Natuzzi, S.p.A 2026 Q1 Earnings Call

Please go ahead. Thank you, Daryl, and good day to everyone.

Thank you for joining the Natuzzi's conference call for the 2026 first quarter financial results. After a brief introduction, we will give room for the Q&A session. Before proceeding, we would like to advise our listeners that our discussion today could contain certain statements that constitute forward-looking statements under the U.S. securities laws. Obviously, actual results might differ materially from those in the forward-looking statements because of risks and uncertainties that can affect our results, operations and financial condition. Please refer to our most recent annual report on Form 20-F filed with the SEC for a complete review of those risks. The company assumes no obligation to update or revise any forward-looking matters discussed during this call. Now I would like to turn the call over to the company's Chief Executive Officer. Please, Mr. Natuzzi. Thank you, Piero.

Daryl, if you don't mind, I can give some more color about the action that we are taking, to have more clarity on that. While waiting for questions, then we can give you a bit of more color in what we are doing as a management to recover from the situation. Maybe this can help in understanding better how we are facing all the issues. As Mr. Natuzzi has rightly underlined, we are taking several actions on this, but I would like also to give you people also what are the expectations on the action that we are taking. For example, when you talk about the relocation of production from Italy to Romania of the Natuzzi Editions for the U.S. market. If the question will come out, anticipate it.

The total volume of business is in the ballpark between EUR 30 million and EUR 40 million, that will give, according to our preliminary analysis, that, of course, will defer because it will be part by the actual product mix, will give us a 25% of that EBIT of that portion of business. This is action that we are taking into action and will impact, of course, the results in the second part of the year. The figures that I did mention before refer to the full year impact.

When we were discussing about the reduction of the 120 employees that have voluntarily, for the moment, signed an intention to participate in volunteer, that of course, has to be confirmed, meaning that the 120 employees will be, let's say, not in our roster from the 1st of January 2027, and all the cash flow of this exit cost will be in 2027. In terms of cost advantages, a portion of our workforce cost today is already offset through social safety net measures and wage support program. The results of the saving achieved will depend on the level of plant utilization and on the extent of the social support mechanism for next year. This is important. The main point of this initiative is that this is our first step to a more structurally efficient cost base, and will give not only immediate financial impact, but will improve operational flexibility, enhance productivity, and better align our workforce with the current future needs.

On the same side, as a plan that is going through several years of dismissal of idle assets and offer for another plant, that has also a potential rehiring of 40 people because the objective remains the disposal of non-core assets. The process has also been designed with a strong focus on protecting employment. This is also something that the company is really evaluating. On the cost base, what I would like also to remind, start the downsizing of the top managerial structure.

For the moment, we have had the exit in U.S. and Italy of some executives that will bring saving in our cost structure base. On a side note, I would like to underline that the company is actively working. This is our work. We're actually discussing with a place that may support us in the future. Thank you. May I would like maybe Pasquale Junior to add some on the commercial side, so to receive the full picture of what's happening, and then leave the floor to the questions.