Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Natuzzi Third Quarter and Nine Months 2016 Results Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session and instructions will be provided at that time. Joining us today on call from Italy will be Natuzzi's Chairman and Chief Executive Officer, Mr. Pasquale Natuzzi; the Chief Financial Officer, Mr. Vittorio Notarpietro; and Francesca Cocco, Investor Relations, Manager. As a reminder today's call is being recorded. I would now like to turn the conference over to Francesca. Please go ahead, ma’am.

Good morning to our listeners in U.S. and good afternoon to those of you connected from Europe. Welcome to the Natuzzi third quarter and nine months 2016 conference call. After a brief introduction, we'll give room for a Q&A session. Mr. Pasquale Natuzzi together with Mr. Notarpietro and the Management Team will be glad to answer to your questions. By now you should have received an email copy of the Natuzzi earnings results. If not, you can find this information within our Website at www.natuzzi.com under the Investor Section or please call our Investor Relations Department at +39 080 882011 to receive the results by email. You can also email information requests or questions to our email address investor_relations@natuzzi.com. We'll respond to you as soon as possible. Before proceeding, we'd like to advise our listeners that our discussion today could contain certain statements that constitute forward-looking statements under the United States Security Law. Obviously, actual results may differ materially from those in the forward-looking statements because of risks and uncertainties that can affect our results of operations and financial condition. We have discussed such risks and uncertainties, which have in the past affected and may continue to affect our results of operation and financial condition in our Annual Report on Form 20-F for the fiscal year ended December 31, 2015. These reports are available within our Website www.natuzzi.com or from us upon request. You may also obtain a copy of our Form 20-F filing from the United States Securities and Exchange Commission. And now I'd like to turn the call over to Mr. Natuzzi. Please Mr. Natuzzi.

Thank you. Good afternoon. I’m Pasquale Natuzzi, the CEO of Natuzzi Group. Welcome to the third quarter and first nine months of 2016 conference call. Joining me are Vittorio Notarpietro, our CFO; and Francesca Cocco, our Director of Investor Relations. I would like to share with you some highlights from our first nine months and then I will ask Vittorio to discuss with you the number. We have been busy moving forward on the transformation of our company, having now created two operating divisions. Nazzario Pozzi, Head of the Natuzzi Division and Gianni Tucci, Head of the Softaly, private label worldwide division have made real progress. The Natuzzi division has opened six new direct operated stores location since January this year. In addition, the division has achieved 10% growth in revenue for our flag Natuzzi Italia brand in our direct store. We will push hard to continue this trend going forward. We are at the same time starting the process of rationalizing our distribution network. The Softaly division has made progress in resolving the difficulties of one of our major client as well as opening relationship with several important new clients globally. The recently completed North American Furniture Market in High Point was the best market I have experienced in several years. Both the product and production process innovation continue to make improvement in our productivity and our quality. The evolution of our company through the new strategy is a huge task. We are making great progress, management is in place, organizations are aligned, system has been restructured and we are opening stores. The ultimate transition will take time, but we are on our way. Now, let me turn to Vittorio Notarpietro to take you through the numbers. Vittorio?

Thank you, Mr. Natuzzi. Welcome everybody. Let me start with the – from the analysis of the cash flow. As of September 30, 2016, the company had €56.8 million cash improving by €4.3 million from December 2015. Net financial position was positive by €15.9 million, up from €12.8 million at the end of second quarter 2016 and much better than the €5 million at the end of first quarter this year. Cash flow from operating activities has been strong for the two main reasons: working capital management, first, and more importantly the profit and loss performance, which is improving constantly from the second quarter of 2014. This EBIT improvement has been realized in spite of decreasing upholstery sales in the nine months. This is partly a result of improved pricing in our wholesale and retail and some growth in establishing sales. Natuzzi direct retail chain made promises from last year and those who are Natuzzi dealers, independent dealers, are achieving better results in the old Natuzzi stores, especially [indiscernible] recently opened in the appropriate retail part with high traffic and numerous advertising on, which Nazzario will elaborate later. We have our retails very happy in UK, Australia, and China at least. That’s confirming that the Natuzzi brand equity is constantly growing and this is crucial for us to look at the future growth based on new retail management format, possibly direct management. As said by Pasquale Natuzzi in the press release, our private label division softened as a result of the difficulties of one of our major customers, but we are working with them on a new strategy, which we believe will benefit both. I am sure Jammie will be happy to discuss about that. This year raw material prices and transportation costs went significantly down. And in this case,…

Okay. We are ready for any question.

Thank you. [Operator Instructions] Our first question today comes from Edgar Oravais [ph] and he is a Private Investor. Please go ahead.

Hi, Pasquale and the team. So I don’t often talk on these calls, but I’m a little frustrated as being an investor with your company for quite some time. And my couple arguments and concerns are residing around the customer reach. It sounds like you currently have the best customer reach while upgrading inter-continent. And yet, La-Z-Boy, in the Flexsteel is beating Natuzzi on top line as well as on the bottom line. And I’m not even factoring the fact that they’re expanding out to Europe shortly. This is going to be a great competition for you as well. I guess my question for you is, what are you guys doing with respect to developing the e-commerce versus only selling your furniture through retail stores. What are you doing with respect to efficiency and with respect to savings and with respect to expanding the e-commerce and bringing the value to shareholder?

Nazzario, our Chief Commercial Officer for Natuzzi brand will answer to you, okay.

