Business Plan Natuzzi Group 2014-2016

March 2014

Executive Summary

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements set forth in this presentation regarding Natuzzi’s Plan constitute

forward-looking statements within the meaning of the safe harbor provisions of Section

27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements involve risks and uncertainties that

could cause Natuzzi’s actual results to differ materially from those stated or implied by

such forward-looking statements. The potential risks and uncertainties associated with the

Plan include, among others, the uncertainty concerning Natuzzi’s ability to achieve the objectives set forth under the Plan, the company’s ability to reorganize its manufacturing

facilities and adjust the composition of its workforce, the cost of implementing the Plan

and the impact that the company’s initiatives may have on its competitiveness and profitability, and the conditions in the macroeconomic environment and the accuracy

of the assumptions upon which the Plan is based, among others. More information about

potential factors that could affect the Company’s business and financial results is included in Natuzzi’s filings with the Securities and Exchange Commission, including the

Company’s Annual Report on Form 20-F for the year ended December 31, 2012 and its

quarterly results for the quarter ended December 31, 2013, filed on Form 6-K.

Natuzzi undertakes no obligation to update any of the forward-looking statements after the date of this presentation.

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S.W.O.T. ANALYSISTHE 2014-2016 BUSINESS PLAN

STRENGTHS WEAKNESSES

■High production costs

■DOS network profitability

■High Overhead costs

■Commercial and HQ organization to be reviewed

and reinforced

■Leadership in the upholstery sector and high brand

awareness

■Global reaching distribution network (also via DOS)

■High production capacitywith international footprint

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RESTRUCTURING AND GROWTHTHE 2014-2016 BUSINESS PLAN

GROWTHGROWTHRESTRUCTURINGRESTRUCTURING

TIME

COSTS

BRAND STTRATEGY

EVOLUTION

DISTRIBUTION & RETAIL STRATEGY

COMMERCIAL ORGANIZATION

TIME

PRODUCT & INDUSTRIAL PROCESS INNOVATION

SUPPLY CHAIN

DOS

SG&A

RESTRUCTURING OF THE

ITALIAN OPERATIONS

REVENUES

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RESTRUCTURING ED EFFICIENCY RECOVERYSTRUCTURAL COSTS SAVINGS

GOAL OF THE PROJECT: COMPETITIVENESS RECOVERY OF ITALIAN OPERATIONS

ITALY PROJECT

PRODUCT INNOVATION

PROCESS INNOVATION

1506 REDUNDANT WORKERS TO BE MANAGED THROUGH THE JOINT EFFORTS OF

THE COMPANY, UNIONS AND GOVERNMENT

COGS 2016

*-25 €/MLN

(EBIT +5.9%)

€ 10.6 MILIONS PLANNED INVESTMENTS IN THE 2014-2016 PERIOD

REDUCTION IN PRODUCTION COSTS

RE-DESIGN AND IMPLEMENTATION OF THE PRODUCT DEVELOPMENT PROCESS

PRODUCT DEVELOPMENT ACCORDING TO INDUSTRIAL PLATFORMS LOGIC

RE-ENGINEERING OF EXISTING MODELS

REDUCTION IN COMPONENTS COSTS (ALTERNATIVE MATERIALS,

STANDARDIZATION IN COMPONENTS, ETC.)

OPTIMIZATION OF THE INDUSTRIAL COST PER MINUTE THROUGH:

• INCREASE IN PRODUCTIVITY

• REDUCTION IN THE INDIRECT/DIRECT WORKERS RATIO

• REDUCTION IN THE PRODUCTION LEAD-TIME

• LESS PRODUCTION SPACE NEEDED

* BASELINE 2013

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RESTRUCTURING AND EFFICIENCY RECOVERYFURTHER COSTS SAVINGS

SUPPLY CHAIN

SHARED

SERVICES

REDUCTION IN INVENTORY LEVEL

OPTIMIZATION OF TRANSPORTATION COSTS

LEAD-TIME REDUCTION

CREATION OF A CENTRALIZED SHARED SERVICE STRUCTURE TO MORE

EFFICIENTLY MANAGE BACK-OFFICE PROCESSES BY LEVERAGING ON

SAP

D.O.S.

