Natuzzi S.p.A. Price & Performance (NTZ)

Thank you, Kevin, and good day to everyone. Thank you for joining the Naturci's conference call for the twenty twenty four fourth quarter and full year financial results. After a brief introduction, we will give room for the Q and 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 United States security laws. Obviously, actual results might differ materially from those in the forward looking statements because of risks and uncertainties that can affect our results of 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. And now, I would like to turn the call over to the company's Chief Executive Officer. Please, Antonio.

Thank you, Kevin. Thank you, Piero. It's a pleasure to be again with you, and good morning to the people joining from U. S, and good afternoon for those joining from Europe. We're going to be today discussing the result of the last quarter and the full fiscal year 2024. As usually, we'd like to provide also context there and what we are working on beyond the figure we're going to be sharing. That's the reason why with Pasquale, we also decided to invite our Chief Marketing Officer. They will be testifying together with Pasquale the standard that our brand retail journey went up to now. Let me start with the financial. As you have read by our press, we closed the year at €318,800,000 3 percent lower than last year. As you know, the market continue being quite volatile and challenging. This is a level of sales, which, of course, does not make us satisfied. At the same time, I believe, is a testament that our company is very resilient in light of a very, very volatile and through 2024, still a very soft market in most of the geography we operate in. Looking at the share out of the total, which is represented by branded, out of the $318800000.0.02 €89,000,000 has been made through our brand.

This is definitely part of our vision initiated by our Chairman, Pasquale, of transforming a manufacturer into a brand retailer. This figure compared with February so in 2023 and €295,900,000 in 2019. So while we look at 2019 and we continue looking at 2019 as a comparable year as a year of comparison because it was the last year before this very prolonged period in which we actually witnessed everything from COVID to wars to duty war. It's interesting to flesh out that in 2019, our sales were higher, were €387,000,000 But when you look at the brand, the sales were pretty much at the same level. This means that we've already been working to improve the quality of sales, which then are going to be which is reflected in margin, which is something we'll comment later on. And in fact, today, branded sales represent roughly 93% versus 80% in 2019. So I hope you appreciate that we increased by almost 13% the quarter revenue that we do through branded business, which is, of course, a more representative way of our value, not only in term of margin, but a way of expressing the G and A of the company.

Another element which goes hand in hand with that is the relevance of the retail because typically, if you are branded, you want to express the DNA and the customer experience in a more controlled environment, being a freestanding store in The U. S. Or franchising or a gallery, which is our way to ensure a presence in a multi brand retailer. Looking at the direct to operator store. In the year, we reported €70,100,000 which is up 4% versus 2023 and eighteen percent versus 2019. The growth had been mostly in term of top line, driven by The U. S, where it is important also to remember we opened an additional store in 2024, in particular, in Denver. At the same time, to better interpret those data with a like for like approach, it's important to notice that we also closed two nonperforming stores of Natuzzi Italia, one in Spain and one in Switzerland. In addition, we closed one store not performing of Divani Divani, which I remind you is the brand used to sell Natuzzi Editions. How you should interpret this closure? In a positive way, because the company started retail and this will be something we'll be discussing today, thirty years ago.

So the company and the collection were very different. Some of the location where we opened initially the stores, not only maybe they changed location because city evolve, mall evolves, but also because our brand evolve. So this is particularly true for Natuzzi Italia. Natuzzi Italia today is a very different brand than it was twenty years ago. So some of the location, they don't longer they don't represent any longer our brand. And when there is an opportunity to exit the contract, the location contract, we take it to then requalify the network. Another important element we keep on very focused through 2024 is continuing our transformation. It's been, I would define it, silent in the sense that luckily, no single line of newspapers will be written on this, but very, very pervasive. In 2024, we let go six thirty eight people, roughly out of which in China, where, and I will discuss later, we'll allocate our production from Shanghai, which was not any longer cost effective, especially for labor, to Qinzhou, which is 300 kilometers south, which offer a better rents and cost condition. In doing so, and again, I think the credit goes very much also to our Chairman, which helped really to anticipate some of the things happening outside, we decided not to have any longer the production of Natuzzi Edition for North America and China, which was moved in October 2024 to Europe.

