You are now rejoining the. For the 2025 Financial Results Webcast. As a reminder, if you'd like to join via telephone, please dial +1 412-717-9633, then passcode 39252103#. Once again, to join via telephone, please dial +1 412-717-9633, then passcode 39252103#. In addition to the link already provided, to join via video. At this time, all participants are in listening-only mode. Following the introduction, we'll conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. Joining us on today's call, as usual, are Antonio Achille, Chief Executive Officer; Pasquale Natuzzi, Executive Chairman; Carlo Silvestri, Chief Financial Officer; Mario De Gennaro, Chief HR, Organization and Legal Officer. Furthermore, at the explicit request of the Executive President, Mr. Natuzzi, also joining us on today's call are Pasquale Junior Natuzzi, Executive Director, Chief Trade and Contract Officer, Diego Babbo, Global Retail Division Officer, Codrin Coroama, Chief Wholesale Officer, Daniele Tranchini, Chief Marketing and Communication Officer, Domenico Ricchiuti, Chief Operations Officer, and Piero Direnzo, Investor Relations. As a reminder, today's call is being recorded. I would now like to turn the conference 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 2025 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 U.S. 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. I would like to turn the call over to the company's Chief Executive Officer. Please, Antonio. Thank you, Piero. Let me start, as usual, by sharing the highlight of the first quarter. We're going to be particularly brief since we want to leave more space. Piero, [Foreign language]. To leave more space for a quality discussion with the management. As you see, we invited the core people from the organization. Looking at the highlight, we closed the quarter at EUR 78.1 million, which is down from last year by 7.6%. We're going to be commenting on the specific reason for this shortfall of revenue, in addition, clearly, to a very challenging market condition. Gross margin was down to 34.1% compared to 36.9% of the previous quarter. We will elaborate on this because it's particularly important. The primary reason is because in the first quarter, we had a transition phase, which was planned, of the shift of production for Natuzzi Edition for North America from China to the Italian market. I will elaborate later on why this contributed for a slight decrease in margin this quarter. The combination of revenue below what we need from scale and margin led to a loss in terms of operating loss of EUR 0.8 million in the quarter. Net financial costs were EUR 2.9 million compared to EUR 2.2 million of the previous quarter or the quarter of the previous year, mostly due to currency movement. As you know, the currency has been particularly volatile in the first quarter. Despite all this element, we continue investing roughly EUR 2 million, primarily on the factory side. In terms of cash, we closed the quarter with EUR 22.2 million in cash, slightly above from EUR 20 million at the end of the year. On this regard, it's important to notice that this was also the quarter where we completed the transaction of High Point, which contributed to the cash position. We will have plenty of opportunity to discuss with you what we're experimenting as an industry. I would say it's global citizens of the world as well in a market that continues to be clearly very challenging. I don't, let's say, expand on this element because it's obvious the reason why I'm doing this statement. I was just reading the data on consumer confidence, the board confidence for the U.S., which went back to the beginning of 2023. I also saw the data for confidence in Europe, which are down 3.1 percentage points. It is quite evident that we are still working in a market where consumers tend to postpone durable purchases. As I mentioned, I keep it very short, the highlight. I will return later to comment on some of these elements. Let me now pass to Pasquale for an overview of the commercial achievement in the quarter. Good morning, everyone. Just for everyone's information, I'm okay. I'm Pasquale. My position is Operative President. In other words, I'm working together with our CEO to put all my experience at the company disposal, considering the situation, I mean, which is complicated, no question about it. I mean, the business environment, it's very, very difficult. Because I have the commercial responsibility, I'd like just to recap what I wrote on my press release in order to stimulate questions, which would be very welcome from all of you, shareholders, analysts, or bankers, whoever. That's why also I invite the Channel Director, like Diego Babbo. Diego Babbo has responsibility for the Retail Channel, and Codrin has responsibility for the Wholesale Channel, and Pasquale Junior Natuzzi has the Trade and Contract responsibility, while Daniele Tranchini is our Chief Marketing Officer. Again, I will read whatever, no, whatever, what I wrote on the press release just to remind everyone or to stimulate everyone to ask eventually any question. The Channel Director, Marketing Director, that is why they have been invited here to answer to any of your questions because they have been very much involved in all the activities