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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Natuzzi's Conference Call for 2023 Fourth Quarter and Full Year Financial Results. As a reminder, interested parties can join this conference call live 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. [Operator Instructions]
Joining us on today's call are Mr. Antonio Achille, Natuzzi's Chief Executive Officer; Mr. Pasquale Natuzzi, Founder and Executive Chairman; Mr. Carlo Silvestri, Chief Financial Officer; then Mr. Mario De Gennaro, Chief HR, Organization and Legal Officer; Mr. Diego Babbo, Global Retail Division Officer; and Piero Direnzo, Investor Relations. As a reminder, today's call is being recorded. I'd now like to turn the conference 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 2023 Fourth Quarter and Full Year Financial Results. After a brief introduction, we will give room for the question-and-answer 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 conditions. Please refer to our last 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, and good morning, everyone, and good afternoon for people which are connecting from Europe. Let me start to briefly discuss the figures of the last quarter of '23 and the full year of '23. Then I will provide together with my colleague, an understanding of what we are doing and our long-term objective.
So starting from the last quarter of the year, we reported a decline in sales. It's important to consider this decline in perspective versus 2022 where throughout the year and especially in the last quarter of 2022, we had a strong backlog. If we net the performance of 2023 last quarter from that effect, the decrease is still significant, but is in line from what we observed in the industry in general, given a very tough market for the durable and furniture in 2023. This is, let's say, clearly tough market condition in 2023 last quarter, we work to accelerate our transition to becoming a brand retail company. In particular, in the last quarter, we have reported sales from branded goods in excess of 92%, which means that basically our entire sales is composed by branded sales, either Natuzzi Italia or Natuzzi Editions.
The percentage was 85% at the beginning of 2021, so a step acceleration. Equally for retail that if you wish, is the natural consequence of becoming a brand company, retail on total sales has been nearly [indiscernible] from 52%, which was the reported in 2021. I will discuss later, but I believe this is a very important element because Natuzzi just completed a transformation as investor or other people interested in our story. Now we should really in full look at Natuzzi as a company which has been investing for more than 20 years to establish itself as a globally recognized brand and especially with Natuzzi Italia in the segment of the market. This also implied that we had to invest, and we will comment later also with the help of Diego to evolve our tools and organization really to control this retail and branded business in a manner that before was not required by the company. The other area, which become evident in 2023 last quarter and more in general in the full year is that we are executing and accelerating on our restructuring plan and effort. In 2023 last quarter, in fact, we accrued EUR 5.9 million of one-off restructuring cost for intervention that will become from a cash perspective and from a benefit perspective, visible -- fully visible in the following year.
In the last quarter, our gross margin, net of this one-off restructuring activity has been up 36.2%, which compared with 38.8% in the last quarter 2022 and compared with 34.6% in the last quarter of 2019. So we are still in a trajectory of improving margin, clearly the effect of having a sub-utilization in factory as a partial impact on the margin. These key figures on last quarter of 2023. Looking at the full year, I would say the key underlying elements that apply to 2023 are pretty similar in the sense that for us, as for the majority of the people we compete with the public, the result. 2023 has been a year where after 2 years, very strong demand given the implication of real estate and low confidence of consumer, we witnessed a lot of postponement in purchasing. And again, this caused a decrease that if you compare it with 2022 net of backlog is significant, but in line with what we serve from competitors.
We discussed about restructuring. Let me give you a few numbers to give you the size of what we're talking about. In 2023 only, we reduced our team, especially from factory by 514 units, 5-1-4 units, which brings the total of reduction from the beginning of 2021 to 759 units, equivalent to 17.5% of the total workforce, which I believe is a significant achievement because in most of the geography where we operate, starting from Italy, there is a very rigid labor law. So every step needs to be accurately planned and accurately executed. And we did so avoiding any kind of, let's say, turmoil in our environment. This restructuring will produce on yearly benefit -- on a yearly basis, a benefit of EUR 22.5 million running benefit and labor cost compared to 2021.
In 2023, we also kept investing some EUR 12 million of which EUR 4.6 million in retail, we opened 9 new DOS and EUR 7.2 million again in the area of factory enhancement. So this is the key highlight on numbers and figures on which then our CFO will provide some other details.
In opening the Q&A, I would like to give you a more holistic and strategic perspective. So it's clear and evident that the results we reported in 2023 are an effect of adverse market for furniture. It's clear that those figures are well below our midterm target and our potential.
