and gentlemen, please stand by. Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Natuzzi S.p.A. second quarter 2025 financial results. As a reminder, interested persons can join this conference also via telephone by dialing in the following number: +1 412-717-9633, then passcode 39252103#, in addition to the link already provided to join via video. Once again, interested persons can join live this conference call also via telephone by dialing in the following phone number: +1 412-717-9633, then passcode 39252103#, in addition to the link already provided to join via video. At this time. Daniele Direnzo. At this time, all participants are on a listen-only mode. Following the introduction, we will 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 Pasquale Natuzzi, Executive Chairman and Chief Executive Officer at Interim, Carlo Silvestri, Chief Financial Officer, Mario De Gennaro, Chief HR Organization and Legal Officer. Furthermore, also joining us on today's call are Ms. Marilena Scaranuzzo, Treasury Vice President, Domenico Ricchiuti, Chief Operations Officer, and then Piero Direnzo, Industry Relations. As a reminder, today's call is being recorded. I will now turn the conference over to Piero. Please go ahead. [Foreign Language] Thank you. [Foreign Language] Okay. Okay. Thank you, Donna, and good day to everyone. Thank you for joining the Natuzzi's conference call for the 2025 second 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 20F 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, Mr. Natuzzi. Thank you. Thank you. Good morning, everyone, and thank you for attending this conference call. While all the information regarding the performance of the first six months has been available on the press release, which we sent to all of you, I believe that for all stakeholder information, I would like to add also some additional information, which I believe are very important for everyone. What has caused the result which everyone is happy—okay, starting by me, by the shareholder, by all the stakeholders, and by the management—has been caused primarily from the Chinese market and the American market. I like to explain that, which I believe is very important. In China, China is an important market for us, so that's why. Like the United States, it's another important market. Unlikely, in the last, I would say, almost a quarter month, but even before, there have been always some conflicts between China and China regarding the tariffs. That has caused, in China, a crisis which has impacted our business. The volume that was forecasted for China was very much higher, much, much higher than what we are doing today. To give you an idea, just in 2025, we closed 77 stores in China, and we opened 30 new stores. While we closed 77 stores between Natuzzi Italia and Natuzzi Edition, we opened 30 new Natuzzi stores in China. There is really a situation, let's say, complicated situation. The fact that we are closing the store and opening a new store, 30 stores with the partners that are investing in our brand, this is something that needs to be told, needs to be understood from everyone. Now, in the meantime, the tariffs and the uncertainty between how much it would cost to import products from China. China has been always an important market for us, not only for distribution but also for production. Our production for the United States, for the second line and Natuzzi Edition, has been always manufactured in China. Since the tariff war started in 2019, where it was announced, tariff of first 15% and then an additional 10%, that caused a decline in sales from China to America and was affected on our volume and consequently on balance sheet. Recently, and that was last year, October, when again, tariff uncertainty in the relation between the United States of America and China were harboring every morning, we decided to shut down our factory in Shanghai and open a new small factory in Quinzhou, a province where the cost would be much lower than Shanghai. We moved the production from Shanghai to Italy to supply the American market and cut down the fixed cost of, obviously, the factory in China and improving production and cost efficiency in the Italian plants. That was last year, October last year. Obviously, a few weeks later, start again tariff between Europe and China. When we decided to move the production from China to Italy, there was no idea that one day the United States of America would ask a tariff also from Europe. Obviously, that has been also impacting negatively on our margin. Back to China. Again, we shut down 77 stores. We closed 77 stores in China, and we opened 30 new stores in China. While also in the rest of the world, we opened also 12 new stores and we shut down 17 stores. I mean, to improve our retail division by eliminating stores that are not qualified for the brand position and to substitute with a new store in the appropriate location with updated consumer experience, it is a process that we are pursuing, investing continually. That is because of that, for the all stakeholder interest, I would like just to show a little bit what I mean, we do not give up as a company. We have been continuing to invest on our brand in terms of new product and new merchandising, I mean, exhibition. I'd like just to show you a little bit, okay? It's something very interesting for all stakeholders to understand. Piero, can you help me please to show the—no, let's just start from the beginning. Want to start from here? No, no. I mean, go after, please, Piero. In order to support the commercial development, we implemented several initiatives in 2025: trade fairs, client congress, and design shows. Can we look at that, please? Go ahead. Go