This we didn't have any anticipation of what would happen, but this proved clearly very smart in the light of the evolving tariff because it would have been impossible to serve North America from China. So the new plant in Qingzhou is entirely dedicated to the domestic market, to the China market where we operate with our JV. So looking at the perspective more with a three years horizon, which is the horizon I've been having the honor to serve the company, we let go eleven forty one people as net reduction, which means that at the same time, we hired more than 100 people to reinforce our marketing and retail competencies. Daniele, for instance, is one of those hires. So we reduced by 26% by one fourth by the total account of the company, so quite pervasive. Again, privileging to protect and reinforce, let's call it, new Natuzzi, merchandising, retail, marketing, digital, Italy, and reducing the historical large capacity we had in production, which was due when the company was a manufacturer in the large volume business. 2024 gross margin closed at 36.3, again improving by two percentage points versus 2023, where it was of 34.3%. So I repeat it because I understand it was not very clear.

So the margin in 2024 was 36.3% against 34.3% in 2023 and twenty nine point seven percent in 2019. So versus 2019, we improved the margin of almost seven percentage point, and we continue improving also in two years, which, again, I would say they were not definitely easy for many aspects. How does it play in term of breakeven? It's interesting to note that, for instance, in 2019, when we had €387,000,000 sales, so roughly €70,000,000 more than we had this year. The company closed with €22,500,000 losses, while this year, we closed with €70,000,000 less revenue with €6,300,000 losses, which, of course, does make us very, very, very unsatisfied, very unhappy. But I think it testifies that the company is lowering the breakeven. And in fact, if we don't consider the restructuring that according to the FSRS, they are inputted before the EBIT, the operational loss would have been of €1,000,000 Clearly, we are not operating with the aspiration of losing. We want to definitely win and be profitable. But I believe it gives you a sense of how the machine now is responding in term of extracting value from what we do. In term of net financial cost, there's been pretty much stability.

As you know, for the IFRS principle, according to IFRS principle, part of the lease goes under this net financial cost. In particular, we had EUR 700,000.0 that were due to the fact that we increased the number of store in 2024, which explained the difference in cost, net financial cost. We continued on the program to divest on strategic asset. As we've been very transparent, the Board approved a proposal from inside shareholder to acquire High Point, which is being completed. The transaction has been completed in March 2025. I give we give transparency in this press release. Of course, the additional payment, which was reported of €8,300,000 is not yet reflected in the net financial position net cash position of the year end because we closed the net cash position on the thirty first December twenty twenty four, while the transaction was completed in March 2025. So it will be something visible next round. I will not go line by line in commenting the last quarter. The things which I maybe fleshed out, there are two. The reallocation between plants, so the closing of Shanghai and the transfer of the production for the domestic market to Qinzhou, which had, of course, a ramp up and moving all the Natuzzi Editions collection for North America in U. S. Has been well planned, but of course, they are quite a significant move.

So operation in the last quarter, were not able to fully keep up with the production pace. And in fact, we increased the backlog of €6,400,000 in the last quarter that without this change in production, should have materialized in terms of sales for the quarter. So last quarter was really affected by that. The other element, maybe I'll flesh out, is that the last quarter closed at 38.1% in term of margin. So again, I would say a nice progression because if we look at just last quarter, again, it's quite an increase because of the last quarter of twenty twenty three, the margin was 30%, so eight percentage point compared to previous year. This, of course, is something we're to be very disciplined in trying to defend and amplify. So this is for, let's say, the financial. And of course, we will be very happy to take more questions. Let me provide some color on what we are working on. In 02/1944, we worked very hard in the group future because we do believe that this group has a strong future. And it's a kind of combination because you need to manage the cost with the microscope, but use the telescope to keep looking at the future because if you are just too tactical, you don't build the future.