Having said that, there are three key messages I would like to share and elaborate on. The first one is now that we really have completed the transformation to become a brand company. As I mentioned, nearly 92% is branded, which is a huge, huge achievement considering that the company has been investing 20 years to arrive to this point and its origin were very different because in origin, Natuzzi it was an incredible growth story but very much focused on the value segment. So we're selling at selling price in U.S. in the range of $395. Currently in U.S., average ticket for Natuzzi Italia is in the range of $9,000 and the best sold configuration product is in the range of $14,000. So you can imagine how much it takes to legitimate a brand to do this kind of stretch.
So first element, we are a branded company. Second element, we really invested to excel in distribution. Distribution for us is both the retail. We remain DOS, direct operated store and franchising, but also, which is very important for us, wholesale or branded product that we distribute through a format which is called Gallery, which again is a control format where we spread the right merchandising and the right brand experience.
And the last element, as I mentioned, transformation, which we've been working on very hard to prepare it in the last few months and year now is getting to a pace that is what is going to be continuing and accelerating in the following year. So to get some more detail, talking about the retail front, we now have 680 stores with the branded Natuzzi, being them Natuzzi Italia, Natuzzi Editions, being the DOS or franchising operator. But from a customer perspective, those are stores. And then we have some 600 galleries, which are store-in-store. For us, both deserve equal attention.
For the first area, the stores, we've worked very much to really learn how to do retail and to really control the sales at sellout level. Doing so requires quite a significant program of investment in '18 because historically, the store were just an account number. We didn't really have an understanding of what's happening in the store. Now we have a very timely and functional understanding of what is happening in the store, in terms of people getting in, people buying, what they buy, and this for our transformation to become a consumer-centric company is really invaluable.
To support that this knowledge get progressively spread across our market, we created not only systems, but an organization, in particularly some 12 months ago, we created an organization that we called explicitly Global Retail Excellence Division, which really has the purpose of serving best practice, could define them and make them available, first to our directly operated stores, but progressively also to our dealer because we want the experience and the productivity also at the dealer level be [indiscernible]. Let me invite Diego Babbo for a brief illustration of some examples of what we do under this chapter Global Retail Division.
Thank you, Antonio. Good day to everyone. Just briefly, let me introduce myself while I'm attending this call for the first time. On top of my previous experience, the retail downstream within the oil company sector, I've been working for more than 20 years now in this company, embracing many roles within our retail environment, from purchasing to construction and development. And I can witness the effort that Natuzzi put in place in order to sustain the transition from factory to retailer and a lifestyle brand, which has to do with cultural and mindset evolution for the majority of us, supported through the adoption of new tools and routines. And this is exactly, as Antonio was saying, what retail division established last year is about. Our goal is to set up appropriate retail processes and guidelines in order to generate consistency within the brand experience and ultimately increase stores' profitability. Our willingness is to partner with each regional manager and assisting him or her in achieving the retail network respective performances.
But let me give a few examples of some recent achievements. We have recently launched a state-of-the-art 3D room configurator, which is allowing a more efficient interaction at store level within the local trade community. We have also revised the compensation scheme for the store manager and designer system which, together with the launch for the first time here of a sales contest for the global DOS network is intended to boost performance and sense of belonging for our employees. We are also cherishing our store staff by addressing the training needs through a brand-new online platform, boosted with the artificial intelligence-driven multi-language live translator which will allow for the first time ever to reach all our network on top of the classroom session with more than 300 attendees already set up. Leveraging our store staff has already proven to achieve very good results in some of our more representative stores with double-digit growth, for instance, in our Ambassador store in New York and Madrid. Back to you, Antonio.
Thank you, Diego. Just in synthesis, I mean, to make a long story short, the Global Retail division has the objective to improve organic performance because you have to think that with 600 stores, and then we'll discuss all of the stores in China, is quite terrific, the upside potential that we have by simply working on organic growth. Then I mentioned branded wholesales. So as anticipated, 40% is still distributed within wholesale, branded product. That for us is still a very important strategic part of the business. So for that, we developed what we call Natuzzi Commercial Excellence Program.
