SEC Form 6-K filed by Natuzzi S.p.A.

Securities and Exchange Commission
Washington, D.C. 20549

Form 6-K

Report of Foreign Issuer
Pursuant To Rule 13a-16 Or 15d-16
Of The
Securities Exchange Act of 1934

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ⊠ Form 40-F □

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes □ No ⊠

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

RESHAREHOLDER LETTER AND FINANCIAL RESULTS - 2024 FIRST QUARTER RESULTS

FIRST QUARTER 2024 HIGHLIGHTS

***

Santeramo in Colle (BA), June 21, 2024 – Natuzzi S.p.A. (NYSE: NTZ) (“we”, “Natuzzi” or the “Company” and, together with its subsidiaries, the “Group”), one of the most renowned brands in the production and distribution of design and luxury furniture, today reported its unaudited financial information for the first quarter ended March 31, 2024.

Pasquale Natuzzi, Chairman of the Group, commented: “Our business is still confronting difficult market conditions alongside cautious customer behavior. Persistent high interest rates are postponing the housing market recovery, which remains a primary driver for new demand of furnishing.

In this market context, our team is efficiently allocating resources and tightly managing discretionary expenses. Our primary objective remains leveraging our brand strength to regain growth and execute our mid-term plan. We continue investing in the quality of our collections, in coherence with the DNA of our Brand, that blends design, functions, materials and colors to create harmonious living. The recent endorsement of our CEO and Board of Directors provides the competences and stability needed to navigate these challenging times. I am confident that our combined efforts will drive us towards achieving our mid-term growth objectives and enhancing the efficiency of our operating model.

Antonio Achille, CEO of the Group, commented: “We remain steadfast in the execution of the 8 key pillars of our mid-term value creation strategy:

We are prioritizing marketing investments, including digital strategies, to leverage our brand strengths to increase foot traffic to our own stores and those of our partners. Additionally, we are expanding our Trade and Contract division globally, leveraging our brand awareness and design expertise to capitalize on opportunities with designers and real estate developers.

***

1Q 2024 CONSOLIDATED REVENUE

1Q 2024 consolidated revenue amounted to €84.5 million, compared to €86.1 million in 1Q 2023. 1Q 2024 continued to be affected by the persisting macroeconomic and industry-specific challenges, resulting in a reduced consumers’ spending capacity and postponement of durable purchases.

Excluding “other sales” of €2.1 million, 1Q 2024 invoiced sales from upholstered and other home furnishings products amounted to €82.4 million, compared to €84.0 million in 1Q 2023.

Revenues from upholstered and other home furnishings products are hereafter described according to the main dimensions of the Group’s business:

The Group operates in the branded business (with Natuzzi Italia, Natuzzi Editions and Divani&Divani by Natuzzi) and unbranded business, the latter with collections dedicated to large-scale distribution.

A1. Branded business. Within the branded business, Natuzzi is pursuing a dual-brand strategy:

In 1Q 2024, Natuzzi’s branded invoiced sales amounted to €76.0 million, compared to €77.5 million in 1Q 2023. In the context of deteriorated consumer spending and postponement of durable purchase, Natuzzi Italia continues to be affected strongly given its premium positioning relatively to Natuzzi Editions.

The following is the contribution of each Brand to 1Q 2024 invoiced sales:

A2. Unbranded business. Invoiced sales from our unbranded business amounted to €6.4 million in 1Q 2024, compared to €6.5 million in 1Q 2023. The Company’s strategy is to focus on selected large accounts and serve them with a more efficient go-to-market model.

Below is a breakdown of 1Q 2024 upholstery and home-furnishings invoiced sales compared to 1Q 2023, according to the following geographic areas.

Figures in €/million, except percentage.

*Include South and Central America, Rest of APAC.

In North America the increase in sales from the retail part of the business has more than offset the weak performance in the wholesale branded channel, as distributors continue to be focused on reducing their stock rather than placing new orders.

In Greater China, although revenue has increased compared to 1Q 2023, the furniture industry and real estate markets continue to encounter significant challenges. Enhanced coordination efforts within our joint venture have been instrumental in reducing the inventory of Natuzzi Italia products accumulated during 2022. Concurrently, the JV is realigning the organization’s scale and capabilities to better reflect recent business trends.

