Green Building Materials in Italy: A Strategic Reference, 2006

Green Building Materials in Italy: A Strategic Reference, 2006 Edited by Philip M. Parker, Ph.D. Eli Lilly Chair Profe...

Author: Philip M. Parker

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Green Building Materials in Italy: A Strategic Reference, 2006

Edited by

Philip M. Parker, Ph.D. Eli Lilly Chair Professor of Innovation, Business and Society INSEAD (Fontainebleau & Singapore)

www.icongrouponline.com

©2007 Icon Group International, Inc.

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COPYRIGHT NOTICE ISBN 0-497-36039-X All of ICON Group International, Inc. publications are copyrighted. Copying our publications in whole or in part, for whatever reason, is a violation of copyrights laws and can lead to penalties and fines. Should you want to copy tables, graphs, or other materials from our publications, please contact us to request permission. ICON Group International, Inc. often grants permission for very limited reproduction of our publications for internal use, press releases, and academic research. Such reproduction requires, however, confirmed permission from ICON Group International, Inc. Please read the full copyright notice, disclaimer, and user agreement provisions at the end of this report.

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About Icon Group International, Inc. Icon Group International, Inc.’s primary mission is to assist managers with their international information needs. U.S.-owned and operated, Icon Group has field offices in Paris, Hong Kong, and Lomé, Togo (West Africa). Created in 1994, Icon Group has published hundreds of multi-client databases, and global/regional market data, industry and country publications. Global/Regional Management Studies: Summarizing over 190 countries, management studies are generally organized into regional volumes and cover key management functions. The human resource series covers minimum wages, child labor, unionization and collective bargaining. The international law series covers media control and censorship, search and seizure, and trial justice and punishment. The diversity management series covers a variety of environmental context drivers that effect global operations. These include women’s rights, children’s rights, discrimination/racism, and religious forces and risks. Global strategic planning studies cover economic risk assessments, political risk assessments, foreign direct investment strategy, intellectual property strategy, and export strategies. Financial management studies cover taxes and tariffs. Global marketing studies focus on target segments (e.g. seniors, children, women) and strategic marketing planning. Country Studies: Often managers need an in-depth, yet broad and up-to-date understanding of a country’s strategic market potential and situation before the first field trip or investment proposal. There are over 190 country studies available. Each study consists of analysis, statistics, forecasts, and information of relevance to managers. The studies are continually updated to insure that the reports have the most relevant information available. In addition to raw information, the reports provide relevant analyses which put a more general perspective on a country (seen in the context of relative performance vis-à-vis benchmarks). Industry Studies: Companies are racing to become more international, if not global in their strategies. For over 2000 product/industry categories, these reports give the reader a concise summary of latent market forecasts, pro-forma financials, import competition profiles, contacts, key references and trends across 200 countries of the world. Some reports focus on a particular product and region (up to four regions per product), while others focus on a product within a particular country.



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Table of Contents 1

INTRODUCTION & METHODOLOGY.............................................................................1

1.1

What Does This Report Cover?

1

1.2

How to Strategically Evaluate Italy

1

1.3

Latent Demand and Accessibility in Italy

3

2

GREEN BUILDING MATERIALS IN ITALY....................................................................5

2.1

Latent Demand and Accessibility: Background

5

2.2

Latent Demand: Market Composition

5

2.3

Key Players

6

2.4

Market Issues and Obstacles

7

2.5

Latent Demand: Market Data

8

3 FINANCIAL INDICATORS: GENERAL BUILDING CONTRACTORS AND OPERATIVE BUILDERS.............................................................................................................9 3.1 Overview 9 3.1.1 Financial Returns and Gaps in Italy ......................................................................................................... 10 3.1.2 Labor Productivity Gaps in Italy .............................................................................................................. 13 3.1.3 Limitations and Extensions ...................................................................................................................... 13 3.2 Financial Returns in Italy: Asset Structure Ratios 14 3.2.1 Overview .................................................................................................................................................. 14 3.2.2 Assets – Definitions of Terms .................................................................................................................. 14 3.2.3 Asset Structure: Outlook .......................................................................................................................... 17 3.2.4 Large Variances: Assets ........................................................................................................................... 18 3.2.5 Key Percentiles and Rankings .................................................................................................................. 21 3.3 Financial Returns in Italy: Liability Structure Ratios 36 3.3.1 Overview .................................................................................................................................................. 36 3.3.2 Liabilities and Equity – Definitions of Terms .......................................................................................... 36 3.3.3 Liability Structure: Outlook ..................................................................................................................... 38 3.3.4 Large Variances: Liabilities ..................................................................................................................... 39 3.3.5 Key Percentiles and Rankings .................................................................................................................. 42 3.4 Financial Returns in Italy: Income Structure Ratios 55 3.4.1 Overview .................................................................................................................................................. 55 3.4.2 Income Statements – Definitions of Terms .............................................................................................. 55 3.4.3 Income Structure: Outlook ....................................................................................................................... 57 3.4.4 Large Variances: Income.......................................................................................................................... 58 3.4.5 Key Percentiles and Rankings .................................................................................................................. 61 3.5 Financial Returns in Italy: Profitability Ratios 74 3.5.1 Overview .................................................................................................................................................. 74 3.5.2 Ratios – Definitions of Terms .................................................................................................................. 74 www.icongrouponline.com


Contents 3.5.3 3.5.4 3.5.5

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Ratio Structure: Outlook .......................................................................................................................... 76 Large Variances: Ratios ........................................................................................................................... 77 Key Percentiles and Rankings .................................................................................................................. 80

3.6 Productivity in Italy: Asset-Labor Ratios 95 3.6.1 Overview .................................................................................................................................................. 95 3.6.2 Asset to Labor: Outlook ........................................................................................................................... 96 3.6.3 Asset to Labor: International Gaps........................................................................................................... 97 3.6.4 Key Percentiles and Rankings ................................................................................................................ 100 3.7 Productivity in Italy: Liability-Labor Ratios 115 3.7.1 Overview ................................................................................................................................................ 115 3.7.2 Liability to Labor: Outlook .................................................................................................................... 116 3.7.3 Liability and Equity to Labor: International Gaps.................................................................................. 117 3.7.4 Key Percentiles and Rankings ................................................................................................................ 120 3.8 Productivity in Italy: Income-Labor Ratios 133 3.8.1 Overview ................................................................................................................................................ 133 3.8.2 Income to Labor: Outlook ...................................................................................................................... 134 3.8.3 Income to Labor: Gaps ........................................................................................................................... 135 3.8.4 Key Percentiles and Rankings ................................................................................................................ 138

4

MACRO-ACCESSIBILITY IN ITALY ............................................................................151

4.1

Executive Summary

151

4.2

Fundamental Dynamics

152

4.3

Dynamics in Agriculture

152

4.4

Dynamic Markets

152

4.5

Government Intervention Risks

153

4.6

Infrastructure Development

153

4.7

Economic Relationship with the United States

154

4.8 The Political System 154 4.8.1 Political Risks for Agriculture................................................................................................................ 155 4.9 Marketing Strategies 156 4.9.1 Distribution Channel Options................................................................................................................. 156 4.9.2 Agents and Distributors.......................................................................................................................... 157 4.9.3 Franchising ............................................................................................................................................. 158 4.9.4 Direct Marketing Options....................................................................................................................... 160 4.9.5 E-Commerce........................................................................................................................................... 160 4.9.6 Leasing ................................................................................................................................................... 162 4.9.7 Joint Ventures and Licensing Options.................................................................................................... 163 4.9.8 Creating a Sales Office........................................................................................................................... 163 4.9.9 Advertising and Trade Promotion .......................................................................................................... 163 4.9.10 Pricing Issues.......................................................................................................................................... 171 4.9.11 Quotes and Payment Terms.................................................................................................................... 172 4.9.12 Selling Strategies.................................................................................................................................... 172 4.9.13 Public Sector Marketing......................................................................................................................... 173 www.icongrouponline.com


Contents 4.9.14 4.9.15 4.9.16

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Hiring Local Counsel ............................................................................................................................. 173 Performing Due Diligence...................................................................................................................... 173 Marketing Agricultural Products............................................................................................................ 174

4.10 Trade Barrier Risks 175 4.10.1 Broadcast Directive and Motion Picture Quotas .................................................................................... 175 4.10.2 Civil Aviation......................................................................................................................................... 176 4.10.3 Government Procurement....................................................................................................................... 176 4.10.4 Customs Regulations, Tariff Rates, and Import License Requirements ................................................. 176 4.10.5 Value-Added Taxes................................................................................................................................ 177 4.10.6 Temporary Goods Entry Requirements.................................................................................................. 177 4.10.7 Special Import/Export Requirements and Certifications ........................................................................ 178 4.10.8 Labeling Issues....................................................................................................................................... 178 4.10.9 Restrictions on Imports .......................................................................................................................... 179 4.10.10 Controls on Exports............................................................................................................................ 179 4.10.11 Local Standards .................................................................................................................................. 179 4.10.12 Free Trade Zones and Warehouses..................................................................................................... 186 4.10.13 Adherence to Free Trade Agreements ................................................................................................ 186 4.10.14 Customs Contact Information............................................................................................................. 187 4.10.15 Warranty and Non-Warranty Repairs................................................................................................. 187 4.10.16 Trade Regulations and Standards for Agriculture .............................................................................. 187 4.11 Investment Climate 188 4.11.1 Openness to Foreign Investment ............................................................................................................ 188 4.11.2 Right to Private Ownership and Establishment ...................................................................................... 189 4.11.3 Intellectual Property Risks ..................................................................................................................... 189 4.11.4 Laws Governing Intellectual Property Rights ........................................................................................ 190 4.11.5 Foreign Trade Zones and Free Ports....................................................................................................... 192 4.11.6 Taxation Issues....................................................................................................................................... 192 4.11.7 Performance Requirements and Incentives ............................................................................................ 193 4.12 Transparency of the Regulatory System 193 4.12.1 Corruption .............................................................................................................................................. 193 4.12.2 Labor ...................................................................................................................................................... 194 4.12.3 Capital Market Risks .............................................................................................................................. 195 4.12.4 Conversion and Transfer Policies........................................................................................................... 196 4.12.5 Expropriation and Compensation ........................................................................................................... 196 4.12.6 Dispute Settlement ................................................................................................................................. 196 4.12.7 Political Violence ................................................................................................................................... 197 4.12.8 Bilateral Investment Agreements ........................................................................................................... 197 4.12.9 OPIC and Other Investment Insurance................................................................................................... 199 4.12.10 Capital Outflow Policy....................................................................................................................... 199 4.12.11 Major Foreign Investments................................................................................................................. 199 4.13 TRADE AND PROJECT FINANCING 200 4.13.1 The Banking System .............................................................................................................................. 200 4.13.2 Foreign Exchange Control Risks............................................................................................................ 201 4.13.3 General Financing Availability .............................................................................................................. 201 4.13.4 Financing Export Strategies ................................................................................................................... 201 4.13.5 Financing Options .................................................................................................................................. 202 4.13.6 Availability of Project Financing ........................................................................................................... 202 4.13.7 Banks with Correspondent U.S. Banking Arrangements ....................................................................... 203 4.14

Travel Issues


206 ©2007 Icon Group International, Inc.

Contents 4.14.1 4.14.2 4.14.3 4.14.4 4.14.5

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Local Business Practices ........................................................................................................................ 206 Travel Advisory and Visas ..................................................................................................................... 207 Work Week ............................................................................................................................................ 207 Infrastructure for Conducting Business.................................................................................................. 207 Temporary Entry of Goods..................................................................................................................... 209

4.15 Key Contacts 210 4.15.1 U.S. Embassy Trade Contacts ................................................................................................................ 210 4.15.2 American Chamber of Commerce.......................................................................................................... 212 4.15.3 Italian Government Agencies ................................................................................................................. 212 4.15.4 Italian Trade Associations ...................................................................................................................... 215 4.15.5 Market Research Firms .......................................................................................................................... 222 4.15.6 Italian Commercial Banks ...................................................................................................................... 223 4.15.7 Contacts in Washington D.C. ................................................................................................................. 225 4.15.8 U.S.-Based Multipliers Relevant for Italy .............................................................................................. 225 4.15.9 Agricultural Contacts By Industry.......................................................................................................... 226

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DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS .........243

5.1

Disclaimers & Safe Harbor

243

5.2

Icon Group International, Inc. User Agreement Provisions

244



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1 1.1

INTRODUCTION & METHODOLOGY WHAT DOES THIS REPORT COVER?

The primary audience for this report is managers involved with the highest levels of the strategic planning process and consultants who help their clients with this task. The user will not only benefit from the hundreds of hours that went into the methodology and its application, but also from its alternative perspective on strategic planning relating to green building materials in Italy. As the editor of this report, I am drawing on a methodology developed at INSEAD, an international business school (www.insead.edu). For any given industry or sector, including green building materials, the methodology decomposes a country’s strategic potential along four key dimensions: (1) latent demand, (2) micro-accessibility, (3) proxy operating pro-forma financials, and (4) macro-accessibility. A country may have very high latent demand, yet have low accessibility, making it a less attractive market than many smaller potential countries having higher levels of accessibility. With this perspective, this report provides both a micro and a macro strategic profile of green building materials in Italy. It does so by compiling published information that directly relates to latent demand and accessibility, either at the micro or macro level. The reader new to Italy can quickly understand where Italy fits into a firm’s strategic perspective. In Chapter 2, the report investigates latent demand and micro-accessibility for green building materials in Italy. In Chapters 3 and 4, the report covers proxy operating pro-forma financials and macro-accessibility in Italy. Macro-accessibility is a general evaluation of investment and business conditions in Italy.

1.2

HOW TO STRATEGICALLY EVALUATE ITALY

Perhaps the most efficient way of evaluating Italy is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance to green building materials are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).



Introduction & Methodology

2

Framework for Prioritizing Countries Demand/Market Potential Driven Firm

High

Highest Priority

High Priority Latent Demand

Moderate Priority Low Priority

Low

Lowest Priority Low

High Relative Accessibility

Accessibility/Supply Averse Firm High Highest Priority High Priority Latent Demand

Moderate Priority Low Priority Lowest Priority

Low High

Low Relative Accessibility



Introduction & Methodology

3

In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market – neither a market-driven nor a costdriven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).

1.3

LATENT DEMAND AND ACCESSIBILITY IN ITALY

This report provides a detailed overview of factors driving latent demand and accessibility for green building materials in Italy. Latent demand is largely driven by economic fundamentals specific to green building materials. This topic is discussed in Chapter 2 using work carried out in Italy on behalf of American firms and authored by the United States government (typically commercial attachés or similar persons in local offices of the U.S. Department of State). I have included a number of edits to clarify the information provided. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for green building materials in Italy. I use the term “micro” since the discussion is focused specifically on green building materials. Chapter 3 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Italy. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Italy. The numbers are only indicative of an average firm whose primary activity is in Italy. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Italy. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “general building contractors and operative builders”, as defined in Chapter 3. Again, while “general building contractors and operative builders” does not exactly equate to “green building materials”, it nevertheless gives an indicator of how Italy compares to other countries for a proxy adjacent category along various dimensions. Chapter 4 deals with macro-accessibility and covers factors that go beyond green building materials. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Italy: •

Openness to Trade in Italy

•

Openness to Direct Investment in Italy

•

Local Marketing and Entry Strategy Alternatives

•

Local Human Resources



Introduction & Methodology •

4

Local Risks

Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are covered in the Chapter 4, which is a general overview of investment and business conditions in Italy. Chapter 4 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Italy. This chapter is also authored by local offices of the U.S. government, as is Chapter 2. Likewise, I have included a number of edits to clarify the provided information as it relates to the general strategic framework mentioned earlier.



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2

GREEN BUILDING MATERIALS IN ITALY

2.1

LATENT DEMAND AND ACCESSIBILITY: BACKGROUND

The term “green building” can be translated into Italian by the term “architettura bioecologica” or the word “bioedilizia”. The trend towards green building in Italy is very positive and has been growing at an increasing rate for quite a few years, but the building sector in Italy lags behind that of other industrialized countries in its awareness of green building issues among sector professionals, in the number of green building structures actually erected and in the availability of green building materials. In Italy discussion of green building issues traditionally has evolved not in academic and political circles, but rather among associations of professionals, mostly architects, who have been trying to promote green building among policymakers; local (city and provincial) administrations so far have been fairly receptive to green building issues and they are increasingly including green building products and techniques in their regulatory plans. Quantitative data on green building products in Italy do not yet exist. The main reason for this is the lack of an official, stable and agreed-upon definition of what exactly belongs under “bioedilizia”. Therefore, hard statistics on the topic would at the moment be highly questionable, but nonetheless, the trend towards green building in Italy is certainly positive and more and more jurisdictions are including green building standards in their building regulations.

2.2

LATENT DEMAND: MARKET COMPOSITION

Perhaps even more so than “green building”, the term “architettura bioecologica” reflects the essence of the Italian approach to what is not simply a subsector of the building industry, let alone a passing fad, but rather a way of interpreting architecture and therefore of how to build on and transform land. “Architettura” means “architecture”, “bio” means “favorable to life”, “eco” means “in balance with the environment” and finally “logica” means “intelligent, rational”. Alternatively, the terms “bioedilizia” or “bioarchitettura” can be used. The root of all the Italian terms reported previously is the Greek word “bios” (life): in fact, the proponents of green building in Italy seem to be very aware of two key issues: •

90% of an individual’s life is spent within “closed” spaces (home, school, office, factory), where the quality of the air is actually worse than it is outside.

•

A sizeable portion of the environmental pollution in Europe is caused by activities related to the building sector. Therefore, attention to “green building” themes is the way in which an increasing number of building professionals all over the world, including Italy, are trying to improve the quality of life of individuals.

In Italy discussion of green building issues traditionally has evolved among architects concerned about the sustainability of an environment whose health is increasingly affected by the choice of building materials and not in academic and political circles. In fact, the building sector in Italy has experienced considerable growth in the past few years. Unfortunately the working conditions and the quality of the buildings and of the infrastructures have not kept up with the growth of the sector, and actually have deteriorated. It is the architects who are trying to promote green building among policymakers: for instance, the network of Italian Cooperatives for Sustainable Living has identified ten principles that are meant to guide local authorities in fostering sustainable urban development, as follows: •

To seek a harmonious and sustainable development of the territory, of the urban environment and of building activity.

•

To safeguard the historical identity of towns and to favor the conservation of the historical and proprietary features of buildings.

•

To contribute to energy savings and to the use of renewable sources through appropriate measures and actions.



Green Building Materials

6

•

To build in a safe and healthy manner.

•

To seek and apply environmentally, economically and socially sustainable building techniques.

•

To utilize building materials that are environmentally friendly and of certified quality.

•

To respond to different living needs with differentiated solutions.

•

To guarantee the safety and security of buildings.

•

To apply domotics (the application of computer and robot technologies to domestic appliances) for the development of a new quality of home living.

•

To promote professional growth, joint projects and conscious choices in building.

Examples of green building products and techniques include, but are not limited to, the following: •

Harnessing external natural light.

•

Utilizing solar panels, both thermal and photovoltaic.

•

Applying ‘greenhouse’ building techniques to the construction of certain rooms (e.g. using natural heating techniques).

•

Using natural cooling techniques.

•

Increasing the number of green spaces in cities and towns.

•

Increasing the use of wood products in construction.

•

Avoiding plastics and petrol derivates.

The debate around green building in Italy only started in the early 1990s, well after the concept had gained a foothold in other European countries, especially in Northern Europe. As a consequence, the building sector in Italy lags behind that of other countries for in the awareness of green building issues among sector professionals, in the number of green building structures actually erected and in the availability of green building materials.

2.3

KEY PLAYERS

The first Italian association of architects promoting green building awareness, ANAB (acronym for Associazione Nazionale Architettura Bioecologica, Web site is: www.anab.it), was founded in 1989. ANAB’s current president, Mr. Siegfried Camana, thinks that architecture should play the role of “preventive medicine”, since illnesses attributable to unhealthy living and specifically to unhealthy building, are on the rise. Mr. Camana equates unhealthy building with “traditional building” and points to the economical damage that traditional building practices cause to society. ANAB has been particularly active in trying to develop green building guidelines aimed at the public sector. Aside from a limited number of urban redevelopment projects, Italy lacks norms and regulations that steer building activities towards ecological sustainability. Interestingly, local (city and provincial) administrations undertake most of the activities in this field, and they do so by including green building in their regulatory plans, sometimes seeking financing directly from the European Union, which publishes tenders that favor projects that satisfy environmental requisites. Architects who are proponents of green building therefore have been rather successful in steering the actions of certain local administrations towards setting up rules that favor sustainable building or towards actually erecting structures that demonstrate the benefits of green building to private companies and citizens, thereby “setting a good example”. One Italian region where much progress has been made in terms of green building structures is




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Tuscany: the Province of Florence has been particularly active in undertaking the promotion of green building techniques, especially in regard to school buildings, energy saving and renewable resources. INBAR (which stands for Istituto Nazionale di Bioarchitettura) is another non-profit association of professionals, technicians and other experts, which for the past decade has been promoting the awareness, information, and education of future generations of professionals on green building issues. INBAR’s Web site is: www.bioarchitettura.org/. INBAR, together with the Italian Federation of Construction Cooperatives (Federabitazione, www.federabitazione.confcooperative.it/), has launched a network of construction cooperatives named “La Casa Ecologica”, whose aim is specifically to promote sustainable building. Within La Casa Ecologica, another environmental and energy certification system is being launched: under that system INBAR grants its own “INBAR” mark, which verifies the achievement of certain energy and environmental performance levels in the construction of new residential buildings. The aim is to evaluate the impact of a building during its whole life cycle.

2.4

MARKET ISSUES AND OBSTACLES

There is one mandatory form of certification, stemming from EU norm 91/2002, which mandates that from January 2006 EU member countries must certify the energy consumption of buildings through rules defined at the national level. This norm concerns public buildings occupying a space in excess of 1000 square meters (10,764 square feet) and new buildings; a certificate is therefore required in order to prove the habitability, or to sell or rent the unit. In addition to the previous mandatory certification, ANAB has developed a voluntary certification system based on sustainability parameters that meet the following objectives: •

Limit natural resources waste.

•

Pay attention to the quality of the environment and to the health of those who spend most of their time inside buildings.

•

Consider the social implications connected with inhabiting, because those implications determine the growth of the community.

The previously referenced certification system is called SB100 (which stands for “sustainable buildings with 100 actions). The system includes a list of objectives grouped by themes (bioenvironmental, social, economical, etc.) and lists 100 possible actions to be accomplished in order to reach those objectives. Looking at the whole of Italy, a recent study conducted on 250 cities and towns showed that 55% of the communities surveyed has already adopted building regulations aimed a increasing the construction of houses that are “green” and have low energy consumption and low environmental impact thanks to the use of certified environmentally friendly materials. A further 10% of cities and towns plans on doing the same and only 35% have not done anything with regard to sustainable building or has no plans for it in the future. In order to achieve the above mentioned objectives, different measures have been launched: discounts to builders on urban taxes, increases to allowed building areas to those who erect low emission buildings, discounts on property taxes, etc. 16% of cities and towns surveyed chose to designate certain areas only for sustainable buildings, while another 12% issue tenders specifically for green buildings. An interesting challenge is posed by how to modify Italy’s existing buildings into green structures. Green building is better applied to new construction, but many Italians live in apartment buildings erected in the 1960s and 1970s when, for example, correct insulation was certainly not a main concern of the builders. Another challenge is how to make “green building” aesthetically pleasing as well, given the scarce appeal of the few green building structures erected in Italy so far. www.icongrouponline.com



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It should be noted that the trade show SANA, which mostly features natural health products, will again this year dedicate a space measuring about 9,000 square feet to “natural” building products (bricks, natural coatings, domotics etc.).

2.5

LATENT DEMAND: MARKET DATA

Quantitative data on green building products in Italy do not yet exist. The main reason for that is the lack of an official, stable and agreed-upon definition of what exactly belongs under “bioedilizia”. So far all the working groups that had been created with the purpose of harmonizing the definitions of what falls within the scope of green building have not yet reached acceptable conclusions. Therefore, the results of any statistics conducted on the topic would at the moment be highly questionable. However, the trend towards green building in Italy is certainly very positive and has been so for quite a few years, at an increasing rate of growth. But, again, no one so far has measured the size of the green building phenomenon in Italy in square meter terms or in terms of revenues for the companies involved. Green building is certainly still a market niche, but a very dynamic one, also because of European and local norms that steer builders in that direction (e.g. the aforementioned EU norm on the energy consumption of buildings) and because an increasing number of tenders in the building sectors are incorporating sustainability criteria. Again, many different types of products can fall under “green building”, from construction material to furniture. Currently, the general criteria under which a building product can be considered “green” relate to its impact on human and environmental health. Generally, the origin of most green materials and products used in Italy is domestic (Italian), although certain raw materials, such as wood, are mostly imported. (A sizeable percentage of wood imports come from Austria, with imports from other countries in lesser quantities). Certain complex technical installations, such as photovoltaic panels and heat pumps, are also imported in sizeable quantities. By way of example, according to the most recent report from the U.S. Foreign Agricultural Service (FAS) on the topic, Italy depends largely on supplies of imported wood for its wood processing industries. After positive growth in 2004, the industry slowed down in 2005. According to industry sources however, the outlook for 2006 is strong. Total Italian wood production in 2005 amounted to almost 9 million cubic meters on a log basis, of which approximately two thirds consisted of wood not suited for industrial use and therefore used for firewood. A large share of this wood was produced in the central and northern regions. Imports of softwood lumber increased by about 7% in 2004 and then flattened in the first half of 2005. Imports of hardwood lumber have been in constant decline over the 18-month period from January 2004 through June 2005. The U.S. share of Italian softwood lumber imports is small, while the U.S. share of hardwood lumber imports has increased from 15% in 2003 to almost 19% in the first half of 2005, while the total of imports from all countries decreased during the same period.



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3 3.1

FINANCIAL INDICATORS: GENERAL BUILDING CONTRACTORS AND OPERATIVE BUILDERS OVERVIEW

Is Italy competitive? With the globalization of markets, the increased mobility of corporate assets, and the need for productive human resources, this question has become all the more complex to answer. The financial indicators section was prepared to tackle this question by focusing on certain fundamentals: financial performance and labor productivity. Rather than focus on the economy as a whole, the analysis presented here considers only one sector: general building contractors and operative builders. We are essentially interested in the degree to which firms operating in Italy have fundamentally different financial structures and performance compared to firms located elsewhere. With respect to this view of competitiveness, if one were to invest or operate in Italy, how would the firm’s asset structure likely vary compared to a firm operating in some other country in Europe or average location in the world? In Italy, do firms typically hold more cash and other short term assets, or do they concentrate their assets in physical plant and equipment? On the liability side, do firms operating in Italy have a higher percent of payables compared to other firms operating in Europe, or do they hold a higher concentration of long term debt? The structure of the income statement is also telling. Do firms operating in Italy have relatively higher costs of goods sold, operating costs, or income taxes compared to firms located elsewhere in the region or the world in general? Are returns on equity higher in Italy? Are profit margins greater? Are inventories held longer? The financial indicators section was designed to answer these and similar questions that naturally affect one’s decision to invest or operate in Italy. Again, we are particularly interested in general building contractors and operative builders, and not the economy as a whole. In many instances, people make all the difference. In addition to financial competitiveness, we consider the extent to which labor deployment and productivity in Italy differs from regional and global benchmarks. In this case, we are interested in the amount of labor required to operate a typical business in Italy and the likely returns on this human investment. What is the typical ratio of short-term and long-term assets to employee (employed in general building contractors and operative builders operations)? What are typical capital-labor ratios? How different are these ratios to those in Europe in general and the world as a whole? What are the average sales and net profits per employee in Italy compared to regional benchmarks? The goal of this section is to assist managers in gauging the competitive performance of Italy at the global level for general building contractors and operative builders. With the globalization of markets, greater foreign competition, and the reduction of entry barriers, it becomes all the more important to benchmark Italy against other countries on a worldwide basis. Doing so, however, is not an obvious task. This report generates international benchmarks and measures gaps that might be revealed from such an exercise. First, data is collected from companies across all regions of the world. For each of these firms, data are standardized into comparable categories (assets, liabilities, income and ratios), by country, region and on a worldwide basis. From there, we eliminate all currency effects by standardizing within each category. Global benchmarks are then compared to those estimated for general building contractors and operative builders in Italy. Though we heavily rely on historical performance, the figures reported are not historical but are forecasts and projections for the coming fiscal year.



Financial Indicators

3.1.1

10

Financial Returns and Gaps in Italy

The approach used in this report to evaluate operating performance for general building contractors and operative builders in Italy is called "vertical analysis." For those unfamiliar with this type of analysis, frequently taught in graduate schools of business, the reader is recommended Jae K. Shim and Joel G. Siegel’s recent book titled Financial Management.1 In their discussion of financial statement analysis and ratios, Skim and Siegel (p. 42-43), describe common-size statement (vertical analysis) as follows: A common-size statement is one that shows each item in percentage terms. Preparation of common-size statements is known as vertical analysis, in which a material financial statement item is used as a base value and all other accounts on the financial statement are compared to it. In the balance sheet, for example, total assets equal 100 percent, and each individual asset is stated as a percentage of total assets. Similarly, total liabilities and stockholders’ equity are assigned a value of 100 percent and each liability or equity account is then stated as a percentage of total liabilities and stockholders’ equity, respectively. … For the income statement, a value of 100 percent is assigned to net sales, and all other revenues and expense accounts are related to it. It is possible to see at a glance how each dollar of sales is distributed among various costs, expenses, and profits. The authors suggest that vertical analyses involve industry-based comparisons. Such a comparison “allows you to answer the question, ‘How does a business fare in the industry?’ You must compare the company’s ratios to… industry norms.” (p. 43-44) This approach is extended to country competitiveness (in this case Italy) for a particular sector (in this case general building contractors and operative builders). This involves calculating country, regional and global norms. This introduction will describe the seven-stage methodology used to perform this analysis. Each stage should be seen as a working assumption behind the numbers presented in later chapters. Stage 1. Industry Classification. This stage begins by classifying the company into an industry. For this, we have relied on a combination of the North American Industry Classification System (NAICS pronounced “Nakes”), a relatively new system for classifying business establishments, and the older Standard Industrial Classification (SIC) system. Adopted in 1997, NAICS codes are the new industry classification codes used by statistical agencies of the United States. NAICS was developed jointly by the U.S., Canada, and Mexico to provide comparability in statistics about business activity across North America. After 60 years of service, the outdated SIC system was retired on October 1, 2000, leaving only the NAICS codes for official use. The NAICS classification system adds some 350 new industries and represents a revision to over 60% of the previous SIC industries. Despite its official retirement, the SIC system is still commonly used (and often reported in firm’s financial statements). For most companies in the world, classification within either the new NAICS or older SIC systems is a rather straight forward exercise. For some, however, it can be problematic. This is true for several reasons. The first being that the SIC or NAICS classification systems are rather broad for many product and industry categories (a firm’s products or services may be only a minor aspect of the classification’s definition). The second is that some firms’ activities span multiple codes. Finally, it is possible that a firm is classified by one source using its SIC code, and by another using its NAICS code, and by a third using both. Furthermore, some sources do not report either code, but instead use qualitative statements of the firm’s activities. Nevertheless, if one wishes to pursue a vertical analysis, some classification needs to take place which selects a peer group. In making this classification, one can rely on a number of sources. In some countries, firms must “self” classify in official periodic reports (e.g. annular reports, 10Ks, etc.) to public authorities (such as the Securities and Exchange Commission). These reports are then open for public scrutiny (e.g. EDGAR filings). In other cases, commercial data vendors or private research firms provide SIC/NAICS codes for specific companies. These include: •

Bloomberg - www.bloomberg.com

•

Datastream (Thomson Financial) - www.datastream.com

1

Skim and Siegel (2000), Financial Management published by Barron’s Educational Series, Inc. (BARON’S BUSINESS LIBRARY Series), ISBN: 0-7641-1402-6. www.icongrouponline.com


Financial Indicators •

11

Dun & Bradstreet - www.dnb.com

•

Hoovers - www.hoovers.com

•

HarrisInfoSource - www.HarrisInfo.com

•

InfoUSA - www.infousa.com

•

Investext (Thomson Financial) - www.investext.com

•

Kompass International Neuenschwander SA. – www.kompass.com

•

Moody's Investors Service - www.moodys.com

•

Primark (Thomson Financial) - www.primark.com

•

Profound (The Dialog Corporation – A Thomson Company) - www.profound.com

•

Reuters - www.reuters.com

•

Standard & Poor's - www.standardandpoors.com

It is interesting to note that commercial vendors often report different qualitative descriptions and industrial classifications from one to another. These descriptions and classifications may also be different from those reported by the firm itself. Anyone hoping to perform a benchmarking study, therefore, has to make a judgment call across these various sources in order to determine a reasonable classification. In this report, we have decided a metaanalytic process, by combining various sources (including linking a classification’s keywords to qualitative descriptions of the firm’s product line). In cases of inconsistency, the most recent or globally comparable available is chosen. Again, the overall goal is to classify firms, which either produce similar products, offer similar services, or are in the same stage of the value chain for a particular industrial classification. In the case of this report, the SIC code selected is: 15 which is defined as “general building contractors and operative builders”. This classification should be seen as a working assumption. In order to obtain a more detailed discussion of this classification, the reader is referred to the Web sites developed by the U.S. Census Bureau: http://www.census.gov/epcd/www/naics.html. Basic definitions and descriptions are provided at: http://www.census.gov/epcd/www/drnaics.htm#q1. A full correspondence table between SIC and NAICS codes, and detailed definitions are given at http://www.census.gov/epcd/www/naicstab.htm. Stage 2. Firm-Level Data Collection. A global search was conducted across over 20,000 companies in over 40 major economies, including Italy, for those that report financials (balance sheet and income statements) and that are involved in general building contractors and operative builders. It should be noted that the public-domain financials can be either historic or projections. It should also be noted that even historic figures can be modified in the future and often represent “estimates” of performance. Stage 3. Standardization. Once collected, public domain financial figures of firms identified in Stage 2 are standardize into comparable categories (assets, liabilities, and income). Again, these are limited to firms involved in some aspect of general building contractors and operative builders (i.e. are members of the value chain). From there, we eliminate all currency effects by standardizing within each category (creating ratios). In order to maintain comparability over time and across countries, vertical analysis is used. In the case of a firm’s assets, we treat the total assets as equaling 100, irrespective of the value of the local currency. All other assets are then calculated as a percent of total assets. In this way, the structure of the firm’s assets can be easily interpreted and compared with international benchmarks. For liabilities, total liabilities and equity are indexed to equal to 100. For the income statement, total revenue is indexed to equal 100, and all other figures are calculated as a percent of these figures. Stage 4. Filtering. Not all the firms selected in Stage 2 or the ratios calculated in Stage 3 are used for the country, regional or global benchmarks, as a number of companies are purposely dropped from the analysis. This is justified by the “outlier” phenomenon that plagues such analysis. The problem lies in that any given company in the benchmarking pool may be facing some exceptional event or may be organized in an exceptional way so as to make its ratios vastly different from the norm. By including such firms, the global benchmarks can be overly skewed. In many countries, firms are organized into holding groups. These groups nominally have very few employees (e.g. 4




12

to 25 employees), but have extremely large assets, liabilities, or revenues. As such, the inclusion or exclusion of firms having this form of management can affect the ratios and benchmarks reported. Likewise, some firms have no net sales, no assets, no liabilities, or ratios. Others have ratios that appear implausible for a normal or viable company. In order to not allow these firms to affect the global benchmarks, only those firms with reasonable financials have been chosen. Finally, in some countries, detailed financials are not available or are not comparable to either the company in question or the global norm (e.g. various forms of depreciation). In this case, only those which exist and are comparable are reported. The details, therefore, that comprise a given ratio or set of ratios may not be reported. This may lead to the addition of several ratios, not summing to the whole. Stage 5. Calculation of Global Norms. Once the filtering process has eliminated outliers, a final list of companies included is compiled. Based on this list, the ratios discussed in Stage 3 are calculated for every firm, and then averaged to create country, regional and global benchmarks. The world average is calculated using each country’s population as a weight. Stage 6. Projection of Deviations. The goal of this report is not only to estimate raw ratios or averages, but also to present the difference between Italy and projected global averages for that same ratio. Furthermore, it can be insightful to know the location of each ratio within the distribution of the countries represented in Stage 5. These deviations, in fact, can be seen as projections or likely scenarios for the future. This is often true for two reasons. First, while a company’s financials change from year to year, its ratios are often stable. This is especially true for the country, regional and global benchmarks which represent averages across companies. From a purely Bayesian sense, the difference between the company’s recent ratios and the benchmarks are a reasonable prior for future deviations. This is true, even if the entire industry is hit by an external or exogenous shock, such as an oil crisis or economic slowdown. In other words, we assume that the structure of the variance in the industry’s financials remains stable. Second, many of the data are based on preliminary reports that might be changed in future filings. As forecasts, therefore, the numbers derived from these are also forecasts of past and future performance (with associated uncertainties). The calculation of the difference between a country’s ratios and the global benchmarks is meant to yield roughly approximate forecasts, or "useful measures". Within Europe, the reliability of estimates varies from one country to another for those ratios given in tables that report national averages. This is true because reliable source statistics are not available for all countries in Europe. Countries with the highest reliability, or sample sizes after filtering in Stage 4, include Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, and United Kingdom. Others are generally econometrically extrapolated using models that use country characteristics (e.g. income per capita) as independent variables (i.e. countries having similar economic structures are assumed to have similar operating ratios). Again, the forecasts are based on the assumption of relative stability. This assumption has proven extremely robust in previous applications of this methodology (i.e. today’s weather is a good predictor of tomorrow’s weather, but not the weather three years from now). The results reported should be viewed as those for a “prototypical” firm operating in Italy whose primary activity is general building contractors and operative builders. Stage 7. Projection of Ranks and Percentiles. Based on the calculation of deviations, relative ranks and percentiles are calculated across the firms used in the benchmarks. The percentile estimates the percent of a representative sample of countries in the world having values of the ratio lower than Italy. It is important to note that a percentile being high (or low) does not mean good (or bad) past, present or future financial performance. The reader must draw this conclusion on their own. The estimates provided were created to provide managerial insight, and not a recommendation with respect to particular investments within any country. We graphically report, for each part of the financial statement, the larger structural differences between Italy and the regional and global benchmarks, and provide a summary table of ranks and percentiles. These are estimates for firm which would be involved in general building contractors and operative builders. A deviation from the global norm need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or perhaps signal a country's relative strength or weakness for the coming fiscal year.




3.1.2

13

Labor Productivity Gaps in Italy

In the case of labor productivity measures, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. The seven stage approach given above is used in a similar manner. We then report, for each part of the financial statement, the larger labor productivity gaps that Italy has vis-à-vis the worldwide average (for general building contractors and operative builders). Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.

3.1.3

Limitations and Extensions

Shim and Siegal (p. 60) stress that “while ratio analysis is an effective tool for assessing a company’s financial condition,” operating Italy or any other country, “its limitations must be recognized.” They find that (p. 59) “no single ratio or group of ratios is adequate for assessing all aspects of a company’s financial condition” operating in a particular country. The authors note the following limitations associated with ratio analyses which apply to the global benchmarking and vertical analysis presented here (p.60): •

Accounting standards or policies may limit useful comparisons across companies

•

Management accounting practices across companies and countries may not be performed in the same style

•

Ratios are static and do not reveal future trends

•

Ratios do not indicate the quality of the components used to calculate the ratios (i.e. ratios have ambiguous interpretations)

•

Reported ratios may not reflect real values

•

Companies may be highly diversified, limiting the comparability of their ratios to others

•

Industry averages or norms are approximate; finer industry definitions may be required for certain interpretations or comparisons

•

Financial statements and resulting ratios often mean different things to different people depending on their points of view or motivations.

Again, all figures reported here are estimates, so due caution is required. The above caveats, and the fact that statements made in this report are forward-looking, requires that this point be emphasized. A number of intervening factors can have material effect on the ratios and variances forecasted. These include changes in a company's management style, exchange rate volatility, changes in accounting standards, the lack of oversight or comparability in accounting standards, changes in economic conditions, changes in competition, changes in the global economy, changes in source data quality, and similar factors.




3.2 3.2.1

14

FINANCIAL RETURNS IN ITALY: ASSET STRUCTURE RATIOS Overview

In this chapter we consider the asset structure of companies involved in general building contractors and operative builders operating in Italy benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of assets is then presented for companies operating in Italy and the average global benchmarks (total assets = 100 percent). For ratios where there are large deviations between Italy and the benchmarks, graphics are provided (sometimes referred to as a financial “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis asset ratios are highlighted across countries in the comparison group.

3.2.2

Assets – Definitions of Terms

The following definitions are provided for those less familiar with the asset-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of assets, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Accumulated Depreciation - Buildings. Accumulated depreciation is commonly understood as a contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of a fixed asset. Buildings are fixed assets which represent the acquisition and improvement costs of permanent structures owned or held by the company. Such structures typically include office buildings, storage quarters, or other facilities and also associated items such as loading docks, heating and airconditioning equipment, refrigeration equipment, and all other property permanently attached to or forming an integral part of the structure. However, it generally does not include furniture, fixtures, or other equipment which are not an integral part of the building.

•

Accumulated Depreciation – Property, Plant & Equipment Under Capitalized Leases. Accumulated depreciation of property, plant and equipment under capitalized leases is commonly understood as a contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of property, plant and equipment under capitalized lease obligations.

•

Accumulated Depreciation - Transportation Equipment. Accumulated depreciation of transportation equipment is commonly understood to be contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of transportation equipment.

•

Accumulated Depreciation -Machinery & Equipment. Accumulated depreciation of machinery and equipment is commonly understood to be contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of machinery and equipment.

•

Buildings. Buildings are defined as fixed assets which represent the acquisition and improvement costs of permanent structures owned or held by the company. Such structures include office buildings, storage quarters, or other facilities and also associated items such as loading docks, heating and air-conditioning equipment, refrigeration equipment, and all other property permanently attached to or forming an integral part of the structure. However, it does not include furniture, fixtures, or other equipment which are not an integral part of the building.




15

•

Cash. Cash is typically defined as money on hand, on deposit with chartered bank, or held in the form of eligible securities.

•

Current Assets. Current assets are generally defined to be resources which are available, or can readily be made available, to meet the cost of operations or to pay current liabilities.

•

Deferred Charges. Deferred charges are generally understood to represent the amount which has been paid for services already received by the company but has not been charged to operations.

•

Finished Goods. Finished goods generally comprise the ready-for-sale inventory.

•

Intangible Other Assets. Intangible assets are generally understood to be nonphysical assets such as legal rights (patents and trademarks) recorded at their historical cost then reduced by systematic amortization.

•

Investments in Unconsolidated Subsidiaries. Investments in unconsolidated subsidiaries are typically defined as investments for the purpose of generating revenue in subsidiaries whose financial statements are not combined with the company's.

•

long Term Receivables. Long-term receivables are commonly defined as amounts due within a period exceeding one year from private persons, businesses, agencies, funds, or governmental units which are expected to be collected in the form of moneys, goods, and/or services.

•

Machinery & Equipment. Machinery and equipment is commonly defined as a fixed asset classification which typically includes tangible property (other than land, buildings, and improvements other than buildings) with a life of more than one year. Such assets typically include office equipment, furniture, machine tools, and motor vehicles. Equipment may be attached to a structure for purposes of securing the item, but unless it is permanently attached to an integral part of the building or structure, it will generally be classified as equipment and not buildings. Equipment is generally defined as tangible property other than land, buildings, or improvements other than buildings, which is used in operations. Examples include machinery, tools, trucks, cars, furniture, and furnishings.

•

Progress Payments. Progress payments are commonly defined as periodic payments to a supplier, contractor, or subcontractor for work as it is completed as desired, in order to reduce working capital requirements.

•

Property Plant & Equipment Under Capitalized Leases. Property plant & equipment under capitalized leases generally consists of the gross book value (rather than the more commonly-used measures of fixed capital stocks in current or real value), of all commercial buildings, associated land and equipment used therein that are owned by the company and that are either used or operated by the company or leased or rented to others (under capitalized leases).

•

Property Plant and Equipment - Gross. Gross property, plant and equipment generally consists of the gross book value (rather than the more commonly-used measures of fixed capital stocks in current or real value), of all commercial buildings, associated land and equipment used therein that are owned by the company and that are either used or operated by the company or leased or rented to others.

•

Property Plant and Equipment - Net. Net PP&E equals the original cost of property, plant, and equipment (PP&E), less accumulated depreciation, depletion and amortization (DD&A).

•

Raw Materials. Raw materials are materials which will be converted by a manufacturer into a finished product.




16

•

Receivables (Net). Net receivables are defined as the net amount due to the company from private persons, businesses, agencies, funds, or governmental units which is expected to be collected in the form of moneys, goods, and/or services.

•

Short Term Investments. Short-term investments are investments which can be typically liquidated in less than one year.

•

Tangible Other Assets. Other tangible assets are commonly understood to be something substantial or real that is capable of being given an actual or approximate value (market or estimated), not classified elsewhere.

•

Total Assets. Total assets are defined as the financial representation of economic resources, the beneficial interest in which is legally or equitably secured to a particular organization as a result of a past transaction or event.

•

Total Inventories. Total inventories are defined as the total amount of goods on hand.

•

Transportation Equipment. Transportation equipment is equipment used for the transportation of goods for sale.

•

Work in Process. Work in progress includes goods which have been started but are not yet ready for sale.