What is it about? Basically 2 things. One is standardizing the format. So we defined a new brand gallery format. So basically, is kind of business card of the Natuzzi in a multi-brand environment. I know most of you -- a lot of you come from U.S., so you need to think about the large furniture retailer where you find different providers maybe on the same floor. Given the confidence we have in our brand, we want to have a special role in positioning of the floor, which means that the shopping environment, the brand presentation need to fully express the potential of the brand like it happened in our stores. So in the wholesale, we really invested on these topics again with organizational people appointed.
Secondly, the commercial excellence program aims at improving the performance of our commercial team. We have 304 people at different roles in the organization, some direct employees, some other agents, which are dealing with clients, with the dealers. So we are standardizing the methodology they should approach this dealer, but also we are setting very clear productivity target and budget by dealer that can be managed centrally. Again, because Natuzzi is a very spread organization, and we realized that we needed to really reinforce the control of the center.
On the retail front, I believe it's very important to show a concrete sign of our commitment to that, to remember that in 2023, which is a year where a lot of company cut investment, we actually opened 9 stores, of which 6 in North America. Our store is a name, but the store can be very different. The store that Natuzzi 30 years ago, they are very different on what we open now. What we open now, especially market in North America, we really strive to have signature location, signature retail infrastructure environment. An example is Manhasset. Manhasset, as you might know, is in Long Island, it's called the Miracle Mile because it's really connecting Manhattan to [indiscernible] and is one of the areas with highest productivity.
There, we open an absolute flagship which is really a very iconic new store. And this is an example of what we are now doing when we talk about new stores for Natuzzi Italia. So they are really major, major investment in the appropriate location to fully express the potential of the brand commercially and from a brand perspective.
Shifting gear to the restructuring. Maybe before that, let me do a couple of comments on individual market. Now as you know, as we discussed, we're operating under market. But let me provide some insight in the most important markets, which are U.S., China and Europe. On U.S., our focus remains very high. We believe is one of the highest priority and opportunity we have is where the company is listed, is where the company since found its own way of doing business. We opened 6 directly operated store and 1 franchising, an additional 7 galleries and there is quite an interesting pipeline on new gallery as we speak. We also stabilized the organization with Lou Mossotti taking on the baton from Jason Camp announced in the press release March 7. Lou Mossotti is a person with more than 20 years experience in North America, and he was with us for more than 2 years, really coming from the same team of Jason Camp. And then we have Scott Kruger who is developing the branded wholesale business.
To accelerate on this letter, we also have now 24 independent agents, which basically are covering, I will say the state, not second priority, but the one where we didn't have yet a direct agent, a direct rep. So this under the belief and certainty that U.S. is a large opportunity, is a continent, it's made of significant state where currently Natuzzi no longer distributed but were being distributed and very successful for more than 30, 40 years, there is a clear business case for coming back.
The other market where I would like to provide some background is China. In fact, out of the 680 stores, more than half, 346 are in China. First, I want to provide some insight on how to read the number of stores, the productivity of stores because in fact, the store belonging to the JV where we don't have the majority are not consolidated. So that is important because otherwise, when you assess the productivity of the retail, you might think that in some stores we just entertain clients, but we don't sell. So when we look at the productivity in a sense, the stores need to be carved out because for the store that belong to Natuzzi Italia, which are 96, we report in our P&L the selling. For the stores on Natuzzi Editions, which are the majority, we report in our P&L only the cost of production plus a markup because this is the way in which the deal with the JV has been structured. Of course, then as a financial shareholder, we take full benefit of the growth of the JV.
In the journey of becoming a global retail company, we recognized that the JV needed to be more integrated in our way of working. So this happened through our presence directly. For instance, myself, but also with Pasquale, we've been several times, personally 6 times since it was possible to travel back. And now the team is really working with the same approach when it comes to retail merchandising and visual. We are very excited to welcome some 24 of the top dealer on Natuzzi Italia to the coming Milan Design Week, which is a special opportunity not only to develop business, but also for brand positioning and this year, it will be extraordinary event because Natuzzi celebrate 65 years of heritage, and not many companies in our environment can arrive and celebrate that milestone.
So China is now integrating our IT system. We can see the performance at this level. We can see the performance at the U.S. level. And this, for us, is a major achievement, and this is the base on which we will build to increase the performance of China operation through our JV team at City Shanghai. That's on the 2 largest markets. I was anticipating on the restructuring. Restructuring for us is very important. It comes from -- as a consequence of the journey we are doing, you have to imagine that Natuzzi, it was historically a huge production platform, it produced also for third party, just to name one, which was a client since a few years ago, IKEA.