You can also die by being too tactical. Tactical. So we really focus on cost control, but at the same time, maintaining the ability to invest for brand, for retail system. I mentioned already the achievement in term of margin. This is, for us, something, of course, important and again, is the direction we're going to be continuing. The other aspect I will mention is the hard work, which is not yet, I would say, reflected in sales that has been taken to really transform a company, which for a long part of its history was a manufacturer to a company that had the vision to become a retailer, but then had to become a retailer in terms of systemic competencies. And on this, I would like to call in Pasquale, who is the person which can testify best at this journey because it was his vision and he's best able to describe how hard that was with him also with the new team to transform a very successful manufacturer in a company that need to learn a new job being a retailer. So I think it would be nice to hear indirectly from him how difficult, but also what has been the important step achieved by the company under this dimension.

Pasquale, do you mind sharing this your view with the team?

Probably, Antonio. We should first allow the shareholder to ask some question, okay? I mean, let's interact in this we shouldn't talk always we. I mean, let us also our shareholders to ask a question, Absolutely. Kevin, I would say, let's open up first round of discussion. The other point in the agenda I might cover directly or with the help of Pasquale is the work we have done in the commercial side, which I wanted to share because, of course, I believe you should tell us, but I believe as an investor myself in the company is, okay, you've been working on the margin, but when the revenue will come? Because now the machine, if you wish, is ready to deliver better results, but we need sales. So I want to tell you what we are working to get sales. But let me stop here for the first round of Q and A. Thank Once again, anyone who would like to ask a question at this time, please use the ask a question feature that is on your screen. And at this point, it appears nobody has any questions at this time.

So let's complete the presentation, and I'm sure there will be question at the end. So the aspect I was mentioning, Pasquale, you jump any time, but then I will ask Differy Daniele to comment, is the transformation in the direction of being a retailer. Do you want to contribute, Pasquale, or should I continue as you prefer?

No, no, no. You can continue, Antonio. Don't worry. I'm here just to support you in any You're free to jump anytime. So very transparently, because we are all being very transparent with you as investor. In February, the company decided to become a retailer because he also understood and as was really credited to Pasquale of this lucidity, them being a manufacturer out of Italy, being a value manufacturer out of Italy with aero, with inflation was not any longer defendable. But we also understood that the story under Natuzzi had the legitimacy to sustain a brand positioning because there was innovation, there was style, there was also this mythological ability to create beauty, which are all elements which are at the core of a brand. And a brand is a retailer by definition. And this vision, in fact, encountered quite a significant success with partners that decide opening stores, but also Nazzucci decide to open stores. But at the time, there was a significant disconnect between that vision and operation because system were not allowed to read data and sell out timely. There were no competencies to manage aspects which are critical for a retailer like merchandising, like customer experience, visual.

Neither ability to decide, and we discussed before about the closing of some store, whether allocation was completely appropriate. There was not yet a methodology. So the company in a sense had to learn why it was already on flight because store were opened, expectations were generated, but system were not there. I must say that I'm particularly impressed and you know that my background has been for twenty five years in advisory by the speed in which this company has been able to equip itself with tools, competencies and system and people. Under the last three years, we created new division that were not simply existing. We created a customer experience division with a wonderful gentleman that in one of our call, I will introduce you, Michele Ciardi, which is setting rules on how to create emotion within the store because a store is not like a transaction place. It's a place where you have to create emotion. We now define that every product needs to be launched on the market with an end to end marketing approach. And in fact, we abolished the word product and we talk about project because like in automotive and other sector or in consumer electronics, when now we define to launch a new project, there is a clear positioning, there is a clear marketing strategy and there is a clear selling point to the market.

And in fact, we defined five major projects, two for Natuzzi Italia and two and three for Natuzzi Editions, which I'm sure Daniel will comment later, which set the tone not just for one collection but for multiple collection. And we also had to develop tools. Merchandising is a very complex matter because you have to imagine that our collection can be customized in many dimensions, size, versatility, fabrics, covering, and every solution target a specific segment of the market. So when we define what is the deal merchandising for a store is a very complex exercise that typically was taking four, five, six weeks for an individual store. And having six sixty stores, you can imagine this was becoming a bottleneck as we want to suggest this to the market. We don't let the individual partners decide it. We now completed an automation process where process that were possible to complete only in weeks, they are now completed in hours, where our system produce immediately a diagnostic of what needs to be changed in term of layout and suggest a solution, which then are still refined by us. So I can detail the more most of these, but the key message is the company is bridging the gap from a vision to operation.