3.2.3

17

Asset Structure: Outlook

Using the methodology described in the introduction, the following table summarizes asset structure benchmarks for firms involved in general building contractors and operative builders in Italy. To allow comparable benchmarking, a common index of Total Assets = 100 is used. All figures are current-year projections for companies operating in Italy based on latest financial results available. Asset Structure Italy Europe World Avg. _________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Other Investments Property Plant and Equipment - Net Property Plant and Equipment - Gross Buildings Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Property Plant & Equipment Under Capitalized Leases Accumulated Depreciation - Total Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Accumulated Depreciation - PP&E Under Capitalized Leases Other Assets Deferred Charges Tangible Other Assets Intangible Other Assets Total Assets

7.03 2.66 4.78 31.95 33.37 0.76 30.96 0.36 2.02 0.52 72.86 4.37 6.28 0.02 9.92 26.14 2.78 20.13 1.73 2.66 1.39 17.35 1.47 13.60 1.40 1.89 0.63 5.84 0.19 0.08 3.20 100.00

10.18 6.14 4.45 28.47 18.41 1.51 16.16 2.80 5.24 3.96 61.08 1.69 4.78 1.58 21.55 34.77 11.62 12.58 3.30 3.90 4.09 14.81 2.93 8.10 1.97 2.04 0.65 6.19 0.55 3.04 2.05 100.00

9.27 3.17 3.76 16.36 25.39 1.02 9.10 2.83 2.31 6.68 57.93 1.99 2.59 1.16 24.06 24.04 8.28 6.39 0.68 6.32 0.13 6.81 1.66 3.58 0.47 0.77 0.02 5.95 0.23 1.84 2.51 100.00

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007




3.2.4

18

Large Variances: Assets

The following graphics summarize for general building contractors and operative builders the large asset structure gaps between firms operating in Italy and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Receivables (Net) 40

31.95

30

28.47 16.36

20

15.59

10 0

Italy

Europe

World Average

Gap

Gap: Total Inventories 40

33.37

30

25.39 18.41

20

7.98

10 0

Italy

Europe

World Average

Gap

Gap: Work in Process 40 30.96 30

21.86 16.16

20

9.1

10 0

Italy


Europe

World Average

Gap



19

Gap: Other Current Assets 10

6.68 3.96

5 0.52 0 -5 -10

-6.16 Italy

Europe

World Average

Gap

Gap: Current Assets - Total 80

72.86 61.08

60

57.93

40 14.93

20 0

Italy

Europe

World Average

Gap

Gap: Investments in Unconsolidated Subsidiaries 8

6.28

6

4.78 3.69

4

2.59

2 0

Italy

Europe

World Average

Gap

Gap: Property Plant and Equipment - Net 30 20 10

21.55

24.06

9.92

0 -10 -20

-14.14 Italy


Europe

World Average

Gap



20

Gap: Buildings 15

11.62 8.28

10 5

2.78

0 -5 -10

-5.5 Italy

Europe

World Average

Gap

Gap: Machinery & Equipment 25

20.13

20 13.74

12.58

15 10

6.39

5 0

Italy

Europe

World Average

Gap

Gap: Accumulated Depreciation - Total 20

17.35 14.81

15

10.54 10

6.81

5 0

Italy

Europe

World Average

Gap

Gap: Accumulated Depreciation -Machinery & Equipment 15

13.6 10.02

10

8.1 3.58

5 0

Italy


Europe

World Average

Gap



3.2.5

21

Key Percentiles and Rankings

We now consider the distribution of asset ratios for general building contractors and operative builders using ranks and percentiles. What percent of countries have a value lower or higher than Italy (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of asset structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical asset ratios are highlighted in additional tables. Asset Structure

Italy

Rank of Total

Percentile

7.03 2.66 4.78 31.95 33.37 0.76 30.96 0.36 2.02 0.52 72.86 4.37 6.28 0.02 9.92 26.14 2.78 20.13 1.73 2.66 1.39 17.35 1.47 13.60 1.40 1.89 0.63 5.84 0.19 0.08 3.20 100.00

35 of 53 39 of 48 18 of 40 13 of 53 12 of 53 29 of 37 5 of 47 29 of 37 25 of 47 43 of 48 13 of 53 10 of 37 12 of 47 40 of 40 48 of 53 40 of 48 40 of 48 7 of 48 16 of 32 28 of 41 6 of 15 15 of 48 28 of 45 6 of 48 11 of 31 17 of 40 5 of 14 22 of 53 14 of 21 26 of 29 18 of 47

33.96 18.75 55.00 75.47 77.36 21.62 89.36 21.62 46.81 10.42 75.47 72.97 74.47 0.00 9.43 16.67 16.67 85.42 50.00 31.71 60.00 68.75 37.78 87.50 64.52 57.50 64.29 58.49 33.33 10.34 61.70

_________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Other Investments Property Plant and Equipment - Net Property Plant and Equipment - Gross Buildings Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Property Plant & Equipment Under Capitalized Leases Accumulated Depreciation - Total Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Accumulated Depreciation - P P & E Under Capitalized Leases Other Assets Deferred Charges Tangible Other Assets Intangible Other Assets Total Assets

_________________________________________________________________________________________________________





22

Cash & Short Term Investments Countries

Value (total assets = 100)

Rank

Percentile

22.59 22.53 22.37 15.21 15.16 15.05 14.96 14.27 13.72 13.54 12.78 12.70 12.61 12.10 11.07 10.98 10.88 10.78 10.41 10.06 10.04 9.10 8.85 8.66 8.59 8.49 8.32 8.05 8.03 7.96 7.27 7.18 7.03 6.86 6.64 6.54 6.14 5.83 5.36 5.23 4.09 3.24 2.36 2.34 1.89

1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 33 34 35 36 38 39 40 42 44 45 48 49 51 52 53

98.11 96.23 94.34 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 37.74 35.85 33.96 32.08 28.30 26.42 24.53 20.75 16.98 15.09 9.43 7.55 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Poland Canada Greece Germany France Norway Czech Republic Spain Argentina Switzerland Denmark Japan China Luxembourg Pakistan Malaysia USA South Korea South Africa Brazil Thailand Chile India New Zealand Hong Kong Sweden Israel Ireland Belgium Singapore Italy the United Kingdom Taiwan Peru Indonesia Russia Finland Hungary Netherlands Philippines Austria Portugal Australia

the Middle East Latin America Europe North America Europe Europe Europe Europe Europe Europe Latin America Europe Europe Asia Asia Europe the Middle East Asia North America Asia Africa Latin America Asia Latin America Asia Oceana Asia Europe the Middle East Europe Europe Asia Europe Europe Asia Latin America Asia Europe Europe Europe Europe Asia Europe Europe Oceana

_________________________________________________________________________________________________________





23

Cash & Short Term Investments (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

22.37 21.47 20.11 19.70 19.35 19.32 19.15 18.47 15.16 15.05 14.96 14.27 14.05 13.87 13.72 13.54 13.02 13.02 12.71 12.70 12.61 11.85 10.98 10.52 9.70 8.05 7.98 7.96 7.27 7.08 7.03 6.97 6.86 6.72 5.95 5.93 5.83 5.81 5.71 5.36 5.23 4.71 4.47 4.41 4.09 2.36 2.34 2.34 2.28 2.28 2.24

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Poland Romania Moldova Bosnia & Herzegovina Kazakhstan Bulgaria Macedonia Serbia & Montenegro Greece Germany France Norway Malta Isle of Man Czech Republic Spain Latvia Croatia Slovenia Switzerland Denmark Liechtenstein Luxembourg Iceland Estonia Sweden Faroe Islands Ireland Belgium Vatican City Italy Monaco the United Kingdom Andorra Belarus Slovakia Russia Lithuania Albania Finland Hungary Ukraine Gibraltar Georgia Netherlands Austria San Marino Portugal Guernsey Jersey Cyprus

_________________________________________________________________________________________________________

Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com



24

Receivables (Net) Countries


Rank

Percentile

59.30 42.67 41.43 40.75 40.67 39.52 36.88 36.54 33.39 33.07 32.42 31.95 30.66 30.20 29.83 26.98 26.27 25.82 25.79 24.65 24.49 23.77 23.59 23.28 22.50 21.38 20.95 20.64 20.02 19.81 19.01 18.80 18.16 18.10 17.23 16.39 13.07 7.60 7.47 7.31 7.29 6.31 6.25 5.21 3.77

1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 32 33 34 36 37 38 39 40 42 43 44 45 46 48 49 50 51

98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 39.62 37.74 35.85 32.08 30.19 28.30 26.42 24.53 20.75 18.87 16.98 15.09 13.21 9.43 7.55 5.66 3.77

Region

_________________________________________________________________________________________________________

Spain Poland Canada France Russia Portugal Malaysia Hungary Norway Belgium Czech Republic Italy Denmark Argentina Switzerland Greece Sweden Japan Luxembourg Finland Thailand South Korea Philippines Singapore Austria New Zealand Hong Kong the United Kingdom Germany Netherlands South Africa India USA Peru Brazil Chile Australia China Pakistan Turkey Mexico Israel Ireland Taiwan Indonesia

Europe Europe North America Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Latin America Europe Europe Europe Asia Europe Europe Asia Asia Asia Asia Europe Oceana Asia Europe Europe Europe Africa Asia North America Latin America Latin America Latin America Oceana Asia the Middle East the Middle East Latin America the Middle East Europe Asia Asia

_________________________________________________________________________________________________________





25

Receivables (Net) (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

59.30 55.67 42.67 41.53 41.43 40.75 40.67 40.58 39.52 38.36 37.83 36.92 36.85 36.54 33.39 33.07 32.86 32.42 32.20 31.95 31.25 30.77 30.76 30.76 30.66 29.83 27.83 26.98 26.27 25.79 25.01 24.68 24.65 22.91 22.57 22.50 22.29 21.77 21.73 21.73 20.64 20.09 20.02 19.81 18.35 15.80 6.95 6.37 6.25 6.19 5.98

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Spain Slovenia Poland Belarus Slovakia France Russia Lithuania Portugal Moldova Cyprus Kazakhstan Bulgaria Hungary Norway Belgium Ukraine Czech Republic Vatican City Italy Gibraltar Latvia Georgia Croatia Denmark Switzerland Liechtenstein Greece Sweden Luxembourg Malta Isle of Man Finland Estonia Monaco Austria San Marino Andorra Jersey Guernsey the United Kingdom Faroe Islands Germany Netherlands Iceland Albania Romania Bosnia & Herzegovina Ireland Macedonia Serbia & Montenegro

_________________________________________________________________________________________________________




26

Total Inventories Countries


Rank

Percentile

68.47 67.91 56.59 51.27 48.46 44.47 40.05 37.29 36.67 34.68 34.54 33.37 32.95 26.90 25.67 23.55 23.46 21.26 20.22 19.87 18.45 18.06 16.87 16.72 16.55 16.28 15.89 15.18 14.61 13.61 13.23 13.13 12.00 9.95 9.59 8.73 8.55 8.50 7.64 7.64 7.21 4.93 3.02 2.83 2.82

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 19 21 22 23 24 25 26 27 28 29 30 32 33 34 35 36 37 38 39 41 42 43 44 45 47 48 50 51

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 64.15 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 22.64 20.75 18.87 16.98 15.09 11.32 9.43 5.66 3.77

Region

_________________________________________________________________________________________________________

Israel Ireland Taiwan the United Kingdom USA Finland Austria China Pakistan Sweden Belgium Italy India Thailand Germany Japan South Africa Brazil Chile Peru Greece Australia Singapore South Korea Canada France Denmark Switzerland Czech Republic Argentina Portugal Luxembourg Norway Malaysia Poland New Zealand Hong Kong Russia Hungary Spain Philippines Netherlands Indonesia Turkey Mexico

the Middle East Europe Asia Europe North America Europe Europe Asia the Middle East Europe Europe Europe Asia Asia Europe Asia Africa Latin America Latin America Latin America Europe Oceana Asia Asia North America Europe Europe Europe Europe Latin America Europe Europe Europe Asia Europe Oceana Asia Europe Europe Europe Asia Europe Asia the Middle East Latin America

_________________________________________________________________________________________________________





27

Total Inventories (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

67.91 51.27 48.96 44.47 40.05 39.67 38.68 38.68 34.68 34.54 33.64 33.37 25.67 18.45 17.35 17.10 16.88 16.36 16.28 16.12 15.89 15.78 15.18 14.61 14.17 13.87 13.86 13.23 13.13 12.66 12.00 9.59 8.68 8.66 8.62 8.50 8.48 8.30 8.28 8.20 7.64 7.64 7.17 6.87 6.53 6.43 4.93 2.69 2.47 2.40 2.31

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Ireland the United Kingdom Iceland Finland Austria San Marino Jersey Guernsey Sweden Belgium Vatican City Italy Germany Greece Albania Malta Isle of Man Monaco France Estonia Denmark Andorra Switzerland Czech Republic Liechtenstein Latvia Croatia Portugal Luxembourg Cyprus Norway Poland Belarus Slovakia Moldova Russia Lithuania Kazakhstan Bulgaria Faroe Islands Hungary Spain Slovenia Ukraine Gibraltar Georgia Netherlands Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro

_________________________________________________________________________________________________________




28

Current Assets - Total Countries


Rank

Percentile

88.25 87.52 81.87 81.59 81.12 80.18 78.05 78.02 76.73 75.41 73.35 72.93 72.86 72.14 71.58 66.80 65.87 65.59 65.53 64.81 64.75 63.68 61.10 61.09 60.40 60.37 60.18 59.68 58.36 57.85 57.38 56.78 56.67 55.43 54.07 49.26 45.14 42.81 42.74 38.61 37.84 37.47 37.37 31.77 13.75

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 24 25 26 27 28 29 30 31 32 33 34 35 36 38 40 41 42 43 44 45 46 50 51

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 24.53 22.64 20.75 18.87 16.98 15.09 13.21 5.66 3.77

Region

_________________________________________________________________________________________________________

Israel Ireland the United Kingdom Spain Poland Finland India Sweden USA Belgium Canada Taiwan Italy France Austria Japan South Africa Norway Switzerland Czech Republic Germany Portugal Greece Thailand Denmark Argentina Russia Brazil China Malaysia Pakistan Chile Luxembourg South Korea Hungary Singapore Peru Philippines Australia New Zealand Hong Kong Turkey Mexico Netherlands Indonesia

the Middle East Europe Europe Europe Europe Europe Asia Europe North America Europe North America Asia Europe Europe Europe Asia Africa Europe Europe Europe Europe Europe Europe Asia Europe Latin America Europe Latin America Asia Asia the Middle East Latin America Europe Asia Europe Asia Latin America Asia Oceana Oceana Asia the Middle East Latin America Europe Asia

_________________________________________________________________________________________________________





29

Current Assets - Total (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

87.52 81.87 81.59 81.12 80.18 78.02 77.51 76.59 75.41 73.44 72.94 72.86 72.14 71.58 70.90 70.19 70.06 69.13 69.13 65.59 65.53 64.81 64.75 63.68 61.52 61.49 61.45 61.31 61.15 61.10 60.95 60.40 60.18 60.04 56.67 56.63 55.89 54.07 53.43 48.62 47.77 46.23 46.07 45.52 39.40 36.28 35.60 32.67 31.77 31.75 30.63

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Ireland the United Kingdom Spain Poland Finland Sweden Iceland Slovenia Belgium Vatican City Moldova Italy France Austria San Marino Kazakhstan Bulgaria Jersey Guernsey Norway Switzerland Czech Republic Germany Portugal Latvia Croatia Belarus Slovakia Liechtenstein Greece Cyprus Denmark Russia Lithuania Luxembourg Malta Isle of Man Hungary Estonia Ukraine Monaco Gibraltar Andorra Georgia Albania Faroe Islands Romania Bosnia & Herzegovina Netherlands Macedonia Serbia & Montenegro

_________________________________________________________________________________________________________




30

Property Plant and Equipment - Net Countries


Rank

Percentile

76.90 57.43 56.14 39.07 34.77 33.62 32.88 32.28 32.21 31.08 30.21 28.95 28.65 26.86 26.41 25.97 25.51 25.11 24.77 23.57 23.33 23.26 21.91 21.78 21.68 21.35 20.98 20.32 17.36 17.19 17.06 14.88 14.84 13.81 13.15 12.93 10.92 10.27 10.04 9.92 8.58 7.85 5.27 5.23 4.36

1 3 4 6 7 9 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 35 36 37 38 39 40 42 43 45 46 47 48 49 50 51 52 53

98.11 94.34 92.45 88.68 86.79 83.02 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 33.96 32.08 30.19 28.30 26.42 24.53 20.75 18.87 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Indonesia Netherlands Australia Philippines Singapore Russia New Zealand Denmark Hong Kong Czech Republic Hungary Argentina Switzerland Malaysia China Pakistan Austria Germany Luxembourg South Africa Norway Thailand Portugal South Korea India Brazil Japan Chile Greece Peru Poland Turkey Mexico Sweden Canada France the United Kingdom Belgium Finland Italy USA Spain Israel Ireland Taiwan

Asia Europe Oceana Asia Asia Europe Oceana Europe Asia Europe Europe Latin America Europe Asia Asia the Middle East Europe Europe Europe Africa Europe Asia Europe Asia Asia Latin America Asia Latin America Europe Latin America Europe the Middle East Latin America Europe North America Europe Europe Europe Europe Europe North America Europe the Middle East Europe Asia

_________________________________________________________________________________________________________





31

Property Plant and Equipment - Net (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

57.43 34.33 34.25 33.72 33.62 33.54 32.52 32.28 31.08 30.89 30.21 29.50 29.48 28.65 27.16 26.73 25.83 25.51 25.43 25.27 25.11 24.77 24.63 24.63 23.33 21.91 21.00 20.97 17.36 17.06 16.09 15.88 15.34 15.00 14.76 14.73 14.14 13.81 12.98 12.93 12.61 12.17 10.92 10.27 10.04 10.00 9.92 8.67 7.85 7.37 5.23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Netherlands Belarus Slovakia Monaco Russia Lithuania Andorra Denmark Czech Republic Faroe Islands Hungary Latvia Croatia Switzerland Ukraine Liechtenstein Gibraltar Austria Georgia San Marino Germany Luxembourg Guernsey Jersey Norway Portugal Estonia Cyprus Greece Poland Malta Isle of Man Moldova Albania Kazakhstan Bulgaria Romania Sweden Bosnia & Herzegovina France Macedonia Serbia & Montenegro the United Kingdom Belgium Finland Vatican City Italy Iceland Spain Slovenia Ireland

_________________________________________________________________________________________________________




32

Accumulated Depreciation - Total Countries


Rank

Percentile

31.03 28.81 26.06 22.54 22.42 21.99 20.61 20.53 20.49 19.89 19.04 18.02 17.96 17.35 17.15 16.12 16.08 15.84 15.57 15.25 15.17 14.38 13.62 11.55 10.20 9.79 9.72 9.52 9.29 8.73 8.56 8.14 7.68 6.59 6.33 5.60 3.20 3.15 1.42 1.41 1.17

1 2 3 5 6 7 8 9 10 11 12 13 14 15 17 18 19 21 22 23 24 26 27 28 30 31 32 33 34 35 36 38 39 40 41 43 44 45 46 47 48

97.92 95.83 93.75 89.58 87.50 85.42 83.33 81.25 79.17 77.08 75.00 72.92 70.83 68.75 64.58 62.50 60.42 56.25 54.17 52.08 50.00 45.83 43.75 41.67 37.50 35.42 33.33 31.25 29.17 27.08 25.00 20.83 18.75 16.67 14.58 10.42 8.33 6.25 4.17 2.08 0.00

Region

_________________________________________________________________________________________________________

Germany Philippines Switzerland Luxembourg Portugal Czech Republic Norway Thailand Argentina South Africa Denmark Brazil Belgium Italy Chile Turkey Mexico Canada France Netherlands Peru Austria Finland Singapore Sweden Japan New Zealand Hong Kong Greece Indonesia Malaysia Spain Australia USA the United Kingdom South Korea China Pakistan Israel Ireland Taiwan

Europe Asia Europe Europe Europe Europe Europe Asia Latin America Africa Europe Latin America Europe Europe Latin America the Middle East Latin America North America Europe Europe Latin America Europe Europe Asia Europe Asia Oceana Asia Europe Asia Asia Europe Oceana North America Europe Asia Asia the Middle East the Middle East Europe Asia

_________________________________________________________________________________________________________





33

Accumulated Depreciation - Total (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

31.03 26.06 24.32 22.54 22.42 21.99 21.46 20.88 20.87 20.61 19.04 17.96 17.49 17.35 15.57 15.32 15.25 14.38 14.24 14.06 13.88 13.88 13.66 13.62 13.24 13.18 11.20 10.80 10.20 9.29 9.13 8.61 8.50 8.14 7.64 6.65 6.33 5.40 1.41

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

97.44 94.87 92.31 89.74 87.18 84.62 82.05 79.49 76.92 74.36 71.79 69.23 66.67 64.10 61.54 58.97 56.41 53.85 51.28 48.72 46.15 43.59 41.03 38.46 35.90 33.33 30.77 28.21 25.64 23.08 20.51 17.95 15.38 12.82 10.26 7.69 5.13 2.56 0.00

_________________________________________________________________________________________________________

Germany Switzerland Liechtenstein Luxembourg Portugal Czech Republic Cyprus Latvia Croatia Norway Denmark Belgium Vatican City Italy France Romania Netherlands Austria San Marino Bosnia & Herzegovina Guernsey Jersey Macedonia Finland Albania Serbia & Montenegro Monaco Andorra Sweden Greece Faroe Islands Malta Isle of Man Spain Slovenia Iceland the United Kingdom Estonia Ireland

_________________________________________________________________________________________________________





34

Intangible Other Assets Countries


Rank

Percentile

9.17 8.53 6.51 6.48 6.16 6.14 6.12 6.05 5.87 5.77 5.72 5.61 5.58 4.80 4.77 4.72 3.31 3.20 2.69 2.52 2.42 2.23 1.74 1.72 1.66 1.23 1.09 1.09 0.97 0.82 0.73 0.71 0.62 0.58 0.52 0.47 0.43 0.38 0.37 0.31 -0.80 -0.86

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 24 25 26 29 30 31 33 34 35 36 37 38 40 41 42 43 44 45 46 47

97.87 95.74 93.62 91.49 89.36 87.23 85.11 82.98 80.85 78.72 76.60 74.47 72.34 70.21 68.09 65.96 63.83 61.70 59.57 57.45 55.32 53.19 48.94 46.81 44.68 38.30 36.17 34.04 29.79 27.66 25.53 23.40 21.28 19.15 14.89 12.77 10.64 8.51 6.38 4.26 2.13 0.00

Region

_________________________________________________________________________________________________________

USA Finland Greece South Africa Canada South Korea Norway France Brazil Israel Ireland Portugal Chile China Taiwan Pakistan Belgium Italy Sweden the United Kingdom Australia Indonesia Denmark Philippines Germany Spain Turkey Mexico Malaysia Switzerland Singapore Luxembourg Japan Netherlands Russia Hungary Poland New Zealand Hong Kong Austria Argentina Czech Republic

North America Europe Europe Africa North America Asia Europe Europe Latin America the Middle East Europe Europe Latin America Asia Asia the Middle East Europe Europe Europe Europe Oceana Asia Europe Asia Europe Europe the Middle East Latin America Asia Europe Asia Europe Asia Europe Europe Europe Europe Oceana Asia Europe Latin America Europe

_________________________________________________________________________________________________________





35

Intangible Other Assets (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

9.27 8.53 6.51 6.12 6.05 6.04 5.96 5.92 5.72 5.61 5.37 3.31 3.22 3.20 2.69 2.52 1.74 1.66 1.23 1.16 1.04 0.95 0.92 0.89 0.82 0.76 0.71 0.70 0.68 0.58 0.53 0.53 0.52 0.52 0.47 0.43 0.42 0.40 0.39 0.39 0.37 0.37 0.36 0.31 0.30 0.30 0.30 -0.82 -0.82 -0.86

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

98.00 96.00 94.00 92.00 90.00 88.00 86.00 84.00 82.00 80.00 78.00 76.00 74.00 72.00 70.00 68.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 48.00 46.00 44.00 42.00 40.00 38.00 36.00 34.00 32.00 30.00 28.00 26.00 24.00 22.00 20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00

_________________________________________________________________________________________________________

Iceland Finland Greece Norway France Malta Isle of Man Estonia Ireland Portugal Cyprus Belgium Vatican City Italy Sweden the United Kingdom Denmark Germany Spain Slovenia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Switzerland Liechtenstein Luxembourg Monaco Andorra Netherlands Belarus Slovakia Russia Lithuania Hungary Poland Ukraine Gibraltar Georgia Moldova Kazakhstan Bulgaria Faroe Islands Austria San Marino Guernsey Jersey Croatia Latvia Czech Republic

_________________________________________________________________________________________________________





3.3 3.3.1

FINANCIAL RETURNS RATIOS

IN

36

ITALY: LIABILITY STRUCTURE

Overview

In this chapter we consider the liability structure of firms operating in Italy benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of liabilities and shareholder equity is then presented for the proto-typical firm operating in Italy and the average global benchmarks (sometimes referred to as a financial “gap” analysis). The figure reflect firms involved in general building contractors and operative builders in Italy. For ratios where there are large deviations between Italy and the benchmarks, graphics are provided (total liabilities and equity = 100 percent). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis liability ratios are highlighted.

3.3.2

Liabilities and Equity – Definitions of Terms

The following definitions are provided for those less familiar with the liability-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of liabilities and equity, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Accounts Payable. Accounts payable are defined as amounts owed on open account to private persons or organizations for goods or services received.

•

Accrued Payroll. Accrued payroll is defined as the cost of payroll that has been incurred but has not yet been paid. Payroll is typically defined as comprising records detailing the salaries, wages, allowances and deductions for each employee for a specific period of time.

•

Capital Surplus. Capital surplus is commonly defined as an amount of equity which is directly contributed capital in excess of the par value.

•

Capitalized Lease Obligations. A capitalized lease obligation is commonly defined as an ownership arrangement in which the item under lease is typically a long-term asset. Capital leases are generally recorded as assets with liability at the current value of the lease payment.

•

Common Equity. Common equity is defined to equal the company's net worth. It typically comprises capital stock, capital surplus, retained earnings, and, in some cases, net worth reserves. Common equity is the portion of total net worth belonging to the common stockholders. Synonyms which are often used for common equity are “common stock” and “net worth”.

•

Common Stock. Common stock is defined as the securities which represent the company's ownership interest. Common stockholders typically assume greater risk than preferred stockholders; although common stockholders maintain greater control and generally greater dividends and capital appreciation. Common stock can be used interchangeably with the term capital stock when the company has no preferred stock.

•

Current Liabilities - Total. Total current liabilities are defined as the total amount of obligations which would require the use of current assets or other current liabilities to pay.




37

•

Current Portion of Long Term Debt. The current proportion of long term debt is typically defined as debt which is payable in more than one year.

•

Deferred Income. Deferred income is commonly defined as the amount for services rendered that has not yet been received.

•

Deferred Taxes. Deferred taxes are compulsory charges from a previous accounting period which are yet unpaid.

•

Income Taxes Payable. Income taxes payable are understood to mean taxes which are levied by state, federal, and local governments on the company's reported accounting profit. Income taxes payable are those which are due in the current accounting period.

•

Long Term Debt. Long-term debt is defined to be due in a period exceeding one year or one operating cycle, whichever is longer. Long-term debt can have an extended repayment period such as a many-year mortgage on land and buildings, or debt that's intended to be permanent such as bonds issued to investors.

•

Long Term Debt Excluding Capitalized Leases. Long term debt excluding capitalized leases is defined as debt which is typically due in a period exceeding one year or one operating cycle, whichever is longer, less capitalized leases (see Long Term Debt for exceptions). Capital leases are generally recorded as assets with liability at the current value of the lease payment.

•

Minority Interest. Minority interest is the proportional share of the minority ownership's interest (less than 50 percent) in the earnings or losses.

•

Non-Equity Reserves. Non-equity reserves are the amount set aside for losses or liabilities which are certain to arise but cannot be quantified with certainty, and are not part of the firm’s equity.

•

Retained Earnings. proprietary funds.

•

Shareholders Equity. Shareholders equity is commonly defined to be the amount of total equity reserved for common and preferred shareholders.

•

Short Term Debt. Short term debt is generally defined as debt payable within one year.

•

Total Liabilities. Total liabilities are generally defined to include all the claims against a corporation. Liabilities include accounts and wages and salaries payable, dividends declared payable, accrued taxes payable, fixed or long-term liabilities such as mortgage bonds, debentures, and bank loans.


Retained earnings is an equity account reflecting the accumulated earnings of



3.3.3

38

Liability Structure: Outlook

Using the methodology described in the introduction, the following table summarizes liability and equity structure benchmarks for firms involved in general building contractors and operative builders in Italy. To allow comparable benchmarking, a common index of Total Liabilities & Shareholders Equity = 100 is used. All figures are current-year projections for companies operating in Italy based on latest financial results available. Liability Structure Italy Europe World Avg. _________________________________________________________________________________________________________

Accounts Payable Short Term Debt & Current Portion of Long Term Debt Accrued Payroll Income Taxes Payable Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Capitalized Lease Obligations Provision For Risks and Charges Deferred Income Deferred Taxes Other Liabilities Total Liabilities Non-Equity Reserves Minority Interest Common Equity Common Stock Capital Surplus Revaluation Reserves Other Appropriated Reserves Unappropriated Reserves Retained Earnings Unrealized Foreign Exchange Gain/Loss Total Liabilities & Shareholders Equity

14.88 9.44 2.28 1.74 40.70 63.74 9.93 9.61 0.31 2.78 0.27 0.73 4.53 80.90 0.06 0.62 15.03 6.15 1.03 0.00 5.82 1.22 0.00 0.31 100.00

17.05 11.34 1.92 1.91 20.67 47.29 9.68 9.59 0.09 3.33 0.42 1.30 2.88 62.92 0.32 2.13 28.80 6.79 9.57 0.85 7.93 2.61 8.56 -0.12 100.00

7.97 12.31 0.60 0.68 23.44 44.24 12.91 12.38 0.59 0.70 0.17 0.34 2.75 60.75 0.13 1.82 29.54 6.80 8.34 0.57 3.70 4.86 4.49 0.06 100.00

_________________________________________________________________________________________________________





3.3.4

39

Large Variances: Liabilities

The following graphics summarize for general building contractors and operative builders the large liability structure gaps between firms operating in Italy and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Accounts Payable 20 15

14.88

17.05

7.97

10

6.91

5 0

Italy

Europe

World Average

Gap

Gap: Short Term Debt & Current Portion of Long Term Debt 15 10

9.44

11.34

12.31

5 0 -5

-2.87 Italy

Europe

World Average

Gap

Gap: Other Current Liabilities 50

40.7

40 30

20.67

23.44 17.26

20 10 0

Italy


Europe

World Average

Gap



40

Gap: Current Liabilities - Total 80

63.74

60

47.29

44.24

40 19.5

20 0

Italy

Europe

World Average

Gap

Gap: Long Term Debt 12.91

15 10

9.93

9.68

5 0 -5

-2.98 Italy

Europe

World Average

Gap

Gap: Long Term Debt Excluding Capitalized Leases 15 10

12.38 9.61

9.59

5 0 -5

-2.77 Italy

Europe

World Average

Gap

Gap: Total Liabilities 100

80.9

80

62.92

60.75

60 40

20.15

20 0

Italy


Europe

World Average

Gap



41

Gap: Common Equity 28.8

30 20

29.54

15.03

10 0 -10 -20

-14.51 Italy

Europe

World Average

Gap

Gap: Capital Surplus 9.57

10 5

8.34

1.03

0 -5 -7.31 -10

Italy

Europe

World Average

Gap

Gap: Unappropriated Reserves 6

4.86

4 2

2.61 1.22

0 -2 -4

Italy

Europe

World Average

-3.64 Gap

Gap: Retained Earnings 8.56

10

4.49

5 0 -5

0

Italy


Europe

World Average

-4.49 Gap



3.3.5

42


We now consider the distribution of liability ratios for general building contractors and operative builders using ranks and percentiles. What percent of countries have a value lower or higher than Italy (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of liability structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical liability ratios are highlighted in additional tables. Liability Structure

Italy

Rank of Total

Percentile

14.88 9.44 2.28 1.74 40.70 63.74 9.93 9.61 0.31 2.78 0.27 0.73 4.53 80.90 0.06 0.62 15.03 6.15 1.03 0.00 5.82 1.22 0.00 0.31 100.00

17 of 47 20 of 52 7 of 22 10 of 45 5 of 52 6 of 53 30 of 53 29 of 53 13 of 24 9 of 32 16 of 24 16 of 39 16 of 49 7 of 53 20 of 25 34 of 46 50 of 53 26 of 48 36 of 37 27 of 28 14 of 46 18 of 29 45 of 51 8 of 32

63.83 61.54 68.18 77.78 90.38 88.68 43.40 45.28 45.83 71.88 33.33 58.97 67.35 86.79 20.00 26.09 5.66 45.83 2.70 3.57 69.57 37.93 11.76 75.00

_________________________________________________________________________________________________________


_________________________________________________________________________________________________________





43

Accounts Payable Countries

Value (total liabilities & equity = 100)

Rank

Percentile

52.88 44.33 41.30 32.51 28.00 27.54 25.41 23.79 22.91 22.81 22.29 20.66 19.66 17.43 16.02 15.40 14.88 13.91 13.60 13.19 12.46 12.36 11.50 11.41 10.95 10.34 10.30 10.28 10.18 9.86 8.52 8.38 7.76 7.20 7.06 6.10 5.24 4.75 4.74 2.91

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 24 25 26 28 29 30 31 32 33 34 36 38 39 40 41 43 44 47

97.87 95.74 93.62 91.49 89.36 87.23 85.11 82.98 80.85 78.72 76.60 74.47 72.34 70.21 68.09 65.96 63.83 61.70 59.57 57.45 55.32 53.19 48.94 46.81 44.68 40.43 38.30 36.17 34.04 31.91 29.79 27.66 23.40 19.15 17.02 14.89 12.77 8.51 6.38 0.00

Region

_________________________________________________________________________________________________________

Spain Czech Republic Argentina Norway Canada France Japan Singapore the United Kingdom South Africa Portugal Brazil Chile Germany Malaysia Belgium Italy Thailand Denmark Switzerland Israel Ireland USA Luxembourg Sweden Austria Taiwan Peru South Korea Philippines China Pakistan Greece New Zealand Hong Kong Finland Indonesia Turkey Mexico Netherlands

Europe Europe Latin America Europe North America Europe Asia Asia Europe Africa Europe Latin America Latin America Europe Asia Europe Europe Asia Europe Europe the Middle East Europe North America Europe Europe Europe Asia Latin America Asia Asia Asia the Middle East Europe Oceana Asia Europe Asia the Middle East Latin America Europe

_________________________________________________________________________________________________________





44

Accounts Payable (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

52.88 49.64 44.33 42.08 42.06 32.51 27.54 23.07 22.91 22.29 22.25 21.33 17.43 15.40 15.00 14.88 13.60 13.19 12.36 12.31 11.62 11.41 10.95 10.34 10.25 9.99 9.99 9.82 8.97 7.76 7.19 7.10 6.77 6.10 4.52 4.14 4.03 3.89 2.91

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

97.44 94.87 92.31 89.74 87.18 84.62 82.05 79.49 76.92 74.36 71.79 69.23 66.67 64.10 61.54 58.97 56.41 53.85 51.28 48.72 46.15 43.59 41.03 38.46 35.90 33.33 30.77 28.21 25.64 23.08 20.51 17.95 15.38 12.82 10.26 7.69 5.13 2.56 0.00

_________________________________________________________________________________________________________

Spain Slovenia Czech Republic Latvia Croatia Norway France Monaco the United Kingdom Portugal Andorra Cyprus Germany Belgium Vatican City Italy Denmark Switzerland Ireland Liechtenstein Iceland Luxembourg Sweden Austria San Marino Guernsey Jersey Estonia Albania Greece Malta Isle of Man Faroe Islands Finland Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Netherlands

_________________________________________________________________________________________________________





45

Current Liabilities - Total Countries


Rank

Percentile

75.86 71.63 66.09 65.97 65.20 63.74 62.93 58.43 57.01 56.27 55.31 55.05 54.43 54.29 54.25 53.38 52.75 52.67 51.80 51.60 50.47 49.97 49.78 49.56 49.19 48.70 48.55 47.29 44.62 44.20 41.30 39.70 37.06 36.68 34.98 34.78 30.78 28.73 28.40 28.27 27.70 27.55 22.75 14.53 14.49

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 41 42 43 44 48 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 16.98 9.43 3.77 1.89

Region

_________________________________________________________________________________________________________

Spain Austria Norway Belgium Japan Italy South Africa Czech Republic Brazil Finland Portugal Poland Argentina China Chile Pakistan India Canada France Switzerland Sweden Israel Singapore Ireland Russia Denmark the United Kingdom Germany Luxembourg Hungary Taiwan South Korea Malaysia Greece Philippines Australia Thailand Netherlands USA New Zealand Hong Kong Indonesia Peru Turkey Mexico

Europe Europe Europe Europe Asia Europe Africa Europe Latin America Europe Europe Europe Latin America Asia Latin America the Middle East Asia North America Europe Europe Europe the Middle East Asia Europe Europe Europe Europe Europe Europe Europe Asia Asia Asia Europe Asia Oceana Asia Europe North America Oceana Asia Asia Latin America the Middle East Latin America

_________________________________________________________________________________________________________





46

Current Liabilities - Total (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

75.86 71.63 71.21 70.95 69.18 69.18 66.09 65.97 64.25 63.74 58.43 56.27 55.46 55.44 55.31 55.05 52.94 51.80 51.60 50.47 50.23 50.11 49.56 49.50 49.19 49.08 48.70 48.55 48.27 48.15 47.63 47.54 47.29 46.55 44.62 44.20 39.74 38.27 37.79 37.21 36.68 33.99 33.54 28.73 28.69 26.56 19.86 13.80 12.66 12.31 11.87

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Spain Austria Slovenia San Marino Jersey Guernsey Norway Belgium Vatican City Italy Czech Republic Finland Latvia Croatia Portugal Poland Cyprus France Switzerland Sweden Belarus Slovakia Ireland Moldova Russia Lithuania Denmark the United Kingdom Monaco Liechtenstein Kazakhstan Bulgaria Germany Andorra Luxembourg Hungary Ukraine Estonia Gibraltar Georgia Greece Malta Isle of Man Netherlands Iceland Faroe Islands Albania Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro

_________________________________________________________________________________________________________




47

Long Term Debt Countries


Rank

Percentile

29.74 27.54 25.42 22.72 22.26 21.89 21.57 21.35 21.17 19.59 17.84 17.64 17.07 14.16 14.04 13.93 13.55 13.21 12.46 12.18 11.94 11.73 11.49 10.44 10.27 9.93 9.72 9.48 9.36 9.34 9.33 8.78 8.69 8.63 7.88 7.72 6.58 5.69 5.16 4.68 4.45 3.61 1.74 0.93 0.02

1 3 4 5 6 7 8 10 11 12 14 15 16 17 18 19 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 40 42 43 44 46 47 48 49 50 51 52 53

98.11 94.34 92.45 90.57 88.68 86.79 84.91 81.13 79.25 77.36 73.58 71.70 69.81 67.92 66.04 64.15 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 24.53 20.75 18.87 16.98 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Indonesia Netherlands USA Philippines Canada France Australia Israel Ireland Sweden Singapore Taiwan India Finland Denmark Portugal Russia Norway South Korea Hungary Japan New Zealand Hong Kong Thailand Belgium Italy the United Kingdom Malaysia Turkey Mexico Czech Republic China Argentina Pakistan Germany Peru Switzerland Luxembourg South Africa Brazil Chile Austria Spain Poland Greece

Asia Europe North America Asia North America Europe Oceana the Middle East Europe Europe Asia Asia Asia Europe Europe Europe Europe Europe Asia Europe Asia Oceana Asia Asia Europe Europe Europe Asia the Middle East Latin America Europe Asia Latin America the Middle East Europe Latin America Europe Europe Africa Latin America Latin America Europe Europe Europe Europe

_________________________________________________________________________________________________________





48

Long Term Debt (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

27.54 25.68 21.89 21.17 19.59 17.30 16.68 14.16 14.04 13.93 13.84 13.81 13.55 13.52 13.34 13.21 12.18 12.01 11.02 10.95 10.41 10.27 10.25 10.01 9.93 9.72 9.33 8.90 8.85 8.85 8.17 7.94 7.88 7.65 6.73 6.58 6.14 5.69 3.61 3.57 3.48 3.48 1.74 1.63 0.93 0.83 0.80 0.80 0.02 0.02 0.02

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Netherlands Iceland France Ireland Sweden Monaco Andorra Finland Denmark Portugal Belarus Slovakia Russia Lithuania Cyprus Norway Hungary Estonia Faroe Islands Ukraine Gibraltar Belgium Georgia Vatican City Italy the United Kingdom Czech Republic Romania Latvia Croatia Bosnia & Herzegovina Macedonia Germany Serbia & Montenegro Albania Switzerland Liechtenstein Luxembourg Austria San Marino Jersey Guernsey Spain Slovenia Poland Moldova Kazakhstan Bulgaria Greece Malta Isle of Man

_________________________________________________________________________________________________________




49

Total Liabilities Countries


Rank

Percentile

88.49 87.71 86.26 83.73 81.25 81.10 80.90 79.18 76.97 76.59 76.15 75.34 73.12 72.77 72.51 72.26 70.50 70.24 70.07 69.11 68.20 68.17 67.82 67.79 66.59 64.11 63.48 63.03 61.48 60.93 60.43 60.40 60.13 58.98 57.34 55.79 48.06 46.78 45.45 41.98 41.13 37.32 34.91 34.82 34.57

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 21 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 41 42 43 44 45 47 49 50 51

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 66.04 64.15 62.26 60.38 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 22.64 20.75 18.87 16.98 15.09 11.32 7.55 5.66 3.77

Region

_________________________________________________________________________________________________________

Austria Canada France Belgium Norway Japan Italy Spain Portugal Sweden Indonesia Germany Israel Czech Republic Ireland Finland India Denmark South Africa Netherlands Switzerland Singapore Russia Argentina South Korea China Brazil Pakistan the United Kingdom Hungary Taiwan Chile Philippines Luxembourg USA Poland Malaysia Thailand Australia New Zealand Hong Kong Greece Turkey Mexico Peru

Europe North America Europe Europe Europe Asia Europe Europe Europe Europe Asia Europe the Middle East Europe Europe Europe Asia Europe Africa Europe Europe Asia Europe Latin America Asia Asia Latin America the Middle East Europe Europe Asia Latin America Asia Europe North America Europe Asia Asia Oceana Oceana Asia Europe the Middle East Latin America Latin America

_________________________________________________________________________________________________________





50

Total Liabilities (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

88.49 87.65 86.26 85.46 85.46 83.73 81.55 81.25 80.90 79.18 76.97 76.59 75.34 74.34 73.68 72.77 72.51 72.26 70.24 69.25 69.11 69.09 69.07 69.04 68.20 67.82 67.66 66.10 64.20 63.75 63.64 61.48 60.93 58.98 57.93 55.79 54.79 52.10 51.29 50.16 48.27 48.18 39.44 37.32 34.59 34.13 33.17 30.44 30.17 29.58 28.54

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Austria San Marino France Jersey Guernsey Belgium Vatican City Norway Italy Spain Portugal Sweden Germany Slovenia Cyprus Czech Republic Ireland Finland Denmark Belarus Netherlands Slovakia Latvia Croatia Switzerland Russia Lithuania Monaco Estonia Andorra Liechtenstein the United Kingdom Hungary Luxembourg Iceland Poland Ukraine Gibraltar Georgia Moldova Kazakhstan Bulgaria Faroe Islands Greece Malta Isle of Man Romania Bosnia & Herzegovina Albania Macedonia Serbia & Montenegro

_________________________________________________________________________________________________________




51

Common Equity Countries


Rank

Percentile

60.98 55.04 54.51 54.36 53.93 51.96 51.71 49.86 42.14 38.21 37.10 33.38 32.69 32.14 31.74 31.37 31.21 30.79 30.35 29.72 29.50 28.08 27.84 27.72 27.49 27.45 27.26 25.44 24.72 24.20 23.40 23.25 23.03 22.91 22.11 21.41 21.32 20.05 18.41 16.06 15.56 15.03 12.62 12.41 11.48

1 2 3 4 5 6 7 9 11 13 14 15 16 17 18 19 20 22 23 24 25 27 28 29 30 31 32 34 35 36 37 38 39 40 41 43 44 45 46 48 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 83.02 79.25 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 58.49 56.60 54.72 52.83 49.06 47.17 45.28 43.40 41.51 39.62 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 18.87 16.98 15.09 13.21 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Greece New Zealand Turkey Mexico Hong Kong Australia Thailand Malaysia USA Peru the United Kingdom Poland China Pakistan Switzerland South Korea Philippines Netherlands Russia Denmark India South Africa Singapore Israel Ireland Luxembourg Hungary Brazil Czech Republic Chile Germany Indonesia Argentina Taiwan Portugal Finland Sweden Spain Japan Norway Belgium Italy Canada France Austria

Europe Oceana the Middle East Latin America Asia Oceana Asia Asia North America Latin America Europe Europe Asia the Middle East Europe Asia Asia Europe Europe Europe Asia Africa Asia the Middle East Europe Europe Europe Latin America Europe Latin America Europe Asia Latin America Asia Europe Europe Europe Europe Asia Europe Europe Europe North America Europe Europe

_________________________________________________________________________________________________________





52

Common Equity (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

60.98 56.52 55.77 51.79 51.72 47.53 46.19 44.56 42.57 37.10 33.38 33.35 31.74 30.98 30.91 30.79 30.35 30.27 30.24 30.01 29.72 29.62 28.88 28.83 27.49 27.45 27.26 27.00 26.03 24.72 24.52 23.47 23.45 23.40 23.31 22.95 22.11 21.41 21.32 21.17 20.05 18.82 16.06 15.56 15.16 15.03 12.41 11.48 11.37 11.09 11.09

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Greece Malta Isle of Man Romania Faroe Islands Bosnia & Herzegovina Macedonia Serbia & Montenegro Iceland the United Kingdom Poland Albania Switzerland Belarus Slovakia Netherlands Russia Lithuania Estonia Moldova Denmark Liechtenstein Kazakhstan Bulgaria Ireland Luxembourg Hungary Monaco Andorra Czech Republic Ukraine Latvia Croatia Germany Gibraltar Georgia Portugal Finland Sweden Cyprus Spain Slovenia Norway Belgium Vatican City Italy France Austria San Marino Guernsey Jersey

_________________________________________________________________________________________________________




53

Retained Earnings Countries


Rank

Percentile

50.26 50.13 23.87 22.48 22.03 21.55 19.05 18.89 17.77 16.78 15.74 15.01 14.33 14.20 12.59 9.31 8.86 8.25 8.23 7.09 6.89 6.22 4.63 3.51 3.12 2.86 2.81 2.48 1.91 1.78 1.24 1.22 0.78 0.77 0.44 0.40 0.38 0.03 0.00 0.00 -1.80 -3.13 -7.08

1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 19 20 21 22 23 24 26 27 28 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 48 51

98.04 96.08 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 62.75 60.78 58.82 56.86 54.90 52.94 49.02 47.06 45.10 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 5.88 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico USA New Zealand Hong Kong the United Kingdom Israel Ireland Finland Malaysia Taiwan Denmark Norway South Korea Thailand Peru Czech Republic Argentina Germany Australia Japan Singapore Sweden Spain Russia Switzerland Hungary Luxembourg Austria Greece Canada France China Pakistan South Africa Brazil Chile Poland Belgium Italy Portugal Philippines Indonesia

the Middle East Latin America North America Oceana Asia Europe the Middle East Europe Europe Asia Asia Europe Europe Asia Asia Latin America Europe Latin America Europe Oceana Asia Asia Europe Europe Europe Europe Europe Europe Europe Europe North America Europe Asia the Middle East Africa Latin America Latin America Europe Europe Europe Europe Asia Asia

_________________________________________________________________________________________________________





54

Retained Earnings (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

47.76 43.83 42.59 41.09 24.11 21.55 21.13 18.89 17.77 15.01 14.33 13.69 8.86 8.41 8.40 8.23 8.12 6.03 5.81 4.63 3.51 3.30 3.19 3.18 3.12 3.12 2.86 2.81 2.67 2.52 2.48 2.40 2.36 1.91 1.90 1.85 1.85 1.78 1.65 1.63 1.22 0.03 0.03 0.03 0.03 0.00 0.00 0.00 -1.73 -1.80

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

98.00 96.00 94.00 92.00 90.00 88.00 86.00 84.00 82.00 80.00 78.00 76.00 74.00 72.00 70.00 68.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 48.00 46.00 44.00 42.00 40.00 38.00 36.00 34.00 32.00 30.00 28.00 26.00 24.00 22.00 20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Iceland the United Kingdom Faroe Islands Ireland Finland Denmark Norway Estonia Czech Republic Latvia Croatia Germany Albania Monaco Andorra Sweden Spain Slovenia Belarus Slovakia Russia Lithuania Switzerland Hungary Liechtenstein Ukraine Luxembourg Gibraltar Georgia Austria San Marino Guernsey Jersey Greece Malta Isle of Man France Poland Moldova Kazakhstan Bulgaria Belgium Vatican City Italy Cyprus Portugal

_________________________________________________________________________________________________________





3.4 3.4.1

55

FINANCIAL RETURNS IN ITALY: INCOME STRUCTURE RATIOS Overview

In this chapter we consider the income structure of companies operating in Italy benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of income is then presented for the proto-typical firm involved in general building contractors and operative builders operating in Italy and the average global benchmarks (total revenue = 100 percent). For ratios where there are large deviations between Italy and the benchmarks, graphics are provided. Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis income ratios are highlighted across countries in the comparison group.

3.4.2

Income Statements – Definitions of Terms

The following definitions are provided for those less familiar with the income-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of income, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Amortization. Amortization generally refers to the depreciation, depletion, or charge-off to expense of intangible and tangible assets over a period of time. Amortization is commonly understood to be the taking as an expense (writing off) of the loss of value of an intangible asset such as a copyright, a patent, or a mailing list, in an accounting period.

•

Cost of Goods Sold (excluding depreciation). For retail companies, cost of goods sold is generally defined as the equivalent of starting inventory plus purchases minus ending inventory. In manufacturing, cost of goods sold is defined to equal the starting inventory plus the cost of goods manufactured minus ending inventory. Most pure service firms do not generally have cost of goods sold.

•

Current Domestic Income Tax. Current domestic income taxes are commonly defined as compulsory charges levied by the government where the company is located on current income.

•

Deferred Domestic Income Tax. Deferred domestic income tax is defined as a compulsory charge from a previous accounting period which is yet unpaid to the government where the company is located on current income.

•

Depletion. Depletion is commonly defined to be included as one of the elements of amortization, and is understood to be the portion of the carrying value (other than the portion associated with tangible assets) prorated in each accounting period for financial reporting purposes.

•

Depreciation. Depreciation generally is defined as the expiration in the service life of fixed assets, other than depletable assets, attributable to wear and tear, deterioration, action of the physical elements, inadequacy and obsolescence. Depreciation is commonly defined as the portion of the cost of a fixed asset charged as an expense during a particular period. In accounting for depreciation, the cost of a fixed asset, less any salvage value, is prorated over the estimated service life of such an asset, and each period is charged with a portion of such cost. Through this process, the cost of the asset is ultimately charged off as an expense.




56

•

Earnings Before Interest and Taxes (EBIT). EBIT is a financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and non-operating profit before the deduction of interest and income taxes.

•

Equity in Earnings. Equity in earnings is defined as a company's proportional share (based on ownership) of the net earnings or losses of an unconsolidated company.

•

Gross Income. Gross income is commonly defined as all the money, goods, and property received by the company that must be included as taxable income.

•

Income Taxes. Income taxes are defined to include those taxes levied by state, federal, and local governments on the company's reported accounting profit. Income taxes generally include both deferred and paid taxes. They are generally determined after the interest expense has been deducted.

•

Interest Expense on Debt. Interest expenses on debt are those which are spent on current debt and added to the net income so avoid underestimating interest coverage.

•

Minority Interest. Minority interest is the proportional share of the minority ownership's interest (less than 50 percent) in the earnings or losses.

•

Net Income Available to Common. Net income available to common is defined as the net income available to common stockholders.

•

Net Income Before Preferred Dividends. Net income before preferred dividends is generally calculated as the difference between total revenues and total expense prior to the granting of preferred dividends.

•

Net Sales or Revenues. Revenues or net sales are defined as payments made to and received by an entity. May take the form of taxes, user fees, fines, fees for service, and so on.

•

Non-Operating Interest Income. Non-operating interest income is generally understood to be any interest received (e.g., royalty, production payment, net profits interest) that does not involve the operation of the company.

•

Operating Expenses. Operating expenses are generally defined as those incurred in paying for the company’s day-to-day activities.

•

Operating Income. Operating income is generally defined to equal operating revenues less operating expenses. It typically excludes items of other revenue and expense such as equity in earnings of unconsolidated companies, dividends, interest income and expense, income taxes, extraordinary items, and cumulative effect of accounting changes.

•

Pretax Income. Pretax income is generally defined as income before tax deductions.




