Get a broader view Central Europe Top 500

Transcrição

Get a broader view
Central Europe
Top 500
Main Report 2009
Introduction
As well as ranking Central Europe’s 500
largest companies, the report includes candid
contributions from business leaders and
economists, in-depth analysis of key economic
trends and issues affecting the region as
a whole and its countries.
I am delighted to introduce this year’s edition of the
Deloitte Central Europe (CE) Top 500 report.
As well as ranking Central Europe’s 500 largest
companies, the report includes candid contributions
from business leaders and economists, in-depth
analysis of key economic trends and issues affecting
the region as a whole and its countries.
These insights provide an excellent opportunity to
put the effects of the global economic situation into
context for Central Europe, focusing on the strategies
companies and countries need to implement in order
to pull themselves out of recession towards a sustained
recovery.
Despite the high level of interdependence between
countries in the region and institutions in Western
Europe there is certainly not a ‘one size fits all’
approach to recovery. Assistance from the IMF, World
Bank and EU has helped to stabilise the economies
in the region, and it is fortunate that those countries
owing the largest proportion of total debt, such as
Poland and the Czech Republic, are some of the
stronger markets in Central Europe, thus offsetting, to
some extent, the exposure to risk of weaker markets
in the region.
However, with all economies in Central Europe in 2009
experiencing significant GDP contraction, and only
a tentative growth of no more than 2% projected in
2010 for the majority1, the region remains in a delicate
balance, and country-specific recovery plans are
important for its overall recovery. As well as these
strategies, Central Europe’s position as a significant
part of the global economy hinges on an improvement
in the performance of global financial markets, and on
increased cooperation between all countries, regardless
of their geography, history and political differences.
In the report, we cut through the many column inches
which have been written about the global and regional
economic situation by providing incisive and accurate
information about the performance of companies and
the outlook for countries in Central Europe. This year,
1
Global Business Consulting GmbH, August 2009
to reflect the dramatic changes seen in the corporate
world over the past 18 months, the report includes
a comparison of the Top 500 companies’ financial
results in Q1 2008 and Q1 2009 – giving users an
at-a-glance overview of the recent challenges faced by
companies in the region.
We continue to build on our unparalleled knowledge
of Central Europe in order to offer the best possible
service for our clients – equipping them with the
necessary information to understand market challenges
and providing the professional support and expertise
to assist them in overcoming these. Our aim, as ever, is
to help companies operate from a position of renewed
strength and confidence on both a regional and global
level.
Michael Barrington
CEO, Deloitte Central Europe
Contents
6
Executive Summary: Surveying the landscape
By Béla Seres
37
Ukrainian economy’s unrealised potential
By Ihor Mitiukov
12
Breadth of vision
38
Making sense of Serbia’s unbalanced economy
By Dragan Djuricin
14
The global economy: Contrasting views on recovery
By Ian Stewart
39
Romania, out of the crisis: When?
By Daniel Dăianu
Central Europe: A region-wide perspective
By Rafał Antczak
40
The prospects for Slovakian recovery
By Elena Kohútiková
42
Get a broader view: CE Top 500
44
The methodology
45
Commentary on the ranking
56
Sectors in the spotlight: Industry analysis
Automotive
Banking
Construction
Consumer Business
Energy and Resources
Insurance
Technology, Media and Telecommunications
Public Sector
76
Appendix 1: CE Top 500 ranking
102
Appendix 2: Industry rankings
108
Thought leadership
110
Leadership and governance
16
20
The Central European Economic Outlook 2009-2010
By Dr. Daniel Thorniley
24
Finding value in Central Europe
By Dr. Elisabeth Denison
26
EU currency conversion: Similar… but different
By Luděk Niedermayer
30
Zooming in: Countries in focus
32
Adria local reflections on global economic issues
By Žarko Primorac
34
Conservative approach serves the Czech Republic well
By Jan Švejnar
35
Stagnation is just one challenge facing Hungary
By Péter Duronelly
36
4
Poland’s minor economic miracle
By Henryka Bochniarz
Get a broader view CE Top 500
5
Executive summary:
Surveying the landscape
By Béla Seres
Managing Partner, Financial Advisory
Deloitte Central Europe
In last year’s Central Europe Top 500 Executive
Summary we wrote that Central Europe was “one of
the world’s fastest-growing regions… high growth
rates are helping to counter the effects of the
economic slowdown in the Eurozone”. At the time,
this was true. But despite the impressive economic
progress experienced by many Central European (CE)
countries during the last two decades, the global
economic crisis has brought this to an effective
standstill over the last 12 months.
The impact of the global economic and financial crisis
reached the region late, leading some economists
initially to predict that it would be spared the worst
of its impact. To date, Poland has been the only local
economy to be spared recession. The region’s other
17 have all shrunk between the end of 2008 and
mid-2009, immediately following an era between
2005 and 2007 when GDP growth averaged 7.2%.
A region on the brink?
Writing in this year’s report, Dr. Daniel Thorniley,
DT-Global Business Consulting GmbH, remembers
the virtual panic of late 2008 and early 2009: “The
region got badly knocked by the autumn 2008 global
credit crash and then took another hit in February
2009 when the rating agency Moody’s published
a negative report on the region’s debt outlook. GDP
and industrial output figures were crashing along
with currencies. It looked in those weeks as though
a systemic economic crash could bring down the
whole region or several parts of it.... These were not
funny times”.
Market panic was soon replaced by a more practical
and effective approach as the region’s business
leaders and politicians realised that it was possible to
work their way through the crisis. As Deloitte’s CE Top
500 Report highlights, the region’s largest companies
have survived the crisis, although some industrial
sectors have suffered significant decline.
6
The EU factor
The key factor that has brought Central Europe to
the attention of the world’s business community
in recent years has been its integration with the
European Union. Of the 18 states in the CE region,
10 (Bulgaria, the Czech Republic, Estonia, Hungary,
Latvia, Lithuania, Poland, Romania, Slovakia and
Slovenia) are already members of the EU. Two have
candidate status (Macedonia and Croatia), and the
remainder are moving towards integration (including
Ukraine, which is taking a longer-term perspective).
With the enlarged European Union channelling
funds to candidate and member countries, imposing
unified regulations and driving openess in trade and
(to a lesser extent) free movement of labour, the CE
region has begun its economic consolidation.
For many countries, EU membership or candidate
status, alongside membership of other international
organisations such as the International Monetary
Fund, the European Bank for Reconstruction and
Development (EBRD) and the World Bank, has
enabled access to highly significant support packages
that have reintroduced stability to their vulnerable
economies.
Looking ahead to recovery?
Closer ties with the EU have not always delivered
exclusively good news in Central Europe. During the
last year, the increased regional importance of the EU
has also proved to be a contributory factor to Central
European economic difficulties. Double-digits declines
in exports and drying-up of financing from the EU
private entities (banks, funds, or parent-companies)
that had supported a boom in consumption and
investments across the CE region almost resulted in
a balance of payment crisis in late 2008. The domestic
currencies of CE countries registered a plunge of
30-50% year-on-year in their value against the Euro
at the beginning of 2009. Weak domestic markets in
all CE countries still cannot compensate for a decline
in external demand, which resulted in a wide-spread
recession across the region (except Poland).
Now, as Western European economies such as
Germany and France appear to be showing signs of
recovery, we can expect a gradual improvement in
exports to follow. However, at the time of publication,
it is too early to plot a time-table for broad-based CE
recovery based on economic data from the first two
quarters of 2009. Nonetheless, using five indicators
(GDP dynamics, levels of unemployment and inflation,
trade balances and balances of payments, exchange
rate behaviour and public deficits and debt) we
have made an attempt to judge the likely future
performance of all 18 countries.
This exercise resulted in the identification of three
groups – first, those that might continue to face
particular challenges in combating recession, namely
Croatia, Estonia, Lithuania, Latvia, Macedonia, Serbia,
Ukraine and Hungary. The second group consists
of those countries that are experiencing recession
in a relatively improved shape: Albania, BosniaHerzegovina, Bulgaria, Montenegro, the Czech
Republic, Moldova, Romania, Slovenia and Slovakia.
The third is a group of one – the special case of
Poland, which did not experience a recession and has
shown year-on-year GDP growth (0.8% and 1.1%
respectively) for the first and the second quarters of
2009.
The positive growth outcome for Poland is further
reflected in Deloitte’s new Business Sentiment
Index and its findings. Deloitte Central Europe is
taking an innovative approach to regularly gauging
business sentiment in the region with the publication
of its first survey findings. The survey gauges the
thoughts of those with greatest influence on the
future direction of the economies and largest
companies of Central Europe.
Deloitte will be publishing this regular ‘barometer’
that gathers the opinions of top executives across
almost 200 of the largest companies within six
countries in Central Europe. The index reflects the
latest views of some of the most influential corporate
leaders in the Czech Republic, Poland, Hungary,
Croatia, Romania and Slovakia.
Their responses include views about the current
and future business environment, ranging from
employment prospects and payment trends to new
product development and capital expenditure.
Findings have been collated into an index which
will be an invaluable tool to track changes in their
opinions and outlook. It compares the differences and
similarities of attitudes across national boundaries and
between industrial sectors.
On a general outlook, around three quarters of those
surveyed felt the economy in the next year was
either going to get worse or remain the same – to be
expected after such a tumultuous year. Figure 1 within
the Executive summary illustrates this caution.
This negative outlook is supported by respondents’
opinions on employment levels in their companies.
Figure 2 shows that over a third believed their
firm’s workforce would reduce.
However, these predominantly negative responses
are tempered by the fact that on the whole, business
leaders are optimistic about the prospects for their
individual enterprises, with only around 15% having
negative views about the future (Refer to Figures
3 and 4). As the strongest economy interviewed,
Poland was the most bullish about its companies’
outlook, followed by Slovakia and Hungary.
7
In 6 months’ time, do you expect the general
prospects of your country economy to have…
Titulek Figure
chybí 1: Percentage
Titulek chybí
of opinions
How do you expect your firm’s total workforce
to change in size over the next 12 months? Will it...
TitulekFigure
chybí 2: Percentage
Titulek chybí
4.2% 1.6%
10.5%
4.2% 1.6%
10.5%
0.5%
0.5%
15.8%
of opinions
15.8%
26.8%
26.8%
31.6%
31.6%
A focus on the region’s largest companies
So, what is the financial situation of the 500 largest
companies in the region following the turmoil of the
last year?
25.8%
25.8%
52.1%
52.1%
31.1%
31.1%
Improved somewhat
Improved somewhat
Stayed the same
Stayed the same
Deteriorated somewhat
Deteriorated somewhat
Deteriorated significantly
Deteriorated significantly
Don’t know
Don’t know
Increase somewhat
Increase somewhat
Stay broadly unchanged
broadly unchanged
Reduce Stay
somewhat
Reduce somewhat
Reduce significantly
significantly
IncreaseReduce
significantly
Increase significantly
Generally speaking, how do you feel about the financial prospects for your company now? Are they...
Figure 3: Predictions on the economy by country
(next 6 months)
Figure 4: Percentage of opinions
11.1%
11.1%
Titulek chybí
100
The risks facing the E&R sector
While this is a significant change in fortunes from the
same period last year, the essential structure of the CE
Top 500 ranking has remained largely unchanged.
Titulek chybí
Titulek chybí
Titulek chybí
4.2%
4.2%
12.6%
12.6%
80
100
60
80
40
60
20
40
33.2%
33.2%
0
20
-200
Total
Croatia
Czech Hungary Slovakia Poland Romania
Republic
Total
Croatia
Czech Hungary Slovakia Poland Romania
Republic
-40
-20
-40
Positive
Negative
Positive
Negative
8
38.4%
38.4%
Definitely positive
Definitely positive
Fairly positive
Fairly positive
Balanced, mixed
Balanced, mixed
Fairly negative
Fairly negative
Definitely negative
Definitely negative
In 2008, 388 companies (78% of the top 500)
increased their median revenues by 20%. By way of
comparison, in 2007 398 enterprises (80%) increased
their revenues by 18%. In the first quarter of 2009,
112 (76%) of 148 companies for which we obtained
financial information recorded decreased revenues
averaging 23% compared to the first quarter of 2008.
Only 24% of companies recorded revenue growth
and the average change for the companies that
managed to increase revenue in the first quarter of
2009 was a more modest 8%. Despite this situation,
45.3% of the business leaders surveyed for the
Deloitte Business Sentiment Index expect to see their
sales revenue increase over the next 12 months.
As in the last several years, the energy and resources
(E&R) sector continues to dominate the list, despite
two key areas of impact resulting from the economic
slowdown in Europe. The first is how market
prices for the key outputs of the E&R industry have
developed. For example, the future prices
of electricity decreased by some 40% year-on-year,
with a similar trend underway in the oil and gas
industry. This is the result of the second key area of
impact – a strong decrease in demand, mainly from
industrial customers. The economic situation was
only one cause of crisis for the sector. Another was
the gas crisis of January 2009, following a dispute
between Russia and Ukraine, which revealed serious
vulnerability with supply and a high degree of risk
exposure in the pan-European natural gas supply
system.
A challenged automotive sector
The automotive industry represents a significant
proportion of the CE economy, so declining global
car sales have affected businesses and communities
across the region. The financial position of several
companies worsened during the period. Demand
decreased while price fluctuations and the difficulties
faced by financial markets posed potentially damaging
threats. In the first quarter of 2009, for example,
car production decreased year on year by 23% in the
Czech Republic and by 16% in Poland. Truck sales,
according to available data, decreased by more
than 50%.
The severe suffering of the automotive sector
is reflected across the manufacturing industry as
a whole. In fact, during the first quarter of 2009,
of the 30 manufacturing companies that provided
quarterly data, 28 reported a drop in revenues, while
only two generated improved results.
Damaged confidence hits construction hard
The region’s construction industry has been very
hard hit, in vivid contrast with its performance of
recent years. Several years of economic boom in the
region saw, under certain indicators, CE construction
levels exceed those of the EU-15, leading to market
saturation in some areas. Combined with the financial
crisis, this has served to accelerate the slowdown,
resulting in a rapid decrease of development projects
and pushing several developers to the brink. In the
first half of 2009, there was an 86% year-on-year
decrease in investments in commercial real estate.
However, recovery in the construction sector is
expected during 2011-2012, but the outlook is
far from rosy. The first area to begin recovery will
probably be the transportation construction sector,
while the construction of residential buildings will see
the slowest increase, due to the damaged confidence
of private investors.
9
High vulnerability of the region’s banks
While during 2008 the assets of the top 10 banks
increased slightly (by 1.2%) and profitability by almost
17% year-on-year compared to 2007, in the first
quarter of 2009 total assets shrank by more than
5% (excluding NLB Group) and profitability by almost
54% (excluding BCR) year-on-year, underlining the
true impact of the crisis on the banking sector.
There is, however, an important difference between
the US and UK banking crises and those of Central
Europe; in the first countries, it was the financial
institutions that caused the crisis, while in Central
Europe enhanced risk in local financial systems was
caused by problems with the real economy and
heavy investment in the region by Western parent
banks. Although the exposure of Central European
banks to toxic sub-prime assets was very limited, the
sector’s vulnerability has been and still is very high,
resulting in a continued scarcity across the region of
access to credit for households and businesses, which
has contributed to the depth of recession in many
countries.
However, according to the Deloitte Business
Sentiment Index, 57.9% of the business leaders
surveyed find that credit is still available to them
when needed, with almost a fifth feeling that it
is easily available.
Potential for re-engineering the insurance sector
In the closely aligned insurance sector, the degree
to which markets in the region were touched by the
crisis during the year differs from country to country,
as does the severity of the economic crisis. Currently,
opinions vary about where we are in the business
cycle: whether we are on the way to recovery or
still slowing down. The insurance sector in the CE
region is less consolidated by foreign capital than
the banks. This might prove to be beneficial, as
insurance companies were not as expansionist as
the banks and mainly operated locally. On the other
10
hand, in a time of recession insurance costs are
second in line to be cut after PR budgets. This means
that the performance of the sector is dependent
on the financial situation of clients (companies and
individuals) and on the duration of the global crisis.
We expect to see some significant changes in the near
future, as insurers grasp the opportunity to improve
efficiency across the sector. Initiatives may vary from
cost-optimisation programmes to complete businessmodel redefinition. We also believe that there are
a number of M&A opportunities in the region, which
may be suitable both for ‘insiders’ and companies
which are as yet not present in Central Europe. The
next six to 18 months, in fact, may reshape the CE
insurance market for the next decade.
Battle for customers in TMT
An appearance of calm has disguised an
‘under-the-surface’ battle for customers in the
region’s telecommunications, media and technology
(TMT) sector. Telecoms organisations in particular
have fought on price and service innovations, while
traditional media have suffered at the hands of online
competitors who are effectively driving home their
targeting and ROI measurement advantages.
It is still unlikely that print media will disappear in
the next decade, although it will need to explore
more efficient business models and cost structures
in order to maintain or return to profitability. In the
short term, the greatest winners are set to be the
major, diversified groups involved in traditional and
emergent technologies and business models.
The big picture
Overall, the impression that we have taken from this
year’s CE Top 500 analysis is one of a region that
has teetered on the brink of disaster before drawing
back from the edge. Today, the question for the
region appears not to be so much whether or when
recovery will come, but rather how rapid and
sustainable it will be.
At Deloitte we believe that those companies and
countries which grasp the opportunity that this
moment of shared crisis represents to overhaul and
reform creaking structures, systems and processes
will emerge in the years to come as true regional
powerhouses.
Such issues remain to be answered – yet, we
believe that the new models and approaches that
governments and businesses are being forced to
adopt as a result of this crisis will have the potential
to solve such entrenched, long-term problems across
the CE region as a whole.
The results of the global crisis are far from the only
challenges that face the region. Central Europe has
almost 182 million low-income inhabitants, with
an average monthly wage of EUR 660 in 2008.
Unemployment remains at double-digit levels having
shown little significant decline during the years of
robust growth, and 31% of business leaders surveyed
in the Deloitte Business Sentiment Index expect
employment levels to continue their decline.
Even worse, the (average) economic activity ratio
shows that only half the region’s working-age
population is actually working.
11
Breadth of vision
13
The global economy:
Contrasting views on recovery
By Ian Stewart
Chief Economist
Deloitte United Kingdom
The last six months have seen a dramatic
change in expectations for the world
economy. The deepest global downturn since
the Second World War seems to be drawing
to an end. The debate has shifted from
whether there will be a recovery to the
magnitude of the upswing.
This shift in sentiment has been driven by growing
evidence that looser fiscal and monetary policy is
working. The economic crisis started in the financial
sector and, to a large extent, its resolution lies there
too. The rally in equity markets, a sharp decline
in financial risk aversion and strong banks’ profit
numbers all testify to a marked improvement in
financial markets. Credit conditions, though still
constrained, have improved significantly. Leading
economic indicators, such as new orders and business
confidence, signal better times ahead.
14
In short the financial and economic data which drive
expectations for growth have improved sharply. As
a result, economists have started to upgrade their
forecasts for growth for the first time in two years. By
and large, policy makers and economists agree that
global growth will accelerate into the end of 2009 and
through 2010. But there is an equally strong consensus
that the recovery will be sluggish.
The general view is that a reduction in credit supply,
coupled with still elevated levels of borrowing, will
force many consumers and corporates to focus on
paying down debts. As a result the private sector
in many countries will be channelling income into
debt-reduction rather than spending for some time
to come. Consumers face an additional drag from
unemployment which, historically, tends to lag
somewhat behind the economic cycle. So the recovery
is likely to be marked, at least in many Western
economies, by anaemic growth in both consumption
and investment.
Nor, on the consensus view, can government prop up
demand indefinitely. On the contrary, excessive levels
of public debt in many Western countries are likely
to force governments to curb public spending next
year, so acting as a drag on the recovery. Government
stimuli, from ‘cash for clunkers’ to employment
schemes, will lapse at some stage.
Finally, the consensus worries that a big chunk of the
current impetus to the world economy is coming from
restocking. Faced with a deep recession companies
reduced stocks or inventories so aggressively that we
are now getting a bounce caused, not by stronger
demand, but by a near-exhaustion of stocks.
So for most observers the recovery faces strong
headwinds. But is it possible that the global recovery
might, just, turn out stronger than expected?
Certainly past US economic upswings have tended to
be V-shaped rather than U-shaped. The deeper the
downturn, the swifter the upswing, so to this extent
expectations for a sluggish recovery are not in line with
past experience.
It can, of course, be argued that things are different
this time. This downturn was caused by a financial and
debt crisis, not by high interest rates. On this analysis
many economies will need year’s of growth-inhibiting
debt reduction to restore balance.
However, while the origins of this crisis were different
to previous downturns, the policy response has been
different this time too. Central banks and governments
have demonstrated a willingness to do whatever it
takes to kick-start growth, from printing money to
buying financial assets. This is an economic experiment
without precedent. Economic policy has been likened
to pulling a brick on a piece of elastic. You start
pulling and the brick does nothing. Pull harder and
it still doesn’t budge. You give it a tug and suddenly,
unexpectedly, a brick is flying towards you at speed.
It could just be that this policy works faster than
expected.
