Italian family businesses seem to have ridden the 2010-11 phase better than other businesses. This is what emerges from the 2012 report of theAUB observatory on all medium and large Italian family businesses, realized by Guido Corbetta, Alessandro Minichilli e Fabio Quarato of the AIdAF-Alberto Falck Chair of Family Business Strategy at Bocconi University (http://www.aidaf.unibocconi.it) with the support of AIdAF (Italian Association of Family Businesses), the UniCredit Group and the Milan Chamber of Commerce, presented this afternoon at Bocconi.
The report considered 7.105 companies with a turnover equal to or greater than 50 million euros, analyzing the characteristics and performance of the 4.077 family-controlled businesses (which are reduced to 2.582 if we do not consider the overlaps due to the intertwining owners). According to data from the 2012 AUB report, family businesses maintain a higher growth rate than the average of non-family businesses: in 2011 growth was 4,6% compared to the average 3,6% of the other categories of businesses. After the setback (-9,1%) suffered in 2009, therefore, family businesses confirm in 2011 the recovery already recorded at the end of 2010.
Furthermore, the number of employees in family businesses grew from 2006 to 2010, as did its incidence on the total number of employees in joint-stock companies, equal to around 30%. Analyzing the profitability data, the picture appears more mixed. Although the analysis of the last decade (2001-2011) shows a Roi of family businesses on average two points higher than the others (up to the whole of 2007), this positive gap has progressively reduced to +0,6% points in 2011 (7,3% vs. 6,7%). The dynamics of Roe are similar, which fell from 11,2% in 2007 to 5,9% in 2011. In the same period, non-family members decreased from 8,3% to 6,5%. The average income data of the latter, however, hide a marked variability between the different classes of companies, with state-owned and municipal companies which, during the crisis, were relatively more protected because they were less exposed to national and international competition.
In terms of the ability to repay debt, measured by the net financial position/EBITDA ratio, 2011 confirms the data of the last three years, during which this level stood steadily at 6,3, approximately one point higher than those not family members (5,5). This negative figure, to be attributed above all to the erosion of the profitability of family businesses rather than an increase in financial debts, is however counterbalanced by the low percentage (5,2%) of family businesses with a negative gross operating margin (Ebitda). Among non-family members the 2011 percentage is instead 10%.
On the other hand, family-owned businesses show greater capital solidity. Looking at the four-year period 2007-2011, it can be seen that the debt ratio has dropped sharply, going from 7,1 to 5,6, a value today about two points lower than the average of non-family companies and the lowest ever since 2001 The explanation, according to the AIdAF-Alberto Falck Chair and the AUB Observatory, is that in family businesses the growth of shareholders' equity has been constantly higher than the growth of assets, which have not suffered any setbacks. The increase in shareholders' equity occurred thanks to the lower distribution of company results through dividends.
The 2012 edition of the AUB report includes, among other things, a comparison between the AUB data on family-owned businesses and those of the 2012 Mediobanca report on “Cumulative data of 2.032 Italian companies” and the Cerved report “on all Italian capitals". From the comparison with the Mediobanca report, it emerges that the companies in the AUB Observatory recorded growth in line with the medium-large Italian industrial company and that the income performance of the AUB family businesses was on average better between 2003 and 2011, although they most affected by the crisis between 2009 and 2010. The comparison with the Cerved data is also positive for AUB family businesses, which shows how the former show signs of greater vitality and recovery capacity.
In addition to monitoring the economic-financial data of all medium-large Italian family businesses, the AUB Report observes and analyzes their relationship with leadership and governance models. Guido Corbetta, holder of the AIdAF-Alberto Falck Chair in Family Business Strategy: “In general terms, the AUB data highlight the positive impact that family leadership (whether individual or collegial) tends to have on the performance of family businesses. However, the management of generational turnover and the openness of governance are confirmed among the most delicate and critical elements for family businesses, also in light of the fact that the data indicate that the best performances are achieved by family businesses led by young leaders ( 40-50 years old) and like the involvement in the boards of directors who are not members of the owner family! ia could positively impact the performance of large family businesses, listed or led by a family leader".
Dario Prunotto, head of UniCredit's Private Banking in Italy, reiterates how “the opening of boards of directors to non-family directors is in any case advantageous, as evidenced by the large recovery in profitability recorded by companies in the years following their entry. Which should in any case be carried out with the right timing, or when the companies are doing well and the conditions exist for such insertions to take place gradually and without pressure deriving from any economic-financial criticalities".
Joachim Atantius, AIdAF general manager: “Once again this year the data from the AUB Observatory indicate that family businesses continue to resist the crisis and are more performing than other corporate forms. These data confirm that family businesses are an important driver for Italy's economic future. It should also be emphasized that the AIdAF member companies, present in the Observatory, have more evolved governance models; in all probability our association attracts the most evolved companies on average, but we like to think that AIdAF makes its contribution with the opportunities for discussion and debate that it has been creating for fifteen years".
“Family businesses,” he says Claudius De Albertis, council member of the Milan Chamber of Commerce, "are the mirror of an entrepreneurial reality that in Milan and in Italy has been able to reconcile tradition and innovation by making generational turnover an opportunity for growth and development even in this moment of economic and social. Their story, which however is also mine, is not only a story of entrepreneurial success but is inextricably intertwined with the events of city life. That's why they must be protected and safeguarded through a promotional action shared by the institutions”.