that we have been implementing. No question about it. The market in which we operate has not shown those signs of improvement that we expected. The business environment has been further affected by the introduction of the United States trade duties on April 2nd, the perturbing Russia-Ukraine conflict, and more recently, the escalation of tension in the Middle East. In this context, we have intensified our efforts to support commercial deployment. We continue to implement our brand commercial strategy that integrates collection, marketing, and customer experience, while closely monitoring its effectiveness in a challenging market environment. The brand guidelines have now been centrally codified to accelerate their global and consistent rollout. This year, mark our return to the Salone del Mobile Fair in Milan after five years' absence that coincided with the pandemic and post-mandatory period. At the Milan Fair, we unveiled the new Natuzzi Edition collection: FILROUGE Dolcevita and Neo Heritage. During the Milano Design Week in April, we have also presented the Natuzzi Italia Comfortness and Circle of Harmony collection, which reflect our evolution in a global lifestyle brand. True to our heritage, Natuzzi Italia collection has been enriched through collaboration with international designers such as Andrea Steidl, Karim Rashid, Marcantonio, and Mauro Lipparini, sorry. For both Natuzzi Italia and Natuzzi Edition, the new collection has been supported by a tailored high-quality marketing campaign, which I'm sure if you want to have deeper information, Daniele will give you plenty of explanation. We have worked to support and innovate the three channels in which we operate: retail, the U.S. and franchising, gallery, and the newly established contract channel. In retail, we have made significant investments to improve analytics and intelligence. We have built the infrastructure to monitor store performance in real time, focusing on key indicators such as foot traffic, conversion rate, average ticket, and product category performance. This enables a data-driven diagnostic of each store across our network with the objective of progressively improving the performance of our retailers. The reimagined gallery format that was introduced last year, late last year, has become operational in the first quarter of 2025. While still in this early stage, it has started to show some initial signs of a positive impact, both in terms of new opening and re-merchandising, particularly in the United States. Following the launch of Natuzzi Harmony Residence in Dubai last November, we are seeing early signs of growing interest in our contract division and an area we consider having significant growth potential and strategic relevance for our group. Pasquale Junior Natuzzi will give you all the explanation you need. Our immediate focus is the full and effective deployment of this strategy in our main market. We have prioritized the initiative aimed to strengthen sales and engagement across our region, although their full impact will depend on market dynamics and execution over time. Natuzzi America remains a strategic priority. We have implemented a new organization with the appointment of new Vice President Retailer, Justin Christiansen, and the new Vice President Human Resources, Sharri McIntyre, who will focus on improving our retail and commercial operation. Justin has over 25 years of experience in the retail industry, particularly in fashion, having worked with European and American fashion groups, which include Brioni and Ralph Lauren. Sherry, with over 20 years of experience, has held the position of Vice President Corporate Human Resources at Louis Vuitton and Human Resources Director, Williams Sonoma. In Europe, we have taken direct control of our largest market, the United Kingdom, by appointing the new Country Manager, Antoine Nicolai, to lead the commercial development for both the retail and the wholesale channel. Antoine brings over 10 years of experience in the luxury and consumer goods. In Italy, the recently appointed Country Manager, Rossella, is contributing positively to improve the quality of both our direct and franchising distribution. In China, we have worked closely with our local JV team to enhance the quality of our retail network and strengthen brand presence. In July, we will present a new Natuzzi Italia collection to our dealers, replicating the Milano Design Week format at the local level. Our new collection has generated interest among both existing and prospective clients, leading to commitment to open new galleries in France and Germany. We believe that the steps we have taken on collection, marketing, and retailer management represent a solid foundation for improving our commercial performance over time. Our objective remains to strengthen the brand and enhance operational efficiency with the aim of delivering sustainable value for our stakeholders. However, the actual result will depend on market conditions, consumer sentiment, and the effective execution of our strategy. That's the reason why I got involved with the Direct Channel Director and also the Marketing Director. If you have any questions, we would be very pleased to give you all the explanation we need. Thank you. Antoine would like to open up for