Ultimately the debate about the pace of the recovery
hinges largely on whether you believe that repair
of balance sheets and the financial system is the
precondition for growth – or whether growth itself
causes the necessary repair. My own sense is that while
the recovery faces headwinds, forecasters may be
underestimating the upside risks to global growth.
Whether it is strong or weak, pretty much all
commentators expect a global recovery in growth next
year. What is clear is that the pattern of the global
growth is changing. The only significant growth in
the global economy this year has come from China
and India. With their rapid growth rates, high levels of
savings and low levels of debt, these economies, and
other, large emerging economies, are set to be much
bigger players on the global stage.
Most importantly, considerable uncertainties remain
about the strength of the banking sector and in
particular, its ability and willingness to provide credit
to the private sector. The evidence from the Japanese,
Swedish and Finnish banking crises of the 1990s is that
such deep crises have a prolonged and severe effect on
the supply of credit.
15
Central Europe:
A region-wide perspective
By Rafał Antczak
Vice-president of the Board
Deloitte Consulting, Poland
This is the first time that the Country-by-Country
report, which looks individually at the Central
European (CE) states, has also taken a broader
perspective over the region as a whole.
In recent decades, the CE region has functioned
somewhat as a separate geographical area or worse,
as the object of a political competition between
the East and the West. In those days, this divided
region with its complicated historical relationships
resulting in tension between its proud nations was
hardly a dreamland for foreign investors. What then,
has changed in recent years to bring the CE region
to the attention of the global business community,
consultants and analysts?
The change is due to a single external factor –
integration with the European Union. Of the 18 states
in the CE region, 10 (Bulgaria, the Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Poland, Romania,
Slovakia and Slovenia) are already members of the EU.
Two have candidate status (Macedonia and Croatia),
and the remainder are moving towards integration.
With the enlarged European Union channelling funds
to candidate and member countries, imposing unified
regulations and driving openness in trade and (to
a lesser extent) free movement of labour, the CE
region has begun its economic consolidation.
Average GDP growth across the 18 states reached
7.2% in 2005-2007, and even grew by 2% in 2008
when the full power of the global financial crisis
started to emerge.
16
The CE region’s nominal GDP and its components
(including private consumption, investments, exports
and imports) already account for 12-15% of their
EU-15 counterparts. With 182 million inhabitants
(who are younger than the EU-15 average), ready to
work hard but set to consume even more the risk of
a balance of payments crisis materialised in 2008 as
the (average) current account deficit in the region
reached 9% of GDP.
However, the CE region as a whole is characterised
by the low average indebtedness of the public sector,
with a total general government debt of under 34%
of GDP in 2008, of which just half is accounted
for by foreign debt. Foreign exchange reserves (in
other words, the most liquid element of a central
bank’s foreign reserves) reached almost 18% of
GDP (EUR 196 billion) in 2008, enough to cover
the general government exposure to foreign debt.
Obviously, the foreign debt of private companies
(including financial institutions, subsidiaries of
international firms or local firms) was several times
higher than this. However, because this is strictly
private debt, it is neither guaranteed by the CE
governments nor supported by the foreign reserves
of the region’s central banks. Therefore, any parallels
between the CE region and Asia (which experienced
a balance of payments crisis in 1997 when it became
overburdened by quasi-public or quasi-private
foreign debt) were unjustified. It is rather doubtful
that foreign banks or parent-companies would wish
to bankrupt their CE subsidiaries by not rolling over
their debts. Data for the first two quarters of 2009
rather suggest the contrary, and pressure on domestic
currencies is easing.
The CE region is not, however, without its problems.
It is a region of 182 million low-income inhabitants,
with an average wage of EUR 660 in 2008 (although
this increased by 18% in 2005-2007). Wage growth,
based on an increase in labour productivity, is not
helping to address the problem of unemployment,
which remains at double-digit levels having shown
little significant decline during the years of robust
growth. Even worse, the (average) economic activity
ratio shows that only half the region’s working-age
population is actually working.
In addition, driven by high inflation, central bank and
market interest rates remain relatively high in the
CE region, raising the cost of domestic capital and
tempting households and companies alike to borrow
abroad and in foreign currencies.
This is resulting in growing foreign debt of the
private sector. It is a vicious circle that may only be
resolved by implementing the Euro, which among
other benefits removes the risk of a balance of
payments crisis. However, meeting the Maastricht
criteria became implausible for most during the
global financial crisis. The exception was Slovakia,
which managed to enter the Eurozone at the very last
moment (in late 2008) before the crisis erupted.
Its economic performance will be watched intensively
by the central banks, governments and populations
of the CE countries that still operate their own
currencies.
Economic data for the first two quarters of 2009
cannot answer questions on the timing of recession
in countries across the CE region. However, we have
made an attempt to judge the likely performance of
all 18 CE countries.
The CE region is not however
without its problems.
It is a region of 182 million
inhabitants, with an average
wage of EUR 660 in 2008,
though it increased by 18%
in 2005-2007.
17
To do so, we concentrated on five indicators:
• GDP dynamics, retail sales and industrial production
data in particular, which may provide clues to the
future behaviour of households (whether they
maintain consumption levels or cut spending) and
companies (whether they forecast good or bad
sales levels).
• Levels of unemployment and inflation, as
companies respond to reduced demand by
restructuring their costs and/or reducing prices.
• Trade balances and balances of payments, with an
emphasis on changing exports and imports.
• Exchange rate behaviour, levels of foreign reserves,
and interest rates as central banks (and monetary
policies) make a short-term response.
• General government deficits and levels of public
debt as governments (and fiscal policies) respond
to the crisis in the long-term.
This approach produced three groups of countries.
The first group comprises those countries that face
particular challenges in combating recession, namely
Croatia, Estonia, Lithuania, Latvia, Macedonia, Serbia,
Ukraine and Hungary.
The second group consists of those countries that
are experiencing recession in relatively good shape:
Albania, Bosnia-Herzegovina, Bulgaria, Montenegro,
the Czech Republic, Moldova, Romania, Slovenia and
Slovakia.
The third is a group of one – the special case of
Poland, which did not experience a recession and has
shown year-on-year GDP growth (0.8% and 1.1%
respectively) for the first and the second quarters of
2009.
The first and the second groups both include
successful and sluggish modernisers, large and small
economies situated in various areas across the region.
But it is possible to see a pattern. Some of the best
performers from the past 10 to 15 years (the Baltic
countries, Croatia and, to an extent, Hungary)
appeared to be overheating in terms of the dynamics
of their GDP growth, flow of domestic and foreign
credits, high deficits (fiscal, current account, or both)
and asset price bubbles. On the other hand, some
countries from the second group are among the
poorest of the CE states and could have only relied on
their own. While their growth was less robust it was
also more balanced and their economies were more
diversified in terms of structure (e.g. both industry
and service sectors in the Czech Republic, Slovenia
and Slovakia).
Central Europe
2008
Population (millions)
181.6
Average monthly gross wage (€)
Finally, Poland is a special case because, as the
region’s biggest country (after Ukraine) and the
biggest economy, it is much less dependent on
foreign trade than the others. In addition, Poles are
less burdened with domestic or foreign private or
public debt than some other CE economies. In 2009
Poland abolished its high personal income tax rate
(40%), thereby increasing the disposable income
of households by some 0.5% of GDP which was
enough to maintain positive trends of consumption.
The result of this simple test might not be conclusive,
since we are still in the midst of the crisis and it might
yet take some time for the economic situation to
change significantly. It is still unknown if the CE region
is to emerge as a winner from the global financial
crisis, because this depends on many internal and
external factors, some of which are specific to each
individual CE country.
2008
2005-2007
Change (%)
Change (%)
-0.3
-0.3
661.2
8.5
18.0
EUR mil.
Real change (%)
Real change (%)
GDP
1,102,378
2.0
7.2
Private consumption
633,849
3.1
7.8
Public consumption
172,101
2.9
4.4
Gross fixed capital investments
272,633
-1.0
12.9
Exports (goods and services)
571,008
3.2
9.7
Imports (goods and services)
628,627
1.8
11.6
EUR mil.
Nominal change
(EUR mil.)
Nominal change
(EUR mil.)
Trade balance
-104,700
-591.6
-823.2
Current account balance
- 99,621
-944.4
-867.8
General government balance
-32,489
-929.0
129.8
General government gross debt
372,858
1,343.7
1,406.0
External debt
184,314
1,214.1
999.2
Foreign currency reserves
196,410
688.5
2,384.8
%
Percentage point change
Percentage point change
Economic activity rate
57.8
0.3
3.0
Unemployment rate
10.7
-0.3
-1.3
CPI rate
7.2
-1.4
1.2
Central bank interest rate
6.5
0.6
-0.0
1-year yield on Treasury Bill
7.6
1.4
0.4
10-year yield on Treasury Bond
4.4
1.3
0.3
Source: Reuters EcoWin Pro
What might be the reason for such a strange diversity
among the CE 18 countries? Clearly, there is not
a single answer.
18
19
The Central European
Economic Outlook 2009-2010
By Dr. Daniel Thorniley
President
DT-Global Business Consulting GmbH
Growth and Recovery Prospects
The Central European (CE) region was the darling of
global economies for more than a decade from the
late 1990s, with solid macro-economic indicators and
strong corporate results for Western companies doing
business and investing in the region.
The region got badly knocked by the autumn
2008 global credit crash and then took another
hit in February 2009 when the rating agency
Moody’s published a negative report on the
region’s debt outlook. GDP and industrial output
figures were crashing along with currencies. It looked
in those weeks as though a systemic economic crash
could bring down the whole region or several parts
of it. The rationale at that time was: CE economies
can’t pay back their debts immediately, they will
default, and the whole region will collapse. Austrian
and Italian banks are also hugely exposed and they
will collapse too bringing down their own economies!
The European banks were cited as being especially
vulnerable since they hold 74% of the world’s USD
5 trillion emerging market debt. The exposure of
Austria’s banks to CE debt is worth 80% of the
country’s GDP. These were not funny times.
While times were (and are) tough, thankfully much
of the behaviour in the first weeks of 2009 was driven
by extreme financial shifts resulting from market
panic. A number of factors quickly lightened the
mood somewhat:
• Financial markets realised that all the debt would
not have to be paid off immediately.
• Some/much of the debt could be restructured,
rolled over or turned into equity positions.
• Importantly the International Monetary Fund (IMF),
World Bank and EU made it clear that they would
provide financial support to the region. A safety
net was put under the debt crisis. This was a major
factor in stabilising markets which, in any case,
were beginning to pick up globally.
• It became apparent that the European banks were
not going to desert the CE region and abandon or
sell off their local subsidiaries. These branches are
too important, and will provide a basis for future
growth and profitability. Besides, the reputational
damage of any significant withdrawal would have
been too serious for the banks to contemplate.
That said, the European banks will downsize
their operations to focus on priority branches and
they may cut headcount. These are steps they are
taking globally, however, and are not specific to
the CE region.
• The increased funding provided to the IMF at the
G20 Summit meeting in April 2009 also provided
support for the CE markets.
• If any default were to occur (which looks even less
likely now) it would be carried out in a manageddefault manner in conjunction with the IMF, World
Bank and the EU/European Central Bank (ECB).
Thus the worst case is not quite worst-case. An
orderly default would take place even in the weaker
economies.
As a result of all this, credit default swap spreads
eased and currencies stabilised.
20
The weakest link: corporate and private debt
The major factor which undermined the CE
regional economy was non-sovereign borrowing.
Regional banks pouring money into the regional
credit system (money was pumped in from their
European central offices to cover any local credit
gap), corporate borrowing from CE companies and
personal borrowing (most notably mortgages in
FX) all exceeded sovereign borrowing by the states
themselves. In normal times, most of the CE markets
would have been able to manage their finances with
the exceptions of the three Baltic states, Romania
and Ukraine, which were all building up bubbles
with double-digit current account deficits. Even in
normal times these markets would have imploded
in 2010-2012 and the threat was clear. But the other
markets were all caught up in a tidal wave of fear
and panic in late 2008 and early 2009.
The main figures which spooked the markets were
that the CE region needs to pay back USD 400 billion
of short-term debt in 2009 and is liable for a further
USD 1.5 trillion of longer-term debt.
But what are the biggest threats to growth and
business trends?
There are two major and interrelated issues at work in
the CE and globally:
Credit
Credit is still not flowing properly. Banks are shoring
up their balance sheets, building up their capital
ratios, cutting costs and not lending much because
they fear counter-party risk (ie if they lend money to
someone, will they go bust). The trouble in the CE
region is that if companies don’t get loans soon, then
many good, viable companies may go bust. Large
Western and even large local CE companies are able
to access credit (at a price), but I am hearing many
complaints from medium-sized and small companies
in the CE region (and globally) that they are unable to
get decent credit at a decent price from their banks.
This will entail corporate bankruptcies, more
non-performing loans (NPLs), less willingness by banks
to lend as their NPLs rise, more job losses and sinking
consumer confidence.
In core Central Europe, it is estimated that NPLs were
at a moderate 2-3% of outstanding loans in autumn
2008, but rose to 4-6% by early 2009; the concern
is that these could rise to 8-10% quite quickly – they
have already done so in the Baltic states and Ukraine
and are approaching these levels in Romania. A 10%
figure is often seen as a crucial threshold of pain for
banks. Any figure higher than this causes stress.
Falling consumer demand
This takes us to our second major concern: falling
consumer demand. Perhaps retail sales and
unemployment are the most important indicators
to monitor anywhere in the world today, and it is
critical to assess whether the official figures are
accurate or whether they hide a worse picture. That
said, unemployment figures can be puffed upwards
artificially, as people claim benefits but continue to
work in the black economies. And retail sales figures
reflecting continued (or not) Keynesian smoothening
of consumption may be misinterpreted by altering
indexes (e.g. excluding cars). As job losses rise,
consumers will deleverage (a fancy term meaning
“spend less”); many FMCG companies are extremely
concerned about what will happen with consumption
in the next 3-9 months. The outlook everywhere
is likely to be tough.
In addition to corporate debt, many markets have
seen consumers become highly exposed to mortgage
debt denominated in Euros or Swiss Francs. This
too has a severe psychological impact on consumer
confidence and behaviour. Consumers most hit are
in Hungary and the Baltic states.
21
Differentiate markets
A key outcome of the crisis is that analysts and
corporate executives have to differentiate between
markets in the region: some are still very resilient,
others not.
For example, an important stabilising factor for the
region is that the largest proportion of total debt
is owed by Poland, the Czech Republic and then by
Slovakia. These rate among the stronger markets in
the region, and debt problems ought therefore to
be mitigated.
A rule of thumb for the markets would look like this:
Winning and challenged markets in CE
Challenged
Mid-class/
Possible winners
uncertain
Ukraine
Croatia
Poland
Estonia
Slovenia
Slovakia
Latvia
Czech Republic
Lithuania
Hungary
Romania
Bulgaria
Serbia
The weaker markets are typified by:
• Extremely high external debt.
• Very highly leveraged financial systems.
• Generally low FX reserves.
• Now rapidly contracting economies.
• Until recently, rapidly depreciating currencies.
GDP outlook 2009-2010
The region will be dependent on what happens
globally: China will help everyone, the US will come
back slowly in 2010, but the Eurozone – the key CE
export market – will be weak for 2-3 years. But the CE
has become used to this as the Eurozone was sluggish
for many years before the global credit crunch.
22
On the plus side, the markets we describe above
as winners ought to be among the top 15 global
performers as we move out of the crisis; Russia, too,
has a lot of potential for bouncing back quickly.
There could also be some bounce-back on savings
ratios, past real wages, grey market activity and the
fact that much debt will be rolled over. But we have
to admit (and this applies to most global markets)
that it will take several years before these CE markets
ever get to their mid-2006/mid-2008 GDP and
business growth levels. It will be satisfactory if output
and spending and business can return to the levels
of 2005-2006, which were good. The boom years
of 2007-2008 were built on paper credit and those
times will not come back quickly (which is probably
a good thing). They will not return because credit will
not flow and overall banking business will be down
by 15-20%.
Most economies will see an improvement in their
current-account positions as imports drop. As in
the West, most economies will run larger budget
deficits to mitigate the collapse in demand; the good
news is that most CE markets started with reasonable
positions in their budget balance, unlike, say, the
United Kingdom. This gives the governments some
leeway to spend their way out of trouble, but only at
the margins. The downside is that the authorities will
be able to take in much less tax revenue this year as
corporate profits fall and unemployment rises.
Hungary as a model for temporary survival?
Hungary has gone through several years of weak
growth, but the market may hold some lessons for
business trends in this regional downturn. While
macroeconomic numbers were bad, many Western
companies reported sales and profits better than their
GDP figures would suggest. This was the case through
2005-2007. The reasons for this include:
• People were supported by decent savings levels and
were eating into those savings.
• Many people had more than one job and so could
top up their incomes.
• Many of these jobs, and part-time employment,
took place in the grey/black economy and so official
figures did not (and do not) capture all economic
activity.
• EU funds helped support the economy and while
these funds rarely impact directly on Western
manufacturers, they do stabilise the economy and
boost employment.
But by early 2008, business trends were worsening
as employment trends deteriorated and consumers
had finally eaten through most of their savings.
In addition, with the currency falling, house
owners were exposed to FX loans risk and this hurt
confidence and consumption. But it is significant that
the market held up for one to three years. This may
be a model for other markets in that perhaps the next
15 months may prove not to be as bad as expected.
Then again, the cushion of the above factors will also
disappear after 15 months and business could get
much tougher if the global and European economies
do not provide some support.
Some reasons for hope
The next 9-15 months are going to be very tough for
the economies and Western business but there are
still some rays of light:
• Several of the CE economies are relatively among
the top ten in the world for an eventual bounceback, including Poland, the Czech Republic, Slovakia
and Slovenia.
• The EU acts as a major stabiliser for its member
states; markets in Latin America, Africa, the Middle
East and South East Asia do not have this benefit.
• The tax and legal environment will continue to
improve across the region, again driven by the EU.
• EU funding, which ought to stay up at pre-crisis
commitment levels (depending on ability of
co-financing by local economies) will act as
a buttress for the macroeconomy and infrastructure
spending.
• Some Western European companies, in order to cut
costs, will revisit off-shoring, and parts of CE could
benefit from this.
• Political risk in the region has risen, as it has
globally, but apart from street demonstrations,
the political risk looks manageable, with the highest
risk in any further downturn in the Baltic states,
Ukraine and parts of former Yugoslavia.
GDP trends in CE 2008-10 (annual % change)
2008*
2009**
2010**
Albania
6
-3.5
2.0
Bulgaria
3.5
-4.4
1.3
Croatia
0.2
-4.5
0.7
Czech Republic
3.0
-2.8
1.3
Estonia
-3.6
-13.0
-1.5
Hungary
-2.5
-6.5
0.2
Latvia
-10.3
-16.0
-2.5
Lithuania
3.0
-13.0
-2.5
Macedonia
5.0
-3.5
0.7
Montenegro
8.1
-3.5
1
Poland
4.8
0.5/-0.5
1.3
Romania
7.1
-4.9
1.4
Serbia
5.4
-4.2
0.5
Slovakia
2.5
-5.2
1.1
Slovenia
-0.5
-4.0
1.2
Ukraine
2.1
-10.3
0.5
* Source: Reuters EcoWin Pro
** Source: Daniel Thorniley, DT-Global Business Consulting GmbH
Currency outlook
• CE currencies were more fragile at the start of 2008
than they were in the spring and summer of 2008.
• Most currencies hit their strongest points in spring/
summer 2008.
• CE currencies came under attack through the
autumn of 2008 and again in early 2009.
• They reached low points at the end of Februarybeginning of March 2009.
• Since then they have strengthened against the USD
even more than against the Euro.
Much will depend on trends with the USD and Euro.
The USD ought to weaken in the future given
the high deficit, but it may defy logic as there are few
attractive alternatives. CE currencies ought to benefit
from the relative stability in currency markets and
trend up and down marginally. In the medium term
they ought to strengthen somewhat as risk appetite
returns and convergence with the EU continues and
Euro adoption gets closer.
23
Finding value
in Central Europe
By Dr. Elisabeth Denison
Senior Economist
Deloitte Germany
The financial crisis has disrupted the growth prospects
of most economies around the world. It has also
halted to the recent upswing in Central Europe.
However, there is no doubt that developing and
emerging markets will be drivers of global growth
again in years to come. In some countries of Central
Europe, the crisis has had the positive effect of
fostering long-overdue reforms. Recent studies show
that European executives remain keen on expanding
their reach into the region.
Historic ties
Central Europe is made up of a number of states
sharing some characteristics but diverging greatly
in others. Since the break-up of the Soviet Union,
the region has developed ever closer links with the
economies of Western Europe. In terms of banking
and trade, Europe is now one of the most integrated
regions in the world. According to the International
Monetary Fund (IMF), about a quarter of all trade is
within the region – compared with only about 15% in
Asia. The financial system of Central Europe is almost
entirely in Western European hands. During the boom
years, the rapid integration and development of the
region attracted a wave of foreign capital seeking to
reap the benefits of EU convergence. Unfortunately,
this dependency on foreign capital and the close ties
with Western Europe are now making the region
more vulnerable to the crisis.
