And also attack values, so having bad positioning can be quite bad. You can check the value in effect in battle as a tooltip per side.
The problem is, that the value ia capped at -75% but your admiral with superior tactican gives +25% and with 4 stats in maneuvring you get another +10%.
Do at maximum you are hit with a -40% positioning modifier with a good admiral, no matter how big your fleet is.
Then your ships still bring their HP, even if their attack is halfed, so you are being stronger in battle because of that. But your attack is only halfed at -100% positioning. At -40% you only get -20% attack.
So currently it is always better to bring more ships.
In IHMP mod we drastically increased the values from the defines, so a modern fleet of 30x 1940 ships could defeat 80x older ships, although it was still a bloody battle on both sides.