The Group generates revenue primarily from the sale of leather and fabric upholstered furniture and home furnishing accessories to its customers. Other sources of revenue include sale of polyurethane foam, sale of leather-by products, sale of Natuzzi Display System and sale of Service Type Warranty.

Therefore, all the Group’s revenue is related to revenue from contracts with customers.

In the following tables, revenue from contracts with customers are disaggregated by types of goods, primary geographical markets, geographical location of customers, distribution channels, brands and timing of revenue recognition.


Types of goods	2022		2021		2020
Sale of upholstery furniture		398,768		373,936		280,210
Sale of home furnishing accessories		54,478		39,803		33,325
Sale of polyurethane foam		5,208		7,660		6,848
Sale of other goods		10,033		5,976		7,960
Total		468,487		427,375		328,343

The sale of upholstery furniture includes the following categories: stationary furniture (sofas, loveseats and armchairs), sectional furniture, motion furniture, sofa beds and occasional chairs, including recliners and massage chairs.


Geographical markets	2022		2021		2020
Europe, Middle East and Africa		215,596		197,584		165,025
Americas		165,453		157,373		99,383
Asia-Pacific		87,438		72,418		63,935
Total		468,487		427,375		328,343


Geographical location of customers	2022		2021		2020
United States of America		119,749		117,012		73,676
Italy		61,284		53,157		46,269
China		59,358		48,857		38,339
United Kingdom		55,300		45,864		36,463
Spain		16,037		15,864		13,039
Brazil		15,544		14,166		8,641
Canada		15,033		13,127		9,233
Mexico		10,594		7,509		4,829
Australia		9,864		6,335		6,867
Belgium		8,084		9,250		7,281
South Korea		6,150		7,574		7,151
Israel		5,804		5,236		3,997
Other countries (none greater than 5%)		85,686		83,424		67,238
Total		468,487		427,375		328,343


Distribution channels	2022		2021		2020
Wholesale (distributors and retailers)		386,421		359,021		274,070
Directly operated stores (end consumers)		82,066		68,354		54,273
Total		468,487		427,375		328,343


Brands	2022		2021		2020
Natuzzi Editions		213,481		203,849		152,452
Natuzzi Italia		191,624		156,977		115,155
Private label		48,141		52,922		45,928
Other		15,241		13,627		14,808
Total		468,487		427,375		328,343


Timing of revenue recognition	2022		2021		2020
Goods transferred at a point in time		467,255		426,200		326,705
Goods and services transferred over time		1,232		1,175		1,638
Total		468,487		427,375		328,343

Reference should be made to note 15 “Trade receivables” and note 22 “Contract liabilities (non-current and current)” for details about such contract balances.

Revenue is measured based on the consideration specified in the customer contract. The Group recognises revenue when it transfers control over a good or service to a customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for goods or services. The Group has generally concluded that it is the principal in its revenue arrangements, because it controls the goods or services before transferring them to the customer.

In determining the transaction price for its contracts with customers, the Group considers the effects of variable consideration and the existence of significant financing components.

The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. The allocation of the transaction price to the Group’s performance obligations is performed using the relative stand-alone selling price method.

For detailed information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms and related revenue recognition policies, see note 4(t).

The transaction price allocated to the remaining performance obligations (partially unsatisfied) as at December 31, 2022 and 2021 is as follows:


	31/12/22		31/12/21
Sale of the license for Natuzzi trademarks
Within a year		383		383
More than a year		5,577		5,960
Total		5,960		6,343
Sale of Natuzzi Display System
Within a year		849		1,009
More than a year		1,200		1,169
Total		2,049		2,178
Sale of Service-Type Warranties
Within a year		157		199
More than a year		249		276
Total		406		475

If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Some contracts for the sale of furniture provide customers with volume discounts, which give rise to variable consideration.

In particular, the Group provides retrospective volume discounts to certain customers once the quantity of products purchased during the period exceeds a threshold specified in the contract. Discounts are offset against amounts payable by the customer. Accumulated experience is used to estimate and provide for the discounts, using the expected value method. A refund liability is recognised for expected volume discounts payable to customers in relation to sales made until the end of the reporting period.

For information about financing components, reference should be made to note 4(t)(vi).

The Group typically provides warranties for general repairs of defects that existed at the time of sale, as required by law.

Customers who purchase the Group’s upholstered furniture and home furnishings accessories may require a service-type warranty. As disclosed in note 4(t)(v), the Group allocates a portion of the consideration received to the service-type warranty, based on the relative stand-alone selling price. The amount allocated to the service-type warranty is deferred, and is recognised as revenue over the time based on the validity period of such warranty.

These warranties are accounted for under IAS 37. Refer to the accounting policy on warranty provision in note 4(r).

The Group pays sales commission to its agents for each contract that they obtain. For information about the accounting policy elected by the Group on sales commissions, reference should be made to note 4(x).

The Group accounts for shipping and handling costs related to activities before the customer obtains control of the finished goods as fulfillment costs under the caption “Other assets” of the consolidated statement of financial position. For information about the accounting policy applied by the Group for shipping and handling costs, reference should be made to note 4(v).