So you can imagine what it means in terms of size of production but also in terms of capabilities to move from producing that kind of product to produce something which is really top of the market and allow us now to develop, for instance, the contract business. We are developing business with global leading resort and hotel -- 5-star hotel in the world, has been a huge stretch from a brand perspective, but also from a production perspective. And one of the consequences is that we don't need that much capacity anymore. Executing a restructuring is never easy. Executing a restructuring in Italy is almost impossible, but we are achieving it step by step.
Now it's becoming visible in terms of numbers. As I mentioned, we let go 759 people, out of which 260 are in Italy, South of Italy. I can assure you that normally, when you touch this kind of topic before you get strike and then you get the result. We've been achieving this without any strike. We are looking at a net saving of EUR 22.5 million. And I would like Mario, which has been really a leading force in driving us to this restructuring to provide some more insight on what we achieved so far, but most notably on the way forward on what we want to achieve with the full restructuring of our operations.
Thank you, Antonio. Good day to everybody. Just a few hours before introducing myself because it's the first time I'm joining this event. I have more than 30 years of experience in different cost center, like big cooperation such as Unilever or other western companies. And I am quite used to manage in particular situation in which is needed deep experience in heavy investor relations context like in Italy, but not only in Italy.
In all my experience, I have always managed restructuring change management and the transformation project. Antonio has already highlighted the most important figure of our transformation journey, so I don't want to repeat them. What is important for me is to underline that this is not just a reduction plan because honestly, we are managing in the meantime, a fair approach for the redundancy, but also an important transformation for the rest of our colleagues, in particular, we are managing an important training program for all our people up skilling and reskilling for the digital challenges that we will have in the next future. And just for giving you an example, in Italy, during 2023 we have done more than 100,000 hours of training for our colleague for realign their competences, not only in the commercial side but also in the factories because we have invested a lot of money for creating a future way of managing our production in terms of 4.0 transformation program.
The other important point is as already said by Antonio, that we have to deal with different legislation. In some cases, it is simpler, it's easier to manage the reduction of people. In some other cases, a bit more complex. And obviously, we have to approach everything with the usual ethical cultural approach Natuzzi has. Indeed, this is also the reason for which you can see an acceleration in 2023 for the number of people that we -- let me say, supported in their exit. This is due to the fact that we spent several months to find a good agreement with the Italian government, with the local government in the other countries and with the union for having a very, very let me say, agreed way of managing this redundancy without any claim, without any strike.
And this is also the reason for which we will continue to do that in the next couple of years. In Italy, in particular, we are using specific measures that could be considered a sort of early retirement. And this is also the reason for which as Carlo will better explain in the following minutes, you see that we have accrued the entire cost of redundancy of those people, but the cash out will be in the next 5 years. Thank you, Antonio. Thank you that you can...
I said thank you, Mario. I'm sure there might be questions later on. I suggest, Carlo, that you briefly double-click on some of the figures we mentioned and then we open up for the questions that I'm sure our audience has.
Good morning, everyone. I thank Antonio, Mario, Diego for their notes. I will go very quickly through some of the numbers. As Mario was mentioning, talking about the EUR 7.4 million of restructuring costs, it has to be noted that the application of related accounting principal was to accrue such labor restructuring as soon as the corresponding liability arrives towards our employees and the matter of such liabilities arose in the fourth quarter. So in short, it was planned, but we cannot accrue in the previous quarter. From the financial perspective, we have paid almost half of it and the other half we will pay in the next 5 years. This, of course, impacted the way we need to look at our gross margin.
Antonio did provide a homogenous comparison deducting all the impact of these restructuring costs in the previous year for the last quarter. I will provide it for the full year. If we then neutralize this effect, 2023 closed with a gross margin of 36.3% versus 2022 at 35.6%, 2021 at 36.2% and 2019 at 31%, so confirming the improvement and cost improvement that we are having in the gross margin in the previous year. How will we achieve that? Not only because we were able to align the level of purchase, the consumption with the new sales volume, but because we did achieve a better inventory management, a continuous renegotiation of the condition of the supplier. And this goes also for all the investor costs that will manage a better control -- cost controlling activity.
