we headwinds, to turnaround. plan. continue a positive end very not up is on not quite a part our quarter need in is a which But difficult. necessarily this favorable.We five-year acknowledge which is the context, that which

working headwinds, we not be despite lasting So business We're keep forever. so hope these factory that to going up our and our we it's definitely busy.

Just it's providing When an before given a energy. material, when our G&A, there's better raw to in additional come structure business the our to absorption come few on been leverage. cost opening to it noticeable, and spike it highlights Q&A, also SG&A

the the a extra energy As Material use million metallic of bit industry themself improving part cost. cost energy. on EURX.X Labor Fabric I had production. is rise, a before, mentioned lot a in and because steel is of the an multifaceted dynamics. we those for

so client, in players like circumstances pass additional to And which their cost the they are the us.

and is -- reducing point on yet the has the XXXX, of steadily transportation, especially allowing be us again been to summary from which bit note U.S. platform. wanted a at executive provide. is get other This from not to I to competitive is The to level those normalizing, China but and us

observation question usually. as Let me stop here for and

Thank you.

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you Good morning. guys hear Can me?

you Yes. hear very Dave, we well.

potential, like Okay. out as your quarter is congratulations, but EURX.XX first, to I undervalued demonstrates ADR company per Well, didn't the certainly how know an to and earn would exactly is. and you accomplishment the long-term turn

long-term? conditions. and press a and We've in actions of congratulations, response one cash managed the encouraging your lower our of position. tightly questions, launched G&A, in to is protect working what our the set potential of of a So couple is our So market tough cost comments it's the release to the capital

that you is for terms of implicitly, more you're to on lowering upside the what speak there's me periods in you financial to But give to us specific the G&A? during of the that And it us going normalization. tells quantify of So targeting? cost could that if what's areas model just leverage some specifically success in our could and

understanding for highly been long-term a Well, and know a appreciated. you the hence, come from business. note positive have of that We Dave. you our thank encouragement, that's and investors That's deep Okay.

in which manage that spent support put been the went category, the industrial management process a of the looking with So restructuring to when the also has it across way our a the cost, come basic of G&A, dollar, cost, back in sense purchase, all we quarter in cost, cost, external which company, transformation to tight cost. McKinsey, include any at individual together on XXXX,

internally. McKinsey team So of the have methodology there. replicated that of we part, was I course,

So are that methodology. also people black a here lot of already on belt

you accounted we manage responsible, different down So which, and capital. a have And the responsible. tightly and are around the we working weekly citizen XX can the have we meeting, functional initiative as typical costs to a also have put imagine,

the is really way around we few and So bring identified quarter to the a where I can capabilities. new over in to to the accelerate a give quarter, allow rightsizing One streamlining as also you restructuring in the example. accelerating potential

at factories, of are our we reduce our We all cost reramping factory. looking so additional possible impact the to energy are on way an all

the really is management have, those we are ensure some company, scrutinity a to we the the in that We of we material that different finished trapped means in have have applying cash raw tight all the working those the we also that are capital items geography, which in are processes. working to no reviewing we having that there of a capital, so which lot area. at come product means we our of When

structural want of appealing in also way also of that assortment, consumer, we but to opportunity like make addressing -- stock be we and offering the on to their level. very we which be a some the that the covering are lot simplification there acknowledge compelling to our that We is simplify more done intermediate where can

where methodology we managed progress, So tight resolve every to be approach to a week, it's with a of intervene the appreciate need situation we will change kind and holistic accelerated.

what it savings when a single-digit low mid terms Is in quantify of are you number fully single-digit single-digit, implemented? or high can millions? cost So the it's

Jason, put can So mute. please, you

notif getting We from. all for of or the receiving message a whatever are you're

that quarter, would the I say, mean to we're at, I a a of it increase slowdown doesn't million, in which of we'll counterbalance at also we potential negative the looking order the EBIT, if also so revenue, that to we'll compensate revenue allow but momentum. third EURX look material just in of So for loss us the think million impact, EURX a quarter, means effect the the

believe manage substantial an opportunity tight been on this a the a I restructuring. sustained, days. which So mentioning ways that quite which This se It the know company is has business opportunity is always can that. substantial. a around the can opportunity We've company be of and quite we quite has more be per early to in substantial,

that? SG&A. And to amount the the which a increased of dollar press referred was release, in the What trade impairment you then Okay. receivable, of

I that. opening that answer. will for pass he over has If the to Piero

trade in Impairment is it the written receivables, of table.