24
Financial woes
Problems associated with servicing foreign debt have
been exacerbated in countries with fixed exchange
rate systems, including the Baltic states, Bulgaria
and the West Balkans. Latvia, Lithuania and Estonia
are facing financing needs in 2009 of over 200% of
GDP. Sustaining currency pegs at pre-crisis levels has
become prohibitively expensive, with interest rates
set at inadequate levels and thereby choking growth.
Devaluation, on the other hand, would make servicing
foreign debt virtually impossible. A softening of the
currency pegs would also erase the Euro-accession
aspirations of several countries for the foreseeable
future, causing the test period for Maastricht criteria
to restart from scratch.
The international community appears to be
committed to helping affected countries avoid the
worst impact of the financial and economic crisis,
partly through fear of the domino-effect that
a default or devaluation could have on the whole
region. As well as the IMF, Western European
institutions like the European Bank for Reconstruction
and Development (EBRD), the European Investment
Bank (EIB) and the European Central Bank (ECB)
are offering support.
During the boom years, the rapid integration
and development of the region attracted
a wave of foreign capital seeking to reap
the benefits of EU convergence.
Next to securing government payments,
the recapitalisation of banks is the most pressing
issue in the region. For now, levels of Western bank
capitalisation and government commitment appear
sufficient to deal with the consequences of the crisis.
However, there are worries about the stability of the
banking system should the recession prove to be
longer and more severe than anticipated, due to the
likely effect this would have on corporate default
rates.
Growth prospects and investment opportunities
Fortunately, there are indications that the downturn is
coming to an end. The region’s strongest economies
seem to have the worst behind them. Poland is the
star performer, thanks to the fact that it entered the
crisis with smaller external and internal imbalances
than its neighbours. Some, however, such as Lithuania
and Latvia, are expected to contract by almost 20%
during 2009 and then take years to recover. For the
region overall, the IMF expects 1% growth in 2010,
following a 5%-contraction in 2009.
The deterioration in the macroeconomic environment
will certainly require more thorough commercial
and financial due diligence by companies venturing
into the region. Apart from dealing with short-term
uncertainty stemming from the crisis, investing
in Central Europe involves understanding myriad
cultures, histories and regulatory environments – and
this can be challenging even for the most experienced
investors.
Nonetheless, the current environment offers
interesting opportunities that would only recently
have been unimaginable for investors. With credit
conditions tightening, some companies are having
financial difficulties despite a healthy core business.
For others – mainly small, export-oriented firms – the
loss of one or two customers might be enough to
spell trouble. Such cases can offer good value and
the potential for buyers with a bigger customer base
or more efficient management structure to develop
sustainable long-term success.
Other opportunities might arise through consolidation
within the region, in the energy sector for example.
There also appears to be some potential for
investment activity in growth sectors, including
insurance and healthcare, which are forecast
to gain in importance.
For corporations, building successful international
business relationships will continue to play a crucial
part in their long-term strategy. When executed
effectively, M&A remains a powerful means of
achieving corporate objectives – even when
economic and financial conditions are turbulent.
Related Research:
• “Finding Value: Navigating M&A Risks in Central
& Eastern Europe”, Deloitte Germany, June 2009.
• “Central and Eastern Europe: Diverging fortunes”,
Deloitte Global Economic Outlook, Q3 2009.
25
EU currency conversion:
Similar… but different
By Luděk Niedermayer
Chief Economist
Deloitte Czech Republic
Just 20 years of real monetary independence
Many countries in the Central European (CE)
region have now enjoyed 20 years of freedom in
a democratic society. Due to the similar period taken
to transform their economies, they have equally had
just 20 years of monetary policy.
At the end of the 1980s, most of the currencies in the
CE region were facing serious problems. Several, such
as the Polish Zloty, lacked credibility after a period
of high inflation, while many others, including the
Czech Crown, were not convertible and were subject
to multiple exchange rate systems. Those countries
emerging from the dissolution of the Soviet Union,
meanwhile, had no currency of their own at all.
The early days of these new currencies at the
beginning of the 1990s were far from easy. Countries
suffered from declining economic activity, financial
markets did not function properly, and the credibility
of the new economies and their currencies was low.
For these reasons, many countries in the region took
a gradual approach to liberalising foreign exchange,
relying on virtually fixed exchange rates backed in
some cases by the financial and analytical support of
the International Monetary Fund (IMF).
26
Successful, growing economies and improving
credibility have created a pressing dilemma for the
region’s policymakers. Should they continue with
the fixed exchange rate regimes, supported by strict
fiscal and other policies? Or should they now start to
gradually ease away from such arrangements before
they become unsustainable?
Fix or float?
Two contrasting solutions have emerged as the
primary choices for CE countries.
All the Baltic countries have successfully maintained
their fixed exchange rate arrangements. Bulgaria,
which used a currency board to stabilise the economy
after its banking crisis of 1996-1997, has joined them.
Slovenia too, has moved towards the same position in
opting for a relatively inflexible and closely managed
exchange rate regime.
Countries choosing a floating exchange rate include
the Czech Republic, Hungary, Poland, Romania and
Slovakia.
It could be assumed, based on this information,
that the smaller countries had some concerns about
the impact on their economies of the free market
setting exchange rates. In addition, they were able
to support their fixed exchange regimes with other
policies including disciplined fiscal policy. In order to
Many countries in the region took a gradual
approach to liberalising foreign exchange,
relying on virtually fixed exchange rates
backed in some cases by the financial and
analytical support of the International
Monetary Fund (IMF).
increase the credibility of their currency pegs, they
used so-called currency board arrangements, the
strongest version of the fixed exchange rate regime,
under which any form of monetary independence is
effectively resigned. Larger countries had to give
up the peg, and most of them succeeded in setting
up reasonably well functioning floating exchange rate
regimes alongside monetary policy arrangements.
For these countries, the most suitable arrangement
for monetary policy proved to be inflation targeting.
The Czech National Bank was the first to openly
subscribe to this relatively new regime in early 1998.
Euro – need for speed?
Those countries with a fixed exchange rate regime
were well positioned to adopt the Euro following
EU accession (in 2004 for most, 2007 for Bulgaria
and Romania). The procedures required by the
Maastricht treaty include two years’ devaluation-free
participation in the ERM II exchange rate mechanism,
alongside fulfilment of the Maastricht criteria for
controlling inflation, public debt and deficit and
long-term interest rates.
But it was not just the Baltic states that planned early
entry into the Eurozone. (Technically, 1 January 2007
was the first possible date.) Larger countries including
Hungary and Poland also expressed their interest
in a relatively fast adoption. A few, most notably
the Czech Republic, were not so keen, based on
a combination of political and economic factors.
During the early years after EU entry, although their
good GDP growth started to narrow the gap with
Western Europe, the new member states began to
face a different kind of economic difficulty. The most
visible problems to impact on the Euro adoption plans
of larger countries were in the area of fiscal policy.
Despite rapid economic growth, many countries
suffered with high public finance deficits (which, in
the case of Hungary, reached nearly 10% of GDP).
The smaller countries with fixed exchange rates were
more successful in this respect. On the other hand,
the combination of very strong economic growth
and fixed exchange rates created major inflationary
pressures. These countries were unable to balance
price rises between the nominal appreciation of their
currencies and inflation, so growth in prices started to
threaten their Euro-adoption plans.
27
This mechanism did enable countries with floating
currencies to control inflation quite successfully.
But they also experienced occasional periods when
the appreciation of their currencies exceeded the
potential of their economies. Such developments
cause economies to slow down and decline in
competitiveness, as happened in the Czech Republic
in both 2002 and 2008.
In addition, in some countries the combination of
a stable or appreciating domestic currency with
relatively high domestic nominal interest rates has
stimulated demand for lending in foreign currency.
Some success stories
Such factors have prevented many countries from
achieving the Maastricht criteria, with the fiscal
situation slowing the ambitions of those with floating
exchange rates and inflation damaging the prospects
of the Baltic states. (Lithuania was unfortunate
enough to miss its target by some 0.1%).
The success of a small country like Slovenia proves,
however, that entry into the Eurozone is an entirely
feasible project. This was further confirmed in 2008
when, after some debate in the EU, Slovakia gained
approval to adopt the Euro on 1 January 2009. Years
ago, nobody would have expected this, when it was
a relatively poor economy with many problems. The
combination of far-reaching economic reforms and
a real dedication to meet the Maastricht criteria has
brought well deserved success.
28
The Euro adoption outlook
The economic and financial crises have hit the
region’s economies hard. They are experiencing
a sharp economic decline and have difficulties in
accessing funding, leading many to seek support from
the IMF and similar institutions. Some too, notably
where there has been a large proportion of lending
in foreign currencies, are facing problems in the
financial sector. Currency volatility has increased and
national budgets have fallen into deep deficit, causing
the need to increase taxes which in turn will drive up
inflation and slow down recovery.
While many CE states would choose to be
members of the Eurozone, in order to reach more
liquid financial markets covering over 300 million
inhabitants, fulfilling the entry criteria is now more
difficult than ever before.
It is realistic to expect, however, that those Baltic
states already participating in ERM II will focus on
fulfilling the criteria once their economies have
stabilised. Depending on their inflation performance,
it is possible that some Baltic states might succeed
as early as in 2012.
In Central Europe, rapid fiscal consolidation is
assumed to be the key goal for the Czech Republic,
Hungary, Poland and Romania, which would be the
case even without Eurozone entry as the objective.
Politicians will probably be reluctant to set clear, early
Euro target dates, which would tie them to rapidly
cutting their budget deficit to at most 3% of GDP.
(Poland is currently the closest to achieving this.)
However, as the experience of Slovakia shows, it is
not easy to reach this goal without a target date
and clear dedication to achieving it.
29
Zooming in
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Adria local reflections on
global economic issues
The Croatian economy is facing a serious recession.
In the first quarter of 2009, its GDP fell by around
6.5%, while industrial production, trade and exports
all decreased by over 10%. The recession will probably
continue for the rest of the year, and a slow recovery
is expected in the first half of 2010.
Unlike the ‘real’ economy however, Croatia’s financial
sector appears to be in good health; the banking
industry in particular. While the overall level of activity
in the sector as a whole is lower than in previous
years, business results are relatively good. The banking
sector is sufficiently capitalised, risks are acceptable,
profitability is very good, and the entire sector is
stable and reliable.
Croatia’s recession is the result of structural problems
in the national economy that have caused a high
trade deficit, a balance-of-payments deficit and high
foreign indebtedness. The global financial crisis has
therefore only been a partial cause, although it has
had an impact mainly due to reduced exports and
more difficult refinancing of external debt.
32
By Žarko Primorac, PhD.
Chairman
Deloitte Croatia
We believe that, with the exception of Slovenia,
the recovery of all the region’s countries will be
relatively slow, making the high GDP growth rates of
the pre-crisis period very difficult to achieve again.
Based on our estimates, all countries will see modest
positive growth in 2010. We believe that Slovenia will
experience a more dynamic recovery thereafter, with
Croatia progressing more slowly and BiH following.
We believe that the entire recovery process to reach
pre-crisis rates of GDP growth will take between three
and five years.
Since the Croatian government has been making
sharp cuts to curb public sector overspending, and
has to date regularly settled its foreign debt, we do
not expect the recession to deepen further, although
it will continue for some time. We expect the first
signs of recovery to emerge in the next year, followed
by a gradual upward trend. In this context, we expect
positive GDP growth in 2010.
All the countries are still facing significant risks, not
least to the stability of their financial systems. Despite
the relative health of their banking sectors, they
could face problems in their loan portfolios because
retail loans constitute the largest proportion of bank
borrowings in these countries, particularly in Croatia.
If the recession persists, economic activity will lessen
further, causing many people to lose their jobs and
throwing into doubt their ability to repay housing
and other loans. Illiquidity in the economy, which has
been strongly evident over the past few months, also
poses a high risk for banking portfolios, particularly in
Croatia and BiH.
The recession has also hit the other countries in
the region hard, but with varying levels of intensity.
Slovenia, which is the most developed transition
economy in the region, has recorded a sharp drop in
exports and GDP. However, as a country already in the
Eurozone, with a flexible economy and stable financial
system, we expect it to recover relatively quickly.
The situation is much more complex in Bosnia and
Herzegovina (BiH). Its economy is still suffering from
the aftermath of war, making recovery more difficult.
In addition, the high level of public spending and
widespread social consequences of the war have
monopolised resources that could otherwise be used
to lead it out of financial crisis and recession. BiH
has therefore asked the International Monetary Fund
(IMF) to provide help via an appropriate financing
arrangement that is already underway.
The recovery will first be felt in the service
sector. In Croatia, this will be in tourism, which
is very important for the overall wellbeing of the
country’s economy and is even capable of a good
performance before the crisis ends. We then expect
to see a gradual recovery in the construction industry,
trade, exports and other service industries.
The banking sector is sufficiently
capitalised, risks are acceptable,
profitability is very good, and the
entire sector is stable and reliable.
The dynamics and the order of those industries
coming out of the crisis could be somewhat different
in the other two countries. In general, however, we
expect those industries that can respond flexibly
to market demand and are not capital-intensive in
production and investment to make the most rapid
recovery.
The dynamics of recovery in the region (particularly
in Slovenia, which is more involved with the global
market place) will also depend on the pace of global
and European recovery. Croatia and BiH will need to
reduce further their structural imbalances and public
spending, implement serious reforms and lessen their
external vulnerability. Still, regardless of such internal
imbalances, success in combating the crisis globally
and in Europe will have a positive impact on the
economies of the region’s countries.
33
Conservative approach serves
the Czech Republic well
Stagnation is just one
challenge facing Hungary
By Prof. Jan Švejnar, PhD.
Professor of Economics
CERGE-EI Praha, University of Michigan
Although manufacturing is a traditional strength of
the Czech Republic, it is difficult to select a particular
highlight because the Czech economy is relatively
strong across the board. Despite its looming budget
deficit, the Czech Republic is known and respected
for taking a relatively conservative approach to public
finances. This makes it likely to be able to cope with
the current budgetary pressures that it is facing.
Despite its looming budget
deficit, the Czech Republic is
known and respected for taking
a relatively conservative approach
to public finances.
The country’s main weakness, however, lies in
its inability to form a strong government and
consequently to carry out fundamental reforms in the
areas of pensions, healthcare, education and science.
I believe that this inability to carry out reforms is the
main risk to the country’s ability to achieve a positive
future scenario, although I do not expect it to prevent
the Czech Republic from moving forward into
recovery.
34
The Czech Republic was primarily hit indirectly by
the financial crisis, through the global recession and
its negative effect on those markets that are most
important to Czech exports. On much the same
basis, I expect the country to emerge from the crisis
a quarter or so after Germany and that both the
Czech and Slovak economies will recover in advance
of Hungary.
In fact, except for Hungary. I expect the CE economies
to experience a rapid rate of GDP growth during
the recovery. In the medium to long term, their
competitive position will depend on their ability
to carry out the aforementioned reforms and in
particular on their investment in human capital,
R&D and their approach to FDI.
Looking ahead, I do not believe that much can
be done in the Czech Republic itself to prevent
the occurrence of future crises, as the crisis was
an imported one. In order to give itself the best
possible protection, however, the Czech Republic
should conform to all the financial sector and other
regulations to be adopted by advanced economies,
so that it may be seen as being part of that safe
haven of countries that are reliable partners for trade
and investment.
By Péter Duronelly
Chief Investment Officer
Budapest Fund Management Company
Hungary has been hit by the recession more seriously
than its regional competitors in two ways. First,
Hungary’s growth rate, which was already only just
above zero when the crisis reached the country,
was already perceived as being in decline. Second,
the sudden increase of foreign indebtedness by the
private sector caused refinancing problems when
the international banking system effectively froze.
Although international organisations managed to
avoid financial disaster, thanks to their surprisingly
well-coordinated joint financial risk-management
measures, they could not prevent the recession from
deepening further.
Hungary has other challenges to face as well
as global recession. These include the need to
reconsider a strategy based on cheap labour and
processing industries. A shift towards the export of
services is necessary, but this is not easy in a country
like Hungary where functional language skills are
poor and where study and work gain little social
recognition. In addition, investment capital will be
scarce during the next few years, meaning that
growth will only be achievable with greater levels
of self-financing and reduced levels of consumption.
Hungary’s economy had always depended on
a strong and export-oriented group of multinational
businesses, alongside a relatively fragile sector of
small and medium-sized enterprises (SMEs). This
structure left nothing to fill the gap locally when
the most important export markets collapsed.
Hungary has an extremely open economy, both
on the production side and in terms of financing.
An economy that depends so heavily on foreign
markets is helpless in the face of an external crisis.
An economy that depends so
heavily on foreign markets
is helpless in the face
of an external crisis.
The recession is expected to end during the second
half of 2009. Rather than growth, however,
stagnation is projected for the period to come.
Several factors are helping to stabilise the global
economy, including co-ordinated monetary and fiscal
loosening, the increasing strength of recovering Asian
countries and a powerful inventory cycle.
Some important factors that caused the recession
have not eased, such as over-consumption in North
America and the accompanying massive volumes of
debt. It is also far from clear how hard the balance of
the European banking system has been hit by the risky
positions undertaken during the boom.
Other countries in the region are facing the future
with a number of different perspectives. Poland and
the Czech Republic were achieving better balance
figures when the crisis set in, meaning the setback
to growth has not been as dramatic as in Hungary.
Their high budget deficits need to be dealt with,
however. Romania, Bulgaria and the Baltic states will
need to manage their current account balances, while
Ukraine’s main goal will be to maintain unity. The
crisis posed questions about a number of areas of the
Central European economy, and many of these as yet
remain unanswered.
35
Poland’s minor
economic miracle
Ukrainian economy’s
unrealised potential
By Dr. Henryka Bochniarz
President of the Polish Confederation
of Private Employers (PKPP) Lewiatan
In September 2008, when PKPP Lewiatan carried out
its cyclical analysis of the Polish enterprise sector, 75%
of respondents were projecting that their revenues and
profits would grow in 2009, over 40% were planning
to make investments, and more than 36% were
intending to launch new products and services. Export
was growing. The financial performance of medium
and large enterprises was very good. In the whole of
2008, their revenues increased by over 11% and the
net financial result, although lower than in 2007, was
still very high. While the rest of the world was talking
of worst-case scenarios, Poland remained both calm
and optimistic.
Our later surveys in December 2008, February and May
2009, and analysis carried out by other organisations,
confirmed this general sense of optimism among
businesses and lack of significant concerns among
households. In the first quarter of 2009, Polish GDP
grew by 0.8%, in the second by 1.1% while other CE
countries witnessed a severe slump that was projected
to continue for the whole of 2009.
In my opinion, there are four key reasons why Poland
has been able to maintain its GDP growth. First,
economic growth during the prosperous years of 2004
to 2008 was built on three stable pillars – internal
consumption, investments and net export. Second,
Polish enterprises mainly pursued relatively conservative
investment and financing strategies, leading to the
relatively low levels of debt, which today underpin the
safety and stability of the Polish financial sector. Third,
we have access to EU funds, which the government
is using for infrastructure projects to support the
investment component of economic growth.
36
Finally, the price of imported goods rose sharply due to
the weakening of Polish Zloty, which caused companies
to seek domestic suppliers and partners, so supporting
demand on the consumer goods and investment
markets. Consequently, any growth in unemployment
was relatively insignificant, while the average salary
has risen. This, in turn, has encouraged consumption
among Polish households, mitigated anxieties about
the future economic situation and strengthened the
general mood of optimism.
I am confident that Polish GDP growth will reach
about 1% by the end of 2009. This will be achieved
without the spending of billions of Euros on anti-crisis
programmes or a single Zloty of public money. Quite
simply, Poland did not follow the popular anti-crisis
strategies applied in other countries.
We should bear in mind, however, that public finance
is a weak link within the Polish economy, the area
where the greatest risk is involved. This is because
we are experiencing an economic downturn, which
involves lower budgetary receipts and a higher
deficit. Consequently, public debt is going to grow
considerably. This may impede our economic growth
potential in years to come, as we may be forced to
exploit additional sources of financing in the form of
increased taxes and employers’ social contributions.
The government has implemented an alternative
strategy – to reduce administrative costs. These
actions, however, will not be enough on their own.
Further reductions in spending are inevitable, but this
time they will affect social benefits. If Poland manages
to reform its public finances, the current crisis will have
provided a great opportunity for positive change.
By Ihor Mitiukov
Managing Director of Morgan Stanley
Ukraine
Metallurgy, chemistry and machine-manufacture
have historically been Ukraine’s primary industries.
As well as its large, highly skilled workforce and ample
natural resources in the agricultural, energy, mining
and smelting sectors, the country’s unique geographic
location enables the development of excellent transit
capacity for goods, almost regardless of their type.
Ukraine’s vast size and large population also provide
substantial opportunities for the development of
its currently underdeveloped and import-oriented
consumer market. The country’s widespread
aspiration for a strong national currency makes such
development particularly urgent.
Currently, the weak points of the Ukrainian economy
include:
• Inefficient integration with the global economy.
