Source: newsletter of Sistema Camerale year 3rd , number 18 (1 - 15 February 2008)

We are dealing with 3984 companies, which provide 14% of manufacturing production in value, a percentage reaching 22% if we consider linked activities. Most of these firms are based in the centre of north-eastern Italy and in Lombardy, while their presence in southern Italy is low but expanding.

The Report Unioncamere-Mediobanca, concerning Italian medium-sized enterprises defined on basis of number of employees (between 50 and 499) and turnover (between 13 and 290 million euros), was presented on 15 February 2008 in Milan, at Mediobanca’s headquarters.

This survey, which was carried out by the Centro Studi of Unioncamere in collaboration with the Ufficio Studi of Mediobanca, highlights that medium-sized enterprises’ profits kept rising again after suffering a bad period during the financial year 2003 (1.1% of turnover), and in 2005 they reached an absolute value which was inferior only to the historic maximum of 1999.
The percentage on turnover was 1.7%, and the evaluations for 2006 forecast turnover to grow by 8%, and gross margins increasing by 10 points.
Foreign sales began a new period of growth in 2005: they increased by 15% in the two-year period 2005/2006, and rose further on by 11% on an annual basis, according to the final balances of the first nine months of 2007.

Financial structure remains solid, and net assets by far exceed investments in fixed assets and contribute to a large current account surplus.

The 60% of medium-sized enterprises is worth being rated at investment grade level (the national average for all SMEs is 38.5%), but recourses to stock market and private equity remain negligible, since they involve less than the 0.5% of companies.

The 2008 survey includes two censuses relating to the years 2004 and 2005, conducted with the aim of producing updated data.

Within the last two years subjected to census (2004 and 2005), there were 210 companies that became medium-sized, while 78 others underwent an upgrade, converting theirselves into large companies.

Medium-sized enterprises’ trend to proliferate during cyclical upturns remains confirmed.

In the period between 1996 and 2005, medium-sized enterprises maintained the leadership of growth, with a value added increase by nearly the 42%, as opposed to a scant 11% as for large manufacturing companies under Italian control, and a 13% as for the national total.

The favourable dynamics brought these enterprises to a progressive increase in their value within national manufacturing sector: according to the most recent ISTAT data, they got to represent the 16% of the total annual fixed investment and the 20% of Italian exports.

The return on investment (ROI) of medium-sized enterprises in 2005 was equal to 9.3% as opposed to 7.4% gained by Italian enterprises under control of large companies. The advantage is obtained by means of higher industrial margins: the net operating margin is equal to the 21.5% of added value as opposed to the 15.4% as for large companies.
Therefore, competitiveness keeps being supported by the ability to maintain their market position.
On the other hand, taxation keeps being unfavourable, being the average rate of tax equal to 47% in 2005, as opposed to the 33% of Italian large companies and the 25% of the major European multinational firms.

There are not significant differences in medium-sized enterprises’ income performances, if considered from the point of view of clusters and local production systems.

The latter concern nearly the 40% of all the medium-sized enterprises, which benefit from local roots and the motivating force of skills. On the other hand, the most discriminating aspect for this kind of enterprises within clusters keeps being their strong propensity to export: it is equal to 42.7% of turnover for localization in real clusters, and approximately 40% in local production systems, as opposed to the 29% of enterprises which are based in other areas.

About one half of the enterprises specialized in personal and household goods and in light mechanics are established in cluster-based areas.

A strong financial stability is confirmed: the investment grade level is reached by the 62% of medium-sized enterprises based in provinces with a high concentration of clusters, as opposed to the 56% of the same enterprises based in provinces rich in large companies.
Regarding the recent economic trend, the first evaluations for 2007 indicate a very positive financial year, supported by a strong development of foreign sales in favour of the European Union area, Russia and other eastern countries, and also oil producers.

Rif. Unioncamere, Ufficio Stampa, tel. 06 4704370
email: ufficio.stampa@unioncamere.it