Four out of seven sub-regions and countries reported a deterioration in WC performance.
US vs. Europe performance comparison: The WC performance gap between both regions widened last year, almost completely reversing the tightening trend observed over the previous two years when Europe was closing the gap on the US.
Compared with Europe-based companies, the US continues to exhibit much lower levels of WC. Overall C2C for the US in 2011 was four days, or 10% below that of Europe. This is primarily due to a strong performance in inventory (minus five days, or 15%).
European country performance comparisons
In contrast with 2010, four out of seven sub-regions and countries (representing half of total sales and number of companies in Europe) reported a deterioration in WC performance.
Both Benelux and the UK managed to report solid improvement in WC performance. For Benelux, strong showing from consumer products and oil companies boosted the drop in C2C (down 11%).
For the UK, these latest results (C2C down 4%) bring the total reduction in C2C achieved in the last two years to 7%, which reversed the ground lost in 2009. Oil and mining companies in particular posted improved results compared with 2010.
Germany reported a further marginal deterioration in WC performance. Electric utilities, steel companies and telecommunications operators all made progress, while performance was weaker for automotive suppliers, chemicals and diversified industrials companies, and general retailers.
By contrast, France reported an increase of 3% in C2C, which almost cancelled out the gains achieved in the previous year. Electric utilities and food retailers scored poorly, while food producers, oil companies and telecommunications operators posted stronger results.
For Nordic countries, C2C performance remains heavily skewed towards the performance of certain industries, such as telecommunications equipment and oil, with the former reporting a deterioration and the latter an improvement.
Overall C2C rose by 3%.
In other regions and countries, Switzerland saw a significant deterioration in WC performance, with C2C up 6%. This result reversed the benefits obtained in 2010 when C2C was down 8% due to the impact of a stronger currency at year-end. It is worth noting that Switzerland’s WC performance has been considerably impacted by the poor results of one major food company which accounted for one-quarter of the country’s total sales.
WC changes by European subregion and country,2011 vs. 2010
| ||% weighting ||C2C change |
|Country ||Sales ||Companies ||overall |
|Benelux ||11% ||8% ||-11% |
|France ||22% ||16% ||3% |
|Germany ||18% ||13% ||1% |
|Nordic countries ||10% ||15% ||3% |
|Southern Europe* ||11% ||11% ||0% |
|Switzerland ||5% ||7% ||6% |
|UK ||21% ||27% ||-4% |
|Other ||2% ||3% ||nm |
|Europe ||100% ||100% ||0% |
* Greece, Italy, Portugal and Spain
Source: EY analysis, based on publicly available annualfinancial statements.
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