He decided to become a retailer. Now he's becoming a retailer. And in saying that, unless Pascua has an additional comment, I will ask Daniele to show the new way for instance interpreting marketing, which is not any longer just brand marketing because luckily, as you know, Natuzzi is the most renewed brand in U. S, in Europe, in China. So it's less about the brand awareness, it's more to drive traffic in the store. And again, here, we did significant advancement in make it measurable and predictable. And I will ask Daniel to share a pillar of that.

Thank you, Antonio. I don't know if I can share my screen just for a few minutes.

Choose. If you go Maybe, Kevin, you can help. But You should be able to hover your mouse over the platform and there should be a share screen button on the bottom.

While I try to, in fact, I try to get the technology to assist me, let me start by commenting some of the words that somehow I don't seem to be able to Sorry, I'm switching. I'm doing a bit of remote IT support. Yes. Anthony?

Yes. I have. And all the reference in that.

I apologize. It says you're sharing your screen now. I just don't see anything being shared.

Sorry?

No, mate. It's an article of a file there.

Somehow my, let's see, one last run rate.

By the way, Pasolena, you made a point, so there is a bit of additional complexity from OPN in the quarter.

Okay. Somehow, it does not allow me to do what I'm trying to do, but never mind. I will It may be a firewall issue, sir. I do apologize on that.

Yeah. It's alright. Don't don't worry. Let me just give you a few let let let me give you a few comments to reinforce what Antonio was was talking about just now. The challenge that taken on as Daniel, while you are to show the image of the new collection that we launched together with the marketing, let me explain a little bit, okay, the journey that the company is doing in terms of retailer. So let's say in our history, we have made always a wonderful product. And the consumer loves Natuzzi products, no question about. And because of that, a lot of entrepreneurs in China, in America, in United Kingdom, in Spain, everywhere, they decided to open a Natuzzi store and show the brand and show the product. But obviously, that doesn't mean to manage retailer because each individual, interpreter in each individual country, they were managing the brand in their way, Okay? We have been grateful to them for believing and trusting in us. But we realized that, you know, we need to control our brands. So that's why we have been working on analytics in order to first of all, do we clusterize the store? Where we have the store?

How many store have we? Where are located? Are the appropriate locations? Yes or not. And then we succeed also to connect with our store in order to control the store traffic, in order to control also the conversion rates. The customer gets in the store. Okay. Are we able to to convert the visit and sell Okay.

Okay, okay. Guys, I think this was commenting what pretty much we discussed. Definitely, Prosper will be able to No.

Kevin, again, maybe you want to go around for Q and A for this question?

Will Our first question is coming from George Miloszky from MKH Management. Your line is now live. George, please proceed. Hello, George. Unmute your phone. Cory Pinskin, your line is now live.

Antonio, do you hear me now? I have been disconnected for a little while. I mean Yes.

As you know, I'm in America. I'm in America, but I'm surprised. I must be more connected than I am in Italy. But anyway That's true. Okay. So go ahead then.

Corey Pinkston, your line is live.

Good afternoon, gentlemen. Can you hear me?

We do.

Yes.

Great. Congratulations on navigating the environment we're in, especially with the manufacturing movements that you made for additions to get it back into Europe and all the rest and all the development of the brand. And as you said project versus product development in the company, which probably is as critical today as it has ever been in light of the current environment. One question, I missed the very beginning of your comments, Antonio, but as it relates to the tariffs, I know we're speculating as to how long, how they're going to be, what they're going to be, etcetera. Based on kind of as you look at the current market, if we assume that there are going to be some kind of increased tariffs in place and maybe we can speculate on that. As it relates to either pricing of the product to the customer or margin impact, is there any ability to kind of give us some thoughts as to how to think about that? And also, I don't we're not as close to the market as you are. But when Natuzzi is in America, obviously, we can look at the comps that are out there, whether it's RH or others.

But you're a very different, I'll say, and approach to the market. And so as we think about the fact of the consumer being in very different categories, whether it's a higher end consumer, medium, kind of higher medium, can you just give us a little bit of idea as to what you're seeing in the market now, obviously, without trying to give us forecast?