As you said, based on – we are aware of our customer reach and brand strength and based on these, we have now adopted and announced a new go-to-market strategy in last July and this summer we started executing this and we already see very positive signs after few months. Because since the beginning of the year, the value of transactions in our flagship Natuzzi Italia stores, directly operated stores, is up 6.3% versus last year, the average ticket. The average value proceed of these transactions is up 11% versus last year. And in our directly operated stores, we have achieved, since the beginning of the year, a 10% increase in revenue growth and 2.8% growth on a same-store basis. These are very early signs of the new go-to-market strategy that we just started executing a few months ago at this summer and we are undertaking the realignment of our organization, of our corporate and regional organization to keep executing this strategy. And as for the e-commerce, we are very much aware that in the [indiscernible] market, on-line purchases, we have become more and more significant. It might not yet be the case, but it will definitely be the case over the coming years, and we are getting prepared our go-to-market strategy definitely include e-commerce and integration between online commerce and offline stores, which we will execute.

But is this a part of your strategy? Is this something that you actually guys are going to act upon? What’s the turnaround? I mean – and I’m pretty sure meaning investors like me are pretty much padded with respect to waiting for a decade for a turnaround. What’s the timeline? I mean, we want to see the results.

Edgar, this is Pasquale. First of all, I will appreciate that [indiscernible] our performance, our company, and I’m sure that you realize. If you know, in the last – to make the turnaround for an Italian company, so why we are down, your benchmarking Natuzzi with La-Z-Boy, we are two different company. La-Z-Boy is primarily an American company, they do business in America. They have just a single currency, they have a single language. We are an Italian company with different laws, with a global company, different currency, with factory in Romania, factory in China, factory in Brazil, with a factory in Italy exporting everywhere in the world. We are a different company. We are a global company. And we have facing a turnaround process, which has been not too easy, but we are getting there. Because if you look back eight quarters from, let’s say the second or the third quarter of 2014, we have been progressing quarter by quarter by quarter and I would expect from shareholder also to appreciate the effort that we are putting as Manager. So I mean – then comparing Natuzzi with La-Z-Boy, I have a lot of respect for this company, but we are a different company. I don’t know if…

Pasquale, I completely understand what you’re saying. My fear is that the American companies are reaching out to Europe to pretty much steal your market share and what you guys are going to do about it? How you’re going to protect that market share that you’re already building up over the past couple of quarters?

We are investing for the future of our company, okay? So as Nazzario Pozzi, our Chief Brand Officer said, just to give you an example, what we have done in the last six months, we realized that we need to divide the organization because private label business that we do with Macy's, with IKEA, with big guys in America, Costco, and also in Europe, it’s a different business from the branded business of Natuzzi, so we created two separate organization. We are linking factories with the distribution channel, with markets; we are reorganizing the entire company and just prepare really for the growth. Probably the numbers we are delivering now are not [indiscernible] but please look, I mean, the overall situation. We are improving productivity through product innovation and production process innovation. We are improving performance of the retail store and in fact now we are focusing, you know, why we have two different transition – and we are also improving the number of managers with retail and high-end brand experience to drive the business at corporate level and even at the regional level. We are improving the management, the team, the organization, the – if you look just the direct operating store performance, I mean, we are starting to make money. But to switch a manufacturing company to a brand – consumer brand and to retailer, it’s a big, big jump, but we are getting there. As Manager and as CEO of the company, I’m very much satisfied for the result that we are getting and also encouraged about the future. That’s what I can tell you. And then, again, I invite you to come to Italy, it’s a beautiful country. I mean – and [indiscernible] is a beautiful region. Please come. Spend one day, two days with us and touch with your hand, watch with your eyes what we are really doing for our shareholder.

Understood. Thank you. And one last question, I understand now Natuzzi has over 50 million in cash on hand. What are you guys planning to do with that? Any chance you can potentially buyback some shares? Or any chance you can issue small amount of dividends for those who been waiting for you to turnaround over the decade?

We are not foreseeing – possibly, I’m afraid, but we are not foreseeing to give any dividend in the next year. We have a plan for the next year to continue to transform this company from a pure manufacturer to a retail company. This means that we have to continue to invest into the organization. You ask us about the way to protect the company, the future, that’s one of – the main way to protect the company is to build the brand and build out the Natuzzi retail chain. This is the way to protect our future state. And by the way, as far as numbers are concerned, last year, very well because you follow us constantly, we were down €11 million EBIT. At the end of this, you know, of September, we broke even, so we are doing something. While we are investing in the company and in the organization where we will continue to invest and in the restructuring of the company, we need our cash in order to continue this process. As soon as the cash, the net financial position, we will be happy, shareholder will be happy to receive some dividend, but this is not in the next possible quarter.

Understood, thank you.

Thank you, Edgar.

[Operator Instructions] There appear to be no additional questions at this time. We will take our next question from [indiscernible].

[indiscernible] Hello, good afternoon. We have one question regarding – it’s more micro economical, but we are wondering what could be a potential impact in the United States if there would be like some protection measurements from – towards China, how would that affect Natuzzi’s business in the United States? Is that already something that you are taking into account?

Honestly, I’m not very much concerned. I believe that the power of our brand is so strong that even with an import tax, American consumer still will buy Natuzzi, which is an Italian style, I mean, of the proposition. We have been serving now for 37 years American consumer with great product, with good quality product and the consumer they go into store, they go and they decide – on Google also and see where I can find the Natuzzi. I mean, consumers are looking for – they ask for Natuzzi product. So, honestly, I’m not concerned. We hope that doesn’t, but eventually I don’t think will impact on our business.

Okay. That’s fine. Thank you for answering.

You are welcome.

And there are no additional questions at this time.

Okay. So I like to thank you very much for all the attendees and we look forward for the next conference call where we are very much committed to do all our best to satisfy your expectation. Thank you very, very, very much and have a nice weekend

Thank you, ladies and gentlemen. That will conclude today’s presentation. We appreciate your attendance. You may now disconnect.