Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Natuzzi S.p.A. first quarter 2024 financial results. As a reminder, you can join the conference call live, also via telephone, by dialing into the following number: +1 412-717-9633, then passcode 39252103#, in addition to the link already provided via video. Once again, to join via phone, that's +1 412-717-9633, then passcode 39252103#. At this time, all participants are to listen only remotely. Following the introduction, we'll conduct a question-and-answer session. Instructions will be provided at that time. Please queue up for questions. Joining us on today's call are Mr. Antonio Achille, Natuzzi's Chief Executive Officer; Mr. Carlo Silvestri, Chief Financial Officer of the Natuzzi Group; Mr. Pasquale Natuzzi, Founder and Executive Chairman; Mr. Mario De Gennaro, Chief HR, Organization and Legal Officer; Mr. Diego Babbo, Global Retail Division Officer; and Piero Dir enzo, Investor Relations. As a reminder, today's call is being recorded. I'd like to turn the call over to Piero. Please go ahead. Thank you, Kevin, and good day to everyone. Thank you for joining the Natuzzi's conference call for the 2024 first quarter financial results. After a brief introduction, we will give room for the Q&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 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 would like to turn the call over to the company's Chief Executive Officer. Please, Antonio. Thank you, Piero. Welcome, everyone, and good morning for people joining from the U.S. Good afternoon from people joining from Europe. I will start by highlighting some of the figures of the first quarter 2024 and then provide more transparency on the strategic agenda and operational agenda myself and the team is focusing on. We close the first quarter 2024 with invoice sales pretty much in line with the previous year at around EUR 84.5 million. If we look at that split by geography, the U.S. and China and the remaining geography are above last year. South and West Europe and emerging markets are the geographies that reported lower sales versus past year. Clearly, when we talk about emerging markets, we include Russia, and this is clearly a region where there is still a very significant geopolitical turbulence, as well as when we talk about emerging markets, we talk about all the Middle Eastern area. Europe is also, in a sense, closer to those dynamics. In terms of sales, I believe it's important to highlight that sales from directly operated stores, so the store that we own and operate directly, have been growing of EUR 20 million—sorry, have arrived at EUR 20 million, growing 13% versus first quarter, same period last year, and 10% versus 2022, that, as you know, was still a very strong year. This doesn't happen by chance, but happens because, as we declared several times, we continue executing our strategy to become a more retailer-centric company. In particular, that's true for North America, where the directly operated sales grew by nearly 30% versus the first quarter 2023 and 32% versus the first quarter 2022. Again, let me restate that retail and US are two worlds very central to our future development strategy. Another element I would like to highlight is that despite the low level of sales, we have been improving on gross margin. Gross margin reached almost 37%, almost 37%, which is almost 1.5 percentage point above 2023, and is almost 7% above 2019. This is important and is, again, another element of our strategy around value creation. The gross margin and the level of sales led us to an operating profit of EUR 0.6 million, which compared to a loss of EUR 0.9 million in 2023 and a loss of EUR 3 million versus pre-COVID level 2019. When we look at operating profit, it's more difficult to compare to the year in between because there's been a lot of one-off support measures and restructuring measures that affected those figures. Another element which is worth fleshing out is that we continue executing our restructuring. So in the first quarter, some 94 resources left the company, bringing to almost 18% the total reduction that we reported and achieved since 2021. This is, I would say, the overall profile of the quarter. I will not spend too many words on the context that, as you know, you are very seasoned investors and following closer what's happening. Clearly, the markets are not yet bouncing back because the interest rates remain where they are, and we are very much depending on real estate. But I will not spend words on that. I would rather engage with you on being as pleasing on what we are working on in terms of management team. And in particular, we are working on eight pillars. The first one, as I mentioned, is expanding margin and lowering our break-even point. We improved of 7 percentage points our gross margin since 2019. And this has been achieved regardless of the fact that we don't have our factories, especially in Italy, saturated. And also, regardless of the fact that 2021 and 2022 were a year of unprecedented high inflation. So if we would normalize for those elements, the improvement would have been more in the range of 10 percentage points of gross margin. That is important because, basically, we lower the break-even of the company of some EUR 100 million in terms of revenue required to break-even on a yearly basis. That means that when we achieve growth, that growth will be very healthy in terms of margin conversion and cash conversion. This is not yet the end of the story because we continue working in spending the margin, and I believe we're going to be achieving our internal results, which are to continue this kind of trajectory for the next years. The other pillar we are very much working on in the context of low traffic is leveraging our brand strengths. We just commissioned a survey performed by an independent