Recovery yes, but not yet at pre-Covid levels. The latest report by Mediobanca's Study Area on the Italian System examines the state of health of 2.140 Italian companies which represent 47% of industrial and manufacturing turnover, 36% of transport and 38% of distribution retail. These are large and medium-sized companies, which include practically all Italian companies with more than 500 employees: their turnover shows that 2020 marked a clear decline of 11,7%, however less worse than the 14,7% with which these same companies closed 2009, following the financial crisis of the previous year. Public companies left 16,8% on the ground, thanks to their strong involvement in oil (-34,7%) and energy (-12%) activities; however, the performance of the private sector was better, which settled with -10,4%, due to the greater exposure to manufacturing activities which in turn limited the loss to 8,4%.
The production slowdown in 2020 inevitably had an impact on profitability. According to Mediobanca the net profit of the 2140 companies examined decreased by 32,5% and their Roe went from 8,1% to 4,9%. In 2009, the decline in operating profit was 27,4% and Roe fell from 8% to 5,8%, but 2020 benefited from an exceptional tax realignment operation (August Decree) of goodwill, without which its net result would have fallen by 54,3% and Roe by 3,4%. In general, in 2020 all profit and loss account margins suffered larger decreases than turnover, despite the fact that labor costs contracted by 4,8%, an exceptional size, due to the CIG-Covid-19 provisions which excluded business participation. The workforce lost 0,9%, less than half of the 2,3% that was sacrificed in 2009. Financial management also offered partial relief to the bills, thanks to an exceptionally low average cost of debt (2,6% , it was 4,5% at the beginning of the decade), to the moratorium measures and the entry into the balance sheets of large doses of liquidity.
Not for everyone, however, 2020 has been so tragic. We all remember the counter-trend growth of the agri-food sector and the Mediobanca report confirms that food production is the first privileged area which includes canning (+3,5%), where the performance of the fruit and vegetable preservation activities (+10,3%) and production of prepared meals and dishes (+10,6%), various food products (+3,4%) – where the production of sugar (+12,7%) and pasta (+8,5%) stand out – and dairy (+0,6%). Retail food distribution (obviously) also performed well, as well as pharmaceuticals, household appliances and road transport, clearly unlike air and rail transport, largely penalized by the restriction measures. The worst flops, on the other hand, were tourism (-70,7%) and theme parks (-73%), textiles (-24,9%), clothing (-20%) and accessories in hide and leather (-27%), followed by metallurgy (-11,7%) and the construction of means of transport (-11,6%).
What about 2021? There is a comeback, it is underway but it still leaves a lot of turnover on the ground compared to pre-pandemic levels: Italian companies have gained the possibility of spending higher depreciation from 2021, with relative tax benefit, and in general the expectations are of one growth of the Italian System equal to 7,7% in 2021, which would be followed by a +6,5% in 2022, the year during which it should return to full capacity.
