European non-financial listed groups:
analysis of 2013 data
ERICA (European Records of IFRS Consolidated Accounts) WG
European Committee of Central Balance Sheet Data Offices (ECCBSO)
February 2015
EUROPEAN NON-FINANCIAL LISTED GROUPS: ANALYSIS OF 2013 DATA
Members of the ERICA (European Records of IFRS Consolidated Accounts) WG
Manuel Ortega (chairman)
manuel.ortega@bde.es
Ilse Rubbrecht
Ilse.Rubbrecht@nbb.be
Banco de España
Banque Nationale de Belgique
Pilar Saura
pilar.saura@bde.es
Vincenzo Favale
vincenzo.favale@cervedgroup.com
Banco de España
Centrale dei Bilanci / Cerved Group
Riccardo Renzi
riccardo.renzi@bancaditalia.it
Matthias Lörch
matthias.loerch@bundesbank.de
Banca d’Italia
Deutsche Bundesbank
Ana Bárbara Pinto
apinto@bportugal.pt
Martina Hemsath
martina.hemsath@bundesbank.de
Banco de Portugal
Deutsche Bundesbank
Olga Lymperopoulou
olimperopoulou@bankofgreece.gr
Lena Leontyeva
olena.leontyeva@bundesbank.de
Bank of Greece
Deutsche Bundesbank
Claire Mangin
Claire.MANGIN-SOUBRET@banque-france.fr
Sabine Wukovits
Sabine.Wukovits@oenb.at
Banque de France
Oesterreichische Nationalbank
Lisa Schirmer
Lisa.SCHIRMER@acpr.banque-france.fr
Sébastien Pérez-Duarte
Sebastien.Perez_Duarte@ecb.int
Banque de France
European Central Bank
Laurent Carlino
Laurent.CARLINO@banque-france.fr
Bartek Czajka (observer)
bczajka@ifrs.org
Banque de France
IASB
Saskia Vennix
Saskia.vennix@nbb.be
Banque Nationale de Belgique
IMPORTANT INFORMATION ABOUT THE SOURCE USED (ERICA1 DATABASE)
The data used in this study are obtained from publicly available financial statements of European nonfinancial listed groups, having been treated manually, by CBSO statisticians and accounting
specialists, to be fitted on a standard European format (ERICA format); this manual treatment involves,
in some cases, the interpretation of the original data, a constraint that readers of this document should
bear in mind.
The database does not represent the total population of European non-financial groups; nevertheless,
the coverage attained with ERICA (in the whole dataset of around 1.000 groups, as well as in ERICA+,
a subset of around 200 groups with extra accounting details) on the listed European groups is wellattuned to the situation and national composition of the stock markets. The analysis performed in this
document with both datasets of ERICA, with the limitation expressed in the previous paragraph,
provides a view of the position and performance of the listed non-financial European groups.
The opinions of the authors of this document do not necessarily reflect those of the national central
banks to which they belong or those of the ECCBSO.
All the graphs and tables presented in the document are from the same source (ECCBSO-ERICA
database), unless otherwise indicated.
1
ERICA (European Records of IFRS Consolidated Accounts) is a database of the European Committee of Central Balance Sheet Data Offices.
EUROPEAN NON-FINANCIAL LISTED GROUPS: ANALYSIS OF 2013 DATA
ERICA (European Records of IFRS Consolidated Accounts) WG
European Committee of Central Balance Sheet Data Offices (ECCBSO)
February 2015
CONTENTS
I
EUROPEAN NON-FINANCIAL LISTED GROUPS: MAIN FINDINGS IN 2013 DATA
5
II
PROFITABILITY: THREE CONSECUTIVE YEARS OF NEGATIVE PERFORMANCE
6
II.1 EBIT: THE ONGOING ECONOMIC WEAKNESS IS REFLECTED BY A FURTHER DECLINE IN
PROFITS
7
II.2 CASH FLOW FROM OPERATING ACTIVITY: DECREASE IN ALL SECTORS EXCEPT INDUSTRY
9
II.3 PROFIT (LOSS) BEFORE TAX: PROFITS DECLINED FOR ONE MORE YEAR DUE TO THE
DETERIORATION AT LARGE GROUPS
9
III
FINANCIAL POSITION SLIGHTLY IMPROVED IN 2013
11
III.1 IMPROVEMENT IN EQUITY RATIO, COMPATIBLE WITH A SLIGHT OVERALL DROP IN EQUITY
LEVELS
11
IV
III.2 SLIGHT RISE IN CASH AND CASH EQUIVALENTS
13
III.3 DECREASE OF FINANCIAL DEBT, BUT LARGELY STABLE INDEBTEDNESS RATE
14
III.4 EMPLOYMENT OF FINANCIAL RESOURCES
15
FAIR VALUE: POSITIVE IMPACT ON FINANCIAL STATEMENTS
IV.1 POSITIVE IMPACT ON THE STATEMENT OF PROFIT OR LOSS AND ON EQUITY
16
16
IV.1.1 Positive impact on the statement of profit or loss due to non-current assets and reclassification of
cash flow hedges
16
IV.1.2 Positive impact on equity due to available-for-sale financial assets and cash flow hedges
17
BOXES
Box 1 ERICA database: main characteristics and coverage
Box 2 Activities pursued by European non-financial listed groups in Europe: an analysis of their
diversification
ANNEXES (these annexes are only distributed in www.eccbso.org)
Statistical Annex 1
Statistical Annex 2
Statistical Annex 3
Statistical Annex 4
Statistical Annex 5
Statistical Annex 6
Statistical Annex 7
Structure of the balance sheet of European non-financial listed groups in 2013
Structure of the income statement of European non-financial listed groups in 2013
Statistical results on profitability in 2013
Statistical results on financial structure in 2012 and 2013
Statistical results on fair value data for total groups in 2013
Fair value impact on consolidated accounts and its comparison with stock indices
Multiple linear regression model
European non- financial listed groups: analysis of 2013
4
I
EUROPEAN NON-FINANCIAL LISTED GROUPS: MAIN FINDINGS IN 2013 DATA
The members of the ERICA WG of the ECCBSO have prepared the third publication of the aggregated results of
the ERICA database, in this case with the main results obtained for the year 2013. This study summarises the
more relevant facts found in the database from the 960 listed non-financial groups of eight participant countries that
make up the ERICA database of 2013, focusing on their profitability, financial structure and the impact of fair value
in their accounting. The document offers other insights on questions about coverage of the samples and sectoral
concentration of the European largest groups, and it is complemented by statistical annexes (only available in the
version distributed in www.eccbso.org) and other documents, called “the ERICA series”. The “ERICA series” will
appear on the ECCBSO website, the first such series being disseminated at the same pace as this document,
under the title: “Recalculated data in European listed non-financial groups and the impact of IAS 19”, and “IFRS
alternatives used by European groups included in ERICA database”. Some of these analyses have been
conducted with a subset of data called ERICA+, which contains some additional accounting details only available
for certain groups (around 200). The main findings of the study with 2013 data are:
1 The negative trend on results and profitability dating back to 2011, lasting for its third consecutive year
- The third year of consecutive decline in income and profitability has come together with a reduction in net
turnover reflecting the negative environment that prevents growth both in terms of organic growth as well as in
terms of acquisitions. The ongoing economic weakness also affected the industrial groups in 2013.