market research, which reconfirmed what was already been highlighted a few years ago, which is the very strong positioning of Natuzzi among European and even domestic brands in markets like the U.S., where Natuzzi is ranked first brand among European brands. Same is true for China, and same is true for most European markets. Building this kind of awareness today will cost under a million, if not a billion, in each of those geographies. So that is an inherited asset that we have. In a situation like this, we are increasingly of low traffic. We are increasingly leveraging the brand strengths to increase foot traffic in the stores directly operated and those of our partners. Increasingly, we are doing so also by having a more active digital approach in the early part of the consumer journey. Another way in which we are leveraging the strength of our brand is trade and contract. These are an organic way of growing our business because we don't need to open new stores. We established one year ago a new division, and the quality of discussion we are engaging on, especially for contract, is very interesting. They are interesting on a global scale, from the Middle East to Europe to the U.S., confirming the strengths of our brand, but also our ability to come out with a very appealing design, not only for furniture but for living space. I hope I will be able to report more specific wins. We are engaging in some very exciting discussions in the Middle East, but it's premature to share more on those. The third pillar where we are focusing on, and not by accident, Diego Babbo is joining this call regularly, is retail. As I mentioned, retail, in terms of directly operated stores, has been growing nearly 4% in the quarter. When we look at retail, the way consumers will look at it, which means Natuzzi, freestanding stores, regardless of if they are operated directly by the group or operated by franchising, the weight of that business on the total business has been growing of some 25 percentage points since 2019. In 2019, that percentage of business was 40%. We are now at 66.4%. A very strong steady acceleration to become really a consumer-centric and retail-focused company. We have been managing retail somehow before knowing fully how to do it. I believe the work that the global retail division has been doing recently to catch up has been very noticeable in terms of tools, training approach, merchandising approach. The area of retail is an area where we continue investing. I'm pleased to report that the new retail format, which is an evolution in the term of sustainability that Natuzzi Italia presented in the Milan Design Week last April, has been really welcomed by a strong acceptance by our dealers globally, from China to emerging markets to the U.S. This is the base now to create a more immersive brand experience in each of the more than 200 stores we have for Natuzzi Italia. This concept will be part of the future retail development that we will push in our stores. Part of this concept is a design studio, which has been a place specifically created to welcome clients, and especially designers and architects, to continue the journey that Natuzzi Italia has now really matured, which is to say we want to create harmony not only in a specific space selling a specific product, but in the total home selling project, which means designing living space, being the living room, being the bedroom, being the rest of the house. Wholesale remains still a very important dynamic component of our revenue, especially in geographies like the U.S. And as a fourth pillar of our work, we really wanted to step up in terms of quality of the relationship we have with our wholesale partner and quality of the relationship we have with our customers through them. As part of that, we launched what we called Reimagine Gallery format. As you know, Natuzzi has been historically operating with gallery, which are shop-in-shop kind of retail environments. But the quality of the customer experience in those environments was often left to freedom of interpretation by our retail partner. In the intent of becoming more a consumer and brand company, we also standardized that kind of environment to what, as I mentioned, we call Reimagine Gallery concept, which is a shop-in-shop environment conveying a more comprehensive experience of our brand. Also, this innovation has been and is very welcomed by our partner, not only in the U.S., where we have 29 deals of this type, some with important accounts that we're not distributing anymore in Natuzzi, that decide to reinvest. And the same is happening in other geographies, including Germany, where important partners that decide to engage in this type of distribution. This is particularly true for Natuzzi Editions and, in some circumstances, also for Natuzzi Italia. But Natuzzi Italia, the privileged channel, is really a freestanding store. The fifth element we are working very hands-on, and Pasquale was really lucky to have still very involved in design, is our collection. Especially for Natuzzi Italia, the Milan Design Week we just ended in April has been a very important moment to show to the global partners the maturity of the Natuzzi Italia project, which is a maturity achieved somehow leveraging even more our DNA, which is a DNA which talks about harmony, is a DNA which talks about comfort. And the new collection, which has been presented based on those elements, is receiving very strong positive feedback and orders. As you know, our time to market is quite, as for the industry, long because once the collections are purchased by our partner, it takes a few months to be delivered, and basically, it's when they start being presented to the final consumer. This will happen in a few months, and we are very confident that the freshness of this new collection for Natuzzi Italia