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27.10.2020

Medium-sized Businesses: High debt, declining Profits and Financing Gap due to Covid-19

  • After the corona shock, European SMEs are showing very high levels of debt, a considerable deterioration in profitability in some cases, and insufficient capitalization
  • The Covid-19 pandemic is particularly affecting small and medium-sized enterprises (SMEs) in France and Italy
  • Compared to its European counterparts, German SMEs have come through the crisis relatively well so far
  • Already before the crisis 20% "zombies" among Italian SMEs, in France 11%, Germany 10%  

In France and Italy in particular, the Covid-19 pandemic is taking a toll on small and medium-sized enterprises (SMEs): they are currently lacking financial resources totaling an estimated EUR 100 billion - despite the extensive economic stimulus packages and after the exclusion of so-called "zombie" companies.

  • After the corona shock, European SMEs are showing very high levels of debt, a considerable deterioration in profitability in some cases, and insufficient capitalization
  • The Covid-19 pandemic is particularly affecting small and medium-sized enterprises (SMEs) in France and Italy
  • Compared to its European counterparts, German SMEs have come through the crisis relatively well so far
  • Already before the crisis 20% "zombies" among Italian SMEs, in France 11%, Germany 10%  

In France and Italy in particular, the Covid-19 pandemic is taking a toll on small and medium-sized enterprises (SMEs): they are currently lacking financial resources totaling an estimated EUR 100 billion - despite the extensive economic stimulus packages and after the exclusion of so-called "zombie" companies. In Germany too, SMEs lacking around EUR three billion of financial resources for a sufficient recapitalization. In view of the lack of EUR 70 billion in Italy and around EUR 29 billion in France, however, the local SMEs are in a much better position. This is the conclusion of a recent analysis by the world's leading credit insurer Euler Hermes.

"European SMEs have a very high level of debt, significantly deteriorated profitability and insufficient capitalization," Ron van het Hof, CEO of Euler Hermes in Germany, Austria and Switzerland says. "In the medium term, this is a very bad combination for the solvency of these companies. In Italy and France in particular, Covid-19 is making the situation increasingly acute, even if the numerous economic stimulus packages have at least avoided a short-term liquidity crisis. German SMEs have once again proven to be relatively robust and have so far come through the crisis relatively well compared to their European counterparts."

In this country too, debt has increased as a result of numerous liquidity measures. In France in particular, however, it is almost twice as high in relation to gross domestic product (81% of GDP) as in Germany (43% of GDP). In Italy, the debt of 65% of GDP is above average also in a European comparison (average: 63%).

In terms of profitability, French SMEs are at the bottom of the European league
"French small and medium-sized companies are now at the bottom of the European league in terms of profitability, even behind Italy," Ana Boata, Head of Macroeconomics at Euler Hermes says. "The profitability of French SMEs has fallen dramatically by 7 percentage points (pp) since the beginning of the year compared to -0.6 pp in Germany. In Italy, we estimate that profitability has also fallen by up to 3pp[1]. With 33%, the equity ratio in Italy is the lowest and thus well below the 40% that is generally considered as being adequate. Accordingly, Italy is the country where the greatest need for additional funding for recapitalization exists."

In France, the equity ratio of SMEs is 37%, while in Germany, at 39%, only slightly below the recommended capital adequacy level. In their analysis, the economists have already deducted such companies that were already practically unviable before the Covid 19 pandemic.

"A majority of medium-sized companies are proving to be very robust even in the current crisis, especially in Germany, Van het Hof says. "This fact, however, must not hide the fact that there are numerous zombie companies in their shadow in Europe - even before the Covid-19 pandemic. In Italy, for example, even before the crisis, around one-fifth of the SMEs were no longer economically viable, while in France (11%) and Germany (10%) only about half as many were known. However, this number is likely to have increased dramatically with the current crisis, as have the financing requirements of SMEs. The situation will be particularly tight for companies and sectors that had little buffer before the crisis."

In Germany, the equity ratio before the pandemic was particularly low in the transportation industry: in shipping it was around 32%, in aviation 29%. With Covid-19 the existing financing gap has widened again. In France and Italy, companies in the hotel and restaurant industry as well as in mechanical engineering and trade had particularly bad starting positions and therefore have the greatest need for capital now.

