The effect of Covid-19 on the global economy has been devastating and the first quarter results of the large global multinationals have shown to the eyes of the world how deep and radical this impact can be. Above all, the airlines are paying the highest price of the crisis, at risk of bankruptcy and already dealing with thousands of layoffs, the Oil & Energy giants, forced to face the collapse in the price of oil, and the big fashion companies, at the mercy of the sharp drop in sales in their main export market, Asia.
However, there is also another side of the coin, much more smiling and benevolent, which tells how the coronavirus pandemic has benefited some sectors, WebSoft, large-scale distribution and pharmaceuticals above all, pushing to the maximum revenues, margins and quotations. He certifies it the Mediobanca Research Area is in a report analyzed the impact of the coronavirus on the first three months of 2020 financial statements presented by more than 150 multinationals with annual revenues exceeding $3 billion.
COVID-19 EFFECT: HERE'S WHO EARNS AND HOW MUCH
The impact of the coronavirus on the real economy and on the accounts of companies and multinationals has been enormous. But it was both good and bad. Mediobanca's Research Department provides an interesting "map of winners and losers", underlining how the collapses experienced by some sectors correspond to the surge of others, essentially making the game end in a draw. In fact, in terms of turnover, "it appears on average unchanged compared to the first quarter of 2019", analysts underline.
Starting with the winners, to show the highest growth rates are above all the Web Soft (Internet and Software-related companies), which in the first quarter of 2020 saw their turnover rise by 17,4% thanks to the strong increase in subscriptions to digital services, the increase in web searches and cloud services. In second place in the standings i supermarkets, which, by virtue of the strong demand for basic necessities and hygiene products, recorded a growth in revenues of +9,1%. Followed by pharmaceutical companies (+6,1%), digital payments (revenues +4,7%), Electronics (+4,5%) and Food (+3,4%)
Moving on to the other parameters, the operating result average decreases by 18,9% on the first quarter despite the race of large-scale distribution (+33,6%), pharmaceutical companies (+18,1%), WebSoft (+17,6%) and Electronics (+10,9 .XNUMX%). The average net operating margin of multinationals is equal to 14,3% (-2,4% on the 1st quarter of 2019). “Profitability rewards the Electronic Payments sector which records the highest Ebit margin ever (28,4%; -4,2 pp). Followed by pharmaceuticals (26,8%; +2,6 pp) and the Electronics sector (22%; +1,1 pp)”, explain the Mediobanca economists.
For the profits large-scale distribution excels, with net profits up 34,8%. Double-digit increases also for pharmaceuticals (+20,5%), WebSoft (+14,9%) and the Electronics sector (+10%).
COVID-19 EFFECT: WHO LOSES THE MOST
The crisis has literally overwhelmed the aircraft manufacturers and the Oil & Energy giants which in the first three months of the year saw their revenues contract respectively by 22,1% and 15,9%. Fashion (-14,1%), Automotive (-9,1%) and Telco (-2,6%) are also bad.
In terms of profits, "the repercussions for the multinational aircraft manufacturers and the Oil&Energy giants (which go from a profit to a net loss), in addition to the strong decreases recorded by the Automotive (-92,4%) and Fashion (- 92%)” reads the report.
Dizzying decline also for EBIT, with "aircraft manufacturers (whose EBIT passes into negative territory), the Oil & Energy (-87,8%), Fashion (-81,5%) and Automotive (-75,8 .10,1%) who have suffered the hardest blow”. Less clear, but still important, the contraction of the EBIT of the Drinks sector (-8,9%), of Electronic Payments (-7,7%), Media & Entertainment (-5,9%), Telco (-3,4 %) and Food (-XNUMX%).
COVID-19 EFFECT: WE ARE STILL AT THE BEGINNING
We are still grappling with the first economic repercussions of the health crisis that has shocked the world. Yet the percentages are already record-breaking. If there is one thing all analysts agree on, it is that what we are beginning to face is the deepest recession since World War II and that its effects will be seen above all in the second quarter of 2020, the month in which the USA and Europe introduced their lockdowns by looking at what was done previously by China, where, Mediobanca underlines, "already since the end of March 2020, some signs of recovery can be glimpsed".
And speaking of recovery. In Europe and the USA, according to the forecasts of the Mediobanca Research Area, it will be necessary to wait for the second half and in particular the fourth quarter of 2020. “The impact of Covid-19 on the numbers for all of 2020 remains difficult to predict for various reasons : above all, the great uncertainty generated by a crisis whose scale, duration and geographical extent are constantly evolving”, explains the report. Not surprisingly, numerous companies (including many Italian listed companies) have decided to withdraw guidance for the current year.
Generally speaking, the economists of Piazzetta Cuccia seem to rule out a "V" recovery (collapse followed by a surge), leaning towards a “U" of the economy. The collapse will therefore be followed by a “low” phase before seeing growth again.