will help provide a better experience of our brand, and, which is very important, support sales in the stores where they will be presented. The sixth pillar is about geography, Natuzzi, being a global brand, operating in more than 100 markets. And this is definitely an advantage of being a global brand. But in the discussion with the board, it has been clearly highlighted and agreed on that a global strong position can only be achieved with a stronger local position. We identified three macro opportunities. One is the U.S. As I mentioned, the U.S. is central to our future strategy, as it has been central to the historical success of the company. And to the U.S. goes all our effort in terms of supporting the retail and also supporting the organization, where we are still working on to finalize the final, let's say, structure. China is the second continent or geography where our brand has clearly a strong potential. We now operate some 340 stores between the two brands. As you know by now, we don't consolidate line by line in China, so you don't see that sales in terms of sell-out, but you see that sales in terms of sell-in. We are working very intensively to make sure that China is integrated in the journey we have been doing, especially for Natuzzi Italia. This integration is continuing as a sum of more cohesive interaction with the management. The key team of China will be in July in Italy. It's continuing by means of integrating IT systems. So China is now in progress of being integrated in our IT system and also in the way of operating stores. End of July, there will be a new opening of a Hangzhou store. Hangzhou is one of the largest cities in China, 40 minutes by train from Shanghai. That store has been designed by us in terms of layout, merchandising, and customer experience, really to become a first flagship that can talk the language of Natuzzi Italia. We believe that having the Diego, which has by governance the authority to the legitimacy to complete this design, having gained the legitimacy to do it ourselves, is an important sign of the journey we are doing with them. In September, there will be a similar store opening in Shanghai. We really start reviewing the network of the stores directly operated by Diego to really set up a standard of what should be Natuzzi Italia's experience in China. Europe, beyond the UK and Italy and Spain, which are really three geographies, we are working to re-enter some of the countries where Natuzzi had a historical, even significant footprint, but for a reason of defocusing has been somehow neglected. One example is Germany. We have recently signed an agreement with the KUKA AG to reopen 22 galleries in the next month. The seventh pillar we are working on is the restructuring and modernization of our factory and the restructuring of our SG&A. We have been extensively commenting during the last press call with Mario on the effort we are doing to reduce our headcount while reinvesting in areas like consumer experience, marketing, and retail. This process continues. Of course, the speed of this process is determined by two main elements. One is the regulatory framework that, as you know, in most European countries is very strict, and especially in Italy when it comes to workforce reduction. The second is our ability to invest in the restructuring because, of course, most of those restructurings outside the U.S., they are quite demanding in terms of one-off restructuring, even though then they have a very promising payback in the long term. This leads to the last point of our agenda, which is disposing of non-strategic resources because in a time where, given the level of sales, we don't have the ability to invest as much as we want, we continue exploring, actively exploring how to sell some of the assets that are not clearly any longer strategic. This includes a point where there have been several discussions. The high interest rate clearly doesn't favor at the moment this kind of sales for the right values, and we don't want to undersell the building. This also includes the tannery we have in Italy, which is part of our value chain, but for which we could think of alternative setting, and includes some minor assets such as terrain we have close to Romania. So this is what gets our attention. Clearly, in a situation like this, there's always the risk of compromising more the midterm for the short term. This is not the case. We are definitely focusing on the short term in terms of cash management, but we want to keep our eyes on what will create value more in the midterm, considering the strengths of our company, the strengths of our brand, which is globally recognized, and the strengths of our nearly 700 stores globally. Let me stop here for your question. Of course, then with Carlo, we can also double-click on working capital and cash management and other elements. But let me stop here for an initial reaction to this general overview of our strategic agenda. Thank you. If you'd like to be placed in the question queue, please use the ask a question feature at this time. Once again, you may ask a question at any time by using the ask a question feature at any time on your screen. One moment, please, while we pull up our questions. Our first question today is coming from David Keenan from KWM LLC. Your line is now live. Hi, guys. Are you able to hear me? Yeah, we do. Okay. Well, first, I'd like to, in a way, congratulate you on some of the green shoots that I'm seeing. I think there are a lot of encouraging signs in the financial results that you reported. And I'd like to just drill down a little deeper to gain a greater understanding. I'm encouraged by the improvement in gross margin as well as the management of operating expenses. It sounds like you have a number of growth initiatives underway, expanding your network of DOS stores