3.4.3

57

Income Structure: Outlook

Using the methodology described in the introduction, the following table summarizes income structure benchmarks for firms involved in general building contractors and operative builders in Italy. To allow comparable benchmarking, a common index of Net Sales or Revenues = 100 is used. All figures are current-year projections for companies operating in Italy based on latest financial results available. Income Structure Italy Europe World Avg. _________________________________________________________________________________________________________

Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Deferred Domestic Income Tax Minority Interest Equity in Earnings Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common

100.00 90.22 2.79 3.49 97.12 3.99 -1.61 0.22 0.60 0.61 4.08 2.65 1.34 1.31 0.57 0.79 0.06 0.24 -0.08 0.67 0.67 0.67

100.00 80.82 2.51 12.08 91.11 3.85 3.48 0.21 0.38 0.99 1.59 6.22 2.40 3.86 1.29 1.16 -0.08 0.31 0.04 2.60 2.72 2.59

100.00 48.15 2.65 13.85 56.54 2.06 7.21 0.10 0.18 0.72 2.14 10.15 4.21 6.08 1.10 1.05 0.12 0.15 0.01 4.59 5.20 4.58

_________________________________________________________________________________________________________





3.4.4

58

Large Variances: Income

The following graphics summarize for general building contractors and operative builders the large income structure gaps between firms operating in Italy and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Cost of Goods Sold (Excluding Depreciation) 100

90.22

80.82

80 60

48.15

42.07

40 20 0

Italy

Europe

World Average

Gap

Gap: Gross Income 12.08

15 10 5

13.85

3.49

0 -5 -10 -15

-10.36 Italy

Europe

World Average

Gap

Gap: Other Operating Expenses 100

97.12

91.11

80 56.54

60

40.58

40 20 0

Italy


Europe

World Average

Gap



59

Gap: Operating Income 10 5

7.21 1.61

3.48

0 -5 -10

-5.6 Italy

Europe

World Average

Gap

Gap: Other Income/Expense Net 5

4.08

4 3 1.59

2

2.14

1.94

1 0

Italy

Europe

World Average

Gap

Gap: Earnings Before Interest and Taxes (EBIT) 15

10.15

10 5

6.22 2.65

0 -5 -10

-7.5 Italy

Europe

World Average

Gap

Gap: Interest Expense on Debt 6

4.21

4 2

1.34

2.4

0 -2 -4

-2.87 Italy


Europe

World Average

Gap



60

Gap: Pretax Income 8 6 4 2 0 -2 -4 -6

6.08 3.86 1.31

-4.77 Italy

Europe

World Average

Gap

Gap: Net Income Before Extra Items/Prefer Dividends 6

4.59

4 2

2.6 0.67

0 -2 -4

Italy

Europe

-3.92 Gap

World Average

Gap: Net Income Before Preferred Dividends 5.2

6 2.72

4 2

0.67

0 -2 -4 -6

-4.53 Italy

Europe

World Average

Gap

Gap: Net Income Available to Common 6

4.58

4 2

2.59 0.67

0 -2 -4

Italy


Europe

World Average

-3.91 Gap



3.4.5

61


We now consider the distribution of income ratios for general building contractors and operative builders using ranks and percentiles. What percent of countries have a value lower or higher than Italy (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of income structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical income ratios are highlighted in additional tables. Income Structure

Italy

Rank of Total

Percentile

100.00 90.22 2.79 3.49 97.12 3.99 -1.61 0.22 0.60 0.61 4.08 2.65 1.34 1.31 0.57 0.79 0.06 0.24 -0.08 0.67 0.67 0.67

5 of 49 25 of 53 48 of 49 13 of 48 13 of 44 52 of 53 12 of 24 14 of 24 25 of 47 7 of 53 48 of 53 38 of 53 46 of 53 39 of 49 27 of 44 16 of 38 9 of 46 16 of 19 46 of 53 46 of 53 46 of 53

89.80 52.83 2.04 72.92 70.45 1.89 50.00 41.67 46.81 86.79 9.43 28.30 13.21 20.41 38.64 57.89 80.43 15.79 13.21 13.21 13.21

_________________________________________________________________________________________________________


_________________________________________________________________________________________________________





62

Cost of Goods Sold (Excluding Depreciation) Countries

Value (total revenue = 100)

Rank

Percentile

93.38 93.28 92.96 92.01 90.22 90.06 89.09 88.64 88.05 87.85 87.00 86.03 85.74 85.13 84.29 83.89 83.54 83.43 83.04 82.90 82.75 82.61 82.06 81.66 81.02 80.40 80.33 79.75 79.55 79.39 78.51 76.66 76.37 76.08 73.97 72.66 70.14 69.95 68.39 64.16 63.08 56.64

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 42 45 48

97.96 95.92 93.88 91.84 89.80 87.76 85.71 83.67 81.63 79.59 77.55 75.51 73.47 71.43 69.39 67.35 63.27 61.22 59.18 57.14 55.10 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 36.73 34.69 32.65 30.61 28.57 26.53 24.49 22.45 20.41 18.37 14.29 8.16 2.04

Region

_________________________________________________________________________________________________________

Belgium Portugal Switzerland Sweden Italy Czech Republic Indonesia Norway Poland Finland Singapore Japan South Korea Germany South Africa Argentina Spain Netherlands Canada Greece Israel Austria Ireland France New Zealand Luxembourg Denmark the United Kingdom Australia Hong Kong Malaysia Thailand Brazil USA Philippines Chile Turkey Mexico Taiwan China Pakistan Peru

Europe Europe Europe Europe Europe Europe Asia Europe Europe Europe Asia Asia Asia Europe Africa Latin America Europe Europe North America Europe the Middle East Europe Europe Europe Oceana Europe Europe Europe Oceana Asia Asia Asia Latin America North America Asia Latin America the Middle East Latin America Asia Asia the Middle East Latin America

_________________________________________________________________________________________________________





63

Cost of Goods Sold (Excluding Depreciation) (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

93.38 93.28 92.96 92.01 90.94 90.22 90.06 89.29 88.64 88.05 87.85 86.75 85.48 85.44 85.13 84.37 83.54 83.43 82.90 82.66 82.61 82.06 81.82 81.66 81.36 80.40 80.33 79.78 79.78 79.75 79.16 78.42 76.86 76.84 76.18 76.13 76.04 75.82 66.65 61.16 59.44 57.34 49.44

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43

97.67 95.35 93.02 90.70 88.37 86.05 83.72 81.40 79.07 76.74 74.42 72.09 69.77 67.44 65.12 62.79 60.47 58.14 55.81 53.49 51.16 48.84 46.51 44.19 41.86 39.53 37.21 34.88 32.56 30.23 27.91 25.58 23.26 20.93 18.60 16.28 13.95 11.63 9.30 6.98 4.65 2.33 0.00

_________________________________________________________________________________________________________

Belgium Portugal Switzerland Sweden Vatican City Italy Czech Republic Cyprus Norway Poland Finland Liechtenstein Latvia Croatia Germany Monaco Spain Netherlands Greece Estonia Austria Ireland San Marino France Andorra Luxembourg Denmark Guernsey Jersey the United Kingdom Moldova Slovenia Iceland Malta Kazakhstan Faroe Islands Bulgaria Isle of Man Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Albania

_________________________________________________________________________________________________________





64

Operating Expenses - Total Countries


Rank

Percentile

13.98 13.27 11.49 8.85 8.02 7.63 6.29 5.58 5.49 5.39 4.13 3.99 3.62 3.50 3.39 3.33 3.32 3.31 3.24 3.06 2.64 2.57 2.52 2.39 2.37 2.05 1.71 1.14 0.82 0.27 0.24 0.24 0.17 0.07 0.04 0.03 0.00

1 2 3 4 5 6 7 8 9 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 33 34 35 37 38 39 42 44

97.73 95.45 93.18 90.91 88.64 86.36 84.09 81.82 79.55 77.27 72.73 70.45 68.18 65.91 63.64 61.36 59.09 56.82 54.55 52.27 50.00 47.73 45.45 43.18 40.91 38.64 36.36 34.09 31.82 25.00 22.73 20.45 15.91 13.64 11.36 4.55 0.00

Region

_________________________________________________________________________________________________________

Austria Germany Spain South Africa Brazil Chile Philippines Finland Canada France Belgium Italy Australia Netherlands China Pakistan Malaysia New Zealand Hong Kong Denmark Singapore Czech Republic Norway Argentina Switzerland Luxembourg the United Kingdom Portugal Indonesia South Korea Turkey Mexico Sweden USA Thailand Peru Japan

Europe Europe Europe Africa Latin America Latin America Asia Europe North America Europe Europe Europe Oceana Europe Asia the Middle East Asia Oceana Asia Europe Asia Europe Europe Latin America Europe Europe Europe Europe Asia Asia the Middle East Latin America Europe North America Asia Latin America Asia

_________________________________________________________________________________________________________





65

Operating Expenses - Total (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

13.98 13.85 13.50 13.50 13.27 11.49 10.79 5.58 5.39 4.13 4.03 3.99 3.50 3.11 3.06 2.57 2.56 2.52 2.47 2.43 2.43 2.37 2.21 2.05 1.71 1.14 1.09 0.26 0.23 0.21 0.21 0.20 0.17 0.07 0.03

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

97.14 94.29 91.43 88.57 85.71 82.86 80.00 77.14 74.29 71.43 68.57 65.71 62.86 60.00 57.14 54.29 51.43 48.57 45.71 42.86 40.00 37.14 34.29 31.43 28.57 25.71 22.86 20.00 17.14 14.29 11.43 8.57 5.71 2.86 0.00

_________________________________________________________________________________________________________

Austria San Marino Jersey Guernsey Germany Spain Slovenia Finland France Belgium Vatican City Italy Netherlands Faroe Islands Denmark Czech Republic Monaco Norway Andorra Latvia Croatia Switzerland Liechtenstein Luxembourg the United Kingdom Portugal Cyprus Estonia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Sweden Iceland Albania

_________________________________________________________________________________________________________





66

Operating Income Countries


Rank

Percentile

16.85 16.80 14.11 13.83 13.59 13.39 10.43 10.17 10.12 9.48 9.40 8.74 8.66 8.17 7.84 6.29 5.88 4.50 4.23 4.06 4.00 3.38 3.36 3.06 2.97 2.94 2.91 2.71 2.66 2.58 2.45 2.35 2.19 1.96 1.70 1.70 1.62 0.77 0.76 0.69 0.37 -1.28 -1.47 -1.61 -1.66

1 2 4 5 6 7 10 11 12 13 14 15 16 17 18 20 21 22 23 24 25 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 44 45 46 47 50 51 52 53

98.11 96.23 92.45 90.57 88.68 86.79 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 11.32 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Thailand China Pakistan Australia Peru Netherlands Malaysia Israel Ireland the United Kingdom USA South Korea Taiwan India Greece Philippines Finland Canada France South Africa Spain Brazil Sweden Denmark Chile New Zealand Hong Kong Norway Japan Czech Republic Argentina Switzerland Singapore Luxembourg Portugal Russia Austria Hungary Poland Indonesia Germany Italy Belgium

the Middle East Latin America Asia Asia the Middle East Oceana Latin America Europe Asia the Middle East Europe Europe North America Asia Asia Asia Europe Asia Europe North America Europe Africa Europe Latin America Europe Europe Latin America Oceana Asia Europe Asia Europe Latin America Europe Asia Europe Europe Europe Europe Europe Europe Asia Europe Europe Europe

_________________________________________________________________________________________________________





67

Operating Income (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

16.01 14.69 14.28 13.77 10.17 9.40 9.10 8.75 8.74 7.87 5.88 5.45 5.38 4.23 4.00 3.36 3.16 2.97 2.94 2.58 2.55 2.35 2.23 2.23 1.96 1.83 1.70 1.65 1.62 1.59 1.55 0.78 0.78 0.77 0.77 0.76 0.76 0.74 0.74 0.69 0.62 0.59 0.58 0.37 0.33 0.32 0.32 -1.47 -1.61 -1.62 -1.66

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Netherlands Ireland Albania Iceland the United Kingdom Estonia Greece Malta Isle of Man Finland France Spain Slovenia Sweden Denmark Norway Faroe Islands Czech Republic Latvia Croatia Switzerland Liechtenstein Luxembourg Monaco Portugal Andorra Cyprus Belarus Slovakia Russia Lithuania Austria San Marino Jersey Guernsey Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Germany Italy Vatican City Belgium

_________________________________________________________________________________________________________




68

Earnings Before Interest and Taxes (EBIT) Countries


Rank

Percentile

31.82 21.11 21.06 16.69 15.84 15.74 15.47 15.12 14.15 12.80 12.33 10.99 9.55 9.47 9.27 9.01 7.89 7.72 7.57 6.91 6.61 6.50 5.79 5.49 5.33 5.24 4.91 4.81 4.59 4.18 4.16 3.96 3.77 3.62 3.56 3.37 3.06 2.80 2.74 2.65 2.52 2.34 2.03 0.83 0.74

1 4 5 7 8 9 10 11 12 15 16 17 18 19 20 22 23 24 25 26 27 28 29 30 31 32 34 35 36 37 38 39 40 41 42 43 44 46 47 48 49 50 51 52 53

98.11 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 71.70 69.81 67.92 66.04 64.15 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Indonesia Turkey Mexico Thailand Greece China Pakistan Australia Malaysia Netherlands Peru the United Kingdom Israel Ireland South Korea USA Taiwan New Zealand Hong Kong India Canada France Philippines Austria Spain Finland Denmark Sweden South Africa Norway Brazil Chile Portugal Czech Republic Singapore Argentina Poland Russia Belgium Italy Hungary Switzerland Luxembourg Germany Japan

Asia the Middle East Latin America Asia Europe Asia the Middle East Oceana Asia Europe Latin America Europe the Middle East Europe Asia North America Asia Oceana Asia Asia North America Europe Asia Europe Europe Europe Europe Europe Africa Europe Latin America Latin America Europe Europe Asia Latin America Europe Europe Europe Europe Europe Europe Europe Europe Asia

_________________________________________________________________________________________________________





69

Earnings Before Interest and Taxes (EBIT) (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

20.06 18.41 17.89 17.26 15.84 14.68 14.49 12.80 10.99 10.77 9.47 9.10 8.94 7.26 6.50 5.49 5.43 5.33 5.30 5.30 5.24 5.00 4.91 4.81 4.18 3.77 3.62 3.61 3.45 3.43 3.43 3.33 3.06 2.86 2.86 2.80 2.80 2.75 2.74 2.67 2.65 2.65 2.64 2.52 2.34 2.27 2.19 2.15 2.12 2.03 0.83

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Greece Malta Isle of Man Netherlands the United Kingdom Albania Ireland Iceland Estonia Faroe Islands France Austria San Marino Spain Jersey Guernsey Finland Slovenia Denmark Sweden Norway Portugal Czech Republic Cyprus Monaco Latvia Croatia Andorra Poland Belarus Slovakia Russia Lithuania Moldova Belgium Vatican City Italy Kazakhstan Bulgaria Hungary Switzerland Ukraine Liechtenstein Gibraltar Georgia Luxembourg Germany

_________________________________________________________________________________________________________




70

Pretax Income Countries


Rank

Percentile

18.94 18.89 15.27 15.16 14.26 13.12 12.27 11.20 10.55 10.37 8.50 8.38 7.98 7.41 7.35 6.12 4.86 4.10 4.01 3.90 3.63 3.49 3.16 3.10 3.01 2.91 2.89 2.75 2.71 2.51 2.30 2.17 2.14 1.66 1.65 1.57 1.38 1.36 1.35 1.31 -0.05 -0.16 -3.08 -3.42 -4.37

1 2 4 5 6 8 10 12 13 14 16 17 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 53

98.11 96.23 92.45 90.57 88.68 84.91 81.13 77.36 75.47 73.58 69.81 67.92 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Greece Thailand Indonesia Australia Malaysia Peru China Pakistan the United Kingdom Netherlands USA Israel Ireland Taiwan South Korea New Zealand Hong Kong Spain India South Africa Brazil Denmark Chile Czech Republic Finland Austria Argentina Sweden Poland Canada France Portugal Norway Switzerland Singapore Luxembourg Belgium Italy Germany Japan Hungary Russia Philippines

the Middle East Latin America Europe Asia Asia Oceana Asia Latin America Asia the Middle East Europe Europe North America the Middle East Europe Asia Asia Oceana Asia Europe Asia Africa Latin America Europe Latin America Europe Europe Europe Latin America Europe Europe North America Europe Europe Europe Europe Asia Europe Europe Europe Europe Asia Europe Europe Asia

_________________________________________________________________________________________________________





71

Pretax Income (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

18.00 16.51 16.05 15.48 15.27 14.15 13.96 9.78 8.50 8.38 8.06 7.35 4.68 3.90 3.85 3.66 3.10 2.91 2.89 2.77 2.76 2.75 2.72 2.65 2.65 2.51 2.30 2.14 2.07 1.99 1.99 1.66 1.65 1.59 1.57 1.47 1.36 1.35 1.34 1.32 1.31 1.29 -0.05 -2.59 -2.63 -2.77 -3.08 -3.42 -3.42 -3.49 -3.50

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Greece Malta Isle of Man Albania the United Kingdom Netherlands Iceland Ireland Estonia Spain Faroe Islands Slovenia Denmark Czech Republic Finland Latvia Croatia Austria San Marino Guernsey Jersey Sweden Poland France Moldova Kazakhstan Bulgaria Portugal Norway Cyprus Switzerland Liechtenstein Luxembourg Belgium Monaco Vatican City Italy Andorra Germany Georgia Gibraltar Ukraine Hungary Lithuania Russia Slovakia Belarus

_________________________________________________________________________________________________________




72

Income Taxes Countries


Rank

Percentile

5.35 4.74 3.75 3.44 2.98 2.81 2.80 2.79 2.58 2.35 1.74 1.63 1.51 1.50 1.41 1.39 1.25 1.14 1.12 0.93 0.93 0.91 0.91 0.87 0.82 0.81 0.80 0.78 0.78 0.76 0.73 0.59 0.57 0.54 0.50 0.44 0.41 0.40 0.35 0.28 0.04 -0.19

1 2 4 5 7 8 9 10 12 13 16 17 18 19 20 21 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 49

97.96 95.92 91.84 89.80 85.71 83.67 81.63 79.59 75.51 73.47 67.35 65.31 63.27 61.22 59.18 57.14 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 36.73 34.69 32.65 30.61 28.57 26.53 24.49 22.45 20.41 18.37 16.33 14.29 12.24 10.20 8.16 6.12 4.08 0.00

Region

_________________________________________________________________________________________________________

Greece Indonesia Malaysia Australia USA Netherlands Turkey Mexico the United Kingdom Thailand Peru South Korea Israel Ireland China Pakistan Taiwan Spain Finland Czech Republic Canada France South Africa Argentina Brazil Sweden New Zealand Hong Kong Chile Norway Poland Belgium Italy Denmark Singapore Portugal Germany Switzerland Luxembourg Japan Austria Philippines

Europe Asia Asia Oceana North America Europe the Middle East Latin America Europe Asia Latin America Asia the Middle East Europe Asia the Middle East Asia Europe Europe Europe North America Europe Africa Latin America Latin America Europe Oceana Asia Latin America Europe Europe Europe Europe Europe Asia Europe Europe Europe Europe Asia Europe Asia

_________________________________________________________________________________________________________





73

Income Taxes (General Building Contractors and Operative Builders) Countries in Europe


Rank

Percentile

5.35 4.96 4.89 3.01 2.81 2.66 2.58 2.44 2.37 2.29 1.57 1.52 1.50 1.14 1.12 1.07 0.93 0.91 0.88 0.88 0.81 0.76 0.75 0.73 0.65 0.63 0.63 0.59 0.57 0.57 0.54 0.49 0.47 0.44 0.42 0.41 0.40 0.38 0.35 0.04 0.04 0.04 0.04

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43

97.67 95.35 93.02 90.70 88.37 86.05 83.72 81.40 79.07 76.74 74.42 72.09 69.77 67.44 65.12 62.79 60.47 58.14 55.81 53.49 51.16 48.84 46.51 44.19 41.86 39.53 37.21 34.88 32.56 30.23 27.91 25.58 23.26 20.93 18.60 16.28 13.95 11.63 9.30 6.98 4.65 2.33 0.00

_________________________________________________________________________________________________________

Greece Malta Isle of Man Iceland Netherlands Romania the United Kingdom Bosnia & Herzegovina Macedonia Serbia & Montenegro Estonia Albania Ireland Spain Finland Slovenia Czech Republic France Latvia Croatia Sweden Norway Faroe Islands Poland Moldova Kazakhstan Bulgaria Belgium Vatican City Italy Denmark Monaco Andorra Portugal Cyprus Germany Switzerland Liechtenstein Luxembourg Austria San Marino Jersey Guernsey

_________________________________________________________________________________________________________





3.5 3.5.1

74

FINANCIAL RETURNS IN ITALY: PROFITABILITY RATIOS Overview

In this chapter we consider additional financial ratios estimated for firms involved in general building contractors and operative builders operating in Italy benchmarked against global averages. The chapter begins by defining relevant terms. Estimates are then presented for the proto-typical firm operating in Italy compared to average global benchmarks. For ratios where there are large deviations between the average firm in Italy and the benchmarks, graphics are provided. Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key ratios are highlighted across countries in the comparison group.

3.5.2

Ratios – Definitions of Terms

The following definitions are provided for those less familiar with financial ratio analysis. As this chapter deals with the global benchmarking of ratios, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •

Accounts Receivables Days. The number of days' receivable sales generally correlates to the amount of the accounts receivables to the average daily sales on account. Accounts receivables days is often determined by dividing the gross receivables by (net sales/365).

•

Cash Earnings Return On Equity (%). Cash earnings return on equity generally measures the return of revenues to the shareholders. This ratio is generally calculated by dividing (net income before nonrecurring items minus preferred dividends) by the average common equity.

•

Cash Flow. Cash flow is generally defined as being equal to the company's net income plus the charge-off amounts for depreciation, depletion, amortization, extraordinary charges to reserves. These are bookkeeping deductions which are not paid out as cash.

•

Current Ratio. The current ratio is generally defined as a ratio of liquidity measuring the ability of a business to pay its current obligations when due. The current ratio is generally calculated by dividing total current assets by total current liabilities. Managers and lenders often want the current ratio to be 2.00 or greater. This ratio is often seen as an indication of short-term debt-paying ability. The higher the ratio, the more liquid the company.

•

Dividend Payout (% Earnings) - Total Dividends (%). The dividend payout ratio is generally used to measure the amount of current earnings per common share which are paid out in dividends. This ratio is generally determined by dividing dividends per common share by diluted earnings per share.

•

Fixed Charge Coverage Ratio. The fixed charge coverage ratio is generally seen as an indication of the company's ability to cover its fixed charges. This ratio is typically determined by dividing recurring earnings excluding interest expense, tax expense, equity earnings, and minority earnings plus interest from rentals by interest expense including capitalized interest and interest from rentals.

•

Gross Profit Margin (%). The gross profit margin is typically defined to equals the difference, in percent, between net sales revenue and the cost of goods sold.




75

•

Inventories (# of Days) Held. Inventory days held is generally determined by dividing the ending inventory by (the cost of goods held/365). The number of days held results in the average daily cost of goods held.

•

Inventory Turnover (%). Inventory turnover is used as a measure of the balance of inventory. It generally compares the amount of inventory with the total sales for the year. The ratio can reflect both on the quality of the inventory and the efficiency of management. Typically, the higher the turnover rate, the greater the likelihood that profits would be larger and less working capital bound up in inventory.

•

Net Margin (%). The net margin is the ratio of net income dollars generated by each dollar of sales.

•

Operating Profit Margin (%). Operating profit margin percent is the ratio of operating profit to net sales. Operating profit (loss) is income or loss before taxes calculated by the difference between total revenues and total expense disregarding the effects of any extraordinary transactions.

•

Quick Ratio. The quick ratio, also commonly known as the “acid test ratio”, is a refined current ratio and is often seen as a more conservative measure of liquidity. The quick ratio is generally determined by dividing cash and equivalents plus trade receivables by total current liabilities. The ratio shows the degree to which a company's current liabilities can be covered by the most liquid current assets. Financial management texts generally conclude that any value of less than 1 to 1 implies a reciprocal dependency on inventory or other current assets to liquidate short-term debt.

•

Reinvestment Rate - Total (%). The reinvestment rate is typically defined as the rate at which an investor assumes interest payments made on a debt security can be reinvested over the life of that security.

•

Return on Assets (%). Return on assets is generally used to measure a company's ability to use assets to create profit.

•

Return on Equity - Total (%). The return on total equity ratio is often seen to reflect the profitability of the company's operations after income taxes. Return on equity is often considered to be a good measure of the company's profitability. Tax laws and tax loss carryovers can affect the net income and therefore can also affect the return on equity.

•

Return on Invested Capital (%). The ratio of return on invested capital is typically defined as an evaluation of earnings performance without regard to the method of financing. This ratio measures the earnings on investment and is an indication of how well the company utilizes its asset base. Return on investment is a type of return on capital, therefore this ratio can be an indication of the company’s ability to reward investors who provide long-term funds and to attract future investors.

•

Tax Rate (%). The tax rate is typically defined as the average rate of domestic tax owed to government by the company.

•

Working Capital. Net working capital equals the difference between total current assets and total current liabilities. Working capital often reflects a company's ability to expand volume and meet obligations. Since growth is usually one goal, the amount of working capital on this year's balance sheet should be greater than that of the previous year's. This is an efficiency, or turnover, ratio which benchmarks the rate at which current assets less current liabilities are used by the company in making sales. A low ratio can indicate a less profitable use of working capital in making sales. On the other hand, a very high ratio can indicate the company is wasting current assets which could be more efficiently deployed in production and in increasing sales and profits; or that the company my be undercapitalized, and thus vulnerable to liquidity problems in a period of weak business conditions.




3.5.3

76

Ratio Structure: Outlook

Using the methodology described in the introduction, the following table summarizes ratio structure benchmarks for firms involved in general building contractors and operative builders in Italy. All figures are current-year projections for companies operating in Italy based on latest financial results available. Ratios Italy Europe World Avg. _________________________________________________________________________________________________________

Profitability Return on Equity - Total (%) Reinvestment Rate - Total (%) Return on Assets (%) Return on Invested Capital (%) Cash Earnings Return On Equity (%) Cash Flow % Sales Cost Goods Sold / Sales (%) Gross Profit Margin (%) Operating Profit Margin (%) Operating Inc / Total Capital (%) Pretax Margin (%) Tax Rate (%) Net Margin (%) Total Asset Turnover (X) th USD Asset Utilization Inventory Turnover (%) Net Sales % Working Capital Capital Expenditure % Gross Fixed Assets Capital Expenditure % Total Assets Capital Expenditure % Total Sales Accumulated Depreciation % Gross Fixed Assets Leverage Total Debt % Total Capital Long Term Debt % Total Capital Equity % Total Capital Fixed Charge Coverage Ratio Dividend Payout (% Earnings) - Total Dividends Fixed Assets % Common Equity Working Capital % Total Capital Liquidity Quick Ratio Current Ratio Cash & Equivalents % Total Current Assets Receivables % Total Current Assets Inventories % Total Current Assets Accounts Receivables Days Inventories (# of Days) Held

4.56 2.76 1.45 6.08 28.46 4.36 90.22 3.49 -1.61 -2.47 1.31 22.03 0.67 1.09

9.39 7.27 4.51 8.79 25.18 5.37 80.82 12.08 3.48 9.15 3.86 34.26 2.72 1.11

10.96 9.44 6.13 9.28 17.19 7.60 48.15 13.85 7.21 13.23 6.08 19.61 5.20 0.88

2.70 16.92 11.95 4.05 4.84 66.53

17.77 -89.77 11.47 3.82 4.24 41.45

6.47 4.91 10.25 4.43 9.31 20.06

46.65 33.93 60.21 3.51 29.77 85.20 33.76

36.52 22.26 67.40 14.36 17.24 90.87 29.09

40.87 25.88 62.09 5.00 17.22 87.54 24.90

0.58 1.11 8.98 42.46 44.37 148.04 139.84

0.87 1.37 17.10 44.53 26.10 97.25 83.31

0.61 1.36 17.46 26.86 37.58 79.52 242.39

_________________________________________________________________________________________________________





3.5.4

77

Large Variances: Ratios

The following graphics summarize for general building contractors and operative builders the large ratio structure gaps between firms operating in Italy and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Cash Earnings Return On Equity (%) 30

28.46

25.18

25 17.19

20 15

11.27

10 5 0

Italy

Europe

World Average

Gap

Gap: Cost Goods Sold / Sales (%) 100

90.22

80.82

80 60

48.15

42.07

40 20 0

Italy

Europe

World Average

Gap

Gap: Gross Profit Margin (%) 12.08

15 10 5

13.85

3.49

0 -5 -10 -15

-10.36 Italy


Europe

World Average

Gap



78

Gap: Operating Inc / Total Capital (%) 13.23

15

9.15

10 5

2.47

0 -5 -10 -15

-10.76 Italy

Europe

World Average

Gap

Gap: Net Sales % Working Capital 89.77

100 80 60 40 20 0

16.92 4.91 Italy

Europe

World Average

12.01 Gap

Gap: Accumulated Depreciation % Gross Fixed Assets 80

66.53

60

46.47

41.45 40 20.06

20 0

Italy

Europe

World Average

Gap

Gap: Dividend Payout (% Earnings) - Total Dividends 30

29.77

25 17.24

20

17.22 12.55

15 10 5 0

Italy


Europe

World Average

Gap



79

Gap: Working Capital % Total Capital 40

33.76 29.09

30

24.9

20 8.86

10 0

Italy

Europe

World Average

Gap

Gap: Receivables % Total Current Assets 50

42.46

44.53

40 26.86

30

15.6

20 10 0

Italy

Europe

World Average

Gap

Gap: Accounts Receivables Days 150

148.04 97.25

100

79.52

68.52

50 0

Italy

Europe

World Average

Gap

Gap: Inventories (# of Days) Held 300 200

242.39 139.84 83.31

100 0 -100 -200

-102.55 Italy


Europe

World Average

Gap



3.5.5

80


We now consider the distribution of financial ratios for general building contractors and operative builders using ranks and percentiles. What percent of countries have a value lower or higher than Italy (what is the ratio's rank or percentile)? The table below answers this question with respect to financial ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key financial ratios are highlighted in additional tables. Ratios

Italy

Rank of Total

Percentile

4.56 2.76 1.45 6.08 28.46 4.36 90.22 3.49 -1.61 -2.47 1.31 22.03 0.67 1.09

39 of 53 38 of 53 45 of 53 38 of 53 18 of 53 32 of 53 5 of 49 48 of 49 52 of 53 51 of 53 46 of 53 30 of 47 46 of 53 22 of 53

26.42 28.30 15.09 28.30 66.04 39.62 89.80 2.04 1.89 3.77 13.21 36.17 13.21 58.49

2.70 16.92 11.95 4.05 4.84 66.53

47 of 53 11 of 53 22 of 46 24 of 51 20 of 51 2 of 48

11.32 79.25 52.17 52.94 60.78 95.83

46.65 33.93 60.21 3.51 29.77 85.20 33.76

22 of 53 18 of 53 37 of 53 32 of 53 13 of 42 24 of 53 19 of 53

58.49 66.04 30.19 39.62 69.05 54.72 64.15

0.58 1.11 8.98 42.46 44.37 148.04 139.84

36 of 53 37 of 53 44 of 53 25 of 53 12 of 53 10 of 53 20 of 53

32.08 30.19 16.98 52.83 77.36 81.13 62.26

_________________________________________________________________________________________________________

Profitability Return on Equity - Total (%) Reinvestment Rate - Total (%) Return on Assets (%) Return on Invested Capital (%) Cash Earnings Return On Equity (%) Cash Flow % Sales Cost Goods Sold / Sales (%) Gross Profit Margin (%) Operating Profit Margin (%) Operating Inc / Total Capital (%) Pretax Margin (%) Tax Rate (%) Net Margin (%) Total Asset Turnover (X) th USD Asset Utilization Inventory Turnover (%) Net Sales % Working Capital Capital Expenditure % Gross Fixed Assets Capital Expenditure % Total Assets Capital Expenditure % Total Sales Accumulated Depreciation % Gross Fixed Assets Leverage Total Debt % Total Capital Long Term Debt % Total Capital Equity % Total Capital Fixed Charge Coverage Ratio Dividend Payout (% Earnings) - Total Dividends Fixed Assets % Common Equity Working Capital % Total Capital Liquidity Quick Ratio Current Ratio Cash & Equivalents % Total Current Assets Receivables % Total Current Assets Inventories % Total Current Assets Accounts Receivables Days Inventories (# of Days) Held

_________________________________________________________________________________________________________





81

Gross Profit Margin (%) Countries

Value

Rank

Percentile

China Pakistan Turkey Mexico USA Thailand the United Kingdom Malaysia Australia New Zealand Israel Ireland Philippines Hong Kong Denmark Canada France Peru Spain Austria Taiwan Netherlands South Korea Greece Japan South Africa Germany Brazil Poland Chile Finland Singapore Norway Czech Republic Argentina Sweden Indonesia Switzerland Luxembourg Belgium Italy Portugal

32.27 31.72 26.99 26.91 22.87 20.30 19.29 18.93 18.30 17.31 17.26 17.12 17.06 16.96 16.87 15.60 15.34 15.00 14.86 14.75 14.27 13.67 13.52 13.20 13.06 12.54 11.82 11.36 10.82 10.81 10.53 10.08 9.10 9.07 8.45 6.51 5.56 5.17 4.47 3.61 3.49 2.77

1 2 3 4 6 7 8 9 10 11 12 13 14 16 17 19 20 21 22 23 25 26 27 28 29 30 31 32 34 35 36 37 38 39 40 41 42 44 45 47 48 49

97.96 95.92 93.88 91.84 87.76 85.71 83.67 81.63 79.59 77.55 75.51 73.47 71.43 67.35 65.31 61.22 59.18 57.14 55.10 53.06 48.98 46.94 44.90 42.86 40.82 38.78 36.73 34.69 30.61 28.57 26.53 24.49 22.45 20.41 18.37 16.33 14.29 10.20 8.16 4.08 2.04 0.00

Region

_________________________________________________________________________________________________________

Asia the Middle East the Middle East Latin America North America Asia Europe Asia Oceana Oceana the Middle East Europe Asia Asia Europe North America Europe Latin America Europe Europe Asia Europe Asia Europe Asia Africa Europe Latin America Europe Latin America Europe Asia Europe Europe Latin America Europe Asia Europe Europe Europe Europe Europe

_________________________________________________________________________________________________________





82

Gross Profit Margin (%) (General Building Contractors and Operative Builders) Countries in Europe

Value

Rank

Percentile

Romania Bosnia & Herzegovina Iceland Macedonia Serbia & Montenegro the United Kingdom Ireland Denmark Faroe Islands France Spain Austria San Marino Guernsey Jersey Slovenia Netherlands Greece Albania Estonia Malta Isle of Man Germany Poland Finland Monaco Moldova Andorra Kazakhstan Bulgaria Norway Czech Republic Latvia Croatia Sweden Switzerland Liechtenstein Luxembourg Belgium Vatican City Italy Portugal Cyprus

25.64 23.53 23.10 22.87 22.06 19.29 17.12 16.87 16.26 15.34 14.86 14.75 14.61 14.24 14.24 13.95 13.67 13.20 13.09 13.03 12.24 12.07 11.82 10.82 10.53 9.78 9.73 9.43 9.36 9.35 9.10 9.07 8.61 8.60 6.51 5.17 4.83 4.47 3.61 3.52 3.49 2.77 2.65

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43

97.67 95.35 93.02 90.70 88.37 86.05 83.72 81.40 79.07 76.74 74.42 72.09 69.77 67.44 65.12 62.79 60.47 58.14 55.81 53.49 51.16 48.84 46.51 44.19 41.86 39.53 37.21 34.88 32.56 30.23 27.91 25.58 23.26 20.93 18.60 16.28 13.95 11.63 9.30 6.98 4.65 2.33 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________





83

Pretax Margin (%) Countries

Value

Rank

Percentile

Turkey Mexico Greece Thailand Indonesia Australia Malaysia Peru China Pakistan the United Kingdom Netherlands USA Israel Ireland Taiwan South Korea New Zealand Hong Kong Spain India South Africa Brazil Denmark Chile Czech Republic Finland Austria Argentina Sweden Poland Canada France Portugal Norway Switzerland Singapore Luxembourg Belgium Italy Germany Japan Hungary Russia Philippines

18.94 18.89 15.27 15.16 14.26 13.12 12.27 11.20 10.55 10.37 8.50 8.38 7.98 7.41 7.35 6.12 4.86 4.10 4.01 3.90 3.63 3.49 3.16 3.10 3.01 2.91 2.89 2.75 2.71 2.51 2.30 2.17 2.14 1.66 1.65 1.57 1.38 1.36 1.35 1.31 -0.05 -0.16 -3.08 -3.42 -4.37

1 2 4 5 6 8 10 12 13 14 16 17 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 53

98.11 96.23 92.45 90.57 88.68 84.91 81.13 77.36 75.47 73.58 69.81 67.92 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 0.00

Region

_________________________________________________________________________________________________________

the Middle East Latin America Europe Asia Asia Oceana Asia Latin America Asia the Middle East Europe Europe North America the Middle East Europe Asia Asia Oceana Asia Europe Asia Africa Latin America Europe Latin America Europe Europe Europe Latin America Europe Europe North America Europe Europe Europe Europe Asia Europe Europe Europe Europe Asia Europe Europe Asia

_________________________________________________________________________________________________________





84

Pretax Margin (%) (General Building Contractors and Operative Builders) Countries in Europe

Value

Rank

Percentile

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Greece Malta Isle of Man Albania the United Kingdom Netherlands Iceland Ireland Estonia Spain Faroe Islands Slovenia Denmark Czech Republic Finland Latvia Croatia Austria San Marino Jersey Guernsey Sweden Poland France Moldova Kazakhstan Bulgaria Portugal Norway Cyprus Switzerland Liechtenstein Luxembourg Belgium Monaco Vatican City Italy Andorra Germany Georgia Gibraltar Ukraine Hungary Lithuania Russia Slovakia Belarus

18.00 16.51 16.05 15.48 15.27 14.15 13.96 9.78 8.50 8.38 8.06 7.35 4.68 3.90 3.85 3.66 3.10 2.91 2.89 2.77 2.76 2.75 2.72 2.65 2.65 2.51 2.30 2.14 2.07 1.99 1.99 1.66 1.65 1.59 1.57 1.47 1.36 1.35 1.34 1.32 1.31 1.29 -0.05 -2.59 -2.63 -2.77 -3.08 -3.42 -3.42 -3.49 -3.50

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________




85

Quick Ratio Countries

Value

Rank

Percentile

2.06 2.05 1.32 1.28 1.18 1.15 1.13 1.06 1.06 1.03 0.96 0.94 0.93 0.91 0.91 0.88 0.84 0.83 0.82 0.79 0.78 0.76 0.76 0.75 0.74 0.69 0.69 0.61 0.60 0.60 0.58 0.57 0.57 0.52 0.51 0.45 0.41 0.39 0.38 0.38 0.36 0.35 0.29 0.29 0.24

1 2 4 5 6 7 8 9 10 11 12 14 15 16 17 18 19 20 21 22 24 25 26 27 28 31 32 33 34 35 36 37 38 39 40 42 43 44 45 46 47 48 50 51 53

98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 54.72 52.83 50.94 49.06 47.17 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 20.75 18.87 16.98 15.09 13.21 11.32 9.43 5.66 3.77 0.00

Region

_________________________________________________________________________________________________________

Turkey Mexico Greece Malaysia Poland Canada France USA New Zealand Hong Kong Spain Thailand Russia South Korea Switzerland Denmark Philippines Hungary Czech Republic Germany Luxembourg Argentina Portugal Netherlands Norway Peru Sweden Singapore Belgium Japan Italy the United Kingdom Finland India Australia South Africa Brazil Chile China Pakistan Indonesia Austria Israel Ireland Taiwan

the Middle East Latin America Europe Asia Europe North America Europe North America Oceana Asia Europe Asia Europe Asia Europe Europe Asia Europe Europe Europe Europe Latin America Europe Europe Europe Latin America Europe Asia Europe Asia Europe Europe Europe Asia Oceana Africa Latin America Latin America Asia the Middle East Asia Europe the Middle East Europe Asia

_________________________________________________________________________________________________________





86

Quick Ratio (General Building Contractors and Operative Builders) Countries in Europe

Value

Rank

Percentile

1.96 1.80 1.74 1.68 1.32 1.22 1.21 1.18 1.13 1.07 1.06 1.02 1.02 0.99 0.96 0.95 0.95 0.93 0.93 0.91 0.90 0.88 0.88 0.85 0.83 0.82 0.79 0.78 0.78 0.78 0.76 0.75 0.75 0.74 0.72 0.71 0.70 0.69 0.61 0.60 0.59 0.59 0.58 0.57 0.57 0.57 0.35 0.34 0.34 0.34 0.29

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Greece Malta Isle of Man Poland France Iceland Moldova Kazakhstan Bulgaria Faroe Islands Spain Belarus Slovakia Russia Lithuania Switzerland Slovenia Estonia Denmark Liechtenstein Hungary Czech Republic Germany Luxembourg Latvia Croatia Portugal Netherlands Ukraine Norway Cyprus Gibraltar Georgia Sweden Albania Belgium Monaco Vatican City Italy Andorra the United Kingdom Finland Austria San Marino Jersey Guernsey Ireland

_________________________________________________________________________________________________________




87

Current Ratio Countries

Value

Rank

Percentile

3.59 2.71 2.58 2.57 2.06 2.00 1.78 1.77 1.75 1.70 1.64 1.52 1.49 1.48 1.47 1.47 1.45 1.45 1.45 1.43 1.40 1.37 1.27 1.26 1.24 1.23 1.20 1.15 1.15 1.13 1.11 1.11 1.10 1.09 1.08 1.08 1.06 1.06 1.05 1.03 1.00 0.95 0.92 0.90 0.50

1 2 3 4 8 9 10 11 12 13 14 15 16 18 19 20 21 22 23 24 25 26 27 28 29 30 32 33 34 35 36 37 38 39 40 41 43 44 45 46 47 48 49 50 51

98.11 96.23 94.34 92.45 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77

Region

_________________________________________________________________________________________________________

USA Thailand Turkey Mexico the United Kingdom Peru Israel Ireland Sweden Greece Malaysia Canada France India Poland Taiwan Germany South Korea Finland Switzerland New Zealand Hong Kong Philippines Denmark Luxembourg Australia Russia Portugal Belgium Czech Republic China Italy Netherlands Pakistan Spain Hungary Japan Argentina South Africa Norway Austria Brazil Singapore Chile Indonesia

North America Asia the Middle East Latin America Europe Latin America the Middle East Europe Europe Europe Asia North America Europe Asia Europe Asia Europe Asia Europe Europe Oceana Asia Asia Europe Europe Oceana Europe Europe Europe Europe Asia Europe Europe the Middle East Europe Europe Asia Latin America Africa Europe Europe Latin America Asia Latin America Asia

_________________________________________________________________________________________________________





88

Current Ratio (General Building Contractors and Operative Builders) Countries in Europe

Value

Rank

Percentile

3.63 2.45 2.25 2.19 2.11 2.06 1.77 1.75 1.75 1.70 1.57 1.55 1.49 1.47 1.45 1.45 1.43 1.40 1.33 1.32 1.31 1.28 1.27 1.26 1.24 1.23 1.22 1.20 1.20 1.15 1.15 1.13 1.12 1.11 1.10 1.10 1.08 1.08 1.08 1.08 1.03 1.01 1.00 0.99 0.97 0.97 0.97 0.92 0.91 0.89 0.86

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Iceland Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro the United Kingdom Ireland Sweden Albania Greece Malta Isle of Man France Poland Germany Finland Switzerland Estonia Liechtenstein Moldova Faroe Islands Kazakhstan Bulgaria Denmark Luxembourg Belarus Slovakia Russia Lithuania Portugal Belgium Czech Republic Vatican City Italy Netherlands Cyprus Spain Hungary Latvia Croatia Norway Slovenia Austria San Marino Ukraine Guernsey Jersey Gibraltar Georgia Monaco Andorra

_________________________________________________________________________________________________________




89

Inventories % Total Current Assets Countries

Value

Rank

Percentile

Israel Ireland Taiwan China USA the United Kingdom Pakistan Austria Finland Australia Belgium Italy Sweden India Thailand Germany Japan South Africa Brazil Chile South Korea Peru Denmark New Zealand Hong Kong Singapore Netherlands Canada Greece France Switzerland Czech Republic Indonesia Argentina Portugal Malaysia Luxembourg Norway Philippines Russia Hungary Poland Spain Turkey Mexico

78.24 77.59 64.66 59.77 59.36 58.94 58.77 55.95 54.56 48.18 45.92 44.37 42.59 42.22 38.87 38.10 35.53 34.72 31.46 29.93 29.58 28.72 27.74 26.76 26.22 25.76 25.55 23.06 22.97 22.68 22.67 22.45 22.00 20.91 20.36 19.71 19.60 19.34 16.54 13.87 12.46 11.82 9.40 7.55 7.53

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 20 22 23 24 25 26 27 28 29 30 31 32 33 34 35 37 39 40 41 42 43 47 48 49 50 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 30.19 26.42 24.53 22.64 20.75 18.87 11.32 9.43 7.55 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

the Middle East Europe Asia Asia North America Europe the Middle East Europe Europe Oceana Europe Europe Europe Asia Asia Europe Asia Africa Latin America Latin America Asia Latin America Europe Oceana Asia Asia Europe North America Europe Europe Europe Europe Asia Latin America Europe Asia Europe Europe Asia Europe Europe Europe Europe the Middle East Latin America

_________________________________________________________________________________________________________





90

Inventories % Total Current Assets (General Building Contractors and Operative Builders) Countries in Europe

Value

Rank

Percentile

Ireland Iceland the United Kingdom Austria San Marino Finland Jersey Guernsey Belgium Vatican City Italy Sweden Germany Estonia Denmark Netherlands Faroe Islands Albania Monaco Andorra Greece France Switzerland Czech Republic Latvia Croatia Malta Liechtenstein Isle of Man Portugal Luxembourg Cyprus Norway Belarus Slovakia Russia Lithuania Hungary Poland Ukraine Gibraltar Moldova Georgia Kazakhstan Bulgaria Spain Slovenia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro

77.59 59.97 58.94 55.95 55.41 54.56 54.03 54.03 45.92 44.73 44.37 42.59 38.10 28.52 27.74 25.55 25.14 25.07 24.98 24.09 22.97 22.68 22.67 22.45 21.31 21.30 21.29 21.15 21.01 20.36 19.60 19.49 19.34 14.16 14.13 13.87 13.84 12.46 11.82 11.21 10.66 10.63 10.49 10.23 10.21 9.40 8.82 7.17 6.58 6.40 6.17

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________




91

Accounts Receivables Days Countries

Value

Rank

Percentile

Philippines Spain Portugal Malaysia Belgium Canada Russia Italy France New Zealand Austria Hungary Hong Kong Greece South Korea China Pakistan Japan Singapore Poland Thailand Netherlands Sweden Denmark India Finland Peru Switzerland Norway Luxembourg Czech Republic Germany Argentina Australia USA the United Kingdom Indonesia Turkey Mexico South Africa Israel Ireland Brazil Chile Taiwan

234.96 182.53 170.39 160.94 153.22 149.54 149.15 148.04 147.06 134.66 134.07 134.00 131.95 111.38 105.11 101.77 100.06 94.93 89.70 87.87 85.41 83.86 72.55 70.24 67.91 64.48 63.11 61.72 59.22 53.38 51.82 50.86 48.27 48.27 46.48 43.81 41.85 40.44 40.33 20.43 20.05 19.88 18.51 17.62 16.57

1 3 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 28 30 31 32 33 34 35 36 37 38 40 41 42 43 44 48 49 50 51 52 53

98.11 94.34 92.45 90.57 88.68 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 16.98 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Asia Europe Europe Asia Europe North America Europe Europe Europe Oceana Europe Europe Asia Europe Asia Asia the Middle East Asia Asia Europe Asia Europe Europe Europe Asia Europe Latin America Europe Europe Europe Europe Europe Latin America Oceana North America Europe Asia the Middle East Latin America Africa the Middle East Europe Latin America Latin America Asia

_________________________________________________________________________________________________________





92

Accounts Receivables Days (General Building Contractors and Operative Builders) Countries in Europe

Value

Rank

Percentile

Spain Slovenia Portugal Cyprus Belgium Belarus Slovakia Vatican City Russia Lithuania Italy France Austria Hungary San Marino Guernsey Jersey Faroe Islands Ukraine Gibraltar Georgia Greece Malta Isle of Man Estonia Poland Monaco Andorra Netherlands Moldova Kazakhstan Bulgaria Sweden Denmark Finland Switzerland Norway Liechtenstein Albania Luxembourg Czech Republic Germany Latvia Croatia Iceland the United Kingdom Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Ireland

182.53 171.36 170.39 163.10 153.22 152.28 151.93 149.23 149.15 148.80 148.04 147.06 134.07 134.00 132.80 129.48 129.48 126.53 120.50 114.57 112.81 111.38 103.23 101.87 101.33 87.87 86.98 83.88 83.86 79.00 76.03 75.89 72.55 70.24 64.48 61.72 59.22 57.59 55.09 53.38 51.82 50.86 49.19 49.17 46.95 43.81 38.43 35.26 34.27 33.06 19.88

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________




93

Inventories (# of Days) Held Countries

Value

Rank

Percentile

China Pakistan Austria Israel Ireland Thailand the United Kingdom Taiwan Canada Peru France New Zealand Hong Kong USA Finland Sweden Belgium Italy Japan Germany Malaysia South Korea Australia India Philippines Portugal Greece South Africa Singapore Brazil Chile Netherlands Switzerland Indonesia Spain Denmark Russia Poland Norway Luxembourg Hungary Czech Republic Argentina Turkey Mexico

783.90 770.74 266.48 260.06 257.91 255.13 239.13 214.93 189.08 188.51 185.95 185.56 181.82 176.77 168.87 146.96 144.74 139.84 115.88 115.54 112.05 84.72 78.66 65.07 62.46 60.76 55.11 48.16 46.08 43.63 41.52 38.95 32.31 30.55 30.34 28.87 28.76 28.41 28.05 27.94 25.84 23.48 21.87 21.83 21.77

1 2 3 4 5 6 7 8 11 12 13 14 15 16 17 18 19 20 22 23 24 25 26 27 28 29 30 32 33 34 35 36 37 38 39 41 42 44 45 46 47 48 50 51 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 22.64 20.75 16.98 15.09 13.21 11.32 9.43 5.66 3.77 1.89

Region

_________________________________________________________________________________________________________

Asia the Middle East Europe the Middle East Europe Asia Europe Asia North America Latin America Europe Oceana Asia North America Europe Europe Europe Europe Asia Europe Asia Asia Oceana Asia Asia Europe Europe Africa Asia Latin America Latin America Europe Europe Asia Europe Europe Europe Europe Europe Europe Europe Europe Latin America the Middle East Latin America

_________________________________________________________________________________________________________





94

Inventories (# of Days) Held (General Building Contractors and Operative Builders) Countries in Europe

Value

Rank

Percentile

Austria San Marino Ireland Jersey Guernsey the United Kingdom France Iceland Faroe Islands Finland Albania Sweden Belgium Vatican City Italy Germany Estonia Portugal Cyprus Greece Malta Isle of Man Monaco Andorra Netherlands Switzerland Spain Liechtenstein Belarus Slovakia Denmark Russia Lithuania Slovenia Poland Norway Luxembourg Hungary Moldova Kazakhstan Bulgaria Czech Republic Ukraine Latvia Croatia Gibraltar Georgia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro

266.48 263.94 257.91 257.35 257.35 239.13 185.95 178.58 174.35 168.87 164.55 146.96 144.74 140.97 139.84 115.54 81.67 60.76 58.16 55.11 51.07 50.40 44.69 43.10 38.95 32.31 30.34 30.15 29.37 29.30 28.87 28.76 28.70 28.48 28.41 28.05 27.94 25.84 25.54 24.58 24.53 23.48 23.24 22.29 22.28 22.10 21.76 20.74 19.03 18.50 17.84

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________




3.6 3.6.1

95

PRODUCTIVITY IN ITALY: ASSET-LABOR RATIOS Overview

In this chapter, we consider numerous asset-labor ratios for general building contractors and operative builders in Italy benchmarked against global averages. Productivity and utilization ratios are presented for companies oprating in Italy and the average global benchmarks for general building contractors and operative builders. For ratios where there are large deviations between Italy and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain asset-labor ratios are highlighted across countries in the comparison group. In the case of asset-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. We then report the larger asset-labor ratio gaps for general building contractors and operative builders that Italy has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.