As anticipated, we are placing renewed emphasis on the wholesale segment of our business, which remain a strategic channel in several geographies including US and Europe. To support this, we are introducing a re-imagined gallery concept, which provides a practical setting for sales associates to engage with clients, narrate the captivating Natuzzi story, showcase our collections, and support sales.

During the first three months 2024, the Group distributed its branded collections in 89 countries, according to the following table.

(1) Included 3 DOS in the U.S. managed in joint venture with a local partner. As the Natuzzi Group does not exert full control in each of these DOS, we consolidate only the sell-in from such DOS.

(2) All directly operated by our joint venture in China. As the Natuzzi Group owns a 49% stake in the joint venture and does not control it, we consolidate only the sell-in from such DOS.

FOS = Franchise stores managed by independent partners.

The Group also sells its branded products by means of approximately 600 points of sales located in five continents, encompassing mostly shop-in-shop galleries (including 12 Natuzzi Concessions, i.e., store-in-store points of sale directly managed by the Mexican subsidiary of the Group).

During 1Q 2024, Group’s invoiced sales from direct retail, DOS and Concessions directly operated by the Group, amounted to €20.5 million, compared to €18.0 million in 1Q 2023. In an effort to continuously improve the productivity of our DOS, we closed the tail of 2 nonperforming DOS, namely in Switzerland (Zurich) and Spain (Tres Aguas).

In 1Q 2024, invoiced sales from franchise stores (FOS) amounted to €34.2 million, compared to €33.8 million in 1Q 2023.

We continue executing our strategy to evolve into a Brand/Retailer and improve the quality of our distribution network. The weight of the invoiced sales generated by the retail network (Direct retail and Franchise Operated Stores) on total upholstered and home furnishings business in 1Q 2024 was 66.4% compared to 61.7% in 1Q 2023.

The Group also sells its products through the wholesale channel, consisting primarily of Natuzzi-branded galleries in multi-brand stores, as well as mass distributors selling unbranded

products. During 1Q 2024, invoiced sales from the wholesale channel amounted to €27.7 million, compared to €32.2 million in 1Q 2023.

1Q 2024 GROSS MARGIN

During 1Q 2024, we had a gross margin of 36.9%, compared to 35.6% in 1Q 2023, for a total improvement of 1.4 p.p.

The increase in gross margin was primarily driven by enhanced efficiency in material consumption during the manufacturing process, successful renegotiation of supplier terms, and a general decline in raw material costs. Additionally, we benefited from reduced industrial costs, improved channel mix, and disciplined cost control measures.

In 1Q 2024, labor costs rose by €0.3 million compared to 1Q 2023. This includes a €1.3 million increase at our Italian industrial facilities, largely due to the renegotiation of national collective bargaining agreements. This increase was partially offset by cost savings from headcount reductions implemented in 2023 at our plants in China and Romania. Additionally, 1Q 2024 labor costs include a €0.1 million accrual (or 0.2% of revenue) related to our workforce reduction program at the Italian operations.

We intend to find further sources of efficiency, as the increase in the Group’s flexibility to enhance gross margin remains among our top priorities.

1Q 2024 OPERATING EXPENSES

During 1Q 2024, operating expenses, which encompass selling expenses, administrative expenses, other operating income/expenses, and the impairment of trade receivables, totaled (€30.6) million, or 36.2% of revenue, compared to (€31.5) million, or 36.6% of revenue, in 1Q 2023.

Key drivers included a €1.8 million reduction in transportation costs due to lower transportation rates and renegotiated carrier terms. This reduction was partially offset by the increase of €0.4 million in marketing expenses, €0.2 million in utility costs and €0.2 million increase in amortization expenses both related to new store openings in 2023, and a €0.1 million increase for ERP system upgrades.

Looking ahead, the Company remains committed to further reducing selling and administrative expenses in 2024. Strategies include renegotiating supplier contracts, optimizing staff allocation at headquarters and retail levels, and refining overall processes to enhance efficiency.

1Q 2024 NET FINANCE INCOME/(COSTS)

During 1Q 2024, the Company accounted for (€2.2) million of Net Finance costs compared to Net Finance costs of (€3.4) million in 1Q 2023. Persisting high interest rates continue to adversely impact our results principally in terms of increased interest expenses of rental contracts as well as third-party financing, while in 2024 we were not impacted by adverse exchange rate.