The complete study can be found here: https://ots.de/lYcKea 

[1] Figures are currently available for Germany and France until H1 2020, in Italy only for Q1 2020. The decline in profitability of up to 3pp in Italy is an expert estimate.

Euler Hermes is the world leader in credit insurance and a recognized specialist in bonding and guarantees, debt collection and protection against fraud or political risks. Every day, Euler Hermes monitors and analyzes the insolvency of more than 80 million small, medium and multinational companies through its proprietary monitoring system. Overall, the expert analyses cover markets that account for 92% of the global gross domestic product (GDP).


Please read the attached document for notes regarding forward-looking statements.

Source:

Euler Hermes Deutschland

PERFORMANCE DAYS Nothing to Waste - Closing the Loop (c) PERFORMANCE DAYS
20.10.2020

PERFORMANCE DAYS Nothing to Waste - Closing the Loop

  • Finite resources and endless mountains of rubbish set the tone of the upcoming 25th edition of PERFORMANCE DAYS. Closing the loop means nothing is wasted, not even time, as recycled clothing gets recycled again and again.

In keeping with this topic, the trade fair organizers are planning expert discussion panels to help present the facts as well as visions of the future. Expect the corresponding displays of sustainable materials, chosen by the PERFORMANCE FORUM Jury. Look for materials such as fibers from recycled PET bottles, recyclable mono-component materials or blends, and shirts that decompose to biomass in a "Cradle-to-Cradle" approach. "Nothing to Waste - Closing the Loop" is open to the public at the Messe München fairgrounds and as a Digital Fair online starting on December 9-10, 2020.

  • Finite resources and endless mountains of rubbish set the tone of the upcoming 25th edition of PERFORMANCE DAYS. Closing the loop means nothing is wasted, not even time, as recycled clothing gets recycled again and again.

In keeping with this topic, the trade fair organizers are planning expert discussion panels to help present the facts as well as visions of the future. Expect the corresponding displays of sustainable materials, chosen by the PERFORMANCE FORUM Jury. Look for materials such as fibers from recycled PET bottles, recyclable mono-component materials or blends, and shirts that decompose to biomass in a "Cradle-to-Cradle" approach. "Nothing to Waste - Closing the Loop" is open to the public at the Messe München fairgrounds and as a Digital Fair online starting on December 9-10, 2020.

The PERFORMANCE DAYS trade fair has chosen a new Focus Topic that concerns not only our own industry. The textile industry has long been achieving more efficient production by recycling its own waste products and using recycled materials from outside the industry, for example, PET-bottles. Nevertheless, textiles exist alongside glass, paper, metal, and plastics as a separate branch of waste management. Despite ambitious efforts at recycling by the waste and textile industries, the efficient use of textile waste as a resource remains a challenge. Compounding this challenge are the difficulties caused by a global world: production, consumers, and disposal sites are miles apart, shared expert knowledge about the other industries is lacking, and international standards and political support are nearly non-existent.

Final destination: the waste bin
Information from the Federal Office for the Environment shows that 0.8% of the oil produced is used in the textile industry for the production of new textiles. But the costly processing chain of this finite resource ends all too quickly in waste. A Greenpeace survey reveals outdated fashions or clothing of worn quality is thrown away within three years, only to land in the trash dumpsters. The European Environmental Agency estimates that 5.8 million tons of used textiles are discarded every year and either incinerated, used for landfill, or taken to mechanical-biological sewage treatment plants. Even if used clothing is collected by state or private companies, in many cases it cannot be sold (as second hand), donated, or recycled (into rags or insulating material). In the best case scenario, it is incinerated and converted to thermal energy.