questions now. If you'd like to ask a question at this time, please use the Ask a Question feature on your screen at this time to be placed into the question queue. Once again, if you'd like to ask a question at this time, please use the Ask a Question feature. Our first question is coming from David Cannon. Your line is now live, sir. David, I'm afraid you're on mute. I don't know if you, Kevin, can help David to unmute. I don't know if you can see him locally or you manage it. David, your line should be open, my friend. Go right ahead and please ask your question. Okay. My apologies. Are you able to hear me now? Yeah. Please go ahead, David. Yes, yes, yes. Okay. In the prepared remarks, you highlighted that you moved production for various reasons out of China and over to Italy, and that that caused some disruption in gross margin. Furthermore, you explained that you enacted a price increase of 10%. Last quarter, Q4 gross margin was 38.1%. We went backwards about 400 basis points. With the moves now completed, should we expect a return back to the 38% level, assuming we're doing EUR 75 million-EUR 80 million a quarter? Is that a good assumption, or is it going to take some time? It is definitely something we want to manage. As you know, since 2 April, which is after this quarter we are just commenting, the administration also introduced a 10% out of the—yeah. Can you partially mute David? There is a return in the voice. After this quarter, which we are commenting, the U.S. administration also introduced a duty of 10% for product exported from Italy. We are definitely reviewing also this aspect in light of the 9 July, which was the deadline anticipated by the American administration to potentially review this duty because absolutely we want to take all the measures to reinforce the margin, especially for this component. In addition, as anticipated in the press release, we are also considering more sustainable production locations for Natuzzi Edition for North America. We have, as you know, factories including Romania. Any movement of that production needs to be clearly considered in the light of the rigid preconditions we have in terms of agreement with the public institution and the contract in Italy. The protection of margin, it will be pursued with two actions. Short term, we're going to be reviewing our, let's say, price list, also in consideration of the duty which has been introduced and will be most likely confirmed. More midterm, we are also considering potentially allocation of the production for Natuzzi Edition outside Italy, but this is something which needs to be concerted also with the local institution beyond as in any industrial transition, carefully be planned from an operational standpoint. In case you want to add, which is a very important element, more contents of the constraint and the pre-existing agreement, Mario is the best person in this team to provide them. Okay. So my question is, in Q2 and for the balance of the year, notwithstanding, yes, it looks like there's going to be a 10% tariff from product coming in from Italy unless Trump makes a special deal with Meloni. They seem to get along pretty well, but we'll assume 10%. Should I continue to assume that gross margin will remain at the 34% level in Q2 and beyond with the tariff, let's say, landing at 10%, or will it improve with the price increase and some of the moves? I don't feel like I got a clear answer. It's a central question. As you know, we don't provide specific guidance on these figures, also because they are a result of a complex algorithm where there is price realization, product mix, production cost, materials. We don't provide specific guidance. What I can reassure you, at least in my capacity of CEO, is that we're going to be very determined in readjusting the marginality on Natuzzi Edition towards North America in light of also the tariff. We need to protect our margin because the tariffs don't depend on us. It's an industry standard. Definitely, we're going to take price adjustment there. In terms of production allocation, it's a more structural move, but also there, the company is very serious about having a discussion with the government to face some of the historical constraints that prevent a more effective allocation for this production. Okay. And then operating expenses for the quarter were down to EUR 27.4 million in Q1. Had you done 38% in gross margin, you would have actually had almost a $3 million operating profit, $2.5-$3 million. That is why I'm focusing on margin. That reduction in operating expense of EUR 27.4 million, is that sustainable? I know there are some variable costs, specifically transportation, commission, etc., but assuming all things equal, let's say EUR 78 million with the same mix, more or less, in revenue, can you maintain that EUR 27.4 million operating expense level, or was there something anomalous that drove it lower? I'm going to be going back to your question to make sure I answer in a correct way. Provided the scale is this one we are discussing, because, of course, there's a matter of absorption of those expenses, I have good confidence that we are on a good track to reduce operating expenses. We're also doing a contingency. We just discussed and implemented with our CFO here a