Date:
4 May 2018
The report, produced by Confindustria and Cerved, reveals a more solid and structured business system, albeit one developing at different speeds: dimensional growth and investments to improve regional competitiveness. Lombardy is confirmed as the region with the most robust production apparatus in absolute terms.
Bologna, 4 May 2018. The slow but progressive improvement in the economic climate of the most developed part of the country is confirmed. The SME fabric of the Centre-North is being repopulated: births are hitting new records, but new companies remain small. Overall, SMEs are improving their financial statements, increasing margins and reducing the burden of debt: greater financial stability is making the recovery of investment possible and sustainable. This potential is worth up to 94 billion euros, and in particular, for high-automation SMEs, there is a potential within the "Industry 4.0" revolution of almost 30 billion.
This is how the third edition of the SME Report for the Centre-North, produced by Confindustria and Cerved, summarises the health of limited liability SMEs (between 10 and 250 employees), which is representative of the main characteristics of the entrepreneurial fabric of the most industrialised part of the country.
A very large sample, consisting of 118,000 limited companies (81.5% of the 145,000 present in Italy), of which 49,000 are located in the North-West (36,000 in Lombardy alone), 36,000 in the North-East and approximately 29,000 in the Centre, with a very significant economic weight: they generate approximately 740 billion euros in turnover, 174 billion euros in value added, and employ 3.2 million people. These companies alone account for 13.5% of the area's GDP.
This entrepreneurial fabric, which weakened during the years of the crisis, has begun to repopulate, but with marked territorial differences, with an increase of 4% in 2016 in the North-West, 3.4% in the North-East, and 2.8% in the Centre. These improvements have allowed the North-West to return to above pre-crisis levels (51,000 SMEs in 2016 compared to 50,000 in 2007), while there are still over a thousand SMEs missing in the North-East and 2,322 in the Centre.
The birth rate remains very high, with 62,000 new companies, the vast majority of which are small, partly thanks to the growing spread of simplified limited liability companies (especially in the Centre). The number of SMEs exiting the market has returned to physiological levels, with a net drop in bankruptcies (-20% between 2015 and 2016) and voluntary closures in all areas analysed.
Improvements are being recorded not only from a demographic point of view, but also from an economic perspective: for the fourth consecutive year, in fact, SMEs in the Centre-North have seen their turnover increase, albeit with significant territorial differences. Revenues grew between 2015 and 2016 by 2.9% in the North-East (which has now recovered to pre-crisis levels and presents the best fundamentals), by 2.2% in the Centre and by 1.8% in the North-West, the area furthest from 2007 levels. Value added is also growing, having returned well above pre-crisis levels in all areas analysed.
Gross profitability is improving, but again with marked territorial differences: margins are, in fact, growing strongly in the North-East (+5.5%), in the North-West (+3.5%) and at a slower pace in the Centre (+1.9%). The distance from pre-crisis levels, already wide in the North (-16.8% in the North-East and -26.2% in the North-West), remains at very low levels in the regions of the Centre, with SMEs having lost 39 points of gross profitability compared to 2007.
Profits are growing throughout the area, both in relation to turnover and invested capital, with higher levels in the North-East. ROE has returned to double digits in the North (11.1% in the North-East and 10.7% in the North-West) and stands at 8.8% in the Centre; everywhere, however, ROE levels are still lower than pre-crisis levels.
Improving financial statements are accompanied by more sustainable debt and more punctual payments. In 2016, the strengthening of SME equity continued at a sustained pace, with an increase in net equity of 5.4% in the North-East, 4.6% in the Centre and 4.5% in the North-West: this is a long-term trend that has brought capitalisation more than 50 points above 2007 levels in the North-East, over 44 points in the North-West and 37 points in the Centre. Financial debt is rising again (+1.1%), but at a more modest pace than equity, with positive effects on its sustainability: it accounts for 70% of net capital in the North and 85% in the Centre, far from 2007 levels.
A strengthening that translates into greater creditworthiness: at the end of 2017, more than 70% of SMEs in the North and 55% of those in the Centre were, according to the Cerved Group Score, "secure" or "solvent", with a very limited twelve-month probability of default that is falling compared to the previous year. The growth in the number of solid SMEs is, however, accompanied by a slight increase in those in the risk area, with a more polarised distribution.
