Average ROI of leading paper companies in Italy 2016-2018

Between 2016 and 2018, Munksjo Italia S.p.A. was the Italian paper company recording the highest return on investment (ROI). Data provided by Prometeia show that the average ROI generated by this company over the three years was equal to 23.5 percent. The graph shows the companies classified by production value. Munksjo Italia S.p.A. ranked fifth among the leading paper companies in Italy based on production. Burgo Group S.p.A. – the firm generating the highest production value – registered the lowest ROI among the companies considered. Overall, the average return on investment (ROI) of the Italian paper industry amounted to 10.4 percent in 2017, but it is expected to decrease to nine percent in 2020.  

What is a good ROI for the paper manufacturing industry?

The return on investment is an important indicator used by investors to decide whether it is profitable investing in a business or not. In fact, it measures the gain or loss generated due to an investment and it is expressed as a percentage. Hence, the ROI can be used to compare the profitability of different companies active in the same sector or to conduct a cross sector analysis. In the case of the Italian paper manufacturing industry, for instance, it may be assumed that the companies with a ROI higher than 15 percent were performing very well, given that the average ROI of the industry as whole was equal to 11.3 percent in 2019. Another indicator for measuring the financial performance of a company is the return on equity (ROE), which provides information about the profitability of a firm in relation to its equity. In 2017, the ROE of the Italian paper manufacturing industry was equal to 11.7 percent. According to estimates, the ROE will decrease to 9.2 percent in 2020.  

Italian paper manufacturing industry

Most of the firms operating in the paper manufacturing sector in Italy generated an average annual production value lower than two million euros. Only 25 of the companies active in this sector were large enterprises with a production value exceeding 50 million euros. Nonetheless, the large companies were the ones cornering the market, given that, in 2018, they owned a   market share of roughly 82 percent.