Yes. No, and thank you for being so respectful, Corinne, in posing your question. I would decompose the answer maybe in three parts. So how we plan to react and how we already actually reacted. What we expect this could be the impact in term of large distributor and consumer short term, but also, which is the third part, how this position Natura would see in light of the large competitors in U. S. That you didn't mention explicitly, but we know which they are. It's Restoration Hour, it's Cretan Barrel, Aarhausen and other company. So how we are reacting? Definitely, this was not something we would have hoped for, that's for sure. I mean, were actually expecting the opposite, at least from U. S, there would have been some signal of stability. But having said that, our platform per se is more equipped to navigate volatility because we are not dependent on third party. We have our own production. And as I mentioned, we have several platforms because we have Italy, which is definitely the place where we produce our high end branded collection. But we operate also facility across Europe in Romania. Romania, just to tell you, we have 1,000,000 square feet surface.

So it's huge, definitely scalable. We have a production, as I mentioned before, in China. We have a production predominantly in outsourcing in Vietra, and we have production in Brazil and Salvador de Bahia. So this legacy, as you know, is a heavy legacy when you look in our P and L. But in a phase like this, give us flexibility to reorient production where it makes sense. I made an example before of Natuzzi Editions for North America being moved to Europe before. And there are other options we are currently considering. So this is from an industrial, let's say, footprint. Then in terms of protecting our marginality, of course, if we are as you know, there's been a ninety day procrastination. But even in those ninety days, there's been a 10% applied. Of course, we had to protect our margin in this period. So we had discussion with our partner to do a fair sharing of these to protect our marginality even for the order that were taken before the tariff enter in place. So we're being very careful in protecting our marginality with something which does not depend on us. It's a very similar situation like in 'twenty one when we had a spike in freight and we had to protect ourselves by introducing in a very transparent manner, freight surcharge, which is not caused by our avidity but is simply a consequence of decision taken somewhere else.

So this is how we are acting. So long story short, we have multiple production flexibility. We are protecting the marginality, introducing the equivalent of free surcharge, let's call it duty full surcharge, to protect the sales that goes to North America. Of course, the other geography, they have not been impacted. What we see? We see that this is creating uncertainty, and uncertainty does not help the business. So we are definitely seeing a more selective approach from the large distributors and consumer after all this story started, Also because I believe the level of unpredictability of the setting is what is preventing from doing business. You have to imagine yourself being a large distributor in U. S. And not knowing what's going to happen to China, to Vietnam, to Europe in term of tariff that can have us swing from zero to 135. In absence of clarity, you, of course, don't take a huge investment decision. How does position this Natuzzi versus the competitor? Having said that, we don't see this as a positive for the industry. I mean, we don't, let's say, celebrate when other company have issue. But clearly, it's a company, it's been entirely set up to source product from Far East, being China or as typically happened lately, Vietnam, this might be a very, very strong factor for them because recreating a supply chain in our sector doesn't take days.

And if the tariff after these ninety days are confirmed, I honestly would not be in there. I mean, our my seat and our seat is not easy, but I wouldn't like to be in their seat because what you do, if you need if overnight, you have the sourcing where you source 85% of your product, they have a duty of 120% or 46%. I think this will be, of course, a strong discontinuity for the market. And in this context, Natuzzi may have some advantage from a competitive standpoint. Corey, did this relatively long and unstructured answer address your short and effective question or not?

No. Thank you very much. It really does. And part of the thesis that as shareholders is being a little bit smaller than the competition, being in a different segment than the competition to a certain extent as we look at it, which is across the board. But I think the flexibility you have on the supply chain gives us a lot of comfort. And hopefully, as you said, we get to some type of resolution sooner rather than later. But thank you very much, Antonio.

And if any of you who sit in The U. S. Can help, we will be very grateful to each of you. Next up.

It appears there are no further questions at this time. But if you do want to ask a question, please use the Ask a Question feature on your screen, okay?

Kevin, in transparency, I received some question by email, which is a bit atypical because so I don't know, Pierre, if you do receive question by mail.