While exports account for almost 50% of GDP, most
export contracts are restricted to spot markets (in
which commodities are bought and sold mainly for
cash) so rendering the economy vulnerable to world
market fluctuations.
• The economy’s slow adaptation to world energy
prices, especially in the housing and public utility
sectors.
• The low levels of technology used by businesses
across all sectors of the economy.
An inefficient political model, with an imperfect
electoral system as its central weakness, is also
impeding the structural reforms that are necessary to
achieve the nation’s substantial economic potential.
Ukraine’s vast territory
and large population denote
a substantial opportunity for
the development of the
consumer market.
Ukraine is returning to 2005-2006 levels of
economic activity, according to most of this
year’s macroeconomic indicators and consumption
standards, leading me to believe that 2009 will prove
to be the toughest year for the Ukrainian economy in
the decade to come.
The speed of economic recovery will depend on both
external and internal factors. The key external factors
are the regeneration of traditional Ukrainian export
markets, productive co-operation with international
financial organisations and, subsequently, the
country’s re-entry into international capital markets.
However, no recovery should be expected without
fundamental structural reforms in the energy,
agro-industry and transport sectors. Elimination of
fiscal imbalances at all levels and better regulation
of the financial sector, based on the early
identification and management of risks which have
the potential to destabilise the financial system,
will allow more efficient management of the public
finances.
37
Making sense of
Serbia’s unbalanced
economy
Romania, out of the
crisis: When?
By Prof. Dragan Djuricin, PhD.
Chairman
Deloitte Adria
The current global downturn has dealt two major
blows to the Serbian economy. These are a sudden
cessation of capital inflows, driven by global
deleveraging as companies seek to reduce their
debt burdens, and a collapse in demand for the
country’s exports.
The negative effects of the current global downturn
are serving to amplify a local economic crisis that has
existed in Serbia for the last two decades, in a form
of ’transitional downflation’. As a result of this, Serbia
began 2009 with just 73% of the GDP it achieved in
the pre-transitional year of 1989, and with
double-digit inflation.
The focus of government policy
has shifted to encouraging
a stable FX rate and maintaining
existing levels of economic
activity.
The key macro-economic indicators demonstrate
that there is an imbalance between Serbia’s real
economy and its financial sector, with the real
sector being greatly more exposed to the crisis and
its negative impact. In the current environment,
the increased depreciative pressure on the local
currency has created uncertainties in the nominal
foreign exchange (FX) rate. As a result, the focus of
government policy has shifted to encouraging a stable
FX rate and maintaining existing levels of economic
activity. Proposed measures to be undertaken by the
government and the Central Bank of the Republic
of Serbia are therefore designed both to
bring about a stable FX rate and to maintain levels of
private demand and public spending.
The only bright (or rather grey) spot in
Serbia’s economy is the banking sector. In recent
years, most foreign banks operating in Serbia grew
by between 20% and 30% each year, and Return on
Equity (ROE) ranged between 15% and 20%. Despite
its profitable growth, the Serbian banking sector is
still smaller than the country’s GDP. This is much less
than in more established capitalist economies, where
banking assets are commonly between three and
four times greater than GDP. Foreign ownership in
Serbia’s banking sector is almost 80%.
Nevertheless, in a crisis threats may be transformed
into advantages. As the old saying goes, “When
the wind blows, some people build walls, others
build windmills“. In other words, intelligent risk
management is one step in the right direction.
38
By Daniel Dăianu
Professor of Economics
Former Finance Minister of Romania
and former MEP
Poorly regulated financial markets, the neglect of
systemic risks and repetition of quick fixes via cheap
money, especially in the US and the UK, have created
premises for the current worldwide crisis. The latter
has hit the emerging economies of Europe very
powerfully, though, ironically, they are not heavily
exposed to toxic products but have however relied
massively on capital imports and EU markets while
their banking sectors are extensively controlled by
foreign banks, which makes contagion effects quite
significant.
Romania has experienced one of the most dramatic
turnarounds in its economic dynamics. This is not
surprising in view of its large external deficits. Capital
flight and a freeze of capital markets have set into
motion strong negative multipliers while the floating
exchange rate arrangement has not helped much
to ease the shocks. The compression of the non
governmental sector has been abrupt and intense.
The room for using a budget stimulus to combat the
crisis was dented by the ballooning short term private
debts of recent years.
Romania’s total public debt is not large at about 25%
of GDP, which is an asset under the circumstances.
But a high budget deficit in 2008 – when the
economy grew by over 7% – and a sharp rapid rise in
salaries in the public sector during 2005-2008 have
weakened the capacity to weather this crisis. The
conundrum which policy-makers have to deal with
is: how can they make sure that external obligations
are met in order to avert a fatal run on the national
currency and, at the same time, trying to avoid
too much procyclicality in budget policy when the
economy is falling? Consequently, an IMF and EC
supported stabilization program, amounting to some
EUR 20 billion, has become inevitable.
In the short run it is essential
that arrears do not clobber the
economy; well calibrated
injections of liquidity would be
useful in this respect.
The economy will probably shrink by around 8% this
year and, unless its current expenditure is restrained
the budget deficit will go beyond 7.5% of GDP. In the
short run it is essential that arrears do not clobber
the economy; well calibrated injections of liquidity
would be useful in this respect. It is critical that
the government succeeds in funding infrastructure
programs, which depends on restructuring the budget
expenditure and the use of EU funds. The latter would
be the best available tool in mitigating the effects
of the economic downturn. Over the medium term
it is highly important that a reform of the wage and
pension schemes is undertaken, as this would help
put the public budget on a sound basis and the entry
into the Eurozone. Pieces of good news are that the
current account deficit will shrink to about 6% of GDP
this year (from 13% in 2008) and that Romanians
save more. An economic upturn may occur in the
second half of 2010 but a lot hinges on the nature
of economic recovery in the major EU countries and
inward investment going into higher value added
sectors.
39
The prospects for
Slovakian recovery
By Ing. Elena Kohútiková, PhD.
Deputy CEO
VÚB Bank
In the last five years, the Slovak economy has enjoyed
the fastest economic growth of any country in the
CE region. In 2007, when GDP growth reached
10.4%, Slovakia was the fastest-growing economy in
the EU. Joining the EU in 2004 alongside structural
reforms (such as the introduction of a 19% flat tax
rate, pension system reform and a more flexible
labour market) all played significant roles in launching
economic growth. Slovakia joined the Economic and
Monetary Union (EMU) of the EU, and adopted the
Euro in January 2009. Other strengths of the Slovak
economy include a relatively cheap labour force and
good geographic position. The risks arising from its
weaknesses relate in particular to the openness of
the country’s economy, which makes it sensitive to
changes in the economic cycles of developed EU
countries. Another disadvantage is the concentration
of procyclical sectors that change in line with the
overall state of the economy. From a strategic
viewpoint, there is also insufficient focus on sectors
that render high added value.
40
The rapidity with which the negative consequences
of the crisis struck was surprising, with the level of
economic optimism falling almost immediately to
a record low. Real GDP, which grew by 2.5% in the
fourth quarter of 2008, dropped by 5.5% in the
first six months of 2009. Since October 2008 the
unemployment rate has increased by 4.3% to reach
11.8%, the highest it has been since the beginning
of 2006. Along with the gradual recovery of the
European economy, the Slovak economy will start
growing again but not before the first quarter of
2010. Nevertheless, labour market conditions will
probably remain weak.
In my opinion, the Euro will play a significant role
in stimulating economic growth in Slovakia. It
should provide support for the Slovak export sector,
which at the time of the crisis was at a competitive
disadvantage when compared to neighbouring
countries, in particular due to their weakening
currencies.
The Euro will play a significant role in
stimulating economic growth in Slovakia.
It is unlikely that the region’s economies will recapture
the GDP growth they achieved before the crisis or
regain the competitive position they enjoyed in the
coming two or three years. Recapturing economic
growth in Eurozone countries will probably be slow
and gradual. The close relationships between the
economies of developed countries and those of
Central Europe, alongside reduced growth potential
coming from domestic demand, suggest that local
economies will not recapture the positive pre-crisis
growth trends in the near future.
From a global perspective, the main risks threatening
Slovakia’s ability to achieve a positive future scenario
are unfulfilled expectations of recovery for the
world’s economies and the potential for a second
recession, the so-called “W” scenario. From the local
perspective, there is a risk that public finances will not
be sufficiently recovered to drive a quick reduction in
the deficits resulting from the recession. This in turn
would create a basis for future economic imbalances.
Theoretically, those industries that will recover most
quickly will be in procyclical sectors, such as car
manufacturing, metal processing and production,
machine production, raw materials processing
and construction. The most important question,
however, is what will be the post-crisis position
of the automotive sector, to which many other
manufacturing sectors are connected? State aid
for the automotive sector and car sales could bring
demand forward, but this does not necessarily mean
that demand will continue to grow strongly for
producers and dealers after the crisis.
It is hard to see how lessons learned from this
financial crisis could prevent similar problems from
arising again, or help mitigate the effects of future
crises. The main reason for Slovakia’s economic
recession was the interconnection of our economy
with global economic development. Due to its
extent and structure, the Slovak economy needs to
be an open one and measures to change this would
be inappropriate. Some positive change could be
achieved through greater diversification of sectors in
the economy, with a focus on attracting those foreign
investments that are not sensitive to the fluctuations
of the global economic cycle.
41
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CE Top 500
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50050043
2
Commentary on the
ranking
The methodology
The Central Europe Top 500 ranking is compiled
based on consolidated company revenues for the
fiscal year ending 2008. The rankings are based
on revenues reported by a particular legal entity
operating in Central Europe.
The ranking groups companies by industry and
country. We also display the ranking of the largest
Central European companies by market capitalisation
as of 31 December 2008 and a list of the major
foreign investors in the region.
Deloitte has sourced the information by individually
approaching the companies themselves, from
publicly available sources and estimates based on
a comparison with last years’ results and our research.
We have ranked banks and insurance companies by
total assets and gross written premium, respectively.
The gross written premium of insurance companies
includes both premiums from life and non-life
operations, despite the fact that in certain areas these
companies operate as separate legal entities.
The list of major foreign investors in the region is
made up of aggregated revenues of those Top 500
companies controlled by particular investors. These
figures are only approximate, as they do not include,
inter alia, intra-group sales and it is possible that they
also do not contain the revenues of all subsidiaries
in the region.
Missing data
In cases where revenue for the fiscal year 2008 was
not available, we used the reported 2007 revenue
as a proxy for 2008.
We have not presented revenues of various
subsidiaries of the top capital groups due to lack of
data. This concerns in particular MetInvest Holding
and Naftogaz of Ukraine and the Ukrainian railway
state company, where we presented only consolidated
figures representing the whole capital group.
44
Ukraine
The ranking for top Ukrainian companies is based on
data from questionnaires filled in by representatives
of these companies. The list does not include
companies that were invited to participate in the
ranking, but who informed us in writing or verbally
that they would not be taking part this year.
As in previous years, the objective of the ranking
is to analyse how individual countries are coping in
the current political and economic environment, how
particular industries in the region are performing,
and what challenges the investors and management
of the leading Central European enterprises, banks
and insurance companies are currently facing.
In some cases, companies’ financial data was
gathered from public sources and the alt.com.ua
website. These are marked in the table with an
asterisk.
Previous rankings also sought to establish how the
region’s business leaders were pursuing growth
strategies and how they were coping with the rising
costs of materials, the appreciation of local currencies
and an increasingly expensive and hard-to-attract
workforce. This year’s edition presents the economic
scene during the crisis that erupted in the region at
the end of 2008. It shows how Central European
enterprises have coped during the economic
downturn, particularly in view of the predictions of
economists (and the hopes of politicians) from a year
ago - that the crisis might not have a severe impact
on the region.
Data gathered from public sources has not been
confirmed by representatives of the companies
themselves. Deloitte is not responsible for the
accuracy or correction of third party data gathered
from public sources or provided by company
representatives.
Revenue calculation
Revenue has been calculated in Euros at the relevant
average exchange rates for 2006, 2007, and 2008.
The revenue for subsidiaries of large groups has
been reported as part of the consolidated revenue
and shown separately for those subsidiaries. In our
research, we scrutinised also companies from Albania,
Bosnia and Herzegovina, Moldova and Kosovo.
However they have not entered the Top 500 list due
to their relatively low revenues.
Russia/Belarus
For the purposes of this analysis, our ranking includes
companies in Central and Eastern European countries
with the exception of Russia and Belarus.
In both cases we were unable to find reliable data
that could be used in the rankings. The size of the
Russian economy and some of its major companies
also makes industry and country comparisons difficult.
Good year – bad year
So, what is the financial situation of the 500 largest
companies in the region following the dramatic
change that took place last year?
In 2008, 388 companies (78% of the top 500)
increased their revenues on average by 20%. By
way of comparison, in 2007, 398 enterprises (80%)
increased their revenues by 18%. In the first quarter
of 2009, 112 out of 148 companies (76%) for which
we obtained financial information, recorded revenue
decrease. On average, revenue decreased by 23%
compared to the first quarter of 2008. Only 24%
of companies recorded revenue growth and the
average change for the companies that managed
to increase revenue in the first quarter of 2009 was
approximately 8%.
The percentage of companies with revenue increase vs. decrease
100%
8%
14%
80%
76%
60%
40%
700
300
400
20%
0%
1500
78%
300
400
800
2007-2008
1000
1300
24%
1900
Q1 2008-Q1 2009
No change
Decrease
Increase
45
Revenue change in 2008 and Q1 2009
Bulgaria
Top 500 industry results
Median
revenue
change (%)
Median revenue
increase (%)
Median
revenue
decrease (%)
Median revenue
change (%)
Median revenue
increase (%)
Median revenue
decrease (%)
2007-2008*
2007-2008**
2007-2008
Q1 2008-Q1 2009
Q1 2008-Q1 2009
Q1 2008-Q1 2009
22.8
23.2
-1.3
17.8
19.0
-20.3
Industry
Median
revenue
change (%)
Median revenue
change (%)
Number of
companies
with revenue
increase
Median
revenue
increase (%)
Q1 2008-
Number of
companies
with revenue
decrease
Median revenue
decrease (%)
2007-2008
Q1 2008-Q1 2009
Q1 2008-Q1 2009
-Q1 2009
Q1 2008-Q1 2009 Q1 2008-Q1 2009
14.8
-12.5
8
2.7
29
-20.1
Croatia
8.3
11.5
-4.7
1.6
3.7
-13.8
Czech Republic
16.6
19.1
-3.5
-29.0
10.4
-31.2
Consumer Business
and Transportation
Estonia
9.8
9.8
N/A
17.9
39.5
-3.7
19.8
-16.5
15
18.9
35
-29.2
Life Sciences
and Health Care
18.4
-0.8
3
2.8
5
-10.3
Manufacturing
7.8
-33.2
2
10.3
28
-33.3
Public Sector
8.5
N/A
N/A
N/A
N/A
N/A
Real Estate
19.2
Hungary
6.2
13.3
-7.5
-29.2
N/A
-29.2
Latvia
20.3
20.5
-3.7
-53.5
N/A
-53.5
Lithuania
25.7
25.7
N/A
-36.8
N/A
-36.8
Poland
16.2
23.4
-5.9
-18.5
8.6
-20.8
Macedonia
32.2
32.2
N/A
N/A
N/A
N/A
Romania
2.8
12.8
-9.4
-26.8
N/A
-26.8
Serbia
19.6
19.6
N/A
N/A
N/A
N/A
Slovakia
17.2
22.4
-8.0
-16.9
7.7
-41.1
Slovenia
4.0
14.7
-6.8
-5.5
1.2
-21.8
Ukraine
16.2
20.9
-12.1
N/A
N/A
-31.6
Total
14.9
19.9
-6.8
-17.4
7.6
-23.4
* Represents the revenue change across the entire sample (2007-2008).
** Represents the median growth of revenue for the companies that recorded growth.
46
While companies from the region’s smaller countries
recorded relatively higher revenue increases, they
were also more severely impacted by the crisis.
Growth rates for Bulgaria and Estonia reflect the
increased revenues of the local energy and telecom
companies, while the significant presence of the
manufacturing sector in the Czech Republic caused
the revenues of its largest companies to decrease
by 29%.
TMT recorded rates similar to those in manufacturing,
but only 21% of companies in this sector showed
revenue decrease. The energy sector showed the
highest growth rate of all industries in 2008 at 20%,
with the greatest increases and most dynamic growth
among large enterprises taking place in Lithuania
(Mažeikių nafta – up by 99%), Ukraine (Naftogaz –
50%), Hungary (MOL – 36%) and Poland (PKN Orlen
– 34%, Lotos – 34%).
In 2008, all industries performed well. Our data
indicates however, that 27% of manufacturing
companies recorded lower revenues than in 2007,
with an average increase in revenue of just 8%
compared to the 15% average achieved in other
industries (with the exception of TMT). In 2008,
Data available for the first quarter of 2009 indicated
a drop in revenues across all industries. The most
dramatic decrease was observed in the manufacturing
sector (-33%), real estate (-22%) and energy and
resources (-17%).
-22.4
1
8.6
3
-23.7
Technology, Media
6.8
and Telecommunications
-11.3
7
6.8
12
-14.6
Total
-17.5
36
7.6
112
-23.4
14.9
In the first quarter of 2009, 28 manufacturing
companies (out of 30 that provided quarterly
data) reported a fall in revenues (meaning just two
generated improved results). In the energy and
resources sector, 35 of the 50 companies that
provided financial results for the first quarter of 2009
saw revenues decline and only 15 increased revenue.
The life sciences and health care industry, where
revenues declined by just 1% year-on-year in the first
quarter of 2009, is in a relatively good position.
The revenues generated by the automotive companies
included in our top 500 list increased by 7.2% in
2008 with average company growth of approximately
4.4%, particularly significant considering the scale
of the crisis in Western countries. Compared to the
first three months of 2008, however, some major
CE-based producers, including Škoda Auto and
Volkswagen Poland, saw revenues decline by some
30%. Others, including Fiat Poland, saw no decline
in the same period.
Biggest companies grow most, then shrink most
The largest companies gained most from the still
good economic climate during 2008. The average
revenue increase among the 100 largest companies
was 17.5%, compared with just 12% among the
100 smallest. This is due to the fact that some 33%
of the smaller companies were from the manufacturing
sector, while the largest are dominated by energy and
oil companies. In the first quarter of 2009, the top
100 companies saw revenue decrease by an average
of 22%, while the 100 smallest recorded an average
revenue decline of just 11%. This reflects the impact
of the dramatically reduced revenues of some of the
oil companies at the top of the list.
47
Top 500 industry breakdown by number of companies
2008
2007
Top 500 sector breakdown by number of companies (last year)
Top 500 sector breakdown by number of companies (last year)
9.6%
2.6%
1%
9%
9.6%
2.6%
1%
3.2%
1%
29.8%
29.8%
22.8%
9%
3.2%
1%
27%
27%
27.2%
22.8%
27.2%
4%
4%
3.6%
30.2%
3.6%
30.2%
Consumer Business and Transportation
Consumer
Business and Transportation
Energy and
Resources
29%
29%
Energy
and
Resources
Life Sciences
and
Health
Care
Energy
and
Resources
Life Sciences
and
Health
Care
Life
Sciences
and Health Care
Manufacturing
Life Sciences and Health Care
Manufacturing
Manufacturing
Public Sector
Manufacturing
Public Sector
Public Sector
Real Estate
Public Sector
Real Estate
RealMedia
Estate and Telecommunications
Technology,
Real Media
Technology,
Top 500 industry breakdown by revenues
2008
Top 500 sector breakdown by revenues in 2008
Top 500 sector breakdown by revenues in 2008
2007
Top 500 sector breakdown by revenues (last year)
Top 500 sector breakdown by revenues (last year)
9.9%
1.6%
0.8%
1.6%
0.8%
10.5%
9.9%
1.9%
0.9%
1.9%
0.9%
23.4%
23.4%
21,5%
21,5%
10.5%
19.8%
19.8%
26.1%
26.1%
Changing industry structure
Decreased demand for some manufacturing exports
and the relatively slower growth of the automotive
sector reduced the presence of the manufacturing
sector in the list, to the benefit of consumer-focused
and energy companies. Compared with last year, the
share of manufacturing companies has decreased
from 27% to 23%. Companies representing the
consumer business and transportation sector grew
from 27% to 30%, and the representation of those
from the energy sector rose to 30% from 29% last
year.
PKN still the largest
As in previous years, the largest petrochemical
companies – PKN and MOL – occupy the two top
positions. PKN strengthened its place as the biggest
Central European company in terms of revenues.
Full consolidation of the results of Mažeikių nafta
and high petroleum prices through much of 2008
were among the key factors that allowed the
company to increase its Euro revenues by 34%.
Admittedly, petroleum prices fell in the fourth quarter
of 2008, but this was partly compensated for by
the depreciation of the Polish Zloty. The increase
in MOL’s revenues was similar in its scale to that of
PKN, but the change was primarily due to organic
growth. Nonetheless, both petroleum companies
were affected by the economic crisis – their revenues
in the first quarter of 2009 were lower by almost
one third (PKN - 35%, MOL - 29%) than during the
corresponding period of 2008. PKN recorded losses
throughout 2008 and in the first quarter of 2009.