contingency on all discretionary expenses. We launched with Domenico here and his procurement team an effort to review the cost of purchasing material and transportation. Provided the scale and the mix, which was in your opening question, stay at the level we are witnessing today, I have confidence that the expenses will go down in percentage. They will go down in absolute terms. It's a matter also then to maintain or increase the scale to witness also a reduction in percentage. Okay. Mr. Pasquale called out some of the changes that you've made in your new, I guess you would call it, software or technology platform to track retail locations. He said something like, "You're seeing early signs of improvement." Could you just speak to that a little bit, what these differences are, and when did you see this improvement, and how profound is it? I'll let Pasquale comment on this. Sincerely, I mean, I don't—I mean, communication is not really the best one here, and I've understood what David said. Can you repeat, please, David, again? Yes. Mr. Natuzzi, you had said that you had implemented some changes in terms of, I'm assuming, technology, information flow between headquarters and your retail locations. This new platform you said is showing early signs of improvement. I believe you said that both for the commercial unit, the new commercial unit, as well as your North American retail. If you could explain what some of these changes are before and after, what it was like before, and the magnitude of the improvements that you're seeing and why. Just give us more color or depth on these early signs of improvement. Okay. All right. So I asked Diego Babbo. Diego is our Retail Division Officer, so he will give you an explanation about that, okay? Diego. Yes, David. Actually, Mr. Natuzzi is referring to the fact that we have a, let's say, institutionalized, robust process of ongoing performance assessment with actionable insight translated into precise and timely action plan. This is part of our culture of continuous improvement, which has allowed us to swiftly address underperforming categories and capitalize on emerging opportunities. We are based on a software platform, which is the Power BI platform, which is allowing us, on a rolling basis, to look at each single store, not only directly overridden, but also including all our dealers that decided to join our system, which are more and more embracing the idea. We are now able to really make a sounding business decision based on facts and figures, as was a practice probably in most of the advanced retailers, but not very much in our industry. I have to say we achieved a good threshold and a good level of excellence in that. Through that, by the way, to give you some color, a cornerstone of our progress in that lies also in our merchandising strategies, which has been measured through this system. In terms of meticulously analyzing the behavior of consumers and in-store dynamics through the system, we have refined our product placement and visual storytelling, making our showrooms, let's say, more engaging and effective in driving conversion. It's a data-driven approach that is paired with enhancing performance analytics that somehow has empowered our teams to anticipate market trends and consumer needs to create agility. To give you just a couple of examples, by looking at this trend in our store, we have been able to set action planning in order to try to offset what has been a quite strong decrease in traffic, let's say. The key factor in mitigating the client in-store traffic has been the dedication and professionalism of our store staff who have benefited from the target training program. This has been achieved by using the system, measuring results, offsetting the decline in traffic, mostly in the U.S., through three main pillars and actions. One, as PJ could be eventually commenting more on me, is the fact that we are addressing the trade business through the architect in our store, which is now part of our, let's say, double-check activity through our software, which has achieved considerable results. Mostly in the U.S., we have stores where we are exceeding 25%-30% of our business made through the trade business. Through the system, we also implement action in order to improve the conversion rate of the fewer customers that are getting B2C and consumers that are getting to our stores, together with actions that protect the average ticket of our store. Everything is now, let's say, putting on a rolling basis in the system, which is also strengthening our internal collaboration, integrating feedback loops between retail operations, merchandising, and supply chain to ensure optimal execution at every level. Okay. I'm going to go back into queue in case someone else would like to ask questions. I have a request, Antonio, if you would be kind enough to make an introduction to Justin Christiansen, the new North American retail VP. I would appreciate that. Sure. We will put you in contact with our local team. Absolutely. Thank you. Once again, ladies and gentlemen, if you'd like to ask a question at this time, please use the ask a question feature on your screen. If you'd like to ask a question at this time, please use the ask a question feature on the screen. We're just going to