Natuzzi S.p.A (NYSE:NTZ) Q3 2019 Earnings Conference Call - Final Transcript

Dec 02, 2019 • 10:00 am ET

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Natuzzi S.p.A (NYSE:NTZ) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning ladies and gentlemen. Thank you for standing by. Welcome to the Natuzzi Third Quarter and First Nine Months 2019 Conference Call.

[Operator Instructions]

Joining us today on the call are Natuzzi's Chief Executive Officer, Mr. Pasquale Natuzzi; the Chief Financial Officer, Mr. Vittorio Notarpietro; and Piero Direnzo, Investor Relations. As a reminder, today's call is being recorded. And now I would like to turn the conference over to Piero. Please go ahead.

Executive
Piero Direnzo

Thank you, Kathy. Just a short notice, together with the Chief Financial Officer and the Chief Executive Officer, we also have today Mrs. Italia Casalino, who is in charge of the retail channel; and then we have also Mr. Cosimo Bardi, who is in charge of the Wholesale Branded Channel; and then we've also Gianni Tucci, who is in charge of the Wholesale Unbranded Channel.

So good morning to our listeners in the United States and good afternoon to those of you connected from Europe and Asia. Welcome to Natuzzi's third quarter and first nine months 2019 conference call. After a brief introduction by the Chief Executive Officer and the Chief Financial Officer, we will give room for a Q&A session. Mr. Pasquale Natuzzi, together with the top management team, will be glad to answer your questions.

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 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 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'd like to turn the call over to the Chief Executive Officer. Please, Mr. Natuzzi.

Executive
Pasquale Natuzzi

Thank you. Good morning to everyone. Despite the unpleasant number that we generated during the first nine months of 2019, which disappoints everyone, but caused primarily by the trad

E war between United States and China and like still without a solution, the management has taken initiatives aiming to overcome this difficult situation.

In fact, I would like to emphasize that the retail division, represented by direct operating store and franchising one, the percentage of volume has increased to 49% of the entire business compared to 44% of last year. Within the retail business, the roll-out of franchising store in China proceeds according to the plans. By the end of this year, we will have 240 stores in China, thanks to the 55 new Natuzzi store opened overall in 2019. We will continue to open stores in China with this intensity, and this will positively support our revenue in that region.

In United Kingdom, we have recently reached an agreement with the two historical partners for the aggressive development of the retail business. Within end of this year, we plan to