ahead. I don't need to read all those things. Just to show image. Last April in Milano, the picture that you will see here, that you see on this slide, is our participation to Milano Fair last April. The reason why we—and since the COVID, we haven't participated in fairs because, unlike retailers, they were not traveling. After six years, we decided to attend again this fair in Milano and was a really success. You can see, have all the information regarding the visitors, the number of companies, the number of countries, whatsoever. You will find all the information on the website, and we will provide also to send as we do with the press release, okay? Go to the next, please, Piero. Consequently, even in High Point, that building that you will see on the image is our Natuzzi America headquarters in High Point in North Carolina. We attended two fairs this year, one in April and one in October, where obviously we meet the customer, we show new projects, we show new marketing plans. These are all efforts that the company has made in 2025. Go to the next, Piero. We also organized the headquarters congress here in Italy, where we invite the customer from emerging markets primarily. I invite the customer from Italy, from Europe. They come to our congress, and they spend one to two days here in our headquarters to choose a new project, new product, new marketing plan, update their store. It's really a very important activity that we do. For example, we have the summer edition, 80 clients from Europe and Far East and our Divani&Divani partners, so all the customers. This is another huge investment to organize those two congresses in Italy, in our headquarters. Go to the next. We also organized this year three congresses in China. One was in March with the launching of Feelwell Concept. It's a concept of comfort, which is very innovative, and we introduced it to 200 journalists, VIP and institutional guests, and 320 dealers. That was March this year, 2025. In July, also in Wuxi, was launched the new Natuzzi Italia store concept. Seven media interviews, 40 articles published, 143 architects and designers, and 21 VIP dealers were there. And Natuzzi Edition, another event, very important last October in China with 150 dealers, 100 VIP, and 5 media. In other words, China, which is a very important market, which is unlikely is facing a crisis that we never would imagine before, we are closing stores that are not performing. We are opening 30 new stores, but we have been attending exhibitions, congresses, and meeting customers and promoting the business. Go to the next, please, Piero. Then we have the design show. We had 10 design shows. In February, we were in Riyadh, Downtown Design. In April, Milano Design Week. In May, ICFF New York, we were present there. June, Design Show Melbourne in Australia. July, Casa & Flor in Madrid. September, we were Dubai, Mumbai Design Week. In November, we will attend again Mumbai, Dubai. No, Dubai. We were last week in Dubai with Design Week, and we will be next week in Mumbai again in India. The first week of December in Miami after Basel. All those exhibitions where we show our novelty, our new projects are very, very important to be in touch with the market, with the customer, with the designer, architect. We were also in Osaka last April, the Expo Osaka. We were there, 791 events organizing and Italian pavilion, 1,300 official delegation, and whatever, 7,500 company representatives. Okay. Next, please, Piero. Highlights trade contract. Those buildings that we show you, we launched last November in Dubai, the first Natuzzi Harmony Residence. Because the building is under construction, we already sold several apartments, Natuzzi apartments, all furnishing by Natuzzi. We already signed the second contract always in Dubai with the same developer for another 80 apartments. We signed another contract with an entrepreneur developer in Jerusalem, in Israel, where we designed already the building, and we have the contract in our hands to develop this tower. Many other projects are in the pipeline. All those information I gave to you just to show that despite the headwind we are facing in terms of business, we strongly believe that all those initiatives, all those initiatives that we have made, and we developed more than 30 new projects because obviously when we attend fairs and congresses and those events specialized for architects, we show a new project, a new project in order to stimulate the interest in our brand, in our company. Again, we do not give up. We strongly believe in the future, and all the investment made in 2025 makes me personally and makes the company confident about the potential growth of the business. I can stop here for now, and I am ready for any stakeholder to ask a question. Thank you very much for listening. Thank you. The floor is now open for questions. For participants connected via the phone, if you would like to ask a question, please press star one on your telephone keypad at this time. For participants connected via the web link, please click on the Q&A button and then click raise hand. Again, parties on the phone, please press star one. Participants connected via the link, please click the Q&A icon and then raise hand. Our first question today is coming from David Cannon. Please go ahead. Thank you for taking my questions. The first one is, I see that you've extended personally a credit line to the company of $15 million. What are the terms of that in terms of the interest rate? Also, you've referenced non-core assets that you can dispose of. Could you quantify for us some of those assets, what they're worth, tannery, other property that you can potentially dispose of while we're