Mould manufacturers: labour costs account for 74.4% of added value

Mould manufacturers: labour costs account for 74.4% of added value
The ceramic mould manufacturing sector, analysed through a representative sample of 17 comparable companies over a three-year period, saw a reversal in its sales trend in 2023. Turnover decreased by 8.7%, falling from €101.7 million to €92.9 million.  Despite this decline, gross operating profitability, which had sharply reduced in the previous analysis, has now stabilised, showing a slight improvement as a percentage of the value produced, even though it declined in absolute terms. EBITDA (earnings before interest, taxes, depreciation and amortisation) stood at 8.49% of the value produced in the last year, compared to 8.01% in the year before, and 9.62% in the year before that. A percentage increase in Added Value underpins this consolidation in profitability. However, much of this increase has been offset by the rising share of employee costs.
The slight reduction in labour cost efficiency is also confirmed by the decline in turnover per employee, which fell from €203,000 to €193,000. However, in this sector, labour accounts for the majority of the added value generated. In fact, 74.4% of the value added to purchases is absorbed by the wages of the personnel responsible for generating that value. 
A better indicator of efficiency, therefore, is added value per employee, which has stabilised at an average of €75,000 in the ceramic mould manufacturing sector. Of course, added value depends not only on productivity but also on product quality and the marketing strategies used to influence customer choices—key factors in determining a company's ability to differentiate itself from the competition. This also highlights the importance of continuous benchmarking activities.
Continuing with the analysis of the sector, the reclassified income statement shows that profitability has declined, mainly due to higher depreciation and provisions. In fact, EBIT (earnings before interest and taxes), which reflects operating profit after depreciation, amortisation and provisions, decreased both in absolute terms and as a percentage of value produced, falling from 4.11% to 3.42%. The current result also decreased, from 3.85% to 3.55%, while net profit at the bottom line of the statement declined from 3.10% to 2.96%.  The increase in renewal provisions, depreciation and amortisation was driven by the resumption of investments, which reached 2.65% of turnover, compared to virtually no investments on average in the previous year. 
In summary, the company's engine, represented by its income statement, has slowed down, losing some revs, but has become more fuel-efficient (in terms of costs for purchases and services), while channelling more fuel into reserves to power future trips.
 
Financial analysis: the ability and strength to sustain business
The financial situation is clearly reflected in the bottom row of the pie charts on the right-hand side of the balance sheet analysis. These show a near-zero net financial position (financial debts net of liquidity). This suggests a generally calm situation, with the potential to access credit for future needs, even after the resumption of investments. In the graph of the financial structure presented in the full sector analysis report, no negative values are recorded; the Cash Margin (i.e. the “general current account” of the balance sheet) is also positive. This is visually represented by the difference in height between the two red bars, indicating that short-term financial liabilities are lower than available liquidity. The same graph shows a healthy Net Working Capital (represented by the step between the green bars), highlighting a solid underlying balance between the maturity of liabilities and the timeframe required to convert assets into cash. 
The financial cycle of collections and payments shows a deterioration in average collection days from customers, increasing by 14 days, while average payment terms to suppliers improved, extending by 28 days. Inventory turnover is also improving, further strengthening the financial cycle and contributing to the near elimination of the need for bank borrowing.   
We conclude with a summary of financial reliability, reflected in the credit rating, and the capacity to generate value, calculated through multiples typically used for companies listed on the stock exchange.
 
Rating analysis: quality and reliability summarised in an indicator
Altman’s Z-Score stands at a solid 2.6, showing a slight improvement over the previous value of 2.5
The rating, calculated using a methodology similar to that of S&P, confirms the highest rating: AAA+
 
Enterprise and equity multipliers: shareholder value expressed as a ratio to provide classic stock market multiples
Enterprise Value/EBITDA 7.7 times
Price/Earnings 20 times
Price /Book Value 1.3 times
 
Comparative analysis with some Spanish companies operating in the same sector
To provide a basic international comparison with the district of Castellón, we aggregated data from a sample of Spanish companies active in the same sector. The key figures emerging from this analysis are summarised below to facilitate direct comparison with the data previously presented:

• Profitability:

          EBITDA 12.90% up from 12.23%.
          EBIT 6.94% down from 7.12%.
          Net Profit 4.50% down from 5.1%

• Finance:

          Net financial position 13.4% (debt) down from 16.8%
          Average payment days 60 down from 75 days
          Average collection days 150 down from 158 days

• Rating:

          Altman’s Z-Score 3.5 excellent level as in the previous year
          Our S&P AA+

• Multipliers of average shareholder value:

          EV/EBITDA 7.9 times
          P/E 18.9 times
          P/B 1.1 times