pause for further questions at this time. If you have any questions, you could use the ask a question feature on your screen. Okay. If there are no further questions at this time, you can proceed with any further questions you may have, my friend. If there are no other questions, why maybe people. Sorry, David. I have David's on, but I just want to make sure he's on. Okay. Please, please. Otherwise, I would have moved to comment the figure more in detail with Carlo. Please, David. David, can you hear me, my friend? I'm just going to make sure you're unmuted. Okay. Thank you. My last question is on the commercial division. Also, you called out that you're seeing early signs in that business. If you could give us an update, what is longer term? What is the potentiality of the size of that business? Any color that you can give us in terms of the early signs that you're seeing now that are encouraging? I'm not sure if you're referring to—are you referring to the projects business, the trade and contract business? Yes. Is that not what you call the commercial division, like selling to hospitality? No, we call it—I think that's the reason why the team was a bit puzzled. We call it the contract, not commercial is all the division. Contracting is what we refer more with this, let's call it B2B or B2B2C opportunity, which is led by PJ. PJ, I believe you are the one best suited to address the question. Please, go ahead. Mr. David, as you well know, we're overseeing for sure, first of all, a phenomenon which is pretty positive on one end for consumers, which is the growth and the extended, let's say, lifespan of furniture products that is growing. That is causing, as a matter of fact, a significant, a slower pace in the repurchase cycle for consumers. That's a phenomenon that we're somehow looking at on the retail side. If you consider the macroeconomic pressures that we're all feeling, clearly that impacts, like Antonio was opening in his remarks, it's definitely impacting consumers' confidence and purchase intention. Now, we are seeing there is a shift in our retail business model. There is somehow hybridization of what was a B2C purely type of commercial dynamic into a B2B2C model, where the business-to-business is represented by the relationship with the design community, which is what I'm looking and overseeing with what we call trade and contract division, which is a team and a business unit that overlooks on two, let's say, business trajectories. On one end, we do develop and deliver bespoke solutions to hospitality operator, hospitality and entertainment, commercial, residential, not to mention, of course, bespoke solution in the residential field, of course, which is very important. That is what we call contract, is bespoke, and is what also gave life to an incredible best practice of the Harmony Residences in Dubai, which was a relationship, let's say, an opportunity built over a relationship started with a real estate developer based in Dubai, and that is now being replicated in different geographies of the world that are adding onto the opportunity of Dubai by opening up to new opportunities of branded residential. On the other end, we are also in parallel improving the organization by ensuring commitment and discipline growth with design leadership, bespoke project development, integrated customization, and leveraging, of course, of the Natuzzi controlling of retail, but also leveraging the Natuzzi supply base for whatever that is more related to retail. The trade business in our retail fleet is what I also overlook at supporting Diego and his retail teams with, let's say, a dedicated set of skills, guidance, and tools to promote the business with designers, architects, or even developer and hospitality operator in all of those adjacent areas where our retail network lies today. Here we're seeing that, of course, there's some market research of which one is—I want to quote—it's ThinkLab US, who reported that the average power of a design studio in America is 40 times higher than an average American consumer. The top 200 design firms in America have 140 times the spending power potential of an average American consumer. You can understand that this business-to-business relationship has much more loyalty and potential than whatever we were going after on the B2C side of our retail business. Let's say consider the trade and contract division as a business unit that on one end is trying to leverage on our global retail network, trying to have a localized type of relationship or sentinels, business procurers that do grasp, hear out for opportunities of any sort of development in their areas, and they relate to our corporate team, which is a team that I started up over the last year and that does, in effect, contract and bespoke solutions. Then we have our stores. Like Diego said, there are locations today in which implementing and focusing, especially in America where the potential is definitely the highest, these locations where we're focusing on—consider every Monday I speak to the overall American trade teams of the world in each and every location. We're seeing an incredible growth where, like Diego said, some stores reached 30% and even more of a share of voice of trade sales in their stores, which is sales where, of