- The poor performance of profitability ratios in 2013 was based on worse rotation ratios, specifically the
reduction of the rotation of current assets.
- Although cash flow from operating activities decreased in 2013, its relative significance compared to revenue
showed an improvement for industry groups and service groups.
- The weak performance of the largest groups affected profit generation in 2013, which fell -9.2%. Nevertheless,
the aggregated value of the profits of ERICA groups stands at €236 bn.
2 The financial position of European groups improved slightly in 2013
- Although in 2013 there was a reduction in equity levels in the ERICA groups, relative significance measured by
the equity ratio (equity to total assets) improved, across all sizes and nearly all sectors of activity. Energy groups
were the only exception, with a deterioration in their equity ratio.
- The liquidity ratio remained stable in 2013
- In 2013 the listed groups, in all sizes and sectors (except in industry), reduced their financial debt, a
development that could be in line with the deleveraging process faced in Europe, although in relative terms (i.e. the
debt ratio) they held stable in the year considered.
- On average, the use of financial resources is equally spread between current and non-current assets. However,
the relative significance of property, plant and equipment is higher in the energy sector and investment property
has a higher weight in small groups, the latter due to the importance of real estate group on this size.
3 Fair value accounting had a positive impact on 2013 financial statements
- In 2013 fair value had a positive impact on the statement of profit or loss (mainly due to non-current assets and
reclassification of cash flow hedges) and equity (driven by available-for-sale financial assets and cash flow hedges)
- The highest impact was found in industry and the largest groups. In absolute terms, the impact on the income
statement amounted to €2.4 bn (something less than 5% of total profits of the groups with fair value revaluation in
the income statement), while the effect on equity was €8.1 bn (0.5% of total equity).
- The correlation analysis shows that European groups did not use fair value to control profit in 2013.
4 Coverage and sectoral diversification.
- The coverage obtained with ERICA on the total population of listed non-financial groups varies between 85%
and 100%.
- The European groups are highly concentrated in one kind of activity (industry, energy, construction or services),
with services the activity most selected by those with two different kinds of activities.
European non- financial listed groups: analysis of 2013
5
II
PROFITABILITY: THREE CONSECUTIVE YEARS OF NEGATIVE PERFORMANCE
Profitability, as well as the financial structure analysis carried out in this document, is based on the financial
data of 2013 available in the ERICA database for 960 non-financial European groups listed on a European
stock exchange.
BREAKDOWN OF THE SAMPLE: SIZES, SECTORS AND COUNTRIES COVERED
BREAKDOWN
THE
SAMPLE:
Main
figures forOF
2013,
data
in € bn SIZES, SECTORS AND COUNTRIES COVERED
Main figures for 2013, data in billion of €
Number
Total
Assets
EBIT
Cash Flow
Op. Act.
TABLE 2
P/(L) bef.
Tax
Revenue
By country
Austria
44
137,81
7,36
11,48
6,05
Belgium
76
211,21
15,86
19,44
17,84
131,62
France
315
2134,44
99,09
142,99
77,72
1400,10
Germany
202
1807,25
95,48
112,45
83,34
1424,35
Greece
Italy
Portugal
110,19
49
67,57
1,21
4,82
0,12
47,43
134
528,99
33,37
13,40
25,08
320,46
37
115,85
5,25
8,68
3,35
72,54
106
720,33
33,91
53,84
21,69
385,89
1. Industry
434
2718,60
156,49
180,03
143,84
2017,04
2. Energy
48
1366,33
48,87
71,03
31,98
748,33
3. Construction
50
295,47
8,61
13,05
4,12
187,70
422
1418,94
80,40
107,27
55,79
1014,03
6
4,26
0,28
0,36
0,23
2,75
1. Small groups (<250mn)
437
106,26
1,99
4,45
0,75
42,37
2. Medium (250mm-1,5bn)
282
323,99
16,11
21,80
10,75
193,34
3. Large groups (>1,5 bn)
241
5373,35
276,55
345,49
224,46
3734,14
960
5803,60
294,65
371,74
235,96
3969,85
Spain
By sector
4. Services
5. Not classified
By size (revenue)
Total
a. Note: The number of firms by country and by sector or by size are different: some double accounted groups belong to the same country
but are in different sectors.