in North America. But what seems new is you called out this agreement with galleries in both North America and in Europe. So excuse me, if you could speak to the incrementality of these galleries in Europe and North America, and then also you spent a little time talking about the JV in China, is that an area, despite the, let's call it, furniture depression that we're in right now, is that an area where also you expect to see some growth before the, let's call it, the reduction in interest rates and normalization in housing? So there's a lot I gave you there. I'll let you respond. Thank you. Dave, and if the question is just complete, I will take one question at a time to make sure we're really fully capturing the questions. So I will start answering today before opening to the next question. First of all, thank you, Dave, for the encouraging word on the direction the company and the team is doing hard work to achieve, clearly in a context of still headwinds. To your question around the gallery in China, so we definitely are focusing on the quality of interaction with our final customers. These in retail reach the maximum, let's say, level of quality and brand immersion because we really can create, and I'm talking specifically for Natuzzi Italia, an immersive experience into our brand showing the total living, which includes beyond the upholstered furniture, dining, bedroom, accessory lighting. And we also, as I mentioned before, especially for Natuzzi Italia, create a physical space where clients and designers are invited and welcomed to spend time in defining a more, let's say, high-quality project. This is the long-term direction, especially for Natuzzi Italia. At the same time, this concept applies to a portion of the market, which in certain geography is still an opportunity for us. In particular, I'm referring to the U.S., where there are large retailers, maybe in geography where a directly operated store would not be guaranteeing an adequate return. So we don't want to neglect those opportunities. At the same time, we want to elevate the quality of those opportunities, both for the benefit of the partner, so the retail, and also for the benefit of establishing a strong relationship with the final customer. The Reimagine Gallery is really shooting for those two objectives because by providing a more conducive experience in the brand in this multi-brand environment, it guarantees high returns for the retailer because the investment in those Reimagine galleries has really been very thoughtful about guaranteeing a good retail return for the partner. We're not talking about investment in the amount that will go in a directly operated store. Still, those elements that create an atmosphere of the brand, plus a very careful interpretation of the layout and the merchandising, can provide an adequate level of experience of the brand for the final customer. These apply specifically for Natuzzi Editions, even though there are some circumstances where also Natuzzi Italia can explore this option. This does not contradict at all our long-term view of having a more customer-centric and a more high-quality interaction with consumers. To recognize that there are pockets of growth opportunities in the channel that are very important and also somehow needed to sustain the volume we need to achieve for our growth. I hope I addressed in a proper manner the first question. Unless, please, Dave, stop me because I will move then to the second question regarding China. Well, if you could provide more detail on the gallery business in North America and Europe. In the press release, you specifically called out 29 new gallery agreements in North America and then 92 in the rest of the world. So should we view this as investors as this is incremental, that the gallery business should grow year-over-year with this incremental distribution? So the short answer is yes, but let me provide a bit more context because they are not entirely new accounts. There are situations where those galleries are a way to restart a dialogue with accounts that were sleeping. This is the case, for instance, of Germany. Germany, we were not distributing. Now we're going to open 22 galleries. That is fully incremental business. In some circumstances, especially in the U.S., part of that additional gallery is a conversion of a space that we have in a department store where the quality of display of the brand was not adequate. So you could interpret that more as an organic growth, elevating the quality of the distribution in existing accounts. So in that part of business, there is somehow an organic growth we are requalifying. David, there is a little bit of background noise. Maybe Kevin, you can help us in. Okay, much better. Thank you. So within the gallery, you could see a part of, let's call it, organic growth, which is achieved by elevating the quality distribution of existing partners, convincing them to step up and open a gallery instead of a less qualified environment. There is also a new account which has been reached, which is this appealing proposal of gallery that they get convinced to create a space for Natuzzi Italia or Natuzzi Editions that they didn't have before. So that is the way you should, as investors, look at this opportunity, which is not, as I mentioned, at all contradicting our idea of retail first. Can you hear me? Yep. Now yes. Okay. Okay. And then here's a question for Carlo. We know that at some point, the housing market is going to improve. Here in North America, last year, I believe, just over 4 million homes sold. When you look at the long-term average, it's around 5.5 million, so about 28% fewer homes sold. And there's a direct correlation between furniture sales and housing transactions. They almost correlate one-to-one. So at some point, things are going to normalize, and the Fed's going