Just received a list of requests from a guy who is not in the position to participate in the call.

So this gentleman, Garrett Larson, is not in the call. So we can address it offline. Okay. Okay. Okay. Okay. Any other question?

It appears there are no further questions at this time.

Pasquale, it looks like your line has been stabilized.

Okay. But again, yes, today, if we should look at the positive side, okay, of our company today is that we are in the position to analyze and make dianuses why the store in Sarasota is making money. What they make special? Why the store in in in United Kingdom probably? It's not making money. What's the reason? So low traffic, it's conventional rates is the problem. The issue is the ticket, which product are we selling, which product are we not selling. Today, we are in the position in a very fast way to do diagnosis on each model, everywhere in the world, each store in the world we have. And basic It appears the WiFi froze.

I'm connected again, Antonio, because I don't know.

You are? You can give it another try. Hope this time, it's going be poor stable.

No, I'm sorry because communication is not really the good one that should be. But anyway, I was saying that while we are in the position with our system to analyze and make diagnosis on the performance of each individual store that allow us to define action plan through changing. Product is not performing with a new product that could perform, based on our know how, knowledge and also supported with the marketing. That's what we have been doing in 2024 preparing. How can we because we have the store. We have a store in China. We have a store in America. We have a store in Europe. We have a store in Middle East. We have a store in everywhere. We needed to increase the sales. And in order to do that, we feel very confident that with the new collection that we developed in 2024, whatever we have done already, the launch of the new collection supported by really an effective and very good marketing support are performing very well. So that's our challenge this year. It's just to improve consumer confidence in each geography, in each store, and we have all the tools to do that. I mean, so that's what I can say that I'm confident that despite the geopolitical situation, I mean production wise, we are very well, let's say, organized because of the factory in Brazil, factory in Romania, the factory in Italy, the factory in China, the factory is also in Vietnam.

Mean, regarding the duty, the tariff doesn't concern us really very much. Our challenge is primarily how we should improve the sales in each individual store and geography. We have the new collection that we've developed for Natuzzi Italia but also for Natuzzi Editions. And we have all the marketing plan. We have made huge investment in order to support geography and individual store or group of store like we did in Florida for example. We have been doing launching Comfort Inn as a collection in Florida, but also in Georgia and also in Texas. And we have I mean, we are getting, you know, the traffic is increasing. Absolutely. We are getting a lot of contact. So that's what I can say regarding the marketing department and the product development market company has been doing in order to overcome this situation that no question about, it's not an easy situation. We see also other peers how they are performing. So that's the reality.

Thank you, Pascal. And this time, line that supported the speech. So thank you for closing in a very positive and optimistic way. And it's an optimism that come from our work, not just from Ulta. Kevin, I believe unless there are questions, we are complete for the section.

We do have one question from George Melaszio Giriase. Okay. I'm going join him right through. Okay. George, your line is now live, sir. George, can you please unmute your phone? Here you We got you, my friend. There you go.

Okay. Great. Great. Okay. Well, it's actually quite quite interesting. I think Pasquale answered a lot of the questions that I had, so I appreciate that, But it was about the tools the tools in the system to to to really in that transition into retail. And I think you mentioned, Pasquale, that you have sort of all the tools, and I just wanna go over that one more time. Is are there certain things that you feel are missing that you still need to to add to your capability primarily in terms of system in order to and then the second question is with this analytical ability to really look at, you know, products across so many jobs, so many stores, what have you learned so far? What is it that is it that does that impact the way you think about the collection?

Okay. So regarding the the tools that we have today, we believe we have done really something, you know, which we we should be proud of. Because, you know, to to be based in Italy and manage a store in America and in China, in South America and in Mexico or in all Europe, Middle East and Africa, I mean, been not an easy exercise. But today, we are in the position to analyze and do diagnosis why we are not performing well or why or what we need to perform better in terms of probably, we need to do training to the people because the conversion rate is very low. So then we know that our human resource management will provide for training, for example, for the people in the store. If there are some products because we have a living room, a different style and function in our store, we have a dining, we have a bedding. I mean our product proposition to decorate the home and we have a different product in our store. But we need to understand which product is performing and which one is not performing and what we do. How fast can we replace and and improve the merchandising in the store?