Recycling and circular design
From an economic and environmental perspective, the term recycling refers to waste-free products, waste avoidance, and waste recovery and disposal. In our industry as it stands, recycling at the end of the product life cycle usually means converting the product into some other product, i.e., not clothing. This is the "Open-Loop" process. Accordingly, textiles are eventually incinerated, but the amount of energy recovered can vary greatly depending on how efficiently the waste incineration plant works. Such devaluing of the product to a product with less value than the original product is known as Downcycling. However, Downcycling is not the only solution: the "Closed-Loop" approach has the goal of making new clothes out of old ones through recycling. The closed loop for renewable natural resources, for example, can mean that natural fibers used in textiles will end up becoming soil, which is the nutrient for new natural fibers, i.e., a cradle-to-cradle approach. Synthetic garments similarly require extracting the man-made fibers and reprocessing them to produce another garment.

Planning for the end in advance
Rather than thinking about recycling opportunities at the end of the product life cycle, brands can already begin developing closed loop options while in the design phase. Among other things, designing out the waste can reduce the environmental impact of the products. To extend the useful life, consider leasing the materials and/or adding labels with instructions for disposal, repair, or repurposing. And, what about the idea of preparing 100% used textiles that can be reintroduced into the supply chain as 100% new textiles? Separating the different types of fiber used in blends is complex, cost-intensive, and further complicated when labels are non-existent (or no longer existing) or it is simply not (yet) technically possible. More and more clothing makers and suppliers are trying to avoid mixing fibers and are switching to "mono-materials" or "mono-components." Shirts are easy to make in this way, but if you add buttons, zippers, etc., the issue becomes more complex.

Nothing to waste - not even time
If you are like many end consumers, brand managers, and producers and want to make use of valuable resources in a more sustainable manner, register now on the trade fair website under "Visitor Login." There you can access a free trade fair ticket for December 9-10, 2020. You can also learn about the complimentary and soon to be expanded offers at the Digital Fair. Don’t forget to sign-up for the free Newsletter mailings. 

•     09.-10. December 2020      DIGITAL FAIR  Trends Winter 2022/23 

 

UPDATE
CoVid-19 continues to keep the world on edge. Many PERFORMANCE DAYS visitors, as well as exhibitors, have already announced that travelling to Munich in December would be simply impossible for them. Due to the increasing number of infections, further international travel bans and company-internal travel restrictions are now threatening. As a result, the December 2020 edition of PERFORMANCE DAYS will unfortunately not take place at the Messe München, but as Digital Fair! On the planned dates of December 09-10, both approved and advanced new tools will go online and provide further proof of PERFORMANCE DAYS’ expansion of its pioneering role in creating a digital textile trade fair experience.

 

ISPO Munich 1 (c) Messe München GmbH
13.10.2020

ISPO Munich 2021 as a hybrid event

  • Hybrid concept to combine the best of both worlds
  • Systematic enhancement of ISPO’s digital strategy
  • End consumers to be digitally integrated into the event for the first time

The world-leading trade fair ISPO Munich will take place from January 31 to February 3, 2021, for the first time as a hybrid event that will be held both in-person in Munich and online around the world. The new concept marks the event’s systematic transformation into a platform and applies the broad range of digital expertise that ISPO has gained over the past 10 years. With the threat of travel restrictions looming over the trade fair, the digital elements will create the ideal basis for integrating global target groups: While representatives from European markets are generally expected to attend the in-person event, the digital enhancements will enable an intercontinental audience to participate as well.

  • Hybrid concept to combine the best of both worlds
  • Systematic enhancement of ISPO’s digital strategy
  • End consumers to be digitally integrated into the event for the first time

The world-leading trade fair ISPO Munich will take place from January 31 to February 3, 2021, for the first time as a hybrid event that will be held both in-person in Munich and online around the world. The new concept marks the event’s systematic transformation into a platform and applies the broad range of digital expertise that ISPO has gained over the past 10 years. With the threat of travel restrictions looming over the trade fair, the digital elements will create the ideal basis for integrating global target groups: While representatives from European markets are generally expected to attend the in-person event, the digital enhancements will enable an intercontinental audience to participate as well. Another new addition next year will be the digital integration of end consumers.

“Sports and outdoor activities – two areas that are closely related to the topic of health at the moment – have never been so socially relevant,” said Klaus Dittrich, the Chairman and CEO of Messe München. “This has created a growing desire in the industry for personal interaction. The urge to present and discuss new potential, partnerships and business models is greater than ever. The industry has been communicating this need to us, and we have come up with the concept to meet it.”

