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Delayed Borsa Italiana  -  11:40:33 2023-02-03 am EST
2.383 EUR   -2.93%
10:07aINTESA SANPAOLO S.P.A. : Jefferies reiterates its Neutral rating
02/04Monte dei Paschi too big a deal for Banco BPM, says BPM boss
02/03INTESA SANPAOLO S.P.A. : Goldman Sachs reiterates its Buy rating
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Energy crisis tests resilience of Italian businesses

10/21/2022 | 07:07am EST

(Repeats story for media clients with amended media identifier)


Response to energy crisis key for economic outlook


Bankers say firms more resilient than given credit for


Italy performed better than expected so far this year

MILAN, Oct 21 (Reuters) - Italian media had only just begun talking about the threat of winter gas rationing when Marco Checchi sprung into action to ensure bottle top maker Pelliconi would continue to supply customers including Coca-Cola, Heineken and Guinness.

Pelliconi, which produces 35 billion bottle tops a year, mostly in Italy but also in Egypt and China, stepped up production of energy-intensive semi-finished goods, invested in solar panels and commissioned a prototype of a new digital printer for metal sheets that did not require gas ovens.

"When you run a business, if you keep hearing on the news that gas supplies are at risk, you've got to do something. It's not like you can start screaming and stamping your foot when they actually do halt flows for two hours a day," Checchi told Reuters.

Like other Italian businesses wrestling with the energy crisis sparked by the Ukraine war, Pelliconi has seen costs for electricity and gas more than triple in relation to turnover this year, compounding problems posed by higher steel prices.

In some cases it has been able to pass on almost two thirds of the cost increases to its customers and plans to further hike prices next year.

Higher prices contributed to the 16.2% rise in manufacturing turnover Italy reported in July on a calendar adjusted basis, but volumes also increased by 1.7%. That broadly compares with a 0.8% yearly drop in Germany.


Traditionally the laggard among the biggest euro zone economies, Italy has experienced a more vigorous post-pandemic rebound in terms of industrial output than France and Germany, Intesa Sanpaolo economist Paolo Mameli said.

After growth exceeded expectations in the first half, the situation has worsened rapidly and the government now expects the Italian economy to have shrunk in the third quarter, with the contraction seen lasting until mid-2023.

Investors have trouble gauging the depth of the slump awaiting the European economy and debt-laden Italy.

"The euro area outlook remains unusually uncertain," Goldman Sachs economists said.

Goldman expects an around 1% contraction in the bloc's economy through the second quarter of next year, adding that resilient industrial activity could limit the fall to 0.2% while it would approach 3% in a worst case scenario.

The coping strategies adopted by firms like Bologna-based Pelliconi are an element in the equation that will determine the final outcome, according to UniCredit CEO Andrea Orcel.

"Companies are adjusting, it's wrong to assume they aren't. We see that all the time when we look at our clients: businesses are reorganising their value chains, their logistics, everything," he recently told a labour conference.

"So far households and companies have proven more resilient than anticipated ... markets worry a lot over Italy's performance within the euro zone overlooking the fact that Italy keeps growing more than France or Germany," he added, noting that corporate deposits were up 35% from pre-pandemic levels.

UniCredit, which is financing companies' investments to boost installed capacity for renewable energy, said some of its customers in non-energy intensive sectors were able to generate independently 30-40% of their power needs, in some cases as much as 50%.

Most companies are rushing to install solar panels, but some are more ambitious. Fastener maker SBE-Varvit has secured 400 gas containers that will be shipped to its plant in north eastern Italy by January to offset any shortages.


Even in a battered industry like ceramics, which like the glass and paper sectors has been hit hard by soaring energy bills, high-end tile maker Italcer expects to cover a quarter of its energy consumption once it completes the two combined heat and power plants it is building.

"Already in September 2021 there were warnings of what was to come," CEO Graziano Verdi told Reuters, adding Italcer faced an extra 60 million euros in costs for gas and electricity this year - accounting for 70% of manufacturing costs from 20% previously.

"We invested 10 million euros to build two cogeneration plants and save 4 million euros this year," he said, adding Italcer saved another million by reducing the tiles' thickness to 8.5 from 10 millimetres.

"We raised prices by 30-35% with a good market response. A weaker euro certainly helped, as did the government's support measures."

Outgoing Prime Minister Mario Draghi's government has set aside 66 billion euros so far this year for tax breaks and subsidies to help energy-intensive firms and poor households.

Italian business lobby Confindustria has warned of an "economic earthquake", saying the new government will struggle to offset the hit from energy prices on firms like Draghi managed to do without hurting Italy's fragile public finances.

But others are more positive.

Veteran banker Corrado Passera said the crises had operated a natural selection among businesses and his digital lender illimity continued to face growing requests to fund acquisitions, or innovation and internalisation projects.

"When you speak to business owners in private ... outside Confindustria ... they have great confidence about their ability to react," Giuseppe Castagna, who leads Italy's third-biggest bank Banco BPM, said recently. (Reporting by Valentina Za and Elvira Pollina; Editing by Keith Weir, Kirsten Donovan)

ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / EURO (AUD/EUR) 0.00% 0.6411 Delayed Quote.1.90%
BANCO BPM S.P.A. 0.00% 4.103 Delayed Quote.23.07%
BRITISH POUND / EURO (GBP/EUR) 0.01% 1.1163 Delayed Quote.-0.83%
CANADIAN DOLLAR / EURO (CAD/EUR) -0.09% 0.691238 Delayed Quote.-0.16%
HEINEKEN HOLDING N.V. 0.85% 77.5 Real-time Quote.7.56%
HEINEKEN N.V. 0.98% 92.98 Real-time Quote.5.80%
ILLIMITY BANK S.P.A. 1.77% 7.49 Delayed Quote.8.55%
INDIAN RUPEE / EURO (INR/EUR) 0.51% 0.011231 Delayed Quote.-1.08%
INTESA SANPAOLO S.P.A. -2.93% 2.383 Delayed Quote.14.68%
UNICREDIT S.P.A. -0.66% 18.018 Delayed Quote.35.76%
US DOLLAR / EURO (USD/EUR) 0.00% 0.926526 Delayed Quote.-1.86%
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Sales 2022 21 162 M 22 965 M 22 965 M
Net income 2022 4 270 M 4 634 M 4 634 M
Net Debt 2022 - - -
P/E ratio 2022 10,8x
Yield 2022 6,53%
Capitalization 43 552 M 47 262 M 47 262 M
Capi. / Sales 2022 2,06x
Capi. / Sales 2023 1,89x
Nbr of Employees 95 554
Free-Float 95,0%
Duration : Period :
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Number of Analysts 23
Last Close Price 2,38 €
Average target price 2,79 €
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Managers and Directors
Carlo Messina Chief Executive Officer, MD & Director
Stefano del Punta Treasurer
Gian Maria Gros-Pietro Chairman
Massimo Proverbio Chief IT, Digital & Innovation Officer
Paola Angeletti Chief Operating Officer
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