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	2023		2022		2021
Sale of upholstery furniture		281,638		398,768		373,936
Sale of home furnishing accessories		38,199		54,478		39,803
Sale of polyurethane foam		2,509		5,208		7,660
Sale of other goods		6,272		10,033		5,976
Total		328,618		468,487		427,375

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	2023		2022		2021
Europe, Middle East and Africa		159,570		215,596		197,584
Americas		122,820		165,453		157,373
Asia-Pacific		46,228		87,438		72,418
Total		328,618		468,487		427,375


Geographical location of customers	2023		2022		2021
United States of America		87,250		119,749		117,012
Italy		39,037		61,284		53,157
United Kingdom		36,291		55,300		45,864
China		26,211		59,358		48,857
Brazil		14,498		15,544		14,166
Spain		11,634		16,037		15,864
Mexico		8,197		10,594		7,509
Canada		8,117		15,033		13,127
Australia		6,256		9,864		6,335
Belgium		5,302		8,084		9,250
United Arab Emirates		4,839		4,453		3,034
South Korea		3,518		6,150		7,574
Israel		3,371		5,804		5,236
Taiwan		3,326		329		2,342
Other countries (none greater than 5%)		70,771		80,904		78,048
Total		328,618		468,487		427,375


Distribution channels	2023		2022		2021
Wholesale (distributors and retailers)		255,507		386,421		359,021
Directly operated stores (end consumers)		73,111		82,066		68,354
Total		328,618		468,487		427,375


Brands	2023		2022		2021
Natuzzi Editions		176,600		213,481		203,849
Natuzzi Italia		119,323		191,624		156,977
Private label		23,914		48,141		52,922
Other		8,781		15,241		13,627
Total		328,618		468,487		427,375


Timing of revenue recognition	2023		2022		2021
Goods transferred at a point in time		327,316		467,255		426,200
Goods and services transferred over time		1,302		1,232		1,175
Total		328,618		468,487		427,375

Reference should be made to note 15 “Trade receivables” and note 23 “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, 2023 and 2022 is as follows:


	31/12/23		31/12/22
Sale of the license for Natuzzi trademarks
Within a year		383		383
More than a year		5,194		5,577
Total		5,577		5,960
Sale of Natuzzi Display System
Within a year		813		849
More than a year		1,349		1,200
Total		2,162		2,049
Sale of Service-Type Warranties
Within a year		160		157
More than a year		257		249
Total		417		406

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).