• The European Family Business Barometer shows that 71% of respondents (more than 710 companies across 18 EU countries took part) have a positive outlook for their business, an increase of 17% from the last edition in December 2013.
• Family companies have highlighted the decline in profitability and the ‘war for talent’ as their major obstacles over the next 6 months.
• A majority of family businesses surveyed have maintained or increased their turnover and staff numbers.

EFB and KPMG launch their second edition of the European Family Business Barometer, which seeks to measure the confidence levels of family-owned businesses across Europe.

The latest figures from the euro zone may be predicting uncertain growth, but for family businesses the future appears bright.  Our survey indicates that a decline in profitability has increased as a concern with 49% of respondents (compared to 38% in 2013) classifying it as their biggest challenge. The survey also shows that family businesses have a huge potential to fully exploit the benefits of doing business internationally; and many have a lack of movement in their internationalisation. Yet, despite these pressures family businesses remain confident.

There has been a noticeable increase inthe positive indicators with respect to increasing or maintaining both turnover and staff numbers; the percentage of businesses signalling a decrease in turnover and staff numbers reducing from 31% to 24% and 23% to 11%, respectively. Also with an increase in respondents willing to state their view as positive, as opposed to neutral, all the signs point to returning market confidence.

The war for talent continues to be a big influence on future success and has become an increasing trend across the last two Barometers.  The warning signs are that attracting the right people with the right skills is becoming an increasing challenge and one which may require intervention if we are to mitigate it having a negative impact on the future of family businesses.

Quote Roger Pedder, EFB President:

‘The results of this second edition reinforce the assertion that family companies are a stable and responsible platform for growth in Europe. We must not ignore the other results from the Barometer, namely the challenges that remain. The pressures on profitability and the worrying trend surrounding the ‘war for talents’ is something that must be monitored and mitigated to ensure the continued success of family businesses. ’

Quote Christophe Bernard, Global Head of KPMG’s Family Business Practice:

‘Six months on from our first Barometer, it is really pleasing to see that Family Businesses are becoming increasingly confident in their future. Nevertheless, they express a clear concern on profitability which may balance their positive feelings. This is a key point to keep a close eye on in the near future.’

The European Family Business Barometer is based on the responses of an online survey from 710 finished questionnaires which were received from family businesses across 18 European countries; this second edition was open from 31 March to 4 May 2014. The survey will be conducted twice a year to measure the changing issues facing family businesses. The 3rd edition of the Barometer will be published in late-2014.

European Family Businesses (EFB) is the federation of national associations representing long-term family owned enterprises, including small, medium-sized and larger companies. EFB represents 1 trillion euros in aggregated turnover, which is 9 per cent of European GDP.  EFB’s mission is to press for policies that recognise the fundamental contribution of family businesses in Europe’s economy and create a level playing field when compared to other types of companies.

KPMG’s Global Family Business Centre of Excellence is designed to leverage KPMG member firms expertise on Family Businesses, enabling them to offer specialized insight to clients. This cross-border initiative aims to position KPMG member firms as leading advisors to family businesses. KPMG operates in 155 countries and have 155,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Contact: Demetris S. Vakis, Board Member

dvakis@kpmg.com