Reggio Emilia, 27 January 2006 Fulvio Coltorti - Emanuela Salerno (Mediobanca Research Department)
businesses selected in p In all: 3,893 medium-size businesses selected in 2002, 546 of which in Emilia Romagna (91 in Reggio Emilia) p Data classified: p by principal place of operation (macro-areas and regions) p by main activity (Ateco02 s codes by 4 digit) p by location in industrial districts or some other local productive system (LPS) 2
% of turnover in 2002 Mechanical engineering 31.0% Goods for home and person 31.9% Made in - Turnover 70.1% - Exports 77.1% Others 5.8% Reggio Emilia - Mechanical engineering 38.9% - Goods for home and person 25.6% - Food and drink 23.1% - Others 12.4% Iron and steel 3.5% Chemicals 8.6% Food and drink 19.2% Made in - Turnover 72.4% - Exports 84.6% 3
Growth in value added 1996-2002 % change - manufacturing, closed aggregates, nominal prices Italian businesses 32.3 - North-West 28.0 - North-East 35.7 Large firms 9.8 - Italian-owned 4.2 - Non-Italian-owned 17.7 - Value added by manufacturing industry * 11.7 * Factor cost 4
Growth in value added 1996-2002 % change manufacturing, closed aggregates, nominal prices 35.7 Friuli-Venezia Giulia 37.2 Veneto 37.1 Emilia Romagna 34.8 Trentino-Alto Adige 29.3 Reggio Emilia 55.0 5
Sales: medium-size and large manufacturing Italian businesses 162.5 154.0 mediumsized 137.8 130.7 143.0 136.9 145.2 139.3 145.6 143.2 150.4 119.6 115.0 108.3 106.1 111.8 115.9 large 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 MSEs in : total sales MSEs in : exports Italian large firms: total sales Expected total sales Expected exports Italian large firm: exports 6
Sales: medium-size and Reggio Emilia 162.5 Reggio Emilia 154.0 145.2 145.6 150.4 137.8 143.0 136.9 139.3 143.2 119.6 130.7 115.0 108.3 115.9 106.1 111.8 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 MSEs in : total sales MSEs in : exports MSEs in Reggio Emilia: total sales Expected total sales Expected exports MSEs in Reggio Emilia: exports 7
Sales: medium-size and large manufacturing 162.0 154.0 mediumsize 137.8 130.7 136.9 143.0 145.2 139.3 145.6 143.2 150.4 119.6 115.0 108.3 106.1 111.8 115.9 large 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 stima MSEs in : total sales MSEs in : exports Large firms in : total sales Expected total sales Expected exports Large firms in : exports 8
Margins on sales: medium-size and large businesses 6.1 5.9 6.2 6.4 5.9 5.4 5.3 5.0 4.0 4.0 4.6 4.4 4.0 4.1 4.5 3.6 4.4 3.2 1996 1997 1998 1999 2000 2001 2002 2003 2004 MSEs in : net operating margin MSEs in : current profit Large firms in : net operating margin Expected net operating margin Expected current profit Large firms in : current profit 9
businesses headquartered in 1,482 companies Source: Unioncamere Research Department 10
Growth in Net changes in number of companies 111 152 77 52-26 -25-34 -36 1999 2000 2001 2002 Small companies now medium-size companies now large 11
firms: where are they growing? Net change in number of 1996-2002 period=557 Central/North East ; 53 North-East ; 239 42.9% 9.5% North West ; 172 30.9% Central/Southern, Sicily and Sardinia; 93 16.7% 12
firms in : where are they growing? Net change in number of 1996-2002 period=239 Emilia-Romagna; 107 44.8% 19 in the province of Reggio Emilia Friuli-Venezia Giulia; 4 1.7% Veneto; 119 49.8% Trentino-Alto Adige; 9 3.7% 13