3.6.2

96

Asset to Labor: Outlook

The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for general building contractors and operative builders in Italy based on latest financial results available. Labor-asset Ratios ($k/employee) Italy Europe World Avg. _________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Other Investments Property Plant and Equipment - Net Property Plant and Equipment - Gross Buildings Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Property Plant & Equipment Under Capitalized Leases Accumulated Depreciation - Total Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Accumulated Depreciation - PP&E Under Capitalized Leases Other Assets Deferred Charges Tangible Other Assets Intangible Other Assets Total Assets

14.05 6.42 9.52 96.43 92.01 1.74 100.94 1.37 3.54 0.74 203.24 22.74 22.20 0.07 28.18 85.28 8.15 70.83 9.13 4.46 2.27 54.14 3.52 45.90 7.38 2.95 0.73 9.05 0.24 0.41 5.03 274.23

16.89 14.48 8.33 47.20 56.17 4.55 54.02 10.62 19.29 6.58 126.86 4.79 11.05 6.34 38.62 75.90 22.52 25.91 5.88 9.62 9.87 27.07 4.75 16.12 3.71 4.57 1.28 12.19 1.44 4.96 5.59 192.97

21.52 8.51 8.33 30.50 100.77 3.71 31.75 8.98 14.87 10.28 162.29 3.98 6.53 7.04 36.51 44.81 18.86 9.10 1.19 13.74 0.43 10.89 3.57 4.07 0.70 1.90 0.09 23.02 0.76 4.21 6.19 236.60

_________________________________________________________________________________________________________





3.6.3

97

Asset to Labor: International Gaps

The following graphics summarize for general building contractors and operative builders the large labor-asset gaps between firms operating in Italy and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Receivables (Net) ($k/employee) 100

96.43

80

65.93

60

47.2 30.5

40 20 0

Italy

Europe

World Average

Gap

Gap: Work in Process ($k/employee) 120

100.94

100 69.19

80

54.02

60

31.75

40 20 0

Italy

Europe

World Average

Gap

Gap: Current Assets - Total ($k/employee) 250

203.24

200

162.29 126.86

150 100

40.95

50 0

Italy


Europe

World Average

Gap



98

Gap: Long Term Receivables ($k/employee) 25

22.74 18.76

20 15 10

4.79

5 0

Italy

Europe

3.98

World Average

Gap

Gap: Investments in Unconsolidated Subsidiaries ($k/employee) 25

22.2

20

15.67

15

11.05

10

6.53

5 0

Italy

Europe

World Average

Gap

Gap: Property Plant and Equipment - Gross ($k/employee) 100

85.28

80

75.9

60

44.81

40.47

40 20 0

Italy

Europe

World Average

Gap

Gap: Machinery & Equipment ($k/employee) 80

70.83 61.73

60 40

25.91

20 0

9.1 Italy


Europe

World Average

Gap



99

Gap: Accumulated Depreciation - Total ($k/employee) 60

54.14

50

43.25

40

27.07

30 20

10.89

10 0

Italy

Europe

World Average

Gap

Gap: Accumulated Depreciation -Machinery & Equipment ($k/employee) 50

45.9

41.83

40 30 16.12

20 10 0

4.07 Italy

Europe

World Average

Gap

Gap: Other Assets ($k/employee) 30

23.02

20 10

9.05

12.19

0 -10 -20

-13.97 Italy

Europe

World Average

Gap

Gap: Total Assets ($k/employee) 300

274.23 236.6

250

192.97

200 150 100

37.63

50 0

Italy


Europe

World Average

Gap



3.6.4

100


We now consider the distribution of asset-labor ratios using ranks and percentiles across . What percent of countries have a productivity indicator lower or higher than Italy (what is the indicator's rank or percentile)? The table below answers this question with respect to asset-labor structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key asset-labor ratios are highlighted in additional tables. Asset Structure ($k/employee)

Italy

Rank of Total

Percentile

14.05 6.42 9.52 96.43 92.01 1.74 100.94 1.37 3.54 0.74 203.24 22.74 22.20 0.07 28.18 85.28 8.15 70.83 9.13 4.46 2.27 54.14 3.52 45.90 7.38 2.95 0.73 9.05 0.24 0.41 5.03 274.23

30 of 53 33 of 48 15 of 40 9 of 53 20 of 53 17 of 37 10 of 47 27 of 37 24 of 47 45 of 48 18 of 53 4 of 37 9 of 47 37 of 40 23 of 53 13 of 48 35 of 48 3 of 48 4 of 32 32 of 41 13 of 15 5 of 48 21 of 45 2 of 48 4 of 31 16 of 40 13 of 14 23 of 53 16 of 21 22 of 29 17 of 47 24 of 53

43.40 31.25 62.50 83.02 62.26 54.05 78.72 27.03 48.94 6.25 66.04 89.19 80.85 7.50 56.60 72.92 27.08 93.75 87.50 21.95 13.33 89.58 53.33 95.83 87.10 60.00 7.14 56.60 23.81 24.14 63.83 54.72

_________________________________________________________________________________________________________

Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Work in Process Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Other Investments Property Plant and Equipment - Net Property Plant and Equipment - Gross Buildings Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Property Plant & Equipment Under Capitalized Leases Accumulated Depreciation - Total Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Accumulated Depreciation - P P & E Under Capitalized Leases Other Assets Deferred Charges Tangible Other Assets Intangible Other Assets Total Assets

_________________________________________________________________________________________________________





101

Cash & Short Term Investments Countries

Value ($K/employee)

Rank

Percentile

119.33 70.88 54.06 53.16 40.69 40.00 39.93 35.88 31.33 31.07 30.55 30.46 29.25 29.21 29.13 25.89 25.12 21.11 20.79 20.69 19.94 17.29 16.14 15.36 14.95 14.55 14.05 13.31 12.88 11.20 9.38 8.74 8.51 8.34 7.99 6.72 6.15 5.53 5.17 2.40 2.17 2.07 2.01 1.20 1.08

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 17 18 19 20 21 22 24 25 27 28 29 30 31 32 34 35 36 37 38 39 40 41 42 44 46 47 48 49 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 67.92 66.04 64.15 62.26 60.38 58.49 54.72 52.83 49.06 47.17 45.28 43.40 41.51 39.62 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 16.98 13.21 11.32 9.43 7.55 1.89 0.00

Region

_________________________________________________________________________________________________________

South Korea Japan Canada France China Pakistan USA the United Kingdom Israel Ireland Malaysia Spain Greece Turkey Mexico Taiwan Germany New Zealand Thailand Hong Kong Norway Switzerland Sweden Peru Luxembourg Belgium Italy Singapore Australia Denmark Czech Republic Argentina Netherlands Poland Finland Portugal Austria Indonesia India South Africa Brazil Chile Philippines Russia Hungary

Asia Asia North America Europe Asia the Middle East North America Europe the Middle East Europe Asia Europe Europe the Middle East Latin America Asia Europe Oceana Asia Asia Europe Europe Europe Latin America Europe Europe Europe Asia Oceana Europe Europe Latin America Europe Europe Europe Europe Europe Asia Asia Africa Latin America Latin America Asia Europe Europe

_________________________________________________________________________________________________________





102

Cash & Short Term Investments (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

115.04 53.16 40.34 35.88 31.07 30.46 29.25 28.60 27.75 27.11 26.75 25.47 25.12 24.75 23.87 19.94 19.84 17.29 16.14 16.13 14.95 14.55 14.17 14.05 13.41 12.91 12.45 11.20 9.38 8.91 8.90 8.51 8.34 7.99 7.50 7.21 7.20 6.72 6.43 6.15 6.09 5.94 5.94 1.23 1.23 1.20 1.20 1.08 0.97 0.92 0.91

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Estonia France Iceland the United Kingdom Ireland Spain Greece Slovenia Romania Malta Isle of Man Bosnia & Herzegovina Germany Macedonia Serbia & Montenegro Norway Faroe Islands Switzerland Sweden Liechtenstein Luxembourg Belgium Vatican City Italy Albania Monaco Andorra Denmark Czech Republic Latvia Croatia Netherlands Poland Finland Moldova Kazakhstan Bulgaria Portugal Cyprus Austria San Marino Jersey Guernsey Belarus Slovakia Russia Lithuania Hungary Ukraine Gibraltar Georgia

_________________________________________________________________________________________________________




103

Receivables (Net) Countries

Value ($K/employee)

Rank

Percentile

266.35 187.18 174.07 136.99 134.72 114.28 113.48 99.81 96.43 83.75 58.57 54.35 46.75 44.75 42.39 41.63 40.58 40.21 39.94 39.40 35.10 33.35 33.16 33.14 29.64 28.52 25.72 25.40 25.29 24.60 24.40 23.66 21.07 20.33 15.90 15.29 11.33 9.45 9.42 8.40 7.54 4.08 3.70 3.52 3.39

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 33 35 36 37 39 41 42 43 46 47 48 49 50 51

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 37.74 33.96 32.08 30.19 26.42 22.64 20.75 18.87 13.21 11.32 9.43 7.55 5.66 3.77

Region

_________________________________________________________________________________________________________

South Korea Japan Spain Canada France Australia Portugal Belgium Italy Malaysia Austria USA the United Kingdom Singapore Sweden Norway Switzerland New Zealand Greece Hong Kong Luxembourg Germany Netherlands Finland Denmark Thailand China Czech Republic Pakistan Israel Ireland Argentina Peru Taiwan Poland Philippines India Turkey Mexico Russia Hungary South Africa Brazil Chile Indonesia

Asia Asia Europe North America Europe Oceana Europe Europe Europe Asia Europe North America Europe Asia Europe Europe Europe Oceana Europe Asia Europe Europe Europe Europe Europe Asia Asia Europe the Middle East the Middle East Europe Latin America Latin America Asia Europe Asia Asia the Middle East Latin America Europe Europe Africa Latin America Latin America Asia

_________________________________________________________________________________________________________





104

Receivables (Net) (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

256.77 174.07 163.41 134.72 113.48 108.63 99.81 97.21 96.43 58.57 58.01 56.56 56.56 54.90 46.75 43.39 42.39 41.84 41.63 40.58 39.94 37.87 37.78 37.01 36.53 35.10 33.35 33.16 33.14 29.64 25.40 24.40 24.10 24.09 18.39 15.90 14.30 13.76 13.73 8.98 8.57 8.55 8.40 8.38 8.24 8.01 7.72 7.54 6.78 6.45 6.35

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Estonia Spain Slovenia France Portugal Cyprus Belgium Vatican City Italy Austria San Marino Jersey Guernsey Iceland the United Kingdom Monaco Sweden Andorra Norway Switzerland Greece Liechtenstein Faroe Islands Malta Isle of Man Luxembourg Germany Netherlands Finland Denmark Czech Republic Ireland Latvia Croatia Albania Poland Moldova Kazakhstan Bulgaria Romania Belarus Slovakia Russia Lithuania Bosnia & Herzegovina Macedonia Serbia & Montenegro Hungary Ukraine Gibraltar Georgia

_________________________________________________________________________________________________________




105

Total Inventories Countries

Value ($K/employee)

Rank

Percentile

325.56 306.22 277.26 267.11 264.91 228.92 225.07 220.76 204.87 190.49 184.58 156.75 104.23 100.57 95.24 92.63 92.01 91.09 80.21 78.25 42.35 41.50 39.68 38.51 36.47 27.03 22.68 22.44 21.17 19.86 19.62 16.79 14.12 9.09 8.47 5.29 4.79 4.56 3.66 3.65 3.57 2.98 2.72 1.76 1.58

1 2 3 4 5 7 8 9 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 46 47 52 53

98.11 96.23 94.34 92.45 90.57 86.79 84.91 83.02 79.25 77.36 75.47 73.58 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 13.21 11.32 1.89 0.00

Region

_________________________________________________________________________________________________________

USA the United Kingdom Thailand Israel Ireland China Pakistan Taiwan Peru Japan South Korea Australia Austria Sweden Belgium Canada Italy France Finland Greece New Zealand Hong Kong Germany Malaysia Portugal Singapore Switzerland Netherlands Spain India Luxembourg Denmark Norway Czech Republic Argentina South Africa Brazil Chile Turkey Mexico Poland Philippines Indonesia Russia Hungary

North America Europe Asia the Middle East Europe Asia the Middle East Asia Latin America Asia Asia Oceana Europe Europe Europe North America Europe Europe Europe Europe Oceana Asia Europe Asia Europe Asia Europe Europe Europe Asia Europe Europe Europe Europe Latin America Africa Latin America Latin America the Middle East Latin America Europe Asia Asia Europe Europe

_________________________________________________________________________________________________________





106

Total Inventories (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

328.90 306.22 264.91 178.83 177.94 104.23 103.24 100.66 100.66 100.57 95.24 92.76 92.01 91.09 80.21 78.25 72.53 71.57 39.79 39.68 36.47 34.91 26.21 25.28 22.68 22.44 21.17 21.17 19.87 19.62 16.79 14.12 9.09 8.63 8.62 3.57 3.47 3.21 3.19 3.10 3.09 3.09 2.99 1.79 1.79 1.76 1.75 1.58 1.42 1.35 1.33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Iceland the United Kingdom Ireland Albania Estonia Austria San Marino Jersey Guernsey Sweden Belgium Vatican City Italy France Finland Greece Malta Isle of Man Faroe Islands Germany Portugal Cyprus Monaco Andorra Switzerland Netherlands Spain Liechtenstein Slovenia Luxembourg Denmark Norway Czech Republic Latvia Croatia Poland Romania Moldova Bosnia & Herzegovina Macedonia Kazakhstan Bulgaria Serbia & Montenegro Belarus Slovakia Russia Lithuania Hungary Ukraine Gibraltar Georgia

_________________________________________________________________________________________________________




107

Current Assets - Total Countries

Value ($K/employee)

Rank

Percentile

626.96 499.10 424.80 386.79 344.26 341.41 332.17 310.36 305.15 286.01 284.51 281.27 245.44 229.14 210.36 203.24 186.31 182.30 174.65 153.98 148.96 127.38 103.93 103.70 101.62 89.27 88.83 85.12 77.20 66.13 58.86 48.43 48.30 47.45 47.04 44.20 34.84 30.24 28.54 16.22 14.69 13.98 12.42 12.37 11.16

1 2 3 4 5 6 7 8 9 10 11 12 15 16 17 18 19 20 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 41 42 44 45 46 47 49 50 52

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 71.70 69.81 67.92 66.04 64.15 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 16.98 15.09 13.21 11.32 7.55 5.66 1.89

Region

_________________________________________________________________________________________________________

South Korea Japan USA the United Kingdom Israel Ireland Thailand China Pakistan Canada Taiwan France Peru Spain Belgium Italy Austria Portugal Sweden Malaysia Greece Finland Germany New Zealand Hong Kong Switzerland Singapore Norway Luxembourg Netherlands Denmark Turkey Mexico Czech Republic India Argentina Philippines Poland Australia South Africa Brazil Chile Russia Indonesia Hungary

Asia Asia North America Europe the Middle East Europe Asia Asia the Middle East North America Asia Europe Latin America Europe Europe Europe Europe Europe Europe Asia Europe Europe Europe Oceana Asia Europe Asia Europe Europe Europe Europe the Middle East Latin America Europe Asia Latin America Asia Europe Oceana Africa Latin America Latin America Europe Asia Europe

_________________________________________________________________________________________________________





108

Current Assets - Total (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

604.41 429.15 386.79 341.41 281.27 229.14 215.11 214.25 210.36 204.88 203.24 186.31 184.54 182.30 179.93 179.93 174.65 174.50 148.96 138.06 136.25 127.38 103.93 97.44 89.27 86.14 85.12 83.30 83.07 77.20 66.13 58.86 47.45 46.02 45.04 45.02 42.23 41.04 39.59 30.24 27.19 26.16 26.11 12.69 12.66 12.42 12.40 11.16 10.04 9.54 9.40

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Estonia Iceland the United Kingdom Ireland France Spain Slovenia Albania Belgium Vatican City Italy Austria San Marino Portugal Jersey Guernsey Sweden Cyprus Greece Malta Isle of Man Finland Germany Faroe Islands Switzerland Monaco Norway Liechtenstein Andorra Luxembourg Netherlands Denmark Czech Republic Romania Latvia Croatia Bosnia & Herzegovina Macedonia Serbia & Montenegro Poland Moldova Kazakhstan Bulgaria Belarus Slovakia Russia Lithuania Hungary Ukraine Gibraltar Georgia

_________________________________________________________________________________________________________




109

Property Plant and Equipment - Net Countries

Value ($K/employee)

Rank

Percentile

392.16 320.65 233.44 148.21 98.51 96.53 91.75 69.17 69.12 67.62 66.39 55.02 54.09 38.40 38.26 33.64 33.21 31.06 29.90 29.17 28.18 25.83 25.79 25.41 25.38 25.21 24.92 23.72 22.62 22.10 22.09 20.57 20.40 19.24 19.19 17.00 15.98 13.07 10.83 6.94 6.36 6.24 5.80 5.26 5.00

1 2 3 4 5 6 7 8 9 10 11 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 33 34 35 37 38 39 40 42 44 45 46 48 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 75.47 73.58 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 37.74 35.85 33.96 30.19 28.30 26.42 24.53 20.75 16.98 15.09 13.21 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Australia Netherlands South Korea Japan New Zealand Hong Kong Singapore Indonesia Malaysia Portugal Austria China Pakistan Switzerland Germany Denmark Luxembourg Norway Thailand Belgium Italy Canada Sweden France Philippines Greece the United Kingdom Czech Republic Spain Argentina Peru Israel Ireland Turkey Mexico Taiwan USA India Finland Russia Poland Hungary South Africa Brazil Chile

Oceana Europe Asia Asia Oceana Asia Asia Asia Asia Europe Europe Asia the Middle East Europe Europe Europe Europe Europe Asia Europe Europe North America Europe Europe Asia Europe Europe Europe Europe Latin America Latin America the Middle East Europe the Middle East Latin America Asia North America Asia Europe Europe Europe Europe Africa Latin America Latin America

_________________________________________________________________________________________________________





110

Property Plant and Equipment - Net (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

320.65 225.04 92.56 88.97 85.80 67.62 66.39 65.76 64.73 64.12 64.12 38.40 38.26 35.83 33.64 33.21 31.06 29.17 28.41 28.18 25.79 25.41 25.21 24.92 23.72 23.37 23.06 22.62 22.51 22.50 21.24 20.40 19.29 18.28 16.78 16.30 16.15 15.73 10.83 7.09 7.07 6.94 6.92 6.36 6.24 5.72 5.61 5.50 5.49 5.33 5.25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Netherlands Estonia Faroe Islands Monaco Andorra Portugal Austria San Marino Cyprus Jersey Guernsey Switzerland Germany Liechtenstein Denmark Luxembourg Norway Belgium Vatican City Italy Sweden France Greece the United Kingdom Czech Republic Malta Isle of Man Spain Latvia Croatia Slovenia Ireland Albania Romania Bosnia & Herzegovina Macedonia Iceland Serbia & Montenegro Finland Belarus Slovakia Russia Lithuania Poland Hungary Moldova Ukraine Kazakhstan Bulgaria Gibraltar Georgia

_________________________________________________________________________________________________________




111

Accumulated Depreciation - Total Countries

Value ($K/employee)

Rank

Percentile

70.15 61.81 58.64 56.04 54.14 47.53 37.42 34.60 30.92 27.78 26.74 26.47 24.71 24.65 24.30 23.77 20.84 20.79 20.53 20.49 20.12 17.09 16.75 16.58 15.07 13.27 12.75 12.06 11.33 11.23 10.39 9.26 7.85 6.62 6.38 6.27 6.00 5.71 5.54 5.50 4.58

1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 20 21 22 23 24 26 27 28 30 31 32 33 34 35 36 37 38 40 41 42 43 44 46 47 48

97.92 95.83 93.75 91.67 89.58 87.50 85.42 83.33 81.25 77.08 75.00 72.92 70.83 68.75 66.67 64.58 58.33 56.25 54.17 52.08 50.00 45.83 43.75 41.67 37.50 35.42 33.33 31.25 29.17 27.08 25.00 22.92 20.83 16.67 14.58 12.50 10.42 8.33 4.17 2.08 0.00

Region

_________________________________________________________________________________________________________

Portugal Japan South Korea Belgium Italy Germany Austria Philippines Switzerland Thailand Luxembourg Singapore Canada Netherlands France Norway Turkey Mexico Peru Spain Denmark New Zealand Hong Kong Malaysia Sweden Finland Greece Czech Republic USA Argentina the United Kingdom Australia Indonesia South Africa China Pakistan Brazil Chile Israel Ireland Taiwan

Europe Asia Asia Europe Europe Europe Europe Asia Europe Asia Europe Asia North America Europe Europe Europe the Middle East Latin America Latin America Europe Europe Oceana Asia Asia Europe Europe Europe Europe North America Latin America Europe Oceana Asia Africa Asia the Middle East Latin America Latin America the Middle East Europe Asia

_________________________________________________________________________________________________________





112

Accumulated Depreciation - Total (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

70.15 67.15 56.53 56.04 54.58 54.14 47.53 37.42 37.06 36.14 36.14 30.92 28.85 26.74 25.67 24.75 24.65 24.30 23.77 20.49 20.12 19.80 19.23 18.17 17.92 17.66 17.04 16.06 15.07 13.27 12.75 12.06 11.82 11.66 11.45 11.44 11.44 10.39 5.50

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

97.44 94.87 92.31 89.74 87.18 84.62 82.05 79.49 76.92 74.36 71.79 69.23 66.67 64.10 61.54 58.97 56.41 53.85 51.28 48.72 46.15 43.59 41.03 38.46 35.90 33.33 30.77 28.21 25.64 23.08 20.51 17.95 15.38 12.82 10.26 7.69 5.13 2.56 0.00

_________________________________________________________________________________________________________

Portugal Cyprus Estonia Belgium Vatican City Italy Germany Austria San Marino Jersey Guernsey Switzerland Liechtenstein Luxembourg Monaco Andorra Netherlands France Norway Spain Denmark Romania Slovenia Bosnia & Herzegovina Albania Macedonia Serbia & Montenegro Faroe Islands Sweden Finland Greece Czech Republic Malta Isle of Man Iceland Latvia Croatia the United Kingdom Ireland

_________________________________________________________________________________________________________





113

Intangible Other Assets Countries

Value ($K/employee)

Rank

Percentile

62.86 34.08 33.21 22.62 22.51 22.32 22.25 18.60 14.60 13.13 12.61 9.09 8.93 8.61 7.24 5.20 5.03 4.70 4.36 4.35 4.22 4.08 2.67 2.16 2.08 2.00 1.97 1.95 1.86 1.41 1.40 1.21 1.04 0.80 0.77 0.75 0.37 0.16 0.11 0.10 -0.88 -0.94

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 32 33 35 36 37 38 39 40 42 44 45 46 47

97.87 95.74 93.62 91.49 89.36 87.23 85.11 82.98 80.85 78.72 76.60 74.47 72.34 70.21 68.09 65.96 63.83 61.70 59.57 57.45 55.32 53.19 51.06 48.94 46.81 44.68 42.55 40.43 36.17 31.91 29.79 25.53 23.40 21.28 19.15 17.02 14.89 10.64 6.38 4.26 2.13 0.00

Region

_________________________________________________________________________________________________________

South Korea USA Australia Canada Israel Ireland France Taiwan Portugal Finland Greece China Pakistan the United Kingdom Norway Belgium Italy Spain Malaysia Sweden Netherlands Japan Germany South Africa Denmark Indonesia Singapore Brazil Chile Turkey Mexico Switzerland Luxembourg Austria New Zealand Hong Kong Philippines Poland Russia Hungary Argentina Czech Republic

Asia North America Oceana North America the Middle East Europe Europe Asia Europe Europe Europe Asia the Middle East Europe Europe Europe Europe Europe Asia Europe Europe Asia Europe Africa Europe Asia Asia Latin America Latin America the Middle East Latin America Europe Europe Europe Oceana Asia Asia Europe Europe Europe Latin America Europe

_________________________________________________________________________________________________________





114

Intangible Other Assets (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

60.60 34.43 22.32 22.25 14.60 13.98 13.13 12.61 11.69 11.53 8.61 7.24 5.20 5.07 5.03 4.70 4.41 4.35 4.22 2.67 2.08 1.91 1.84 1.34 1.23 1.21 1.19 1.15 1.13 1.04 0.80 0.79 0.77 0.77 0.72 0.16 0.15 0.14 0.14 0.11 0.11 0.11 0.11 0.10 0.09 0.08 0.08 -0.89 -0.89 -0.94

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

98.00 96.00 94.00 92.00 90.00 88.00 86.00 84.00 82.00 80.00 78.00 76.00 74.00 72.00 70.00 68.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 48.00 46.00 44.00 42.00 40.00 38.00 36.00 34.00 32.00 30.00 28.00 26.00 24.00 22.00 20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00

_________________________________________________________________________________________________________

Estonia Iceland Ireland France Portugal Cyprus Finland Greece Malta Isle of Man the United Kingdom Norway Belgium Vatican City Italy Spain Slovenia Sweden Netherlands Germany Denmark Monaco Andorra Romania Bosnia & Herzegovina Switzerland Macedonia Serbia & Montenegro Liechtenstein Luxembourg Austria San Marino Guernsey Jersey Faroe Islands Poland Moldova Kazakhstan Bulgaria Belarus Slovakia Russia Lithuania Hungary Ukraine Gibraltar Georgia Croatia Latvia Czech Republic

_________________________________________________________________________________________________________





3.7 3.7.1

115

PRODUCTIVITY IN ITALY: LIABILITY-LABOR RATIOS Overview

In this chapter we consider the liability-labor ratios of companies operating in Italy benchmarked against global averages for general building contractors and operative builders. For ratios where there are large deviations between Italy and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of productivity ratios is presented in the form of ranks and percentiles. Certain key liability-labor ratios are highlighted for general building contractors and operative builders across countries in the comparison group. Definitions of liability statement terms are given in Chapter 3. In the case of liability-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. I then report the larger liability-labor ratio gaps for general building contractors and operative builders that Italy has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.




3.7.2

116

Liability to Labor: Outlook

The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for general building contractors and operative builders in Italy based on latest financial results available. Labor-liability Ratios ($k/employee) Italy Europe World Avg. _________________________________________________________________________________________________________


37.39 20.87 4.31 3.02 130.98 184.32 24.82 24.30 0.51 7.96 0.98 1.74 18.25 234.91 0.09 1.51 37.73 23.11 5.42 0.02 12.09 4.53 0.01 0.35 274.23

38.62 24.40 3.45 5.17 41.03 91.23 25.95 25.81 0.14 7.89 1.04 3.53 6.43 131.20 0.56 3.34 57.72 18.29 29.67 4.51 11.84 8.56 19.91 -0.23 192.97

25.80 40.17 1.15 2.45 48.63 114.34 34.47 34.16 0.32 2.11 0.19 0.31 8.95 159.68 0.11 4.12 72.49 17.99 23.09 0.94 9.75 3.26 21.19 -0.14 236.60

_________________________________________________________________________________________________________





3.7.3

117

Liability and Equity to Labor: International Gaps

The following graphics summarize for general building contractors and operative builders the large labor-liability gaps between firms operating in Italy and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Accounts Payable ($k/employee) 40

37.39

38.62 25.8

30 20

11.59

10 0

Italy

Europe

World Average

Gap

Gap: Short Term Debt & Current Portion of Long Term Debt ($k/employee) 50 40 30 20 10 0 -10 -20

40.17 20.87

Italy

24.4

Europe

World Average

-19.3 Gap

Gap: Other Current Liabilities ($k/employee) 150

130.98

100

82.35 41.03

50 0

Italy


Europe

48.63

World Average

Gap



118

Gap: Current Liabilities - Total ($k/employee) 200

184.32

150

114.34 91.23

100

69.98

50 0

Italy

Europe

World Average

Gap

Gap: Long Term Debt ($k/employee) 40 30

34.47 24.82

25.95

20 10 0 -10

Italy

Europe

-9.65 Gap

World Average

Gap: Long Term Debt Excluding Capitalized Leases ($k/employee) 40 30

34.16 24.3

25.81

20 10 0 -10

Italy

Europe

-9.86 Gap

World Average

Gap: Total Liabilities ($k/employee) 250

234.91

200

159.68 131.2

150

75.23

100 50 0

Italy


Europe

World Average

Gap



119

Gap: Common Equity ($k/employee) 72.49

80 60 40

57.72 37.73

20 0 -20 -40

-34.76 Italy

Europe

World Average

Gap

Gap: Capital Surplus ($k/employee) 29.67

30

23.09

20 10

5.42

0 -10 -20

-17.67 Italy

Europe

World Average

Gap

Gap: Retained Earnings ($k/employee) 30

19.91

20 10 0

21.19

0.01

-10 -20 -30

-21.18 Italy

Europe

World Average

Gap

Gap: Total Liabilities & Shareholders Equity ($k/employee) 300

274.23 236.6

250

192.97

200 150 100

37.63

50 0

Italy


Europe

World Average

Gap



3.7.4

120


We now consider the distribution of liability-labor ratios using ranks and percentiles across . What percent of countries have a value lower or higher than Italy (what is the indicator's rank or percentile)? The table below answers this question with respect to liability-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key liability-labor ratios are highlighted in additional tables. Liability Structure ($k/employee)

Italy

Rank of Total

Percentile

37.39 20.87 4.31 3.02 130.98 184.32 24.82 24.30 0.51 7.96 0.98 1.74 18.25 234.91 0.09 1.51 37.73 23.11 5.42 0.02 12.09 4.53 0.01 0.35 274.23

18 of 47 27 of 52 9 of 22 20 of 45 3 of 52 10 of 53 28 of 53 28 of 53 11 of 24 9 of 32 12 of 24 13 of 39 5 of 49 15 of 53 21 of 25 29 of 46 33 of 53 15 of 48 29 of 37 28 of 28 13 of 46 13 of 29 44 of 51 3 of 32 24 of 53

61.70 48.08 59.09 55.56 94.23 81.13 47.17 47.17 54.17 71.88 50.00 66.67 89.80 71.70 16.00 36.96 37.74 68.75 21.62 0.00 71.74 55.17 13.73 90.63 54.72

_________________________________________________________________________________________________________


_________________________________________________________________________________________________________





121

Accounts Payable Countries

Value ($K/employee)

Rank

Percentile

186.12 148.39 132.04 129.85 122.06 71.85 62.23 55.62 48.61 48.20 44.72 42.36 40.86 40.44 40.17 40.17 38.70 37.39 30.97 28.85 28.10 26.92 25.21 24.70 21.08 19.94 16.97 15.92 15.53 14.67 12.82 11.77 9.14 7.60 7.31 6.88 6.55 6.14 6.13 4.71

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 32 34 35 37 38 39 40 42 43 45

97.87 95.74 93.62 91.49 89.36 87.23 85.11 82.98 80.85 78.72 76.60 74.47 72.34 70.21 68.09 65.96 63.83 61.70 59.57 57.45 55.32 53.19 51.06 48.94 46.81 44.68 42.55 40.43 38.30 36.17 31.91 27.66 25.53 21.28 19.15 17.02 14.89 10.64 8.51 4.26

Region

_________________________________________________________________________________________________________

Japan Spain Canada France South Korea the United Kingdom Portugal USA Israel Ireland Singapore Malaysia China Norway Pakistan Taiwan Belgium Italy Czech Republic Argentina Germany Austria New Zealand Hong Kong Netherlands Sweden Switzerland Thailand Greece Luxembourg Denmark Peru Finland South Africa Philippines Brazil Chile Turkey Mexico Indonesia

Asia Europe North America Europe Asia Europe Europe North America the Middle East Europe Asia Asia Asia Europe the Middle East Asia Europe Europe Europe Latin America Europe Europe Oceana Asia Europe Europe Europe Asia Europe Europe Europe Latin America Europe Africa Asia Latin America Latin America the Middle East Latin America Asia

_________________________________________________________________________________________________________





122

Accounts Payable (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

148.39 139.31 129.85 117.67 71.85 62.23 59.57 56.19 48.20 43.36 41.82 40.44 38.70 37.70 37.39 30.97 29.39 29.38 28.10 26.92 26.67 26.00 26.00 23.68 21.08 19.94 16.97 15.83 15.53 14.67 14.40 14.21 12.82 10.27 9.14 5.84 5.36 5.21 5.02

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

97.44 94.87 92.31 89.74 87.18 84.62 82.05 79.49 76.92 74.36 71.79 69.23 66.67 64.10 61.54 58.97 56.41 53.85 51.28 48.72 46.15 43.59 41.03 38.46 35.90 33.33 30.77 28.21 25.64 23.08 20.51 17.95 15.38 12.82 10.26 7.69 5.13 2.56 0.00

_________________________________________________________________________________________________________

Spain Slovenia France Estonia the United Kingdom Portugal Cyprus Iceland Ireland Monaco Andorra Norway Belgium Vatican City Italy Czech Republic Latvia Croatia Germany Austria San Marino Guernsey Jersey Faroe Islands Netherlands Sweden Switzerland Liechtenstein Greece Luxembourg Malta Isle of Man Denmark Albania Finland Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro

_________________________________________________________________________________________________________





123

Current Liabilities - Total Countries

Value ($K/employee)

Rank

Percentile

496.55 443.15 263.19 258.77 212.04 194.95 193.34 190.77 186.44 184.32 174.29 171.40 164.21 161.11 159.79 128.86 96.78 93.72 93.39 90.76 89.14 86.87 83.01 75.42 74.31 72.81 68.42 61.34 60.47 59.17 46.29 41.24 38.42 31.79 28.50 24.78 23.22 20.52 18.78 18.73 15.58 14.12 13.43 10.16 9.12

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 28 30 31 32 33 35 36 37 38 39 42 43 44 45 48 49 50 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 47.17 43.40 41.51 39.62 37.74 33.96 32.08 30.19 28.30 26.42 20.75 18.87 16.98 15.09 9.43 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

Japan South Korea China Pakistan Spain Israel Ireland Belgium Austria Italy Canada France the United Kingdom Taiwan Portugal USA Singapore Greece Sweden Malaysia Finland Norway Thailand Germany New Zealand Hong Kong Switzerland Peru Netherlands Luxembourg Denmark Czech Republic Argentina India Philippines Indonesia Australia Poland Turkey Mexico South Africa Brazil Chile Russia Hungary

Asia Asia Asia the Middle East Europe the Middle East Europe Europe Europe Europe North America Europe Europe Asia Europe North America Asia Europe Europe Asia Europe Europe Asia Europe Oceana Asia Europe Latin America Europe Europe Europe Europe Latin America Asia Asia Asia Oceana Europe the Middle East Latin America Africa Latin America Latin America Europe Europe

_________________________________________________________________________________________________________





124

Current Liabilities - Total (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

427.21 212.04 199.06 193.34 190.77 186.44 185.81 184.67 184.32 180.05 180.05 171.40 164.21 159.79 152.96 130.19 93.84 93.72 93.39 90.50 89.14 86.87 86.86 85.72 75.42 69.82 68.42 63.85 60.47 59.17 53.54 46.29 41.24 39.14 39.13 20.52 18.45 17.84 17.75 17.72 16.37 15.91 15.35 10.37 10.35 10.16 10.13 9.12 8.21 7.80 7.68

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Estonia Spain Slovenia Ireland Belgium Austria Vatican City San Marino Italy Jersey Guernsey France the United Kingdom Portugal Cyprus Iceland Monaco Greece Sweden Andorra Finland Norway Malta Isle of Man Germany Faroe Islands Switzerland Liechtenstein Netherlands Luxembourg Albania Denmark Czech Republic Latvia Croatia Poland Moldova Romania Kazakhstan Bulgaria Bosnia & Herzegovina Macedonia Serbia & Montenegro Belarus Slovakia Russia Lithuania Hungary Ukraine Gibraltar Georgia

_________________________________________________________________________________________________________




125

Long Term Debt Countries

Value ($K/employee)

Rank

Percentile

172.06 163.33 146.41 132.79 130.59 111.74 105.79 83.29 82.60 79.95 72.73 68.83 59.08 48.27 47.53 46.16 45.23 40.70 40.33 39.12 38.47 26.75 25.69 24.82 21.39 18.67 15.41 13.25 12.11 12.07 10.29 9.87 9.70 9.38 8.55 8.39 7.96 4.91 2.80 2.51 1.49 1.35 1.28 0.35 0.03

1 2 3 4 5 6 7 8 9 10 11 12 15 16 17 18 19 21 22 23 24 25 26 28 29 31 32 33 34 35 37 38 39 40 41 42 44 45 47 48 49 50 51 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 71.70 69.81 67.92 66.04 64.15 60.38 58.49 56.60 54.72 52.83 50.94 47.17 45.28 41.51 39.62 37.74 35.85 33.96 30.19 28.30 26.42 24.53 22.64 20.75 16.98 15.09 11.32 9.43 7.55 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Australia USA South Korea Canada France Netherlands Japan Israel Ireland Thailand the United Kingdom Taiwan Peru Sweden Singapore New Zealand Hong Kong Portugal Malaysia China Pakistan Indonesia Belgium Italy Finland Norway Denmark Germany Turkey Mexico India Philippines Switzerland Austria Czech Republic Luxembourg Argentina Spain Russia Hungary South Africa Brazil Chile Poland Greece

Oceana North America Asia North America Europe Europe Asia the Middle East Europe Asia Europe Asia Latin America Europe Asia Oceana Asia Europe Asia Asia the Middle East Asia Europe Europe Europe Europe Europe Europe the Middle East Latin America Asia Asia Europe Europe Europe Europe Latin America Europe Europe Europe Africa Latin America Latin America Europe Europe

_________________________________________________________________________________________________________





126

Long Term Debt (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

165.00 141.15 130.59 111.74 82.60 72.73 51.57 48.27 46.09 44.45 43.37 40.70 38.96 25.69 25.02 24.82 21.39 18.67 15.41 13.25 11.50 10.55 10.26 9.90 9.70 9.38 9.29 9.06 9.06 9.05 8.55 8.39 8.11 8.11 4.91 4.60 2.86 2.85 2.80 2.79 2.51 2.26 2.15 2.12 0.35 0.31 0.30 0.30 0.03 0.03 0.03

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Iceland Estonia France Netherlands Ireland the United Kingdom Albania Sweden Monaco Andorra Faroe Islands Portugal Cyprus Belgium Vatican City Italy Finland Norway Denmark Germany Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Switzerland Austria San Marino Guernsey Jersey Liechtenstein Czech Republic Luxembourg Latvia Croatia Spain Slovenia Belarus Slovakia Russia Lithuania Hungary Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Greece Malta Isle of Man

_________________________________________________________________________________________________________




127

Total Liabilities Countries

Value ($K/employee)

Rank

Percentile

730.47 634.60 343.76 331.13 325.64 314.58 309.30 300.83 285.23 282.87 256.97 244.44 243.14 235.73 234.91 230.32 225.06 222.14 166.19 157.80 145.63 136.79 126.25 123.71 122.80 120.36 112.28 107.21 95.50 91.05 78.74 69.23 68.49 52.74 49.13 45.13 45.01 43.02 42.49 20.79 17.48 15.83 15.07 14.00 12.58

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 25 26 27 28 29 30 31 32 34 35 36 38 40 41 42 43 44 47 48 49 50 52 53

98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 56.60 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 35.85 33.96 32.08 28.30 24.53 22.64 20.75 18.87 16.98 11.32 9.43 7.55 5.66 1.89 0.00

Region

_________________________________________________________________________________________________________

South Korea Japan Australia Canada France China Pakistan USA Israel Ireland the United Kingdom Netherlands Belgium Taiwan Italy Austria Portugal Spain Thailand Sweden Singapore Malaysia New Zealand Hong Kong Peru Germany Finland Norway Greece Switzerland Luxembourg Denmark Indonesia Czech Republic Argentina Turkey Mexico Philippines India Poland South Africa Brazil Chile Russia Hungary

Asia Asia Oceana North America Europe Asia the Middle East North America the Middle East Europe Europe Europe Europe Asia Europe Europe Europe Europe Asia Europe Asia Asia Oceana Asia Latin America Europe Europe Europe Europe Europe Europe Europe Asia Europe Latin America the Middle East Latin America Asia Asia Europe Africa Latin America Latin America Europe Europe

_________________________________________________________________________________________________________





128

Total Liabilities (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

704.20 325.64 303.92 282.87 256.97 244.44 243.14 236.81 234.91 230.32 228.13 225.06 222.43 222.43 222.14 215.44 208.54 157.80 141.22 136.19 120.36 118.63 112.28 107.21 107.19 95.50 91.05 88.51 87.35 84.96 78.74 69.23 52.74 50.06 50.04 42.88 39.35 38.24 36.89 20.79 18.70 17.99 17.96 14.30 14.26 14.00 13.97 12.58 11.31 10.76 10.59

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Estonia France Iceland Ireland the United Kingdom Netherlands Belgium Vatican City Italy Austria San Marino Portugal Jersey Guernsey Spain Cyprus Slovenia Sweden Monaco Andorra Germany Faroe Islands Finland Norway Albania Greece Switzerland Malta Isle of Man Liechtenstein Luxembourg Denmark Czech Republic Latvia Croatia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Poland Moldova Kazakhstan Bulgaria Belarus Slovakia Russia Lithuania Hungary Ukraine Gibraltar Georgia

_________________________________________________________________________________________________________




129

Common Equity Countries

Value ($K/employee)

Rank

Percentile

373.52 329.96 299.94 227.89 221.63 207.48 152.38 138.46 134.41 131.70 108.44 108.13 107.24 106.62 102.67 102.04 89.36 70.47 70.28 66.70 64.44 53.57 53.46 52.68 51.93 44.11 39.05 38.15 37.73 35.48 32.31 30.57 29.89 25.76 20.91 18.67 18.30 17.78 17.05 12.44 7.34 6.65 6.33 6.26 5.63

1 2 3 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 25 26 27 28 29 30 31 32 33 34 35 36 37 39 40 42 43 44 45 47 48 49 51 52 53

98.11 96.23 94.34 88.68 86.79 84.91 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 26.42 24.53 20.75 18.87 16.98 15.09 11.32 9.43 7.55 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

Australia South Korea Thailand the United Kingdom Peru USA Netherlands Malaysia New Zealand Hong Kong China Israel Ireland Pakistan Greece Japan Taiwan Turkey Mexico Singapore Portugal Canada Sweden France Spain Switzerland Belgium Luxembourg Italy Germany Denmark Philippines Austria Finland Indonesia Norway Czech Republic India Argentina Poland South Africa Brazil Chile Russia Hungary

Oceana Asia Asia Europe Latin America North America Europe Asia Oceana Asia Asia the Middle East Europe the Middle East Europe Asia Asia the Middle East Latin America Asia Europe North America Europe Europe Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Asia Europe Europe Asia Latin America Europe Africa Latin America Latin America Europe Europe

_________________________________________________________________________________________________________





130

Common Equity (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

318.09 227.89 209.60 193.46 152.38 126.29 107.24 102.67 95.15 93.90 66.95 64.68 64.44 62.38 61.69 61.44 59.72 57.60 53.46 52.68 51.93 48.75 44.11 41.16 39.05 38.15 38.03 37.73 35.48 32.31 29.89 29.60 28.86 28.86 25.76 18.67 18.30 17.37 17.36 12.44 11.19 10.77 10.75 6.40 6.38 6.26 6.25 5.63 5.06 4.81 4.74

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Estonia the United Kingdom Iceland Albania Netherlands Faroe Islands Ireland Greece Malta Isle of Man Romania Monaco Portugal Andorra Cyprus Bosnia & Herzegovina Macedonia Serbia & Montenegro Sweden France Spain Slovenia Switzerland Liechtenstein Belgium Luxembourg Vatican City Italy Germany Denmark Austria San Marino Guernsey Jersey Finland Norway Czech Republic Latvia Croatia Poland Moldova Kazakhstan Bulgaria Belarus Slovakia Russia Lithuania Hungary Ukraine Gibraltar Georgia

_________________________________________________________________________________________________________




131

Retained Earnings Countries

Value ($K/employee)

Rank

Percentile

152.52 134.65 130.94 129.84 112.70 97.45 74.32 73.70 64.98 64.80 61.42 53.71 40.82 40.00 31.23 17.23 15.38 13.65 12.37 12.09 10.52 10.35 7.35 7.21 6.89 6.77 6.55 6.10 4.98 3.78 3.67 3.27 0.64 0.58 0.15 0.13 0.13 0.01 0.01 0.01 -3.57 -5.70 -6.37

1 2 3 4 7 8 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 43 44 45 47 49 51

98.04 96.08 94.12 92.16 86.27 84.31 80.39 78.43 76.47 74.51 72.55 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 7.84 3.92 0.00

Region

_________________________________________________________________________________________________________

Thailand the United Kingdom USA South Korea Peru Australia Israel Ireland Turkey Mexico Taiwan Malaysia New Zealand Hong Kong Japan Finland Denmark Germany Norway Singapore Canada France Sweden Spain China Pakistan Czech Republic Argentina Austria Switzerland Greece Luxembourg Russia Hungary South Africa Brazil Chile Belgium Italy Poland Philippines Portugal Indonesia

Asia Europe North America Asia Latin America Oceana the Middle East Europe the Middle East Latin America Asia Asia Oceana Asia Asia Europe Europe Europe Europe Asia North America Europe Europe Europe Asia the Middle East Europe Latin America Europe Europe Europe Europe Europe Europe Africa Latin America Latin America Europe Europe Europe Asia Europe Asia

_________________________________________________________________________________________________________





132

Retained Earnings (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

134.65 132.28 125.17 98.38 73.70 61.74 56.66 55.06 53.12 38.36 17.23 15.38 13.65 12.37 11.73 11.31 10.35 7.35 7.21 6.77 6.55 6.21 6.21 4.98 4.93 4.81 4.81 3.78 3.67 3.53 3.40 3.35 3.27 0.66 0.66 0.64 0.64 0.58 0.52 0.50 0.49 0.01 0.01 0.01 0.01 0.01 0.01 0.01 -5.46 -5.70

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

98.00 96.00 94.00 92.00 90.00 88.00 86.00 84.00 82.00 80.00 78.00 76.00 74.00 72.00 70.00 68.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 48.00 46.00 44.00 42.00 40.00 38.00 36.00 34.00 32.00 30.00 28.00 26.00 24.00 22.00 20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00

_________________________________________________________________________________________________________

the United Kingdom Iceland Estonia Albania Ireland Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Faroe Islands Finland Denmark Germany Norway Monaco Andorra France Sweden Spain Slovenia Czech Republic Latvia Croatia Austria San Marino Jersey Guernsey Switzerland Greece Liechtenstein Malta Isle of Man Luxembourg Belarus Slovakia Russia Lithuania Hungary Ukraine Gibraltar Georgia Belgium Vatican City Italy Poland Moldova Kazakhstan Bulgaria Cyprus Portugal

_________________________________________________________________________________________________________





3.8 3.8.1

133

PRODUCTIVITY IN ITALY: INCOME-LABOR RATIOS Overview

In this chapter we consider the income-labor ratios for general building contractors and operative builders in Italy benchmarked against global averages. For ratios where there are large deviations between the average firm operating in Italy and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key income-labor ratios are highlighted across countries in the comparison group. In the case of income-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. We then report the larger income-labor ratio gaps for general building contractors and operative builders that Italy has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.




3.8.2

134

Income to Labor: Outlook

The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for general building contractors and operative builders in Italy based on latest financial results available. Labor-income Ratios ($k/employee) Italy Europe World Avg. _________________________________________________________________________________________________________


288.10 319.30 6.01 14.51 341.16 14.94 -1.98 0.75 3.69 1.53 8.83 5.80 3.26 2.54 1.12 1.45 0.14 0.35 -0.10 1.39 1.39 1.39

187.45 190.95 3.58 29.92 232.61 8.46 9.84 0.61 1.19 1.71 2.37 13.26 3.88 9.61 3.34 3.13 0.12 0.40 0.17 6.77 6.86 6.75

154.15 109.36 2.24 25.56 113.63 2.00 13.23 0.46 1.02 0.80 1.60 15.11 4.43 11.26 2.21 2.20 0.09 0.34 0.08 8.65 8.97 8.62

_________________________________________________________________________________________________________





3.8.3

135

Income to Labor: Gaps

The following graphics summarize for general building contractors and operative builders the large labor-income gaps between firms operating in Italy and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.