Box 1 shows the great representativeness of the ERICA database in respect of the listed markets of nonfinancial groups, and accordingly, the table included in that box shows the significance of French and German
groups in ERICA (as occurs in the total population): more than 50% in terms of the number of groups and about
70% of the other quantitative indicators (such as total assets and revenue) is reported by the groups of these
two countries. With regard to size, for all variables analysed in this chapter (assets, revenue, EBIT, cash flow,
profit/losses), between 92% and 95% are reported by the large groups (those with revenue over €1.5 bn). If we
consider the main activity of the groups (see Box 2, for more details about the degree of diversification of
European listed non-financial groups), the weight of the industrial groups is notable: more than 50% of the EBIT
is generated in industry groups, a percentage that rises to 61% when it refers to profit and loss before tax. The
second sector of activity in significance is services; both services and industry cover 89% of the number of
groups analysed.
European non- financial listed groups: analysis of 2013
6
II.1
EBIT: THE ONGOING ECONOMIC WEAKNESS IS REFLECTED BY A FURTHER DECLINE IN
PROFITS
The analyses of the available data in ERICA for 2013 present a reduction in the generation of profits by the
European non-financial listed groups for three years in a row.
EBIT and profit/loss before tax as basic indicators performed poorly once more. For the total ERICA sample,
EBIT fell by -7%, and profit/loss by -9%. Most affected were groups in the energy sector and large groups.
Exceptions to this negative development were represented by the services sector and small groups.
In 2012 perimeter revenue rose by 6%, influenced by the good performance in industry and energy, and it thus
stood in contrast to the deterioration of profitability. 2013 data show a decrease even in revenue (-2.6%)
reflecting the negative environment that prevents growth both in terms of organic growth as well as in terms of
acquisitions. Industry – a major driver of last year’s revenue gains - more or less stagnated at 1%, and energy
dropped by as much as -11%. Regarding group sizes, the declining trend of revenue is caused by large groups
(-3%), whereas medium and small groups presented growth rates of +2.7% and +8.9%, respectively.
EBIT ratios: decline continued in 2013, mainly measured in a lower rotation of assets
Profitability analysis is based on the ratio EBIT to total assets, which was improved by its split into two
components: an indicator of the evolution of margins (EBIT/Revenue) and one of rotation (Revenue/Total
assets). Additionally, rotation was analysed for the first time in the edition of this European report by another
split in non-current and current assets. Charts 2.1.1 and 2.1.2 facilitate the interpretation of the behaviour of the
first two variables, profitability and margins, in the year 2013 (for more details, please consider the full statistical
annex available on the ECCBSO website, at www.eccbso.org).
In 2013 the profitability of listed European groups fell slightly by -0.1 points in terms of the median (which
represents the behaviour of the population not affected by the weight of a precise and singular group) and by
-0.2 points in terms of the weighted average, both corresponding to the evolution of the large groups. The minor
increase in the energy sector in terms of the median turns into a sharp drop (from 5.7% to 3.6%) when looking
at the weighted average, as individual large energy groups performed poorly in 2013. The opposite could be
observed for services, where profitability stagnated in the median but increased in the weighted average by
+0.7 points.
Developments in margins generally correlate with profitability, i.e. a decrease of -0.1 points in the median and
-0.3 points in the average. A major loss was recorded in energy, down -1.8 points in the median and even
worse in the weighted average (-2.8 points). Only in services did the margin increase in terms of the median
and the weighted average.
European non- financial listed groups: analysis of 2013
7
CHART 2.1.1
EBIT / ASSETS TOTAL
WEIGHTED AVERAGE (IN %)
10
2
5,8
0
Industry
Energy
Constru- Services
ction
2012
Total
Small
Medium
Large
Industry
Energy
Constru- Services
ction
2012
2013
Total
Small
Medium
Large
2013
CHART 2.1.2
EBIT / REVENUE
WEIGHTED AVERAGE (IN %)
MEDIAN (IN %)
%
15
%
7,0
5,9
6,1
4,6
4,4
5,8
5,7
5,6
Energy
3,8
3,8
3
4,9
Industry
6
5,3
7,4
7,8
6,0
4,7
6,0
9
5,8
7,4
7,7
8,7
7,4
7,7
7,9
4,6
4,9
6,5
6,9
7,8
7,5
6
8,3
12
9,3
12
9
5,7
2
0
15
5,6
5,4
3,7
3,3
4,9
4,8
4,6
2,0
2,8
1,9
1,5
4
4,6
4,3
6
4,4
5,7
5,4
5,2
5,0
4,9
5,1
5,7
5,0
3,0
2,9
4
5,3
5,7
3,6
6
5,8
8
5,6
8
%
5,6
10
MEDIAN (IN %)
%
3
0
0
Industry
Energy
Constru- Services
ction
2012
Total
Small
Medium
Large
2012
2013
Constru- Services
ction
Total
Small
Medium
Large
2013
The average margin for all groups stood at 7.4% in the weighted average and 5.7% in the median. In
comparison to 2010 data, this means a reduction by -2 points and -0.6 points, respectively. The decline was
especially significant from 2011 to 2012, whereas the rate of decline slowed down in 2013.
CHART 2.1.3
EBIT / REVENUE
WEIGHTED AVERAGE
10
MEDIAN
9,5
8,6
7,7
8
7,4
6
4
2
0
2010
2011
EBIT / Revenue
2012
2013
7
7
7
6
6
6
6
6
5
5
5
6,3
6,2
5,8
2010
2011
2012
5,7
2013
EBIT / Revenue
Against the background of declining revenues, rotation of assets fell by -2.4 points in median terms and -0.9
points in weighted average terms. The split of the ratio into current and non-current assets shows that this
decrease is caused by current assets (-4 points), whereas the rotation of the non-current assets increased by 2
European non- financial listed groups: analysis of 2013
8
points in the weighted average. Among all sectors, industry showed the largest decrease, by -3.7 points in the
median. The slight increase in profitability in the energy sector in median terms was much affected by the
changes in rotation, which rose by 3 points. A totally different and very pessimistic picture was shown once
more for the weighted average, where revenue / assets fell drastically by -6.7 points. Developments in both
current and non-current assets rotation were along these lines.
