The key to the growth of large Italian companies (turnover greater than 50 million euros) is theinternationalization. To say it is a research conducted by the Claudio Demattè Research Division of the SDA Bocconi, together with EY, on the analysis of the strategies of the most successful international companies during the economic crisis.
The analysis was conducted on a sample of 115 internationalized and 112 large non-internationalized companies. For both samples, the main economic and financial data were analysed 2005-2014 period. The ownership of foreign subsidiaries and the percentage of foreign turnover were used to determine the degree of internationalization of the companies.
The internationalized companies, mainly operating in the manufacturing sector, are mainly located in northern Italy (84% of the sample) and are family-owned in the majority of cases (65%). On average, the revenues of these companies are produced for the 65,5% abroad.
In any case, the research has highlighted how large companies, both internationalized and those focused solely on the domestic market, have shown a greater degree of resilience to the turbulent market phases we have witnessed in recent years. There size therefore it seems to "protect" both types of companies from the alternating phases of the market.
The average Return on Equity (ROE) and Return on Assets (ROA) of internationalized companies were negatively affected by the economic crisis, but returned to growth promptly: between 2009 and 2014, ROE and ROA respectively increased from 5,5 .8,2% to 5,02% and 6,97% to 5,4%. The values of non-internationalized companies were lower: ROE from 7,03% to 4,24% and ROA from 3,44% to XNUMX% in the same period.
Internationalized companies have reacted to the financial crisis by optimizing their capital structure, reducing debt levels in favor of a greater use of equity capital, improving its solvency. The D/E ratio went from 1,38 to 0,96 between 2009 and 2014.
Business investment with better results they continue to be concentrated above all in Western Europe and Asia (38% and 19% of investments). The most successful large companies were more present than those with the worst performances in Latin America (11% vs 6% of investments) and in African countries (8% vs 1% of investments). Eastern Europe is the area where the companies with the worst results were most present (13% of investments).
“The choice of markets in which to operate – commented Andrea Paliani, EY Partner and Mediterranean Advisory Leader – has depended so far on the size of the company; a "SafePlay" approach was recommended for SMEs, while large companies were able to move towards more complex markets, being able to manage costs and risks".
The most successful internationalized companies see their business amplified income dynamics and assets that emerged for the general sample. These companies have seen their ROE rise, on average, from 13% in 2009 to 15,3% in 2014 and have reduced their D/E from 1,12 to 0,58 in the same period, improving their degree of solvency compared to the whole sample.
In summary, the international growth process therefore offers sustainability and profitability, if favored by a balanced financial structure and an adequate composition between exports and direct investments. The cost containment objective no longer seems to be the winning strategy in a context in which developed markets, more typical for smaller companies, recognize the added value of "Made in Italy".
