Natuzzi (NTZ) investor relations material

Executive summary

• Geopolitical instability and weak consumer confidence continue to impact business, with store foot traffic lagging in the US and Europe despite marketing investments.

• Total net sales for 3Q 2025 were €74.4 million, down 0.8% year-over-year, reflecting ongoing macroeconomic and geopolitical challenges impacting consumer demand and sales.

• Gross margin improved to 36.0% from 31.8% in 3Q 2024, driven by a more favorable sales mix, higher-margin branded product sales, and cost savings from Chinese operations.

• Management is advancing a restructuring plan focused on cost reduction, asset divestitures, and operational flexibility, with ongoing discussions with the Italian government for strategic aid.

• A shareholders' meeting has been called to address share capital reduction due to losses, as required by Italian law.

Financial highlights

• Sales of higher-margin branded products (Natuzzi Italia) grew 18–18.2% year-over-year, while unbranded product sales declined about 20%.

• Gross margin improvement attributed to sales mix shift and cost savings from the closure of the Shanghai factory.

• Operating loss narrowed to (€1.7) million from (€3.8) million in 3Q 2024; net loss for the period was (€5.1) million, compared to (€7.4) million a year earlier.

• SG&A costs remain high relative to current revenue, despite reductions in wages and transportation expenses.

• Cash and cash equivalents: €18.1 million as of September 30, 2025, down from €20.3 million at year-end 2024.

Outlook and guidance

• Management targets profitability at monthly revenues of €28–29 million, aiming for positive cash flow through cost reduction and margin improvement.

• Ongoing restructuring plan includes significant fixed cost reductions, asset divestitures, and outsourcing of low value-added activities.

• Conservative forecast for the contract trade division in 2026, expecting €5–10 million in revenue, with potential for exponential growth as projects scale.

• Optimism for improved sales in the next year, contingent on consumer confidence and geopolitical developments.

• Persisting weak consumer confidence and trade duties, especially in the U.S., are expected to continue to impact results.