II.2
CASH FLOW FROM OPERATING ACTIVITY: DECREASE IN ALL SECTORS EXCEPT INDUSTRY
According to the downward trend in EBIT, cash flow from operating activity also performed badly in aggregated
terms, posting a decline of -6.6%. This decline was caused by large groups, whereas the small and medium
groups recorded a gain in operating cash flows. Regarding sectors, only industry was able to improve cash
flows. Energy in fact lost a quarter of its cash flow in comparison to last year due to negative developments at
single large groups.
Chart 2.2. shows the relationship of cash flow from operating activity to revenue. In total there was a reduction
of -0.2 points in the average and of -0.1 points in the median, both in line with the decline in the EBIT ratios.
Considering the higher cash flows in industry, the cash flow ratio showed growth of 0.2 points in the median
and even higher growth in the weighted average (+0.9 points). All other sectors deteriorated in terms of the
weighted average. In median terms, services also increased its ratio by 1.4 points and energy by +1.5 points
without the bias of the poor performance of single large groups. Large and small groups performed worse in
terms of the median than in terms of the weighted average, indicating once more the difficult economic
environment.
CHART 2.2
CASH FLOW OPERATING ACTIVITIES / REVENUE
WEIGHTED AVERAGE (IN %)
15,8
5,3
8,7
8,2
7,7
7,5
7,2
6,9
7,8
7,7
7,1
5,7
7,3
9,5
9,3
11,4
11,3
10,5
10,0
9,6
9,4
8
4
4
0
0
Industry
Energy
2012
II.3
12
7,5
7,6
8
7,0
8,9
8,0
12
9,5
11,2
11,4
16
10,6
16
%
14,0
20
7,7
20
MEDIAN (IN %)
%
Constru- Services
ction
2013
Total
Small
Medium
Large
Industry
Energy
2012
Constru- Services
ction
Total
Small
Medium
Large
2013
PROFIT (LOSS) BEFORE TAX: PROFITS DECLINED FOR ONE MORE YEAR DUE TO THE
DETERIORATION AT LARGE GROUPS
The level of aggregated profits generated by the listed non-financial European groups was €236 bn; 95% of this
surplus was created by large groups and 61% in industry. In comparison to 2012, European groups saw profits
decline once more (-9.2%) due to the weak performance of the large groups. This is also reflected in relative
terms (ratio Profits/Revenue), showing that the European groups generated profits reaching the 12.8% for the
aggregated sample, which represents a deterioration of -0.9 points. In contrast to the large groups were the
small and medium groups, which in the average improved their profits also in relative terms (see Chart 2.3).
European non- financial listed groups: analysis of 2013
9
The analysis of the statistical distribution (the median) also shows an increasing ratio due to the large number
of small and medium groups (75% of the sample).
The sectoral breakdown shows positive developments for services and a decline for industry both in average
and median terms. Construction improved its ratio significantly in terms of the average but the median shows
an ongoing deterioration in the sector, in particular for the small groups. Energy once more is contradictory in
average and median terms, reflecting an improvement in the median.
CHART 2.3
PROFIT (LOSS) BEFORE TAX/ EQUITY RATIO
WEIGHTED AVERAGE (IN %)
14,0
13,8
11,4
10,1
5,5
5,5
9,6
9,1
10
4,6
5
8,9
7,9
10,6
9,5
11,2
10,3
13,3
14,6
7,8
9,1
13,7
15
%
2,0
10
7,0
8,2
9,6
15
12,8
12,5
15,7
20
15,8
20
%
15,1
25
MEDIAN (IN %)
1,1
5
0,0
-0,1
0
0
-5
Industry
Energy
2012
Constru- Services
ction
2013
Total
Small
Medium
Large
Industry
Energy
2012
Constru- Services
ction
Total
Small
Medium
Large
2013
European non- financial listed groups: analysis of 2013
10
III FINANCIAL POSITION SLIGHTLY IMPROVED IN 2013
Despite its heterogeneity, the number and the weight of the groups included in ERICA provide a relevant
assessment of the financial structure of the main listed groups of the non-financial sector in continental Europe
(though some large groups of certain countries are missing). Indeed, the results rely on the data of around 1000
European groups. However, as the 241 largest groups represent more than 94 % of total revenue, they have a
strong influence on the aggregated results.
BREAKDOWN OF THE SAMPLE: SIZES, SECTORS AND COUNTRIES COVERED
Main figures for 2013, data in billion of €
Number
Total Assets
Financial
Debt
TABLE 3
Cash
Equity
By country
Austria
44
137,81
38,89
9,24
54,72
Belgium
76
211,21
66,83
16,78
80,00
France
315
2134,44
576,62
179,26
725,18
Germany
202
1807,25
566,19
122,14
549,31
49
67,57
23,08
6,63
24,19
134
528,99
180,75
32,87
181,00
37
115,85
51,93
9,25
31,34
106
720,33
283,12
58,83
209,75
1. Industry
434
2718,60
815,42
242,12
952,29
2. Energy
48
1366,33
384,71
60,73
389,78
3. Construction
50
295,47
112,64
28,32
59,19
422
1418,94
516,99
123,38
444,89
6
4,26
1,14
0,58
1,93
1. Small groups (<250mn)
437
106,26
45,00
7,79
38,54
2. Medium (250mm-1,5bn)
282
323,99
121,12
27,74
118,28
3. Large groups (>1,5 bn)
241
5373,35
1664,77
419,61
1691,25
960
5803,60
1830,90
455,13
1848,08
Greece
Italy
Portugal
Spain
By sector
4. Services
5. Not classified
By size (revenue)
Total
a. Note: The number of firms by country and by sector or by size are different: some double accounted groups belong to the same country
but are in different sectors.