course, it's not just delivering the design service, but it's also harvesting the relationship with design professionals, which will allow us to have loyalty and long-lasting B2B kind of connection with these design professionals. To be frank, I do believe that this is the future of our industry. I also sit on the board of directors of the Italian National Furniture Association, which also owns the Salone del Mobile Furniture Fair. All of the peers and competitors or colleagues that we have on the international level, they all are seeing incredible results by pursuing the world of contract projects and trade because in these periods of times, working once again with design professionals, being specified by contractors, becoming loyal suppliers for big hospitality operators is what can mind the gap of what the global economy is unlikely showing to effect today. Okay. Thank you for that commentary. Last question. I had made an introduction, Antonio, to probably the largest home furnishings e-commerce company, and I believe it was something that you were going to get stood up. Could you give us an update on that? When you expect to launch and give us an update there? Thank you. I will pass it to Codrin, who has been the person implementing this opportunity. Thank you, Antonio. David, thank you for the question. We have met quite a few times. They have visited us during Milano, during Salone del Mobile. We have had a great time together. We have also met again. They have followed up with a meeting in High Point Market in October. We are now going through some technicalities in terms of finding the common ground in moving forward, technically speaking. I will also be meeting with their executive leadership team in Florida, where they have a congress upcoming in September. We are confident that we will be able to positively conclude discussions by the time we meet in September in Florida. First and foremost, thank you for bringing this opportunity forth. We are working on it, and we are cautiously optimistic about moving forward in a positive way. Okay. Thank you, guys. Thanks to you. Thank you, David. At this time, I'd like to turn the floor back over for any further or closing comments. In closing, maybe as typically we do, Carlo, you want to—Carlo and Piero, you want to highlight some of the key dimensions of the quarter as reported, even though I believe most of the audience is a well-educated audience which had the opportunity to review. Yeah. Maybe Antonio also. With figures, please, if you want to provide any commentary on the performance and more on the economic element. Yeah, I would. Go ahead. Thank you, Antonio. Do you hear me well? Yeah, we do. Yeah. Thank you, Antonio. I will provide a couple of comments that maybe it's worth to underline again related to our performances, why we have been discussing about the gross margin given the situation in both channel mix and, let's say, between retail and wholesale and the new, let's say, production location. What is maybe worth to be, let's say, confirmed is that in the other industrial costs, we see a decrease from EUR 4.9 million -EUR 4.4 million. So we have a saving of EUR 500,000 given as a result of a lower related depreciation following the closure of our Shanghai plant and the move to the new plant of Quinjao. This is a saving that will—yeah, it's in our P&L as a result of this transition process. Going back to the selling expenses, while we have seen an overall increase in the transportation costs as a result of higher tariff of Italy-North America shipping route, on the other side, we have benefited of EUR 800,000 saving given this new industrial location. We have lowered deliveries from China. This is like a plus of all the process we are going through in terms of industrial location. Adding on the question of Mr. Cannon, we need to confirm that we had closed in 2024 three non-performing stores: one in Spain, one in the U.K., and one in Italy. This is benefiting us with $700,000 saving in selling expenses. These are data that confirm that our active portfolio management is indeed giving benefit to our P&L. On the other side, when, let's say, some few remarks on our financial costs, while we'll see the impact of the decrease of the interest rates that is reflected in financial costs from EUR 2.6 million last year to EUR 2.2 million, we have been overweight by unfavorable currency movements on the trade receivable and payable. We did not have any change in our hedging policy. This has been basically the result of the floating and unpredictable exchange rate of the US dollar in the first quarter that has brought us a EUR 1 million loss compared to EUR 200,000 profit last year. These are, let's say, something on top of what we have fully described in our press release. Okay. Thank you, Carlo. Kevin, I believe if there are no further questions, and as always, we also welcome the audience to reach us separately individually after the completion of the call. I believe, Kevin, if there are no further questions, we can thank the audience on behalf of Natuzzi. I also thank Pasquale and all the team who joined us today, and we can close the meeting. Thank you. Thank you everyone for joining us today. 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. Thank you all.