That's very very important in order to monitor the the sales by square foot. It's very important because, you know, the the lease, people, the cost of the store is very high. So we need really to be careful and act very fast in order to improve the sales by square foot. So that's one of the challenge. Product wise, we believe that based on our sixty six years experience and the people that we have in our company, because we have been based always in the same territory. We haven't changed. In our industry, you know, company, they move from one country to another country, from one region to another region, And they never put together the management that should be able really to manage the brand in the appropriate way. Regarding that, we are very proud because we have people in Apulvia working with us, very talented people. We have the people. We have the production. We have the store everywhere in the world. We need to improve how to manage and how to improve the sales in our store. We created the tools. We have the products. We have the collection. We have the marketing. We want and we are confident despite whatever will happen the world because we we don't know.

I mean, the world in Ukraine, what will happen? The world in The Middle East, what will happen? Who knows? I mean, you know, there are uncertainty in all the way around. But even though we are confident, motivated, and we work very hard in order to overcome this challenging period. I mean, that's what I can say.

Great. Appreciate that very much. And maybe a question for Antonio as my last question. Do you sort of have a line of sight to to profitability, what it takes to get to profitability. Of course, I think the the real big factor is is is what Pasparli was talking about increasing revenue and increasing revenue per store. But but maybe can you talk a little bit about that? And maybe also about, is there any expansion in The US, any retail expansion in The US in '25 or '26 that you're looking at?

Our priority now is to improve our organic growth. We have the store. We are committed to make the store more profitable. That will be our today and tomorrow challenge. Antonio, on Tissento. You are mute, Antonio.

Yes, yes. I say, I agree with you, of course, with Pasquale because of the decision I was taking in Symphony. I think given the current market and given how much headroom we have, we believe the organic growth is a reasonable way for at least the remaining 25 We opened in U. S, as you know, five new Natuzzi Editions Natuzzi Italia store over the last twelve months. Each of them is a baby. They now need to be cured and let grow in the proper way. On your the other question, George, in reality, if you look at the company, has invested a lot in this journey, more than CHF1 billion because if you look over the last fifteen years, the last years were from, let's say, the only years from a reported year where we had a positive EBIT were 2021 and 2022. And so reflecting on what could be a threshold for with the current model to be at breakeven is clearly much, much lower than it used to be. We saw that in 2019 with €390,000,000 sales, the company lost CHF 22,000,000. I believe now, and Carlo can correct me if I'm not right, I've not done sophisticated modeling, but I believe if we're in the range of CHF $340,000,000, are profitable.

And we with a bit more than that, we definitely produce positive cash flow. So I think the level at which the company can be breakeven has been seriously reduced if we keep protecting our marginality. So if we go back to the revenue, the company was able and, I believe, is still able to express with six sixty stores and 400 gallery. There should be the approval of the equation we have been hardly working on, there should be translating profitability. You. Not the pleasure, Jorge, and thank you for your continuous trust in our company.

Thank you, Jorge. And Antonio, because there are no further questions at this time.

Okay. Then if this is, let's say, the last question, I take the opportunity to thank Pasquale, Daniele, Carlo and Piero for being us today and supporting the conversation. But I particular thanks everyone of you, which has been joining this conversation. The message I would like to convey is that, of course, this is not the easiest time for a brand retail company, but we're very convinced on what we are doing, and we are believing we are building a model that can be delivering results. I welcome, as typically it happen, also follow-up question. I'm sure that between myself, Pierre and Carlo will be able to address them even beyond this conference call. Thank you so much, and wish you a great end of the week. If you happen to be around this point, please stop at our building. There will be a great opportunity to interact with Pasquale, with our team and to see our collection. This year, I stayed in a quarter to be focused on a few things that need to be closed, but there will be definitely a lot of colleagues that can be sharing with you the excitement of the new collection at my point.

I extend and I confirm the invitation. I would be pleased to have anyone of you to visit us here. Thank you.

Thank you so much, Kevin. You can close.

Thank you very That does conclude today's webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today, everyone.