In fact, the results obtained with ERICA cannot be considered as a perfect snapshot of the financial situation of
the non-financial companies as a whole, but they probably gauge properly the situation of European listed nonfinancial groups.
III.1
IMPROVEMENT IN EQUITY RATIO, COMPATIBLE WITH A SLIGHT OVERALL DROP IN EQUITY
LEVELS
Moderate decrease in equity in 2013
In the year 2013, there were again only slight changes in equity. In contrast to the two years before, where we
noted overall growth, an overall drop in equity by -0.8 % is seen in 2013.
European non- financial listed groups: analysis of 2013
11
CHART 3.1.1
CHANGE 2013 (IN %)
%
10
+1.6%
5
+2.1%
0
-0.8%
-5
-1.0%
-1.5%
-4.2%
-2.6%
-10
-6,5%
-15
Industry
Energy
Construction
Services
Total
Small
Other equity interest
Non-controlling interests
Retained earnings
Other reserves
Share premium
Share capital
Medium
Large
Treasury shares
The strongest decline was to be found in the construction sector (-6.5 %), mainly due to the fall in retained
earnings, but the energy (-4.2 %) and the services sector (-1.5 %) also had a reduction in equity. The only
sector evidencing positive developments in the period considered was industry, with a slight increase of 1.6 %.
In terms of size, only the medium-sized groups were able to increase their equity – by 2.1 % – thanks to a
higher share premium. The large and small groups, on the other hand, faced a decrease in equity.
The equity ratio (Equity / Total assets) improved in 2013 in nearly all sectors and sizes
Both figures of the equity ratio increased slightly: the weighted mean and the median grew 0.5 points to 32.2 %
and 38.9 %, respectively.
This positive development is reflected in the weighted average of nearly all sectors and sizes. The largest
increase had been reported in the industry sector (+1.2 points), followed by the services sector with a rise of 0.7
points and the construction sector with an increase of 0.1 points. Only the energy sector showed a distinct
decrease, of -1.7 points. Despite this development the construction sector still posted a lower ratio (less than
20 %) than all other sectors (around or above 30 %). In terms of size, all groups improved their equity ratio, but
the most notable improvement was that of the medium sized groups, with an increase of 1.5 points.
GRAPH 3.1.2
EQUITY RATIO - EQUITY / TOTAL ASSETS
WEIGHTED AVERAGE (IN %)
19,5
20
20
10
10
0
33,7
33,1
39,2
41,7
38,1
40,6
38,9
38,4
38,4
24,6
23,8
30,5
37,6
42,6
41,8
40
30
19,4
30
%
28,6
31,9
31,4
36,3
34,8
36,1
36,0
32,2
31,7
30,7
30,2
28,5
31,4
50
36,0
40
%
34,8
50
MEDIAN (IN %)
0
Industry
Energy
2012
Constru- Services
ction
2013
Total
Small
Medium
Large
Industry
Energy
Medium
Large
European non- financial listed groups: analysis of 2013
12
2012
Constru- Services
ction
Total
Small
2013
The picture is similar for the median. Again, the largest decline had been reported in the energy sector
(-1.9 points). The equity ratio of the other three sectors improved. With regard to the size of the groups, the
small and medium-sized groups were able to increase their ratio by 1.1 points. Only the large groups of the
sample had to report a decrease (-0.6 points) of their equity ratio.
III.2
SLIGHT RISE IN CASH AND CASH EQUIVALENTS
Slight increase of liquidity in 2013, driven exclusively by industry groups
The strong preference for liquidity of the previous years has weakened in 2013. During the period under study,
there was only a slight increase in cash and cash equivalents of 1.7 % on average. In fact, only the industry
sector experienced strongly accelerating growth rates (10.1 %), while the groups in the energy, construction
and services sector reduced their cash funds by -12.2, -6.9 and -1.2 %, respectively. With regard to the size of
the groups, only the medium-sized groups showed a significant increase in cash (10.2 %).
CHART 3.2.1
CHANGE IN CASH AND CASH EQUIVALENTS
15
5,2
1,2
2,4
4,8
-12,2
5
1,7
4,8
6,3
10
10,2
10,1
%
10,1
Sliding Sample 2012/2013
1,7
-1,2
-6,9
-2,8
-5
-0,8
0
-10
-15
Industry
Energy
WEIGHTED AVERAGE (IN %)
Construction
Services
Total
Small
Medium
Large
MEDIAN (IN %)
The overall median increased by 4.8 %. Often, the changes in liquidity were less pronounced in the median
than in the weighted average. Only in the case of the medium-sized groups - where the median rose by 10.1 %
- was the development nearly the same.
Liquidity rate remained stable
Considering the slight increase in cash and cash equivalents, liquidity in relation to total assets remained
largely stable (+0.2 points) with a level of 7.6 % on average at the end of 2013. This applies equally for the
median ratio.
The main changes can be found in the industry sector with an increase of 0.6 points, and in the energy sector
with a decrease of -0.8 points. In terms of size, the medium-sized groups again showed the most distinct rise,
up by 0.7 points on average.
European non- financial listed groups: analysis of 2013
13
CHART 3.2.2
CASH - CASH AND CASH EQUIVALENTS / TOTAL ASSETS
MEDIAN (IN %)
4
4
2
2
8,6
7,9
8,0
7,4
6,8
7,8
7,2
7,6
7,6
7,5
6,8
6,4
5,4
4,6
6
0
0
Industry
Energy
Constru- Services
ction
2012
III.3
8,4
8
4,4
6
%
8,1
7,5
7,4
8,6
7,9
7,5
7,6
10
5,2
8
7,0
7,4
8,4
8,7
8,9
9,6
%
7,8
10
9,8
WEIGHTED AVERAGE (IN %)
Total
Small
Medium
Large
Industry
Energy
Constru- Services
ction
2012
2013
Total
Small
Medium
Large
2013
DECREASE OF FINANCIAL DEBT, BUT LARGELY STABLE INDEBTEDNESS RATE
Broad decrease of financial debt in 2013
Total financial debt fell by -3.2 % on average and by -1.9 % in the median.
