Por que a resiliência é o antídoto para a crise para os executivos de manufatura?

Faced with the debilitating impact of the pandemic on global economies, competition for assets and a mounting focus on filling commercial and operational gaps in their business models, 78% of manufacturing executives do not expect profits to recover to pre-pandemic levels until 2022 or later, according to the 23rd EY Global Capital Confidence Barometer (pdf) (CCB). While sales growth and margins have improved since the CCB survey closed in February, manufacturers remain concerned about supply chain challenges and other issues.

The CCB shows that fewer than half of manufacturers (48%) surveyed expect to actively pursue mergers and acquisitions; while that is a decline of 8 points from our last survey, it is in line with other sectors (49%) this year.

Mounting competition for scarce assets may be hindering deal sentiment as private investors drive up prices — especially for businesses focused on automation, analytics and advanced additive tools used in manufacturing. Half (52%) of the survey’s manufacturing respondents say they failed to complete or canceled a planned acquisition in the past 12 months, and the top reason is disagreement on price/valuation (25%).

This unprecedented combination of imminent challenges and risks is having a dramatic impact on how leaders think about M&A, the workforce and their international footprint.

Investing to transform in tough times

However, despite partially stepping back from traditional M&A, some manufacturers are investing internally or considering alliances to build their digital capabilities.

Survey respondents in manufacturing rank investing in digitization of customer journeys and business processes as a top strategic action in progress. Among those who identify ecosystem changes in their businesses, the majority (82%) say they would partner with competition to create new ecosystem solutions.

For manufacturing executives considering M&A, when asked how the pandemic has impacted their strategy and outlook, 21% say they focus more on a target’s business resilience, the single largest result. They also cite a focus on the target’s digital strategy and technology alignment (18%).

Of those manufacturers planning M&A, the largest grouping (55%) expect primary M&A activity to be bolt-on acquisitions in the same sector designed to increase market share. Only 22% plan a transformative deal, which could involve a new business model and customer base, or major geographic expansion. Another 18% plan acquisitions focused on operational improvements including production efficiencies or distribution chain improvements, and a mere 5% are looking to acquire in an adjacent sector.