The profit generated by MOL in 2008 was nearly 50%
below that for 2007; the company also recorded
a loss in the first quarter of 2009.
MetInvest Holding ranks 3rd in the CE Top 500 in
terms of revenue. The company recorded a 60%
increase in revenue compared to the previous year,
driven by the consolidation of its subsidiaries and high
steel prices in 2008.
As might be expected, companies from the fuel and
energy sectors occupy the highest places in the list.
ČEZ remains the largest power company in terms of
revenue. For the past few years this Czech electricity
producer and distributor has been strengthening
its position in the region by consistently following
its acquisition policy, and it has recently acquired
the Albanian national electricity production and
distribution company (although the results of this deal
will not be available until the publication of the 2009
financial statements). ČEZ has also purchased energy
assets outside the region, in Germany. In the ranking,
ČEZ also kept its position as the company with the
highest capitalisation. During the 12 months to
31 July 2009, the stock exchange capitalisation of ČEZ
decreased by 34%, while the market values of overall
ranking leaders PKN and MOL fell respectively by 26%
and 41%, and of the largest banks by nearly 50%.
At just 12%, PGNIG and the Czech Telefónica O2
both experienced the smallest decrease in the stock
exchange capitalisation.
2.6%
2.6%
38.4%
40.3%
40.3%
Manufacturing
Manufacturing
Public Sector
Public Sector
Real Estate
Real Estate
48
38.4%
2.4%
2.4%
Manufacturing
Manufacturing
Public Sector
Public Sector
Real Estate
RealMedia
Technology,
49
Top companies by market capitalisation
CE Top 500 - breakdown by ownership
Company
Country
Market Cap.
Market Cap.
31. 12. 2008 (EUR mil.)
31. 7. 2009 (EUR mil.)
in EUR (%)
currency (%)
1
ČEZ
Czech Republic
17,709.8
20,795.3
17.4
11.5
Bulgaria
2
PKO BP
Poland
8,519.4
8,017.5
-5.9
-6.2
3
Pekao
Poland
7,941.9
9,195.3
15.8
15.5
4
TPSA
Poland
6,301.8
4,783.5
-24.1
5
PGNiG
Poland
5,092.8
6,312.7
24.0
6
Telefónica O2
Czech Republic
5,072.3
6,169.8
7
MOL
Hungary
4,535.5
5,836.6
8
Komerční banka
Czech Republic
4,234.0
ArcelorMittal
Ukraine
3,910.9
9
Change
Change in local
Foreign
Regionally
Locally
State
controlled
controlled
controlled
controlled
9
-
2
3
14
Croatia
3
2
3
3
11
Czech Republic
46
7
7
9
69
-24.3
Estonia
-
-
1
1
2
23.6
Hungary
47
6
2
5
60
21.6
15.5
Latvia
-
6
-
1
7
28.7
29.5
Lithuania
3
1
4
2
10
4,647.9
9.8
4.3
Macedonia
-
-
-
1
1
2,568.7
-34.3
-34.5
Poland
96
8
35
49
188
Romania
24
-
2
8
34
Kryvyj Rih
Total
10
PKN Orlen
Poland
3,289.1
3,618.8
10.0
9.7
Serbia
2
-
1
3
6
11
OTP Bank
Hungary
3,071.0
4,247.0
38.3
38.9
Slovakia
16
3
1
4
24
12
Petrom
Romania
2,583.9
3,412.5
32.1
39.6
Slovenia
3
1
11
7
22
13
Magyar Telekom
Hungary
2,353.0
2,889.0
22.8
23.5
Ukraine
13
-
25
14
52
14
HT
Croatia
2,233.8
2,520.6
12.8
13.0
Total
262
34
94
110
500
15
Pliva
Croatia
2,162.2
1,458.9
-32.5
-32.4
16
Richter Gedeon
Hungary
2,009.7
2,595.5
29.1
30.0
17
BZ WBK
Poland
1,995.0
2,284.3
14.5
14.2
18
Krka
Slovenia
1,703.3
2,517.0
47.8
47.8
19
ZABA
Croatia
1,677.0
1,783.0
6.3
5.7
20
INA Group
Croatia
1,576.5
1,990.3
26.2
26.4
21
Bank Handlowy
Poland
1,503.1
1,851.3
23.2
22.8
22
Enea
Poland
1,488.7
2,180.7
46.5
46.1
23
BRE
Poland
1,434.7
1,416.0
-1.3
-1.6
24
KGHM
Poland
1,361.9
4,170.0
206.2
205.3
25
ING
Poland
1,341.3
1,548.4
15.4
15.1
50
The number of state-controlled organisations on
the CE Top 500 list fell by 11 from 2008 to total 110,
49 of which are Polish enterprises. The revenues
of state-owned companies amount to 26% of the
revenues of all top 500 firms (as compared to 20%
last year). This can be attributed to the revenue
growth reported by the energy sector, which is still
controlled to a significant degree by the State Treasury.
The Metro Group, having observed a 19% rise
in revenues, has overtaken ArcelorMittal, while
significant increases in power industry revenues have
driven the sector’s investors up the ranking. These
include OMV (up from 8th to 5th position) and RWE
(moving from 14th to 9th).
The list of foreign investors present in the region
has not changed significantly from last year. The
automotive industry, consumer goods’ sector,
metalworking, the power industry and the
telecommunications sector all continue to display
the most significant involvement by foreign investors.
Once again, Volkswagen, Metro Group and
ArcelorMittal occupy the leading positions.
51
2.2%
10.4%
13.8%
4.4%
4.8%
0.4%
1.2%
6.8%
12%
CE Top 500 - largest foreign investors (by revenue)
0.2%
Company
Revenues 2007
Revenues 2008
(EUR mil.)
(EUR mil.)
Change (%)
1
Volkswagen
23,523
23,290
-1.0
2
Metro
9,601
11,411
18.8
3
ArcelorMittal
10,743
11,311
5.3
The largest Central European companies
1.4%
according to countries (based
on the revenue
2%
of companies in Top 500)
37.6%
10.4%
2.8% 2.2%
4
Lukoil
8,112
10,210
25.9
5
OMV
7,868
9,957
26.5
6
Deutsche Telekom
8,976
9,651
7.5
7
E.ON
6,981
8,347
19.6
8
Tesco
6,495
7,525
15.9
9
RWE
5,380
7,414
37.8
10
France Telecom
6,780
7,283
7.4
11
Samsung Electronics
5,987
6,656
11.2
12
Nokia
5,531
5,531
0.0
13
Fiat
4,249
5,405
27.2
14
BP
4,168
4,563
9.5
15
Philips
4,536
4,207
-7.2
16
U.S. Steel
3,994
3,880
-2.9
17
Shell
3,267
3,787
15.9
18
Toyota
3,233
3,657
13.1
Bulgaria
Bulgaria
1.3
Croatia
Croatia
Czech Republic
Czech Republic
Estonia
Estonia
19
Philip Morris
3,578
3,624
13.8%
4.4%
Croatia
4.8%
5.3%
Estonia
0.4%
1.2%
Hungary
6.8%
12%
0.2%
Lithuania
Macedonia
Serbia
0.7%
2.3%
Slovakia
Slovenia
Ukraine
35.4%
37.6%
CE Top 500 - breakdown by industry and country
21
Carrefour
2,722
3,470
27.5
22
Continental
2,345
3,093
31.9
Latvia
Consumer
Energy and
Life Sciences
23
Kaufland
2,525
2,954
17.0
Lithuania
Business
Resources
and Health
24
PCA
2,761
2,887
4.6
Poland
and Transportation
Bulgaria
Macedonia
-
10
-
2
Croatia
Serbia
4
3
1
-
Czech
Republic
Slovakia
18
18
3
17
Slovenia
Estonia
Note: The ranking above was prepared by adding up the interest revenues of the Top 500 companies controlled by entities originating
from outside Central Europe. These figures are only approximate, as they do not include, inter alia, intra-group sales and it is possible
that they also do not contain the revenues of all subsidiaries in the region.
More Polish firms in CE Top 500
Poland has traditionally dominated the list of the Top
500 largest companies in CE.
This year, the list includes even more enterprises
from Poland (+12 companies), due to consolidation
in the energy sector and growth reported by
consumer goods manufacturers. However, there is
also an increased presence of companies from the
south of the region – one more from Bulgaria, four
more from Romania and four more from Slovenia.
Bulgaria’s move up the list was due to the greater
number of companies from the energy sector (from
6 in 2007 to 10 in 2008). Romania increased its
number of companies from the consumer business
sector (from 9 to 11) and energy (from 13 to 14).
Similarly, Slovenia contributes additional companies
from the consumer, energy and life and science
sectors, but fewer from TMT and manufacturing.
The number of Ukrainian companies, however, fell
by 23 as a result of mergers and the depreciation
of the Ukrainian currency. In particular, Ukrainian
representation in the energy and resources sector
is significantly lower this year.
13.6%
0.1%
Romania
1.4%
2%
10.5
93.3
5.8%
Poland
3,584
2,660
0.2%
1.5%
Latvia
3,244
1,377
15.5%
3.8%
Czech Republic
REWE
Agip
2.6% 2.3%
11%
Bulgaria
20
25
52
The largest Central European companies
according to countries (based on the number of
companies in Top 500)
Hungary
Romania
Hungary
Manufacturing
Public
Latvia
Sector
Lithuania
Care
Real
Technology
Estate
Media and
Telecommunication
Poland
Macedonia
-
Total
-
2
14
-
-
3
10
Slovakia
6
7
69
Romania
Serbia
1
1
-
-
Slovenia
-
-
-
2
Hungary
13
16
5
16
Ukraine
1
1
8
60
Latvia
2
4
-
-
-
-
1
7
Lithuania
4
3
-
3
-
-
-
10
Poland
69
46
6
46
2
6
13
188
Macedonia
-
1
-
-
-
-
-
1
Romania
11
14
-
6
-
-
3
34
Serbia
1
3
-
1
-
-
1
6
Slovakia
2
9
1
7
-
-
5
24
Slovenia
8
6
4
3
-
-
1
22
Ukraine
16
17
-
13
2
-
4
52
Total
149
151
20
114
5
13
48
500
Ukraine
53
Banking and Insurance
Central European banks should regard 2008 as
a successful year despite the crisis. A year ago, they
could boast double-digit increases in assets and only
slightly lower growth in net profits. Their assets were
still on the increase in the first half of 2008, but that
growth ceased towards the end of the year, and
assets even showed a decrease as the credit squeeze
led to write-downs. Consequently, average asset
growth in the 50 largest banks in 2008 amounted
to 10% in Euros, and approximately 21% in local
currencies. 42 (84%) of the largest Central European
banks observed an increase in the balance sheet total
in 2008, and just 25 recorded lower net profits than
in 2007. However, the situation changed radically in
the first quarter of 2009. Results for this period show
that banking assets dropped year-on-year by 3% on
average, and by 6% in comparison with the end of
December 2008. Approximately 29 out of 36 banks
that provided quarterly results for 2009 observed
a decrease in the balance sheet total compared to
the end of 2008. On average, the net result for the
first quarter of 2009 was 66% lower than in the
corresponding period of 2008.
OTP’s leadership position now appears to be under
threat. In the first quarter of 2009, third-ranked Česká
spořitelna observed only a slight fall in the value of
its assets against 2008, narrowing the gap with OTP.
Česká spořitelna also overtook PKO BP.
Limited credit activity and credit provisions
contributed to the losses recorded by Central
Europe’s financial institutions. In 2008 not 1 of the 50
largest Central European banks recorded a net loss,
but 14% of financial institutions incurred a net loss in
the first quarter of 2009.
The financial situation of the banking sector seems
similar in each country across the region. In the first
quarter of 2009, Hungarian banks saw a 6% decrease
in their interest profits and an almost 70% decrease
in net profit. Polish banks, meanwhile, saw a 24%
decrease in their interest profits, a six-fold increase in
the cost of provisions and, in effect, a 63% reduction
in net profits. The largest Czech banks recorded
a nearly three-fold rise in the costs of provisions for
non-performing loans and a 14% reduction in their
net profit.
Judged by the level of its assets, OTP has been the
region’s largest bank since our first edition, closely
followed by PKO BP and Česká spořitelna. Differences
in the assets of these leading banks seem to narrow
by the year. OTP saw a 6% increase in its balance
sheet total for 2008, and a corresponding 6%
decrease in the first quarter of 2009. In the same
periods, net profit grew by 16% before dropping
by 34%.
54
As in the previous years, the ranking includes
a relatively large number of banks originating from
the Czech Republic - three Czech banks are listed
among the 10 largest, the same as the number from
Poland, which is a much larger country.
The shift in the rankings of the 4th and 5th largest
Central European banks is particularly interesting. At
the end of 2008, the balance sheet total of Pekao SA
was greater than that of ČSOB; but, based on data for
the first quarter of 2009, ČSOB had more assets than
either Pekao SA, PKO BP or even Česká spořitelna
which was ranked 2nd overall. The Romanian BRD
bank (a subsidiary of Société Générale) occupying
14th position achieved a 40% return on equity (ROE),
the highest level of all the listed banks. BCR, also from
Romania but controlled by Erste Bank, came second
by this measure with an ROE of 35%.
In the insurance sector, the average increases in gross
premiums amounted to 13% in 2008, with 41 of the
50 largest insurance companies increasing their gross
written premium levels. In the first quarter of 2009,
gross written premium was on average 12% lower
than in the first quarter of 2009, and 21 out of 35
insurers that provided financial data recorded lower
revenue in the first quarter of 2009.
PZU has been the undisputed leader of the Central
European insurance companies for some years now,
and saw gross written premiums increase by close
to 50% in 2008. Česká pojišťovna and Warta were
second and third in the ranking, Warta rising from
seventh position in 2007 thanks to dynamic life-policy
sales in 2008.
Conclusion
The next edition of our ranking is likely to show
precisely the havoc that the crisis has wrought on
the region. This year, however, we can conclude that
those companies best prepared for the downturn
were those from sectors which are traditionally most
resilient to financial crisis – those providing energy
and resources (oil industry) and those which are
flexible enough to respond to new customer needs
(automotive sector).
The first effects of the crisis can be seen in the very
industry that triggered the avalanche – banking. Our
region’s banks used to be perceived as a safe haven,
due to their low involvement in complicated financial
instruments. Now, in a highly untypical trend for the
industry, they are showing the first signs of decline.
55
Sectors
in the spotlight:
Industry analysis
GetGet
a broader
a broader
view
view
CE Top
CE Top
50050057
2
Sectors in the spotlight:
Industry analysis
The Industry Analysis section
of the Deloitte CE Top 500 report
analyses how recent changes
in the Central European economies
differ from sector to sector.
The Industry Analysis section of the Deloitte CE
Top 500 report analyses how recent changes in the
Central European economies differ from sector to
sector.
The strongest influence of the global economic
and financial crisis appears to have been felt in the
automotive, banking and insurance industries. The
automotive industry represents a significant part of
the CE economy, meaning that a global decline in car
orders and sales has significantly affected the industry
across the region, placing pressure on companies
to introduce cost-cutting measures and even new
business models.
The banking industry suffered, because the
valuations of the region’s banks decreased to all
time lows in relative terms, reflecting investors’
views of the inherent risks in both the region and
the banking sector. Furthermore, because Western
banks withdrew financing, lending in Central Europe
effectively came to a halt as the crisis hit.
In the insurance sector, stakeholders showed their
concerns regarding factors including investment
guarantees, collapsed share prices, increased levels
of commercial risks or the financial soundness of the
insurance sector as a whole.
58
Some sectors differ significantly from country to
country. One example is the construction industry.
While some countries may be forced to decrease
their public construction investments, others (such as
Poland) are heavily utilising EU funds to drive forward
the construction of national infrastructure. Recovery
in CE’s construction industry as a whole is expected
for 2011-2012, with the transportation construction
sector expected to recover first and the residential
sector last.
It is important to stress that factors other than the
global crisis also affected the different industries.
For example, while the energy and resources (E&R)
and technology, media and telecommunications
(TMT) industries felt the impact of the crisis, they
also had other challenges to deal with. The gas
crisis of January 2009, for example, revealed
serious weaknesses and a high degree of risk in the
pan-European natural gas supply system. And while it
appeared at first glance that 2008 was quite a stable
year for the TMT industry, a closer look reveals
that the industry experienced an ongoing fight for
customers, with continuous price reductions and
constant inventions of new products and customer
care solutions.
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2
Automotive
The automotive industry is a vital component of
the Central European (CE) economy. Automotive
companies and their suppliers are among the
region’s most prestigious businesses, and have
a significant influence upon the performance of its
economies and employment markets.
From a technological perspective, Central
Europe’s automotive industry is directly comparable
to those of the 15 long-established EU countries (the
EU-15). A number of major European manufacturers
have production plants in the region (including
Volkswagen in Slovakia, Audi in Hungary and Fiat in
Poland) while several CE automotive companies are
owned by traditional foreign manufacturers (such as
Škoda’s ownership by Volkswagen).
Automotive companies will have
to seek new ways to motivate
consumers to buy new cars
in the years to come.
The near future is likely to see technological
development principally in regard to alternative power
sources.
As with the global automotive sector, the CE industry is
subject to a high level of regulation through standards
and rules. Producers and their suppliers focus on
attaining high technological levels; for example, from
2011 all new cars will have to meet the EURO 5
standard, and from 2014 the EURO 6 standard. The
requirement to meet ever-higher standards is directly
leading to higher levels of technological sophistication,
but conversely, also influences production costs.
Owing to technological progress and global trends,
customers in CE are demanding high levels of
quality and reliability in equipment and functionality.
Compared to EU-15 customers, however, they
generally have lower incomes and, consequently,
60
are more likely to choose less expensive cars. Their
purchasing behaviour is typically marked by a careful
comparison of cost against economic utility.
For these reasons, the cars produced and sold in
Central Europe are mainly in the economy and
mid-market segments. Fleet cars and those intended
for business purposes represent a significant proportion
of demand, although many are also used for personal
purposes. Cars produced in Central Europe, such as the
Škoda Fabia, are often acquired as a family’s only car,
while in the EU-15 countries they are often a second
vehicle.
As a result of the global economic crisis, car orders
and sales decreased, which subsequently affected
companies linked to the automotive industry. In
response to this trend, some EU governments applied
measures to provide sales support to the automotive
industry. During the past 12 months the following
factors particularly influenced demand for new
vehicles in CE:
• The impact of the global crisis, in the form of
consumer pessimism about employment prospects,
cost-cutting measures by companies and, in the case
of haulage vehicles, decreased transport
of consumer goods.
• Decreased demand for luxury cars in favour of
mid-market cars in Western Europe.
• The “scrap” programmes implemented by some
European countries, notably Slovakia, Germany and
Spain, which stimulated sales to customers who
would not otherwise consider buying a new car.
• Tax incentives, such as those in the Czech
Republic which introduced a VAT allowance for
cars for business purposes in April 2009 and an
environmental tax in January 2009.
The financial position of several companies worsened
as a result of the global crisis. Demand decreased while
price fluctuations and the difficulties faced by financial
markets posed potentially damaging threats. In the first
quarter of 2009, car production decreased year on year
by 23% in the Czech Republic and by 16% in Poland.
Truck sales, according to available data, decreased by
more than 50%. As a result of the measures taken,
however, demand increased in the second quarter of
2009, especially for small cars.
Car manufacturers in CE focused their efforts on
mitigating the impacts of the global crisis by:
• Reducing prices and special offers.
• Temporarily halting production, shortening the
working week or making employees redundant.
• Increasing pressure on suppliers to reduce material
and service prices, so passing the effects of the crisis
further down the supply chain.
The main exposures resulting from the global crisis,
including decreased demand for new cars and pressure
on suppliers to reduce prices, should not be expected
to subside in the near future. Automotive companies
will have to seek new ways to motivate consumers
to buy new cars in the years to come. In that respect,
companies are being forced to change their business
models.
Most automotive companies have already started to
reduce costs, through organisational improvements
as well as exerting strong price pressures on their
supply chains. Improvements include reduced use of
agency workers and, when resources allow, a cut in
the number of activities they outsource. EU grants
for personnel training in the Czech Republic have
also proved to be a successful means of reducing the
impact of the crisis, which has reduced the volume
of employee redundancies. One of the challenges for
car manufacturers will involve decreasing prices while
maintaining quality and user value, as consumers
increasingly tend to view purchases of new vehicles in
terms of overall acquisition costs rather than only the
purchase price.
Due to cost-cutting pressures, some CE suppliers are
considering or have already undertaken a transfer of
production to regions with lower labour costs – for
example, the Czech cable producer Alcoa Fujikura
Czech has moved to Romania. Some suppliers
have also had to reorganise their operations due to
insolvency.
In the long term, however, an approach based on
cost reduction alone will not necessarily be successful.
Based on continuous development by all players, the
differences between competing brands will become
increasingly insubstantial, especially in terms of
technology, equipment and driving characteristics.
In future, it will also be more difficult to persuade
customers to buy a new car. Manufacturers that
wish to succeed will therefore have to differentiate
themselves from their competitors through advanced
design and use of modern technologies.