Gap: Net Sales or Revenues ($k/employee) 300

288.1

250

187.45

200

154.15

133.95

150 100 50 0

Italy

Europe

World Average

Gap

Gap: Cost of Goods Sold (Excluding Depreciation) ($k/employee) 400

319.3

300 209.94

190.95

200

109.36 100 0

Italy

Europe

World Average

Gap

Gap: Gross Income ($k/employee) 29.92

30 20

25.56

14.51

10 0 -10 -20

-11.05 Italy


Europe

World Average

Gap



136

Gap: Other Operating Expenses ($k/employee) 400

341.16

300

232.61

200

227.53 113.63

100 0

Italy

Europe

World Average

Gap

Gap: Operating Expenses - Total ($k/employee) 15

14.94 12.94 8.46

10 5 0

2 Italy

Europe

World Average

Gap

Gap: Operating Income ($k/employee) 13.23

15

9.84

10 5

1.98

0 -5 -10 -15

-11.25 Italy

Europe

World Average

Gap

Gap: Earnings Before Interest and Taxes (EBIT) ($k/employee) 20 13.26

15 10

15.11

5.8

5 0 -5 -10

Italy


Europe

World Average

-9.31 Gap



137

Gap: Pretax Income ($k/employee) 15

9.61

10 5

11.26

2.54

0 -5 -10

-8.72 Italy

Europe

World Average

Gap

Gap: Net Income Before Extra Items/Prefer Dividends ($k/employee) 10 5

6.77

8.65

1.39

0 -5 -7.26 -10

Italy

Europe

World Average

Gap

Gap: Net Income Before Preferred Dividends ($k/employee) 10 5

6.86

8.97

1.39

0 -5 -7.58 -10

Italy

Europe

World Average

Gap

Gap: Net Income Available to Common ($k/employee) 10 5

6.75

8.62

1.39

0 -5 -7.23 -10

Italy


Europe

World Average

Gap



3.8.4

138


We now consider the distribution of income-labor ratios using ranks and percentiles across . What percent of countries have a value lower or higher than Italy (what is the ratio's rank or percentile)? The table below answers this question with respect to income-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key income-labor ratios are highlighted in additional tables. Income Structure ($k/employee)

Italy

Rank of Total

Percentile

288.10 319.30 6.01 14.51 341.16 14.94 -1.98 0.75 3.69 1.53 8.83 5.80 3.26 2.54 1.12 1.45 0.14 0.35 -0.10 1.39 1.39 1.39

12 of 53 7 of 49 7 of 53 37 of 49 9 of 48 5 of 44 51 of 53 11 of 24 5 of 24 15 of 47 2 of 53 38 of 53 28 of 53 41 of 53 33 of 49 23 of 44 14 of 38 17 of 46 17 of 19 42 of 53 42 of 53 42 of 53

77.36 85.71 86.79 24.49 81.25 88.64 3.77 54.17 79.17 68.09 96.23 28.30 47.17 22.64 32.65 47.73 63.16 63.04 10.53 20.75 20.75 20.75

_________________________________________________________________________________________________________


_________________________________________________________________________________________________________





139

Cost of Goods Sold (Excluding Depreciation) Countries

Value ($K/employee)

Rank

Percentile

888.99 583.04 545.87 401.95 348.76 330.48 319.30 316.02 313.41 261.17 258.65 254.36 235.21 226.55 221.76 218.84 207.45 206.99 203.42 188.01 186.26 156.15 153.99 151.18 137.63 135.05 130.50 129.79 123.99 121.56 80.02 78.67 77.50 75.94 50.12 48.18 48.05 44.59 40.40 38.44 22.90 18.17

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 24 25 27 28 29 30 31 32 34 35 36 37 38 39 40 42 43 44 45 47

97.96 95.92 93.88 91.84 89.80 87.76 85.71 83.67 81.63 79.59 77.55 75.51 73.47 71.43 69.39 67.35 65.31 63.27 61.22 59.18 57.14 55.10 51.02 48.98 44.90 42.86 40.82 38.78 36.73 34.69 30.61 28.57 26.53 24.49 22.45 20.41 18.37 14.29 12.24 10.20 8.16 4.08

Region

_________________________________________________________________________________________________________

South Korea Japan USA Australia the United Kingdom Belgium Italy Israel Ireland Taiwan Canada France Switzerland Portugal Norway Spain Sweden Greece Luxembourg Germany Thailand Singapore Netherlands Finland Peru Austria Czech Republic Denmark Malaysia Argentina China Pakistan New Zealand Hong Kong Poland Turkey Mexico South Africa Brazil Chile Indonesia Philippines

Asia Asia North America Oceana Europe Europe Europe the Middle East Europe Asia North America Europe Europe Europe Europe Europe Europe Europe Europe Europe Asia Asia Europe Europe Latin America Europe Europe Europe Asia Latin America Asia the Middle East Oceana Asia Europe the Middle East Latin America Africa Latin America Latin America Asia Asia

_________________________________________________________________________________________________________





140

Cost of Goods Sold (Excluding Depreciation) (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

857.01 551.46 348.76 330.48 321.88 319.30 313.41 254.36 235.21 226.55 221.76 219.49 218.84 216.86 207.45 206.99 205.44 203.42 191.85 189.32 188.01 153.99 151.42 151.18 146.02 135.05 133.77 130.50 130.43 130.43 129.79 123.87 123.82 120.14 72.82 50.12 45.78 45.06 43.36 43.28 42.01 40.83 39.39

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43

97.67 95.35 93.02 90.70 88.37 86.05 83.72 81.40 79.07 76.74 74.42 72.09 69.77 67.44 65.12 62.79 60.47 58.14 55.81 53.49 51.16 48.84 46.51 44.19 41.86 39.53 37.21 34.88 32.56 30.23 27.91 25.58 23.26 20.93 18.60 16.28 13.95 11.63 9.30 6.98 4.65 2.33 0.00

_________________________________________________________________________________________________________

Estonia Iceland the United Kingdom Belgium Vatican City Italy Ireland France Switzerland Portugal Norway Liechtenstein Spain Cyprus Sweden Greece Slovenia Luxembourg Malta Isle of Man Germany Netherlands Monaco Finland Andorra Austria San Marino Czech Republic Guernsey Jersey Denmark Latvia Croatia Albania Faroe Islands Poland Romania Moldova Kazakhstan Bulgaria Bosnia & Herzegovina Macedonia Serbia & Montenegro

_________________________________________________________________________________________________________





141

Operating Expenses - Total Countries

Value ($K/employee)

Rank

Percentile

34.36 29.04 22.86 15.46 14.94 14.15 13.91 11.97 11.22 10.52 7.40 6.40 6.27 5.12 4.68 4.24 4.04 3.68 3.62 3.61 3.41 3.10 2.75 2.74 2.60 2.42 1.74 1.71 0.94 0.27 0.26 0.21 0.20 0.17 0.17 0.13 -0.19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 31 32 34 36 38 39 43 44

97.73 95.45 93.18 90.91 88.64 86.36 84.09 81.82 79.55 77.27 75.00 72.73 70.45 68.18 65.91 63.64 61.36 59.09 56.82 54.55 52.27 50.00 47.73 45.45 43.18 40.91 38.64 36.36 34.09 29.55 27.27 22.73 18.18 13.64 11.36 2.27 0.00

Region

_________________________________________________________________________________________________________

Spain Germany Austria Belgium Italy Canada France Australia Netherlands Finland Switzerland Luxembourg Norway Singapore South Africa Brazil Chile New Zealand Malaysia Hong Kong Denmark South Korea Portugal the United Kingdom Czech Republic Argentina China Pakistan Philippines Thailand Sweden Indonesia Peru Turkey Mexico USA Japan

Europe Europe Europe Europe Europe North America Europe Oceana Europe Europe Europe Europe Europe Asia Africa Latin America Latin America Oceana Asia Asia Europe Asia Europe Europe Europe Latin America Asia the Middle East Asia Asia Europe Asia Latin America the Middle East Latin America North America Asia

_________________________________________________________________________________________________________





142

Operating Expenses - Total (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

34.36 32.25 29.04 22.86 22.64 22.08 22.08 15.46 15.06 14.94 13.91 11.22 10.52 7.40 6.91 6.40 6.27 4.96 4.79 3.46 3.41 2.98 2.75 2.74 2.63 2.60 2.46 2.46 0.26 0.17 0.16 0.15 0.14 0.14 0.13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

97.14 94.29 91.43 88.57 85.71 82.86 80.00 77.14 74.29 71.43 68.57 65.71 62.86 60.00 57.14 54.29 51.43 48.57 45.71 42.86 40.00 37.14 34.29 31.43 28.57 25.71 22.86 20.00 17.14 14.29 11.43 8.57 5.71 2.86 0.00

_________________________________________________________________________________________________________

Spain Slovenia Germany Austria San Marino Jersey Guernsey Belgium Vatican City Italy France Netherlands Finland Switzerland Liechtenstein Luxembourg Norway Monaco Andorra Faroe Islands Denmark Estonia Portugal the United Kingdom Cyprus Czech Republic Latvia Croatia Sweden Albania Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Iceland

_________________________________________________________________________________________________________





143

Operating Income Countries

Value ($K/employee)

Rank

Percentile

75.93 70.22 67.47 60.43 51.89 51.28 36.21 35.91 30.24 29.93 18.93 18.61 18.26 15.85 15.80 11.57 11.54 10.80 10.62 9.28 8.41 7.39 6.37 5.17 4.99 4.56 4.31 4.25 4.04 3.93 3.76 2.51 2.46 1.61 1.46 1.39 1.25 0.73 0.21 0.19 0.17 -0.33 -1.98 -2.05 -2.27

1 2 3 4 7 8 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 44 46 47 50 51 52 53

98.11 96.23 94.34 92.45 86.79 84.91 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 16.98 13.21 11.32 5.66 3.77 1.89 0.00

Region

_________________________________________________________________________________________________________

South Korea Thailand USA Australia Peru the United Kingdom Israel Ireland Netherlands Taiwan Canada France Greece Malaysia Japan Turkey Mexico China Pakistan Finland Spain Sweden Norway India Switzerland Portugal Luxembourg Denmark Czech Republic Singapore Argentina New Zealand Hong Kong South Africa Brazil Chile Austria Philippines Poland Russia Hungary Indonesia Italy Belgium Germany

Asia Asia North America Oceana Latin America Europe the Middle East Europe Europe Asia North America Europe Europe Asia Asia the Middle East Latin America Asia the Middle East Europe Europe Europe Europe Asia Europe Europe Europe Europe Europe Asia Latin America Oceana Asia Africa Latin America Latin America Europe Asia Europe Europe Europe Asia Europe Europe Europe

_________________________________________________________________________________________________________





144

Operating Income (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

73.20 68.16 51.28 45.29 35.91 30.24 18.61 18.26 16.92 16.70 11.00 10.09 9.81 9.46 9.28 8.41 7.89 7.39 6.37 4.99 4.65 4.56 4.37 4.31 4.25 4.04 3.83 3.83 3.81 3.67 2.36 1.25 1.24 1.21 1.21 0.21 0.19 0.19 0.19 0.19 0.19 0.18 0.18 0.17 0.15 0.14 0.14 -1.98 -1.99 -2.05 -2.27

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Estonia Iceland the United Kingdom Albania Ireland Netherlands France Greece Malta Isle of Man Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Finland Spain Slovenia Sweden Norway Switzerland Liechtenstein Portugal Cyprus Luxembourg Denmark Czech Republic Latvia Croatia Monaco Andorra Faroe Islands Austria San Marino Jersey Guernsey Poland Belarus Slovakia Russia Lithuania Moldova Kazakhstan Bulgaria Hungary Ukraine Gibraltar Georgia Italy Vatican City Belgium Germany

_________________________________________________________________________________________________________




145

Earnings Before Interest and Taxes (EBIT) Countries

Value ($K/employee)

Rank

Percentile

83.16 75.94 65.02 64.65 56.11 55.73 36.47 36.17 33.29 30.14 28.18 23.95 23.55 22.23 14.50 14.46 13.66 13.43 12.88 12.09 10.26 9.87 9.18 8.97 8.18 7.79 7.63 7.35 6.38 6.00 6.00 5.80 5.68 5.49 5.43 5.19 5.06 2.88 2.23 2.02 1.92 1.74 1.68 0.69 0.62

1 2 3 4 7 8 10 11 12 13 14 15 16 17 18 19 20 22 23 24 25 26 27 28 29 30 32 33 34 35 36 38 39 40 41 42 43 44 45 46 47 48 49 52 53

98.11 96.23 94.34 92.45 86.79 84.91 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 1.89 0.00

Region

_________________________________________________________________________________________________________

South Korea Thailand Australia USA Peru the United Kingdom Israel Ireland Netherlands Taiwan Greece Canada France Malaysia Turkey Mexico China Pakistan Spain Sweden Norway Portugal Finland Austria Indonesia New Zealand Hong Kong Denmark Singapore Belgium Switzerland Italy India Japan Czech Republic Luxembourg Argentina Germany South Africa Brazil Chile Poland Philippines Russia Hungary

Asia Asia Oceana North America Latin America Europe the Middle East Europe Europe Asia Europe North America Europe Asia the Middle East Latin America Asia the Middle East Europe Europe Europe Europe Europe Europe Asia Oceana Asia Europe Asia Europe Europe Europe Asia Asia Europe Europe Latin America Europe Africa Latin America Latin America Europe Asia Europe Europe

_________________________________________________________________________________________________________





146

Earnings Before Interest and Taxes (EBIT) (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

80.17 65.31 55.73 48.98 36.17 33.29 28.18 26.12 25.78 23.55 13.78 12.88 12.65 12.29 12.09 12.09 11.86 10.26 9.87 9.45 9.18 8.97 8.88 8.66 8.66 7.35 7.32 6.19 6.00 6.00 5.97 5.84 5.80 5.60 5.43 5.19 5.16 5.16 2.88 1.74 1.56 1.51 1.50 0.70 0.70 0.69 0.68 0.62 0.55 0.53 0.52

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

_________________________________________________________________________________________________________

Estonia Iceland the United Kingdom Albania Ireland Netherlands Greece Malta Isle of Man France Romania Spain Bosnia & Herzegovina Macedonia Sweden Slovenia Serbia & Montenegro Norway Portugal Cyprus Finland Austria San Marino Jersey Guernsey Denmark Faroe Islands Monaco Belgium Switzerland Andorra Vatican City Italy Liechtenstein Czech Republic Luxembourg Latvia Croatia Germany Poland Moldova Kazakhstan Bulgaria Belarus Slovakia Russia Lithuania Hungary Ukraine Gibraltar Georgia

_________________________________________________________________________________________________________




147

Pretax Income Countries

Value ($K/employee)

Rank

Percentile

72.50 60.54 60.15 53.57 47.50 46.95 28.29 28.05 26.63 25.23 23.38 19.28 13.01 12.98 12.45 12.24 9.17 9.01 8.68 6.35 5.32 4.54 4.53 4.49 4.28 4.17 4.09 3.99 3.96 3.88 3.66 3.61 2.98 2.62 2.54 2.14 1.66 1.51 1.43 1.31 0.92 -0.57 -0.75 -0.84 -1.35

1 3 4 6 7 8 10 11 12 13 14 15 16 17 18 19 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 40 41 42 43 44 45 46 47 49 50 51 53

98.11 94.34 92.45 88.68 86.79 84.91 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 7.55 5.66 3.77 0.00

Region

_________________________________________________________________________________________________________

Thailand USA Australia Peru South Korea the United Kingdom Israel Ireland Greece Netherlands Taiwan Malaysia Turkey Mexico Canada France China Pakistan Spain Sweden Finland Portugal Denmark Austria Czech Republic Switzerland Norway Argentina New Zealand Hong Kong Indonesia Luxembourg India Belgium Italy Singapore South Africa Brazil Chile Poland Germany Philippines Hungary Russia Japan

Asia North America Oceana Latin America Asia Europe the Middle East Europe Europe Europe Asia Asia the Middle East Latin America North America Europe Asia the Middle East Europe Europe Europe Europe Europe Europe Europe Europe Europe Latin America Oceana Asia Asia Europe Asia Europe Europe Asia Africa Latin America Latin America Europe Europe Asia Europe Europe Asia

_________________________________________________________________________________________________________





148

Pretax Income (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

61.16 46.95 46.76 45.79 28.05 26.63 25.23 24.68 24.35 12.36 12.24 11.34 11.03 10.64 8.68 8.15 6.35 5.32 4.54 4.53 4.49 4.45 4.35 4.34 4.34 4.28 4.17 4.09 4.07 4.06 3.89 3.72 3.61 2.62 2.56 2.54 2.07 2.00 1.31 1.18 1.13 1.13 0.92 -0.63 -0.64 -0.68 -0.75 -0.84 -0.84 -0.85 -0.86

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00

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Iceland the United Kingdom Albania Estonia Ireland Greece Netherlands Malta Isle of Man Romania France Bosnia & Herzegovina Macedonia Serbia & Montenegro Spain Slovenia Sweden Finland Portugal Denmark Austria San Marino Cyprus Jersey Guernsey Czech Republic Switzerland Norway Latvia Croatia Liechtenstein Faroe Islands Luxembourg Belgium Vatican City Italy Monaco Andorra Poland Moldova Kazakhstan Bulgaria Germany Georgia Gibraltar Ukraine Hungary Lithuania Russia Slovakia Belarus

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Income Taxes Countries

Value ($K/employee)

Rank

Percentile

23.31 16.85 15.26 14.37 13.50 9.97 9.31 8.84 5.93 5.76 5.72 5.31 5.22 4.76 2.17 2.13 2.05 1.97 1.92 1.92 1.78 1.36 1.27 1.22 1.16 1.16 1.12 1.12 1.12 0.97 0.91 0.86 0.81 0.80 0.48 0.44 0.41 0.41 0.07 -0.30 -1.12 -1.14

1 2 3 4 5 8 9 10 12 13 14 15 16 17 18 19 20 21 22 23 25 26 27 28 29 30 32 33 34 35 36 38 39 40 41 42 43 44 45 47 48 49

97.96 95.92 93.88 91.84 89.80 83.67 81.63 79.59 75.51 73.47 71.43 69.39 67.35 65.31 63.27 61.22 59.18 57.14 55.10 53.06 48.98 46.94 44.90 42.86 40.82 38.78 34.69 32.65 30.61 28.57 26.53 22.45 20.41 18.37 16.33 14.29 12.24 10.20 8.16 4.08 2.04 0.00

Region

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USA Australia South Korea the United Kingdom Thailand Peru Greece Netherlands Malaysia Israel Ireland Canada France Taiwan Spain Japan Finland Sweden Turkey Mexico Norway Czech Republic Argentina Indonesia Belgium Singapore Switzerland Italy Portugal Luxembourg Germany Denmark New Zealand Hong Kong South Africa Brazil Chile Poland Austria Philippines Pakistan China

North America Oceana Asia Europe Asia Latin America Europe Europe Asia the Middle East Europe North America Europe Asia Europe Asia Europe Europe the Middle East Latin America Europe Europe Latin America Asia Europe Asia Europe Europe Europe Europe Europe Europe Oceana Asia Africa Latin America Latin America Europe Europe Asia the Middle East Asia

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Income Taxes (General Building Contractors and Operative Builders) Countries in Europe

Value ($K/employee)

Rank

Percentile

23.55 14.71 14.37 9.31 8.84 8.70 8.63 8.51 5.72 5.22 2.17 2.05 2.04 1.97 1.83 1.78 1.68 1.63 1.57 1.36 1.29 1.29 1.16 1.13 1.12 1.12 1.12 1.12 1.08 1.07 1.05 0.97 0.91 0.86 0.76 0.41 0.37 0.36 0.36 0.07 0.07 0.06 0.06

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43

97.67 95.35 93.02 90.70 88.37 86.05 83.72 81.40 79.07 76.74 74.42 72.09 69.77 67.44 65.12 62.79 60.47 58.14 55.81 53.49 51.16 48.84 46.51 44.19 41.86 39.53 37.21 34.88 32.56 30.23 27.91 25.58 23.26 20.93 18.60 16.28 13.95 11.63 9.30 6.98 4.65 2.33 0.00

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Iceland Estonia the United Kingdom Greece Netherlands Albania Malta Isle of Man Ireland France Spain Finland Slovenia Sweden Romania Norway Bosnia & Herzegovina Macedonia Serbia & Montenegro Czech Republic Latvia Croatia Belgium Vatican City Monaco Switzerland Italy Portugal Andorra Cyprus Liechtenstein Luxembourg Germany Denmark Faroe Islands Poland Moldova Kazakhstan Bulgaria Austria San Marino Jersey Guernsey

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4 4.1

MACRO-ACCESSIBILITY IN ITALY EXECUTIVE SUMMARY

One of the U.S. Mission to Italy’s highest priorities is to expand commercial relations between the United States and Italy. The United States and Italy already have strong commercial ties on which to build. More than 1,000 multinational companies operate in Italy, of which about one-quarter are American. The size and importance of the Italian economy, the sixth largest among market economies, are not fully appreciated by American exporters. The U.S. Mission seeks to increase American interest in the highly promising Italian market. This includes raising awareness of possible business opportunities in Italy’s developing regions, which are designated for major infrastructure development in the next few years. The potential for expanded American exports to Italy is significant. Among the areas that are ready for growth, if Italy continues to adopt the institutional changes that are necessary to succeed in the competitive global economy, are: infrastructure development, information and communications technology, and services. Legislation, such as the intellectual property protection statute passed in July 2000 to combat piracy of software, films, music, and books, is encouraging for American firms considering business in Italy. Although Italy has ranked lower than other European countries in recent economic surveys, due to impediments such as a burdensome and complicated tax system, labor rigidity, a lack of physical infrastructure in certain regions, and crime, it has made some minor progress in confronting some of these. Moreover, Government liberalization and privatization will create considerable potential for U.S.-Italian public and private partnerships. Entrepreneurs and officials from both countries must continue to encourage a lessening of barriers to trade, through bilateral, U.S.-European Union (EU), and international institutions such as the World Trade Organization. Reducing such obstacles will expand the number and breadth of commercial opportunities and foster the market conditions for international partnerships in the truly global sectors of aerospace, energy, information technologies, telecommunications, architecture and engineering, transportation, and medicines and pharmaceuticals. Italy and the United States retain impressive capacities in each of these and may furnish equally extraordinary combinations. The American Embassy and Consulates in Italy work closely with the American Chamber of Commerce in Italy (AmCham) on major issues affecting business opportunities in Italy. Founded in 1915 and headquartered in Milan, the AmCham is one of the largest chambers in the world, with a mix of both U.S. and Italian firms. Its objectives are to promote and represent the interests of its members in matters of trade and industry between and within the United States and Italy and to encourage and facilitate commerce between the two countries. The AmCham is affiliated with the U.S. Chamber of Commerce in Washington, D.C. It is also a founding member of the European Council of American Chambers of Commerce. In order to attract more American firms to the Italian market, the U.S. Mission’s commercial sections actively participate in the U.S. Department of Commerce’s trade promotion program called “Showcase Europe.” This program intends to open European markets to more U.S. firms by reducing tariff and non-tariff barriers to trade, ensuring full access to government procurement opportunities and national treatment for investors, and helping U.S. firms broaden their efforts beyond their traditional markets in Europe. Working with sister sections at Embassies and Consulates across Europe, the U.S. Mission’s commercial sections use a variety of vehicles to bring Italy to the attention of U.S. firms. They plan an active program of trade events and promotional activities throughout Italy to introduce new American products and services in the Italian market.



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152

FUNDAMENTAL DYNAMICS

During most of the 1990’s, Italy’s gross domestic product (GDP) growth was the slowest in what is now the Economic and Monetary Union (EMU) zone. The gap was once attributed to the tough budget discipline of the ‘90s, but now, at the end of the EMU accession process, seems to reflect structural impediments in the Italian economy that discourage investment and job creation.

4.3

DYNAMICS IN AGRICULTURE

Italy’s agricultural trade is primarily with other EU Member States. Over 73 percent of total imports (mainly represented by raw materials) come from within the EU, while almost two-thirds of Italian exports (chiefly valueadded products) stay within the EU. National and international developments are expected to shape Italy’s agricultural sector in the near future. At the national level, the main drivers are national budget review and the decentralization of the decision making process, with an increasing number of agricultural competences being transferred from the Rome government to regional administrations. The “decoupling” of CAP farm payments from agricultural production, and the parallel increase of EU budget for rural development, will probably result in a shift in marginal areas from traditional farming activities to other complementary activities (e.g., rural tourism, landscape management, etc.). The completion of the EU farm policy reform will likely result in different land uses (intensive vs. extensive agriculture) and in a new geographic distribution of productions in the country (re-location where more competitive). The eventual future accession of countries such as Romania, Bulgaria and Turkey to the EU (likely to happen in the next 5-7 years) is creating some concerns to Italian farmers. This event would increase competition in the EU for some products that are key for Italy, especially fruit, vegetables and olive oil. The effects of this second round of enlargement are expected to be much more stronger than those of the May 2004 enlargement. The EU Commission is in charge of almost all the extra EU agricultural trade issues, including WTO negotiations and bilateral agreements with other countries (or group of countries). Italy for obvious reasons has a special interest in the current negations for the creation of the Mediterranean free trade area (Euromed).

4.4

DYNAMIC MARKETS

Italian companies are adjusting to a period of slower growth in both the domestic economy and the euro-zone as a whole. Both inflation and unit labor costs have risen faster in Italy than the euro-area average, eroding Italian exporters’ competitiveness and market shares abroad. Italy is heavily dependent on exports to its largest market, Germany, which has also entered a recessionary period. In addition, Italian exporters are also facing increasing competition from lower cost producers in Eastern Europe and Asia in other large export markets in Europe and the United States. To accommodate these conditions, Italian exporters need to streamline operations to reduce production costs, which likely will entail moderate investment in labor-saving equipment and technology. Given the more favorable dollar-euro exchange rate at present, U.S. firms have a slight pricing advantage vis-à-vis their European competitors, but must be aggressive in identifying opportunities for their products and services. In general, rationalizing business practices and achieving cost-savings create opportunities for U.S. equipment, technology and expertise in computer software and hardware, management consulting. The full liberalization of the Italian telecommunications market, with a belated but enthusiastic interest in the Internet, is creating substantial www.icongrouponline.com


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business opportunities. Privatization and liberalization in the energy sector following EU directives should also spur future demand for equipment and services in this sector. In addition, the Italian public as well as private sector is looking for ways to improve efficiency while reducing costs, through outsourcing, training programs and better application of new information technologies. U.S. firms with products and services that contribute to the further rationalization and increased competitiveness of the Italian economy will find that Italy offers significant opportunities. Despite the current economic climate in Italy, the fluctuations in the dollar/euro exchange rate, and the often protectionist regulations of the CAP, there are still many opportunities in the near-to-medium term to both maintain and expand the market for a variety of U.S. agricultural products.

4.5

GOVERNMENT INTERVENTION RISKS

In the post World War II period, the Italian state traditionally played a dominant role in the Italian economy. In the early 1990s, the Italian government controlled about a third of all industrial activity and almost two-thirds of banking operations. In many sectors, the state’s role was eliminated or vastly reduced. In the last ten years, the GOI raised USD135 billion through privatizations, which helped reduce the debt/GDP ratio from 125 to 106 percent of GDP. Despite substantial sales of state assets in the 1990’s, the GOI still holds substantial stakes in more than 20 Italian companies with a total value of more than USD 80 billion. The most important remaining assets to be sold include a significant portion of ENEL, Italy’s main electricity producer, in which the GOI owns 61 percent of the stock. The other large assets are the GOI’s 30.33 percent share in ENI (Italy’s hydrocarbon conglomerate, and the country’s largest company) and its 32.34 percent share of Finmeccanica (the large aerospace and defense holding company). Despite official statements, the GOI seems reluctant to sell any part of firms in sectors considered critical to national security, such as aerospace and defense, and is committed to keeping a controlling share in these key companies. Since 1993, four major banks (Credito Italiano, Banca Commerciale Italiana, Istituto Mobiliare Italiano and Banca Nazionale del Lavoro (BNL)) and the country’s second largest insurance company, INA, have seen government control transferred to banking foundations, which are non-profit entities with government-approved directors. IRI, once the major government-owned industrial holding company, dismantled itself through sell-offs in the 1990s. Telecom Italia was sold in a stock offering in 1997. There have been five offerings of stakes in oil and gas parastatal ENI. Since 1999 there have been offerings of 39 percent of Enel, the electricity company; 87 percent of Autostrade, which operates highways; 45 percent of Finmeccanica, the defense industries holding company; and 52 percent of the Rome Airport Authority. The GOI Treasury still holds a 53 percent stake in Alitalia, the national flag airline. If Alitalia survives its severe financial crisis, through a program of layoffs, new management, and bridge loans, the GOI has vague plans to sell at least some of its share in the distant future.

4.6

INFRASTRUCTURE DEVELOPMENT

To jump-start the ambitious ten-year effort to improve and expand the transportation network, the Parliament approved the GOI bill that included measures intended to eliminate bureaucratic obstacles to public works and infrastructure investment.

Railroad The railroad system is operated by the Italian State Railways (Ferrovie dello Stato, abbreviated FS), a government agency. The railroad provides an efficient and economical method of transportation. More than half of the rail system is electrified. www.icongrouponline.com


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Highway The highway system is approximately 197,000 miles long, including over 3,000 miles of superhighways, called “autostrade.” The network connects the major industrial centers and offers easy access to Northern Europe. Mainly private companies under government concession operate trucking services.

Air Alitalia, a state-owned company is Italy’s principal airline, providing both international and domestic service. Additional service is provided by Lauda Air, Itavia, Air Europe and Meridiana airlines. Charter service is offered by SAM, an Alitalia subsidiary, and by Air One, while air-taxi service is available from Unijet Italia in Rome and Agena in Milan. Italy has an extensive airport network consisting of 19 international, 17 domestic, and 59 general aviation airports. Federal Express, UPS, DHL, and other rapid delivery services are also available.

Sea Italy has eight major seaports: Gioia Tauro, Genoa, La Spezia, Livorno, Naples, Palermo, Trieste, and Venice. In addition, there are 35 smaller ports primarily used for coastal shipping.

Industrial Districts Small and medium sized enterprises, especially in the North, have increased Italy’s output, exports and job creation. The districts take advantage of areas where many small enterprises operate in the same industry and where the steps of production are divided up among the various enterprises. Over time, cooperation among the firms (and often unions of their workers) has paid off in better exchange of information, group purchases, and market development. The districts have been given legal recognition so that communities have the tools to plan joint activities, tap national and regional financing for projects, establish service contracts (for example, with research institutes and universities), and otherwise maximize public and private resources for the success of their industry and local development.

4.7

ECONOMIC RELATIONSHIP WITH THE UNITED STATES

Italy is an important economic and political partner of the United States. Italy’s proximity to areas of tension in the Balkans, the Eastern Mediterranean, and North Africa underscores its strategic significance. A founding member of NATO, Italy has worked with the United States in efforts to promote reconstruction, democratization and stability in Iraq, Afghanistan, and Central and Eastern Europe, implementation of the Dayton accords in Bosnia, and the success of the Middle East Peace Process. Italy played a crucial role in NATO’s action in Kosovo and in managing the refugee crisis, as well as in efforts toward economic and political stabilization in Albania. Italy has played a central role in the growth of the European Union, supporting European economic and political integration and advocating a stronger European security and defense identity within NATO.

4.8

THE POLITICAL SYSTEM

The Republic of Italy is a parliamentary democracy. Parliament consists of the Chamber of Deputies (630 members) and the Senate (315 members). The Chamber of Deputies is the more influential body. No single political party commands a parliamentary majority and coalition governments are the norm. Much of Parliament’s work takes place in committees.



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Executive authority is vested in the Council of Ministers, headed by the President of the Council (Prime Minister) who, as Head of Government, is responsible for its day-to-day functioning. The ministries form the basic structure of the state’s public administration. The Berlusconi government has 22. The President of the Republic is Head of State and has limited powers. He or she appoints the Prime Minister, subject to parliamentary concurrence. The President can also dissolve Parliament and call for elections if it is clear that no governing majority can be formed. The President is elected for a term of seven years by the Members of the Chamber of Deputies, the Senate and representatives of the 20 regions. The judicial system includes three separate lower courts whose decisions may be appealed to the Assizes Court of Appeals. Decisions of the Assizes Court of Appeals can be appealed to the highest court, the Court of Cassation (Supreme Court) in Rome. The Constitutional Court rules only on matters concerning the constitutional legitimacy of referenda, legislation and other actions of the central and regional governments. Although State authority in Italy remains centralized, the country has devolved certain responsibility for transportation, health and welfare issues to regional and local bodies. Regions can also present draft laws to Parliament on issues of particular interest.

Major Political Parties Center-Right “Freedom House” Governing Coalition: •

Forza Italia (FI)

•

National Alliance (AN)

•

Northern League (LEGA)

•

Union of Christian Democrats of the Center (UDC)

Center-Left Opposition: •

Democrats of the Left (DS)

•

Italian People’s Party (PPI)

•

The Democrats (DEMOCRATICI)

•

Union of Democrats for Europe (UDEUR)

•

Italian Renewal (RI)

•

Italian Communists (PDCI)

•

The Greens (VERDI)

•

Italian Democratic Socialists (SDI)

Independents: •

Communist Renewal (RC)

4.8.1

Political Risks for Agriculture

In the center-left Government of Giuliano Amato in 2000, the GOI unilaterally banned the import of the four main biotech corn varieties (even though they had been approved for use within the EU for several years) based on



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arguments that the products should have had a full EU review instead of an abbreviated review based on substantial equivalence. Imports of non-biotech corn and soybean seed for planting were also hindered over concerns of adventitious biotech presence. Minister of Agriculture Alemanno, while not a member of the Green party, has allied himself with the Greens’ position insofar as they oppose the import and use of products derived from agricultural biotechnology.

4.9 4.9.1

MARKETING STRATEGIES Distribution Channel Options

American business representatives will find that selling in Italy offers new challenges, but it presents no overwhelming problems. Over 7,500 American companies are actively represented in Italy, with approximately 850 of them having subsidiaries there. U.S. executives may find that some commercial practices differ from those in the United States, but most will be very familiar. The system of retail and wholesale distribution, for instance, centers on small, family-operated stores. Despite this phenomenon, the supermarket-type operation has gained importance, and there are a number of substantial department store operations.

Retail Distribution in Italy The Italian retail distribution system is faced with the new challenges of competition and technology. Reforms introduced starting in 1998 have entailed some degree of liberalization, especially as regards small retail businesses. Nevertheless, compared to other EU countries, Italy’s retail distribution sector is characterized by a large number of small firms and low concentration. In food retailing, for example, the combined market shares of the five largest retailers in Italy is 17.6 percent, the lowest ratio in the EU, and considerably lower than the EU average of around 50 percent. The retail sector has one of the highest outlet densities in the EU, with a very low average number of employees per enterprise, reflecting the general absence of medium and large retail outlets. Thus, productivity in the sector is low, and estimated mark-ups in wholesale and retail distribution in Italy are among the highest for EU countries. Accounting for this is the fact that retail distribution in Italy traditionally has been subject to more extensive regulation that in other EU countries and is hindered by numerous restrictions. A law introduced in 1998 liberalized the opening, relocation and expansion of mall-sized outlets by abolishing the requirement for small business to obtain commercial licenses in order to start-up. However, implementation of regulatory measures at the regional level, in line with Italy’s devolution of authority to regional governments, has meant that new commercial establishments, rather than being subject to regulation on commercial activities, are now subject to regulations on urban planning. In practice this has meant that authorization for medium and large outlets is required (and rarely granted) in order to integrate them into urban development plans, while the opening of small shops has been liberalized. Firms operating in the Italian retail distribution sector find that they must invest large amounts of money in new techniques, management, research, media promotion, and equipment. The industry’s average return on investment is approximately 13 percent. In terms of existing points of sale, there is a gradual trend away from the family-type stores and street vendors to the distribution chains. Italian distribution systems include small family-owned stores, street vendors, hyper-markets, shopping malls, specialized stores and discount stores. Horizontal points of sale such as general stores, which had experienced boom conditions in the early 1980s, very gradually have begun to lose ground to specialized stores, franchising chains, and hyper-markets. In order to create a unique business identity, department stores have begun a process of realignment and now tend to attract the more affluent, quality-oriented consumers, as well as compete on price and product selection. Supermarket chains now look toward further expansion, particularly in creating and operating large shopping malls. Where such shopping centers exist, they are proving to be successful. www.icongrouponline.com


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157

Agents and Distributors

Italy represents a large and affluent market where language and personal relationships are valued when conducting business transactions. Consequently, some form of local presence is generally required to be successful. Companies wishing to enter the Italian market, as an alternative to establishing a subsidiary, might decide to use an agent or a distributor. The choice depends on the nature of the goods or services to be distributed in Italy. There are important distinctions in Italian law between distribution and agency agreements: •

Agency Agreement: Agency contracts are governed by the Italian Civil Code and by a number of other legislative decrees. The term “commercial agent”, as a literal translation from the Italian Civil Code, does not correspond exactly to the concept of agency in common law countries. Under an agency contract the principal (manufacturer or exporter) appoints an agent as principal’s sole agent for the territory concerned, who then permanently acts for and on behalf of the principal in promoting the execution of the agreements. The agent may or may not have a special power of attorney to execute contracts, but, if so, will do so only on behalf of the principal. The contractual relationship is thus between the principal and the buyer, not the agent. The normal pattern of remuneration for an agent is either entirely by commission or partially by commission in addition to a periodic payment.

•

Distribution Agreement: Under Italian law a distribution agreement is one by which a manufacturer or exporter contracts with a distributor to purchase goods which the distributor then sells on the distributor’s own account, usually to retailers for ultimate resale to the public. The incentive for the distributor is in the price differential between one transaction and the other. There may be variations involving the possibility of returning the nonsold goods or other formulae, but the distributor is always acting as the principal in the contract with the subsequent purchaser. There are no laws or regulations currently in effect in Italy providing for advance notice of termination, termination compensation, or social security payments in connection with these agreements.

Frequently, a distributorship agreement provides for exclusive sales rights. There is nothing in Italian law preventing exclusive arrangements in all or part of Italy. However, if these agreements provide for exclusive sales rights in all or part of the EU, they should be examined carefully, and with the assistance of a competent international lawyer, in light of the antitrust provisions of the EU regulations.

Appointing an Agent or a Distributor It is important to obtain specific legal advice on appointing an agent or distributor. However, some general guidelines apply and are outlined here. Italy implemented EU directive 86-653 in October 1991. As a result, Italian agency law is now in conformity with EU requirements. All agent agreements should be in writing and state the marketing area and any exclusivity arrangements. Termination of the relationship is the area that most frequently causes problems for American exporters. Generally, the civil code protects the interests of the representative. In the absence of termination provisions in a written agreement, the law provides for a minimum notice of termination of one month during the first year of the agreement, two months during the second year, three months for the third year, four months for the fourth year, five months for the fifth year, and six months for the sixth and additional years. Parties may agree to other terms, provided the notice of termination is not less than the above. An agreement with a definite period terminates on the agreed expiration date. If the parties continue to operate under the agreement after that date, the agreement becomes an agreement of indefinite term, which can be terminated in accordance with the aforementioned notice periods. If the American principal wants to terminate the relationship, notice of termination should be given, even with a definite term contract. The termination of an agreement without the required notice makes a U.S. principal liable for compensation. The Italian sales agent could seek to claim the amount of the commissions that would have been earned during the termination period or for the amount of actual damages suffered. In exceptional cases, and only for just cause (such as competition or fraud), an agreement may be terminated without notice provided the other party is immediately advised of the reason. In such cases, the courts may be requested to terminate the contract.



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At the expiration or termination of an agreement, by whatever means, an agent who has increased the value of the business is entitled, in principle, to an adequate remuneration which cannot exceed the average of the commissions in 1 year. Such claims by agents are subject to an expiration period of 1 year. Three kinds of distribution agreements are commonly used: •

Exclusive distributorships, where the distributor has the sole right to sell specified goods within a defined area

•

Quasi-exclusive distributorships, where the distributor sells almost all the specified products within a defined area

•

Informal distributor arrangements, under which the grantor imposes heavy obligations on the distributor and which would cause damage to the distributorship if the grantor terminated the agreement.

In the absence of mutual agreement, or the failure to meet contract obligations, a distribution agreement of indefinite term cannot be terminated by the grantor without reasonable notice or fair compensation. In general, grantors should consider protecting themselves by entering into agreements for definite periods rather than an indefinite period. Also, specific minimum performance clauses should be considered, such as percent of distributor’s sales, minimum annual sales, and number of business contacts to be made, and grantors should propose that U.S. law and courts have jurisdiction. A continued and close working contact between the American firm and the agent or distributor is very desirable and should be developed early in the relationship. Certain products and equipment require servicing to maintain their useful life. The U.S. exporter should determine if servicing is needed and develop a distribution network to include such servicing by qualified personnel. To build trust, loyalty, and marketing skills, U.S. producers frequently bring their agents or distributors to the United States for training and marketing assistance.

4.9.3

Franchising

The Italian business community has accepted the concept that franchising is the most innovative way to introduce a new business concept. The Italian population has shown itself to be receptive to the fast and efficient formulas provided by franchises. At the same time, the Italian end-user is not always open to franchises for services that are traditionally strong and consolidated in the country. Nevertheless, the Italian market’s receptivity to the franchising concept appears to be steadily growing, particularly in the services sector.

End-User Profile There are considerable differences in economic characteristics among various geographic regions of the country. Northern Italy, the most developed part of the country, has a larger number of commercial, financial, and industrial enterprises and double the per capita income of the south. Similarly, among the various regions distribution of franchising is disparate, with franchising networks concentrated in northern Italy. However, there are recent indications that franchising is also gaining momentum in southern Italy, where it is perceived as a way to alleviate the effects of chronic unemployment.

Competitive Situation Italy has an extremely fragmented distribution system. The predominance of small, family-owned stores and the disproportionately large number of point-of-sale outlets contribute to market inefficiency. The present retail system survives mainly due to the complexity and protective nature of existing regulations. However, there is now a noticeable move towards concentration in retail distribution, which creates economies of scale and more efficient management. Thus, franchising seems to be increasingly a system well suited to Italy.



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Franchising in Italy was formally established in 1971, with the foundation of the Italian Franchise Association (Assofranchising Italiana). The beginnings were very slow and in 1978 there were only 15 franchisers in the country. Growth has since escalated, and between 1990-1995 there was a surge in growth, with 89 percent more new brands. Local Italian franchisers have now been in operation for a number of years and have achieved both success and profitability and some have acquired name recognition worldwide. The most developed segment of the franchising sector is services, with over 20,000 franchisees and 297 franchisers, while the personal products sub-sector ranks second, with 8,000 franchisees and 157 franchisers. Another very strong sub-sector is specialty retail stores, with 77 franchisers and 4,000 franchisees. The Italian business community views American franchising companies with a very open attitude and recognizes their predominance in the sector. However, smaller American franchisers trying to find Italian master licensees may find they face obstacles related to lack of name recognition in Italy and to inexperience with local business practices. The price for the master license is almost always set too high and the assistance to be provided by the franchiser is often not spelled out clearly enough. Commercial Service Italy can assist in this regard by providing introductions to the most qualified, suitable potential business partners for U.S. firms in Italy, either through one-on-one counseling and assistance, or through such events as our U.S. Pavilion at the annual Franchising and Partnership trade show in Milan, usually held during the fall each year (for more information, contact Commercial Service Italy at E-mail: [email protected]).

Best Sales Prospects The sectors that appear to have the best potential are in the services area. New activities stemming from the “new economy” are making a breakthrough and concepts linked to Internet, E-commerce, telecommunications and information technology have a proven record of success. Other very promising and more consolidated areas are travel and tourism, education and training, fast delivery services, management and consulting services, and automotive services. Other good prospects are offered in fast food and hotels that have good brand recognition, and in personal items and fashion.

Legal Requirements After several years of negotiations, Italy has signed a law regulating franchising activities. The Italian franchising law became effective on May 2004. An English version of the Italian franchising law can be viewed on www.buyusa.it. In Italy, a franchising agreement is governed by general contract law principles and is considered a bilateral agreement between separate business enterprises resulting in “collaboration”, not “association”, between parties. Franchising agreements are subject to the laws governing commercial contracts in general and to those governing sales of trademark licensing agreements in particular. The Italian Franchising Association (Assofranchising) has established a set of rules, which reflect standards prevailing in the Italian business community and are often taken into consideration in legal proceedings. The development of the European Union has stimulated harmonization of trade, tariffs, legal requirements, standards and procedures. There are no trade barriers or limitations to the importation of US franchise business methods in Italy. However, due to the lack of specific Italian norms on franchising agreements, it is advisable that contracts be written in great detail when entering into an agreement with a master licensee. The average validity of a franchising contract in Italy is 5 years in 40 percent of cases, 3 years in 19.4 percent and 6 years in 16 percent. An entry fee is required by 51 percent of franchisers, while royalties are requested by 70 percent of master franchisers. Most of the standard contracts provide comprehensive training programs, manuals and programs of regularly scheduled workshops for franchisees.



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Financing Financing tailored to franchising activities is a concept that is gradually penetrating the local banking system. At present, a small number of local banks have programs tailored to the specific needs of the sector, offering loans to franchising systems and setting up a specialized franchising department. Other leading banks have indicated an interest in approaching the franchising sector. However, the prevailing practice remains that financing is generally negotiated privately on a case-by-case basis between the master franchiser and the franchisees. Over 50 percent of the franchisers offer financing and leasing programs. Virtually all franchisees pay entry fees, royalties and contribute to advertising expenditures. Close to 80 percent of franchisers grant exclusive area contracts, while 46 percent require total inventory turnover with a contractually based mark-up. More than 70 percent of the large companies offer assistance in the way of operations manuals, computerized management programs, assistance for the opening of the points of sale, as well as training seminars. Most companies hold annual conventions and provide newsletters and comprehensive assistance programs. The cost of a franchise varies from a minimum of $10,000 to an average cost of $100,000 and escalates to $300,000 and more.

4.9.4

Direct Marketing Options

There are many logistical problems of operating a nationwide sales network as well as managing the growing personnel and promotion costs. Part-time employment is presently restricted, although there are now some moves to liberalize regulations governing part-time employment. Marketing firms are developing new distribution techniques designed to employ the casual worker and to target groups of consumers by catalog, door-to-door sales, tele shopping or telemarketing. The most widely used methods of direct marketing are: •

Direct selling, mainly used in the nonfood sector.

•

Mail order, catalog sales, or orders placed directly with the supplier.

Mail order marketing has been in Italy for approximate 15 years. Although direct marketing is considered a very effective marketing technique, it still remains a modest channel of distribution for Italian companies. One of the disadvantages of this technique, which may be overlooked by foreign investors, is some delay by the postal system. However, the establishment of a semiprivate nationwide express mail service, the proliferation of couriers, and the arrival of foreign parcel delivery services now offer alternatives to the national mail system. Telephone direct marketing is growing faster than any other selling technique. With the development of new telephone equipment, the business world has turned to the use of the facsimile, making Italy the second largest per capita user in the world. Tele shopping (home shopping through TV) is becoming a popular sales approach to reach the consumer. There are a number of privately owned television stations which mainly host telemarketing programs. Telecommunications technologies are playing an increasing role in the process of restructuring the distribution system. Scanners, electronic cash registers, and display management systems are now common while computerized stock control systems, customer databases, and inventory control programs are being used only by the large distribution networks. The more sophisticated groups have also resorted to consulting services, resulting in technical cooperation agreements between a number of Italian and international chains.

4.9.5

E-Commerce

The main factors fueling the development of E-commerce in Italy are: •

Improved Internet access infrastructure



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•

Recognition of E-commerce as a means to provide better support to customers and suppliers

•

Improved consumer protection legislation and greater confidence in online payment systems

•

Italian legislation which recognizes the legal validity of digital signatures and digital contracts

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Agreements between Italian banks and credit card operators to introduce Secure Electronic Transaction (SET) protocol

•

Italian government plans for accelerating the development of a new economy culture, ICT acceptance and Ecommerce adoption

•

Initiatives of trade associations, major organizations and local governments to foster innovation and to promote E-commerce, especially among small- and medium-sized enterprises

•

A mobile phone diffusion among the highest in the world, which will enable both the business and consumer segments to take advantage of new telecom technologies for E-commerce transactions (It is estimated that there are over 55 million mobile phone lines activated, and over 40 million cellular phone users--over 70 percent of the Italian population).

The growing complexity of network technologies and the need for specialized skills to implement E-business strategies is leading large and medium-sized Italian businesses to outsource services to supplement their in-house capabilities.

Business-to-Business (B2B) & Virtual Marketplaces The Italian Government has approved an Action Plan to accelerate the diffusion of the New Information and Communication Technology (NICT) in the Italian economy. Trade associations, major organizations and local governments are also actively promoting initiatives to foster innovation and to promote E-commerce among small and medium enterprises (SMEs) by offering them hosting solutions for both B2B and B2C E-commerce applications (malls, virtual marketplaces, portals, etc.). Many smaller Italian companies with a Web site still only use it to create brand awareness, offer product information, and generate leads, but this is rapidly changing. The evolution of organizational business models and strategies has created the need for increased interaction with suppliers and customers. A growing number of large and mediumsized companies are investing heavily in Intranet/Extranet infrastructure and are implementing web sales and purchasing applications to meet these needs. Both central and local Italian government have implemented excellent E-procurement practices, and virtually all major Italian industrial groups are organized for E-procurement.

Financial Services Banks are investing considerable resources in E-commerce applications both to sell their own home and corporate banking services, and to support the E-business strategies of their clients by developing virtual malls and portals and by supporting secure transactions. E-insurance is also registering positive results, with a growing number of clients especially resorting to on line car insurance to oppose prices among the highest in Europe.

E-Government An important E-government action plan, which calls for an investment of $1.3 billion, was approved by the Italian government within the framework of the European Union’s E-Europe program. It aims at offering more efficient, more integrated, and higher quality public services, as well as Internet access to information and services for all citizens. Among the actions being taken are the development of a nation-wide Extranet to connect and integrate all central and local government networks; the development of specific portals for accessing different government www.icongrouponline.com


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services; issuance of one million electronic ID cards/smart cards to allow easier access to public services; increasing adoption of E-procurement at the central and local government levels; and countrywide promotion and use of digital signatures.

Interesting Internet Sites •

www.innovazione.gov.it/eng/index.shtml (the English version of the Web site of the Italian Ministry for Innovation and Technologies)

•

http://www.bakerinfo.com/ecommerce (legal aspects of E-commerce in 33 countries)

Major Italian Search Engines •

www.motoridiricerca.it/classi_it.htm (for statistics and complete list – in Italian)

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www.altavista.it

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www.excite.it

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www.godado.it

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www.google.it

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www.iltrovatore.it

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www.kataweb.it

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www.libero.it

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www.lycos.it

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www.msn.it

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www.supereva.it

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www.tiscali.it

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www.virgilio.it

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www.yahoo.it

4.9.6

Leasing

As in many other countries, in Italy it has become common to lease, rather than to buy, certain types of goods (machinery, vehicles, boats, etc). All the major Italian banks have their own leasing companies, which can also be used for leasing foreign manufactured goods. The leasing of foreign machines is usually arranged with Italian clients through local branch offices or agents of foreign manufacturers established to provide this type of service. Importation, payment of customs duties, and other related business formalities are usually more easily done through a firm established in Italy. Such tasks would usually be done by either an agent of the foreign manufacturer or by the Italian lessee. Because the lessee is often not willing to assume the inconvenience of handling importation of leased equipment, local representation might be necessary.



