The medium-large family business is resilient, that is, it stands firm in the face of the crisis. The fifth edition of theAUB observatory on all Italian family businesses with revenues exceeding 50 million euros, promoted by AIdAF (Italian Association of Family Businesses), UniCredit Group, AIdAF-Alberto Falck Chair of Family Business Strategy at Bocconi University and the Milan Chamber of Commerce, shows that at the end of 2012 58% of medium-large companies (with revenues exceeding 50 million euros) was family-owned, a percentage that was slightly up on the 57,4% of the previous year.
Not only that: the data confirm that family businesses have increased the number of employees during the long crisis: from 2007 to 2012, in fact, employment increased by 5,7%. The study presented today at Bocconi University, edited by Guido Corbetta, Alessandro Minichilli e Fabio Quarato, is based on an analysis of the financial statements of all 4.249 medium-large Italian family businesses.
To confirm the resilience of the family ownership form, only 8,3% of family businesses, in the long period of crisis, have been affected by discontinuities such as transfer of control, mergers and liquidations, against 10,4% of ownership coalitions and cooperatives, 13,4% of multinational subsidiaries and 14,6% of state-controlled enterprises. Nonetheless, it should be noted that, from 2007 to 2012, even if the overall number of family businesses on the Observatory's radar remained substantially constant, a good third of them changed, testifying to how the crisis has certainly left its mark and still is leaving it on the Italian economic fabric, but also of the fact that despite everything it is actually possible to grow in size and compete on world markets.
After having responded better than other companies to the first signs of recovery in the two-year period 2010-2011, family businesses recorded an above-average contraction in revenues in the extremely difficult 2012: -2,8% against -1,3%, but the figure for other businesses is affected by the growth (+4,7%) of state-owned companies, which seem to enjoy some protection from the crisis. Not all the other types do better than the family ones: multinationals in fact register a -2,9% and companies controlled by private equity -4,2%.
The operating profitability of family businesses continues to be higher than that of the others (+0,4 points), but the gap is narrowing over time, while the ability to repay debt worsens, measured by the NFP/EBITDA ratio, which stands at 6,4 compared to 5,6 for other companies of the same size. Finally, family businesses are confirmed as those least dependent on third-party capital: the debt ratio has dropped to 5,2 from 5,8 in 2011.
“We identified eight challenges,” he says Guido Corbetta, holder of the AIdAF-Alberto Falck Chair, “that family businesses have to face in order to relaunch their competitiveness: avoiding the forced coexistence between generations, in the form of multiple managing directors; planning the succession at the top before it is too late; overcome the glass ceiling that limits women's professional growth; balance family leadership and family board; take root in a non-family culture; increase the skills to make acquisitions; change the geographical focus of foreign direct investment; know private equity”.
CLICK HERE for a detailed breakdown of the eight challenges
"As AIdAF we are very pleased that alongside the usual challenges, such as the management of the generational transition, the Observatory has framed new ones by reading and interpreting the data that emerge from our activities", says the AIdAF president, Elena Zambon. “The need to adopt clear corporate governance, the development of an entrepreneurial spirit that goes beyond national and European borders, the greater involvement of young people based on the assessment of merit, are important requests for us entrepreneurs, called daily to better guide our family businesses".
“Family businesses,” he says Alberto Meomartini, vice president of the Milan Chamber of Commerce, "they are not only an important symbol of continuity and the ability to reconcile tradition and innovation but they are also a living example of that way of doing business that has built the history of Milanese and Italian entrepreneurship . Companies that have managed to make generational turnover an opportunity for growth and that have faced the challenge of modernity also focusing on internationalisation. For this reason, in a moment of crisis such as the current one, it is important to continue to support and promote them from a perspective of partnership between the public and private sectors”.
“Knowledge of the dynamics of family businesses is strategic for us,” he saysMarco Gabbiani, head of family business for UniCredit. “The data tell us that even Italian family businesses must take decisive steps towards dimensional growth, primarily on foreign markets to have new development opportunities both from the point of view of demand and the positive effects in terms of production efficiency, innovation and business diversification induced by trade with foreign countries. To help companies in the internationalization process, UniCredit has launched a comprehensive plan which since 2012 has enabled us to accompany around 13 companies abroad, with the aim of reaching 20 by 2015 thanks to specialist skills, the UniCredit International web platform, orientation and training initiatives dedicated to businesses, operational and financial support or in acquisition transactions, including cross-border ones, which we are able to make available in the 50 countries in which we are present".