BALANCE SHEET AND CASH FLOW

During the first three months of 2024, (€5.2) million of net cash were used by operating activities as a result of:

During the first three months of 2024, (€1.5) million of cash were used in net capital expenditure.

In the same period, €1.3 million of cash were provided by financing activities, as a result of €3.0 million from a new long-term borrowing granted by an Italian financial institution, €1.8 million from a higher utilization of credit facilities under bank overdrafts and short-term borrowings, partially offset by the repayment of long-term borrowings for (€1.1) million and (€2.4) million for lease-related payments.

As a result, as of March 31, 2024, cash and cash equivalents was €29.7 million.

As of March 31, 2024, we had a net financial position before lease liabilities (cash and cash equivalents minus long-term borrowings minus bank overdraft and short-term borrowings minus current portion of long-term borrowings) of (€17.9) million, compared to (€6.6) million as of December 31, 2023.

*******

CONFERENCE CALL

The Company will host a conference call on Monday June 24, 2024, at 10:00 a.m. U.S. Eastern time (4.00 p.m. Italy time, or 3.00 p.m. UK time) to discuss financial information.

To join live the conference call, interested persons will need to either:

Toll/International: + 1-412-717-9633, then passcode 39252103#,

or

*******

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements included in this press release constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be expressed in a variety of ways, including the use of future or present tense language. Words such as “estimate,” “forecast,” “project,” “anticipate,” “likely,” “target,” “expect,” “intend,” “continue,” “seek,” “believe,” “plan,” “goal,” “could,” “should,” “would,” “may,” “might,” “will,” “strategy,” “synergies,” “opportunities,” “trends,” “ambition,” “objective,” “aim,” “future,” “potentially,” “outlook” and words of similar meaning may signify forward-looking statements. These statements involve inherent risks and uncertainties, as well as other factors that may be beyond our control. The Company cautions readers that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to: effects on the Group from competition with other furniture producers, material changes in consumer demand or preferences, significant economic developments in the Group’s primary markets, the Group’s execution of its reorganization plans for its manufacturing facilities, significant changes in labor, material and other costs affecting the construction of new plants, significant changes in the costs of principal raw materials and in energy costs, significant exchange rate movements or changes in the Group’s legal and regulatory environment, including developments related to the Italian Government’s investment incentive or similar programs, the duration, severity and geographic spread of any public health outbreaks (including the spread of new variants of COVID-19), consumer demand, our supply chain and the Company’s financial condition, business operations and liquidity, the geopolitical tensions and market uncertainties resulting from the ongoing armed conflict between Russia and Ukraine and the Israel-Hamas war and the inflationary environment and increases in interest rates. The Company cautions readers that the foregoing list of important factors is not exhaustive. When relying on forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and events. Additional information about potential factors that could affect the Company’s business and financial results is included in the Company’s filings with the U.S. Securities and Exchange Commission, including the Company’s most recent Annual Report on Form 20-F. The Company undertakes no obligation to update any of the forward-looking statements after the date of this press release.

About Natuzzi S.p.A.

Founded in 1959 by Pasquale Natuzzi, Natuzzi S.p.A. is one of the most renowned brands in the production and distribution of design and luxury furniture. As of March 31, 2024, Natuzzi distributes its collections worldwide through a global retail network of 676 monobrand stores and approximately 600 wholesale points of sale, including shop-in-shop galleries and various distribution profiles. Natuzzi products embed the finest spirit of Italian design and the unique craftmanship details of the “Made in Italy”, where a predominant part of its production takes place. Natuzzi has been listed on the New York Stock Exchange since May 13, 1993. Committed to social responsibility and environmental sustainability, Natuzzi S.p.A. is ISO 9001 and 14001 certified (Quality and Environment), ISO 45001 certified (Safety on the Workplace) and FSC® Chain of Custody, CoC (FSC-C131540).

For information:

Natuzzi Investor Relations

Piero Direnzo | tel. +39 080-8820-812 | [email protected]

Natuzzi Corporate Communication

Giancarlo Renna (Communication Manager) | tel. +39. 342.3412261 | [email protected]

Barbara Colapinto | tel. +39 331 6654275 | [email protected]

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.