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Joint Ventures and Licensing Options

A joint venture (Associazione in Partecipazione) involves the participation by a supplier of capital in the profits of the business. The operator manages the business and is solely responsible for the obligations he or she assumes toward third parties. The person furnishing the capital is responsible for any loss in direct proportion to his or her share in the net profit, limited to the amount of his/her original investment. Joint ventures can be for one-time defined transactions with a definite duration (contractual joint venture) or a permanent cooperation between separate groups through the incorporation of a joint-stock company (corporate joint venture). Corporate joint ventures are now seen frequently in Italy. Licensing in Italy allows foreign entities to profit from technology transfers of a formula, process or patent without the need to invest substantial capital. The Italian government imposes no exchange control limitations on the transfer of royalties abroad. Protection over the use and ownership of the technology transferred should be included in the terms of the licensing agreement.

4.9.8

Creating a Sales Office

A foreign citizen wishing to establish temporary or permanent residence in Italy to administer a business or to manage a corporation should obtain a business visa for this purpose from one of the Italian Consulates in the United States. All individuals or firms in business in Italy must be registered with the local Chamber of Commerce, Industry and Agriculture. This is a quasi-government office, operating essentially as a field office of the Ministry of Productive Activities (formerly the Ministry of Industry and Commerce). To register with this office, an agent for a foreign company must produce a power of attorney duly notarized by an Italian consular or diplomatic official in the country of the principal.

4.9.9

Advertising and Trade Promotion

Marketing and advertising are factors critical to success in the Italian market, due to the sophisticated nature of Italian consumers. In the past decade, advertising in Italy has experienced rapid growth in volume, importance, and sophistication. This growth in advertising has been accompanied by a proliferation of advertising agencies and an expansion of services. Along with Italian-owned agencies, there are joint ventures with other European or American firms. While some agencies specialize in specific services and media, a large number of full service agencies deal with all advertising aspects and have market research capabilities. Reorganization and concentration prevail in the Italian advertising market. Most advertising agencies are not limiting their activities to advertising, many also have integrated divisions specialized in direct marketing, sales promotion, etc. Recently a growing phenomenon is the introduction of special divisions devoted to the new electronic forms of advertising. Advertising media include: •

Newspapers: 35 percent of total advertising

•

Magazines: 35 percent

•

Radio and television: 22 percent



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Movie theaters: 2 percent

•

Other methods: 6 percent

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Newspapers and Magazines The main means of product advertising in Italy is through daily newspapers. Newspapers work closely with advertising firms, both Italian and foreign. However, since the newspapers themselves do not maintain advertising departments, advertising firms must place their ads with special agencies commissioned by the papers to receive advertising for them. Of about 90 daily newspapers in Italy, only a dozen or so are distributed throughout the country. While some 230 Italian and foreign periodicals are on sale in Italy, only about 20 have a large circulation.

Television Italy is served by three public television networks operated by Radiotelevisione Italiana (RAI), a government-regulated company in which the national government owns a majority interest. The three networks carry commercials all day long. There are also four major nationwide privately-owned television stations. In addition, some 100 private television stations are licensed for local broadcasting.

Radio There are three radio stations owned and operated by RAI. These are on the air for more than 340 hours weekly, and commercial time is available. In addition to the three networks, there are hundreds of local radio stations and several national private stations.

Motion Picture Theaters Wide use of film clips is made for advertising purposes. There are some 10,000 motion picture theaters in Italy and many regularly show advertising. The rates for advertising vary according to the show time and class of the theater. Advertising is shown during every intermission. Therefore, this medium may be used to reach a wide market and cuts across economic strata.

Posters and Billboards Poster advertising is handled by a number of specialized companies, as is electric sign advertising, which is subject to special regulations. Poster advertisements are used on walls, along streets, in streetcars, buses, and other means of transportation to reach the consumer market. Both posters and billboards are subject to the approval of provincial authorities and to payment of a tax on poster advertising.

Show Windows and Flyers Show window advertising is extensively used in Italy. Displays are usually attractively done and show prices of the items for sale. Advertising flyers are in common use, and street banners are used also for special occasions. Loudspeakers are used for advertising at sporting events. Direct advertising, through the distribution of gifts, samples, and price reduction coupons, is frequently used to motivate consumers.

Trade Fairs Exhibitions are a cost-effective method to enter a foreign market and meet a wide range of buyers interested in a particular industry sector. Sales professionals find that trade fairs attract extensive buyer attendance and frequently can be used to gauge acceptance and pricing of new products and to observe the competition. In the course of a few www.icongrouponline.com


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days, a new market entrant may be able to generate more qualified and motivated prospects than by using any other sales approach. Also, fairs are useful for finding an agent, distributor, or representative. The U.S. Department of Commerce frequently organizes U.S. pavilions at events that are identified as providing excellent prospects for American exporters. Information on participating in Italian trade fairs can be obtained from Department of Commerce Export Assistance Centers located throughout the United States. For information about trade fairs at Fiera Milano, one of the largest international trade fair sites in Europe, firms can visit Fiera Milano’s Web site www.fieramilano.com. They can also contact the U.S. Commercial Service in Milan at +39-02-659-2260, E-mail: [email protected]. Fiera Milano organizes an extensive variety of international shows each year, and the U.S. Department of Commerce participates in some of these events.

Major Italian Newspapers AVVENIRE Piazza Carbonari 3 20125 Milano Tel.: +39-02-67801 Fax: +39-02-678-0208 www.avvenire.it [email protected] CORRIERE DELLA SERA Via Solferino 28 20121 Milano Tel.: +39-02-6339 www.corriere.it/ [email protected] IL FOGLIO Largo Corsia dei Servi 3 20122 Milano Tel.: +39-02-771-2951 Fax: +39-02-781-378 www.ilfoglio.it [email protected] Lungo Tevere Raffaello Sanzio 8/C 00153 Roma Tel.: +39-06-589-0901 Fax: +39-06-5833-5499 www.ilfoglio.it [email protected] LA GAZZETTA DEL MEZZOGIORNO Viale Scipione l’Africano 264 70124 Bari Tel.: +39-080-547-0400 Fax: +39-080-547-0488 www.gdmland.it [email protected] GAZZETTA DEL SUD Via Uberto Bonino 15/C www.icongrouponline.com


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98124 Messina Tel.: +39-090-2261 Fax: +39-090-2936-359/2932-063 www.gazzettadelsud.it [email protected] GIORNALE DI SICILIA Via Lincoln 21 90133 Palermo Tel.: +39-091-662-7111 Fax: +39-091-662-7280/617-7517 www.gds.it [email protected] IL GIORNALE Via Gaetano Negri 4 20123 Milano Tel.: +39-02-85661 Fax: +39-02-7202-3859/80 [email protected] IL GIORNO Via Stradivari 4 20121 Milano Tel.: +39-02-277991 Fax: +39-02-2779-9537 http://ilgiorno.quotidiano.net [email protected] IL MANIFESTO Via Tomacelli 146 00186 Roma Tel.: +39-06-687-191 Fax: +39-06-689-2600/6871-9573 www.ilmanifesto.it [email protected] IL MATTINO Via Chiatamone 65 80121 Napoli Tel.: +39-081-794-7111 Fax: +39-081-794-7584 www.ilmattino.it IL MESSAGGERO Via del Tritone 152 00187 Roma Tel.: +39-06-472-01 Fax: +39-06-472-0665 www.ilmessaggero.it [email protected] LA NAZIONE www.icongrouponline.com


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Via Ferdinando Paolieri 2 50121 Firenze Tel.: +39-055-249-5111 Fax: +39-055-234-3646 L’OSSERVATORE ROMANO 00120 Citta’ del Vaticano Tel.: +39-06-69899310 Fax: +39-06-69883675 www.vatican.va/news_services/or/home_ita.html [email protected] IL PICCOLO Via Guido Reni 1 34123 Trieste Tel.: +39-040-373-3111 Fax: +39-040-779-7043 www.ilpiccolo.it [email protected] IL POPOLO Piazza del Gesú 46 00186 Roma Tel.: +39-06-69190334 Fax: +39-06-695-49354 www.ilpopolo.it [email protected] LA REPUBBLICA Piazza Indipendenza 11/B 00185 Roma Tel.: +39-06-49821 Fax: +39-06-4982-2923 www.repubblica.it [email protected] IL RESTO DEL CARLINO Via Mattei 106 40138 Bologna Tel.: +39-051-600-6111 Fax: +39-051-532-990 www.ilrestodelcarlino.it [email protected] IL SECOLO XIX Piazza Piccapietra 21 16121 Genova Tel.: +39-010-53881 Fax: +39-010-5388426 www.ilsecoloxix.it [email protected] LA SICILIA www.icongrouponline.com


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Viale Odorico da Pordenone 50 95126 Catania Tel.: +39-095-330-5440 Fax: +39-095-338-073 www.lasicilia.it [email protected] IL SOLE 24 ORE Via Lomazzo 52 20154 Milano Tel.: +39-02-312-055 Fax: +39-02-3022-2486 www.ilsole24ore.com [email protected] LA STAMPA Via Marenco 32 10126 Torino Tel.: +39-011-656-8111 Fax: +39-011-655-306 www.lastampa.it [email protected] IL TEMPO Piazza Colonna 366 00187 Roma Tel.: +39-06-675-881 Fax: +39-06-675-8869 www.iltempo.it [email protected] L’UNITÁ Via dei Due Macelli 23/13 00187 Roma Tel.: +39-06-699-461 Fax: +39-06-678-6219 www.unita.it [email protected]

Major Italian Business Journals L’ESPRESSO Via Po 12 00198 Roma Tel.: +39-06-84781 Fax: +39-06-884-5167 www.espressonline.it [email protected] ITALIA OGGI Via Marco Burigozzo 5 20122 Milano Tel.: +39-02-5821-9207 www.icongrouponline.com


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Fax: +39-02-5831-7559 www.italiaoggi.it [email protected] MILANO FINANZA Via Marco Burigozzo 5 20122 Milano Tel.: +39-02-5821-9237 Fax: +39-02-5831-7518 www.milanofinanza.it [email protected] PANORAMA Via Mondadori 1 20090 Segrate (MI) Tel.: +39-02-7542-2512 Fax: +39-02-7542-2769 www.panorama.it [email protected] IL MONDO Via Angelo Rizzoli 2 20123 Milano Tel.: +39-02-2584-3784 Fax: +39-02-2584-3880 www.ilmondo.rcs.it [email protected]

Largest Advertising Agency Trade Association Assocomunicazione Associazione delle Imprese di Comunicazione Via Larga 23 20122 Milano Tel.: +39-02-5830-7450 Fax: +39-02-5830-7147 www.assocomunicazione.it [email protected]

Advertising Agencies Armando Testa Via Luisa del Carretto 58 10131 Torino Tel.: +39-011-8810111 Fax: +39-011-8810367 www.armandotesta.it [email protected] Young & Rubican Italia Piazza Eleonora Duse 2 20122 Milano Tel.: +39-02-77321 www.icongrouponline.com


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Fax: +39-02-7600-0904 www.yr.com McCann-Erickson Italiana S.p.A. Via Albricci 10 20122 Milano Tel.: +39-02-852-91 Fax: +39-02-801-207 www.mccann.com mccann [email protected] BGSD’ARCY Corso Galileo Ferraris 24/A 10121 Torino Tel.: +39-011-560-1911 Fax: +39-011-517-5300 [email protected] BGSD’ARCY (Address 2) Via Correggio 18 20149 Milano Tel.: +39-02-467-91 Fax: +39-02-481-8633 J. Walter Thompson S.p.A. Via Paolo Lomazzo 19 20154 Milano Tel: +39-02-336-341 Fax: +39-02-336-34400 www.jwalterthompson.com [email protected] Lowe Pirella Spa Via Pantano 26 20122 Milano Tel.: +39-02-857-21 Fax: +39-02-878-778 www.lowepirella.it [email protected] Grey Worldwide Italia S.p.A. Via Bertani 6 20154 Milano Tel.: +39-02-349-761 Fax: +39-02-349-76321 [email protected] Leo Burnett Company Via Fatebenefratelli 14 20121 Milano Tel.: +39-02-63541 Fax: +39-02-2900-5229 www.leoburnett.it www.icongrouponline.com


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[email protected] Euro RSCG Via Dante 7 20123 Milano Tel.: +39-02-8020-21 Fax: +39-02-7200-0027 www.eurorscg.com [email protected] Saatchi & Saatchi Corso Monforte 52 20122 Milano Tel.: +39-02-770-11 Fax: +39-02-781-196 www.saatchi.it [email protected] Ogilvy & Mather Spa Viale Lancetti, 29 20158 Milano Tel.: +39-02-607-891 Fax: +39-02-6901-8107

4.9.10

Pricing Issues

When providing the Italian buyer with a price quote, American firms most frequently provide a quote that includes sales price plus packing costs, insurance, and freight to the named point of destination. This is called the c.i.f. price. Very often, the average Italian business representative can then usually determine the charges for customs, taxes, and local transportation to arrive at the final landed cost to the importer. The customary terms of sale in Italy are either cash on delivery (which is rare) or settlement 60-120 days after invoice date (more common). Sales made on cash terms call for payment before delivery, on delivery, or shortly thereafter, that is, usually within 10 days from the date of delivery. A two to five percent discount is made for payment of the full amount of the transaction at the end of the specified period from 1 to 4 months from the date of the invoice. The length of the period depends on the commodity involved, the credit standing of the buyer, and the marketing and sales objective of the seller. A period of up to 2 years is often allowed for payment of capital goods, store equipment, trucks, and similar heavy equipment. Italian firms indicate that some American suppliers are too rigid in their payment terms and have thus lost business to other suppliers. Financing is considered as much a competitive factor as the product itself, the delivery date, or aftersales service. While some U.S. manufacturers request payment upon receipt of the goods, more successful sellers offer terms allowing settlement of the account from 60 to 120 days following the invoice date, which is the most common practice in Italy. The use of irrevocable letters of credit for the Italian market has declined appreciably in recent years. Although such instruments are still required by American exporters, especially when the Italian customer’s credit reputation is not well known, the growing reluctance of Italian firms to provide letters of credit has required American exporters to turn to other methods to assure payment or lose the sale to other suppliers in the competitive Italian market. The Italian businessperson is reluctant to pay a high fee for a letter of credit when other suppliers or means of payment



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are available. American firms have put to greater use the export credit insurance and guarantee programs available through the Foreign Credit Insurance Association (FCIA).

4.9.11

Quotes and Payment Terms

Italian importers generally prefer price quotes on a c.i.f. basis, since they are usually familiar with the Italian customs charges and value-added taxes levied on the product at the time of importation, but may not be acquainted with U.S. costs for trucking, ocean, or air freight. Large Italian firms and department stores, however, may prefer to buy on other terms when they arrange for the shipping and insuring the goods. Quotes and invoicing are usually in terms of the currency of selling country. American quotes, usually stated in dollars and on a f.o.b. basis, are completely acceptable to Italian buyers. The usual practice of American firms selling to a new customer is to require cash against documents for the first sale or two. After establishing credit, the importer will expect to pay by 30-, 60-, or 90-day letter of credit. In all cases, the American exporter will have to decide how to strike a balance between making the sale perhaps more easily with liberal financing terms versus striking a sale by seeking more secure payment terms. When first starting out, American firms may often find it necessary to offer their best price and payment terms in order to land the sale in the competitive international market. Later, prices may be adjusted as sales and volume permit. The Italian buyer may request a quote or shipment of goods under INCOTERMS. This is a set of international rules defining the important commercial terms and practices. By referencing INCOTERMS in contracts or invoices, both buyer and seller will have a uniform understanding of their responsibilities in an agreement. Copies of the 90-page publication Guide to INCOTERMS are obtainable from ICC Publishing, 156 Fifth Avenue, New York, NY 10010, (212) 206-1150. Exporters can also obtain information from the Dun & Bradstreet Exporters’ Encyclopedia. Merchandise may be examined by the Italian importer before customs clearance for inventory purposes. Goods cannot clear customs without shipping documents and payment of any required customs duty, applicable value-added taxes, and excise taxes. These formalities must be undertaken by the importer at the time of clearing customs. Import licenses, if required, should be presented by the importer within the period for which they were issued.

4.9.12

Selling Strategies

Successful marketing in Italy requires even an extra measure of diligence for American companies than does marketing in the United States. Whether establishing a manufacturing operation or sales branch, or appointing a commission agent, stocking distributor, or a combination agent/distributor, the American exporter must make a longterm commitment to pursuing the Italian market, maintain regular contact with the local partner, and remain conscious of customers’ needs. A key factor in serving the overseas buyer is the local stocking of parts and readiness to make immediate air shipments upon request. Dependable after-sales service is essential. An American company entering the competitive Italian market is advised to commit the resources needed to market its products appropriately. Appointment of a resident representative is extremely important. For business promotion and market knowledge, there is no effective alternative to an Italian representative who is fully familiar with the local business culture and readily available to customers. Having a local representative is particularly important when the product is complex and likely will require follow-up service or modification. Personalized service is frequently demanded by customers; supplying it creates goodwill and often stimulates repeat sales. Technical manuals and promotional literature should be in Italian. Italy is a competitive market where reliability is important. Local representatives with solid reputations and promotional material in Italian reflect a commitment to customer service and enhance the business reputation of the American firm.



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A number of U.S. firms maintain their own sales organizations in Italy. Others sell through specialized importers or appoint sales agents who often are manufacturers’ brokers. A large, well-established Italian firm with an efficient nationwide sales organization is likely to insist on an exclusive arrangement. About 7,500 U.S. firms are represented in the Italian market through agents, branches, subsidiaries, or licenses. Of these, nearly 850 have a substantial direct capital investment in the form of stock as a sole owner or partner in an enterprise. Generally, the sales territory includes all of Italy. In other cases, the territory also covers the entire European Union, depending on the type of product and degree of technical support needed. Italian distributors also have excellent contacts with Eastern Europe and the Mediterranean Basin.

4.9.13

Public Sector Marketing

The Italian government does not typically purchase goods and services abroad unless they cannot be procured locally through domestic sources, which would include subsidiaries, branches and agents of American companies. In order to be considered as a source for Italian government purchases, it is recommended that the American firm be represented by an agent/distributor rather than try to deal directly with Italian government agencies. Each of the Italian agencies maintains its own list of contractors and suppliers. Therefore, U.S. firms need to contact each agency directly to establish their eligibility. U.S. companies must first establish their financial and technical capabilities by presenting them directly to the Italian agencies.

4.9.14

Hiring Local Counsel

American companies that are interested in setting up agencies, distributorships, licenses or joint ventures are encouraged to seek professional legal advice and counsel. The American Embassy in Rome and the individual Consulates maintain a list of lawyers (according to geographic jurisdiction) that is available to the public.

4.9.15

Performing Due Diligence

Information on specific Italian firms is available from a variety of private agencies. American companies can contact their local U.S. Department of Commerce Export Assistance Center for a listing of firms offering this service. In addition, this section includes a list of Italian private sector firms that provide this service. American banks also provide credit information services. Just as the terms of any sales offer should be presented in a clear and detailed manner, shipping documents should conform to the contract and to any samples that may have been sent to the Italian importer. Special attention should be given to the prompt observance of agreed delivery schedules, as prompt delivery may be a decisive and possibly an overriding consideration of the importer in placing additional orders. When shipping on letter of credit, all terms specified on the letter of credit must be strictly observed. If the terms are not followed, the letter of credit may not be honored by the issuing bank.

Italian Private Sector Firms Providing Background Information Checks Dun & Bradstreet Kosmos S.p.A. Via di Valtorta, 48 20127 Milano Tel.: +39-02-284-551 Fax: +39-02-287-2181



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www.dnb.com [email protected] Lince S.p.A. Corso Vittorio Emanuele, 22 20122 Milano Tel.: +39-02-77541 Fax: +39-02-7602-0458 www.linceonline.it [email protected] Ponzi S.p.A. Corso Monforte, 9 20122 Milano Tel.: +39-02-7600-2821 Fax: +39-02-781-515 www.ponzi.com [email protected]

4.9.16

Marketing Agricultural Products

Socio-economic and demographic changes have had a very positive impact on the Italian consumer market. There are many more singles and senior citizens who have disposable income and are interested in new and foreign products. These buyers want consumer-ready products (if available, in single portion packages), and are willing to pay the price for high quality food. The Italian market is highly receptive to quality U.S. consumer goods. There are, however, a few constraints affecting the export of U.S. products: •

EU policy and health regulations. There are strict regulations issued by the EU to control the sale of health/dietetic and organic food products.

•

Consumer resistance to biotech products/ingredients. Pressure from environmental groups, supported by a “Green Sympathetic” Agricultural Minister, has resulted in several policies that limit the use of biotech or “genetically-modified” (GM) products in Italy. In August of 2000, the Italian government unilaterally banned the use of four EU-approved corn products, based on an argument that the products should have been approved following a full EU review and not based on substantial equivalence. Italy, additionally, still bans geneticallymodified (GM) products in baby food. In both cases, a zero tolerance level is expected for adventitious GM presence. Few, if any, consumer products containing more than the one percent GM threshold for labeling are found at the retail level because of importer and supermarket chains’ concern about consumer backlash.

•

BSE (bovine spongiform encephalitis, or “mad cow”) and other animal diseases. Outbreaks of BSE and Foot and Mouth disease in many European countries have affected the meat market in Italy and EU. This situation has created strong demand for non-European origin pork and non-hormone treated beef.

The Italian hotel/restaurant and institutional food products sectors are also booming, and is expected to grow even more in the future. Italy is the world’s fourth largest tourist destination, attracting millions of tourists every year. This has stimulated establishment of new restaurants, both traditional and ethnic. In addition, demand from Italy’s younger generation has supported this trend. This presents enormous potential for quality U.S. food manufacturers in this industry sector.



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Italy continues to play a major role in the organic and natural food sector, both as a producer/exporter of bulk organic and natural food products and as a consumer. The Italian organic food sector is enjoying healthy expansion, as Italians are becoming more health conscious. The media has had a major role in this increased interest in organic/natural foods, particularly by constant reporting on food safety problems such as BSE, dioxin, and other food safety problems. Focus is placed on the nutritional/health aspects of organic products, making them desirable and very trendy. U.S. participation in this market continues to face limitations due to strict import certification requirements, allowing EU competitors an advantage in market access. EU policy still stipulates that member state authorities need to be satisfied that imported products meet the EU standard for “organic.” U.S. and EU standards are not identical. In addition, the importer must request import authorization for each separate product imported. Italian citizens’ relative affluence and higher disposable income have opened the market for other specialty food items. The pet care sector, for one, continues to expand, creating new opportunities for unique and high quality U.S. products. Quality U.S. pet food has developed a profitable market share in Italy. However, competition is fierce and new prohibitions on ingredients for pet food took effect in 2002. Because of the BSE (mad cow) crisis, the EU has passed more stringent rules governing products made from animal by-products, including pet food. All ingredients used for the manufacture of pet food must be “fit for human consumption.” To summarize, pet food must come from a registered establishment. These and other requirements are evolving as the EU seeks to instill consumer confidence, even in the pet food sector. The Italian Retail Food Sector in the north has grown rapidly in the last few years, expanding from the traditional mom and pop local store to an ever increasing number of hyper-markets, supermarkets and self service grocery store chains. This retail evolution has brought with it a wider selection of merchandise, better service and quality of food. Italian consumers are becoming accustomed to buying all of their food products in one large store, versus going to several smaller specialty shops. Competition is fierce, as many foreign owned hypermarkets have started to penetrate the Italian market forcing the Italian grocery store chains to increase the number and quality of products offered. The growth of hyper and super markets in the south is much slower. Ongoing socio-economic and demographic changes have also had an impact on the Italian retail food market, as the average consumer has more disposable income and is better-traveled, and therefore is interested in foreign or exotic foods. In addition, the number of singles is on the rise both among the young and the older generations, forcing retailers to cater to their desire for single portion, ready made food products.

4.10 4.10.1

TRADE BARRIER RISKS Broadcast Directive and Motion Picture Quotas

Italy passed legislation in 1998 to significantly tighten European content requirements (TV quotas). Italy’s previous requirement was that a majority of television broadcast time for feature films be reserved for films produced in the EU, and that half of the European quota be dedicated to films produced in Italy. The EU Directive excludes news, sports, game shows, advertising, teletext and teleshopping. Italy’s regulation goes beyond the EU Directive by applying quotas specifically to prime time broadcasting, and excludes talk shows from fulfilling the quota, also. A separate but related issue concerns films shown in Italian theaters. After eliminating obligatory screen quotas for Italian films in 1994, Italy re-instituted EU content quotas specifically for multiplex cinemas in Fall 1998. Building restrictions on new multiplexes were also created, in order to minimize competition with existing cinemas. The quotas require that multiplexes devote 15-20 percent of seats, in at least three theaters per multiplex, to EU content on a “stable” (daily) basis. The United States continues its efforts both to obtain elimination of discriminatory laws and regulations in the audiovisual sector and to limit their impact in the interim. www.icongrouponline.com


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Civil Aviation

Italy and the United States agreed on an “Open Skies” civil aviation regime in 1999. This liberalized the Italy-U.S. air travel market dramatically.

4.10.3

Government Procurement

In Italy, fragmented, often non-transparent government procurement practices and previous problems with corruption have created obstacles to U.S. firms’ participation in Italian government procurement. However, Italy has made progress in making the laws and regulations governing procurement more transparent, although Italy has not yet fully updated its code, nor completely implemented EU directives on government procurement. In addition, the pressure to reduce government expenditures while increasing efficiency is resulting in increased use of competitive procurement procedures and greater emphasis on best value rather than automatic reliance on traditional suppliers. This trend is benefiting U.S. firms.

4.10.4

Customs Regulations, Tariff Rates, and Import License Requirements

Prior to signing a long-term contract or sending a shipment of considerable value, it may be prudent for a U.S. exporter to first obtain an official ruling on the customs classification, duty rate, and taxes. Such requests should be sent to the Ministry of Finance’s Customs Department, Rome, Italy. The request should describe the product, the material it is made from, and other details required by customs authorities to classify the product correctly. While customs will not provide a binding decision, the advance ruling will usually be accepted as long as the imported goods are found to correspond exactly to the description provided by the exporter. With exception of a small group of largely agricultural items, practically all goods originating in the United States can be imported without import licensing or free of quantitative restrictions. There are, however, monitoring measures applied to imports of certain sensitive products. The most important of these measures is the automatic import license for textiles. The import license is the responsibility of the Italian importer. The import license is the responsibility of the Italian importer. This license is granted to Italian importers when they provide the requisite forms. Various textile, apparel, and controlled products (such as arms and munitions), are the most frequently regulated items. Import licenses are generally granted for goods of U.S. origin rapidly and delays are usually caused by lack of proper documentation, or information. Licenses are not transferable, although they may be used to cover several shipments within the total quantity authorized. In general, the goods involved are indicated on the license by the Harmonized System classification number and the corresponding wording of the tariff position.



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Value-Added Taxes

While customs duty rates are the same for all 15 EU countries, the value-added tax (VAT) and excise tax on products and services usually differ from country to country. These taxes are levied in the country of final destination. Following is the schedule of VAT rates presently applicable in Italy: •

Zero rate: Applies to exports outside the EU and supplies of goods to entrepreneurs in other EU states, sales of ships and aircraft and related parts, and supplies (with certain limitations) and specified services relating to international operations

•

4 percent: Applies to numerous basic agricultural products, basic foodstuffs (i.e. bread, milk and fruits), certain medical aids, books and newspapers

•

10 percent: Applies to certain agricultural products, transportation services for individuals, most foodstuff, livestock and meat, most pharmaceutical products, energy for private use, telecommunication services rendered through public phones (tlc for private use are at 20 percent rate), services rendered by hotels and restaurants and the cost of domestic airline tickets

•

20 percent: As the standard rate, applies to all goods and services not subject to other rates (including most of the goods previously subject to the 12 percent rate – i.e., shoes, textiles, records and tapes)

4.10.6

Temporary Goods Entry Requirements

Entering Temporary Imports Material may temporarily be imported into Italy without payment of duties or tax if such material is to be used in the production or manufacture of a product that is to be exported. The importer gives a security deposit, usually in the form of a guarantee from a bank or insurance company, for the amount of the usual duties and taxes. Upon exportation of the finished product, the guarantee is released or the deposit returned. Temporary entry of goods intended to be re-exported in the same condition is permissible free of import duties and taxes upon approval of an application by Italian Customs. Samples of products, without commercial value, are admitted free of duty and taxes. Product literature should be marked “product literature--no commercial value”. Samples with commercial value are also admitted duty and tax free, provided that the following conditions are complied with: •

The samples are accompanied by a representative of the U.S. firm with a statement, notarized by an Italian Consulate, identifying the commercial traveler and attesting to the intention that the samples are being imported into Italy only for show or demonstration, and will be re-exported without sale.

•

A certificate of origin from a recognized chamber of commerce is submitted to identify the source of the goods.

•

A deposit or bond, in the amount of the applicable customs duties and taxes, is made at the point of entry. This will be refunded when the goods are re-exported.

•

A list (in duplicate) with a full description of each sample, including weight and value, is submitted. It is helpful to have such a list in Italian.

U.S. traders should be aware of a more simplified procedure, which is a carnet for the temporary importation of samples without posting guarantees. In practice, samples valued in excess of 2,582 Euro (or about $2,900) are practically impossible to clear through Italian customs informally. In such cases, it is advisable to engage the services of a local freight forwarder. www.icongrouponline.com


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Goods in Transit Goods may clear customs with an EU transit procedure, issuing a single transit document under which the goods may be easily shipped across frontiers of the EU member states. These transit documents are completed for the importer by a freight forwarder in Italy. The EU transit document provides the basis for a single, comprehensive procedure covering the goods within the EU. Since the single transit document is an EU form, the European importer, customs house broker, freight forwarder, or shipper must prepare the document at the point of entry.

Inward and Outward Processing Inward processing is the temporary importation of raw material or products for additional manufacture or processing. Merchandise imported for additional processing and eventual re-export out of the EU is eligible for custom-free treatment. The re-exported goods may be partly or totally processed. The import duty and taxes are levied only on those goods that are not re-exported and are finally sold in the EU. To qualify for inward processing, an Italian (or EU) firm must satisfy customs that it is necessary to use imported goods instead of EU goods; state an intention to export products manufactured from the imported goods (or equivalent goods available in the EU); and assure that, upon re-exportation, the conditions set forth in the authorization are satisfied, the exported products are accounted for, and the entered goods are identifiable and relate to specific importations. In outward processing, a firm in Italy may export goods, for further manufacture or processing, from the EU customs area and then re-import the final product. Duties and taxes are levied only on the increased value added by the expatriate manufacturing or processing when the goods are returned to Italy, not on the total value of the product. Only firms located in Italy or other EU countries are eligible to take advantage of this option, by gaining approval of the Customs authorities.

4.10.7

Special Import/Export Requirements and Certifications

Documents required for exporting include a shipper’s commercial invoice and a bill of lading, or air waybill, none of which require consular legalization. For textiles and apparel, it is good practice to provide a certificate of origin, available through most state chambers of commerce. For other products, however, if substantive proof of U.S. origin is provided through accompanying documents, as well as through characteristic trademarks, a certificate of origin is not normally necessary. For additional information or assistance on export documentation, readers should consult publications such as the Exporter’s Encyclopedia, published by Dun’s Marketing Services or contact a local U.S. Department of Commerce International Trade Administration Export Assistance Center.

4.10.8

Labeling Issues

There is no general requirement for imports to be marked with country of origin. Under Italian legislation, the origin of imported merchandise is established through documentation accompanying the shipments, not through marking of products or their containers. Certain specified commodities, however, must be marked or labeled to show composition, and name and location of manufacturer, in accordance with various laws and regulations. The following articles are subject to special marking or labeling regulations: lime, cement and similar binding agents; pianos, automatic pianos, harmonicas and similar instruments; clinical thermometers; ethical medicines; cosmetics. Hallmarking of gold and silver articles is required before they can be offered for sale. Only small tolerances are allowable for discrepancies from manufacturing errors. The hallmarking may be done by a hallmarking office after importation. www.icongrouponline.com


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Italy uses the metric system of weights and measures, which is called the International System of Units (SI). The European Community has established standardized packaging units for numerous products, which should be consulted by U.S. exporters. Labeling must be in metric units for all imported products to be sold in Italy. Products are allowed to be imported and then labeled in SI metric units prior to sale. Dual labeling information is permitted, but the non-metric information must not predominate. Imports of certain commodities such as packaged foods, distilled spirits, beer, wine, vinegar and foodstuffs are subject to special regulations requiring their labeling to display manufacturer, composition, content (in metric units), and country of origin. In view of the complexity of these regulations and changing requirements, information should be requested from the importer prior to shipment. When the services of an importer are not available, information can be obtained directly from the appropriate Italian Government authority listed at the end of this publication.

4.10.9

Restrictions on Imports

There are a number of Italian regulations and European Community directives that prohibit certain foodstuffs, food colorings, drugs and narcotics, animal products, plants, seed grains, alcohol, cosmetics and toiletries, etc. It is therefore recommended American exporters contact the Italian importer prior to the shipment or use their freight forwarder to make the determination.

4.10.10

Controls on Exports

The Bureau of Industry and Security (BIS), part of the U.S. Department of Commerce, is responsible for implementing and enforcing the Export Administration Regulations (EAR), the legislation regulating the export and reexport of most commercial items. The items that BIS regulates are referred to as “dual-use”--items that have both commercial and military or proliferation applications--but purely commercial items without an obvious military use are also subject to the EAR. The EAR do not control all goods, services, and technologies. Other U.S. government agencies regulate more specialized exports. For example, the U.S. Department of State has authority over defense articles and defense services. A list of other agencies involved in export controls can be found on the BIS Web site www.bxa.doc.gov, or in Supplement No. 3 to Part 730 of the EAR which is available on the Government Printing Office Web (a link is provided on BIS’s Web site). BIS’s Web site (www.bxa.doc.gov) is designed to give people who are new to exporting, and, in particular, new to export controls, a general understanding of U.S. government regulations and how to use them. The Web site also has a number of essential links to other U.S. government sites that can provide background information to U.S. exporters who may have questions.

4.10.11

Local Standards

As a member of the EU, Italy applies the product standards and certification approval process developed by the European Community. EU standards setting is initiated by industry or mandated by the European Commission. This process is carried out by independent standards bodies at the national, European or international level. There is strong encouragement for non-governmental organizations, such as environmental and consumer groups, to participate in the development of European standards. A new legislative strategy was instituted in the 1980’s designed to harmonize the health, safety, and environmental requirements of Member States into one European-wide legislative package. The result is a new set of laws called the New Approach Directives. Directives, the principal form of EU legislation, specify mandatory health and safety



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regulations for products and manufacturing processes. With the establishment of Directives, one unified law replaced various national laws. In 1989, the “New Approach” was supplemented by the “Global Approach” to standardization. This provided for the establishment of procedures to assess the conformity of products with the requirements of the Directives. It also provided for the affixing of CE marking to such products. The goal of the New Approach is to streamline harmonization and the development of standards for broad product families. These product families include machinery, toys, construction products, electromagnetic compatibility, personal protective equipment, non-automatic weighing instruments, medical devices, gas appliances, hot water boilers, and radio and telecommunications terminal equipment (RTTE). Three regional European standards organizations, CEN, CENELEC and ETSI, are mandated by the Commission to develop technical standards that are consistent with the health and safety requirements of EU Directives. As an EU member state, Italy is required to incorporate approved EU Directives into its national laws. U.S. firms exporting to Italy must conform to EU standards and/or national Italian standards. The drafting of EU product standards is handled by three European standards organizations: •

CENELEC, European Committee for Electrotechnical Standardization (http://www.cenelec.org/)

•

ETSI, European Telecommunications Standards Institute (www.etsi.org)

•

CEN, European Committee for Standardization, handling all other standards (http://www.cenorm.be/)

The European Commission (the lawmaking body) and the European standards bodies collaborate to produce Harmonized Standards. When a standard is completed, the Commission publishes the notice of its completion in the Official Journal of the European Communities. Products manufactured to standards adopted by CEN, CENELEC and ETSI and published in the Official Journal conform to the requirements of EU Directives. (Legislation, as well as a list of harmonized standards, can be found on the www.newapproach.org Web site). The manufacturer then applies what is called a CE Mark to the product and issues a Declaration of Conformity. With these measures in place, the product will be cleared for commercial transaction within the European Union. A product manufactured in conformity with EU legislation in one Member State will be guaranteed automatic access to the markets of all the other Member States. A U.S. manufacturer who applies the CE mark to their product will also be guaranteed access to all of the markets in the Member States of the European Union. Italy and other EU Member States are required to transpose EU Directives into national law. The Directives define a schedule for adoption, publication and implementation of national provisions. Directives also recognize a transitional period during which existing national provisions and new legislation will co-exist. In such cases, the manufacturer has a choice of following either of these provisions. Similarly, purely national standards must be replaced when agreement has been reached on a harmonized European standard. To keep abreast of CEN and CENELEC’s plans for future standardization, it is best to visit their Web sites. CEN’s “business domain” page provides an overview by sector and/or technical committee whereas CENELEC offers the possibility to search its database. ETSI’s portal (http://portal.etsi.org/Portal_Common/home.asp) describes ongoing activities. There will be instances when no European standard exists for a product that is unique, or innovative, or whose technology is developing rapidly. In this case, a Member State may inform the manufacturer of an existing national standard it considers relevant, or the use of a national standard may be permitted as a temporary solution to the proper implementation of the essential requirements. In Italy, the national standards bodies are: •

UNI-Ente Nazionale Italiano di Unificazione (The Italian National Bureau of Standards), via Battistotti Sassi 11b, 20133 Milan, +39 02 70024.1, www.uni.com/it




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CEI-Comitato Elettrotecnico Italiano, via Saccardo 9 20134 Milan, +39 02 21006.1, www.uni.com/it

Conformity Assessment Conformity assessment in Europe is the process by which compliance with the health and safety requirements of EU Directives is determined. It ensures consistency of compliance with EU regulations during all stages of the production process to facilitate acceptance of the final product. Conformity assessment is a necessary step for manufacturers. New Approach legislation calls for the issuance of a Declaration of Conformity by the manufacturer, and depending on the product, may require a certificate of conformity from an independent certification body. To indicate conformity to EU requirements, an insignia called a CE mark must be placed on all regulated products before they can be sold on the EU market. The CE mark, which simplifies the market surveillance of regulated products, works like a passport for products entering Europe. CE marking a product, like carrying a passport when entering a foreign country, is required by law if the product falls under an EU Directive. Intended for Member State authorities, it is the visible sign that a product is in compliance with the essential health and safety requirements of all Directives that apply to the product. All manufacturers, European, American, or other, are required to affix the CE mark to products that are governed by EU legislation. Although CE marking is intended primarily for inspection purposes by Member State inspectors, the consumer may well perceive it as a quality mark. The manufacturer or the authorized representative affixes the CE marking to the product. The manufacturer is defined as the entity responsible for designing and manufacturing a product covered by a New Approach Directive, and whose intention is to place it on the European Union market. A manufacturer may contract out the design or production, may use finished products, parts or components. In all cases, however, he or she is ultimately responsible for the product and its compliance with the law. An authorized representative is a person appointed by the manufacturer and delegated to act on his or her behalf in carrying out legal tasks within the EU. This authorized representative must be established inside the European Union and available to Member State authorities. The manufacturer, however, is ultimately responsible for the actions carried out by the authorized representative. The first step to compliance is determining which Directives apply to the product. Because Directives cover broad product families, a single product may be regulated by more than one Directive. Before affixing the CE mark, therefore, the manufacturer must make sure the product complies with EU legislation by (1) determining which New Approach Directives govern the product, (2) applying the appropriate standards, and (3) carrying out the appropriate method of conformity assessment. Most products covered by New Approach Directives can be self-certified by the manufacturer and do not require the intervention of an independent certification body. To self-certify, the manufacturer must assess the conformity of products to the applicable Directives, and to any standards that apply. The manufacturer may affix the CE marking to products or equipment, and prepare what is known as a Declaration of Conformity, as long as he or she can prove conformity to the applicable requirements. A Declaration of Conformity is a document informing Member State surveillance authorities that the product meets the essential requirements of the applicable Directives, or if no Directive applies, that the product has been issued a valid examination certificate signifying compliance with general EU requirements and the relevant national standards. New Approach legislation mandates the issuance of a Declaration of Conformity by the manufacturer and sometimes requires a certificate of conformity from an independent certification body. Certain (high risk) products may not be self-certified, but must be subjected to a special EC type-examination. This examination involves the inspection of a representative example by a notified body. The CE mark must be affixed to the product, to its data plate, or where this is not possible or not warranted on account of the nature of the product, to its packaging. It must also be affixed to the accompanying documents provided by the manufacturer or the authorized representative in the European Union. The CE mark must be affixed visibly, legibly and indelibly. The CE mark is not intended to include detailed technical information on the product, but there must be enough information to enable the inspector to trace the product back to the manufacturer or the authorized representative www.icongrouponline.com


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established in the EU. This information should not appear next to the CE mark, but rather on the Declaration of Conformity or other documents accompanying the product. There are hundreds of conformity assessment bodies in Italy. The European Organization for Conformity Assessment Web site (http://www.eotc.be) has a comprehensive list of Italian conformity assessment bodies with contact information.

Product Certification Independent certification bodies, known in the EU as notified bodies, have been officially cleared by European Union authorities to test and certify to EU requirements. Barriers are costly and sometimes even prohibitive for companies that wish to sell their products in foreign markets. Under Mutual Recognition Agreements (MRAs), manufacturers are able to have the conformity of their products assessed in accordance with the regulatory requirements of the relevant third country (i.e., Italy) in appropriately designated laboratories, inspection bodies, and conformity assessment bodies in their own country. This reduces the cost of such assessments and the time needed to accede to markets. MRAs between the US and the EU allow notified bodies based in the United States (referred to as conformity assessment bodies) to test products according to EU specifications, and vice versa. While EU and US authorities are still in the process of establishing mutually recognized regulations for certain product categories, some MRAs are already in place. The US and EU have concluded mutual recognition agreements on the following commercial topics: network and electromagnetic compatibility (EMC) for telecom, commercial topic communications, information technology equipment, and radio transmitters; EMC and electrical safety for electrical and electronic products; quality inspections for the manufacturing of pharmaceutical products and certain medical devices; product assessment for medical devices; and safety of recreational craft.

Accreditation Accreditation is the procedure whereby an authorized body gives formal recognition that an organization or person is authorized to perform certification tasks. Accreditation in the European Union is handled at the Member State level; each European country has an own accreditation authorities. The accreditation bodies in Italy are SINAL, SNT and SINCERT. They are concerned with the accreditation of laboratories, calibration centers and certification/inspection bodies, respectively. SINAL’s (Sistema Italiano Nazionale di Accreditamento dei Laboratori) purpose is the national accreditation of Italian and foreign testing laboratories, to ensure that the results of the tests performed by them are universally accepted. Among the sectors with the largest number of accreditations are machinery, chemicals and the environment. The Sistema Nazionale di Taratura (SNT) has the task of disseminating units of measurement in the various industries. SNT is composed of the primary institutes of metrology. These are the Istituto di Metrologia “Gustavo Colonnetti,” the Istituto Nazionale Elettrotecnico “Galileo Ferraris,” the ENEA (Ente per le Nuove Tecnologie, l’Energia e l’Ambiente), and SIT (Servizio Italiano di Taratura), a network of over 100 national laboratories accredited by the primary institutes of metrology. SINCERT (Sistema Nazionale per l’Accreditamento degli Organismi di Certificazione) accredits certification bodies for quality systems, products, personnel, environmental management systems, and inspection bodies.

Technical Regulations The Official Journal of the European Communities is the official gazette of the European Union. It is published daily and consists of two series covering draft and adopted legislation as well as case law, questions from the European Parliament, studies by committees, and more (http://europa.eu.int/eur-lex/en/index.html). It lists the



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standards reference numbers linked to legislation. National technical regulations are published on the Commission’s Web site http://europa.eu.int/comm/enterprise/tris/ to allow other countries/interested parties to comment. The International Organization for Standardization (ISO), a network of national standards institutes in 148 countries, allows public input into the development of international technological standards (www.iso.org). ISO invites members of the public, private companies and special interest groups to review and comment on its plans for forthcoming technological standards. At the conclusion of a three-month public review period, an ISO committee considers all comments received. US companies can use this forum to help ensure the broadest possible input into ISO’s technological standards.

Labeling/Marking There is no general requirement for imports to be marked with country of origin. Under Italian legislation, the origin of imported merchandise is established through documentation accompanying the shipments, not through marking of products or their containers. Certain specified commodities, however, must be marked or labeled to show composition, and name and location of manufacturer, in accordance with various laws and regulations. The following articles are subject to special marking or labeling regulations: lime, cement and similar binding agents; pianos, automatic pianos, harmonicas and similar instruments; clinical thermometers; ethical medicines; cosmetics. Hallmarking of gold and silver articles is required before they can be offered for sale. Only small tolerances are allowable for discrepancies from manufacturing errors. The hallmarking may be done by a hallmarking office after importation. Italy uses the metric system of weights and measures, which is called the International System of Units (SI). The European Community has established standardized packaging units for numerous products, which should be consulted by U.S. exporters. Labeling must be in metric units for all imported products to be sold in Italy. Products are allowed to be imported and then, labeled in SI metric units prior to sale. Dual labeling information is permitted, but the non-metric information must not predominate. Imports of certain commodities such as packaged foods, distilled spirits, beer, wine, vinegar and foodstuffs are subject to special regulations requiring their labeling to display manufacturer, composition, content (in metric units), and country of origin. In view of the complexity of these regulations and changing requirements, information should be requested from the importer prior to shipment. When the services of an importer are not available, information can be obtained directly from the appropriate Italian Government authority listed at the end of this publication. For agricultural and food products, see “Trade Regulations and Standards for Agriculture” below.

Contact Information Istituto Nazionale per il Commercio Estero (National Institute of Foreign Commerce) Viale Liszt, 21 00144 Roma Tel: +39-06-59921 Fax: +39-06-5992-6899 www.ice.it [email protected] Ente Nazionale Italiano di Unificazione (UNI) (Italian National Bureau of Standards) Via Battistotti Sassi, 11/B 20133 Milan Tel: +39-02-700-241 Fax: +39-02-7010-5992/6106 www.uni.com www.icongrouponline.com


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[email protected] Comitato Elettrotecnico Italiano (Electrical standards and certification) Via Saccardo 9 20134 Milan Tel: +39-02-210061 Fax: +39-02-21006210 www.ceiuni.it [email protected] Ministero dell’Industria e Commercio Ufficio Centrale Brevetti per Invenzioni (Patent and trademark applications and inquiries) Modelli e Marchi Via Molise 2 00187 Roma, Italy Tel: +39-06-47052910 Fax: +39-06-4705-2042 www.minindustria.it www.european-patent-office.org/it/ [email protected] U.S. Mission to the E.U. Foreign Commercial Service Rue Zinner 13 B--1000 Brussels, Belgium Fax: 32 2 513 1228 Gwen B. Lyle – Standards Attaché Tel: 32 2 508 2674 [email protected] Sylvia Mohr – Standards Specialist Tel: 32 2 508 2675 CEN – European Committee for Standardization Rue de Stassart 36 B – 1050 Brussels, Belgium Fax: 32 2 550 08 19 Tel: 32 2 550 08 25 / 550 08 11 www.cenorm.be CENELEC – European Committee for Electrotechnical Standardization Rue de Stassart 35 B – 1050 Brussels, Belgium Tel: 32 2 519 68 71 Fax: 32 2 519 69 19 www.cenelec.org ETSI--European Telecommunications Standards Institute Route des Lucioles 650 F – 06921 Sophia Antipolis Cedex, France Tel: 33 4 92 94 42 12 Fax: 33 4 93 65 22 99 www.icongrouponline.com


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www.etsi.org European Commission Enterprise Directorate--General Rue de la Science 15 B – 1040 Brussels, Belgium Mail: Office: SC15 02/09 B – 1049 Brussels Tel: 32 2 299 56 72 Fax: 32 2 299 16 75 http://europa.eu.int/comm/enterprise/standards_policy/ EFTA – European Free Trade Association Rue de Trèves 74 B – 1040 Brussels Tel: 32 2 286 17 41 Fax: 32 2 286 17 42 http://www.efta.int/ NORMAPME – European Office of Crafts Trades and Small and Medium-Sized Enterprises for Standardization Rue Jacques de Lalaing 4 B – 1040 Brussels, Belgium Tel: 32 2 282 05 31 Fax: 32 2 282 05 35 www.normapme.com ANEC--European Association for the Co-ordination of Consumer Representation in Standardization Avenue de Tervueren 36, Box 4 B – 1040 Brussels, Belgium Tel: 32 2 743 24 70 Fax: 32 2 706 54 30 www.anec.org ECOS – European Environmental Citizens Organization for Standardization Boulevard de Waterloo 34 B – 1000 Brussels, Belgium Tel: 32 2 289 10 93 Fax: 32 2 289 10 99 EOTA – European Organization for Technical Approvals (for construction products) Avenue des Arts 40 B – 1040 Brussels, Belgium Tel: 32 2 502 69 00 Fax: 32 2 502 38 14 [email protected] EOTC – European Organization for Conformity Assessment Rue de Stassart 36 B – 1050 Brussels, Belgium Tel: 32 2 502 40 40 Fax: 32 2 502 42 39 www.eotc.be



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Free Trade Zones and Warehouses

There are two free trade zones in Italy located in Trieste and Venice. Goods of foreign origin may be brought in without payment of taxes or duties, as long as the material is to be used in the production or assembly of a product that will be exported. Benefits of a free-trade zone include: •

Customs duties deferred for 180 days from the time that the goods leave the free-trade zone to enter another EU country

•

The goods may undergo any transformation free of any customs restraints

•

Absolute exemption from any duties on products coming from a third country

The free-trade zone law also allows a company, of any nationality, to employ workers of the same nationality, under that country’s labor laws and social security. Italy also has numerous general warehouses that are located throughout Italy in all the port areas and cities. There are no limitations as to the type or origin of merchandise that can be stored in free trade zones, bonded or customs warehouses. The time limit for such storage is 5 years. Merchandise that deteriorates while in storage can be destroyed without the payment of a duty. The advantage to American firms of a free trade zone or bonded warehouse is having a European base of supply to assure customers prompt delivery and service, ability to maintain inventory at low cost, and a minimum of customs paperwork.

