Marangoni buoyed by retreading, machinery businesses
During a management meeting in late February, Marangoni CEO Massimo De Alessandri discussed the company’s recent performance. In terms of the economy, he described last year as a “very tough year in Europe and above all in Italy.” Despite these conditions, he reported a rise in profitability for the Marangoni group thanks to the performance of its core retreading and tyre industry machinery businesses.
Reporting De Alessandri’s comments, Marangoni says that more precise data will be published in Marangoni SpA’s official financial statements. However the company was prepared to share that “despite a drop in turnover due to a reduction in sales volumes, 2012 was a year in which the group, through decisive action taken regarding product mix and related revenues as well as operating costs, achieved a substantial increase in operating profits, thus improving its net financial position.”
Marangoni described the general economic context as one “characterised by extreme uncertainty and strong recession on the domestic market and in Europe generally.” Yet its machinery business benefitted from international orders, while its retreading operation was boosted by recovering profitability in Europe and growth in its subsidiaries in North America and Latin America.
Good performance in these core businesses and on foreign markets “more than made up for a drop in profits in the business units most exposed to the recession and the fall in consumption on the European and domestic markets,” Marangoni added. These lower performers include the company’s passenger car tyre production and its wholesale-retail distribution units.
Commenting on plans for the current year, De Alessandri stressed that 2013 will “once again be a year of uncertainties and potential crises, as despite an expected gradual improvement in the global economy, developments in Europe and especially in Italy are quite unclear.” As a result, the Italian company says it will need to differentiate its efforts in the different areas.
On the American markets, where Marangoni’s sales total over 100 million euros, the aim will in fact be to grow sales further, “taking advantage of the technological capabilities of our local production plants and further improving profitability by fully exploiting the manufacturing capacity achieved in recent years.”
Regarding the European business, and with the exception of tyre machinery production, which is buoyed by demand in emerging markets, continuing weak domestic demand “will force our companies to maintain profitability by implementing strict and specific policies to defend sales quality in the various different customer segments, making all company processes more efficient and adapting operational structures to the expected continuing recession and stagnation scenario.”