The trends by sector and size were quite uniform: nearly all sectors and sizes reduced their financial debt in
2013. This is true for the weighted mean as well as for the median. The strongest decrease can be found in the
energy sector, where financial debt fell by -9.8 % on average. The only exception to this development was the
industry sector, where financial debt rose by 0.7 % on average.
GRAPH 3.3.1
CHANGE IN FINANCIAL DEBT
Sliding Sample 2012/2013
5
0,7
%
-2,2
-1,2
-1,0
-2,1
-1,1
-1,9
-3,4
-3,8
-3,2
-1,9
-1,2
-3,8
-1,8
-5
-0,8
0
-9,8
-10
-15
Industry
Energy
WEIGHTED AVERAGE (IN %)
Construction
Services
Total
Small
Medium
Large
MEDIAN (IN %)
The weight of financial debt remained largely stable
Although the absolute amount of financial debt fell broadly in 2013, the indebtedness rate remained largely
stable, at around 31 % of total assets. All sectors and sizes showed only slight changes. Besides, the larger
groups have an average ratio lower than the small and medium-sized ones.
The changes in the median by sector of activity were more pronounced than those of the weighted average.
The median indebtedness rate in respect of all sectors and sizes increased by 0.4 points to 25.8%. It should be
highlighted that medians in the energy and construction sector are notably higher.
European non- financial listed groups: analysis of 2013
14
CHART 3.3.2
FINANCIAL DEBT / TOTAL ASSETS
WEIGHTED AVERAGE (IN %)
0
27,5
26,3
26,4
25,7
42,2
44,1
24,6
10
25,8
10
23,1
20
25,4
20
25,0
30
25,8
30
24,2
40
39,6
36,1
%
23,2
31,0
30,6
37,5
41,9
39,9
42,1
31,8
50
31,2
37,1
36,1
28,2
28,0
30,2
40
29,4
38,5
%
38,4
50
MEDIAN (IN %)
0
Industry
Energy
Constru- Services
ction
2012
III.4
Total
Small
Medium
Large
Industry
Energy
Constru- Services
ction
2012
2013
Total
Small
Medium
Large
2013
EMPLOYMENT OF FINANCIAL RESOURCES
As both equity and financial debt decreased in 2013, non-financial listed groups reduced resources used to
invest in different kinds of assets. Given the recent limitations on resources, it is worth checking whether the
attribution of these resources to current and/or non-current assets depends on the sector of activity and/or the
size of the group.
CHART 3.4
ASSET STRUCTURE 2013 (IN % OF TOTAL ASSETS)
%
100
75
50
25
0
Industry
Energy
Construction
Services
Total
Small
Medium
Property, plant and equipment
Investment property
Intangible assets and goodwill
Investments in related parties
Inventories
Trade receivables
Cash and cash equivalents
Other current assets
Large
Other non-current assets
On average, the financial means of companies are equally balanced between current and non-current assets.
Comparison by sector of activity, however, shows that property, plant and equipment are extremely important in
the energy sector, whereas they are of much less significance in the construction sector. The graph also
reveals the significant weight of investment property in the small groups, and to a lesser extent in the mediumsized groups. The sample used includes 53 real estate groups. Forty of them are small groups; nine of them
are medium-sized groups. Fourteen of these small real estate groups belong to the 20 largest small groups (in
terms of total assets), which explains the importance of investment property in this category. Finally, the larger
the group, the higher the share of intangible assets and goodwill, and property, plant and equipment.
European non- financial listed groups: analysis of 2013
15
IV FAIR VALUE: POSITIVE IMPACT ON FINANCIAL STATEMENTS
Fair value impact analysis relies on financial statements for the year 2013 available in ERICA+ and includes
data from 231 groups, 148 of which were subject to fair value revaluation, corresponding to 64% of the total
sample (67% in 2012). 111 groups reported fair value in the statement of profit or loss, 97 made adjustments
with an impact on equity and 83 groups did not make any fair value adjustment.
IV.1
POSITIVE IMPACT ON THE STATEMENT OF PROFIT OR LOSS AND ON EQUITY
In 2013, fair value has a total positive impact on the statement of profit or loss and equity. While in the
statement of profit or loss the impact is positive, due mainly to fair value of non-current assets and
reclassification of cash flow hedges, in equity fair value impact is driven by available-for-sale financial assets
and cash flow hedges. Large groups tend to record most of all fair value revaluation when compared with small
and medium-sized groups. As in the previous years, the total amount of fair value results from large groups.
CHART 4.1
FAIR VALUE REVALUATION (TOTAL BY SECTOR AND SIZE)
BY SECTOR
BY SIZE
millions
millions
10.000
9.000
8.000
7.000
6.000
5.000
4.000
3.000
2.000
0
1.000
-2.000
Construction
Energy
Industry
Market services
Total
-1.000
Large
Statement of profit or loss
IV.1.1
Equity
Medium
Statement of profit or loss
Small
Total
Equity
Positive impact on the statement of profit or loss due to non-current assets and
reclassification of cash flow hedges
Almost all sectors show a positive impact on the statement of profit or loss. Although the highest value comes
from the industry sector, energy is driving the behaviour of the total amount for non-financial listed groups. In
energy, the positive impact on non-current assets results from the equity method: profits in one subsidiary and
an issue of convertible bonds in two participations available for sale increase the value of the participations; and
also from impairment reversal caused by positive reserve revisions and improved future production costs. Cash
flow hedges were used by one group to cover the risk of changes in raw materials market prices. Energy also
explains the total amount with a negative impact due to significant movements in expenses and incomes
related to derivative instruments in one group. In industry and construction, the positive impact on the statement
of profit or loss is explained by other components. In industry, the figures results in a nearly equal positive
proportion between financial instruments designated as hedges of one group and reclassification adjustments
for available-for-sale financial assets in another group. In the construction sector, positive value is supported by
the gains from financial instruments of one group due to valuation at market price of derivatives shares.