Can Okay. us provide you Piero? that,

for the million third quarter. EURX.X was it Yes,

for question DOS Okay. how do? In we And did quick a North then Jason. like-for-like, American

looking So lot and both how kind at of time we're ‘XX comparing of ‘XX. to spending we're a to

you so trending at look and year-to-date, to plus XX eight And to we're XX year-to-date. XXXX down when

you. Okay. Thank

Like-for-like.

Antonio, single-digit gross on in to that you past you Where final Factory then to the margin that's question. an expect high referred be fully mid to that? in In past, X.X rollout. a us you implemented. out? And once and sequential update to are Okay, we? the you've do Can your when give referred improvement rolled

produce in saturation and of benefit factory that business than potential the approach sure And that of saturated, to our way of means relocation if year working, to Brazil be in most course, Italian then to in the the, modeling cost with application factory in I this result. right -- the means a also operate considering can a again, the floor being plan The potential because acknowledge technology reduction next most next we be, can -- is which confirm minute. the the that range Language], of and that working. of be the translating that of are way manufacturing plant which as of [Foreign factory out new also business, So quietly that the China the utilization, the a on kind need our our can XX% of having to that lean of more -- fixed plus of approach impact factory they the will level we're roll of, a make by is I operation, as wave Romania organizing the before a be here fitting new in which need benefit. cost reduction per the margin, factory direct candid the of has volume is so

on to enhance counter the So see per believe from something potential we -- also it our believe -- in but harder cost a are for opportunity opportunity we utilization the there's we Factory of factories. impact X.X, the deeply margin, not on long lower-capacity deriving an negative because even fight working as an term on to minute only short term

thank Well, holiday. commentary. Good have a the appreciate luck you. you guys Okay. and I nice

talk Well, holiday. going definitely we're to before to

For holiday do the we is plan -- holidays. In we us, holiday do after will XXXX, completed.

there floor over back you. for questions [Operator any at Instructions] are Thank further closing this or turn no comments. I'll time, the further If

anything. or to want leave remark. I will I team floor my want do to I Chairman a floor Pasquale spoken also maybe But the comment open if the myself. want final and the then summary leave also they the I of enough. feel then rest or Hi, -- I do for Jason, the open if comment to And I've Piero

plenty Antonio, explanation, You is we for what and are what happening. doing clear gave

single organization, regard So that market -- to [indiscernible] some like, organization missed care we together the I'm Difficulty] we customer aggregating consolidating the to probably is what example, -- and synergizing also explain and order reduce G&A, also a manager what are with Southwest [Technical missed for Europe in under function. we the other market, and regional reviewing

improve organization certainly the following. the allow reduce -- will I aggregation mean to us So, improve that something mean, you and are is This reviewing know, I the service, cost. we

gave you rest, explanation, the major all For the Antonio, okay?

you, Thank It's on comment very a appropriate side. been Pasquale. your

strategy. Jason, also challenges really We I our committed challenges. are. but just closing, very want we of leader we're equipped us, the know how the cohesive, restate very to in long-term one but The team as plan. North with very remaining see myself, that in one there working we're So America, our Chairman, We're are are those of team, committed ahead on you we for

mentioned We good in also that And We as starting adequately everyone have have on a cash managed aggressiveness position. the due to I in ensure the company And seen as cost this reduction you be as up to from is U.S. we're on of large going company phase. before, stepping front. digital doing is term

said strength the the the changed, of say, that third of I most Natuzzi committed term is, result. nothing we're long-term, let's successful achievable. this current heritage great wish current to believe European of something day, next to thank with make the globally. I your this is the I hope is brand So continuation also our you quarter is In much has you strategy the that, attention. high-end soon still release. brand, a reconnect for press of Having so and due in brand, and

you. Thank

you. and does conference webcast. Thank That today's conclude

your for a thank line at You your disconnect time, have you participation day. We wonderful this and may today.