Distribution of food, beverages and tobacco products analysis
According to the financial statements published by the Ministry of Finance, the companies whose main activity was the "Non-specialized wholesale trade of food, beverages and tobacco" during 2013 generated a total turnover of 21 BEUR and 32,000 jobs, both indicators registering a decrease by 6% compared to the previous year.
Although the efforts of the companies in this sector to maintain the income and recovery of the profitability are evident, the negative lately sales dynamics requires an analysis on multiple levels in order to identify the factors likely to compromise the financial equilibrium at the sectorial level:
- The distribution of the companies by turnover
- Structure of the profit & loss account
- The resources in terms of attracting funding and the allocation of resources for long-term investments
- Liquidity ratios
- Investigation of the cash-flow
Giving up the profitability was the price paid by the distributors of food, beverages and tobacco in order to maintain the sales volume at a level comparable to the one registered in the years before the financial crisis. With the reduction of consumption and the pressure from the large retailers, the cumulative net profit for 2013 reported by the companies operating in this sector decreased to less than half compared to the end of 2008. However, to further complicate the situation, the sales volume decreased last year, after 2 consecutive years of growth.
During 2013, Coface individually analyzed a sample of 561 companies from its portfolio, which are operating in the analyzed sector. The sample is very representative, because these companies generate over 85% of the total turnover registered within the entire sector.
The deterioration possibility of the sector financial balance is confirmed by the insolvency risk assessment model used by Coface (@rating score), which is showing that only 1 out of 3 of the analyzed companies register a decreased risk of insolvency. In addition, 39% of the companies in the sample make payments very slowly, or do not respect their contracts.
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