Ceramic tile companies improve economic and financial performance
The first edition of the Financial Statement Analysis of World Ceramic Tile Manufacturers, produced by the ACIMAC Research Department, is now available.
The volume contains economic and financial data for the 2011-2013 period of 288 companies operating in 41 countries: 89 in Italy, 70 in Spain, 33 in other EU countries and fifteen in non-EU Europe. Seventy Asian manufacturers, and eleven others, located in countries such as Egypt, Mexico and Venezuela, also feature in the study.
The Italian tile industry is performing strongly with large export volumes and a steady increase in selling prices as a result of a shift towards high added-value products. One of the key findings of the 2013 analysis, and of the three-year averages, is the Italian ceramic industry's growth in investment in capital goods and production equipment.
This is reflected in the increase in the ratio of assets per employee (about 360,000 euro) and in the industry's leading position in terms of production efficiency. Its added value margin (the ratio between added value and turnover) is the highest in the world and rose to 30.1 per cent during 2013. The overall financial structure is also satisfactory with an increase in equity ratio.
By contrast, labour costs need to be kept under control as they contribute significantly to the squeezing of margins. Unit Labour Costs (ULC) in Italy are approximately three per cent higher than the corresponding figures for Spain and one per cent above the European average. However, the capacity of Italian companies to generate value is demonstrated by the fact that the average added value per employee (more than 72,000 euro) is the highest in the world.
The Spanish tile industry has also shown a strong overall performance. The growth in turnover, largely due to the adoption of more aggressive price policies with a view to increasing sales volumes, and rationalisation of production costs is leading to an increase in added value. Despite a small increase in leverage, the Spanish tile industry displays a good level of financial stability and strong short-term solvency.
The outlook is less positive for the companies operating in other EU countries, following a fall in profitability. Added value dropped by nearly a percentage point each year owing to the higher average incidence of labour and production costs. However, the financial structure of these companies is improving in spite of a condition of undercapitalisation.
Non-EU European companies are also experiencing a slowdown in economic and financial performance. These results generally reflect their unsatisfactory management of structural and production factors. Thanks to their exceptional advantage in terms of low labour costs, Asian producers enjoy a good level of production efficiency in spite of their position in the low-price and low-quality product segments. With one of the lowest ULC in the world (10.4 per cent), their added value ratio stands at 27 per cent, and net profits are excellent, too.
The cluster analysis conducted in the ACIMAC study reveals the characteristics of the best performers: a group of 26 companies – 10 in the European Union, including 6 in Italy, 5 in non-EU Europe, 10 in Asia and 1 in Africa – with returns on investment of above 15 per cent. These companies follow two contrasting business models. The first is based on production processes that make intensive use of low-cost labour (e.g. Asia and non-EU Europe) with medium- to low-end product ranges, sold mostly on the domestic market.
The second is the model followed by Italian and some EU-based companies, which focuses on differentiation, a limited workforce, large investments and high levels of productivity, resulting in a comparable ULC to that of Asian competitors.