4.10.13

Adherence to Free Trade Agreements

Italy has been a member of the European Union (EU) since its inception in 1958. The other EU members are Belgium, Denmark, France, Germany, Greece, Ireland, Luxembourg, the Netherlands, Portugal, Spain, the United Kingdom, Austria, Finland and Sweden. The EU forms a large unified market having free trade among the member states. It levies a common tariff on imported products coming from non-EU countries such as the United States, Japan, and Canada. The EU also has a common agricultural policy, joint transportation policy, and free movement of goods and capital within the member states. Other aspects of commercial activity are being harmonized, such as financial markets, insurance regulation, and pension programs. The EU grants tariff preferences to more than 100 developing countries and about 40 overseas territories under the EU’s Generalized System of Preferences (GSP). Imports of nearly all semi-manufactured and manufactured goods originating in these countries and territories enter the EU duty free. Annual duty-free quotas are established for those products, and a system with certificates of origin has been established to ensure that goods are not diverted by third parties through the GSP countries. Free trade agreements have been developed between the European Union and the European Economic Area (EEA), which includes Norway, Iceland, Liechtenstein, and Switzerland. Under the terms of these agreements, most industrial products and certain processed agricultural products are exempt from import duties if exchanged within this trading bloc. The result of the agreements reached between the EU members and the EEA members is an open trading area for most industrial products between 19 nations, encompassing population of 380 million, soon to grow even larger as the EU expands.



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Customs Contact Information

Ministero dell’Economia e delle Finanze (Ministry of the Economy and Finance) Agenzia delle Dogane (Customs Agency) Contact: Mario Andrea Guaiana, Customs Agency Director Via M. Carucci 71 00143 Roma Tel.: +39-06-50241 Fax: +39-06-5024-3076 [email protected] www.agenziadogane.it

4.10.15

Warranty and Non-Warranty Repairs

Products that are exported for repairs, will not incur duties or taxes upon return to Italy. Shipments of replacement parts to Italy, however, are subject to duties plus VAT, even if shipped for a product under warranty.

4.10.16

Trade Regulations and Standards for Agriculture

Since Italy is a member of the European Union (EU), virtually its entire agricultural sector is governed by the Common Agricultural Policy (CAP). Similarly, Italy employs the same tariffs, levies and other EU regulations as the other fourteen member states. For example, Italy imposes variable levies (on grain products) and quotas (on meat, cheese, bananas) as required by the European Union. Italy also applies a value-added tax on most food/agricultural items (ranging from 4 percent for semi processed commodities to 19 percent for “luxury”, or high value food items). If a product is directly imported into Italy it must meet all Italian food safety and quality standards, as well as Italian labeling and packaging regulations. Many of these standards and regulations have been harmonized within the European Union. For example, the EU has adopted a number of regulations covering production standards, analytical characteristics, product specifications, allowable additives, and labeling. Specific EU regulations exist for cocoa, chocolate products, sugars, fruit juices, fruit jams and jellies, milk and casein products. However, where EU standards do not exist, Italy can set its own national requirements. Some of these have been known to hamper imports of game meat, processed meat products, frozen foods, alcoholic beverages, and snack foods/confectionery products. U.S. exporters of “health” foods, weight loss/diet foods, baby foods and vitamins should work closely with an Italian importer, since Italy’s labeling laws regarding health claims can be particularly stringent. Italian legislation sets forth orders, obligations and criminal sanctions for violations. Food law is divided into two basic categories: rules dealing with hygiene/sanitary issues and rules governing labeling and packaging. All laws apply equally to domestically produced and imported goods. Italy is still working on specific sectors of food law to bring the regulations scientifically up to date in the areas of hygiene/sanitation. In the case of food additives, coloring and modified starches, Italy’s laws are considered to be comparable to current U.S. laws, albeit sometimes more restrictive.



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Basic Labeling Requirements in the EU/Italy: •

Name of products (physical condition or specific treatment)

•

Name/address of manufacturer, packager, seller or importer

•

Use of local language

•

Country of origin

•

Ingredients in descending order of weight

•

Metric weight and volume

•

Additives by category name

•

Special storage conditions

•

Minimum shelf life date

•

Special preparation instructions

U.S. exporters should be aware that any food or agricultural product transshipped through Italian territory must meet Italian requirements, even if the product is transported in a sealed and bonded container and is not expected to enter Italian commerce.

4.11 4.11.1

INVESTMENT CLIMATE Openness to Foreign Investment

Foreign investors generally find no major impediments to investing in Italy, although bureaucratic requirements can be burdensome. One hundred percent foreign ownership of Italian firms is allowed, but is not common. Some restrictions on foreign investment exist. The government has the authority to block mergers involving foreign firms for “reasons essential to the national economy” or if the home government of the foreign firm applies discriminatory measures against Italian firms. There are industry sectors that are either closely regulated or prohibited outright to foreign investors, such as defense and aircraft manufacturing. An U.S. investment company has, nonetheless, purchased a majority share in Avio, an aerospace company formerly controlled by Fiat group. Finmeccanica, a large aerospace and defense holding company, 33 percent owned by the GOI, now has a minority share of Avio. Outside these sectors, there are no screening or blocking procedures directed solely at foreign investment. Italian anti-trust law (which applies to domestic and foreign investors) gives the government the right to review mergers and acquisitions over certain financial thresholds. In conformity with EU Treaty Article 43, Italy provides national treatment to foreign investors except in a few instances. The exceptions include limits to access to government subsidies for the film industry, some additional capital requirements for banks from countries not in the European Union (EU), and restrictions on non-EU airlines operating domestic routes. Italy also maintains restrictions in shipping. Companies may bring in non-EU workers only after government-operated employment offices have certified that no unemployed Italian is available to carry out the expected duties. Firms incorporated in EU countries may offer investment services in Italy without establishing a presence. U.S. and other firms from non-EU countries may operate based on authorization from Italian Companies and Stock Exchange Commission, the security oversight body (CONSOB, Italy’s equivalent of SEC). CONSOB may deny such authorization to firms from countries that discriminate against Italian firms.



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In the banking sector, privatizations and a wave of mergers and other alliances are reducing the formerly dominant role of the State. Authorization by the Bank of Italy, the country’s central bank, is required to acquire more than five percent of a financial institution’s capital (or to gain effective control of a financial institution, regardless of the amount of capital acquired). Non-bank companies (either Italian or foreign) may not acquire more than 15 percent of a bank’s capital. Government authorization is required to offer life and property insurance and is usually based on reciprocal treatment for Italian insurers. Foreign insurance firms must prove that they have been active in life and property insurance for not less than ten years and must appoint a general agent domiciled in Italy. There are some limits regarding foreign private ownership in banks. For instance, according to the banking law, a foreign institution seeking to increase its stake in a bank above five percent needs the authorization by the Bank of Italy, which often uses its authority to influence or forbid mergers. Local practice and national legislation are used to restrict the expansion of modern, large-scale distribution units, such as chain stores, department stores, and large supermarkets. These subject applications for retail units above a certain merchandising floor area to a lengthy and cumbersome authorization process. The situation has improved recently. Foreign investors are not prevented from investing in firms to be privatized, except in the defense sector. Privatization sales techniques have included private placement, worker shareholdings and management buy-outs and public stock offerings. Often the government establishes a “hard-core” group of shareholders who agree to keep their shares for a minimum period, say three years, or retain a “golden share” (modest government stake, but with controlling authority). The EU Commission has ruled against golden shares. The Italian tax system does not discriminate between foreign and domestic investors. The Berlusconi government is implementing its ambitious ten-year effort to improve and expand the transportation system (both land and sea) and to renew Italy’s dilapidated transportation infrastructure funded with domestic and foreign private capital, in addition to some European Union and central government funds.

4.11.2

Right to Private Ownership and Establishment

Laws governing physical property are adequate and enforced. There is no limitation in either the Italian constitution or Italian civil law on the right to private ownership and establishment. In general, there is competitive equality between the private and public sectors. For years, Italian government bonds absorbed a large share of available domestic investment, but this share has declined as interest rates on those bonds dropped in the run-up to European economic and monetary union. As an alternative, Italian investors have turned to stocks and corporate bonds, significantly increasing the Milan stock exchange’s capitalization as a result. This trend stopped as a result of the losses registered from mid-2000 through end-May 2003, when the Milan stock exchange suffered a 49 percent drop. Private Italian investors have also been badly financially hurt by bankruptcies of Argentine, Cirio, Parmalat and other bonds, and are hesitant to risk further losses.

4.11.3

Intellectual Property Risks

Laws governing physical property are adequate and enforced. The legal system protects and facilitates acquisitions and disposition of all property rights, such as land, building, and mortgages In August 2000 the Italian Parliament enacted the long-awaited “anti-piracy” law, providing for higher criminal penalties for copyright violations. Italy has since been moved from the U.S. Trade Representative’s Special 301 IPR “Priority Watch List” to the “Watch List.” According to American film, music and software industry representatives,



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law enforcement efforts against piracy have been improving over recent years. In August 2001 the GOI passed implementing regulations for the copyright anti-piracy law. In January 2003, these were revised to permit exemptions for business software from the SIAE sticker requirement. The revised regulations appear to generally satisfy U.S. industry. The United States Government continues to closely monitor developments in this area. In recent years, the Italian Government has substantially increased enforcement actions against both video and software pirates, creating an Interministerial Anti-Piracy Committee, specialized training courses for Italy’s three law enforcement agencies, and “pools” of prosecutors specialized in administrative and civil cases involving intellectual property right in Milan, Rome, Naples and other major cities. However, further effort is needed to reduce the level of piracy, which remains unacceptably high. Italy is a member of the Paris Union International Convention for the Protection of Industrial Property (patents and trademarks) to which the United States and about 85 other countries adhere. U.S. citizens generally receive national treatment in acquiring and maintaining patent and trademark protection in Italy. In addition, after filing a patent application in the United States, a U.S. citizen is entitled to a twelve-month period within which to file a corresponding application in Italy and receive the benefit in Italy of his or her first U.S. filing date (rights of priority). The priority right filing period for trademarks is six months. Patent and trademark applications and inquiries should be addressed to: Ministero dell’Industria, del Commercio, e dell’Artigianato Ufficio Italiano Brevetti e Marchi Via Molise, 19 00187 Rome, Italy Applications and inquires concerning copyrights should be addressed to: Presidenza del Consiglio dei Ministri Dipartimento per l’Informazione e per l’Editoria Via Boncompagni, 15 00187 Rome, Italy

4.11.4

Laws Governing Intellectual Property Rights

Patents and Licensing The principal laws governing patent protection are Royal Decrees No. 3731 of October 30, 1859, No. 1127 of June 29, 1939, and Presidential Decree No. 338 of June 19, 1979. Decree 338 amends the former Italian legislation and implements the European Patent Convention. To be patentable, an invention must be novel, that is, it cannot have been available to the public anywhere else before the date of the filing or of the priority claimed and non obvious, that is, if the differences between the subject matter to be patented and the prior act are such that the subject matter would have been obvious to an ordinarily skilled person. Patents are granted for 20 years from the effective filing date of application. They are assignable and transferable. A patent can be subject to compulsory licensing if not worked within 3 years from date of grant or four years from the filing date of application, whichever is later. In accordance with Italy’s Uruguay Round implementing statute (Law 747 of December 29, 1994) and the implementing decree enacted on March 19, 1996, the Italian law was amended so that the introduction or sale in Italy of items manufactured in foreign countries belonging to the World Trade Organization constitutes working of the invention.



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Licensing and technical assistance agreements with foreign firms are encouraged by the government. The foreign exchange necessary to effect payment abroad (including the United States) of bona fide royalties and/or technical assistance fees can be obtained simply upon application to the Italian Exchange Office through a bank. Applicants are required to produce the original contract with the foreign concern and to submit a certified copy of such a contract. A certificate confirming the validity of the patent should also be submitted in the event that the contract provides for the use of patents. Annual taxes must be paid during the period an Italian patent is in force. These taxes are progressive and range from euro .52 for the first year to euro 18.08 for the 15th year.

Trademarks The principal trademark registration laws are Royal Decree No. 929 of June 21, 1942. Some types of terms may not be registered as trademarks, such as those deemed generic, those containing false indications of quality or origin of goods, and those with similar terms already registered by others in Italy or for which applications are pending. For some goods, geographic names may not be used in trademarks nor can the portraits of persons be registered without their consent. Trademark applications are examined for acceptability of their format and consistency with the laws. If an application is in order, the mark will be registered. The first applicant is entitled to registration. However, any other person who claims to be the first user of the mark in Italy can have the prior registration cancelled, provided the claim can be proven. No claim of prior use can be made after the registered mark is 5 years old. Trademarks are registered for 20 years from the effective application filing date and are renewable for similar periods. Failure to use a mark within three years after its registration can result in cancellation. Trademarks may be assigned to other users provided such action does not involve deceptive trade practices. For administrative purposes, trademark products are classified under 42 groups (1-34 for products and 35-42 for services). Applications must indicate the appropriate classification.

Copyrights Both Italy and the United States are signatories of the Universal Copyright Convention, which provides for mutual copyright protection. In Italy, copyrights are protected by Law No. 633 of April 22, 1941 and Decree Law No. 82 of August 23, 1946. Executive recognition in the form of copyright protection to the author is accorded intellectual creations pertaining to science, literature, music, decorative arts, architecture, the theater, and motion pictures. The following additional legislation relating to the protection of copyright was subsequently issued: Illegal duplication of phonographic material (No. 406 7/29/81); Illegal duplication and transmission of cinematographic film works (No. 400 7/20/85); Illegal duplication of software (No. 518 12/20/92--enacting EU Directive 91/250) – criminal sanctions for software piracy were subsequently increased by legislative decree in April 1996; Rental and neighboring rights related to intellectual property (No. 685 11/16/94--enacting EU rental rights directive and outlawing unauthorized “bootleg” recordings of live performances). Further detailed information on procedures regarding patent, trademark, and copyright protection in Italy should be obtained from competent legal counsel.

EU Initiatives on Intellectual Property Rights (IPR) Protection Italy is also a signatory to the European Patent Convention, which provides for a centralized European-wide patent protection system (Italy has not yet ratified the convention). The European Patents Act of 1977 provides increased legal protection, a patents court, and guidelines for compensation of an inventor. Under the European Convention, an applicant for a patent is to be granted a pre-examined 15-year, non-renewable European patent that has the effect www.icongrouponline.com


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of a national patent in all 16 countries that are signatories of the convention, based on a single application to the European Patent Office. This procedure should expedite the granting of patents. However, infringement proceedings remain within the jurisdiction of the national courts, which could result in some divergent interpretations. Further information may be obtained from the European Patent Office, Motorama-Haus, Rosenheimer Strasse 30, Munich, Germany. The EU commission is attempting to harmonize copyright protection in several areas and views continued progress as a key part of its programs for the internal market. The software directive, approved by the European Council in 1991, entered into force on January 1, 1993. Seven member states including Italy have transposed the directive into national legislation. The directive on rental and lending rights, approved by the Council in 1992, was implemented in Italy in late 1994. In September 1993, the Council adopted a directive on the harmonization of copyright laws in satellite broadcasting and cable retransmission (EU Directive 93/83). This measure allows satellite broadcasters to clear in their country of origin full copyright responsibility for their entire footprint throughout Europe. In an attempt to overcome the significant divergences among the member states in this area of IPR protection, in October 1993, the Council adopted the directive on the harmonization of the duration of copyright and of certain related rights (EU Directive 93/98). It provides for the term of copyright to be harmonized for a period of 70 years after the author’s death. For related rights, it harmonizes the term of protection at 50 years from the date of production. Italian Decree Law 544 of June 1995 and Law 52 of February 1996 implemented these two directives.

4.11.5

Foreign Trade Zones and Free Ports

There are two free trade zones in Italy, located in Trieste and Venice, both in the northeast. Goods of foreign origin may be brought in without payment of taxes or duties, as long as the material is to be used in the production or assembly of a product that will be exported. The free-trade zone law also allows a company, of any nationality, to employ workers of the same nationality under that country’s labor laws and social security systems. Benefits of a free-trade zone include: •

Customs duties deferred for 180 days from the time that the goods leave the free trade zone to enter another EU country

•

Goods may undergo transformation free of any customs restraints

•

Absolute exemption from any duties on products coming from a third country

4.11.6

Taxation Issues

The Italy-U.S. tax treaty contains provisions to avoid the double taxation of income for firms with operations in both countries. Royalties from patents and like properties are exempt from tax withholding under the treaty. They are freely remittable, subject to documentation requirements. In late 1999, Italian and U.S. tax authorities initialed a new tax treaty entitled to replace the old treaty. The new treaty covers royalties and a new Italian tax, called IRAP or regional tax of productive activities. Since the U.S. Congress and Italian Parliament have not yet ratified it, its provisions are not in force.



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Performance Requirements and Incentives

The GOI is in compliance with WTO Trade-Related Investment Measures (TRIMS) obligations. Investors do not face performance requirements specifically directed at foreigners. In the telecommunications sector, however, many new entrants are subject to performance requirements and must post a performance bond to receive a license to operate. The EU has challenged some of Italy’s performance criteria for telecom licenses. The Italian government offers incentives designed to encourage private sector investment, by both Italian and foreign firms, in depressed areas, particularly in the underdeveloped or south of Italy. Foreign investors (U.S. and other foreign firms) are able to participate in government research and development programs based on reciprocal treatment for Italian firms. There are no discriminatory requirements (such as excessively onerous visa, residence and work permit requirements) inhibiting foreign investors mobility.

4.12

TRANSPARENCY OF THE REGULATORY SYSTEM

Italy is subject to single market directives mandated by the European Union, which are intended to harmonize many regulatory structures across EU countries. This includes the mutual recognition agreements negotiated between the EU and the U.S. The EU directives are intended to benefit EU member countries by creating a non-discriminatory, less restrictive trade regime. Harmonization of standards relating to labeling, content, production, safety, etc., is aimed to reduce development costs and contribute to economies of scale for companies that wish to operate in Italy. Several EU directives deal with the issue of transparency in public sector contracts and subcontracts. The process of incorporating these directives into Italian law has focused new public attention on public works corruption scandals that rocked the Italian political world in the early 1990s. Current tax, labor, environment, health and safety regulations might discourage foreign investors.

4.12.1

Corruption

On June 8, 2001, Italy passed law 231/2001, which amends the Italian criminal code and implements the OECD Anti Bribery Convention. The law went into effect on June 19, 2001, upon its publication in the official register. Italy, like the U.S., is a signatory to the 1997 OECD Convention on Combating Bribery that was ratified in September 2000 (law 300/2000). The wide-ranging “Bribesville” domestic corruption scandals of the early 1990s led to a wholesale reform of the Italian political structure, and sharp cutbacks in public works programs, which had been the source for kickbacks. Previous studies done by other organizations, such as the International Monetary Fund, cited the weight of bureaucracy, confusing regulations, the financing of political parties and the low level of civil servants’ wages as factors fostering corruption. A number of national and local political leaders have faced corruption charges and investigations. Former PM Craxi, convicted of corruption in absentia, died as a fugitive from justice in Tunisia. The Prime Minister himself, Silvio Berlusconi, has been accused of involvement in several corruption cases. Over the years, he has had convictions overturned and has been acquitted. There is no record of indictments in cases involving bribery of foreign government officials. Law enforcement officials are, however, investigating at least one suspected case of bribery of foreign government officials by an Italian company.



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Corruption is punishable under Italian law. As in all judicial processes, much discretion regarding punishment is left to the presiding judge in the case. Most corruption in the recent past has involved government procurement or bribes to tax authorities. Surveys of the business community in Italy routinely identify such domestic corruption as a disincentive to investing or doing business, particularly in the South and some other areas of Italy. Italian law does not allow tax deductibility of bribes paid to foreign officials. While there is no such explicit provision in the tax, Italian law does not consider such payments legitimate business expenses. In cases of suspected bribery, the prosecutor conducts an investigation with the aid of police investigators, including the financial police, national police and Carabinieri. Each of the police forces is authorized to investigate bribery, but the Guardia di Finanza (financial police), a law enforcement entity responsible for customs and financial crimes, is the principal government authority for combating domestic financial corruption. The national police have the specific mandate to investigate “crimes against public administration.” The Carabinieri, a branch of the Armed Forces that has responsibility for certain civilian law enforcement functions throughout he country, also play a key role. We are not aware that police forces have received any additional training or resources as a result of the conventions’ implementation. A very active office of Transparency International (TI) operates in Italy and followed closely the ratification and the implementation of the OECD Anti Bribery Convention and other potential concerns. TI is following the legislative decree no. 61, of April 11, 2002, which would de-criminalize “false accounting” below five percent of the company’s profits or one percent of a company’s assets. TI officials argue that bribes can be hidden under false accounting methods and are concerned that this law would, provide loopholes for Convention violations.

4.12.2

Labor

The North’s shortage of labor has led to higher national levels of employment of unskilled and semi-skilled immigrants. Youth (fifteen to twenty-four years of age) and female unemployment continue to be significantly higher in all categories. Traditionally the highest rate is that for youth female unemployment rate in the South. There is a skilled labor pool in the North, where industries and services are more developed. In some areas of the North, labor shortages exist in engineering, nursing, information technologies, marketing, agriculture and for skilled manual workers. The South, where agriculture and the underground economy are more widespread, has an abundance of unskilled labor and well-educated young people who tend not to leave their regions to find a job. Immigrant workers are employed for seasonal harvesting, as well as construction, nursing, and lower-paying, services and unskilled jobs that no longer attract sufficient numbers of Italian workers. Despite low unemployment in the North, movement of workers from high unemployment areas is limited. The higher cost of living in northern cities (relative to the South), along with financial support from families and the availability of informal sector jobs, account at least in part for this anomaly. To encourage firms now operating in the underground economy to become legal entities, the GOI enacted legislation in November 2001 granting three years of tax incentives for such employers, with similar incentives for their employees. (The underground economy is estimated to amount to about 27 percent of GDP.) The tax incentives, approved as part of the Italian government’s so-called 100-day package, expired November 30, 2002. The package had limited success. The Italian labor market is becoming somewhat more flexible. Legislative and regulatory changes in 1997, 1998, 1999 and 2003 encouraged the hiring of part-time employees by reducing employer social security contributions for these workers. Legislation decentralizing the public employment service was enacted, and private employment agencies are allowed to operate. These changes opened the way for the hiring of temporary workers whose scope of activity is substantial, although not as great as in other countries having experience with this type of employment.



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Wages and salaries represent slightly more than half the cost of labor to management. Indirect pay (annual leave, holidays, bonuses, seniority allowances, severance pay) and social security contributions can account for up to 45 percent of gross salary. Italian law provides workers with substantial legal protection against dismissal for other than economic reasons, imposing complex and costly consequences for employers. Although strikes are common in some industries--and especially in public transport--labor relations in Italy generally have been good. However, government initiatives to enact labor law reforms provoked extensive trade union opposition including, on April 16, 2002, an 8-hour general strike. Union displeasure centered on a Government proposal to modify Article 18 of the Workers’ Statute, a measure enacted in May 1970 based on prior unionemployer agreement. Government officials held that Article 18 acts as an employment barrier, as it prohibits firms with more than 15 employees from firing workers without “just cause” as determined by labor courts (and thereby dissuades small firms from expanding over this threshold). The unions, for whom the Workers’ Statute represents a worker’s “Bill of Rights,” reject this argument and view Government efforts to change the law as an assault they resolutely oppose. Most Italian unions are grouped in four major national confederations: •

General Italian Confederation of Labor—CGIL

•

Italian Confederation of Workers’ Unions—CISL

•

Italian Union of Labor–UIL

•

General Union of Labor—UGL

The first three organizations are affiliated with the International Confederation of Free Trade Unions (ICFTU), while the UGL has been associated with the World Confederation of Labor (WCL). The confederations negotiate national level collective bargaining agreements with the employer associations, which in effect are binding on all employers in a sector or industry. As the result of a July 1993 tripartite agreement that also involved employer groups, the confederations accepted wage moderation and, through a process known as concertazione (consensus formation), became active participants with government in forming economic and social policy.

4.12.3

Capital Market Risks

Financial resources flow relatively freely in Italian financial markets, and credit is allocated on market terms. Foreign participation in Italian markets is not restricted. Capitalization on the Italian stock market is small relative to that of other G-7 countries. The market is technologically modern and efficiently administered. The Italian government bond market, among the world’s largest, is predominantly an electronic screen-based market, and is also administered efficiently. The Italian banking system used to be highly fragmented and was generally regarded as quite inefficient, with high operating costs and excessive dependence on interest rate spreads for income. The process of restructuring and modernization mandated by the Central Bank and the privatization process of the second half of the 1990s improved the efficiency of the Italian banking sector somewhat. As a result of mergers in the second half of the 1990s, the top five Italian banks control 54 percent of total assets (36 percent in 1995), in line with other European countries like France and Spain, but more concentrated than that in Germany and in the United States. Improved efficiency and credit management reduced the ratio between new uncollectable loans to total credit from 2.5 percent in the mid-1990s to one percent in 2001. This increased efficiency reverberated positively in the rates of international rating institutions. Government ownership of financial institutions, once common, has almost disappeared. The return on equity system wide improved substantially, but is still below the European average. ABI, Italy’s banking association, reports that the average tax rate of 53 percent, compared to a 37 percent EU average, hurts Italian banks’ profitability. www.icongrouponline.com


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There are percentage limits on cross-shareholding among banks and between banks and non-bank companies. Complex cross-shareholding has been used to fight off takeover attempts in the financial sector, but this has not been directed at takeovers by foreign companies.

4.12.4

Conversion and Transfer Policies

In conformance with EU directives, Italy has no foreign exchange controls. There are no special exchange rates, and currency transfers are freely permitted. There are no restrictions on repatriation of capital, earnings, remittances of profits, debt service, capital, capital gains, returns on intellectual property, imported issues or on payments to foreign creditors. Italians are free to undertake financial transactions abroad, including direct investments and purchases and sales of foreign securities, real estate and loans. Regulations formerly prohibiting residents from entering or leaving the country with bearer securities worth more than 10,329 euro (about $9,500) have been lifted. Residents may freely hold foreign exchange and euro in any form in Italy and abroad. Banks and authorized intermediaries must submit data on any foreign exchange transaction exceeding 10,329 euro to the foreign exchange office of the Bank of Italy. Italy’s participation in the Euro has simplified trade for those companies exporting to several EU countries. It also has created opportunities for U.S. companies with technologies and services that can assist Italian firms to compete in the more integrated European market. U.S. companies, already well known for innovation, will have to continue to emphasize the quality of their products, as well as focus on price and service, to maintain or improve their market share.

4.12.5

Expropriation and Compensation

The Italian constitution permits expropriation of private property for “public purposes”. Compensation is guaranteed and must adequately compensate the legitimate proprietor for losses. Lenders are not covered by the same constitutional guarantee as proprietors. The constitution also authorizes the nationalization of enterprises, which provide essential public services or are indispensable to the national economy. There are a few longstanding disputes in Italy involving U.S. citizens who assert that municipal governments unjustly expropriated their real property or inadequately compensated them. However, this does not reflect any GOI discrimination against U.S. investments, companies or representatives in any specific sector of activity.

4.12.6

Dispute Settlement

U.S. investors in Italy have a choice in selecting a means of dispute resolution, which should be specifically set forth in the contract. Given the slowness of the Italian judicial system (normally at least five years for trial in a civil matter plus many more years for two automatic appeals), investors are advised to choose arbitration, which can be Italian or international. Though extremely slow, the Italian legal system is consistent with generally recognized principles of international law and there are provisions for enforcing property and contractual rights. Italian judges are very politically oriented, compared to U.S. standards. Judgments of foreign courts are accepted and enforced by Italian courts only upon request. Italy has a written and consistently applied commercial law and bankruptcy law. Italy’s bankruptcy law safeguards the creditors that are satisfied pro-quota. Monetary judgments are usually made in local currency (Euro).



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Italy, like all the other members of the EU, is a member of the World’s Bank International Center for the Settlement of Investment Disputes (ICSID).

4.12.7

Political Violence

Political violence is considered a low threat to foreign investments in Italy.

4.12.8

Bilateral Investment Agreements

Italy has bilateral investment agreements with the following countries: •

Albania

•

Algeria

•

Angola (Signed)

•

Argentina

•

Armenia (Ratified by the Italian Parliament with law 232/02

•

Azerbaijan

•

Bangladesh

•

Barbados

•

Belarus

•

Bolivia

•

Bosnia-Herzegovina (Ratified by the Italian Parliament with law 177/02)

•

Brazil (Signed)

•

Bulgaria

•

Cameroon (Ratified by the Italian Parliament with law 20/03)

•

Cape Verde (Ratified by the Italian Parliament with law 529/99)

•

Congo, Rep. of

•

Chile

•

China

•

Croatia

•

Cuba

•

Czech Republic

•

Egypt

•

Eritrea (Ratified by the Italian Parliament with law 103/01)

•

Estonia

•

Ethiopia




Gabon (Signed)

•

Georgia

•

Ghana (Signed)

•

Hong Kong

•

Hungary

•

Indonesia

•

India

•

Iran (Ratified by the Italian Parliament with law 171/02)

•

Jamaica

•

Jordan

•

Kazakhstan

•

Kenya

•

Kuwait

•

Lebanon

•

Latvia

•

Lithuania

•

Macedonia

•

Malaysia

•

Malta

•

Moldavia (Ratified by the Italian Parliament with law 148/01)

•

Mexico (Ratified by the Italian Parliament with law 48/02)

•

Morocco

•

Mongolia

•

Mozambique (Approved by the Italian Parliament)

•

Oman

•

Pakistan (Ratified by the Italian Parliament with law 116/01)

•

Paraguay (Approved by the Italian Parliament)

•

Peru’

•

Philippines

•

Poland

•

Romania

•

Russia

•

Saudi Arabia


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Slovak Republic

•

South Korea

•

Sri Lanka

•

South Africa

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Tunisia

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Uganda

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Ukraine

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United Arab Emirates

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Uruguay

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Uzbekistan

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Venezuela (Signed)

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Vietnam

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Zambia (Signed)

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Zimbabwe (Ratified by the Italian Parliament with law 112/01)

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The 1948 U.S.-Italy Friendship, Commerce and Navigation Treaty contains provisions that may protect U.S. investment in Italy. Generally, existing bilateral investment accords create favorable conditions and guarantees for capital investment. They include reciprocal guarantees of equal treatment vis-a-vis domestic firms and mostfavored-nation status vis-à-vis third countries, assurances against expropriation without fair market compensation, and indemnities against losses suffered during war or revolution. Agreements also include statements allowing for the free transfer of returns, royalties and funds to maintain investments. They usually detail the procedures under which disputes would be arbitrated.

4.12.9

OPIC and Other Investment Insurance

The U.S. Overseas Private Investment Corporation (OPIC) does not operate in Italy. However, in March 2003, OPIC signed a Memorandum of Understanding with SIMEST (Società Italiana per le Imprese all’Estero), its Italian counterpart, to expand cooperation in a number of areas, particularly on projects in third countries. Italy is a member of the Multilateral Investment Guarantee Agency (MIGA).

4.12.10

Capital Outflow Policy

In conformance with EU directives, Italy has no foreign exchange controls. There are no special exchange rates and currency transfers are freely permitted. There are no restrictions on repatriation of capital and earnings, or on payments to foreign creditors.

4.12.11

Major Foreign Investments

Italy has for several years been a net exporter of foreign investment. Foreign investment flows into Italy are weak. Analyses and surveys routinely cite excessive bureaucracy, inadequate infrastructure and a rigid labor market as www.icongrouponline.com


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disincentives for foreign investment in Italy. In addition, retroactive changes to regulations and legislation, a slow justice system and concern about organized crime often serve as disincentives. A key area of foreign industrial investment in Italy is the machine sector. Except for Sweden, France, and Germany, Italy’s European Union partners are net recipients of Italian investment. Among non-EU countries, the largest recipients of Italian investment are the United States, Brazil and Argentina. Many well-known major multinationals, both U.S. and foreign, have a presence in Italy. General Electric, IBM, AT&T, Boeing, Pfizer, EDS, and McDonald’s are just a few of the American companies with sizeable investments in Italy.

Italian Government Contacts For information on foreign investment in Italy, contact Sviluppo Italia, a government body with offices in the U.S. and other countries, or the Italian Trade Commission in Rome as follows: Istituto Nazionale del Commercio Estero Area Cooperazione Investimenti e Rapporti con la UE e con OMC Via Liszt, 21 00144 Roma EUR Tel.: +39-06-5992-9381 Fax: +39-06-5992-6002/+39-06-5422-0007/+39-06-5421-8275 Sviluppo Italia Via Calabria, 46 00187 Roma Tel.: +39-06-421-1601 Fax: +39-06-4216-0816 Call Center: 39 848-886-886 [email protected] www.sviluppoitalia.it; http://www.opportunitalia.it

4.13 4.13.1

TRADE AND PROJECT FINANCING The Banking System

There are numerous banking offices located throughout the country. Among the most important are Intesa-Bci, San Paolo-IMI, Banca di Roma, Unicredito Italiano, and Banca Nazionale del Lavoro. These banks are a principal source of credit information. The banking sector is undergoing consolidation involving mergers and acquisitions among the major banks. Several U.S. banks perform services in Italy, through branches, subsidiaries, or representatives. Many American banks can also provide their commercial customers with bank reports on overseas buyers, provide assistance for letters of credit, and also foreign exchange. U.S. banks with offices in Italy include Chase, Citibank, Morgan Guaranty Trust, Bank of New York, and Bank of America. There are also numerous smaller, regional banks. Banks in Italy that have the authority to participate in foreign exchange usually have a U.S. correspondent. Foreign currency transfers and foreign exchange transactions must be channeled via authorized intermediaries (for example, the Bank of Italy or the Italian Foreign Exchange Office). The larger Italian banks usually have branches in one or more U.S. cities.



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The Bank of Italy, Italy’s central bank, is widely respected both nationally and internationally as a non-political overseer of the Italian economy, responsible for controlling inflation and balance of payments pressures.

4.13.2

Foreign Exchange Control Risks

Italy has no restrictions on the amount of foreign exchange instruments, currency, or checks that may be brought into the country. Normally, Euro 10,000 may be taken out of the country, but any amount declared upon entry, may be re-exported. Italian exchange regulations are issued under authority of the Ministry of Foreign Trade by the Italian Exchange Office (Ufficio Italiano dei Cambi--UIC), Via Quattro Fontane 123, Rome 00184, Italy. Foreign currency may be sold or acquired from the Bank of Italy or any of the banks authorized by the Bank of Italy. In effect, all commercial banks are authorized to conduct foreign exchange transactions. Dollar currency, travelers checks, and, in some cases, personal checks, may be exchanged at banks, exchange offices, authorized tourist offices, and hotels. Major credit cards are accepted with proper identification. It is best to first confirm what form of payment is accepted.

4.13.3

General Financing Availability

Italy has a well-developed banking and credit system with numerous correspondent U.S. banks. Italian banks are subject to close government supervision, and the Bank of Italy must authorize the establishment of any new bank. Until 1993, the Italian banking system was divided into two categories, differentiated by length of lending authorized. The Single Banking Law passed in 1993 abolished this division, effectively allowing all Italian banks to lend at any maturity. Due to this historical legacy, those institutions that focused on longer-term lending remain at the forefront for this type of finance. Short-term business and trade finance is available from a wide range of Italian and U.S. banks. U.S. firms desiring to finance major portions of their capital investment outside the United States may find capital available in the Eurodollar market. U.S. bank branches in Italy can assist in financing capital investment.

4.13.4

Financing Export Strategies

When providing the Italian buyer with a price quote, American firms most frequently provide a quote that includes packing costs, insurance, and freight. This is called the c.i.f. price. The average Italian business representative can then usually determine the charges for customs, taxes, and local transportation to arrive at the final landed cost to importer. The customary terms of sale in Italy are either cash or net. Sales made on cash terms call for payment before delivery, on delivery, or shortly after delivery--usually within 10 days from the date of delivery. A 2 to 5 percent discount is made for payment of the full amount of the transaction at the end of the specified period from 1 to 4 months from the date of the invoice. The length of the period depends on the commodity involved, the credit standing of the buyer, and the motivation of the seller. A period of up to 2 years is often allowed for payment of capital goods, store equipment, trucks, and similar heavy equipment. Italian firms believe that some American suppliers are too rigid in their payment terms and have thus lost business to other suppliers. Financing is considered as much a competitive factor as the product itself, the delivery date, or after-



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sales service. While some U.S. manufacturers request payment upon receipt of the goods, it can be a competitive tool to offer terms allowing settlement of the account from 60 to 120 days following receipt of the order. The use of irrevocable letters of credit for the Italian market has declined appreciably in recent years. Although such instruments are still required by American exporters, especially when the Italian customer’s credit reputation is not well known, the growing reluctance of Italian firms to provide letters of credit has required American exporters to utilize other methods to assure payment or lose the sale to other suppliers in the competitive Italian market. The Italian businessperson is reluctant to pay a high fee for a letter of credit when other suppliers or means of payment are available. American firms have put to greater use the export credit insurance and guarantee programs available through the Foreign Credit Insurance Association (FCIA). Just as the terms of any sales offer should be presented in a clear and detailed manner, shipments should conform to the contract and to any samples that may have been sent to the Italian importer. Special attention should be given to the prompt observance of agreed delivery schedules, as prompt delivery may be a decisive and possibly an overriding consideration of the importer in placing additional orders. When shipping on letter of credit, all terms specified on the letter of credit must be strictly observed. If the terms are not followed, the letter of credit may not be honored by the bank.

4.13.5

Financing Options

As a member of the G-7, Italy as a market for U.S. exporters does not warrant any special USG credit assistance. The network of Italian banks with branches in the U.S. will offer limited export credit assistance. Similarly, large U.S. banks and/or local banks located in the exporter’s state can offer factoring; exchange fluctuation hedging and limited exporter’s credit services. The Export-Import Bank of the United States (Exim Bank) and FCIA consider Italy a low political risk country. Italy is classified as a “rich” country under the OECD rate classification. Small business exporters may obtain assistance under the SBA’s Export Revolving Line of Credit (ELRC) loan program.

4.13.6

Availability of Project Financing

The Italian government has for decades promoted development in poorer parts of the country, particularly the south, through incentives such as tax reductions and financial assistance for private investment projects. A number of American companies have taken advantage of these incentives over the years to establish facilities in Italy. The government is trying to create a “one office” concept so that potential investors have one place to go for all the information and permits they may require. At present, however, a company seeking information on these incentives should inquire at all of the following agencies: Istituto per la Promozione Industriale, IPI Viale Maresciallo Pilsudski 124 00197 Rome, Italy Tel.: +39-06-8097-21 Fax: +39-06-8072-898 [email protected] www.ipi.it Ministero delle Attivita Produttive (Ministry of Productive Activities) Direzione Generale per il Coordinamento degli Incentivi alle Imprese, DGCII (Directorate for Coordination of Enterprise Incentives) Via del Giorgione, 2/B



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00147 Roma Tel.: +39-06-5401-633 Fax: +39-06-5960-1226 www.minindustria.it [email protected] Contact: Prof. Roberto Pasca di Magliano, Dir. Gen.: [email protected] Sviluppo Italia S.p.A. The National Agency for the development of enterprise and investment development Via Calabria 46 00187 Rome, Italy Tel.: +39-06-421601 www.opportunitalia.it [email protected] Contact: Ing. Massimo Caputi, Man. Dir. Ministero dell’Economia e delle Finanze (Ministry of the Economy and Finance) Dipartimento del Tesoro (Department of the Treasury) Via Venti Settembre 97 00187 Roma Tel.: +39-06-47611 Fax: +39-06-4745-327 Contact: Prof. Domenico Siniscalco, Dir. Gen. www.tesoro.it

4.13.7

Banks with Correspondent U.S. Banking Arrangements

A large number of Italian banks have correspondence relationships with U.S. banks. Below is a listing of Italian banks with branch offices in the U.S.: Sanpaolo IMI S.p.A. Piazza San Carlo 156 10121 Torino Tel.: +39-011-5551 www.sanpaoloimi.com [email protected] CEO Area Americas C/o New York Branch 245 Park Avenue, Suite 3500 New York, NY 10167 Tel.: (212) 692-3010 Fax: (212) 692-3046 [email protected] Carlo Persico, Manager 444 South Flower Street 23rd Floor Suite 2360 Los Angeles, CA 90071 www.icongrouponline.com


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Tel.: (213) 489-3100 Fax: (213) 622-2514 [email protected] Contact: Donald Brown, Manager 245 Park Avenue, Suite 3500 New York, NY 10167 Tel.: (212) 692-3000 Fax: (212) 599-5303/599-5304 [email protected] Contact: Renato Carducci, Manager: [email protected] Banca di Roma Viale Umberto Tupini 180 00144 Roma Tel.: +39-06-54451 www.bancaroma.it [email protected] 34 East 51st Street New York, NY 10022 Tel.: (212) 407-1600/407-1707/407-1746/407-1780 Fax: (212) 407-1677/407-1740/407-1786 [email protected] 225 West Washington Street, Suite 1200 Chicago, IL 60606 P.O. Box 7878 (or 6370) CHI.ILL. 60680 Tel.: (312) 704-5600 Fax: (312) 726-3058 [email protected] [email protected] One Market Steuart Tower, Suite 1000 San Francisco, CA 94105 Tel.: (415) 357-0800/ 977-7301 Fax: (415) 357-9869 [email protected] Banca Intesa S.p.A. (The integration between Cariplo and Banco Ambrosiano Veneto (1998), the aggregation of Cassa di Risparmio di Parma e Piacenza and Banca Popolare FriulAdria (1999) and the subsequent merger with Banca Commerciale Italiana (2001) were key developments that made IntesaBci the top Italian banking group.) Via Monte di Pietá 8 20121 Milano Tel.: +39-02-879-11 www.bancaintesa.it [email protected] One William St. New York, NY 10004 Tel.: (212) 607-3500 Fax: (212) 809-2124 www.icongrouponline.com


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Contact: Claudio Marchiori, Direttore Banca Nazionale del Lavoro BNL S.p.A. Via Vittorio Veneto 119 00187 Roma Tel.: +39-06-470-21 Fax: +39-06-7402-7250 www.bnl.it [email protected] 25, West 51st Street New York, NY 10019 Tel.: (212) 581-0710 Fax: (212) 489-9088 [email protected] Xerox Centre 55, West Monroe Street, Suite 3490 Chicago, IL 60603 Tel.: (312) 444-9250/ 444-9251/ 444-9252/ 444-9253/ 444-9254 Fax: (312) 444-9410 [email protected] Sanpaolo Banco di Napoli S.p.A. Via Toledo 177/178 80132 Naples Tel.: +39-081-791-1111 Fax: +39-081-580-1343 www.bancodinapoli.com [email protected] Banco di Sicilia S.p.A. Via Ruggero Settimo 1 90141 Palermo Tel.: +39-091-608-1111 Fax: +39-091-608-3222 www.bancodisicilia.it [email protected] UniCredito Italiano S.p.A. Direzione Centrale Piazza Cordusio 2 20123 Milano Tel.: +39-02-886-211 www.unicredito.it [email protected] 375 Park Avenue New York, NY 10152 Tel.: (212) 546-9600 Fax: (212) 546-9675 [email protected]



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Ufficio di Rappresentanza Two Prudential Plaza 180 North Stetson Avenue, Suite 1310 Chicago, IL 60601-6713 Tel.: (312) 946-1111 Fax: (312) 946-1112 [email protected] Banca Monte dei Paschi di Siena S.p.A. Piazza Salimbeni 3 53100 Siena Tel.: +39-0577-294-111 Fax: +39-0577-294-677 www.mps.it 55, East 59th Street New York, NY 10022-1112 Tel.: (212) 891-3600 Fax: (212) 891-3661/3 Contact: Romeo Carlo Cella, Direttore Titolare: [email protected]

4.14 4.14.1

TRAVEL ISSUES Local Business Practices

In general, what is considered good business practice in the United States also applies when doing business in Italy. Businesspeople in Italy appreciate prompt replies to their inquires, and expect all correspondence to be acknowledged. Conservative business attire is recommended at all times. Business appointments are required, and visitors are expected to be punctual. The “golden keys” of customary business courtesy, especially replying promptly to requests for price quotations and to orders, are a prerequisite for exporting success. In general, European business executives are more formal than their American counterparts; therefore, it is best to refrain from using first names until a solid relationship has been formed. Italian business executives tend to use titles indicating their position in the firm. During the first stages of conducting business, it is best to let the prospective buyer take the lead since the American approach of “getting down to business” may be considered abrupt. Avoid commenting on political events or making negative comments about the country. Some positive and sincere observations about the Italian culture, style, art, history, cuisine, or music are always appropriate. Friendship and mutual trust are highly valued, and, once an American has established this relationship, a productive business association can usually be counted upon. Italian buyers appreciate style, quality, and service, but are also interested in delivered price. Care must be taken to assure that stated delivery dates are maintained and that after-sales service is promptly honored. Italians, and Europeans in general, expect that, after placing an order with a supplier, the delivery date be honored. While numerous factors may interfere with prompt shipment, the U.S. exporter must allow for additional shipping time and keep in close contact with the buyer. Meeting delivery schedules is of prime importance. It is much better to quote a later delivery date that can be guaranteed than promise an earlier delivery that is not completely certain.



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207

Travel Advisory and Visas

Every U.S. traveler must have a valid passport. No visa is required of U.S. citizens visiting Italy for less than 3 months, but one is required for longer stays. American citizens entering Italy must register at the police station (Questura) within 8 days of entering the country if they plan to stay more than 30 days. Hotels automatically register their guests with the police for the period of hotel stay. U.S. citizens planning to work in the country must first obtain a work visa in the U.S. from the Italian Embassy or an Italian Consulate. The Italian employer must first obtain approval for a work permit. This permit is usually granted only for specialized work or skills. The Italian employer files an application at a Provincial Labor Office. If clearance is granted, the prospective employer is further required to obtain a work permit with the approval of the regional and central authorities. The permit is then sent to the worker so that he or she may apply for the entry visa. There are Italian consular offices in all of the largest American cities. The application process should be initiated three to four months before the visa will be needed. A person seeking to work in Italy in an independent or self-employed capacity files an application directly with the Italian Embassy or Consulate along with needed credentials demonstrating experience in the field of work. For further information concerning entry requirements for Italy, travelers can consult the Italian Embassy Web site at http://www.italyemb.org, contact the Consular Section of the Embassy of Italy at 3000 Whitehaven Street, NW, Washington, DC 20008, telephone: (202) 612-4400 or 612-4405, or fax 518-2154, or the nearest Italian Consulate General in Boston, Chicago, Detroit, Houston, Los Angeles, Miami, Newark, New York, Philadelphia, or San Francisco. Italy has a moderate rate of violent crime, some of which is directed toward tourists, principally for motives of theft. Petty crime (pick-pocketing, theft from parked cars, purse snatching) is a significant problem, especially in large cities. Most reported thefts occur at crowded tourist sites, on public buses, or at the major railway stations, including Rome’s Termini, Milan’s Centrale, Florence’s Santa Maria Novella, and in Naples. More detailed information is available from the Department of State’s Consular Information Sheet for Italy. Contact the Bureau of Consular Affairs’ homepage at: http://www.travel.state.gov. The Embassy’s homepage can be found at http://www.usembassy.it.

4.14.3

Work Week

The usual Italian business hours are from 8 or 9 A.M. to Noon or 1 P.M. and from 3 to 6 or 7 P.M., Monday through Friday. Working hours for the various ministries of the government are normally from 8 A.M. to 2 P.M. without intermission. Bank hours are from 8:30 A.M. to 1:30 P.M. and 3:00-4:00 P.M.; they are closed on Saturdays and Sundays. Retail establishments are closed on Sundays although exceptions exist, primarily in tourist areas. In recent years, Italy has enacted legislation providing flexibility in retail store operating.

4.14.4

Infrastructure for Conducting Business

Language Italian is the official language and is spoken in all parts of Italy, although some minority groups in the Alto Adige and Aosta regions speak German and French, respectively. Correspondence with Italian firms, especially for an initial contact, should be in Italian. If a reply comes in English then the subsequent correspondence with the Italian firm can be in English. The use of Italian is not only regarded as a courtesy, but assures prompt attention, and prevents inaccuracies that might arise in translation. Most large commercial firms are able to correspond in various



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languages in addition to English and Italian, but a business overture or proposal is given more serious attention if written in Italian. The importance of having trade literature, catalogs, and instructions printed in Italian cannot be overemphasized. The agent representative in Italy who has such material is in a far better competitive position than the one who can only show literature in English to prospective customers and consumers.

Communication by Telephone For calls made to Italy, it is important to remember that the time zone for Italy is 6 hours ahead of U.S. Eastern Standard Time. As in many Western European countries, Italy’s telephone dialing procedures have changed and the city code has become part of each telephone number. An example of a local call within Rome would be: 06-46741 (06 is the city code). Incoming long distance calls to Italy also require that the “0” in the city code be included when dialing. An example of an incoming long distance call from the U.S. to Rome is as follows: +39-06-46741 (39 being the country code, 06 the city code for Rome). Milan’s city code is 02. Italians are avid users of cellular phones and will generally provide their cellular telephone number. When dialing to cellular phones, please note that no city code is used. Also, the “0” has been dropped from the prefix of all cellular phone numbers. An example of an incoming call from the U.S. to a cellular phone is as follows: +39-328-6187041 (39 being the country code, 328 a sample cellular prefix).

Internet Access For Internet access, there is an abundance of Internet stations and cafes. This is due to the relatively sparse ownership of personal computers in Italy. Many of these stations cater to tourists and also provide easy access to international calling.

Health Medical services are good and hospitals compare with those in the United States. Common medical needs are readily obtained, and special supplies are normally available on short notice, including most pharmaceuticals. An international certificate of vaccination is not required for travelers from the United States. Drinking water is acceptable and sanitation is at American standards.

Rental Automobiles Rental automobiles are available at numerous locations. An international or state driving license is acceptable.

Tipping Tipping is as appropriate in Italy as it is in the United States. Generally, tip waiters 10 percent if “servizio” has not been added to the check.

Utilities Electrical power supplies are generally 220 volts, 50 cycles, single-phase and 380 volts, 50 cycles, three-phase. Electricity at 60 cycles is not available. American appliances, such as electric shavers or hair dryers, do not work and will be damaged if used without a transformer. Service interruptions are rare and the frequency of the current is stable. The electrical plug is the standard plug B. This is a plug that has two round pins instead of the flat prongs. Some outlets may require different plugs in other parts of the country.