European non- financial listed groups: analysis of 2013
16
IV.1.2
Positive impact on equity due to available-for-sale financial assets and cash flow hedges
In equity, the total impact is positive and largely explained by the industry sector, which shows the highest value
in both components. Beyond industry, the positive impact of available-for-sale financial assets of the energy
sector and of the role of cash-flow hedges in construction is evident. Considering available-for-sale financial
assets, the positive impact on industry and energy is driven by one group in each sector related to share
investments in available-for-sale participations. Positive amounts in cash-flow hedges in industry are related to
the currency, interest rate and commodity price risk accounted by one group. In construction, however, the
value concerning cash-flow hedges is spread among different groups.
GRAPH 4.1.2
FAIR VALUE REVALUATION IN PROFIT OR LOSS AND EQUITY (TOTAL BY
SECTOR)
PROFIT OR LOSS
6.000
EQUITY
millions
9.000
4.000
7.000
2.000
5.000
0
3.000
-2.000
1.000
-4.000
-1.000
Construction
Energy
Industry
Market services
Non-current assets
Financial instruments designated as hedges
Financial instruments
Reclassification of available-for-sale financial assets
Reclassification of cash flow hedges
Total
millions
Construction
Energy
Industry
Available-for-sale financial assets
Market services
Total
Cash flow hedges
As in previous years, fair value revaluation in the statement of profit or loss has a limited weight in revenues.
However, some small and medium-sized groups have higher ratios (above 18%) which cause differences
between the simple average and the weighted average, namely in services. The weight of revaluation in equity
in total equity is, for all sectors, less than 1.5%, except for construction (5%), owing to the low equity of this
sector.
The same conclusion of previous years is reached when a correlation analysis between Fair value revaluation
in the statement of profit or loss and profit (loss) before fair value revaluation is conducted. Groups did not use
fair value to control profit in 2013. Fair value revaluation increased the magnitude of profit instead of smoothing
it. Furthermore, running the same regression analysis of previous years (independent variables: total assets,
intangible assets, revenue, profits, research and development, and sector; dependent variable: absolute value
of fair value revaluation), adjusted R square decreases to a low value of 33%. This result indicates that
accounting variables do not explain fair value impact. As presented in previous paragraphs, fair value impact is
driven by the equity method and financial instruments designated as hedges which allow groups to manage the
risk of changes in raw materials and commodity market prices, currency and interest rates.
Finally, a comparison with stock market indices (the detailed information can be found in the statistical annex
distributed only on the website of the ECCBSO, at www.eccbso.org) shows that the trends reflected by the
impact of fair value accounting in the European groups coincide with the positive performance of stock markets
in Europe in 2013. This pattern is followed by some of the sectors of activity analysed, more specifically in
industry and services, whereas construction and energy seem to have decoupled the value on the markets and
the value of portfolios, which performed worse in 2013.
European non- financial listed groups: analysis of 2013
17
ERICA DATABASE: COVERAGE AND MAIN FIGURES
BOX 1
The coverage of ERICA ranges from 32% in Greece or 42% in Germany to 100% (in Portugal) of all listed
groups. Using a quantitative indicator (revenue, share capital or equity) the coverage is very high for all countries
and varies between 86% in Greece and 100% in Belgium, Portugal and Spain. When we consider the subset
ERICA +, which in terms of numbers of groups is clearly lower compared to ERICA, it varies from Portugal
(100%) to Germany (6%); however, quantitative indicators show that ERICA+ is a sound sample of the
consolidated groups´ population with higher coverage rates (from 68% in France to 100% in Portugal).
CHART BOX 1.1
COVERAGE OF DATABASE
ERICA (RELATED TO TOTAL LISTED GROUPS)
100
99 100
97
%
97
ERICA + (RELATED TO TOTAL LISTED GROUPS)
96
95
86
75
80
100 100
98 100
100
100 100
97
%
84
75
80
60
60
88
86
73
68
71
55
42
32
40
20
20
0
0
Austria
Belgium
France
32
40
Germany Greece
Italy
Portugal
Spain
27
15
7
Belgium
Related to number of listed groups
Related to a quantitative indicator
6
France
Germany
Greece
Italy
Portugal
Spain
Related to number of listed groups
Related to a quantitative indicator
The sectoral breakdown (by revenue) of the listed European groups differs greatly from country to country.
Industry is especially significant in most of the countries except in Austria, Spain and Portugal. The construction
sector accounts for a large part of the stock market in Austria and Spain, while in other countries it plays a minor
role. The energy sector has a high share of the stock market in Austria, Italy, Portugal and Spain, but a low one
in Belgium, France, Germany and Greece.
The sectoral structure is well represented by both databases even for those countries with a lower coverage in
terms of quantitative indicators (i.e. in Italy, ERICA+ offers an over-represented energy sector and in France an
under-represented services sector, although overall they are well represented in the database).