Briefly talking about operating expenses and in details about the selling expenses, administrative expenses, we can see in our numbers that from the selling expenses that this include an expansion in terms of retail network and hiring to improve the quality of our personnel, we were able to almost compensate the lower volumes and the impact of the overall selling expenses from 26.7% in 2022 to 27.8%, also in this case through a renegotiation, especially of the transportation cost.
While for the administrative expenses, we did have an increase overall of EUR 2.1 million, and this brought us in terms of impact from 7.7% in 2022 to 11.4%. This, of course, is where we need to work and we are constantly working and is one of the focus of the manager also for 2024, but it can be partially justified because we did invest in 2023 specifically EUR 0.4 million to further digitalize our company and EUR 0.8 million always for approval for the reduction of our workforce. And then on top of that, in 2022, we did achieve EUR 0.5 million contribution from the government on this perspective. A last word of our net finance costs, that did account for EUR 9.3 million in 2023, while EUR 8.5 million in 2022 we did lower our average outstanding bank debt of 7%, but we were impacting negative of the average increase of interest from 4.4% in 2018 to 6.2% in 2023. I will leave now the floor for questions.
[Operator Instructions] Our first question today is coming from David Kanen from Kanen Wealth Management.
The first one is in regards to China. I know the government has worked -- been working on different stimulus measures, including lowering interest rates. Have you started to see an inflection there where things have bottomed and they're starting to turn up?
So let me comment on China, because I feel equipped. I spend, I believe, 3 months out of 6 in China. And some of those actually were really visiting stores. So I visited 70 stores. A fair share of those are in what we call furniture mall. So you have to imagine what in U.S. can be a department store, but floor by floor, we continue on the different category of furniture. The traffic is still very low. So China is still a market that needs to find its way to full recovery. I believe you are very deep in global, let's say, insight, you have witnessed what happened to Evergrande, you're witnessing what's happening to other firm much larger than us, carrying reported 30% loss of Gucci in China.
So for durable, you can imagine it's even more sensitive the loss in spending versus fashion. So long story to say what, for Natuzzi Edition, which is more our affordable brand, we see a kind of initial symptom of rebounce. For Natuzzi Italia not yet, and we are working really to use the best of this Milan Design Week because this is a way to reengage with our key dealer. So as we are confident that the strengths of Natuzzi in China will definitely pay off because we are, by far, the largest distributor company. Our competitors have few dozen of stores. We have 350 stores. So we're highly confident China will be a strong upside. The exact timing when this will become strongly visible on our P&L is still uncertain in terms of weeks and months because really of the macroeconomic and consumer environment in China.
Okay. And then in the rest of the world, especially North America, have you started to see stabilization or with written orders a little bit of an improvement to start 2024?
So on North America, we do see definitely a sign of improvement when it comes to performing area of the business. They are performing stronger in 2024. We are still dealing with a tale of overstocking of the channel. But I'd say, compared to China, I think it's legitimate to expect a faster rebound of business in U.S. than in China. We also, as we speak, Mario, is in U.S.. Again, we are really having a close eyes on what we can do to better support our team basically starting from today, but with the peak in the rest of the week, we will be the High Point market for the wholesale branded business, where, again, we believe we have a very strong and compelling offer that we're bringing to the market. On the retail, we are working one by one to bring quickly at regime, the new opening on the historical stores performance are definitely improved.
For instance, I didn't mention it, but if we take the first 3 stores in terms of productivity, but the same can be to the first 10 stores internal productivity in North America and you compare it to 2019, the like-for-like improvement in the range of 50%, if we take the top 10 store and 70% if we take the top 3 stores. So it means that in 3, 4 years, we've done a huge step in terms of being able to managing stores in U.S. The first 3 stores now, they're all pacing at $4 million and above $3 million. So definitely, there is a -- if you look across cycle a very, very strong in terms of improvement in retail in North America.
Okay. Yes, I'm a big believer in you guys expanding your North American footprint and becoming vertically integrated. So to that point, I know that you have some non-core real estate up for sale in -- specifically in High Point and in Italy, assuming that those assets are liquidated or that capital comes back to you, will you be redeploying that capital into expanding your North American footprint because it seems like you get the most bang for the buck there?
