Smaller than in Germany and France, but Italian Family Businesses Are Still in Good Health
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Smaller than in Germany and France, but Italian Family Businesses Are Still in Good Health

THE AUB OBSERVATORY (AIDAF, UNICREDIT, BOCCONI) THIS YEAR COMPARES FAMILY COMPANIES IN ITALY, FRANCE AND GERMANY. THE GOVERNANCE IS MORE SIMILAR THAN EXPECTED, BUT ONLY 9 ITALIAN FAMILY BUSINESSES EXCEED 5 BILLION IN TURNOVER, COMPARED TO 34 GERMAN FAMILY BUSINESSES AND 21 FRENCH

Italian family businesses are still too small and run by older leaders than German and French ones, but the net profitability gap is narrowing and is practically closing compared to Germany.
 
Partly because of the smaller starting size, from 2012 to 2018 Italian family businesses have grown more: revenues grew 50% in Italy, against 44% of French and 38% of German firms.
 
In terms of female directors’ share, Italian family businesses tripled the number of female members on the German executive boards.
 
The 11th edition of the AUB Observatory of Italian family businesses, presented today at the Italian Stock Exchange by Guido Corbetta and Fabio Quarato of the AIDAF-EY Chair in Strategic Management in Family Business in memory of Alberto Falck, not only contains an analysis of the accounts of all Italian family businesses with a turnover of more than €20mln (11,079, i.e. 65.8% of the 16,845 Italian businesses in this size class), but also presents a comparison between the 500 largest companies in terms of turnover in France, Germany and Italy.
 
«Data on the engagement of family members in governance in Italy, France and Germany give a more similar picture than that found in other research», says Guido Corbetta, the holder of the Chair. Leadership (CEO or executive chairman) is family-based in 50.5% of cases in Italy, 41.0% of cases in France and 34.7% of cases in Germany.
 
On the other hand, the gaps in size and managers’ age remain high. In Italy, there are 9 family businesses with a turnover of more than 5 billion euros, compared to 21 in France and 34 in Germany. 33% of Italian family business leaders are over 70, compared to 15% of French leaders and 9% of German executive board leaders.
 
Restricting the perimeter to Italy, in 2018 family businesses made fewer foreign direct investments (-6%), but much larger, so much so that their total value increased by 63.2% to €593.4bn, with greater activism on the part of larger companies: 67.7% of those with revenues in excess of €250mln made foreign investments, compared to 22.9% of those with revenues between €20mln and €50mln. The geographical areas of investment show a widening range of action of family businesses: while in 2007 51% of the investments were in Western Europe, in 2018 the share fell to 32%, in favor, above all, of Asia and North America.
 
Finally, the performance of family businesses remains better than that of non-family businesses, but the gap is narrowing, from 2.7 points of return on equity in 2016 to 1.9 in 2017, to 1.5 (12.1 against 10.6) in 2018.
 
The AUB Observatory is carried out by Bocconi University, AIDAF, EY, UniCredit, Fondazione Angelini and Cordusio, in collaboration with Borsa Italiana and the Chamber of Commerce of Milano Monza Brianza Lodi.
 
«This year the analysis of the observatory confirms the vitality of family businesses and offers very interesting insights on their peculiarities in the main European markets», says Cesare Bisoni, Chairman of UniCredit. «In the current context, the financial side, and therefore the relationship with the banks, becomes a crucial factor of company competitiveness. An integrated offer to family businesses is the distinctive factor of UniCredit: we leverage on the maximization of synergies between corporate banking and wealth management and the experience gained in the numerous countries in which we are present, including Germany and Italy».
 
«Family businesses», says Alvise Biffi, member of the Board of the Chamber of Commerce of Milano Monza Brianza Lodi, «continue to be an important reference for our territory. They are certainly an example of the Milanese and Italian way of doing business in the world. The positive results are linked to their capacity for innovation and international openness. The difficult challenge that emerges is the generational succession. To monitor this characteristic phenomenon of our territory, the Chamber of Commerce partners with Bocconi University in the Observatory».
 
«The AUB Observatory gives us a slightly better picture of the Italian economy than the common perception: family businesses continue to grow, to explore new and more distant geographical markets, to make larger acquisitions, to attract managers and non-family directors», says Francesco Casoli, President of AIDAF. «Of course, there are also challenges for entrepreneurial families: first of all, the need to grow. This challenge is faced by attracting young talents, increasing research and development activities, accessing international markets and evaluating the various financial instruments for growth. In this AIDAF has always been a forum where entrepreneurs can address and share these and other issues».
 
«The capital markets play a fundamental role in supporting the growth of companies in our country», says Raffaele Jerusalmi, CEO of Borsa Italiana. «Listing on the Stock Exchange implies profound transformations in culture and governance practices and it often represents a solution to the delicate issue of succession in family companies. Many Italian excellent businesses, in recent years, have chosen to access capital markets to support ambitious growth projects, increase their competitiveness in a global context and attract managerial talent».

by Fabio Todesco
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