Two balance sheets compared: Porcelaingres VS Lanka Tiles

They are two excellent companies in terms of balance sheet performance, both in the AA clusterr of the world's best tile manufacturers (a group of 54 excellent companies out of the 345 surveyed in the latest 2023 edition of "World ceramic tile manufacturers - Economic & financial analysis"), yet they have very different indicators and organizational models at opposite ends of the spectrum.

One is Lanka Tiles, a Sri Lankan ceramic company, from Colombo, which with 730 employees does not reach 45 million euros in sales and has sharply reduced its business volume in 2021. The other is Porcelaingres of Vetschau, Germany, which has less than a third of the employees of its Asian competitor but has a turnover of nearly 62 million euros and has experienced strong growth over the same period.

Two medium-sized companies and two very different balance sheets, the correct reading and interpretation of which is very useful in order to know how they stand and how their competitors move in the market. The setup prepared by the MECS study center for the economic-financial analyses of the different industrial sectors in which it specializes makes it easy to compare any company. The data are organized on two mirrored pages: on the left are the key numbers of the balance sheet and income statement (reclassified according to IAS-IFRS standards) on the right are the indicators, and alongside the numerical tables there are always charts and dashboards to highlight some key indices. Data from the last three fiscal years are always compared to assess the evolution of performance. The left-hand charts clearly show the company's assets and liquidity situation. The left-hand page lists all the ratios most in use among operators in terms of profitability, marginality and structural soundness, supported in the graphical display on the right by the similar cluster values and globally averaged data.

Thus it turns out that Porcelaingres and Lanka Tiles, while sharing the same AA cluster of the best have Roe's that are one half of the other, but both have Value Added Margins above 50 percent, Ebitda above 30 percent, and very low debt and excellent operating indicators. However, the German company has focused on very high investments in capital and technology (total assets per employee of almost 450 thousand euros, compared to Lanka's 71 thousand euros) to reduce labor, so that it has a profit per employee figure of more than 83 thousand euros, four times the value of its Sri Lankan competitor (21 thousand euros), which, however, pays each employee less than 4 thousand euros per year compared to the German company's 9,200 euros. These are companies, however, in financial equilibrium, so much so that they both rank in the top ten world ceramic manufacturers with the healthiest and most sustainable corporate structure.