Wednesday, 24 October 2012

Altagamma’s food and beverage companies were up by 11% in 2011

The results of the first "Food&Beverage Luxury Insight" by SDA Bocconi and Altagamma have been presented in Milan.

In 2011 Altagamma’s food & beverage industry grew, according to the results published in the "Food&Beverage Luxury Insight" - the first annual report by SDA Bocconi and Altagamma. This report, presented in Milan on October 15th, analysed the balance sheets of Altagamma’s international food & beverage companies.

The first edition of this annual report looked at the performance of 42 international companies with a turnover above 100 million Euros in 2011 and operating in the following industries: processed and packaged food, sweets, alcoholic beverages, food services and hospitality.
 
The companies analysed grew by 11.04% in 2011 (7.98% in 2010), with an increase in consolidated sales for 32 out of the 42 companies studied. However, this growth didn’t translate into greater profitability, since return on investment was down by 0.27% from 5.56% in 2010 and return on equity was just 12.22%, compared to 14.18% in 2010. In any case, the acceleration in sales was followed by an increase in operational efficiency, while earnings before interest and taxes grew for the third year running reaching 13.28%. The average cash generator was down to 16.60% of the turnover (16.95% in 2010), though the working capital continued to go down, reaching 21.77% of the turnover. On the other hand, the average number of days for payments went up to 46, compared to 45 in 2010.

“The positive trend of 2010 was confirmed and even improved by the data from 2011”, said Massimiliano Bruni, Director of the Master of Management in Food & Beverage at SDA Bocconi and co-author of the report. “The growth of investments to 3.46% of the turnover in 2011 from 2.42% in 2010 suggests that the majority of players has intensified investments towards developing core business and supporting future growth”.

“The good performance of the companies is partly due to market recovery, with demand driving companies. But it is also the result of last year’s company policies, which were aimed at greater operational efficiency and better management of working capital. The focus on operational efficiency is demonstrated by the constant growth of the operating earnings and the significant reduction of working capital compared to the turnover (-3.53% compared to the financial year 2010)”. 

Alcoholic beverages and differentiated foods were the two best-performing sectors. Companies within the alcoholic beverages sector turned out to be the only ones able to maintain good operational results and therefore increased return on equity despite a lower-than-average turnover ratio. Companies from the differentiated foods sector recorded the best return on investment, thanks to a good level of productivity across all of their activities.

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