Less than 20 of the large Italian olive oil companies are profitable

Less than 20 of the large Italian olive oil companies are profitable

2018/21/03 - The last Leanus-BeBeez analysis sheds some light on the dark business landscape of the Italian olive sector. There are a total of 61 companies with revenues exceeding one million euros, but of these only 19 present profitability and a good risk profile. In addition, the study limits in only eight large companies those that are exclusively dedicated to buying and selling olive oil and determines that they gained 4.15% less in 2016, compared to the previous year.
According to the private study of Leanus requested by BeBeez, in Italy there are 61 companies with incomes over one million euros that have the Ateco (ATtività ECOnomiche) code 10.41.10 of Production of Olive Oil from Olives and that have deposited a budget for 2016. Of these, there are 19 with a good-risk profile and good profitability (classified by Leanus as Star or Stable).

However, these 61 companies make very different exchanges between them, because the casification of economic activities ATECO is a type of classification adopted by the National Statistics Institute of Italy (Istat) that does not allow to distinguish whether a company in this sector is only the intermediary, buys and/or sells and or also produces and transforms -or even provides- a specific service to other companies in the sector.

What is clear to Leanus is that a company that has revenues of one million euros can not be compared to a company that earns 50 or even 200. In this way, BeBeez asked Leanus to identify a series of microgroups within the groups of companies classified with identical Ateco codes, in order to calculate, not only the average, but also the main representative indicators of the micro-sector of each company. This was done, first, comparing them properly (with a benchmark) and understanding who their real competitors were and, second, seeing how much they grow in terms of turnover, what profitability they have, how they are regarding debts, how much they can borrow, what are its payment times, the rotation speed of their warehouse, their structure costs... In this way, according to the company, it would be possible to develop a ranking of companies that are strictly competitive in different variables.

Of the 61 companies with identical Ateco code 10.41.10, for example, there are only eight with a business model typical of the commercial company (ie, buying the product and reselling it, adding very little value to the production process), which count with an ordinary or abbreviated full budget in 2016 and, at the same tim,e closing 2016 with revenues of between 15 and 500 million euros.

In total, these eight companies in 2016 reached an income level of 727 million euros, 4.15% less than in 2015, with an Ebitda of 15 million (margin of 2.2%) and an Ebit of 4, 5 millions. In this group, however, are some of the most important names in the sector (with revenues of more than 100 million) such as Castel del Chianti, Fiorentini Firenze and Pietro Coricelli, which account for 70% of the income of the microsector and produce an Ebitda value of around 72% of the total.
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