Natuzzi, the Italy-based interior retail brand, announced its sales for the fourth quarter of 2023 on April 5, amounting to €84.1 million. This figure reflects a notable decrease of 27.8% compared to the robust performance of Q4 2022.
The results of Q4 2022 were bolstered by a €16.9 million reduction in backlog. Adjusted for this backlog effect, the decline would have been 15.5%. Recognising the need for strategic adjustments, Natuzzi intensified its restructuring efforts during Q4 2023, both within its manufacturing facilities and at its headquarters. These initiatives are part of a comprehensive long-term transformation plan aimed at enhancing competitiveness and improving margin generation.
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During Q4 2023, the company incurred €5.9 million in one-off restructuring costs. Despite these challenges, the gross margin for Q4 2023, net of one-off restructuring costs, stood at 36.2%. This represents a decrease from the 38.8% recorded in Q4 2022 and an improvement from the 34.6% reported in Q4 2019.
Following the restructuring expenditures in Q4 2023, Natuzzi reported an operating loss of €1.4 million. This underscores the company's proactive approach to addressing market dynamics and positioning itself for sustained growth in the evolving interiors sector.
Pasquale Natuzzi, Chairman of the Group, commented: 'Market conditions for the furniture industry have remained challenging during 2023. It's evident that the furniture industry faced extraordinary conditions in 2023, with major markets experiencing a significant slowdown in demand, following two consecutive strong years post-COVID. In this context, we continued investing to complete the transition to a lifestyle brand, with direct access to consumers through retail. This is a process I initiated about 20 years ago, which represented a profound transformation of the Group I founded 65 years ago as a manufacturing company, focused on the value segment of the market. Being globally recognised as a Brand in the high-end segment of the market and delivering a superior in-store customer experience has been a long journey that forced us to review our processes, competences, and industrial capabilities. I am now witnessing the progress of this hard work, which, in the current market conditions, is even more important to competing and reaffirming our leadership. Our team has been working with determination also to evolve our production and increase our operational agility, dealing with the industrial legacy of our origins. Drawing from my 65 years of experience, in times such as these, it's imperative to persevere in investment to strengthen our commercial core assets while pursuing restructuring initiatives; this is the agenda our management has been focusing on in 2023.'
Antonio Achille, CEO of the Group, commented: '2023 has clearly been a challenging year for the overall industry. In the main markets of our operations, North America, China and Europe, the real estate, which is a primary source of new demand, has been stagnant, because of the negative economic situation and high interest rates. Consumers remained very prudent when it comes to invest in durable products. This has been reflected on our business, with a decrease in sales.
In this context, we continue working and investing in the two fundamentals pillars for our transformation: completing the transition to a brand-life style and restructure our operations.'