Business Outlook 2018
BUSINESS OUTLOOK 2018
With cost-effectiveness the primary focus for many operators during 2015 and 2016, it was commonplace for activity that did progress to feature tighter work-scopes. Although the performance of individual companies was extremely wide-ranging, Figure 8 shows that the supply chain was, on average, able to maintain a positive EBITDA margin at around 8.5 per cent in 2016. This suggests that the supply chain has also been able to reduce its costs and improve efficiencies during the period of low activity, but the free cash flow position of many businesses remains a major concern. Restructuring costs are usually classified as exceptional items and therefore have a material impact on cash flow and profitability, but are not picked up within EBITDA. Furthermore, many customers are now extending invoice payment periods to preserve their own cash flow positions – a behaviour that accentuates issues further into the supply chain.
Figure 8: UK Supply Chain Revenue Margins
EBITDA EBITDA Margin
noilliB £( seuneveR niahC ylppuS - Nominal)
Average EBITDA Margin
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