to cut rates. It seems with some of the incremental distribution, the new stores, and a recovery kicking in maybe in the next 12-24 months that we should be able to get back over EUR 100 million in revenue. So my question for Carlo is, at EUR 100 million of revenue, will gross margin exceed 40% with some of the measures that you've taken? Let's say that, Dear David, thank you very much for your question, first of all. And let's say that as our progression shows in the previous quarter, we are already heading in that direction. So also integrating the retail margin into it, we're going to go versus the 40% that you did mention. So this is a progression that we did start already by improving our gross margin, working on a pricing discipline, and adding that into a retail progression to our numbers. We should go towards that 40% that you did mention. Antonio, if you could answer the question, and then I'm going to go back into queue regarding the joint venture in China. It seems as though you now have greater autonomy and influence over the Diego Vierenzo. Could you talk a little bit about that and the effect that you expect to see over the next 12 months in China if these changes will contribute growth year-over-year? Okay. Let's move to China. First of all, it does not be misunderstood. The governance, the rules, the China JV hasn't changed in the sense that Natuzzi owning 49% and our, let's say, correspondent part, KUKA, owning 51%, still create a situation where the governance is clearly leading to a key operational decision taken by the majority shareholder. What we have been achieving is creating a legitimacy that supported us to be more active in driving key choices about store merchandising, retail merchandising, what we call commercial excellence, which is how you should approach sales with dealers, where we basically, in a very open and partnership way, we shared with the JV, which is relatively newer to brand management, what has been the achievement of Natuzzi in other geographies. By sharing those best practices and by heavily investing personally, and when I mean personally, not me, but I mean also me, but the full team in showing what can be achieved, we create a space, a much larger space of influence on the Diego Vierenzo, which is a positive influence. So it's not a power influence, but it's a competence-driven influence. Some key people, including the general manager of the Diego Vierenzo, will be in July, first week of July in Italy, and the discussion on how to make sure this kind of influence can continue will be central to that. But this is a description of the process. So if I go back to 2021, for instance, we didn't have any visibility of the performance of the Diego Vierenzo. At the granular level, we now do see the performance of the Diego Vierenzo. At the store level for the stores which are directly operated by the division, Diego Babbo, as our global retail division manager, is daily involved in discussion with the team of the division. On how to improve directly operated stores' performances. We had some 18 dealers from China visiting Milan Design Week and then continuing to our quarter in south of Italy. The year before, we didn't have any dealer coming to our Milan Design Week. And during the Milan Design Week, there were some 20 people, which are the key people in the division, in terms of dealing with Natuzzi Italia, joining that, let's say, tour to Milan Design Week and then Santeramo. Again, the previous year, we didn't have any. And those occasions are really important to create a common way of working. That for a company like us that aspires to manage globally a brand is very important because we are not a grocery retailer. So we need really to invest to educate our partner, which is not only the case of China, on how to interpret what internally has been codified as the brand religion, which doesn't hope, let's say, hurt any political correctness, let's say, sense because religion for us is neutral. It doesn't say what religion, but it means that the credo of the brand cannot be compromised. So a lot of the effort we're doing is spending time with Diego, Piero Di Renzo, really, to make sure that that credo is systematically absorbed and deployed at China level. So would that translate in higher sales and better management of the brands? The answer is we need to believe so, absolutely. Clearly, and you implicitly, no, explicitly, actually, put that in the context of your question, China remains a very troubled geography. So you mentioned the sales of new houses in the U.S. I remind that Evergrande, which was by far the largest retail real estate operator in China, went belly up, and the founder, which was one of the most successful and richest persons in China, has been imprisoned for bankruptcy. So the market in China, especially for real estate, remains significantly down versus previous phases of the country. But again, we know that those cycles, they're not irreversible. We've been in that cycle for quite a long time. So I'm looking also at China with optimistic lenses in terms of growth opportunity that we have. Okay. If that is a sufficient answer, David, I would rather ask you if you have another question, or maybe Kevin can ask the remaining investors and analysts if they have other questions. The question is coming from Cory Pinkston from Waterway Capital Advisors. Your line is now live. Good afternoon. Can you hear me? Yeah, we do, Cory. Great. Well, I think to echo what David said, and obviously, I've been a supporter and continue to be for a while here. Just quickly, the leadership of you and the support and leadership of Pasquale and really the execution of the team is incredibly impressive with the macro headwinds that everybody in your industry faces. But the operating leverage that you're creating and your transparency, it's