Italian Ceramic Machinery State of the Industry Report 2017: Industry Sees Further Improvement in Financial Statement Indicators

The 2016 financial data for the Italian ceramic and brick machinery industry analysed by the Acimac Research Department – MECS reveal a further improvement in productivity and profitability. This further average improvement in management indices was set against a backdrop of strong growth in turnover that was maintained for the whole of 2016 and continues today, with turnover growth accelerating further to 18% on an annual basis. Italian turnover was boosted by government incentives as high as 60% (figures for first two quarters of 2017).

The extremely favourable economic situation is therefore reflected in improvements in productivity. Overall profitability, measured as ROI (return on investment) grew for the third consecutive year and reached 5.1%, a similar figure (but opposite trend) to the rapidly falling index for non-Italian companies, which dropped to 5.3% compared to 7.2% in 2014.

The other gross and net profitability margins (EBITDA 7% and net profits 4.1%) have remained at the previous year’s level, although added value is lower than the average figure for non-Italian companies due partly to smaller company size and partly to the higher degree of outsourcing. While Italian EBITDA has been growing slowly but steadily, that of companies in the rest of the world is higher but falling rapidly.

Productivity per employee (added value per employee) has seen excellent growth to 71,000 euros, an increase of more than 5,000 euros per employee in the space of just two years. Over the same period of time, non-Italian companies have seen their added value per employee fall from the same level as that of Italian companies (66,000 euros) to 58,000 euros.

As for financial robustness, although average cash-flow has seen stable growth of almost one percentage point of turnover, companies have experienced a severe worsening in their financial independence indices and continue to make extensive use of the low cost of money and the profitable financial leverage that can be achieved through expansion of loan capital. Equity ratio remains stable at 25% compared to the more than 40% of non-Italian companies.