Industrial SMEs, which are relatively more numerous in the North than in the Centre, are recording more sustained growth in financial statements and better fundamentals, even if their numbers are growing much more slowly. The increase recorded in 2014 and 2015 is, in fact, still too weak to recover from the heavy falls of previous years (-11.5%), with which, between 2007 and 2015, the regions of the Centre lost 1,322 industrial SMEs, the North-West 1,148 and the North-East 1,126.
On the other hand, the industrial companies remaining on the market are recording growth in balance sheet indices that is even better than that of SMEs as a whole. Turnover is growing, especially in the Centre (+3.8%) and in the North-East (+3.7%), where margins are also rising (+5.8%). The process of selection and exit from the market of the most fragile companies has operated with greater force among industrial companies than in the rest of the economy, making SMEs as a whole financially more solid: a full 70% of limited industrial companies are, in fact, secure or solvent.
Although reduced in number, the industrial fabric of the Centre-North is therefore confirmed as extremely dynamic and competitive: if anything, it encounters difficulties in expanding, in order to recover the numerical dimensions lost during the crisis and to encourage the dimensional growth of companies that too often start small and remain so.
After the decline recorded between 2011 and 2014, SME investments returned to growth in the 2015-2016 two-year period, reaching 7.8% of fixed assets in the North and 8.3% in the Centre. Industrial companies are doing even better, with their investments reaching 8.7% in the Centre, with a peak of 12.4% in Umbria.
These investments are increasingly being financed by sources other than bank credit. Compared to 2007, the dependence of SMEs on banks has been significantly reduced: the share of those financing more than half of their assets with bank loans is just over 4% in all areas concerned (it was over 10% in 2007); consequently, the presence of SMEs "not dependent" on bank credit has grown (in all areas analysed, more than half of the companies analysed have a ratio of bank loans to assets of less than 10%).
Deleveraging, or the reduced reliance on bank capital, has therefore triggered structural changes in the behaviour of Italian companies, especially those in the Centre-North, which have deployed their own capital significantly and experimented with the use of other forms of financing, creating significant financial space for new investments.
Taking the indications of the Cerved Group Score as a reference, there are approximately 51,000 SMEs in the regions of the Centre-North with a very low probability of default (classified in one of the "secure" or "solvent" classes) and with "modest" debt, i.e., with financial debt less than twice their EBITDA. If the financial debt of these SMEs were to increase to this threshold, the companies in question could increase their debt by up to 94 billion euros while maintaining an extremely low level of risk. This potential is worth 46 billion in the North-West, 31.5 in the North-East and 16.4 in the Centre, and everywhere, if transformed into investments, it could significantly increase production capacity (in the three areas, it corresponds to 1/4 of assets). There are over 10,000 high-automation industrial limited companies that are secure and have ample financial space: their debt could safely grow by almost 30 billion euros, contributing substantially to the "4.0" revolution.
La ripresa degli investimenti, in particolare delle PMI industriali, indica un sostanziale miglioramento delle prospettive dell’economia delle regioni del Centro-Nord, confermata dalle previsioni di Confindustria e Cerved, secondo le quali, nel 2018 e nel 2019, fatturato e valore aggiunto delle PMI di capitali dovrebbero continuare ad accelerare gradualmente.
Pur in un quadro nel complesso positivo, le differenze territoriali sono, tuttavia degne di rilievo, riflettendo strutture produttive e caratteristiche d’impresa ampiamente diversificate. In particolare, i margini sono attesi in miglioramento, più nel Nord-Est (6,7% nel 2018 e 7,4% nel 2019) e nel Nord-Ovest (4,9% nel 2018 e 5,6% nel 2019) che al Centro (+3,4% nel 2018 e +3,8% nel 2019), riflettendo la maggiore fragilità del tessuto imprenditoriale in tali territori e maggiori diseconomie esterne che ne condizionano i risultati. Ovunque però, il rischio di ingresso in sofferenza dovrebbe continuare il suo calo
In presenza di buone performance nei fondamentali e di prospettive nel complesso positive per le imprese appartenenti al campione, la sfida decisiva si conferma dunque quella dell’ampliamento del numero delle imprese più strutturate e del consolidamento di quelle esistenti. Crescita dimensionale, irrobustimento patrimoniale, investimenti, innovazione, accesso ai finanziamenti costituiscono le parole chiave di questa sfida: gli strumenti finanziari pubblici e privati (ed in particolare le risorse della politica di coesione comunitaria) possono fornire il carburante per favorire tali processi; la promozione di una moderna cultura d’impresa l’ingrediente decisivo.
subscribe to the EEN newsletter