one thing to execute on these, but when you start to talk about the gross margins getting to 40% and then kind of giving us clarity around the break-even targets, we all think kind of long-term as to what David said, which is the power in this brand is pretty strong. One comment that, as you said, you walk through the retail initiatives that against all of the transformation and turnaround of the operating side and getting that to where you want to have it. Clearly, the environment right now puts some constraints on the, as you said, the full retail expansion. But when I listen to this call and I read your results and you talk about what you're doing on the retail, the design, the gallery, the trade business that you're developing, kind of what I'll call the commercial business with contractors, while you're not able to potentially expand the footprint or some of the other things, as an investor, it doesn't really feel that you're having to be disciplined or more disciplined around the CapEx, etc., as to what you might do. But it really doesn't feel like you're missing on where you want to invest for the turn, as David mentioned, whether it's 12 months or 18 months as we get to a more normalized environment. So can you just expand on that a little bit? Because while you're not able to maybe put the CapEx you might in a normal environment, it doesn't seem like you're missing a lot for the turn. Thank you, Cory, again. It's really encouraging to get your support as an investor because, I mean, we have and I have two priorities. One is the customer. The second one is the shareholder. So for me, it's very important that you are very direct to us, and I appreciate your support to us. If I interpret right your question, but let me restate. Basically, you're asking us why we're not putting more CapEx in retail to support our growth. Is that what you're asking? No, no. Actually, I'm not asking that. I actually applaud you for the fact that you're taking advantage of this situation to not only rationalize your operating footprint and get that to where we want to have it because the power of that operating leverage drives to the bottom line when we get the turn. I guess I'm not asking why not more CapEx. It seems like you're able, through your choices you're having to make on the retail side and the sales channels, that you're kind of getting you're able to continue to support the areas where you're going to drive the greatest growth now and moving forward. Okay. I got you. I got you. I got you. Yeah. So there are basically, let's say, two discontinuity avenues to create better margin and better leverage. And then there is, let's say, business as usual. So business as usual, which is our focus, is organic growth. When you have retail and stores, you bring home all the fixed costs, labor, rents, inventory. So the more you sell, the better it is. And this is a thankless job. We now have in the U.S. a store in the range of EUR 5 million, EUR 6 million, which if you go back just 2019, the top performers were more in the range of EUR 2 million. So something has been achieved, and kudos goes to the management which supports us. But a lot still can be achieved to make that figure more systematic. So this is the first avenue to increase margin and return on capital also because we were talking about margin, and I want to remind that in a well-managed store, we get an integrated margin above 70%, where integrated margin means the retail margin plus the manufacturing margin, which, of course, then shows us in our P&L. This is the, let's say, organic avenue to create margin. Then there are discontinuous ways of creating margin. One is reducing our SG&A structure, where what we can do in terms of reducing discretionary spending has been done. We continue doing, of course, a great focus on discretionary spending, but the company is clearly working on a very tight management of expenses. The other way is cutting, let's say, accounts. And this is something which very much depends on our long-term plan, which has been agreed on with the different stakeholders, but also our capacity to sustain the CapEx to execute those restructuring. And this is the first avenue for creating value in a non-structural way. The second way is to open more stores. Opening a store is not something you should do lightheartedly because we learned the hard way that if you open a store in the wrong location, it's a problem that cannot be solved. So we are very careful about identifying the right location. Once we have the right location, identify the right team. But of course, that is an avenue which, if we identify the right location, the right team, and we're operating well, can be promising. The speed to which we can operate a new store is, again, functional of our ability to reinvest. So it's true that for the time being, we have not been deviating from our, let's say, strategic agenda, which includes those actions that I just finished summarizing. But of course, if we had more capital, we could accelerate on those two areas I mentioned, which are retail and restructuring. In a situation like this, we need to safeguard the cash. And of course, this also calls for some trade-off in terms of reinvesting in those areas versus safeguarding the cash position. Cory, let me know if I addressed your question. No, you did. And from just the balance and clearly the team working on the trade-offs between cash management and the investments, it's just the observation is in a difficult environment, you're continuing to be able to push those areas where you see the ability to get traction in retail across the board without having to compromise or being able to keep some of that CapEx for restructuring. And I'm not going to ask specifically what you anticipate, but I would assume that you are providing for the additional restructuring