In light of anticipated rising oil prices, increasing
consumption in fast growing significant economies
and the accompanying more stringent environmental
requirements, the near future is likely to see
technological development principally in regard to
alternative power sources, including primarily electric
cars, hybrid and hydrogen drives which compete with
conventional models with low emission aggregates.
It is unclear which of the concepts will come out on
top as the most effective, but it is apparent that certain
firms will be able to capitalise on their technological
advantage by strengthening their market positions.
For the time being, firms operating outside Central
Europe, such as Toyota, Honda, Volkswagen or BMW
are pursuing initiatives in this field. However, in this
context, production with alternative power sources c
an also be anticipated in Central Europe in the future.
For these reasons, greater market consolidation and
strategic alliances are expected to further strengthen
co-operation between manufacturers. These initiatives
will lead to greater levels of standardisation and costsharing, particularly with research and development
costs. One example of this type of co-operation is
the Toyota-Peugeot-Citroën Alliance. Wider alliances
can be expected, as well as a trend towards forming
common platforms and aggregates. Mergers and
acquisitions are regular events, and during the past
12 months there have been several transactions
particularly influencing suppliers to the automotive
industry. Examples include the Canadian company
Decoma International, a subsidiary of Magna
International, which acquired Cadence Innovation in
the Czech Republic, and Poland’s Veno which bought
a share in Autogroup.
From the CE customers’ point of view, increased
purchasing power can be expected in the future as
a result of continuous economic development and
the subsequent growth of a prosperous middle class.
Barring any political interventions such as higher tax
rates that negatively influence their net incomes, this
trend will certainly enable new customer growth to
partially offset a general decrease in demand.
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Banking
The banks’ focus has shifted to
the management of existing
portfolios, work-out and
collection.
2008 is a year that bankers will never forget. This was
the year when such leaders of the industry as Lehman
Brothers and Bear Stearns disappeared completely,
when Merrill Lynch was forced to merge with Bank
of America, and when others, like AIG and Citigroup,
almost went out of business.
In our 2008 commentary, we stated that the former
levels of unlimited liquidity in the financial markets
were diminished. No one could have realised then,
however, that after the shock of Lehman Brothers’
fall and the collapse of AIG in September 2008,
inter-bank financing was to cease completely for
several weeks. Owing to the rapid state bail-out
packages and liquidity measures of the Central Banks,
both in the United States and in Europe, the complete
collapse of the international financial system was
avoided. Although global inter-bank markets revived
to some extent some weeks after the initial shock,
this was only through national Central Banks and at
significantly reduced volumes.
With the increased prevalence of risk in the financial
system and growing fears of serious economic
recession, capital fled from equity securities, most
particularly from the developing markets where
stock market indexes fell by 30-60%. Central Europe
was especially badly hit, due to the countries’ high
levels of indebtedness, heavy reliance on exports
and excessive foreign exchange currency exposure
in countries including the Baltic states, Hungary,
Romania, Ukraine and even Poland.
After the collapse of the Icelandic economy, the
International Monetary Fund (IMF) and the EU
immediately decided to provide financial aid to
the most vulnerable CE countries in order to ensure
the stability of the region. There is an important
difference between the US and UK banking crises
and those of Central Europe; in the first countries,
it was the financial institutions that caused the crisis,
while in Central Europe enhanced risk in local financial
systems was caused by problems with the real
economy and the Western parent banks.
Although the exposure of Central European banks
to toxic sub-prime assets was very limited, the
sector’s vulnerability has been and still is very high
for the following reasons:
• In most countries, the loan-to-deposit ratio of the
banking sector is very high, especially in Hungary,
Romania and the Baltics, and also in Ukraine and
Russia. The aggressive lending boom in these
countries was financed by Western European parent
banks.
• In most Central European markets, except for Czech
Republic, Slovakia and Slovenia, the majority of
new lending was placed in foreign currency. With
the depreciation of local currencies against the
Euro (and especially against the Swiss Franc) and
the increased costs of finance, monthly instalments
were substantially enlarged to increase the financial
burden on borrowers, which resulted in increased
defaults.
• Defaults are also increasing due to the economic
recession in the form of higher unemployment,
increased bankruptcy rates and the lack of access
to additional financing for companies.
• In recent decades, the Central European banking
system has only experienced fast and profitable
growth, meaning that the banks’ management and
governance culture were not prepared for the crisis.
The current environment requires a very different
approach and culture.
An analysis of the actual results of the Central
European banks in 2008 might lead one to think
that there is no problem at all with the regional bank
sector, and that the above issues are overstatements.
62
On the other hand, look at the results from the last
quarter of 2008 and the first quarter of 2009 and the
effects of the crisis become obvious. While during
2008 the assets of the top 10 banks increased slightly
(by 1.2%) and profitability by almost 17% year-onyear compared to 2007, in the first quarter of 2009
total assets shrank by 9% (excluding NLB Group)
and profitability by 54% (excluding BCR) year-on-year.
This was mainly due to the risk provision charges
on growing portfolios of non-performing loans.
As a result of the crisis, valuations of Central European
banks decreased to all time lows in relative terms,
reflecting investors’ views of the inherent risk in the
region and the sector itself. Banks with significant
exposure to Ukraine, Romania, Russia and the Baltic
states were especially badly hit by the stock markets.
Their P/TBV (Price to Tangible Book Value of Equity)
in December 2008 decreased even below 1.0x in
some cases compared to historic figures of 3.0x to
5.0x. On the other hand, banks with balanced loanto-deposit ratios and no goodwill on their balance
sheet are still valued at around 1.5x P/TBV. Although
valuations have subsequently improved significantly,
owing to the stock market rally during the late spring
and summer of 2009, they are still substantially below
historic levels.
Due to the disappearance of finance from Western
banks, lending in Central Europe has effectively
come to a halt. There are limited (or even no) new
investment loan or project finance placements in the
region, and debtors are struggling even to renew
their working capital financing. This lack of finance
has further deepened the recession as a result of
reduced investment activity by companies and lower
consumption by individuals. The banks’ focus has
shifted to the management of existing portfolios,
work-out and collection. Most decisions on new
lending have been centralised at the headquarters
of the parent banks. In addition, reward for local
management is now based more on decreasing loanto-deposit or similar ratios than on profitability or
growth. As a result, we are seeing unchanged or even
decreasing banking assets, growing non-performing
loan portfolios, improving loan-to-deposit ratios and
higher interest margins and fee income. However,
overall profitability will remain reduced, during 2009
and even into 2010, due to increased risk costs.
Although the overall composition of the top 10 banks
in Central Europe was unchanged in 2008, there was
some significant movement among them. Hungarian
bank OTP regained its number one slot from ČSOB of
the Czech Republic, as ČSOB was forced to restrict
lending and decrease its exposure due to the financial
health of its parent bank, KBC. Bank Pekao, second
last time, fell to fourth due to shrinking assets.
Česká spořitelna from the Czech Republic and PKO
from Poland moved up to second and third places
respectively. The former seventh-placed Komerční
banka of the Czech Republic overtook the Swedbank
operation in the Baltics to reach sixth position. The
former number eight, BRE Bank of Poland, overtook
BCR of Romania.
In terms of asset growth, BRE Bank was the fastestgrowing of the top 10. Bank Pekao became the
most profitable bank in Central Europe, overtaking
the previous number one, OTP. BCR was able to
increase its profits the most out of the top 10 banks
by doubling its results, though its profit is distorted
by the sale of its insurance assets. Bank Pekao and
Česká spořitelna successfully increased their profits by
76% and 45% respectively, representing an excellent
performance in 2008.
Central Europe was especially
badly hit, due to the countries’
high levels of indebtedness,
heavy reliance on exports and
excessive foreign exchange
currency exposure.
63
Construction
The construction industry and its associated
investments are pillars of the entire European
economy, an important influencer of national
economic development and intrinsic to the GDP
of individual countries. In Central Europe (CE), the
industry has shown solid growth over the last decade,
with construction output growing continuously from
1997 to 2007. This was led by building development,
mainly in recent times by the construction of flats.
This positive trend was interrupted at the end of
2008, when there was a year-on-year decrease of
4.2% in the construction output of EU countries, with
building production down by 4.6% and engineering
construction by 2.5%. The majority of Central
European countries maintained growth throughout
2008, however, with the greatest increases among CE
based EU members being in Slovakia (up by 16.5%),
Romania (13.8%) and Poland (7%). The greatest
decrease was in Slovenia (down by 8.2%).
It is expected that there will be continued
convergence between the fortunes of the
construction industries of the long-established EU
members (the EU-15) and the new member states.
Figures from the fourth quarter of 2008 suggest
that the impact of the financial crisis in CE will be
similar to that on the EU, but lagging some 9 to 12
months behind. Similar convergence may also be
expected in the increased proportion of renovation
and modernisation projects, which at some 43%
represents a significant proportion of the construction
industry in established EU countries.
The first area to begin recovery
will likely be the transportation
construction sector.
In most CE countries, the impact of the global
financial crisis only became significant in the fourth
quarter of 2008, when the region was struck at the
peak of its economic cycle. During 2008, a number
of economic analysts thought that the crisis would
miss some of the region’s fast-growing economies or
that its influence would be minimal. These proved to
be wrong, mainly due to the interconnection of CE
economies with those of the EU. Eurostat announced,
for example, that among the CE countries for which
data were available for June 2009, construction
output rose in the second quarter of 2009 only in
Poland (+0.5%) and in the Czech Republic (+0.2%)
compared with the same quarter of previous year.
The largest year-on-year decrease were registered
in Lithuania (-48%), Romania (-15.5%), Bulgaria
(-10.8%) and Slovakia (-5.4%). But the picture is
far from uniform, the Czech Republic, for example,
saw a year-on-year decrease of 42.6 % in the value
of new building construction orders in the second
quarter of 2009, but 3.3% year-on-year increase in
the value of new civil engineering orders.
The impact of the financial crisis is mainly due to
difficulties in accessing funding for construction and
development projects, the freezing or postponement
of investment activities, a drop in consumer and
business demand and negative expectations for future
development. To date, CE construction companies
have profited from completed orders; a change will
come in 2009, when historic orders will be completed
with few to replace them.
Recovery of the CE construction industry is expected
during 2011-2012, but the picture is far from
uniform. The first area to begin recovery will likely
be the transportation construction sector, followed
by building, led by the increased proportion of
renovations and modernisations and non-residential
construction. The construction of residential buildings
will see the slowest increase, due to the damaged
confidence of private investors.
Several years of economic boom, driven by the
inflow of foreign investment and the growing buying
power of the population, saw the CE construction
levels exceed those of the EU-15, leading to market
saturation in some areas. Combined with the financial
crisis, this accelerated the slowdown, resulting
in a rapid decrease of development projects and
pushing several developers to the brink of survival.
A number of real estate investments were frozen
and the yield required from real estate increased,
resulting in a decrease in land values. In the first half
of 2009, there was an 86% year-on-year decrease in
investments in commercial real estate.
Mergers and acquisitions, with
the aim of market consolidation
and risk diversification can be
anticipated in more fragmented
markets like Romania, Bulgaria
and Poland.
Money from EU funds has driven some significant
infrastructure projects, predominantly in Poland
where infrastructure is insufficient. As a result of
unfinished social reforms and a significant decrease
in the income of public budgets due to reduced tax
receipts, a number of CE countries may, however,
experience decreased public construction investments
as governments elect to focus on mandatory
expenditure. The suspension of several significant
infrastructure projects was announced in the first
half of 2009. For example, the Czech Republic
faces a potential shortfall in the construction and
maintenance of its transport infrastructure of EUR
2 billion, with a threat to almost 300 construction
projects.
The Polish company Polimex-Mostostal moved up
to second, while the Metrostav group, operating
in the Czech Republic and Slovakia, was third. The
year-on-year sales increase among the 10 largest CE
construction companies was 15.5% in 2008, but their
sales decreased year-on-year by 16.9% in the first
quarter of 2009. In 2008, their net profits increased
year-on-year by 32.4%, followed in the first quarter
of 2009, by a year-on-year decrease of 8%. Given first
quarter performance, it is evident that CE construction
companies have been focused on savings in 2009,
with some restructuring to achieve more efficient
management structures.
The CE construction market has historically been
somewhat fragmented. For example, the market
share of the top five Romanian and Polish companies
is under 5% and 12% respectively. On the other
hand, some markets have already experienced
consolidation, in Slovakia for example where the top
five companies have a market share of over 30%. The
situation is similar in Hungary and the Czech Republic,
with the top five sharing close to 30% and 23%
respectively. Mergers and acquisitions, with the aim
of market consolidation and risk diversification can be
anticipated in more fragmented markets like Romania,
Bulgaria and Poland.
The construction industry continues to account
for a relatively high proportion of individual
countries’ GDP, exceeding 11% in 2008 and 2007.
The proportion is highest in the Czech Republic,
followed by Slovakia. In 2008, the proportion of
the construction industry to GDP increased in all CE
countries except for Romania, Bulgaria and Croatia.
It is anticipated that this proportion will decrease
across the region in 2009 and more notably in 2010.
Approximately 2.2 million people were employed in
the construction industry in the CE region in 2008,
an increase of some 2% from 2007. The continuing
impact of the crisis on the construction sector is
expected to cause a decrease in employee numbers
of between 7% and 10%.
In 2007 and 2008, the region’s largest company was
the Skanska CS group, operating in the Czech and
Slovak construction markets.
64
65
Consumer Business
A look at the largest players in this industry shows
that many of the foreign-owned multinationals have
subsidiaries operating in Central Europe (CE). At the
same time, large, privately-owned local players are
emerging to operate outside their home territories.
In the current economic downturn, some of the
largest players in the retail sector appear to be
rethinking their country-level strategies and there
have been several exits by retailers from local markets.
At the same time several countries have either
adopted or are considering new legislation which
targets business practices in the retail chain, including
payment terms between individual companies.
This appears to be an example of the legislative
convergence expected in the retail industry.
In the short term, consumer business (CB) companies
will be focused on market share and positioning to
emerge stronger from the downturn. It was relatively
easy to do well when the market was growing rapidly
but the current environment will determine which
companies have the right strategies.
The key drivers in the CB industry are defined by the
end consumer. Many households, like businesses,
will need to rebuild their balance sheets. That means
reducing debt and increasing savings. But achieving
this in an environment of reduced credit availability
and rising unemployment will be challenging and the
rebalancing process will take some time. Accordingly,
consumer spending is likely to take much of the
strain. In particular, big-ticket spending, from home
improvements to consumer electronics, is coming
under the greatest pressure.
Consumers have not stopped
spending, but they are spending
differently.
66
Consumers will be intensely value-oriented, even
more than in the recent past. We are seeing this
already with consumers both trading down in what
they buy and shifting to more price-focused retailers.
Consumers have not stopped spending, but they
are spending differently. The result is a focus on
cost-cutting on the part of the retailers in order to
maintain competitive pricing.
A recent Deloitte survey indicated that many
businesses will be focusing on cost and price-related
factors over the coming year as they face up to the
challenges of the economic downturn and changing
consumer purchase behaviour. This means that costreduction will be the top priority for a majority of
consumer products businesses in 2009 and beyond.
At present, a very real gap exists between the
increased input costs that companies have faced and
the extent to which they have been able to recover
them. Pricing strategy is becoming a key area of focus
to protect and improve trading performance.
Some important questions which consumer products
companies are considering today include:
• How are shopper and consumer needs changing,
both in the short and longer terms?
• Is our historical market segmentation still relevant?
• What is the most effective way of communicating
our brand value proposition given the
fragmentation of media and the barrage of
messaging that consumers and shoppers receive?
• How can we most effectively integrate messaging
outside the store with that at the point of purchase?
• How can we keep our existing customers and
consumers loyal, and win new ones?
• What do we need to do to adapt our business
model to establish the capabilities needed to
compete effectively in today’s marketplace?
• Where do opportunities exist to improve
operational efficiency and reduce costs?
In answering these questions, to claim that there
is a ‘one size fits all’ recipe would be a great oversimplification. Different businesses find themselves
with differing priorities. For many mid-sized and
smaller suppliers, especially those carrying significant
debt such as many private equity-owned businesses,
cash flow and liquidity are the critical issues,
alongside pressure on prices and margins and the
need to reduce costs. Larger, better-capitalised
businesses, while also focused on costs, are often
more focused on tracking and anticipating changes
in the market by category and geography, and
prioritising investment accordingly to meet the
changing consumer and shopper needs.
Below we identify three critical areas that all
businesses should think about when developing
a strategy appropriate to their particular situation:
• Strengthen the balance sheet – focus on sources
of funding, working capital and cash management.
• Optimise trading performance – focus on
commercial and operational excellence, how to
win in the current market by maintaining/growing
market share with reduced resources while carefully
managing pricing and costs.
• Build confidence among stakeholders – focus on
leading and motivating people in a downturn,
managing shareholder interactions and expectations
and collaborating with suppliers and other business
partners.
winner exceeding sales of EUR 10 billion in 2008 but
the second place would belong to TESCO and third to
Phillip Morris. Overall, the top 10 industry ranking did
not register any significant movements against 2007,
which only goes to prove that key market players
in CE have not been affected significantly by the
economical slowdown at the end of 2008.
In the short term, consumer
business companies will be
focussed on market share and
positioning to emerge stronger
from the downturn.
For 2009, it can be expected that the growth most likely
will not reach similar rates as in the previous years given
the rising unemployment and tighter credit availability
which is expected to negatively impact the consumer
business industry. The fourth quarter of 2009 should
paint an interesting picture which will show if the
different strategies which the companies are adopting
to cope with the current market situation will prove to
be successful.
A glance at the largest company in the industry shows
no surprises, as METRO Group’s (Grupa Metro w
Polsce) subsidiary in Poland followed up on its first
place in 2007, achieving sales of EUR 5.9 billion which
means a spectacular growth of 36.7% compared
to 2007 (26.9% in local currency). However, when
discussing the CB industry, one should take into
consideration the entire CE region as a whole since
this can offer a better perspective. The METRO Group
which is operating in 9 countries in the CE region
including Ukraine would still emerge as the clear
67
Recent developments in the CE
region go to prove the critical
importance of energy security in
Europe’s energy policy.
As with any other sector in Central Europe (CE),
the energy and resources (E&R) industry did not go
unaffected by the global economic crisis and two
key areas of impact can be identified as being of
particular significance.
The first is the development of the market prices for
the industry’s key outputs. For example, by mid-2009,
the future prices for electricity had decreased some
40% year-on-year with a similar trend underway in
the oil and gas industry. This trend is the result of the
second key area of impact, namely the pronounced
decrease in demand, mainly by industrial customers.
These changes are both temporary and fundamental.
The changes in the demand for the industry’s outputs
are directly driven by the phase of the economic cycle
and could be therefore considered as temporary.
The indirect impact of these price reductions is on
the stalling of investments in the construction of
new production capacities. Such investments have
a long-term impact and can therefore be considered
as fundamental to the industry.
68
Demand for the sector’s outputs in Central Europe
was driven by the impact of the overall economic
slowdown in the European Union (EU). However, the
key macroeconomic indicators in the second quarter
of 2009 for Germany outline an improvement in the
economic situation and so provide a glimmer of hope
for an increase in demand for the industry’s products
and services.
The entire industry faced a different type of crisis in
January 2009 following a dispute between Russia
and Ukraine over gas supplies to a number of
Central European countries. The crisis exposed weak
spots and risks not only to the CE region’s natural
gas market but also to all of Europe in the area of
alternatives for gas in the short term. These recent
developments in the CE region go to prove the critical
importance of energy security in Europe’s energy
policy.
The energy and resources industry was influenced
by price developments for both the outputs and
inputs. The lower fuel prices enabled the electricity
producers to keep their margins at an acceptable level
after a reduction of costs in their main areas. On the
other hand, companies from the oil sector suffered
substantial reductions in both revenues and net
income due to the extremely low prices of oil during
the last 12 months.
The chance to significantly change business models
in the short term is not easy due to the principles of
the business itself and the long-term character of
investment. The whole energy and resources sector
is substantially consolidated and the potential for
further mergers is therefore limited. This year’s CE Top
500 results confirm the very strong relations between
Central Europe and the EU-15. The energy market is
more and more integrated and has an increasingly
European dimension. Most of the key European
players are influenced by the negative market
developments with high pressures on their margins.
The energy market is more
and more integrated and has
an increasingly European
dimension.
This year’s ranking was led by PKN Orlen and MOL,
reflecting the 2007 results. MOL has strengthened its
position in Croatian INA and purchased a stake in an
Italian refinery in Mantova. The third place for ČEZ
illustrates the on-going success of the company on
the energy markets in Central Europe. ČEZ continued
with building its business across the region including
a joint venture with Javys, the Slovak state-owned
nuclear and decommissioning company to build
a nuclear power plant in Jaslovské Bohunice in
Slovakia. Javys owns 51% in the venture. The project
is expected to cost between EUR 4 billion and EUR 6
billion.