Personal interaction meets global participation
New participation options, new topics, expanded target groups: All of these things are reflected in particular in the large number of physical and digital attendance options devoted to the focus topics of creativity & digitalization, health and sustainability. In addition to product presentations in the trade fair halls, the event will focus on networking, matchmaking, knowledge transfer and innovations.

Thanks to the integrated hybrid stages, people will be able to attend presentations, talks and workshops not only on site, but also from locations around the world. Brands, key players and top athletes will speak with an audience that extends well beyond the walls of the trade fair halls. ISPO Munich will also include two single-day conference formats: ISPO Digitize Summit (February 1, 2021) and the Sports Tech Conference Europe (February 2, 2021).

In implementing the hybrid concept, the ISPO team has drawn on the digital expertise and reach that it has acquired over the past 10 years: They are based on the development of an eco-system with services that extend along the value chain and on the implementation of an entirely digital ISPO Re.Start Days in the summer of 2020.

New: digital integration of end consumers  
For the first time, end consumers will have an opportunity to experience something that was formerly reserved for the B2B audience: the chance to participate digitally and conduct a direct dialogue with the industry. With the help of presentations, workshops and master classes, the brands and companies will have an opportunity to make digital presentations to sports and outdoor fans around the world and speak directly to them. The ISPO Open Innovation Community has already demonstrated the effectiveness of this concept: Approximately 80,000 end consumers contribute their know-how to crowd-sourcing and market research campaigns and provide companies with valuable insights about new products and ideas throughout the year.

Personal interaction on the exhibition grounds in Munich will remain the provision of the B2B audience.  

Markus Hefter: “We are ready for ISPO Munich 2021 and are really looking forward to lots of new ideas. One thing is clear: Even though many issues can be solved digitally, the desire to meet and interact in person has grown dramatically during the coronavirus pandemic. We are really happy about the strong support we have received from the industry and will provide our customers with a safe platform.”

Maximum safety and flexibility  
A comprehensive safety and hygiene concept that Messe München worked out with the state government of Bavaria will be used during the on-site activities of ISPO Munich 2021. The safety of exhibitors and visitors will have the highest priority. Events began to be successfully held once again on the Munich exhibition grounds on September 1. The rule of thumb for international visitors is: Trade fair participants may travel from all countries to Germany provided that certain conditions are met because they are considered to be business travelers on an important mission.

Exhibitors will have more flexibility as a result of the extension of deadlines and flexible cancellation terms. If needed, pre-built booths may be used in order to cost-effectively and efficiently participate in the trade fair.

If exhibitors or visitors have any questions about the safety and hygiene concept, they may contact the Messe München hotline by phone +49 89 949 11400 or e-mail at corona.support@messe-muenchen.de. The service hours are: Monday through Thursday from 9 a.m. to 5 p.m. and Friday from 9 a.m. to 4 p.m.

Carl Meiser GmbH & Co. KG (c) Carl Meiser GmbH & Co. KG
06.10.2020

Nopma - Experts for antimicrobial finishing: Technical textile coatings from the Swabian Alb

The Carl Meiser GmbH & Co. KG - started in the early 1950s as a day- and nightwear manufacturer. Over the last 20 years the company has become a specialist in the field of technical textiles. With its brand nopma Technical Textiles the company is present as developer and producer of textile solutions via coatings. The main products are nopma anti-slip - textiles with anti-slip effect, nopma adhesion - adhesive pre-coated films, spacer fabrics and substrates for lamination in automotive interiors, nopma ceramics - abrasive more resistant textile surfaces and nopma silicones - silicone coatings on textile surfaces.

Textination talked to the managing director, Jens Meiser, who joined the company in 2005, realigned the division and developed it into a service provider, about his plans and objectives.

The Carl Meiser GmbH & Co. KG - started in the early 1950s as a day- and nightwear manufacturer. Over the last 20 years the company has become a specialist in the field of technical textiles. With its brand nopma Technical Textiles the company is present as developer and producer of textile solutions via coatings. The main products are nopma anti-slip - textiles with anti-slip effect, nopma adhesion - adhesive pre-coated films, spacer fabrics and substrates for lamination in automotive interiors, nopma ceramics - abrasive more resistant textile surfaces and nopma silicones - silicone coatings on textile surfaces.