transitioning the company to profitability? As anticipated in the press release, the board of directors has just approved the guidelines of a multi-year restructuring plan, basing and optimizing the cost structure, increasing the flexibility, and developing the retailer business. To implement these activities in the plan, targeted investments are likely to be required, such as marketing, retailer, the managing, and redundant workers, etc. Therefore, the board will be evaluating measures aimed at strengthening the capital structure to support the restructuring plan. Once the restructuring plan is finalized and approved by the competent corporate body, we will provide further information on the capital strengthening measures required. I have granted the credit line to the company because, as the majority shareholder, I'm firmly convinced that the effective implementation of the restructuring plan guidelines, particularly those relating to the Italian production hub and the general optimization of fixed costs, together with our commercial initiatives, can help the group to relaunch its activities and pursue sustainable profitability. This credit line will provide the resources needed to address short-term needs and help ensure the financial stability required to achieve the group's strategic objectives set out in the restructuring plan. However, as I previously mentioned, together with the board of directors, we are evaluating measures to strengthen the company capital structure. In the current year, that's it. That's the story. Thank you, Mr. Natuzzi. David, to further add, is a zero-interest loan. As you know, we are looking always for opportunity to, let's say, monetize some of our non-core assets. In specific, for the tannery, we do not have any news so far, but we are actively looking for other opportunities to offset some of our non-core assets. This would be also one of the points of our strategy for the near future regarding also the right-sizing of our industry operations and facilities. Thank you. Okay. That is helpful. Thank you, Carlo. Carlo, could you quantify for us two things? First, on the assets, give us a sense as to the value of some of these non-core assets as well as the tannery. How many millions are these assets worth? If you can give us some sense of the restructuring once we move past it. Right now, our gross margins last quarter at these volumes was only 34%. After the restructuring, let's assume similar revenues. What type of gross margin do you think we can achieve? In terms of operating expenses, what kind of a reduction do you think we can get in operating expenses? Will we be positioned to be profitable as a $320 million company? Thank you very much for all the questions, David. Let me elaborate a little bit because it's a bit long. I will try to summarize it to be effective. First of all, in terms of assets. Our total net asset value is around $70 million. To specify which is core and non-core, for the moment, I cannot give you the precise figures because all the investigation and internal analysis and discussion with the board are ongoing. This will be, let's say, quantified in a way once the final setup of our operations is done. As I said before, this is one of our strategic points. If talking about the tannery, the tannery had a value of $5 million. Specifically, that was the last evaluation we had. Of course, David, we need to be aware that then we need to go on the market, and these are the latest evaluations. Specifically for the tannery, it is not an easy market to find a buyer in this moment. For the other assets, when I talk about $70 million, it is composed by the plants and the machinery. Also on this, we need to play careful. It is not a value that we can totally monetize because for the machinery, it is a different way of evaluating. This is for the assets. Allow now to discuss a bit about the gross margin and as far as I can give you indication on what we are working because, of course, the work is in process, and I can't disclose any further detailed information, but allow me to give you the sense of what we're doing. With Mr. Natuzzi and all the team, we are working to be sustainable, especially from the financial point of view. When we talk about increasing marginality, this is one of the main points. The 34% has some factors that need to be specifically addressed. The first one is the direct impact on the lower retail sales. That, as you know, has a higher margin. This, we are working with Mr. Natuzzi and the commercial team to bring back the sales that will grant us a higher marginality. On the other topics, we are working on both operational efficiencies that will increase the margin and will decrease, as one of the replies to your question, all the industrial costs in a permanent way, and working on the price list to adapt the profitability to the changing environment of business. All of these activities, together with other actions that are aimed to be more efficient from the cost point of view, targeting of decreasing and increasing the speed of that activity to the economic environment, will improve our marginality. Therefore, we will go back to the trajectory with increasing margin and decreasing the sales to be breakeven. I hope to be clear and reply to all your questions, David. Yeah, that's very helpful. I appreciate the clarity and the detail. Are you saying at these levels, these depressed levels we're running at, after the restructuring, your objective is to be breakeven? Did I hear that correctly? Yeah. The trajectory of the plan is to be profitable. Yes. The trajectory of the plan is to be profitable. Absolutely. Okay. Okay. In the past, I guess this would be a question for