69
Insurance
2008 was a very challenging year for Central
European (CE) insurance markets, marked by the most
severe economic crisis. The degree to which insurance
markets in the region were touched by the crisis
differs from country to country, as does the severity
of the economic crisis. Stakeholders of all kinds have
concerns: customers worry whether companies can
fulfil their promises regarding investment guarantees
and insurance benefits; foreign shareholders are
concerned by collapsed share prices, exposure to bad
assets, reduced returns on equity and increased levels
of commercial risk, such as counterparty defaults and
borrowing rate spreads; finally, regulatory authorities
and governments are uncertain about the financial
soundness of the whole insurance sector.
As with 2008, the 10 largest companies are based in
four countries and it is not expected that this situation
will change in the near future. These countries are
Poland (five companies), the Czech Republic and
Hungary (two each) and Slovenia (with one). The
Czech Republic, Hungary and Slovenia are represented
by the same companies as in 2008, but there has
been a spectacular change in the list for Poland, with
AEGON losing its position to be replaced by ING.
This change is associated with the strongest trend
at play in the Polish life insurance market: a shift in
the product mix. The market share of unit-linked
products, where the investment risk is borne by the
policyholder, dropped significantly. Simultaneously,
the share and the nominal written premium of
products offering investment guarantees grew
significantly. These guaranteed products represent
a very wide product portfolio, ranging from quasiinsurance deposit products (with a very small
insurance element), through traditional life insurance
products such as endowments, to structured bonds
70
with a guaranteed return through paid-premium and
investment income that depends on the performance
of selected market indices. Despite this change in
the product mix, the life insurance market in Poland
grew by more than 50% in local currency and remains
the largest market in Central Europe. In its growth
strategy for 2009-2011, which was announced
publicly at the end of 2008, PZU, the leader in the
Polish and CE markets, has identified M&A activity
as one of the most important growth opportunities
in the CE region. At the same time, the company is
undertaking a major cost-cutting programme.
The Czech insurance market was not seriously
affected by the financial turmoil of 2008, showing
continuous written-premium growth in both life
and non-life business. The Generali PPF Holding and
Vienna Insurance Group represent nearly two thirds
of the Czech insurance market, where we observed
some interesting initiatives aimed at improving
market efficiency and competitiveness in 2008. For
example, market leader Česká pojišťovna (part of
Generali PPF Holding) reshaped the Motor Third Party
Liability (MTPL) tariff to include more risk factors
which made it more flexible and competitive. Česká
pojišťovna has also announced a transformation
project focused on a new sales strategy, involving
a new organisational structure, a new career plan,
an emphasis on appropriate care about customers’
portfolio and a new sales approach based on financial
advisory principles. Both Czech insurers in the top
10 list (Kooperativa and Česká pojišťovna) registered
healthy growth at 5.6% and 12.3% respectively in
local currency.
In Hungary, we observed a significant decrease
in written premiums from unit-linked products,
amounting to 14% in the local currency. Unlike in
Poland, however, where the whole market registered
growth thanks to increased sales of other life
products, here it led to a contraction of the whole life
market (9% in the local currency). The non-life market
was stable, with a small decline in CASCO written
premiums (3% in the local currency). CASCO written
premiums are usually strongly associated with sales
of new cars, which shrank by around 10% in 2008.
We observed a change in the MTPL market. The
market leader, Allianz is trying to compete on price in
a process of commoditisation that is also underway in
Slovakia.
The Triglav Group continues to be Slovenia’s leading
insurance group. Its strong development has
helped Triglav to generate healthy profits, but the
company’s life business has been affected by the
global financial crisis. This has, however, been offset
by higher growth in non-life insurance.
Across the whole region, we have observed a rapid
growth in direct insurance, especially in the motor
sector, although the channel’s overall market share
is still very small. We believe that the direct channel
may be the right choice for players in markets
where insurance is considered to be a commodity,
with many customers regarding price as their main
priority rather than the quality of cover or service
levels. Currently, the growth-leaders within the direct
insurance channel are registering double-digit growth
in written premiums.
Despite the current gloomy outlook, we believe that
this once-in-a-generation crisis will trigger some
significant transformations in the near future, as
insurers grasp the opportunity to improve efficiency
across the sector. Initiatives may vary from costoptimisation programmes to complete business-model
redefinition. We also believe that there are a number
of M&A opportunities in the region, which may be
suitable both for ‘insiders’ and companies which are
as yet not present in Central Europe. The next 6 to 18
months may reshape the CE insurance market for the
next decade.
Despite the current gloomy
outlook, we believe that this
once-in-a-generation crisis will
trigger some significant
transformations in the near
future, as insurers grasp the
opportunity to improve
efficiency across the sector.
In the last year, we have seen several product
innovations in both life and non-life insurance, some
of which – including unemployment insurance, which
complements credit, mortgage or life insurance –
have generated successful sales. Others, though, such
as variable annuities, have not generated significant
premium income, and several such projects across the
region have been cancelled or put on hold.
71
Technology, Media
The fact that the technology
and telecommunications
segments are made up of
multinational groups can be
simply explained by the level
of experience and scale needed
to succeed in these businesses.
Technology, Media and Telecommunications (TMT)
is a dynamic industry that reinvents itself every few
years. 2008, though was a relatively stable year,
with moderate revenue growth, reasonable margins
(although they decreased on average) and no major
transactions or eye-catching news. So, was it a dull
year?
Certainly not. Under this superficial impression of
stability, there was an ongoing fight for customers,
with continuous reductions in unit prices and
constant invention of new products and customer
care solutions. This was particularly apparent in the
telecommunications sector, which introduced faster
broadband internet speeds by utilising new and more
efficient technologies.
In television broadcasting, growth was largely
affected by the pressure of declining income from
advertising revenues. This was particularly marked
in Ukraine and Romania, as the traditional large
spenders reacted quickly to the turbulent economic
climate by cutting their marketing budgets. Recent
industry estimates show that TV advertising spend
is expected to suffer from double digit-decline
throughout all Central European markets. Conversely,
TV viewing figures, and the average time spent
watching, is expected to rise as a result of increased
unemployment.
72
It might therefore seem that more advertisers would
wish to grasp the opportunity of reaching a larger
audience at discounted prices, thereby offsetting the
initial drop in demand and stabilising the market.
However, this has not happened as advertisers have
instead flocked to the Internet which promises new
business models that target customers more precisely
and provide a more accurate measure of return on
investment.
The Internet media segment is likely to continue its
growth story of 2008 as advertising spend is expected
to post double-digit growth in 2009. Increasing
broadband penetration and higher speeds should give
the Internet a competitive advantage as users are able
to access higher quality content. Such an environment
should attract major advertisers, due to the better
customer targeting and measurement of marketing
spend that it allows. Additionally, traditional media
outlets such as TV and print are increasingly investing
in the Internet to offset their stagnating advertising
sales in the increasingly saturated markets of the CE
region. That said, it is still unlikely that print media
will disappear in the next decade, although it will
need to explore more efficient business models and
cost structures in order to maintain or return to
profitability.
The traditional print segment declined globally in
2008, and is expected to decline in 2009 due to
reduced income from advertising, caused mainly
by the rise of the Internet which has eaten into the
audience for print media. However, Central Europe
was less affected than other regions due to its strong
readership base, as its largest regional publishers
proved, including Bauer Media which managed to
increase revenues by 52% and more than double
its net profit in 2008. The current economic climate
is likely to benefit such larger and more diversified
players, as they are better equipped to cope with
a drop in demand.
However, media companies did not top the ranking,
these slots being occupied by large telecom operators
and high-technology consumer goods companies.
Both sectors have experienced some degree of
saturation in product demand as compared to
previous years and therefore share the need to
continue promoting new products and services to
maintain growth. In telecoms, broadband Internet
access – using both wired and wireless technologies
– was the product in highest demand. Broadband is
by no means a recent innovation, but 2008 saw it
at the top of the industry agenda as growth in voice
business is clearly coming to an end as penetration
rates of landlines have been consistently decreasing
in majority of CE markets. The high-technology
consumer goods companies are launching new HD
TV-sets, phone handsets, laptops and cameras every
week to compensate for the falling prices of products
that were bestsellers just a few months earlier.
There was a limited amount of significant
developments on the M&A front in 2008. The lack of
transactions was mainly caused by the unavailability
of funds and gap in the valuation expectations of
both buyers and sellers. Notable transactions in
the media sector throughout 2008 included the
acquisition of Nova Televizia by the Modern Times
Group, and CME’s acquisition of a majority share
in TV2 Channel and Ring-TV. These transactions
all took place in Bulgaria, indicating the strategic
importance of this market for both these major CE
players. Consolidation among IT integrators provided
a representative example of M&A activity in the
technology sector, as Ness Technologies acquired
Logos to strengthen its IT services portfolio in the
Czech Republic. In the telecommunication sector,
Deutsche Telekom continued to solidify its market
presence in the region with the acquisition of
a significant stake in Hellenic Telecommunications
Organization (OTE), a Greek telecommunications
operator which is mainly present in Albania, Bulgaria,
Romania and Serbia.
Early 2009 brought some significant deals, when in
March 2009 Time Warner acquired a 31% interest in
CME, the leading regional TV broadcaster. Another
notable transaction occurred in April 2009, when
cable TV operator UPC Slovenia was acquired by Mid
Europa Partners, a private equity firm.
The TMT industry in Central Europe has for many
years now been dominated by multinationals
including Samsung, Nokia, Panasonic, HewlettPackard, IBM, Bauer Media, Deutsche Telekom, France
Telecom, Telefónica, Vodafone, and UPC. Of the three
segments, only media is to a large extent represented
by local companies – or strictly speaking, by groups
whose major business is located in Central Europe,
such as CME, ITI, Polsat, Agora and Tisak.
The fact that the technology and telecommunications
segments are made up of multinational groups can be
simply explained by the level of experience and scale
needed to succeed in these businesses. The exception
with the media sector results from the greater ability
of local businesses to produce high-quality local
content.
There are some interesting cases which demonstrate
how certain Central European-grown and based
companies are increasing in importance in the
industry. One example is Asseco, a group formed
following the merger of several Polish IT-integration
companies and foreign acquisitions from beyond
Central Europe, which is now among the largest
integrators on the continent. Others include GTS, an
integrated Central European B2B telecom operator,
and RCS-RDS, a Romanian multi-technology telecom
group that is expanding into the neighbouring
countries.
Increasing broadband
penetration and higher speeds
should give the Internet
a competitive advantage as users
are able to access higher quality
content.
73
Public Sector
In the new economic environment in which the
countries of Central Europe (CE) find themselves,
the traditional roles of business and government
are rapidly being redefined as the private and public
sectors become increasingly interdependent.
Perhaps this is inevitable in a time of such crisis,
following in some cases up to two decades of
transformation, during which the economies of CE
have been subject to the impact of global capitalism
in the form of privatisation of previously state-owned
businesses, significant inflows of foreign direct
investment and sweeping modernisation. In many
instances, this resulted in the partial replacement of
centralised government planning with the vagaries
of the market place, in which projects are driven as
much by profit potential as social, infrastructural or
economic need.
At the moment that the economic crisis hit the
region – dating in the main from mid-to-late 2008 –
the rapid ascendancy of business as an increasingly
independent force equally came to a rapid halt in
many countries. In some instances, governments have
had to intervene completely to stave off collapse,
while in others governmental stimulus spending has
been marshalled to address economic volatility and
introduce stability.
Stimulus spending of this sort is increasing in areas
such as health, infrastructure, energy and education.
Commercial sectors will, as a result, face increased
accountability for their participation in publicly-funded
projects, and will need to navigate new legislative and
regulatory frameworks which exercise increased levels
of control over their activities.
As a result, both sides of the divide have some
highly significant questions about their role and
their exposure to risk. On the government side,
these include the need to understand choices,
the risks involved with entering into partnerships,
deal structures and best practice. Commercial
organisations, meanwhile, want to understand how
best to protect their own interests, what stimulus
spending they are eligible for, and how they should
adhere to related regulatory and governance
conditions.
This is not to underplay some of the lessons that
business can teach government, however, which has
the responsibility to look beyond the problems of the
moment to focus on the distant horizon. A number
of factors are underway in the CE region today,
which make meeting this responsibility particularly
challenging in the light of such increases in public
spending.
CE governments will need to address their
operational structures, away from a siloed,
hierarchical and bureaucratic approach
towards one that is driven by the true needs
and preferences of their citizens.
74
First, governments need to restrain budget deficitgrowth in the face of the economic crisis and the
continually increasing expectations of their citizens
for better value, improved service quality and greater
accountability for how their taxes are spent. Ageing
populations are a common trend throughout the
region, placing further pressure on government
finances, while the number of workers and taxpayers
is in decline.
In addition, governments in CE are facing the need
to reorganise their development activities to comply
with the strict eligibility criteria for EU development
funding. Many countries, too, are receiving direct
assistance from the International Monetary Fund
(IMF), which also imposes its own criteria.
Such forces mean that CE governments will need
to address their operational structures, away from
a siloed, hierarchical and bureaucratic approach
towards one that is driven by the true needs and
preferences of their citizens.
In other words, they will need to undergo a process
similar to that which the region’s businesses have
undertaken during the last 20 years, which has
been driven by their exposure to the power of the
marketplace
The speed at which the economic crisis hit the
countries of Central Europe demonstrates the urgency
of this need for change. And it is through a truly
bi-partisan, dynamic relationship with business that
it can be most effectively achieved.
75
Appendix 1:
CE Top 500 ranking
77
78
79
MVM
Skupina Mercator
Magyar Telekom
Tesco
46
47
48
ArcelorMittal Kryvyj Rih
43
U.S. Steel Košice
Vilniaus prekyba
42
44
Petrol Group
41
45
Rompetrol
Slovenský plynárenský
priemysel
39
Kompania Węglowa
38
40
Panrusgáz
Foxconn
36
ČEZ Prodej
35
37
Unipetrol Rafinérie
Samsung Electronics
Slovakia
33
Lukoil Neftochim
32
34
KGHM
Tauron
30
Jeronimo Martins
Dystrybucja
29
31
INA Group
NIS
27
28
E.ON Földgáz Trade
26
Poland
Hungary
Slovenia
Slovakia
Hungary
Ukraine
Lithuania
Slovenia
Slovakia
Romania
Poland
Czech Republic
Hungary
Czech Republic
Slovakia
Czech Republic
Bulgaria
Poland
Poland
Poland
Serbia
Croatia
Hungary
Croatia
Agrokor
25
Poland
Country
ArcelorMittal Poland
24
Slovakia
Czech Republic
Czech Republic
Poland
Czech Republic
Ukraine
Ukraine
Romania
Poland
Hungary
Lithuania
Poland
Slovakia
Poland
Poland
Hungary
Poland
Ukraine
Czech Republic
Czech Republic
Ukraine
Rank Company name
Unipetrol
Slovnaft
22
Agrofert Holding
21
23
RWE Transgas
Fiat
19
Ukrainian railway state
company
18
20
Petrom
Energorynok
16
Lotos
15
17
Mažeikių nafta
Nokia
13
14
TPSA
12
PGE
9
PGNiG
Audi Hungária
8
Volkswagen Slovakia
Grupa Metro w Polsce
7
10
Naftogaz of Ukraine
6
11
Škoda Auto
ČEZ
4
5
MetInvest Holding
3
Hungary
Poland
PKN Orlen
MOL
1
2
Country
Rank Company name
Consumer Business
and Transportation
Technology, Media
Consumer Business
and Transportation
Manufacturing
Manufacturing
Consumer Business
and Transportation