MSEs in : capital invested from 1996 to 2002 % distribution over 30 categories 30 25 20 15 10 5 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 1996 2002 14
MSEs in : capital invested in 2002 Cumulative % for groups of 6 categories (first category = 8m; last category > 240m) North East 1.6 2.4 6.5 0.6 6.8 1.5 17.1 16.7 74.2 72.6 1-6 7-12 13-18 19-24 25-30 15
MSEs in : capital invested in 2002 Cumulative % for groups of 6 categories (first category = 8m; last category > 240m) Emilia Romagna North East 2.7 1.7 2.4 1.5 10.0 6.8 16.7 21.0 64.6 72.6 1-6 7-12 13-18 19-24 25-30 16
MSEs in : capital invested in 2002 Cumulative % for groups of 6 categories (first category = 8m; last category > 240m) Emilia Romagna Reggio Emilia 2.7 1.7 5.3 8.5 10.0 7.9 55.7 21.0 64.6 22.6 1-6 7-12 13-18 19-24 25-30 17
Technology % of turnover in 2002 (OECD principles) 26.9 18.8 4.1 9.5 44.9 47.4 12.9 26.4 25.1 18.0 43.7 39.4 59.5 24.9 24.0 3.8 3.5 11.5 28.8 26.9 MSEs MSEs in North- Eastern Major Italian groups Italian affiliates of non-italian multinationals German multinationals High Medium-high Medium-low Low 18
Changes in Italian medium-size firms technology % of capital invested 1996 1997 1998 1999 2000 2001 2002 47.1 46.5 45.8 45.6 44.5 44.9 45.4 25.6 25.8 26.4 26.3 27.0 27.3 26.5 24.5 25.0 24.7 24.5 25.2 24.9 24.3 2.8 2.7 3.1 3.6 3.3 2.9 3.8 Low Medium-low Medium-high High 19
Growth and technology in North Eastern % of turnover in 2002 52.5 47.4 36.7 19.6 25.1 30.0 24.9 24.0 29.8 3.0 Small companies now mediumsize 3.5 Current medium-size companies 3.5 companies now large High Medium-high Medium-low Low 20
Financial structure in 2002 % of tangible invested capital 39.1 39.0 56.3 60.9 61.0 43.7-36.2-20.2-35.9-20.0-22.5-40.8-43.6-44.1-36.7 MSEs in Italian MSEs European multinationals Short-term borrowings M/l term borrowings Net worth Working capital Fixed assets 21
Financial strength in 2000 R&S-Unioncamere scoring model (%) 40.9 51.4 55.8 53.8 47.4 44.3 41.6 38.5 11.7 4.3 2.6 All Italian SMEs Italian MSEs MSEs in 7.7 businesses now large major problems intermediate investment grade 22
Financial strength in 2000 R&S-Unioncamere scoring model (%) 63.7 55.8 36.3 41.6 2.6 Reggio Emilia Medie imprese del Nord Est major problems intermediate investment grade 23
Financial strength in 1996-2002 R&S-Unioncamere scoring model (%) 55.4 55.8 57.9 41.9 41.6 38.6 2.7 2.6 3.5 nel 1996 nel 2000 nel 2002 major problems intermediate investment grade 24
Annual average default rates 1999-2002 businesses: National average of Italian North-East 0.13% North-West 0.25% 0.22% manufacturing companies 1.37% 25
Italian medium-size business which became large: where are they now? North-East North-West Defaulted 2.2% Defaulted 6.9% Independent 40.6% Independent 33.7% Acquired by Italian groups 38.4% Acquired by Italian Group 38.6% Acquired by non-italian groups 18.8% Annual average default rate in 0.6% Acquired by non-italian group 20.8% Annual average default rate in North-Western 1.7% 26
Reggio Emilia MSEs MSEs MSEs in in in Reggio Emilia Number of 2002 3,893 1,451 91 Average size - turnover per firm ( m) 34.4 35.4 34.2 Exports (as % of turnover) 33.6 34.6 35.3 % variations 96-02: turnover 40.1 41.7 50.7 exports 49.0 50.0 71.8 employees 16.2 18.4 23.1 Technology: medium-high/high (%) 28.7 27.5 36.1 medium-low/low (%) 71.3 72.5 63.9 27
Mediobanca Research Department Piazzetta M. Bossi 1, Milan, Website: www.mbres.it