here and there that you may continue to need to take those charges. So we won't ask specific numbers. One last question, and I apologize if I had stepped away, but you do refer to the raw material cost and the hyperinflation that we've seen there. And I'm not sure if you covered it earlier in the call, but are you seeing is that alleviating or softening somewhat? How do you see the trends on that side? So material-wise, most of, I mean, we are a complex production company. Our product gets a lot of different inputs. But when we look at the, let's say, bulk of inputs, which are fabric, leather, motion, metallic part, most of those, they are, let's say, not experimenting anymore on inflation similar to what we experimented in the last year. So currently, we just review the progression of the year, and most of the material are in line with our internal expectation. So for gross margin, no surprise. For below-gross margin transport, as you know, there is one of the consequences of the political tension is the Suez Canal not being any longer available to cut the route towards the west. And this is creating some transport increase for those, let's say, routing, which we start witnessing. We were making space in our budget for that increase. We were also protected for a significant part of the year by pre-negotiated tariff. But that is somehow creating some tension on the transport level also because you know that then when the global transportation gets unbalanced, there's always a cascade effect because companies start moving containers from one part to the other, which are not being fully filled. There is also some tactical gaming played by the company, the shipping company. So they might be on shipping some tension. But for raw material, likely, we are definitely witnessing a more normalized environment, which is another way, mid-term, for potentially expanding the margin. We're also being very systematic in assessing our marginality. The company operates in 100 markets, operates in two brands. That's resulting in 100 pricing lists, some of which are customer-specific. We are now being very systematic in making sure that there are no spots in those pricing lists that are eroding our marginality. So that is another area that gives me confidence that mid-term, we'll be able to extract more value in terms of gross margin. Thank you. That's helpful. Thank you, guys. Thank you to you, Cory. Kevin, maybe you want to go another round for sure. We do have one question to you. But just to remind everyone, if you'd like to ask a question, please use the Ask a Question feature on your screen. Or if you're down there over the phone, you can press Star 1 on your telephone keypad. Our next question is coming from Kirby Newburger from Benjamin F. Edwards. Your line is now live. Hello, gentlemen. Can you hear me? We do. Okay. Antonio, when we spoke a week or two ago, one of the things that jumped out at me was that—and maybe it was just in the United States—but over a period of time, your average sale has gone up by 10- or 20-fold. And we talked a little bit about the customers that are hotels and country clubs and the airport lounges or whatever. Are those mainly customized, and do they have a higher margin than the non-customized? Okay. So, Kirby, thank you again. Of course, I welcome any investor to reach us for individual discussion, as in the one we have regularly with some of you. We're very happy to engage and be transparent. Of course, in those discussions, we don't anticipate any, let's say, material non-public information. Then going back on your question, Kirby, let me kind of divide it in two. First is what we are witnessing on our traditional retail business and then the contract. Let me take U.S. So the stretch of the brand in U.S., especially if we talk about Natuzzi Italia, has been terrific. As Pasquale used to remind us, the regional wave of success in the company three decades ago was very much about value for money. So it was delivering this innovative colored leather sofa for $395-$410 landed cost, which was, of course, a terrific innovation in the market at a very affordable price. And it was guaranteed the first wave of success of the company. Natuzzi Italia now most sold individual product configuration. It's called Iago Leather 25, three engines. It's sold nearly to $1,400 USD. So you can think about the stretch of the brand. But that's not only the—that's only part of the reality because for most of clients' situation, we're not talking any longer to sell a product but to create with the client a project, a solution. So we have those kinds of individual residential projects that we call trade because often there is a designer involved. They can go up to $50, $100, $200, $300 for each project because there are multiple environments, very often in large villas, that we can deliver. And this is happening in our store. So in our store, both the individual clients tend to buy in higher-priced tickets, products, but especially with the trade and contract, we serve projects rather than individual sales of product. But this still is a channel through mostly our stores. Contract is a very new, very new avenue for us. While it has been very important for some of the European brands and Italian brands, I will not name any in particular, but there are some brands for which contract is 40%, 50%, 60% of the total revenue because they don't have stores, for us, it's a new opportunity. We created with a very strong manager, and maybe one of the next call, I will introduce him to you, Raimondo Volpe, a contract division. Here we're talking about more large B2B opportunity in the space of hotel, in the space of retail, and let's say travel infrastructure like could be airport, or which is very interesting in a dynamic which is emerging in the Middle East, but in other geographies, which are branded building. That opportunity typically is made of larger contracts where we try to achieve a very good, let's say, overall break-even. We tend to have a back-on-develop rule to say 60%-70% should be our product. 