--------Unter den europ. I-net Firmen haben die Deutschen die Nase vorne :o) ---------
European techs improving
Net firms manage cash better, says consultant; some companies still at risk
September 26, 2000: 8:45 a.m. ET
LONDON (CNNfn) - European technology shares may have been on a roller-coaster ride recently, plunging as investors fretted over earnings forecasts, but a report released Tuesday on the finances of Web companies said Internet start-ups have improved their cash management and strengthened their position.
However, accounting and consulting firm PricewaterhouseCoopers said that the 20 most vulnerable European Internet companies, which have a combined market capitalization of 26 billion ($23 billion), are at risk of running out of cash within a year if they fail to take measures to address their cash reserves.
Overall, the top 150 European Internet companies have extended their "burn rates" this year, concluded the report by PricewaterhouseCoopers and e-business strategy consultants Fletcher Advisory. The burn rate - the period of time a company can survive before its needs additional cash - went up to an average of 20 months as at Aug. 31 from just 13 months last Dec. 31.
Business-to-consumer (B2C) companies are more vulnerable, with average burn rates of 15 months, compared with 23 months for firms in the business-to-business (B2B) sector. High marketing costs for B2Cs, which can be as much as 400 percent of gross profit, quicken the burn rate in this area.
For the most profitable companies, the burn rate isn't an issue, because profits generate the funds that keep the business running. Such companies are mostly found in the service and e-commerce sectors, while content and software companies are most likely to be burning cash the quickest, the report said.
"It seems that investors' views are being influenced by a couple of high-profile insolvencies, when these sub-sectors are producing very strong returns," PricewaterhouseCoopers partner Kevin Ellis said in a statement.
The report also found that German Internet companies are more profitable than their British rivals. Some 50 percent of German Internet firms are profitable, compared with just 26 percent of their British counterparts.
Toby Jennings, director at Fletcher Advisory, said listed Internet firms still represented high-risk investments. On aggregate, the market value of the 150 companies covered by the report was 20 times as great as the group's total sales. In more traditional businesses, typical ratios between a company's market value and its sales can be between one and two times.
The higher the ratio, the more market is betting the company to grow. Since many Internet companies are unprofitable, analysts often use the price to sales ratio instead of the more standard price to earnings ratio.
European techs improving
Net firms manage cash better, says consultant; some companies still at risk
September 26, 2000: 8:45 a.m. ET
LONDON (CNNfn) - European technology shares may have been on a roller-coaster ride recently, plunging as investors fretted over earnings forecasts, but a report released Tuesday on the finances of Web companies said Internet start-ups have improved their cash management and strengthened their position.
However, accounting and consulting firm PricewaterhouseCoopers said that the 20 most vulnerable European Internet companies, which have a combined market capitalization of 26 billion ($23 billion), are at risk of running out of cash within a year if they fail to take measures to address their cash reserves.
Overall, the top 150 European Internet companies have extended their "burn rates" this year, concluded the report by PricewaterhouseCoopers and e-business strategy consultants Fletcher Advisory. The burn rate - the period of time a company can survive before its needs additional cash - went up to an average of 20 months as at Aug. 31 from just 13 months last Dec. 31.
Business-to-consumer (B2C) companies are more vulnerable, with average burn rates of 15 months, compared with 23 months for firms in the business-to-business (B2B) sector. High marketing costs for B2Cs, which can be as much as 400 percent of gross profit, quicken the burn rate in this area.
For the most profitable companies, the burn rate isn't an issue, because profits generate the funds that keep the business running. Such companies are mostly found in the service and e-commerce sectors, while content and software companies are most likely to be burning cash the quickest, the report said.
"It seems that investors' views are being influenced by a couple of high-profile insolvencies, when these sub-sectors are producing very strong returns," PricewaterhouseCoopers partner Kevin Ellis said in a statement.
The report also found that German Internet companies are more profitable than their British rivals. Some 50 percent of German Internet firms are profitable, compared with just 26 percent of their British counterparts.
Toby Jennings, director at Fletcher Advisory, said listed Internet firms still represented high-risk investments. On aggregate, the market value of the 150 companies covered by the report was 20 times as great as the group's total sales. In more traditional businesses, typical ratios between a company's market value and its sales can be between one and two times.
The higher the ratio, the more market is betting the company to grow. Since many Internet companies are unprofitable, analysts often use the price to sales ratio instead of the more standard price to earnings ratio.