The answer is absolutely yes. So I think it's important to share with the broader audience. We discussed the sales of nonstrategic assets, which include High Point, which include a tannery in North of Italy and some minor asset that the company has in the Board for approval. And then the Board has been agreed that in [indiscernible] with our long-term strategy, the priority for potential disinvestment will be reinvesting in North America retail. The other priority will be supporting our long-term transformation. So in our mind, the way to create value for our shareholders is very clear. The Board is absolutely aligned with us, and we are not deviating for one bit there from that journey. The way in which to create value is retail, especially in North America and to reduce the cost base of our factory in Italy. So David, if we have additional funding, those are the only way we're going to be redeploying those funding.
Okay. And then in regards to the 514-person headcount reduction and the $22.5 million savings, does that number primarily show up in cost of goods sold going forward? Or is some of it in selling expense?
It's a combination but I'll let Mario and Carlo comment more precisely in particular [indiscernible] getting the cost of goods sold where account goes in service, but I will let Mario, Carlo, I believe each of you can be precise in answering.
No. As you said, Antonio, obviously, we are improving our contribution margin -- first contribution margin being more efficient in the factory. Obviously, we are also reducing our central staff and that will have an impact -- a positive impact also in our G&A in the next few years.
But just to tell you, the investment the company did over the last 20 years and this restructuring really changed the ability of doing EBIT and cash conversion. We just needed a size and comparison versus different tier that have the same top line that we reported in 2021 and 2022, the company lowered its breakeven of about EUR 150 million, EUR 200 million, really because there's a better mix because it's selling branded instead of unbranding but also because of all these work of reducing the cost base and the account. So now we need really to focus on sales. If we reach the sales we aspire or half of the sales we aspire, there will be huge, huge upside from an economic standpoint, the return standpoint from the investment.
Antonio, just to be more precise, we have only EUR 1.1 million that we are impacting on administrative expenses and selling expenses or the rising in the cost of goods sold.
Okay. One more question before I go back into the queue. Carlo, if I could ask, let's say, over the next 2 years, we have 15 or 20 new direct operated stores here in North America. In theory, that would give us about $15 million to $20 million incrementally per quarter of revenue. That would give us about roughly $65 million to $80 million a year at $4 million average unit volume. At $90 million to $100 million in revenue with the headcount reduction, some of the investments in automation at the factories at -- I'm sorry, at $90 million, $100 million a quarter in revenue, would we achieve a 40% gross margin or better?
May I Antonio or...
Yes, the question was with you but David addressed to you in your capacity obviously for [indiscernible].
Let's say that we are going in that direction in terms of improvement of margin, of course, adding more as to how to absorb better the fixed cost. So of course, 40% is where we are going forward. If we had those sales and even more if we have...
And again, Dave -- we don't provide guidance, but at this point, I think it's fair to do some high-level modeling. On our integrated sales for Natuzzi Italia, we have a contribution margin -- integrated contribution margin, which means the producer plus the retailer of 65%, 68%, with the current sales productivity. So if you, of course, build EUR 100 million with that productivity and that marginality by definition, it will be north of 40% because we are already targeting 40%, let's say, in a sense let me say organic, means with the same structure of business.
Okay. So it sounds like we're well positioned during the next upturn. Hopefully, the Federal Reserve here in the U.S. cuts interest rates. And we're starting to see somewhat of a bounce in housing. There's more inventory. So we'll keep our fingers crossed at this spring, things start to improve.
[Operator Instructions] And if there are no further questions at this time, I'd like to turn the floor back over for any further or closing comments.
I do my closing comment and then, of course, I invite Pasquale, who is the person who created the company, who is the person who's going to be celebrating 65 years we did for a potential final remark. Listen guys, from me the story is very clear, tough year, but we know what we are doing. We're very committed and very confident on the upside. This company is very different. You're investing in a brand retail company. The awareness of this company is really strong and terrific. I don't do any valuation on our, let's say, market evaluation, but I believe there is significant upside in it. And thank you for being with us as an investor, thank you for being with us today as a participant in this call. . I'll let Mr. Pasquale, our Chairman, to do any final remarks if you wish.
Okay. Antonio, thank you very much for the way you have been explaining. You know what we are facing. The same go Diego Babbo and also Carlo, our CFO, and our human resource management. I feel very much confident about the management today, and even in this difficult business environment, war in Ukraine, war in Middle East, consumer confidence is very low. I mean we believe very much in what we are doing, and we are very much confident obviously about the future.
I thank you very much, everyone, for attending this conference call. And we will -- obviously, we are very much committed to all of you, dear shareholders, a better result certainly. Thank you again.
Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.