RETURN TO DOS PROFITABILITY THROUGH:

• CLOSURE OF 13 STORES

• REDUCTION IN LEASE RENTS OF THE ESISTING NETWORK

• REDUCTION IN THE COST OF LABOUR THROUGH THE RATIONALIZATION OF SALES STAFF

• REDUCTION IN THE SG&A WITHIN THE GROUP’S TRADING OFFICES

-6.5 €/MLN

EBIT +1.5%

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THE GROWTHTHE GLOBAL UPHOLSTERY MARKET

2013 2014E 2015E 2016E

Italy

LATAM

Brazil

MEA, India, Turkey

Eastern Europe

Western Europe

NORTHAM

APAC

51,596 €M

TOTAL

CAGR

2013-2016

4.2%

0.3%

4.7%

4.0%

6.0%

3.1%

1.2%

3.5%

6.9%

53,201 €M55,709 €M

58,384 €M

The world upholstery market is expected to grow at an average rate of about 4% per year for the next three years, with the APAC region at almost 7% per year

Source: CSIL

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THE GROWTHBRAND AND DISTRIBUTION STRATEGY EVOLUTION

ONE BRAND

NATUZZI TO CAPITALIZE THE BRAND NAME AWARENESS

TWO DISTRIBUTION CHANNELS

RETAIL AND FREE MARKET TO FURTHER INCREASE BRAND PENETRATION WITHIN MARKETS

THREE LINES OF PRODUCT

NATUZZI ITALIA

NATUZZI EDITIONS

NATUZZI RE-VIVE

BUSINESS UNIT – PRIVATE LABEL STRENGTHENING OF THE DIVISION DEDICATED TO

MASS-MARKET DEALERS

TO BETTER DIFFERENTIATE ITS OFFERING

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THE GROWTHBRAND AND DISTRIBUTION STRATEGY EVOLUTION

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THE GROWTHWHERE TO GROW AND HOW TO GROW

WHERE TO GROW

HOW TO GROW

REGION

• APAC

• ME&INDIA

• RUSSIA & EAST EUROPE

• SOUTH AMERICAS

• NORTH AMERICAS

• WEST EUROPE

• ITALY

• PRODUCTS OFFERING EXTENSION (HOME PHILOSOPHY, RE-VIVE, FABRICS)

• RETAIL AND FREE-MARKET DEVELOPMENT

• INVESTMENTS IN MARKETING AND COMMUNICATION

€ 100 MLN MARKETING INVESTMENTS PLANNED DURING THE 2014-2016 PERIOD

7 COMMERICAL REGIONS

PRIORITY

• DEVELOPMENT

• REORGANIATION

• RESTRUCTURING

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THE GROWTHTOP LINE SELL-IN* (2014-2016)

8.539.112.0

18.021.9

30.248.3

81.6

29.9

33.2

27.6

46.5113.0

137.4146.2

206.4

2013 2016

North America WE EE

Italia APAC MEA

Latam Brasile

407.4

592.4

* UPHOLSTERY & FURNISHINGS ACCESSORIES

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SENIOR MANAGEMENT TEAM

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2014: FIRST RESULTS FROM RESTRUCTURING

LINES OF

PRODUCT

MODEL SAVING

COGS

ORDER

FLOW YTD ‘14

NATUZZI

ITALIA2575

-8.8% *0.7 €/mln

* 2014 Projected turnover: about 5 €/mln

NATUZZI

ITALIA

2570

-12.5%

NATUZZI

ITALIA

2571

-12.0%

0.8 €/mln

0.5 €/mln

Current # of models

Models on platform

WIP on platform

Phase-out

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2014-2016: HIGHLIGHTS PROFIT & LOSS STATEMENT

FY 2013 FY 2016* FY 2013 FY 2016*

Total Net Sales 451,2 611,2 100,0% 100,0%

Cost of Sales (316,9) (376,2) -70,2% -61,6%

Industrial Margin 134,4 235,0 29,8% 38,4%

Selling Expenses (70,6) (125,9) -15,6% -20,6%

Other Selling and G&A (96,3) (85,2) -21,3% -13,9%

EBIT (32,5) 23,9 -7,2% 3,9%

Depreciations 16,6 18,8

EBITDA (15,9) 42,7 -3,5% 7,0%

* Contempleted by the Business Plan 2014-2016

Percentage of Sales

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