Natuzzi SpA Q2 FY2025 earnings call

• Challenges in China and US markets: China market affected by tariffs, closing 77 stores and opening 30 new ones; US market impacted by tariff uncertainties. • Operational initiatives: Implemented trade fairs, client congress, and design shows; participated in Milano Fair, High Point fairs, headquarter congresses in Italy, 3 congresses in China, and various design shows globally. • Trade and Contract projects: Launched Natuzzi Harmony Residences in Dubai, signed contracts in Jerusalem, with other projects in pipeline.

• Board evaluating measures to strengthen capital structure for restructuring plan. • Aim to be profitable after restructuring. • Trade and Contract business is a start-up with potential multiply effect, but phasing of product delivery is uncertain.

• Tariff uncertainties affecting China and US markets. • Challenges in monetizing noncore assets like tannery. • Complexity of finding a suitable permanent CEO with experience in high-end brand, retail, and operations management.

Q: What are the terms of the $15 million credit line extended personally and could you quantify noncore assets?

A: The Board approved a multiyear restructuring plan. Pasquale Natuzzi granted a 0 interest credit line. Noncore assets total net asset value around EUR 70 million, tannery value last evaluated at EUR 5 million, but monetization depends on market.

Q: On gross margin and operating expenses post-restructuring?

A: Working on increasing marginality by addressing lower retail sales impact, operational efficiencies, industrial cost reduction, and price list adjustment to improve margin and aim for breakeven then profitability.

Q: Internal goal for commercial revenue from Trade and Contract next year?

A: Trade and Contract is a start-up, low in beginning but with multiply effect; specific yearly goal not precise as phasing of product delivery is uncertain.

Q: Update on permanent CEO search?

A: Engaged head hunter, seeking CEO with experience in high-end brand, retail, and operations; ongoing search, no specific timeline but in progress.

Q: Third quarter performance relative to Q2?

A: Pasquale Natuzzi referred to press release for clarity on company direction, indicating to refer to press release for third quarter details.