Textination talked to the managing director, Jens Meiser, who joined the company in 2005, realigned the division and developed it into a service provider, about his plans and objectives.

Founded in 1952, Carl Meiser GmbH & Co.KG has changed from a day- and nightwear manufacturer to an innovator in the field of technical textiles, presenting themselves as a specialist for plastic-based coating processes. If you had to introduce yourself in 100 words to someone who does not know the company: What has influenced you most in this development process and what makes you unique?
Innovation is the new normal - This has been true for the textile industry not just since Sars CoV-2. Our industry was one of the first to be disrupted in the early 1990s and has always been subject to constant change. This urge for further development, which is essential for survival, has left its mark on us intensively and has enabled us to manage huge leaps in innovation in recent years

Today we regard ourselves as an innovative development and production service provider with a focus on textile coating. We develop and produce almost exclusively customized special solutions.

Through the combination of coatings on textiles these hybrid materials receive completely new properties.

You manufacture exclusively at your location in Germany. Why? Have you never been tempted to set up subsidiaries in other countries, for example to benefit from lower wage levels?
Today we supply global supply chains from our headquarter in southern Germany. Although we produce in a high-wage country, much more important for us are know-how and the drive of our team to create something new. Globalization will continue to be the key to success in the future. Therefore, subsidiaries in North America and Asia could be very interesting for us in the medium- and long-term perspective. However, this is still too early for us.

You use CIP and Kaizen techniques intensively in your company. How did a Japanese concept come about in the Swabian Alb?
KAIZEN, the change for the better, are actually German virtues. The urge to improve and optimize things is in all of us. Due to the continuous improvement process we do not stand still but evolve constantly. Besides, there is the personal affinity to Japan. A look at another culture simply opens the horizon. And if you additionally recognize parallels in the working methods, it’s even better. 

10 years ago, you turned your attention to new markets: aviation, automotive, protection, caravan and furniture manufacturing, to name just a few. Some of these segments have collapsed significantly during the Covid 19 pandemic. What market development do you expect in the medium term and what consequences will this have for your company?
Of course, the aviation or automotive industry, for example, have substantial problems during or due to the Covid-19 pandemic. Quite honestly, many of these problems existed before. They were further tightened, as if a fire accelerator has been used. Of course, these cut-backs are also hitting us hard economically. But we are pursuing long-term goals. As a medium-sized company, you have to have the resilience to continue on your path. Thanks to our specialisation and the split of our industrial sectors, which we drive forward every day, we manage to decouple ourselves more and more from economic developments in individual industries. For our customers this is a great advantage of relying on a very stable partner with long-term orientation.

We are positive about the future. Megatrends like sustainability, digitization and ongoing globalization will lead to new business models in the above-mentioned sectors, as in many others, and to renewed growth. Our coatings on textiles and flexible woven materials can contribute a wide range of solutions to this. If, for example, materials become lighter with identical usage properties or suddenly become biodegradable, because of biodegradable plastics, many new opportunities will arise.

Tailor-made instead of solutions for major customers: The topic of individualization down to batch size 1 is making up a large part of the discussion today. In 2015, you opened a large development laboratory where you have a wide range of testing technologies for textiles and plastics available. What do you think about individual product solutions, and in which application areas have you successfully implemented them?
In principle, we do not use any standards. We live individualization with the smallest possible batch sizes. In our field, we do not manage batch size 1, but we start with MOQs of 300 running meters at process-safe series production. We have very few finished products, and above all we have no collections. Our development laboratory is the key for this. Together with our customers we have the possibilities to realize very lean development processes.

Even on a laboratory scale, we can develop and test new products within just a few hours. We then strive to scale up to production at a very early stage in order to obtain production series results. This way, we offer our clients speed and power that represent a special potential for our partners.