30%-40% can be complementary product. Those large opportunities clearly are opportunities, but also the counterpart tend to be more price-sensitive. So the margin we're looking at is higher to what we are doing in terms of selling, but still need to consider that those, especially large opportunities, tend to be quite competitive. So it's not an area where you get, let's say, the similar margin that we are operating, for instance, in our retail stores. So long story to say what? Definitely, Natuzzi Italia has been greatly elevated. The quality of sales we're doing in our stores put Natuzzi Italia a completely different animal. It was Natuzzi in U.S. 20, 30 years ago. Contract, more to come. Maybe in the next press release, also touching good that we close a couple of interest contracts we are discussing. I will ask our leader of Contract to introduce better this opportunity, which I believe will be very coherent with the strengths of the brand and very promising. That answers a lot of my question, but I would still like to know a little bit about, and maybe the numbers are here, and I don't, a breakdown of what percentage of sales is the Natuzzi Italia and what percentage of sales is this new contract business. So let me clarify. Contract, we do have visibility because I asked, and I must say, Carlo and the team responded very well, to manage our business as some of the part. So we definitely look at contract as a standalone business unit, but the sales that we do are typically Natuzzi Italia product. So you see that part of the Natuzzi Italia sales not as a different kind of, let's say, reported sales because they are not, which is very important for us, they are not unbranded sales. They are branded sales because by those opportunities, we also look at ways to strengthen, let's say, our brand. If we look specifically at the first quarter 2024, the sales of Natuzzi Italia were EUR 29.5 million, which includes trade and contract. And the sales of Natuzzi Editions were EUR 46.5 million, looking at first quarter 2024. So, Kirby, what I referred before as trade and contract are included in Natuzzi Italia sales. Okay. Thank you. Then internally, we do have the share of that newly created division. And maybe when things will get more mature, we also will be creating transparency for you as an investor to look at this newly established division. They were really looking to manage as a business unit, not only from an organizational standpoint because we appointed a separate team, but also from an economic standpoint because we're looking at it as a kind of new startup within the group. But for the time being, we don't disclose that figure in our press release. We might decide to do it. For the time being, those get accounted under Natuzzi Italia sales. Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments. My side, I will say thank you again, all of you, for being with us. Let me stop here to pass over to Pasquale if you want to have any final remarks in closing this conference. Antonio, first of all, my personal and sincere compliment. You touched all the points. You answered to all the questions in a correct way. I mean, because there have been several questions addressed to you, and probably one of the questions or the answers that probably we needed to address also to our shareholders is that in China, we are teaching them, we are training them how to manage correctly the brand at the retailer. In addition to that, also, we are addressing and teaching them, helping them to restructure the JV company. Because as you remember, certainly, Antonio, they just fired 30 people, and they are going to fire additional people. I mean, and then hire more qualified people to manage brand and retailer. I mean, so that's something that I'm sorry that you miss it. Yeah. No, thank you for complimenting. So that's one. Then there is another question. You mentioned Natuzzi's region. Okay. Yes. I strongly believe, as you know, that we should focus on organic growth. Okay? We know that there are improvements to be made in our store, in our U.S., in America, but also in other geographies where we should improve the consumer experience. That means that we should make some improvements in merchandising, in visual training to the salespeople in the store. I mean, so Diego knows very well what we are doing. Now, brand religion is just, it's just discipline, in other words. Our manager in all the geographies, they need a clear direction. They need to implement the brand management in a very disciplined way. That's what we are doing. That's what we have been doing in the last 8-10 months, and has been very much appreciated from the customer that they came to Milan, they came to High Point, they came to New York during the New York Design Week. They are coming here to the Congress also. I mean, you addressed it very well, all the issues, but there are just those few issues. We know that we have space for organic growth. We know what we should do, and certainly that's our priority. So as you know, Antonio, you and I, we very much agreed on the company direction together with all the management team. Other than that, I appreciate all the questions that our shareholders are asking to us. That means that they care about our company. This is very important for us. Thank you very much, everyone. Thank you. Thank you, Pasquale, for closing this call. Kevin, I believe we can close it now. Thank you, Pasquale, and thank you, everyone. Thank you. That does conclude today's webcast. Let me just connect your line at this time and have a wonderful day. We thank you for your participation today.