Pasquale Junior. I don't know if he's on the call, but if you can speak to the commercial initiative, Mr. Natuzzi highlighted some of these large projects in Jerusalem and Dubai, etc. For next year, could you give us a sense as to your internal goal for annual run rate in commercial revenue? Is it $10 million a year? Is it $20 million, $40 million? What is a realistic internal goal in terms of run rate? Because this is incremental, and I know there are companies that are doing hundreds of millions of dollars in this business. It seems like there's enormous upside to it. If you can give us a sense as to the magnitude, that would be really helpful. Okay. I can answer, David. Certainly, you're right. To be honest, I mean, we want to communicate the real contract that we have in our hands. We started with one contract in Dubai. Because it's been successful, now we have the second contract. Because it's been successful, we have also the contract in Israel. There are already three towers that we should develop. I mean, we have other very important, very exciting projects in the pipeline. I mean, we are not ready now to tell you how much volume we are going to develop with the trade contract business. Certainly, the fact that we've been attending two events in Mumbai and then in Dubai, in Riyadh, and even in New York, where we invest money and we meet architects, I mean, where a developer just, I mean, we are promoting the business, and certainly we are expecting to get good returns, to be honest. Okay? Yes. May I add on this, Mr. Natuzzi? David, to give you a magnitude, it is a startup. So the number will be low in the beginning, but then there will be a multiply effect. The more projects we do, the more they know, the more we have. And specifically, when we talk about revenues on a yearly basis, there are two sides of the contract. The first one is design fees that we will get in the first phase of the contract. The second one is when we realize the project and we deliver all the merchandise. That is a timeline that we do not know and we cannot predict. As a total ballpark, we are in a startup phase. On top of that, it is difficult for us, as of today, to understand the phasing of the delivery of the product. Okay. That is very helpful. Is there a way that perhaps I can extrapolate if you can give me a sense, maybe per unit, let's say there is a building that has 150 units in it. Okay? What do you think the spend is on average? What is a normal spend per unit? Is it $4,000, $7,000? If you can give me some sense. It really depends on the project, David. It really depends. It really depends from the type of project. No, I mean, if I understood well the question, David, I mean, we promote the Natuzzi Harmony Residence, and we promote apartments of different sizes. We give the liberty to the consumer to choose the Natuzzi product. It depends. The amount of cost to furnishing each apartment could be very much different. It depends. As you know, each project we make is available in leather or is made in fabric. The configuration could be a big one or a small one. It depends from the customer needs, the consumer needs. The price could be different. We believe that next year, after we furnish, we decorate several apartments, we must be in the position to average them. We can give you this information. Okay. Let me move on to my last question, and then I'll go back into queue if there's anyone else that would like to pose questions. Could you give us an update on the permanent CEO search? Do you have candidates that you feel you're close to deciding on? Is that something that you expect perhaps by early next year will be finished? We engaged a Nedanter company and started to propose some candidates. I already made one, I interviewed one, and I spent two hours' time. Certainly, we need to find a CEO that should understand how to develop and manage high-end brands. One, we need to, the same CEO needs to have experience also in managing a retailer. Last and not least, should have also experience in operation. Because we are a company which we design a product, we manufacture products, we sell the products through the retailers, we are a global company. I mean, it's not easy, but certainly, we will continue to do the search. There are certainly some people capable to manage our company. We are going forward. Be sure about that because I like to be the president of the company. I cannot be everything. I'm here to help the company, obviously, because I feel responsibility for that. Okay. Okay, David? Thank you. You know what? I'm going to try and squeeze one more question in there. My apologies. The last quarter you reported was second, the June quarter. Clearly, the third quarter is over. Are we basically maintaining the levels that we saw in Q2, or have things gotten worse, or are they slightly better in terms of the written orders? I mean, I already declared on the press release, David, okay? I mean, I hope I have been clear. I'm sure that I have been clear because I wrote, I read, and I reread again the press release. Do the same, please, all right? You will then understand the company's direction. Thank you. Oh, you're very welcome. Thank you. Once again, that is star one for phone participants. Web participants can click Q&A and then the raise hand icon. We're showing no additional questions at this time. I'd like to turn the floor back over to management for closing comments. No further questions? That is correct. Okay. Okay. Thank you very much to everyone, to every listener, and I really appreciate your attendance. Thank you. Thank you very much. You too. Bye-bye. Thank you. Thank you very much. Bye-bye. All right. Bye-bye. Thank you. Thank you.