STRUCTURE BY COUNTRY AND SECTOR (RELATED TO REVENUE) - ERICA
%
Belgium
Austria
100%
80%
8%
9%
14%
13%
40%
2%
1%
60%
44%
43%
34%
35%
ERICA
Total
quoted
groups
40%
2%
1%
France
31%
31%
7%
6%
13%
13%
22%
18%
14%
3%
13%
24%
8%
14%
Portugal
Italy
Greece
Germany
29%
7%
CHART BOX 1.2
10%
2%
10%
1%
38%
37%
33%
33%
6%
6%
22%
22%
39%
39%
ERICA
Total
quoted
groups
11%
40%
57%
20%
57%
64%
49%
50%
ERICA
Total
quoted
groups
66%
54%
53%
50%
52%
ERICA
Total
quoted
groups
Spain
36%
36%
16%
16%
26%
26%
22%
22%
ERICA
Total
quoted
groups
0%
ERICA
Services
Total
quoted
groups
Construction
ERICA
Tota l
quote d
groups
Energy
ERICA
Total
quoted
groups
Industry
European non- financial listed groups: analysis of 2013
18
STRUCTURE BY COUNTRY AND SECTOR (RELATED TO REVENUE) ERICA+
%
France
Belgium
Greece
Germany
100%
18%
80%
60%
41%
40%
31%
2%
1%
56%
57%
18%
24%
15%
3%
13%
8%
8%
20%
2%
1%
21%
6%
14%
13%
29%
7%
11%
CHART BOX 1.3
Portugal
Italy
9%
1%
Spain
10%
1%
33%
33%
6%
6%
22%
22%
39%
39%
ERICA+
Tota l
quote d
groups
34%
36%
17%
16%
29%
26%
37%
52%
40%
54%
20%
64%
66%
54%
50%
53%
52%
38%
20%
22%
ERICA+
Tota l
quote d
groups
0%
ERICA+
Total
quoted
groups
Services
ERICA+
Total
quoted
groups
ERICA+
Construction
Total
quoted
groups
ERICA+
Energy
Total
quoted
groups
ERICA+
Total
quoted
groups
Industry
European non- financial listed groups: analysis of 2013
19
ACTIVITIES PURSUED BY EUROPEAN NON-FINANCIAL
NON FINANCIAL LISTED GROUPS IN EUROPE: AN ANALYSIS OF THEIR
DIVERSIFICATION
BOX 2
The structure of the groups in ERICA+ in terms of the different
activities they pursue (according to NACE) is depicted in Chart Box
2.1. From this chart we can see that 49% of the groups have only
one activity, 24% have two activities, 21% have three activities and
the remaining 7% have four activities. In order to identify how the
revenue of the groups is divided among the different activities the
groups may pursue, groups with a different number of activities are
examined separately.
CHART BOX 2.1
NUMBER OF REAL CASES
& NUMBER OF ACTIVITIES
7,0
21,0
49,0
24,0
1 activity
2 activities
3 activities
4 activities
Chart Box 2.2 shows the nature
of the other activities in which
the groups are involved. From
this chart we can see that, for
the majority of the groups, the
second activity in which they
are involved is in the services
sector.
From a sectoral
oral point of view and in terms of revenue, the construction sector is the most diversified among
groups with only two activities.. The picture changes among groups with three activities, where the energy
sector is the most diversified. Finally, among groups
groups with four activities, both construction and energy sectors
are equally diversified (in industry, only one group cannot lead to general conclusions).
PERCENTAGE OF REVENUE FROM EACH ACTIVITY FOR EACH SECTOR
GROUPS WITH 2 ACTIVITIES
# OF REAL CASES & # OF ACTIVITIES FOR EACH SECTOR
%
%
60
100%
54
50
43
9%
80%
40
24
22
20
20
8
10
3
91%
40%
18
11
6
3
5
6
3
3
25%
87%
75%
52%
20%
1
0
0%
Construction
Energy
Industry
Market Services
1 activity
2 activities
3 activities
4 activities
Construction
16%
9%
16%
25%
Industry
Market Services
1st activity
GROUPS WITH 4 ACTIVITIES
%
6%
Energy
2nd activity
GROUPS WITH 3 ACTIVITIES
80%
13%
48%
60%
30
100%
CHART BOX 2.3
100%
13%
20%
%
8%
7%
16%
20%
31%
29%
19%
80%
20%
32%
60%
60%
6%
8%
11%
22%
40%
40%
77%
66%
20%
75%
67%
52%
20%
46%
44%
40%
Construction
Energy
Industry
0%
0%
Construction
3rd activity
Energy
Industry
2nd activity
Market Services
1st activity
4th activity
3rd activity
2nd activity
Market Services
1st activity
European non- financial listed groups: analysis of 2013
20
The diversification of construction groups is something that is expected. The construction sector is very much
influenced by the turnovers of the economy. Therefore, groups belonging to this sector are forced to diversify in
their activities in order to be protected against possible economic downturn. For groups belonging to the
energy sector there is no straightforward explanation for the results obtained.
From a group size point of view and in terms of revenue, among groups with only two activities, medium and
large-sized groups are slightly less diversified than small groups. The picture is also the same among groups
with three activities. However, among groups with four activities, large groups clearly tend to be more
diversified than small ones.
PERCENTAGE OF REVENUE FROM EACH ACTIVITY FOR EACH GROUP SIZE
# OF REAL CASES & # OF ACTIVITIES FOR EACH GROUP SIZE
Units
%
CHART BOX 2.4
GROUPS WITH 2 ACTIVITIES
100%
80
64
18%
14%
14%
82%
86%
86%
Small
Medium
Large
80%
60
60%
40
24
28
23
17
20
40%
23
15
11
9
8
6
20%
2
0%
0
Small
1 activity
Medium
2 activities
3 activities
Large
4 activities
1st activity
GROUPS WITH 4 ACTIVITIES
GROUPS WITH 3 ACTIVITIES
100%
80%
%
7%
30%
100%
10%
23%
2nd activity
9%
24%
80%
%
2%
9%
4%
5%
19%
11%
27%
21%
60%
60%
40%
40%
63%
67%
67%
72%
63%
20%
20%
16%
52%
0%
0%
Small
1st activity
Medium
2nd activity
Large
3rd activity
Small
1st activity
Medium
2nd activity
3rd activity
Large
4th activity
European non- financial listed groups: analysis of 2013
21