You register important input factors in the production process and evaluate them in monthly environmental analyses. What are these factors in concrete terms and to what extent have their analyses already changed production operations? How do you define environmental management for your company?
For us, environmental management means a holistic approach. In principle, we operate production units and manufacture products that consume many resources. Due to the high production volumes, this continues to accumulate. Because of this, it is self-understanding that we record and evaluate our input and output flows and derive measures from them. This makes economic sense, but is also necessary because of our responsibility for our environment. Specifically, these are energy consumption values, consumption data of primary chemicals, electricity load peaks, our Co2 footprint, just to name a few. This consideration has changed us in many areas. Today we operate a power plant with gas condensing technology, our free roof areas are greened or carry photovoltaic modules, we offer our employees and visitors electric filling stations and finally we have converted the entire power supply of our factory to environmentally friendly hydroelectric power.

With nopma, you have been building up a brand for the technical textiles industry since several years and communicate this via an Individual website parallel to Carl Meiser GmbH & Co. KG. How did this brand name come about and what is the product portfolio behind it?
This is the name of a first technical textile product from the 1990s. It was a textile - coated with dots. Dots on a knitted fabric. NOPMA. My father created this brand.

In 2016 you invested in an additional production line for nopma products and were able to start a directly serial delivery in the NAFTA area. How do you currently assess the market opportunities for North America and Mexico?
We continue to see opportunities in globalization and thus on the North American market also. However, these markets are still severely affected by the pandemic and there are major distortions. When these return to normal, we surely will see more success on these markets again.

As an innovation leader, Meiser offers solvent-free PU adhesive systems as pre-coatings for lamination. How do you assess the importance of such innovations in the context of REACH?
These innovations offer our customers the opportunity to decouple themselves from the pressure REACH triggers in some industries. However, we also have some products that have been developed newly in recent months. This keeps us busy, but also creates opportunities to open up new market segments.

How have you felt about the corona era to date - as a company and personally? What would you on no account want to go through again and what might you even consider maintaining on a daily basis?
I think this time has also strengthened us as a society, as people and even as entrepreneurs. Each crisis you go through makes you a little more relaxed for the unforeseen, but also more motivated to achieve your goals. In my opinion, there have been a lot of positive things in the last few months. Suddenly, for example, digitalization tools have become accepted in our everyday lives, and I feel that people are paying more attention to others again. Hopefully this will stay this way.

The futuristic "tube" escalator at the Elbphilharmonie Concert Hall is just as impressive as the building itself and the longest escalator in western Europe. In August, a start-up based in Cologne installed an UV technology that keeps the handrails clean at all times. At the same time, you presented an antiviral functional coating that can be applied to all textiles in the form of yard goods. How does this work and for what purposes will this technology be suitable?
We have already been working with antimicrobial finishing techniques for many years. This already started with the swine flu in 2009/2010, when we made initial contacts with a young start-up and launched a development. Due to a lack of market interest, however, this had to be discontinued after a few months. Today we are experts in the field of "antimicrobial equipment by means of coatings". We were also able to build up an enormous amount of knowledge on the subject of approval and biocide regulation. Today, we can support our customers holistically in these areas. The function by skin-compatible active substances from the cosmetics sector with a vesicle booster can kill viruses and bacteria within a few minutes.
Since the pandemic has shown us the enormous importance of a new level of hygiene, the applications are very diverse and differentiated. We have already realized the use in personal protective equipment, work furniture, vehicles and for example gloves. In principle, every application is predestined where textile carriers are exposed to many touches by different persons in high frequency. Here our nopma products offer a new level of protection and hygiene.

To break new ground means decisiveness, overcoming fears - and thus the courage to fail. Not every project can succeed. In retrospect - about which entrepreneurial decision are you particularly glad to have made it?
We fail again and again. This is part of the game. But it has never happened that we did not learn anything. The pandemic situation is another good example. In spring we accepted our corporate responsibility for our society and were one of two companies in Baden-Württemberg to achieve certification for FFP protective masks. Since we did not want to participate in the revolver market at that time, we offered these products only to the public sector at favourable pre-crisis prices. However, the decision makers could not make up their minds for weeks and did not order. This disappointed our whole team very much at that time. Today we have overcome this and have taken a lot of knowledge with us from this development.


The interview was conducted by Ines Chucholowius, CEO Textination GmbH