Manufacturing’s recession beaters – PwC report

PwC's 'From Crisis to Growth' report found that manufacturers tend to prioritise eight key areas to survive, including scenario planning, supply chains, R&D and a sharper customer focus. The firm analysed the financial performance of some of the UK's leading industrial companies. These included Renishaw, Morgan Crucible, Senior, Bodycote, Smiths Group and Weir Group. Prior to the recession, gross margins topped 35% in 2008 and EBITDA margins were 18%, dropping to 16% in 2009 as the recession hit. However, adopting the strategies in the report, EBITDA in these firms shot back up to 21% last year and gross margins stood at 37% -- higher than in 2007. Clive Penwarden (pictured), industrial manufacturing partner at PwC, said: "We first looked at these companies in 2010 to see what strategies they were implementing to deal with the impact of the recession and found they weren't just reducing their costs like many sectors in the UK were doing, they saw the financial crisis as an opportunity for growth – and that's what they did." He added: "The businesses we looked at restructured, re-strategised, became agile and flexible and looked to emerging markets for future growth. The strategies they implemented were not only crucial for survival, they have proven to be sustainable. "With revenues showing an average year on year growth of 9% and 16% in FY10 and FY11, and 2012 looking similarly positive, perhaps other sectors should be learning from their success."