Central Europe Top 500 2013
For a third year in a row, ongoing economic uncertainty was the dominant factor affecting the majority of the leading Central European companies featured in the Deloitte CE Top 500 ranking for 2012.
Indeed, the economic slowdown that we predicted in the 2011 edition on the basis of slowing revenue growth took place in 2012. Not only did median revenue growth for the 500 companies fall to just 3.3% from 9.8% in 2011 (and 11.4% in 2010), but the number of companies with declining revenues grew from just 97 in 2010 to 202 in 2012.
Indications to date for 2013 are no better; the available results for Q1 2013 show that company results are continuing to worsen, with an average fall in revenues of 0.5%.
However, the picture is not universally bad. The combined revenue of all the companies in ranking rose by 3.8% to EUR 724 billion, EUR 18 billion more than in 2011 which itself represented a return to the pre-crisis levels of 2008. In addition, despite lower revenue growth, average net profit margins remained unchanged in 2012 at 2.1%.
The external economic position also appears to be lightening somewhat at the time of writing, with the eurozone moving out of recession and optimistic assessments being published by opinion-makers in Poland and Germany. However, countries that recorded a fall in GDP during 2012 – including the Czech Republic, Hungary, Serbia, Slovenia and Croatia – will need to show a considerably improved economic performance during 2013 and into 2014 for the uncertainty affecting the CE region to dissipate to any significant measure.
This suggests that widespread economic recovery will be slow to take a grip across the region. And it is by aligning determination with business strategy and quality of execution that the region's most powerful and dynamic businesses will contribute most to sustainable stability and growth across all markets.
As ever, Poland is represented in the Top 500 by more companies (166) than any other country. It is followed by the Czech Republic (87) and Hungary (62). The biggest growth in representation is by Ukraine, which increased its presence by three companies from 48 in 2011 to 51 in 2012.
This growth for Ukraine was achieved thanks to continuing dynamic revenue increases, particularly among Consumer Business and Transportation businesses. Overall, in fact, this sector increased its representation by four companies to 158, accounting for just under a third of all companies in the ranking. Average revenue growth among Manufacturing companies fell from 17.3% in 2011 to just 4% this time. The Real Estate sector was the biggest loser, with a combined loss in revenues of 11.7%. The Technology, Media and Telecommunications sector continued its gradual decline that started in 2008, since when its representation in the ranking has fallen from 48 to just 33 companies.
There has been an increase in the number of companies controlled by entities from outside Central Europe (from 277 to 281). This growth is mainly driven by energy-sector companies.
The Top 10
The only major change towards the top of the ranking was the slide from 10th to 12th place by Polish/Portuguese retailer Jeronimo Martins, which was replaced by Ukrainian energy company DTEK. This rose from 32nd to seventh place on the back of several acquisitions which drove its revenue up by 108.6% in Ukrainian Hryvna.
As a result of this move, eight of the 10 largest companies in Central Europe are energy companies. One of these, Poland's PKN Orlen, again heads the CE Top 500 ranking of the region's biggest enterprises. As in previous years, it is followed by the same two companies – MOL, from Hungary, and the Czech Republic's Skoda.
The biggest jumpers
The Slovenian GEN-I Group launched new sales activities in 2012, which drove its revenues up by 52.5% and propelled the company up 92 positions to 112th in the ranking. Czech energy business Energetický a průmyslový holding, a.s. moved up 71 places to 126th on the back of a number of acquisitions. Ukrainian retail company, ATB-Market LLC, grew its chain by 30% and rose 61 places to 73rd.
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