Naples, 9 February 2006 Fulvio Coltorti - Emanuela Salerno (Mediobanca Research Department)
businesses selected in Italy Medium-size p In all: 3,893 medium-size businesses in 2002 in Italy, 279 of which in Southern Italy and 80 in Campania (32 in Naples) p Data classified by: p principal place of operation (macro-areas and regions) p main activity (Ateco02 s codes by 4 digit) p location in an industrial district or some other local productive system (LPS) 2
Medium-size businesses in North-Eastern Italy % of turnover in 2002 Others 5.0% Iron and steel 6.1% Mechanical engineering 13.4% Chemicals 10.5% Goods home and person 23.7% Food and drink 41.3% Naples Made in Italy - Turnover 69.6% - Exports 78.2% - Food and drink 44.2% - Goods for home and person 16.7% - Iron and steel 17.3% - Chemicals 12.9% - Mechanical engineering 6.7% -Others 2.2% Made in Italy - Turnover 57.0% - Exports 59.0% 3
Medium-size businesses in Italy % of turnover in 2002 Made in Italy Turnover Exports North-West 57.5 63.2 North-West NEC (North-East / Central Italy) 69.5 76.7 NEC 12.0% 7.8% 32.6% Southern Italy 69.6 78.2 South Italy 8.3% 3.9% 6.3% 29.3% 13.0% 6.1% 5.0% 13.4% 17.6% 10.5% 13.0% 21.5% 23.7% 34.6% 41.3% Mechanical engineering Goods for home and person Food and drink Chemicals Iron and steel Others 4
Growth in value added 1996-2002 % change-manufacturing, closed aggregates, nominal prices Medium-size Italian businesses 32.3 - North-West Italy 28.0 - NEC 36.1 - Southern Italy 40.1 Large firms 9.8 - Italian-owned 4.2 - non-italian-owned 17.7 Italy - Value added by manufacturing industry * 11.7 * Factor cost 5
Growth in value added 1996-2002 % change - manufacturing, closed aggregates, nominal prices Districts LPSs Others Italy 27.1 31.8 34.3 North-West Italy 27.1 26.5 28.6 NEC 25.7 33.4 40.5 Southern Italy 37.9 n.c. 38.3 6
Growth in value added 1996-2002 % change-manufacturing, closed aggregates, nominal prices Medium-size businesses in Southern Italy 40.1 Abruzzo 51.4 Campania 34.3 Apulia 32.5 Other regions in Southern Italy/islands 38.6 Naples 29.3 7
Sales: medium-size and large manufacturing businesses Medium-size 160.4 152.5 Mediumsized 135.0 129.5 141.8 135.5 144,8 144.8 137.9 143.9 139.4 145.7 114.9 117.4 108.2 112.6 115.7 Large 106.4 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Italian MSEs: total sales Expected total sales Italian MSEs: exports Expected exports Italian large firms: total sales Italian large firms: exports 8
MSEs: Italy and South Italy Medium-size 168.1 173.1 163.4 158.3 144.0 147.1 151.2 151.2 107.4 113.5 114.5 125.2 119.7 128.8 127.9 135.6 108.3 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 stima Italian MSEs: total sales Italian MSEs: exports MSEs in Southern Italy: total sales MSEs in Southern Italy: expected sales Italian MSEs: expected total sales Italian MSEs: expected exports MSEs in Southern Italy: exports MSEs in Southern Italy: expected exports 9
Margins on sales: Southern Italian medium-size businesses 6.4 5.6 5.6 4.4 4.7 4.6 4.3 4.5 4.5 4.8 3.8 4.0 4.0 3.0 3.5 4.0 3.7 3.7 3.6 3.5 3.0 2.5 1996 1997 1998 1999 2000 2001 2002 2003 2004 Italian MSEs: net operating margin Italian MSEs: current profit MSEs in Southern Italy: net operating margin MSEs in Southern Italy: expected net operating margin Italian MSEs: expected net operating margin Italian MSEs: expected current profit MSEs in Southern Italy: current profit MSEs in Southern Italy: expected current profit 10
Growth Net changes in number of companies 429 228 194-57 -52-71 -51 49 1999 2000 2001 2002 Small companies now medium-size Medium-size companies now large 11
MSEs in Southern Italy: growth Net changes in number of companies 30 32 15 16-1 -4-2 1999 2000 2001 2002 Small companies now medium-size Medium-size companies now large 12
Medium-size firms: where are they growing? Net changes in number of businesses in 1996-2002 period=557 Central / North East Italy; 53 North East Italy; 239 42.9% 9.5% North West Italy; 172 30.9% Lazio; 14 2.5% South Italy; 79 14.2% 13
MSEs South Italian businesses: where are they growing? Net change in number of businesses in 1996-2002 period=79 Abruzzo; 21 26.6% Campania; 26 32.9% 7 in the province of Naples Other regions; 8 10.1% Apulia; 24 30.4% What do the 79 businesses do? % of turnover - Goods for home and person 35.1 - Mechanical engineering 23.1 - Food and drink 17.5 - Chemicals 16.5 -Ironand steel 2.2 -Others 5.6 14
