Unveiling Natuzzi's 2024 Financial Journey

Net Cash Flow and Balance Sheet

As of September 30, 2024, Natuzzi held €17.1 million in cash, a decrease of €16.5 million from December 31, 2023. The net cash used in operating activities was (€5.1) million, with (€6.0) million allocated to workforce reduction. Investing activities used (€5.4) million, and financing activities used (€7.1) million. The effect of exchange rate movements on cash was (€0.4) million, and there was a difference of €1.5 million in bank-overdraft repayable on demand.

The net financial position before lease liabilities deteriorated by €22.1 million, from (€6.6) million to (€28.7) million. These figures provide a clear picture of the company's cash flow and financial position during the period.

2024 First Nine Months

Consolidated revenue for the first nine months of 2024 was €243.9 million, slightly lower than the €244.5 million in 2023. The branded business contributed €221.2 million, with Natuzzi Italia invoiced sales at €91.9 million and Natuzzi Editions at €129.3 million. Unbranded business invoiced sales were €16.6 million.

Geographically, North America saw a 10.6% increase in sales, while Greater China faced a 3.4% decline. West & South Europe and emerging markets also showed negative growth. The distribution network expanded, with Natuzzi products sold in 103 countries through various channels.

Gross margin for the first nine months was 35.8%, with a net of (€4.1) million in one-off severance costs, it would have been 37.4%. Labor costs increased by €2.8 million, mainly due to severance-related expenses and wage hikes.

2024 Third Quarter

Total revenue in the third quarter was €75.0 million, in line with 2023. Gross margin was 31.8%, but excluding (€2.9) million in one-off severance costs, it would have been 35.7%. Operating expenses were (€27.7) million, and the operating loss was (€3.8) million, with a net of (€3.4) million in one-off severance costs, it would have been (€0.4) million.

Net finance costs were (€3.3) million, mainly due to high interest rates and unfavorable currency movements. The loss after tax for the period was (€7.4) million.

Business Initiatives

Natuzzi is focused on several strategic initiatives. In retail, the company is transforming into a retail-branded company, with sales increasing in direct retail and franchise stores. The re-imagined gallery concept is gaining popularity, with 142 projects in the pipeline.

The trade and contract division is making progress, with the Natuzzi Harmony Residences in Dubai being a significant milestone. The company is also enhancing margins, executing restructuring programs, and simplifying production to improve efficiency.

Divestment of non-strategic resources is ongoing, with the sale of the building in High Point and a land in Romania in progress. The net proceeds will be used to fund restructuring and expand the DOS network.

Despite challenging market conditions, Natuzzi remains committed to its long-term plan and is well-positioned for future growth.