Natuzzi SpA Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kirby Newburger - Benjamin F. Edwards & Co. - Analyst : Yes. I don't know if you can speculate on this but there is talk that the next presidential administration in the United States is going to implement some tariffs. Do you all have a feel for how that might affect you?

Question: David Kanen Kanen - Kanen Wealth Management, LLC - Analyst : Are you guys able to hear me?

Question: David Kanen Kanen - Kanen Wealth Management, LLC - Analyst : Okay. Well, first of all, thank you for taking the time to answer my questions. I have a few and then I'll go back into queue to allow other people to post questions. The first one, Antonio, is you referenced order flow improvements in Q4 subsequent to quarter end Q3. Could you just comment on that a little bit? We heard the same thing from RH in their call yesterday. So if you could just give us a little color on what you're seeing.

Question: David Kanen Kanen - Kanen Wealth Management, LLC - Analyst : Okay. The second question is you called out specifically the move from Shanghai south and that there was an approximate 30% savings. Can you just remind us of the time frame when was that done and when we will see the impact of that in the P&L? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 13, 2024 / 3:00PM, NTZ.N - Q3 2024 Natuzzi SpA Earnings Call

Question: David Kanen Kanen - Kanen Wealth Management, LLC - Analyst : Okay. Do you expect -- so what is the impact that you expect on production from China in terms of cost of goods or gross margin? How many -- if you could quantify for us, what is the improvement that you expect year over year, specifically on that geography to gross margin? Are we talking 100 basis points, 200, 300? If you can give us a little more color, I'd appreciate that.

Question: David Kanen Kanen - Kanen Wealth Management, LLC - Analyst : Okay. I appreciate that. And then you spoke again about this new commercial division, in particular, Dubai. Could you extrapolate for us over the next year or two, what do you think the size of that opportunity is? This seems like it's potentially incremental to us. So if you could quantify on an annual basis what your internal goals are for this division?

Question: David Kanen Kanen - Kanen Wealth Management, LLC - Analyst : Okay. So material means at least an eight-figure number, which would be --

Question: David Kanen Kanen - Kanen Wealth Management, LLC - Analyst : Okay. Excellent, that's exciting. And then just one more question before I go --

Question: David Kanen Kanen - Kanen Wealth Management, LLC - Analyst : Okay. Thank you for sharing that. That's helpful and exciting. And then last question before I go back into queue. You called out in the prepared remarks that without the restructuring charge on an operating basis, we were profitable, I believe, EUR1.3 million on EUR75 million in revenue, which is incredible. And I appreciate you guys, your hard work in terms of rightsizing the business and taking costs out. So on a go-forward basis, is it safe to say with the cost savings that we have that above EUR75 million, EUR80 million, EUR85 million, et cetera, that on an operating basis, we should sustain profitability? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 13, 2024 / 3:00PM, NTZ.N - Q3 2024 Natuzzi SpA Earnings Call

Question: David Kanen Kanen - Kanen Wealth Management, LLC - Analyst : Okay. Well, we look forward to you getting back to EUR100 million a quarter because it looks like the profitability will be profound. So good luck to you, guys. Have a wonderful holiday season, and I look forward to our next conversation.