Deloitte Fiduciaire KMO Kompas. Baromtre pour les PME.

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Deloitte Fiduciaire KMO Kompas. Baromètre pour
les PME.

• A unique study of the Belgian SME market
• Press presentation, 23 November 2005

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Deloitte Fiduciaire knows the SME world like no
other one knows

• A part of Deloitte Belgium with a unique focus on
  family businesses
• Belgian market leader for accountancy, tax
  legal consulting and financial management advice
  for SMEs and family driven companies
• Guides and advises more than 5000 family business
  owners and their companies
• Employs 450 specialists at the disposal of the
  SME market
• Has built 70 years of specific SME experience
• Serves the SME market from 12 regional offices
• Multi-disciplinary teams of accountants, tax
  consultants, business law specialists, financial
  management specialists, grants advisors and
  specialists in corporate finance and family
  successions
• The accountant-tax consultant as a trusted
  advisor and single contact point to a variety of
  specialist services

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A unique study of the Belgian family company in
2004

• Comparative study of the Belgian SME market
• Based on data from more than 2500 SMEs, 15 of
  them with a turnover in excess of 50 million
  euros
• Financial benchmarks from
• three regions (Flanders, Wallonia, Brussels)
• 10 most important industries
• First available study with data for 2004
• Using published and non-published figures
• internal figures which cannot be found in every
  set of annual accounts, if at all
• turnover, shareholders loan, interest on
  shareholders loan, directors remuneration,
  costs of interim personnel, rebursement of social
  security charges, etc.

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Distribution Belgian companies according to
turnover (000)
Benchmark according to turnover (000)
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State of the art methodology

• Selection of 2500 companies on the basis of
• Closing dates between 30-9-2004 to 31-03-2005
• Going concern
• 365 day financial year
• 10 financial indicators around four clusters of
  financial performances
• Financial independence, control of working
  capital, added value and profitability
• Redifined ratios taking into account internal
  data
• Calculation of quartiles and use of positioning
  rosas
• Elimination of top and bottom 3 per indicator
• SME can position its business
• in own region
• in own sector

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Belgium Inc. at glance
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Strong capitalisation by family shareholders

• Real solvency Belgian company
• Q1 Q2 Q3 29 - 55 - 83
• Real shareholders funds consist of
• Shareholders capital reserves
• Plus shareholders loans
• Provided by family shareholders and directors
• On short or long term
• Prof. Ooghe study (Intersentia, 2005) solvency
  30.26 (median)
• Conclusion Family shareholders finance company
  for 25 on top of own funds with interest-bearing
  risk capital
• Fiscal motivation very important
• Notional interest deduction will probably not
  change ratio

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Belgian family companies are groaning under
employment costs

• Added value in relation to total personnel costs
  for Belgian company
• Q1 Q2 Q3 45 - 101 - 145
• Average Belgian company insufficient or slightly
  sufficient added value to cover total personnel
  costs
• Total personnel costs include
• Total cost employed personnel
• Cost hired interim personnel
• Total directors remuneration
• Conclusion 50 of companies must increase added
  value or reduce personnel costs in order to
  garantee profitability and cash position in the
  long run

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Risk premium for Belgian family companies
scarcely 3

• Net return on real shareholders funds for
  Belgian companies
• Q1 Q2 Q3 0 - 6 - 18
• Risk-free interest percentage approx. 3
• Risk premium as difference between net return and
  risk-free interest
• Net return calculated including net interest on
  shareholders loans
• Conclusions
• Median company offers 3 risk premium to
  shareholder
• 25 best-performing companies offer 15
• Risk premium for Belgian companies on stock
  exchange as of 30-9-2005 4.6

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Regional performance differences
Brussels
Flanders
Belgium
Wallonia
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Sectoral differences are significant
Construction
Logistics
Services
Printing
Plastics
Textiles
Wood
Retail
Metal
Food
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Belgian family companies deserve trust

• Capitalisation by family business people exceeds
  perception
• Serious impact of total personnel costs is a
  threat for the construction, services, retail and
  metal-working sectors as well
• Family business owners and directors must build
  strategy taking into account financial strenghts
  and weaknesses of industry

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• Any questions?