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Currency Italy, along with 12 other countries in Europe, adopted the euro as their single currency on January 1, 2002. The euro has become part of daily life, and euro notes and coins are in their second year of circulation. Italy’s former currency, the lira, is no longer in circulation, although in some parts of Italy price quotations may still be seen, and receipts provided, with the lira value indicated alongside the euro cost. Major U.S. credit cards are usually accepted with proper identification, such as a passport, but visitors should always ask if a particular card is accepted prior to ordering meals or making hotel reservations. Travelers’ checks are accepted, but visitors should first inquire on the policy of the bank, hotel, or retail establishment before attempting to use them.

4.14.5

Temporary Entry of Goods

Italy participates in the International Convention to Facilitate the Importation of Commercial Samples and Advertising Materials. Samples of negligible value imported to promote sales are accorded duty-free and tax-free treatment. Prior authorization is not required. To determine whether the samples are of negligible value, their value is compared with a commercial shipment of the same product. Granting of duty-free status may require that the samples be rendered useless for future sale by marking, perforating, cutting, or other means. Imported samples of commercial value may be granted a temporary entry with exemption from custom charges. However, a bond or cash deposit may be required as security that the goods will be removed from the country. This security is the duty and tax normally levied plus 10 percent. Samples may remain in the country for up to 1 year. They may not be sold, put to their normal use (except for demonstration purposes), or utilized in any manner for remuneration. Goods imported as samples may be imported only in quantities constituting a sample according to normal commercial usage.

Carnets As a result of various customs agreements, simplified procedures are available to U.S. business and professional people for the temporary importation of commercial samples and professional equipment. A carnet is a customs document that facilitates clearance for temporary imports of samples or equipment. With a carnet, goods may be imported without the payment of duty, tax, or additional security. The carnet also usually saves time since formalities are all arranged before leaving the United States. A carnet is usually valid for 1 year from the date of issuance. A bond or cash deposit of 40 percent of the value of the goods covered by the carnet is required, in addition to the price of the carnet. This will be forfeited in the event the products are not re-exported and duties and taxes are not paid. Carnets are sold in the United States by the U.S. Council for International Business at the following locations: 1212 Avenue of the Americas, New York, NY 10036, (212) 354-4480; or 1030 15th Street NW, Suite 800, Washington, DC 20005, (202) 371-1316, E-mail at [email protected] Business travelers to Italy seeking appointments with U.S. Embassy Rome officials should contact the Commercial Section in advance. The Commercial Section can be reached by telephone at +39-06-4674-2382, fax at +39-06-46742113, or E-mail at [email protected]

Country Data •

Population: 57.8 Million

•

Population Growth Rate: 0.1 percent



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•

Religion: Most Italians are Roman Catholic

•

Government System: Parliamentary Democracy

•

Languages: Italian. German is the official second language in Trentino-Alto-Adige (Tyrol); French is the official second language in Valle d’Aosta.

•

Workweek: 38 hours, Monday-Saturday

4.15 4.15.1

KEY CONTACTS U.S. Embassy Trade Contacts

U.S. Commercial Service Web site: www.buyusa.it

Commercial Service Contacts in U.S. Embassy Rome Karen Ware Minister Counselor for Commercial Affairs Tel.: +39-06-4674-2202 Fax: +39-06-4674-2113 www.buyusa.com www.buyusa.gov/italy/en/ [email protected] Linda Archer Counselor for Commercial Affairs Tel.: +39-06-4674-2382 Fax: +39-06-4674-2113 [email protected]

Commercial Service Contacts at U.S. Consulates in Italy Hans Amrhein Principal Commercial Officer American Consulate Milan Via Principe Amedeo 2/10 20121 Milan, Italy Tel.: +39-02-659-2260 Fax: +39-02-659-6561 E-mail: [email protected] Joseph White Commercial Officer American Consulate Milan Tel.: +39-02-659-2260 Fax: +39-02-659-6561 E-mail: [email protected] Barbara Lapini Commercial Specialist www.icongrouponline.com


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American Consulate Florence Lungarno A. Vespucci 38 50123 Florence, Italy Tel.: +39-055-211-676 Fax: +39-055-283-780 E-mail: [email protected] Albina Parente Commercial Specialist American Consulate Naples Piazza della Repubblica 80122 Naples, Italy Tel.: +39-081-583-8206 Fax: +39-081-761-1592 E-mail: [email protected] Embassy Web site: www.usembassy.it

Contacts for the Foreign Agricultural Service in U.S. Embassy Rome Embassy Web site: www.usembassy.it/agtrade Geoff Wiggin Minister Counselor for Agricultural Affairs American Embassy Via Veneto 119A 00187 Rome, Italy Tel.: +39-06-4674-2362 Fax: +39-06-4788-7008 E-mail: [email protected] Ann Murphy Agricultural Attache American Embassy Via Veneto 119A 00187 Roma, Italy Tel.: +39-06-4674-2362 Fax: +39-06-4788-7008 E-mail: [email protected]

Contacts in the Economic Section in U.S. Embassy Rome Embassy Web site: www.usembassy.it Scott Kilner Minister Counselor for Economic Affairs American Embassy Via Vittorio Veneto 119/A 00187 Rome, Italy Tel.: +39-06-4674-2107 Fax: +39-06-4674-2230 E-mail: [email protected] Kathleen Reddy www.icongrouponline.com


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Economic Counselor Tel: +39-06-4674-2233 Fax: +39-06-4674-2345 E-mail: [email protected]

4.15.2

American Chamber of Commerce

American Chamber of Commerce in Italy Mario Resca, President Via Cantu’ 1 20123 Milano Tel.: +39-02-869-0661 Fax: +39-02-805-7737 E-mail: [email protected] Web: www.amcham.it

4.15.3

Italian Government Agencies

Banca d’Italia (Bank of Italy) Credit Institutions Supervision Service Via Nazionale 91 00184 Roma Tel.: +39-06-47921 Web: www.bancaditalia.it CONSOB-Commissione Nazionale per le Societá e la Borsa (Securities Regulatory Agency) Via G.B. Martini 3 00198 Roma Tel.: +39-06-847-71 Fax: +39-06-841-6703/841-7707 E-mail: [email protected] Web: www.consob.it The Italian Embassy Commercial Section 3000 Whitehaven St. N.W. Washington, DC 20008 Tel.: (202) 612-4400 Fax: (202) 518-2154 Web: http://italyemb.org Ente Nazionale Italiano per il Turismo (ENIT) Italian State Tourist Board 630 Fifth Avenue, Suite 1565 New York, NY 10111 Tel.: (212) 245-4822/245-5618 Fax: (212) 586-9249



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E-mail: [email protected] Web: www.italiantourism.com

Italian Trade Commission (Assists in locating Italian suppliers and products.) Offices are located in the following cities: ITC Atlanta 2301, Peachtree Center--Harris Tower 233, Peachtree Street N.E. P.O.Box 56689 Atlanta Georgia 30343 Tel.: (404) 525-0660 Fax: (404) 525 -5112 E-mail: [email protected] Web: http://www.italtrade.com ITC Chicago 401, North Michigan Avenue Suite 3030 Chicago, Illinois 60611 Tel.: (312) 670-4360 Fax: (312) 670-5147 E-mail: [email protected] Web: www.italtrade.com ITC Los Angeles 1801 Avenue of the Stars Suite 700 Los Angeles, CA 90067 Tel.: (323) 879-0950 Fax: (310) 203-8335 E-mail: [email protected] Web: www.italtrade.com ITC New York 33 East 67th Street New York, NY 10021-5949 Tel.: (212) 980-1500 Fax: (212) 758-1050 E-mail: [email protected] Web: www.italtrade.com ITC Seattle 1420 Fifth Avenue Suite 2670 Seattle, WA 98101 Tel.: (206) 398-0530 Fax: (206) 398-0532 E-mail: [email protected] Web: www.italtrade.com



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Ministero dell’Economia e delle Finanze (Ministry of the Economy and Finance) Mario Andrea Guaiana, Director Agenzia delle Dogane (Customs Agency) Via M. Carucci 71 00143 Roma Tel.: +39-06-5024-1 Fax: +39-06-5024-3076 E-mail: [email protected] Web: www.agenziadogane.it Istituto Nazionale per il Commercio Estero (ICE) Italian Trade Commission Viale Liszt 21 00144 Roma Tel.: +39-06-5992-1 Fax: +39-06-5992-6899 E-mail: [email protected] Web: www.ice.it Ente Nazionale Italiano di Unificazione (UNI) (National Standardization Board) Via Battistotti Sassi 11/B 20133 Milano Tel.: +39-02-700-241 Fax: +39-02-7010-5992/02-7010-6106 E-mail: [email protected] Web: www.uni.com Ministero delle Attivitá Produttive (Ministry of Productive Activities) Ufficio Italiano Brevetti e Marchi (Italian Patent and Trademark Office) Via Molise 19 00187 Rome Tel.: +39-06-4705-3054/06-4705-3010 Fax: +39-06-4705-3063/06-4705-3015 E-mail: [email protected] Web: www.minindustria.it www.european-patent-office.org/it/ Ministero per i Beni e le Attività Culturali (Ministry of Cultural Heritage and Activities) Diritto d’Autore e Vigilanza sulla SIAE (Copyright and Supervision on SIAE) Elio Vito Silvestro, Director, Segretariato Generale Servizio XI Via Della Ferratella in Laterano 51 Tel.: +39-06-7770-1203/06-7770-1208 Fax: +39-06-7770-1244 E-mail: [email protected]



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Official Italian Agricultural Contacts Istituto Nazionale per il Commercio Estero (ICE) Italian Trade Commission Viale Liszt 21 00144 Roma Tel.: +39-06-59921 Fax: +39-06-5992-6899 E-mail: [email protected] Web: www.ice.it Ministero delle Politiche Agricole e Forestali (Ministry of Agricultural and Forestal Policies) Pasquale Mainolfi, Director, Agr. Production Via XX Settembre 20 00187 Roma Tel.: +39-06-4884-293 Fax: +39-06-4814-628 Web: www.politicheagricole.it Ministero della Salute (Ministry of Health) Romano Marabelli, Director General, Directorate General for Veterinary Health, Food and Nutrition Piazzale Marconi 25 Palazzo Italia 00144 Eur-Roma Tel.: +39-06-5994-6946 Fax: +39-06-5994-66676/06-599-466-217 Web: www.ministerosalute.it Ministero dell’Economia e delle Finanze (Ministry of the Economy and Finance) Mario Andrea Guaiana, Director Agenzia delle Dogane (Customs Agency) Via M. Carucci 71 00143 Roma Tel.: +39-06-50241 Fax: +39-06-5024-3076 E-mail: [email protected] Web: www.agenziadogane.it

4.15.4

Italian Trade Associations

General/Industrial Associazione Bancaria Italiana (ABI) (Italian Banking Association) Piazza del Gesú 49 (Palazzo Altieri) 00186 Roma



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Tel.: +39-06-67671 Fax: +39-06-6767-457 E-mail: [email protected] Web: www.abi.it Associazione Imprenditrici E Donne Dirigenti D’azienda (AIDDA) (Italian Association of Women Entropreneurs and Business Executives) Via degli Scialoja 18 00196 Roma Tel.: +39-06-3230-578 Fax: +39-06-3230-562 E-mail: [email protected] Web: www.aidda.org Associazione Nazionale Costruttori Edili (ANCE) Claudio De Albertis, President Via Guattani, 16--00161 Roma – Tel.: +39-06-845-671 Fax. +39-06-8456-7555/06-8456-7550 E-mail: [email protected] Web: www.ance.it Associazione Nazionale fra le Imprese Assicuratrici (ANIA) (National Association of Insurance Companies) Via della Frezza 70 00186 Roma Tel.: +39-06-326-881 Fax: +39-06-322-7135 E-mail: [email protected] Web: www.ania.it Associazione Nazionale fra Industrie Automobilistiche (ANFIA) (Italian Automotive Industry Association) Corso Galileo Ferraris 61 10128 Torino Tel.: +39-011-554-6511/011-554-6505 Fax: +39-011-545-986/011-545-411 E-mail: [email protected] Web: www.anfia.it Associazione Italiana del Franchising (Assofranchising) (Italian Franchising Association) Viale Majno, 42 20129 Milano Tel.: +39-02-2900-3779/02-3656-9461 Fax. +39-02-655-5919 E-mail: [email protected] Web: http://www.assofranchising.it/contatti.htm ASTER (Agency for the Development of Technology in Emilia-Romagna) (This agency promotes use of new technologies and international trade in the region.) Via Gobetti 101 www.icongrouponline.com


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40129 Bologna Tel.: +39-051-639-8099 Fax: +39-051-639-8131 E-mail: [email protected] Web: www.aster.it Firenze Tecnologia (Special Agency of the Chamber of Commerce, Industry, Handicraft and Agriculture of Florence) Volta dei Mercanti 1 50122 Firenze Tel.: +39-055-266-101 Fax: +39-055-266-1030 Confederazione Generale dell’Industria Italiana (Confindustria) (The Confederation of Italian Industry is a principal trade association in Italy acting as an umbrella organization covering numerous industry trade associations) Maurizio Beretta, General Director Viale dell’Astronomia 30 00144 Roma Tel.: +39-06-590-031 Fax: +39-06-590-3392 E-mail: [email protected] Web: www.confindustria.it Confederazione Generale Italiana dell’Artigianato (Confartigianato) (Italian General Confederation of Craft) Via San Giovanni in Laterano 152 00184 Roma Tel.: +39-06-703-741 Fax: +39-06-7045-2188 E-mail: [email protected] Web: www.confartigianato.it Confederazione Generale dell’Agricoltura Italiana (Confagricoltura) (General Confederation of Italian Agriculture) Corso Vittorio Emanuele II 101 00186 Roma Tel.: +39-06-685-21 Fax: +39-06-6830-8578/06-686-1726 E-mail: [email protected] Web: www.confagricoltura.it Confederazione Generale Italiana del Commercio, del Turismo, dei Servizi e delle P.M.I. (Confcommercio) (Italian General Confederation of Trade, Tourism, Services, and Small and Medium Enterprises) Gianfranco Ruta Direttore Resp, Area Mercato e Territoriale e Direttore dell’Internazionalizzazione Piazza G.G. Belli 2 00153 Roma Tel.: +39-06-586-61 Fax: +39-06-581-2880 E-mail: [email protected] Web: www.confcommercio.it



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Confederazione Italiana della Piccola e Media Industria (CONFAPI) (Italian Confederation of Small and Medium Industries) Via della Colonna Antonina 52 00186 Roma Tel.: +39-06-690-153-04/-06/-07 Fax: +39-06-679-1488 E-mail: [email protected] Web: www.confapi.org Lega Nazionale Cooperative e Mutue (National Cooperatives and Mutual Assistance League) Via Guattani 9 00161 Roma Tel.: +39-06-844-391 Fax: +39-06-8443-9406 E-mail: [email protected] Web: www.legacoop.it Promo Firenze (Special Agency of the Chamber of Commerce, Industry, Handicraft and Agriculture of Florence for the promotion of international trade) Via Por Santa Maria 2 Palazzo Borsa Merci 50122 Firenze Tel.: +39-055-267-141 Fax: +39-055-267-1404 E-mail: [email protected] Web: www.promofirenze.com Puntoit (Organization promoting electronic commerce and Internet use) Via Antonio Nibby 3 00161 Roma Tel./Fax: +39-06-4411-7539 E-mail: [email protected] Web: www.puntoit.org Unione Italiana delle Camere di Commercio Industria Agricoltura e Artigianato (Italian Union of the Chambers of Commerce, Industry, Handicraft and Agriculture) (Umbrella organization responsible for all chambers of commerce in Italy) Piazza Sallustio 21 00187 Roma Tel.: +39-06-470-41 Fax: +39-06-489-070-4240 E-mail: [email protected] Web: www.unioncamere.it Unione Nazionale Cantieri e Industrie Nautiche ed Affini (UCINA) (Italian National Union of Shipyards, Nautical Industries and Related Sectors) Andrea Gasparri, Director General Piazzale J. F. Kennedy 1 16129 Genova Tel.: +39-010-576-9811 www.icongrouponline.com


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Fax: +39-010-553-1104 E-mail: [email protected] Web: www.ucina.net

Agricultural Associazione Italiana Allevatori (Breeders) Dr. Bonizzi, Director Via Tomassetti 9/11 00161 Roma Tel.: +39-06-854-511 Fax: +39-06-4424-9286 E-mail: [email protected] Web: http://www.aia.it Associazione Italiana Industria Olearia (Veg Oil) Giorgio Cilenti, Director General Piazza Campitelli 3 00186 Roma Tel.: +39-06-6994-0058 Fax: +39-06-6994-0118 E-mail: [email protected] Web: http://www.foodarea.it/associazioni/assitol A.I.S. (Seed Industry Assoc) Dino Barin, President Piazza della Costituzione 8, Palazzo Affari 40128 Bologna Tel.: +39-051-503811 Fax: +39-051-355-166 E-mail: [email protected] Web: www.sementi.it Associazione Nazionale Allevatori Bovini della Razza Bruna (Brown Swiss Breeders) Giuseppe Santus, Director Localita Ferlina 204 37012 Bussolengo (VR) Tel.: +39-045-6760111 Fax: +39-045-7156655 E-mail: [email protected] Web: http://www.anarb.it Associazione Nazionale Allevatori Razza Frisona Italiana (Holstein Frisian Breeders) Enrico Santus, Director Via Bergamo 292 21626 Cremona Tel.: +39-045-6706-0111 Fax: +39-045-7156-655 www.icongrouponline.com


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E-mail: [email protected] Web: www.anafi.it Associazione Nazionale Allevatori Suini (Swine Breeders) Luca Buttazzoni Via L. Spallanzani 4/6 00161 Roma Tel.: +39-06-4417-0620 Fax: +39-06-4417-0638 E-mail: [email protected] Web: http://www.anas.it Associazione Nazionale Bieticoltori (Beet Growers) Carlo Biasco, Director General Via V.E. Collamarini, 14 40118 Bologna Tel.: +39-051-603-3411 Fax: +39-051-602-5680 Web: http://www.anb.it Associazione Nazionale Cerealisti (Grain Traders) Lorenzo Fineschi, Director Via Po 102 00198 Roma Tel.: +39-06-841-6554 Fax: +39-06-884-0877 E-mail: [email protected] ASSALZOO (Compound Feed) Emilio Minetti, Director Via Lovanio 6 100198 Roma Tel. & Fax: +39-06-854-1641 E-mail: [email protected] Web: www.assalzoo.it ANEIOA (National Importers/Exporters Horticultural Association) Giuseppe Calcagni, President Via Sabotino 46 00195 Roma Tel.: +39-06-3751-5147 Fax: +39-06-372-3569 http://www.aneioa.it [email protected] ANIPO (National Importers/Exporters Horticultural Association) Fausto Ratto, Secretary General www.icongrouponline.com


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Via Brindisi 5 00182 Roma Tel.: +39-06-772-6401 Fax: +39-06-700-4428 E-mail: [email protected] FEDERCOMLEGNO (Wood Trade Federation) Maurizio Colella, President Via Toscana 10 00187 Roma Tel.: +39-06-4200-681 Fax: +39-06-4201-2236 E-mail: [email protected] Web: www.federlegno.it/associazioni/fedecomlegno FEDERAGROALIMENTARE Francesco De Leo Via Gigli d’Oro 21 00186 Roma Tel.: +39-06-689-341 Fax: +39-06-689-3409 E-mail: [email protected] [email protected] FEDERVINI (Wine Trade Assoc) Federico Castellucci, Director Via Mentana 2B 00185 Roma Tel.: +39-06-446-9421 Fax: +39-06-494-1566 E-mail: [email protected] Web: www.federalimentare.it ITALMOPA (Millers Assoc) Fabrizio Vitali, Deputy President Via Crociferi 44 00187 Roma Tel.: +39-06-678-5409 Fax: +39-06-678-3054 E-mail: [email protected] Web: www.italmopa.it UNA (Poultry Union) Rita Pasquarelli, Director General Via V. Mariano 58 00189 Roma Tel.: +39-06-3325-841 Fax: +39-06-3325-2427 Web: www.unionenaizonaleavicoltura.it www.icongrouponline.com


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UNAPROL (Olive Oil Producers Assoc) Raniero Filo della Torre, Director Via Rocca di Papa 12 00179 Roma Tel.: +39-06-784-6901 Fax: +39-06-7834-4373 E-mail: [email protected] UNICEB (Livestock Meat Traders) Renzo Fossato, President Viale dei Campioni 13 00144 Roma Tel.: +39-06-592-1241 Fax: +39-06-592-1478 E-mail: [email protected] UNIPI (Pasta Traders Assoc) Giuseppe Menconi, President Via Po 102 00198 Roma Tel: +39-06-854-3291 Fax: +39-06-841-5132 E-mail: [email protected] Web: www.unipi-pasta.it

4.15.5

Market Research Firms

Addressvitt S.r.l. Via della Moia 2 20020 Arese, Milano Tel.: +39-02-9345-01 Fax: +39-02-9345-0300 E-mail: [email protected] Web: www.addressvitt.it Databank S.p.A. Via dei Piatti 11 20123 Milano Tel.: +39-02-809-556 Fax: +39-02-805-6495 E-mail: [email protected] Web: www.databank.it Directa S.r.l. Via Giuseppe Sacchi 7 20121 Milano Tel.: +39-02-720-831 www.icongrouponline.com


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Fax: +39-02-7208-3300 E-mail: [email protected] Web: www.directa-ricerche.com Executive Services Business Centres S.p.A. Via V. Monti 8 20123 Milano Tel.: +39-02-4819-4271 Fax: +39-02-4801-3233 E-mail: [email protected] Web: www.executivenetwork.it Loverso Dr. Alfredo Via Morosini 39 20135 Milano Tel.: +39-02-5501-1554 Fax: +39-02-5518-5200 ACNielsen Italia SpA Via Giuseppe. di Vittorio 10 20094 Corsico (MI) Tel.: +39-02-451-971 Fax: +39-02-458-66235 Web: www.acnielsen.it Palandri Horwath S.r.l. Piazza Navona 49 00186 Roma Tel.: +39-06-686-7841 Fax: +39-06-689-6075 Serin S.r.l. Via Nerino 8 20123 Milano Tel.: +39-02-7202-2215 Fax: +39-02-8901-0501 E-mail: [email protected]

4.15.6

Italian Commercial Banks

Sanpaolo Banco di Napoli S.p.A. Via Toledo 177/178 80132 Naples Tel.: +39-081-791-1111 Fax: +39-081-580-1343 E-mail: [email protected] Web: www.bancodinapoli.com Capitalia Gruppo Bancario (Established on July 1, 2002, the Capitalia Banking Group centralized strategy and governance for three traditional banks- Banca di Roma, Banco di Sicilia, Bipop-Carire- the consumer bank- Fineco- and the business bank- MCC. Its main activity is the management of capital in every possible form) www.icongrouponline.com


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Via Minghetti 17 00187 Roma Tel.: +39-06-54451 Web: www.capitalia.it Banca di Roma Viale Tupini 180 00144 Roma Tel.: +39-06-54451 E-mail: [email protected] Web: www.bancaroma.it Banco di Sicilia S.p.A. Via Generale Magliocco 1 90141 Palermo Tel.: +39-091-608-1111 Fax: +39-091-608-3222 E-mail: [email protected] Web: www.bancodisicilia.it Banca Intesa S.p.A. (The integration between Cariplo and Banco Ambrosiano Veneto (1998), the aggregation of Cassa di Risparmio di Parma e Piacenza and Banca Popolare FriulAdria (1999) and the subsequent merger with Banca Commerciale Italiana (2001) are the milestones of a process which has made IntesaBci the top Italian banking group and one of the protagonists in the European financial arena) Via Monte di Pietá 8 20121 Milano Tel.: +39-02-879-11 E-mail: [email protected] Web: www.bancaintesa.it Banca Nazionale del Lavoro BNL S.p.A. Via Vittorio Veneto 119 00187 Roma Tel.: +39-06-470-21 Fax: +39-06-4702-7250 E-mail: [email protected] Web: www.bnl.it UniCredito Italiano S.p.A. Direzione Centrale Piazza Cordusio 20123 Milano Tel.: +39-02-886-211 E-mail: [email protected] Web: www.unicredito.it Banca Monte dei Paschi di Siena S.p.A. Piazza Salimbeni 3 53100 Siena Tel.: +39-0577-294-111 Fax: +39-0577-294-677 Web: www.mps.it



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Sanpaolo IMI S.p.A. Piazza San Carlo 156 10121 Torino Tel.: +39-011-5551 Web: www.sanpaoloimi.com

4.15.7

Contacts in Washington D.C.

For a complete list of U.S. Export Assistance Centers throughout the United States you may consult: U.S. Department of Commerce Trade Information Center Tel.: 1-800-USA-TRADE www.buyusa.gov U.S. Department of Commerce Market Access & Compliance Office David DeFalco, Italy Desk Officer Room H-3042 14th Street and Constitution Ave, NW Washington, DC 20230 Tel.: (202) 482-2178 Fax: (202) 482-2897 E-mail: [email protected] Web: www.mac.doc.gov U.S. Department of Agriculture Foreign Agricultural Service 1400 Independence Ave. S.W. Washington, DC 20250 Trade Assistance and Promotion Office: Tel.: (202) 720-7420 Web: www.usda.gov Overseas Private Investment Corporation 1100 New York Avenue, NW Washington, DC 20527 Tel.: (202) 336-8400 Fax: (202) 408-9859 E-mail: [email protected] Web: www.opic.gov

4.15.8

U.S.-Based Multipliers Relevant for Italy

National Italian American Foundation (NIAF) (NIAF conducts cultural and educational events, sponsors exchange programs, works to enhance cultural, political, and economic relations between the United States and Italy and serves as an advocacy group) 1860 19th Street, NW Washington, DC 20009



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Tel.: (202) 387-0600 Fax: (202) 387-0800 Web: www.niaf.org Delegation of the European Commission to the United States 2300 M Street, NW 3rd Floor Washington, DC 20037 Tel.: (202) 862-9500 Fax: (202) 429-1766 Web: www.eurunion.org

4.15.9

Agricultural Contacts By Industry

For the U.S.-based multipliers listed below, the country code 001 is to be dialed before dialing the listed phone number. Also, the European Based Multipliers whose listed offices are listed below must be reached by dialing 011 before the telephone numbers as needed.

Ag Export Councils Chocolate Manufacturers Association Susan Snyder Smith, Vice President James Johnson, Int’l Marketing Services Dir 8320 Old Courhouse Road Suite 300 Vienna, VA 22182 Tel.: (703) 790-5750 Fax: (703) 790-5752 E-mail: [email protected] Web: www.nca-cma.org Food Export U.S.A.--Northeast Tim Hamilton, Executive Director Public Ledger Bldg, Suite 1036 150 S. Independence Mall West Philadelphia, PA 19106-3410 Tel.: (215) 829-9111 Fax: (215) 829-9777 E-mail: [email protected] Web: www.foodexportusa.org Intertribal Agriculture Council Ross Racine, Executive Director 100 North 27th Street Suite 500 Billings, MT 59101 Tel.: (406) 259-3525 Fax: (406) 256-9980 E-mail: [email protected] Web: www.i-a-c-online.com



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Mid-America International Agri-Trade Council (MIATCO) Tim Hamilton, Executive Director 400 West Erie Street Suite 100 Chicago, IL 60610-4041 Tel.: (312) 944-3030 Fax: (312) 944-1144 E-mail: [email protected] Web: www.miatco.org National Association of State Departments of Agriculture (NASDA) Richard Kirchhoff, Chief Executive Officer Dewit Ashby, Director, Trade Shows 1156 15th Street, N.W. Suite 1020 Washington, DC 20005-1704 Tel.: (202) 296-9680 Fax: (202) 296-9686 E-mail: [email protected] Web: www.nasda.org Southern U.S. Trade Association (SUSTA) Jim Ake, Executive Director World Trade Center 2 Canal Street, Suite 2515 New Orleans, LA 70130 Tel.: (504) 568-5986 Fax: (504) 568-6010 E-mail: [email protected] Web: www.susta.org Western U.S. Agricultural Trade Association (WUSATA) Bruce Prenguber, Executive Director 2500 Main Street Suite 110 Vancouver, WA 98660-2697 Tel.: (360) 693-3373 Fax: (360) 693-3464 E-mail: [email protected] Web: www.wusata.org

Cotton, Oil, Tobacco and Seed American Peanut Council Jeannette H. Anderson, President 1500 King Street, Suite 301 Alexandria, VA 22314 Tel.: (703) 838-9500 Fax: (703) 838-9508 E-mail: [email protected] Other Contacts: Julie Adams, Trade Policy Advisor Linda S. Allison, Director, Administ & Finance T. Patrick Archer, Vice President, Int. Marketing www.icongrouponline.com


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Web: http://www.peanutsusa.com American Seed Trade Association Richard Crowder, Chief Executive Officer 225 Reinekers Lane Suite 650 Alexandria, VA 22314-2875 Tel.: (703) 837-8140 Fax: (703) 837-9365 Other Contacts: Anne Jorss, Director, Financial Services Kent Swisher, Sr. Director, Int. Marketing Tel.: (703) 837-8140, ext 323 E-mail: [email protected] Mark S. Condon, Vice President, Int. Marketing Tel.: (703) 837-8140, ext 329 E-mail: [email protected] Web: www.amseed.com American Soybean Association Stephen Censky, Chief Executive Officer 12125 Woodcrest Executive Drive Suite 100 St. Louis, MO 63141-5009 Tel.: (314) 576-1770 Fax: (314) 576-2786 Other Contacts: Jim Guinn, Executive Director, Int. Mrk. Kimball Nill, Biotechnology & Tech Iss Dir Web: www.soygrowers.com Cotton Council International Allen Terhaar, Executive Director 1521 New Hampshire Avenue, N.W. Washington, DC 20036-1205 Tel.: (202) 745-7805 Fax: (202) 483-4040 Other Contacts: Delorise A. Winter, Fiscal Director C. Vaughn Jordan, Internat. Program Director David B. Collins, Assistant Executive Director Contact’s E-mail: [email protected] E-mail: [email protected] Web: www.cottonusa.org/cci/ www.supimacotton.org National Sunflower Association Larry Kleingartner, Chief Executive Officer 4023 State Street Bismarck, ND 58503 Tel.: (701) 328-5100 Fax: (701) 328-5101 Other Contacts: John Sandbakken, Marketing Director E-mail: [email protected] Web: www.sunflowernsa.com



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Oregon Seed Council David S. Nelson, Executive Secretary 1193 Royvonne, SE, Suite 11 Salem, OR 97302 Tel.: (503) 585-1157 Fax: (503) 585-1292 E-mail: [email protected] Other contacts: Harold Youngberg, Ph.D, Tel.: (503) 390-9265 Fax: (503) 304-9514 E-mail: [email protected] Kathy Beaubien, MAP Coordinator Tel.: (202) 783-0303 Fax: (202) 467-8381 E-mail: [email protected] Harold Youngberg, Ph.D, Tel.: (503) 390-9265 Fax: (503) 304-9514 E-mail: [email protected] Kathy Beaubien, MAP Coordinator Tel.: (202) 783-0303 Fax: (202) 467-8381 E-mail: [email protected] Web: http://forages.orst.edu/organizations/seed/osc

Dairy, Livestock, and Poultry American Sheep Industry Association 6911 South Yosemite Street Suite 200 Englewood, CO 80112-1414 Rita Kourlis-Samuelson, Int’l Marketing Director Tel.: (303) 771-3500 Fax: (303) 771-8200 E-mail: [email protected] Web: www.sheepusa.org Leather Industries of America 1000 Thomas Jefferson Street, N.W Suite 515 Washington, DC 20007 Charles Myers, President Tel.: (202) 342-8086 Fax: (202) 342-9063 E-mail: [email protected] Web: www.leatherusa.com Mohair Council Of America 233 West Twohig P.O. Box 5337 San Angelo, TX 76902 Zane Willard, Executive Director Tel.: (915) 655-3161 www.icongrouponline.com


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Fax: (915) 655-4761 E-mail: [email protected] Web: www.mohairusa.com National Renderers Association 801 North Fairfax Street, Suite 207 Alexandria, VA 22314 Jim Rudbeck, Vice President, Int’l Programs Tel.: (703) 683-3561 Fax: (703) 683-2626 E-mail: [email protected] Web: www.renderers.org/ U.S. Dairy Export Council 2101 Wilson Blvd., Suite 400 Arlington, VA 22201 Marc Beck, Vice President, Marketing Tel.: (703) 528-3049 Fax: (703) 528-3705 E-mail: [email protected] Web: www.usdec.org U.S. Hide, Skin & Leather Association 1700 North Moore Street, Suite 1600 Arlington, VA 22209 Len Condon, President Tel.: (703) 841-5485 Fax: (703) 841-9656 E-mail: [email protected] Web: www.meatami.org/USHSLA_home.htm U.S. Livestock Genetics Export, Inc. 1000 Executive Parkway, Suite 120 St. Louis, MO 63141-6397 Michael Phillips, President Tel.: (314) 469-2278 Fax: (314) 469-6233 E-mail: [email protected] Web: www.uslge.org U.S. Meat Export Federation 1050 17th Street, Suite 2200 Denver, CO 80265 Tom Lipetsky, Director, Int’l Programs Tel.: (303) 623-6328 Fax: (303) 623-0297 E-mail: [email protected] Web: www.usmef.org USA Poultry & Egg Export Council 2300 West Park Place Boulevard Suite – 100 Stone Mountain, GA 30087 www.icongrouponline.com


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James H. Sumner, President Tel.: (770) 413-0006 Fax: (770) 413-0007 E-mail: [email protected] Web: www.usapeec.org

Forest and Fishery Products APA-The Engineered Wood Association PO Box 11700 Tacoma, WA 98411-0700 Ed Elias, Executive Director Tel.: (253) 565-6600 Fax: (253) 565-7265 E-mail: [email protected] Laurent Boilly, Export Marketing Web: www.apawood.org Alaska Seafood Marketing Institute 311 North Franklin Street, Suite 200 Juneau, AK 99801-1147 Barbara Belknap, Executive Director Tel.: (800) 478-2903/(907) 465-5560 Fax: (907) 465-5572 E-mail: [email protected] Web: www.alaskaseafood.org American Forest & Paper Association 1111 19th Street, N.W., Suite 800 Washington, DC 20036 Betsy Ward, Executive Director Tel.: (202) 463-2743 Fax: (202) 463-2785 Anne Pennington, Manager, Compliance & Operatio E-mail: [email protected] Web: www.afandpa.org American Hardwood Export Council 1111 19th Street, N.W., Suite 800 Washington, DC 20036 Mike Snow, Executive Director Tel.: (800) 878-8878 Fax: (202) 463-2705 E-mail: [email protected] Web: www.ahec.org American Seafood Institute 25 Fairway Circle Hope Valley, RI 02832 Colleen Coyne, Executive Director Tel.: (401) 491-9017 Fax: (401) 491-9024 E-mail: [email protected] www.icongrouponline.com


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Softwood Export Council 520 SW Sixth Avenue, Suite 810 Portland, OR 97204-1514 Craig Larsen, President Tel.: (503) 248-0406 Fax: (503) 248-0402 E-mail: [email protected] Web: www.softwood.org Southern Forest Production Association and Southern Pine Council PO Box 641700 Kenner, LA 70064-1700 Jerry Hingle, Executive Director Tel.: (504) 443-4464 Fax: (504) 443-6612 E-mail: [email protected] Web: www.sfpa.org/index.htm The Catfish Institute JEVCO International 375 Diablo Road, Suite 110 Danville, CA 94526-3430 Jean Valentine, TCI Consultant Tel.: (925) 838-5454 Fax: (925) 838-2311 E-mail: [email protected] Web: www.catfishinstitute.com

Grain and Feed National Dry Bean Council 6707 Old Dominion Drive, Suite 315 McLean, VA 22101-4503 Amy Philpott, International Marketing Dir. Tel.: (703) 556-9305 Fax: (703) 556-9301 E-mail: [email protected] National Hay Association 102 Treasure Island Causeway St. Petersburg, FL 33706 Donald F. Kieffer, Executive Director Tel.: (727) 367-9702 Fax: (727) 367-9608 E-mail: [email protected] Web: www.haynha.org North American Export Grain Association 1300 L Street, N.W., Suite 900 Washington, DC 20005 www.icongrouponline.com


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Gary Martin, President Tel.: (202) 682-4030 Fax: (202) 682-4033 E-mail: [email protected] North American Millers Association 600 Maryland Avenue, S.W. Suite 305, West Wing Washington, DC 20024 Betsy Faga, President Tel.: (202) 484-2200 Fax: (202) 488-7416 E-mail: [email protected] Web: www.namamillers.org The Pet Food Institute 2025 M Street, N.W. Suite 800 Washington, DC 20036 Dale Walden, Administrator Tel.: (202) 367-1120 Fax: (202) 367-2120 E-mail: [email protected] The Popcorn Institute 401 North Michigan Avenue Chicago, IL 60611-4267 William E. Smith, Chief Executive Officer Tel.: (312) 644-6610 Ext. 3312 Fax: (312) 245-1083 E-mail: [email protected] Web: www.popcorn.org U.S. Grains Council 1400 K Street, N.W., Suite 1200 Washington, DC 20005 Kenneth Hobbie, President Tel.: (202) 789-0789 Fax: (202) 898-0522 E-mail: [email protected] Web: www.grains.org U.S. Rice Producers James W. Willis, President, Int’l Programs 2900 Wilcrest Drive Suite 180 Houston, TX 77042 Dwight A. Roberts, Chief Executive Officer Tel.: (713) 974-7423 Fax: (713) 974-7696 Web: www.usriceproducers.com U.S. Wheat Associates Alan Tracy, President www.icongrouponline.com


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1620 I Street, N.W. Suite 801 Washington, DC 20006-4005 Tel.: (202) 463-0999 Fax: (202) 785-1052 E-mail: [email protected] Web: www.uswheat.org U.S. Wheat Associates 1200 NW Naito Parkway Suite 600 Portland, OR 97209 John Oades, Director Tel.: (503) 223-8123 Fax: (503) 223-5026 USA Dry Pea and Lentil Council 2780 W Pullman Road Moscow, ID 83843-4024 Tim D. McGreevy, President Tel.: (208) 882-3023 Fax: (208) 882-6406 E-mail: [email protected] Web: www.pea-lentil.com USA Rice Federation A. Ellen Terpstra, President 4301 North Fairfax Drive, Suite 305 Arlington, VA 22203-1616 Tel.: (703) 351-8161 Fax: (703) 351-8162 E-mail: [email protected] Contact: John Mentis, Vice President, Int’l Programs Web: www.usarice.com USA Rice Federation 6699 Rookin Street Houston, TX 77074 Tel.: (713) 270-6699 Fax: (713) 270-9021 E-mail: [email protected] Web: www.usarice.com

Horticultural and Tropical Products Almond Board of California 1150 Ninth Street, Suite 1500 Modesto, CA 95354 Rodger Wasson, CEO Tel.: (209) 343-3215 Fax: (209) 343-3245 Julie Adams, International Program Director www.icongrouponline.com


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Tel.: (209) 343-3238 E-mail: [email protected] Web: www.AlmondsAreIn.com Asparagus USA 375 Diablo Road, Suite 110 Danville, CA 94526-3430 Jean Valentine, Manager Tel.: (925) 838-5454 Fax: (925) 838-2311 E-mail: [email protected] Blue Diamond Growers P.O. Box 1768 1802 C Street Sacramento, CA 95812 Doug Youngdahl, President & CEO Tel.: (916) 446-8354 Fax: (916) 325-2880 E-mail: [email protected] Susan Brauner, Dir. of Public Affairs E-mail: [email protected] Web: www.bluediamondgrowers.com California Ag Export Council 915 L Street, #C 409 Sacramento, CA 95814 Frederick W. Klose, Manager Tel.: (916) 654-0389 Fax: (916) 653-2604 Fred Klose, Manager E-mail: [email protected] California Cherry Advisory Board 1425 Fourth Avenue Suite 808 Seattle, WA 98101 James Christie, Tel.: (206) 292-6340 Fax: (206) 292-6341 E-mail: [email protected] California Cling Peach Advisory Board 531-D North Alta Ave. Dinuba, CA 93618-3203 Jim Melban, General Manager Tel.: (559) 595-1425 Fax: (559) 591-5744 Jean Valentine, MAP Contractor E-mail: [email protected] California Kiwifruit Commission 9845 Horn Road www.icongrouponline.com


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Suite 160 Sacramento, CA 95827 E. Scott Horsfall, President Tel.: (916) 362-7490 Fax: (916) 362-7993 E-mail: [email protected] Lindy Harner, Export Director Web: www.kiwifruit.org California Pistachio Commission 1318 E. Shaw Avenue Suite 420 Fresno, CA 93710 Karen Reinecke, President Tel.: (559) 221-8294 Fax: (559) 221-8044 E-mail: [email protected] Jean Valentine, MAP Contractor Tel.: (925) 838-5454 E-mail: [email protected] Web: www.pistachios.org California Pomegranate Council 350 North 7th Street Fowler, CA 93625 Dave Simonian, President Tel.: (209) 834-5921 Fax: (209) 834-2363 Art Renney, Project Manager California Prune Board 3841 North Freeway Blvd. Suite 120 Sacramento, CA 95834 Richard L. Peterson, Executive Director Tel.: (916) 565-6232 Fax: (916) 565-6237 E-mail: [email protected] Peggy Castaldi, Marketing Director E-mail: [email protected] Web: www.prunes.org California Strawberry Commission 41 Hanger Way P.O. Box 269 Watsonville, CA 95077-1301 David R. Riggs, President Tel.: (831) 724-1301 Fax: (831) 724-5973 E-mail: [email protected] Jean Valentine, MAP Contractor Tel.: (925) 838-5454 E-mail: [email protected] www.icongrouponline.com


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Stephanie Hilton, Export Manager E-mail: [email protected] Web: www.clstrawberry.com California Table Grape Commission 392 West Fallbrook Avenue Suite 101 Fresno, CA 93729-7320 Kathleen Nave, President Tel.: (559) 447-8350 Fax: (559) 447-9184 E-mail: [email protected] Susan Day, International Marketing Web: www.tablegrape.com California Tomato Commission 1625 E. Shaw Avenue Suite 106 Fresno, CA 93710 Ed Beckman, President Tel.: (559) 230-0116 Fax: (559) 230-0635 E-mail: [email protected] Eric Rosenberg, MAP Contractor Tel.: (206) 292-6340 E-mail: [email protected] Web: www.tomato.org California Tree Fruit Agreement 975 “I” Street P.O. Box 968 Reedley, CA 93654-0968 Jonathan W. Field, Manager Tel.: (559) 638-8260 Fax: (559) 638-8842 David Miller, Director Export Market Dev. E-mail: [email protected] Web: www.caltreefruit.com California Walnut Commission 1540 River Park Drive Suite 203 Sacramento, CA 95815 Dennis A. Balint, Chief Executive Officer Tel.: (916) 646-3807 Fax: (916) 923-2548 E-mail: [email protected] Susan Haenny, Marketing Director E-mail: [email protected] Web: www.walnuts.org Cherry Marketing Institute P.O. Box 30285 www.icongrouponline.com


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Lansing, MI 48909-7785 Philip J. Korson II, Managing Director Tel.: (517) 669-4264 Fax: (517) 669-3354 Jean Valentine, MAP Contractor Tel.: (925) 838-5454 E-mail: [email protected] Web: www.cherrymkt.org Cranberry Marketing Committee 266 Main Street Wareham, MA 02571-2172 Dave Farrimond, General Manager Tel.: (508) 291-1510 Fax: (508) 291-1511 E-mail: [email protected] Mike Rucier, BCI, MAP Contractor Tel.: (206) 292-6340 E-mail: [email protected] Florida Department of Citrus P.O. Box 148 1115 E. Memorial Blvd. Lakeland, FL 33802-0148 Robert Crawford, Executive Director Tel.: (863) 499-2500 Fax: (863) 499-2548 E-mail: [email protected] Sandra Pate, Admin. Secretary Ivy Leventhal, Int’l Marketing Director Web: www.floridajuice.com Florida Tomato Committee P.O. Box 140635 4401 East Colonial Drive Orlando, FL 32814 Reggie Brown, Manager Tel.: (407) 894-3071 Fax: (407) 898-4296 Eric Roseberg, BCI Inc., MAP Contractor Tel.: (206) 292-6340 E-mail: [email protected] Ginseng Board of Wisconsin 16-H Menard Plz. Wausau, WI 54401-5374 Lyonel Wisnewski, Export Manager Tel.: (715) 845-7300 Fax: (715) 845-8006 Joan Eckes, Adm. Asst. E-mail: [email protected] Hop Growers of America www.icongrouponline.com


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PO Box 9218 Yakima, WA 98909-0218 Douglas McKinnon, Executive Director Tel.: (509) 248-7043 Fax: (509) 248-7044 Web: www.usahops.org Michigan Agricultural Coop. Marketing Association 7373 West Saginaw Highway Lansing, MI 48917 Randy Harmson, Chief Executive Officer Tel.: (517) 323-7000 Web: www.msue.msu.edu/msue/imp/modit/04059501.html National Honey Board 390 Lashley Street Longmont, CO 80501-6045 Nathan Holleman, Chief Executive Officer Tel.: (303) 776-2337, ext 14 Fax: (303) 776-1177 E-mail: [email protected] Sherry Jennings, MAP Contractor Tel.: (720) 494-9500 Web: www.nhb.org/honey National Potato Promotion Board 7555 East Hampden Avenue Building #1, Suite 412 Denver, CO 80231 John Toaspern, International Director Tel.: (303) 369-7783 Fax: (303) 369-7718 E-mail: [email protected] National Watermelon Promotion Board 1595 S. Semoran Blvd, Suite 1540 Winter Park, FL 32792 William Watson, Executive Director Tel.: (407) 657-0261 Fax: (407) 657-2213 E-mail: [email protected] New York Wine and Grape Foundation 350 Elm Street Penn Yann, NY 14527 James Trezise, President Tel.: (315) 536-7442 Fax: (315) 536-0719 E-mail: [email protected] Susan Spence, Director of Info. Services E-mail: [email protected] Web: www.nywine.com



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North American Blueberry Council 4995 Golden Foothill Parkway Suite 2 Eldorado Hills, CA 95762 Mark Villata, Manager Tel.: (916) 933-9399 Fax: (916) 933-9777 E-mail: [email protected] Mark Villata, Manager Northwest Wine Promotion 500 Union Street Suite 945 Seattle, WA 98101 Steve Burns, Treasurer Tel.: (206) 667-9463 Fax: (206) 583-0573 E-mail: [email protected] Bryant Christie, MAP Contractor Tel.: (206) 292-6340 E-mail: [email protected] Ocean Spray Cranberries, Inc. One Ocean Spray Drive Lakeville-Middleboro, MA 02349 Peter J. Stirling, Tel.: (508) 946-7218 Fax: (508) 946-7726 E-mail: [email protected] Organic Trade Association P.O. Box 1078 Greenfield, MA 01302 Katherine DiMatteo, Executive Director Tel.: (413) 774-7511 Fax: (413) 774-6432 E-mail: [email protected] Web: www.ota.com Papaya Administrative Committee 230 Kekuanaoa Street Hilo, HI 96720 Emerson Llantero, Manager Tel.: (808) 969-1160 Fax: (808) 969-1781 E-mail: [email protected] Web: www.planet-hawaii.com/papaya Pear Bureau Northwest 4382 SE International Way Suite A Milwaukee, OR 97222-4636 Kevin D. Moffitt, President & CEO www.icongrouponline.com


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Tel.: (503) 652-9720 Fax: (503) 652-9721 E-mail: [email protected] Jeff Correa, Vice Pres., Int’l Marketing Web: www.usapears.com Raisin Administrative Committee PO Box 5217 3445 North First Street, Suite 101 Fresno, CA 93755-5217 Terry Stark, General Manager Tel.: (559) 225-0520 Fax: (559) 225-7016 E-mail: [email protected] Harry Rixman, International Director Web: www.raisins.org Sunkist Growers P.O. Box 7888 Van Nuys, CA 91409-7888 Michael Wooten, V.P., Government Affairs Tel.: (818) 379-7340 Fax: (818) 379-7492 Leland Wong, Director of Advertising Web: www.sunkist.com Texas Produce Export Association 901 Business Park Drive Suite 500 Mission, TX 78572 John McClung, Executive Vice President Tel.: (956) 581-8632 Fax: (956) 584-3307 Jean Valentine, MAP Contractor Tel.: (925) 838-5454 E-mail: [email protected] U.S. Apple Export Council/U.S. Apple Association 6707 Old Dominion Drive Suite 315 McLean, VA 22101-4503 Phillip H. Kimball, President Tel.: (703) 556-9300 Fax: (703) 556-9301 E-mail: [email protected] Washington State Apple Commission PO Box 18 2900 Enclid Avenue Wenatchee, WA 98807 Welcome Sauer, President Tel.: (509) 663-9600 Fax: (509) 662-5824 www.icongrouponline.com


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E-mail: [email protected] Ed Brooks, Int’l Marketing Director Web: www.bestapples.com Washington State Fruit Commission/California Cherry Advisory Board 105 South 18th Street Suite 205 Yakima, WA 98901 Eric Melton, V.P. International Marketing Tel.: (509) 453-4837 Fax: (509) 453-4880 E-mail: [email protected] Web: www.wastatefruit.com Welch’s Food 3 Concord Farms 555 Virginia Road Concord, MA 01742-9101 William Hewins, Vice President Tel.: (978) 371-3644 Fax: (253) 663-2834 E-mail: [email protected] Carolyn Porcaro, Exec Admin Assistance Tel.: (978) 371-3646 E-mail: [email protected] Web: www.Welchs.com Wine Institute 425 Market Street Suite 1000 San Francisco, CA 94105 John A. DeLuca, President Tel.: (415) 512-0151 Fax: (415) 512-8416 E-mail: [email protected] Monica Panek, Program Manager Joesph A. Rollo, Director of Int’l Dept E-mail: [email protected] Web: www.wineinstitute.org



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5 5.1

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This report is for informational purposes only and is not intended as a recommendation to invest in a city, country, industry or product area, or an offer or solicitation with respect to the purchase or sale of a security, stock, or financial instrument. This report does not take into account the investment



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END



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