MSEs: capital invested from 1996 to 2002 % distribution over 30 categories 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 Italy Southern Italy 15
MSEs: capital invested from 1996 to 2002 Cumulative % for group of 6 categories (first category = 8m; last category > 240m) Italy Southern Italy 6.5 1.6 0.6 9.2 2.8 17.1 14.8 74.2 73.2 1-6 7-12 13-18 19-24 25-30 16
MSEs: capital invested from 1996 to 2002 Cumulative % for group of 6 categories (first category = 8m; last category > 240m) Campania Southern Italy 7.0 9.2 2.8 17.5 14.8 75.5 73.2 1-6 7-12 13-18 19-24 25-30 17
MSEs: capital invested from 1996 to 2002 Cumulative % for group of 6 categories (first category = 8m; last category > 240m) Campania Naples 7.0 16.2 17.5 52.8 31.0 75.5 1-6 7-12 13-18 19-24 25-30 18
Technology % of turnover in 2002 (OECD principles) 26.9 18.8 4.1 9.5 44.9 26.4 62.7 18.0 12.9 39.4 59.5 43.7 24.9 3.8 27.6 7.1 2.6 11.5 28.8 26.9 MSEs MSEs in Southern Italy Major Italian groups Italian affiliates of non-italian multinationals German multinationals High Medium-high Medium-low Low 19
Financial structure in 2002 % of tangible invested capital 39.0 52.5 56.3 61.0 47.5 43.7-35.9-34.9-22.5-20.0-17.7-40.8-44.1-47.4-36.7 Italian medium-size businesses Southern Italian medium-size businesses European multinationals Short-term borrowings M/l term borrowings Net worth Working capital Fixed assets 20
Financial strength in 2000 R&S-Unioncamere scoring model (%) 40.9 40.8 51.4 50.4 47.4 44.8 44.3 41.5 11.7 14.4 All Italian SMEs All Southern Italian SMEs Italian medium-size businesses 4.3 8.1 Southern Italian medium-size businesses major problems intermediate investment grade 21
Financial strength in Southern Italy in 2002 R&S-Unioncamere scoring model (%) 47.7 62.5 49.1 34.4 3.2 Southern Italian medium-size businesses 3.1 Medium-size businesses of Naples major problems intermediate investment grade 22
Financial strength in Southern Italy in 1996-2002 R&S-Unioncamere scoring model (%) 54.6 50.4 47.7 36.2 41.5 49.1 9.2 8.1 3.2 in 1996 in 2000 in 2002 major problems intermediate investment grade 23
Annual average default rates 1999-2002 Medium-size businesses: National average of Italian manufacturing companies North-East Italy 0.13% North-West Italy 0.25% Southern Italy 0.72% Italy 0.22% Italy 1.37% Southern Italy 1.93% 24
Medium-size businesses which became large: where are they now? Defaulted 5.6% Independent 37.8% Annual average default rate in Italy 1.4% Acquired by non-italian groups 18.8% Acquired by Italian groups 37.8% In Southern Italy: - 4 independent companies - 4 acquired by Italian groups companies - 1 acquired by non-italian groups companies - 2 defaulted 25
businesses in Naples Medium-size MSEs MSEs MSEs in Italy in Southern Italy in Naples Number of businesses in 2002 3,893 279 32 Average size - turnover per firm ( m) 34.4 33.6 33.9 Exports (in % of turnover) 33.6 24.9 25.5 % variations 96-02: turnover 40.1 58.7 27.9 exports 49.0 90.4 39.4 employees 16.2 25.8 20.9 Technology: medium-high/high (%) 28.7 9.7 6.2 medium-low/low (%) 71.3 90.3 93.8 26
Southern Italian MSEs: size Italian average = 100 (2002) 101.0 89.0 95.5 99.2 76.7 84.3 104.6 84.1 93.9 86.0 74.5 89.6 Employees Turnover Capital invested Value added Food and drink Mechanical engineering Textile and clothing 27
Value added and labour cost 000 per capita in 2002 Medium-size businesses 77.3 58.0 55.0 51.9 47.1 61.9 34.9 33.0 30.4 37.8 North West NEC Southern Italy European multinationals Italian multinationals per capita labour cost per capita value added 28
Growth: resources, prices, productivity % variation in 1996-2002 25.8 18.4 12.4 8.6 9.6 9.0 4.9 4.6 2.2 North West North East South Increase in headcount Increase in price Productivity 29
Southern Italian MSEs: value added % by sector 2002 NEC 2002 27.2% 16.6% 20.3% 34.7% 24.2% 1996 12.2% 32.0% 27.1% 14.4% 32.8% 23.0% 35.5% Mechanical engineering Goods for home and person Food and drink Others 30
MSE density in 2002, per 1000 manufacturing industries Medium-size 11.0 9.8 8.8 6.3 2.1 2.2 1.9 1.3 North West Italy North East Italy NEC Southern Italy Abruzzo Campania Apulia Others per 1000 businesses 31
Medium-size and large firms in Southern Italy Selected by headquarters 71.781 13.071 39.400 6.486 2.060 4.587 1.438 21.024 2.884 MSEs Italian large firms (2004) Value added ( m) Capital invested ( m) Employees Non-Italian large firms (2004) 32
Mediobanca Research Department Piazzetta M. Bossi 1, Milan, Italy Website: : www.mbres.it