Technology, Media
Technology, Media
Consumer Business
and Transportation
Consumer Business
and Transportation
Industry
Manufacturing
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Technology, Media
Technology, Media
Manufacturing
Manufacturing
Consumer Business
and Transportation
Manufacturing
Manufacturing
Industry
All revenue and net income figures are in EUR million
Retail
Telecommunications
Retail
Process Industries
Power and Utilities
Process Industries
Retail
Oil and Gas
Oil and Gas
Oil and Gas
Mining
Technology
Power and Utilities
Power and Utilities
Technology
Oil and Gas
Oil and Gas
Power and Utilities
Mining
Retail
Oil and Gas
Oil and Gas
Power and Utilities
Wholesale and
Distribution
Subindustry
Process Industries
Oil and Gas
Oil and Gas
Consumer Product
Companies
Automotive
Oil and Gas
Transportation
Power and Utilities
Oil and Gas
Oil and Gas
Technology
Oil and Gas
Telecommunications
Automotive
Oil and Gas
Power and Utilities
Automotive
Retail
Oil and Gas
Power and Utilities
Automotive
Process Industries
Oil and Gas
Oil and Gas
Subindustry
2007-2008
2,662.8
2,678.8
2,708.6
2,836.8
2,870.6
2,891.7
2,909.1
2,949.6
3,014.4
3,029.8
3,038.9
3,059.8
3,110.4
3,132.9
3,265.0
3,305.2
3,515.0
3,527.1
3,603.2
3,642.4
3,725.4
3,757.9
3,770.7
10.9
-0.5
10.8
-7.7
14.9
6.0
25.7
39.8
26.6
36.5
39.7
0.6
66.8
24.2
-0.7
29.1
22.2
66.6
1.0
53.1
17.9
14.4
20.9
35.7
2008
3,829.7
Revenue
change (%)
N/A
15.3
23.5
35.3
40.2
53.8
9.7
N/A
23.5
33.7
N/A
98.6
7.2
-9.6
19.2
-3.9
0.0
36.7
49.7
15.8
2.8
60.5
36.3
Revenue from
sales
3,870.1
3,912.9
3,934.5
4,063.6
4,306.3
4,351.0
4,379.6
4,496.8
4,551.3
4,639.5
5,017.7
5,074.1
5,172.0
5,172.9
5,248.1
5,864.7
5,908.4
5,924.0
6,609.9
7,281.7
8,379.0
9,136.1
14,069.6
34.3
2007-2008
2008
22,645.7
Revenue
change (%)
Revenue from
sales
76.6
420.3
40.8
338.2
157.8
611.8
243.0
-54.8
616.8
-196.2
10.8
-44.0
11.3
47.9
-29.5
-29.3
-242.0
-17.1
787.5
N/A
-49.4
-152.0
-50.2
33.5
2008
Net income
N/A
25.0
2.6
177.6
88.8
402.4
-1.4
N/A
277.8
-111.0
N/A
15.9
623.6
283.2
246.5
760.3
N/A
N/A
1,524.4
1,898.3
433.7
1,938.1
562.1
-719.4
2008
Net income
29.3
44.6
-7.0
-16.7
9.2
11.0
122.1
N/A
9.4
-77.2
94.9
N/A
N/A
-35.0
-128.0
-131.4
N/A
-55.5
-24.3
N/A
-161.8
N/A
-124.9
-46.0
2007-2008
Net income
change (%)
N/A
-88.9
-94.2
32.8
-3.8
-12.7
N/A
N/A
-47.9
-151.6
N/A
-38.6
3.7
25.8
1.8
-39.7
N/A
N/A
N/A
23.2
-24.7
91.3
-46.2
N/A
2007-2008
Net income
change (%)
556.7
541.2
618.0
N/A
N/A
N/A
N/A
555.0
N/A
37.0
605.9
N/A
N/A
N/A
N/A
N/A
N/A
447.7
582.5
N/A
N/A
608.0
N/A
739.2
Q1 2009
Revenue
from sales
N/A
526.0
525.8
N/A
1,039.5
1,659.7
627.6
N/A
711.9
604.0
N/A
652.3
958.7
N/A
1,418.3
N/A
N/A
N/A
N/A
1,931.2
1,519.0
N/A
2,147.5
3,268.8
Q1 2009
Revenue
from sales
-12.5
-13.7
1.2
N/A
N/A
N/A
N/A
-14.3
N/A
-61.7
-15.5
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-37.6
N/A
N/A
-22.2
N/A
3.7
Q1 2008-Q1 2009
Revenue
change (%)
N/A
-40.6
-39.3
N/A
-0.4
42.9
-31.6
N/A
-29.4
-39.4
N/A
-37.7
-24.3
N/A
-4.9
N/A
N/A
N/A
N/A
1.6
-33.3
N/A
-29.2
-34.8
Q1 2008-Q1 2009
Revenue
change (%)
80
81
Enea
Eurocash
DTEK
Donetskstal
92
93
94
95
Ukrtatnafta
ArcelorMittal
88
89
PS Merkator
Philip Morris
87
91
Linnik
86
Lasy Państwowe
Kyivstar
85
90
Slovenské elektrárne
Poczta Polska
83
TNK-BP Commerce
82
84
PSE Operator
Toyota Peugeot Citroën
Automobile Czech
80
Panasonic AVC Networks
Czech
79
81
Automobile Dacia
Agip Česká republika
77
78
ArcelorMittal Ostrava
Kia Motors Slovakia
73
76
Čepro
72
PGE Górnictwo i Energetyka
Makro Cash and Carry
71
OKD
Poland
Rank Company name
74
Country
Lotos Paliwa
70
75
Poland
Volkswagen
Ukraine
Ukraine
Poland
Poland
Slovenia
Poland
Romania
Ukraine
Poland
Ukraine
Ukraine
Poland
Slovakia
Ukraine
Czech Republic
Poland
Czech Republic
Czech Republic
Romania
Czech Republic
Czech Republic
Poland
Slovakia
Czech Republic
Poland
Poland
Hungary
Poland
Poland
Hungary
Poland
69
Carrefour
63
Ukraine
PTC
Bogdan
62
Poland
68
Centertel
61
Bulgaria
Tesco-Global Áruházak
Lukoil Bulgaria
60
Lithuania
67
Maxima
59
Poland
Energa
PKP
58
Hungary
66
E.ON Hungária Energetikai
57
Hungary
Suzuki
Philips Magyarország
56
Hungary
Polkomtel
Samsung Electronics
Magyar
55
Slovenia
64
Petrol
54
Bulgaria
Czech Republic
Poland
65
Moravia Steel
BEH
BP
51
52
Telefónica O2
50
53
Hungary
GE Hungary
49
Czech Republic
Country
Rank Company name
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Public Sector
Manufacturing
Consumer Business
and Transportation
Technology, Media
Public Sector
Manufacturing
Technology, Media
Manufacturing
Manufacturing
Manufacturing
Consumer Business
and Transportation
Industry
Manufacturing
Technology, Media
Consumer Business
and Transportation
Technology, Media
Manufacturing
Consumer Business
and Transportation
Manufacturing
Technology, Media
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Technology, Media
Manufacturing
Technology, Media
Manufacturing
Industry
Process Industries
Power and Utilities
Retail
Power and Utilities
Retail
National Government
Process Industries
Oil and Gas
Consumer Product
Companies
Oil and Gas
Telecommunications
Postal services
Power and Utilities
Oil and Gas
Automotive
Power and Utilities
Technology
Oil and Gas
Automotive
Process Industries
Mining
Power and Utilities
Automotive
Oil and Gas
Retail
Subindustry
Oil and Gas
Automotive
Telecommunications
Consumer Services
Power and Utilities
Telecommunications
Automotive
Retail
Automotive
Telecommunications
Oil and Gas
Retail
Transportation
Power and Utilities
Industrial Products
and Services
Technology
Oil and Gas
Power and Utilities
Process Industries
Oil and Gas
Telecommunications
Industrial Products
and Services
Subindustry
1,689.2
1,696.7
1,745.3
1,753.3
1,780.2
1,791.8
1,841.1
1,859.3
1,878.6
1,895.2
1,929.6
1,935.0
1,935.4
1,938.5
1,964.4
1,971.7
2,004.5
2,075.5
2,076.5
2,101.5
2,124.5
2,135.4
2,145.4
2,158.0
20.8
30.4
39.7
21.8
4.6
8.5
-11.7
-23.0
-2.5
-5.9
20.6
12.3
36.3
4.8
6.3
6.8
20.6
103.0
-0.2
18.1
47.3
N/A
33.6
38.5
3.5
2007-2008
2008
2,202.8
Revenue
change (%)
N/A
6.6
14.9
19.6
26.1
17.1
9.3
26.3
91.1
15.3
32.5
24.8
2.3
11.9
-13.3
27.1
34.7
23.2
17.2
13.2
15.2
Revenue from
sales
2,229.2
2,240.6
2,255.0
2,293.2
2,408.1
2,415.1
2,425.5
2,437.1
2,447.4
2,458.3
2,465.4
2,487.0
2,562.5
2,565.2
2,580.8
2,588.0
2,605.4
2,608.7
2,615.4
2,624.4
2,647.8
3.9
2007-2008
2008
2,656.5
Revenue
change (%)
Revenue from
sales
-47.1
15.6
22.4
61.3
32.1
65.0
154.2
N/A
46.2
-103.9
N/A
-39.7
159.7
-63.3
56.1
32.2
N/A
-16.5
60.3
368.1
394.6
N/A
48.1
20.4
N/A
2008
Net income
N/A
99.0
N/A
53.0
118.0
387.0
18.4
N/A
-142.9
408.3
-0.8
116.0
N/A
N/A
N/A
22.3
-64.4
43.9
59.7
-29.9
466.2
351.8
2008
Net income
-151.9
-91.0
43.5
-55.5
-9.3
-47.2
58.3
N/A
-23.4
N/A
N/A
N/A
49.6
N/A
56.0
-27.0
N/A
N/A
-54.5
3.1
81.9
N/A
82.9
137.2
N/A
2007-2008
Net income
change (%)
N/A
1.5
N/A
10.3
75.7
7.9
-56.2
N/A
N/A
2.5
-105.1
38.1
N/A
N/A
N/A
-58.8
N/A
-55.4
-48.3
-157.9
24.6
-27.5
2007-2008
Net income
change (%)
N/A
362.4
330.5
419.0
413.0
N/A
N/A
N/A
N/A
237.9
N/A
N/A
N/A
330.1
N/A
N/A
N/A
N/A
N/A
N/A
253.2
N/A
N/A
308.1
N/A
Q1 2009
Revenue
from sales
N/A
395.7
N/A
N/A
N/A
449.3
N/A
N/A
N/A
N/A
N/A
N/A
N/A
700.9
N/A
N/A
463.0
N/A
N/A
406.9
568.2
N/A
Q1 2009
Revenue
from sales
N/A
-9.8
-3.6
-4.8
0.8
N/A
N/A
N/A
N/A
-45.7
N/A
N/A
N/A
-30.6
N/A
N/A
N/A
N/A
N/A
N/A
-56.0
N/A
N/A
-29.0
N/A
Q1 2008-Q1 2009
Revenue
change (%)
N/A
-37.3
N/A
N/A
N/A
-20.8
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-4.1
N/A
N/A
-17.5
N/A
N/A
N/A
-6.4
N/A
Q1 2008-Q1 2009
Revenue
change (%)
82
83
Dunaferr-Csoport
Atlant-M
Aurubis
Petrotel Lukoil
137
138
139
Gorenje Group
134
T-Mobile Czech Republic
J&S Energy
133
135
Sony Slovakia
132
136
Interpipe
ČEZ Distribuce
130
131
OMV Česká republika
129
Makro Cash & Carry ČR
126
Ukrgaz-Energo
PTT
125
České dráhy
ZKiP Lewiatan
124
127
Orlen Petrocentrum
123
128
Castorama
Kaufland Česká republika
121
PGF
120
122
HEP Group
119
Romania
Bulgaria
Ukraine
Czech Republic
Hungary
Slovenia
Poland
Slovakia
Czech Republic
Ukraine
Czech Republic
Czech Republic
Ukraine
Czech Republic
Serbia
Poland
Poland
Czech Republic
Poland
Poland
Croatia
Hungary
Spar
Poland
118
Emperia Holding
117
Poland
Country
Real
116
Czech Republic
Bulgaria
Romania
Czech Republic
Czech Republic
Romania
Czech Republic
Poland
Poland
Croatia
Poland
Czech Republic
Czech Republic
Ukraine
Serbia
Romania
Rank Company name
NEK
Skanska CS
114
115
Rompetrol Downstream
113
Electrica
110
Barum Continental
Shell Czech Republic
109
Siemens Group ČR
Auchan
108
111
PKP Cargo
107
112
JSW
Konzum
105
AHOLD Czech Republic
104
106
Zaporizhstal
Tesco Stores ČR
102
103
Delta Maxi
101
Ukraine
ZAZ
Metro
99
100
Slovakia
PCA Slovakia
98
Serbia
Czech Republic
EPS
Třinecké Železárny
96
97
Country
Rank Company name
Manufacturing
Consumer Business
and Transportation
Technology, Media
Manufacturing
Consumer Business
and Transportation
Technology, Media
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Technology, Media
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Life Sciences
and Health Care
Consumer Business
and Transportation
Industry
Consumer Business
and Transportation
Consumer Business
and Transportation
Real Estate
Technology, Media
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Manufacturing
Manufacturing
Industry
Oil and Gas
Process Industries
Wholesale
and Distribution
Telecommunications
Process Industries
Consumer Product
Companies
Oil and Gas
Technology
Power and Utilities
Process Industries
Oil and Gas
Transportation
Oil and Gas
Wholesale
and Distribution
Telecommunications
Wholesale
and Distribution
Oil and Gas
Retail
Process Industries
Life Sciences
Power and Utilities
Consumer Services
Subindustry
Wholesale
and Distribution
Retail
Construction
Companies
Power and Utilities
Oil and Gas
Technology
Automotive
Power and Utilities
Oil and Gas
Retail
Transportation
Retail
Mining
Retail
Retail
Process Industries
Retail
Wholesale
and Distribution
Automotive
Automotive
Process Industries
Power and Utilities
Subindustry
1,301.7
1,308.5
1,322.2
1,327.0
1,329.2
1,330.8
1,341.1
1,345.7
1,353.1
1,354.2
1,382.6
1,390.5
1,398.0
1,401.5
1,401.7
1,406.5
1,406.8
1,408.3
1,438.4
1,450.9
1,464.9
21.7
16.0
12.6
16.3
19.8
2.9
N/A
55.8
19.9
4.0
12.6
1.2
-73.1
4.8
20.0
19.1
30.2
26.2
72.0
24.4
14.0
31.6
2007-2008
2008
1,489.2
Revenue
change (%)
28.0
9.3
16.6
22.5
25.1
-26.6
-3.7
-15.5
27.9
23.4
4.3
18.8
-2.4
15.1
31.3
16.2
34.8
-3.1
-11.2
8.2
18.0
Revenue from
sales
1,496.8
1,501.9
1,507.6
1,514.7
1,528.3
1,535.0
1,548.8
1,557.2
1,559.1
1,566.0
1,569.2
1,609.4
1,627.9
1,629.0
1,642.0
1,642.5
1,649.7
1,658.5
1,668.5
1,670.9
1,673.8
19.8
2007-2008
2008
1,688.9
Revenue
change (%)
Revenue from
sales
N/A
-100.2
38.8
N/A
90.7
10.2
N/A
N/A
151.9
N/A
5.4
83.9
N/A
N/A
221.2
N/A
0.1
-0.7
172.5
14.7
4.3
N/A
2008
Net income
16.9
N/A
40.6
25.6
-57.7
-90.4
53.2
N/A
26.0
N/A
-51.0
45.6
188.2
-18.6
32.7
-5.3
17.7
N/A
-51.1
38.4
56.5
-316.5
2008
Net income
N/A
N/A
23.0
N/A
-31.3
-57.0
N/A
N/A
57.1
N/A
-7.4
N/A
N/A
N/A
38.4
N/A
-92.2
11.0
N/A
-24.8
21.4
N/A
2007-2008
Net income
change (%)
-27.9
N/A
-4.2
26.9
N/A
-190.8
-22.8
N/A
-14.8
N/A
N/A
48.7
N/A
-19.2
N/A
-106.6
-69.2
N/A
-162.4
-35.1
-62.2
74.7
2007-2008
Net income
change (%)
N/A
N/A
137.6
275.4
N/A
287.0
N/A
N/A
326.8
N/A
220.2
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
304.3
432.6
N/A
Q1 2009
Revenue
from sales
286.0
N/A
N/A
424.4
N/A
N/A
N/A
N/A
N/A
N/A
N/A
324.5
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Q1 2009
Revenue
from sales
N/A
N/A
-54.8
-11.3
N/A
-5.5
N/A
N/A
-1.7
N/A
-31.2
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-19.6
19.0
N/A
Q1 2008-Q1 2009
Revenue
change (%)
-20.2
N/A
N/A
17.9
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1.6
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Q1 2008-Q1 2009
Revenue
change (%)
84
85
Ciech
Západoslovenská energetika
179
Fiat-GM Powertrain
175
180
Interagro
174
Volkswagen Motor Polska
Chinoin + Sanofi-aventis
173
178
CEDC
172
Metro Cash & Carry
Torfarm
171
177
Fozzy
170
Żywiec
OWG Group
169
176
Budapesti Elektromos
Művek
Slovakia
Poland
Poland
Ukraine
Poland
Poland
Romania
Hungary
Poland
Poland
Ukraine
Ukraine
Hungary
Poland
Czech Republic
Poland
Ukraine
Poland
168
Poland
LG Electronics Mława
Grupa Saint-Gobain
161
Poland
167
PKE
160
Poland
Metrostav
Polski Koks
159
Poland
166
Ruch
158
Romania
Złomrex
Vodafone
157
Poland
165
EnergiaPro Gigawat
156
Poland
UMC
Farmacol
155
Poland
164
Media-Saturn
154
Czech Republic
Statoil
E.ON Energie
153
Poland
163
Tele-Fonika Kable
152
Slovenia
Ukraine
Revoz
151
Czech Republic
Nibulon
PCA Logistika
150
Croatia
162
HT
149
Hungary
Country
TIGÁZ Tiszántúli
Gázszolgáltató
148
Poland
Hungary
Poland
Romania
Slovenia
Romania
Rank Company name
OMV Hungária Ásványolaj
Shell
145
Polimex-Mostostal
Lukoil
144
146
Merkur Group
143
147
Orange
142
Hungary
Poland
Vattenfall Poland
Tiszai Vegyi Kombinát
140
141
Country
Rank Company name
Manufacturing
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Life Sciences
and Health Care
Consumer Business
and Transportation
Life Sciences
and Health Care
Consumer Business
and Transportation
Consumer Business
and Transportation
Real Estate
Consumer Business
and Transportation
Technology, Media
Consumer Business
and Transportation
Industry
Manufacturing
Consumer Business
and Transportation
Technology, Media
Life Sciences
and Health Care
Consumer Business
and Transportation
Manufacturing
Manufacturing
Manufacturing
Technology, Media
Real Estate
Consumer Business
and Transportation
Technology, Media
Manufacturing
Industry
Power and Utilities
Process Industries
Automotive
Wholesale
and Distribution
Consumer Product
Companies
Industrial Products
and Services
Consumer Product
Companies
Life Sciences
Consumer Product
Companies
Life Sciences
Wholesale
and Distribution
Oil and Gas
Power and Utilities
Consumer Product
Companies
Construction
Companies
Wholesale
and Distribution
Telecommunications
Oil and Gas
Consumer Product
Companies
Subindustry
Process Industries
Power and Utilities
Mining
Retail
Telecommunications
Power and Utilities
Life Sciences
Retail
Power and Utilities
Industrial Products
and Services
Automotive
Automotive
Telecommunications
Power and Utilities
Construction
Companies
Oil and Gas
Oil and Gas
Oil and Gas
Retail
Telecommunications
Process Industries
Power and Utilities
Subindustry
1,068.5
1,076.6
1,080.9
1,082.7
1,084.9
1,098.3
1,099.9
1,126.1
1,130.2
1,130.3
1,131.8
1,139.7
1,143.1
1,143.6
1,145.1
1,146.9
1,149.2
1,150.4
24.6
19.3
-6.5
20.1
16.8
-6.8
-9.4
17.0
29.7
30.0
24.4
N/A
3.6
-9.4
14.3
28.9
-1.7
25.7
220.7
2007-2008
2008
1,156.5
Revenue
change (%)
13.2
6.4
0.7
8.5
3.2
163.8
24.0
19.6
N/A
-11.6
-2.9
N/A
4.1
22.4
24.3
18.2
5.5
2.4
10.0
5.5
-4.4
Revenue from
sales
1,167.4
1,175.9
1,181.0
1,187.2
1,188.6
1,195.7
1,199.4
1,201.5
1,203.9
1,208.9
1,211.5
1,216.5
1,217.5
1,218.0
1,224.8
1,230.4
1,249.1
1,255.6
1,266.8
1,280.1
1,287.2
21.7
2007-2008
2008
1,287.6
Revenue
change (%)
Revenue from
sales
121.3
15.6
21.2
N/A
118.4
56.2
N/A
83.8
-11.4
4.1
17.4
N/A
102.0
49.9
30.1
-56.9
182.5
N/A
125.3
2008
Net income
N/A
25.6
5.0
-8.1
306.6
9.7
20.2
N/A
N/A
N/A
18.7
N/A
319.8
-20.9
40.0
-15.1
N/A
2.8
22.2
437.9
-0.6
143.7
2008
Net income
-3.0
N/A
-25.3
N/A
7.0
21.6
N/A
N/A
-120.2
2.1
111.9
N/A
10.9
N/A
19.4
N/A
-21.3
N/A
N/A
2007-2008
Net income
change (%)
N/A
-29.9
N/A
N/A
16.0
N/A
4.7
N/A
N/A
N/A
-34.4
N/A
-5.1
N/A
29.6
N/A
N/A
-82.4
-33.4
19.8
-100.6
10.0
2007-2008
Net income
change (%)
N/A
215.9
N/A
N/A
150.4
N/A
N/A
N/A
167.1
261.0
N/A
N/A
N/A
257.2
N/A
124.8
187.0
N/A
142.0
Q1 2009
Revenue
from sales
N/A
N/A
87.6
216.8
N/A
N/A
297.3
N/A
N/A
N/A
N/A
N/A
279.2
N/A
196.1
N/A
N/A
N/A
N/A
264.0
195.5
371.8
Q1 2009
Revenue
from sales
N/A
-25.1
N/A
N/A
-27.0
N/A
N/A
N/A
-20.3
-10.3
N/A
N/A
N/A
-17.3
N/A
-57.9
-31.5
N/A
310.6
Q1 2008-Q1 2009
Revenue
change (%)
N/A
N/A
-75.0
-24.4
N/A
N/A
-0.3
N/A
N/A
N/A
N/A
N/A
0.1
N/A
-23.7
N/A
N/A
N/A
N/A
-14.0
-47.4
2.1
Q1 2008-Q1 2009
Revenue
change (%)
86
87
Poland
Kolporter
Philips Lighting
US Steel Serbia
Carrefour
PHOENIX lékárenský
velkoobchod
Lidl
Ukrtelecom
Flextronics
GDF SUEZ Energy Romania
Bumar
LG Electronics Wroclaw
General Motors Southeast
Europe Autóforgalmazó
181
182
183
184
185
186
187
188
189
190
191
192
České aerolinie
Tesco Stores SR
211
212
Coal of Ukraine
Hungaropharma
Gyógyszerkereskedelmi
KHW
Globus ČR
Fővárosi Gázművek
216
217
218
219
220
Eurovia CS
Richter Gedeon
210
215
Nikopol Ferroalloys Plant
209
Boryszew
Krka Group
208
Achemos grupė
Lukoil-Odesa petroleum
refinery plant
207
213
CMC Zawiercie
206
214
Budimex
British American Tobacco
201
205
Totalizator Sportowy
200
Lek
Rank Company name
204
HSE group
199
Shell Hungary Kereskedelmi
Magneti Marelli
198
BOT Elektrownia Bełchatów
Poland
Enion Grupa Tauron
197
202
Country
GSK
196
203
Slovenia
Slovak Telekom
195
Romania
Hungary
Czech Republic
Poland
Hungary
Ukraine
Czech Republic
Lithuania
Poland
Slovakia
Czech Republic
Hungary
Ukraine
Slovenia
Ukraine
Poland
Poland
Slovenia
Poland
Hungary
Romania
Poland
Poland
Poland
Slovakia
Romania
Porsche
Transilvania General Import
- Export
193
194
Hungary
Poland
Poland
Romania
Hungary
Ukraine
Poland
Czech Republic
Romania
Serbia
Poland
Country
Rank Company name
Consumer Business
and Transportation
Life Sciences
and Health Care
Real Estate
Manufacturing
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Life Sciences
and Health Care
Manufacturing
Life Sciences
and Health Care
Manufacturing
Real Estate
Life Sciences
and Health Care
Consumer Business
and Transportation
Consumer Business
and Transportation
Industry
Manufacturing
Life Sciences
and Health Care
Technology, Media
Consumer Business
and Transportation
Manufacturing
Manufacturing
Technology, Media
Consumer Business
and Transportation
Technology, Media
Technology, Media
Consumer Business
and Transportation
Life Sciences
and Health Care
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Industry
Power and Utilities
Retail
Mining
Life Sciences
Mining
Construction
Companies
Process Industries
Process Industries
Retail
Consumer Services
Life Sciences
Process Industries
Life Sciences
Oil and Gas
Process Industries
Construction
Companies
Life Sciences
Power and Utilities
Oil and Gas
Consumer Product
Companies
Tourism, Hospitality
and Leisure
Subindustry
Power and Utilities
Automotive
Power and Utilities
Life Sciences
Telecommunications
Wholesale
and Distribution
Automotive
Automotive
Technology
Wholesale
and Distribution
Oil and Gas
Technology
Telecommunications
Retail
Life Sciences
Retail
Industrial Products
and Services
Consumer Product
Companies
Wholesale
and Distribution
Subindustry
2007-2008
905.6
909.3
912.8
913.8
914.9
922.5
923.3
923.3
926.7
929.8
939.7
948.0
949.9
951.4
952.9
953.8
955.5
968.3
978.6
979.8
19.5
25.5
21.0
18.1
N/A
19.2
37.7
-18.8
N/A
7.0
5.6
42.8
21.6
96.4
55.4
17.3
N/A
N/A
13.3
18.9
33.5
2008
982.2
Revenue
change (%)
N/A
58.4
N/A
38.7
6.3
-9.4
-0.2
-7.5
58.5
25.0
5.3
1.1
3.6
37.8
21.0
30.3
13.2
8.0
Revenue from
sales
982.3
984.1
984.2
984.6
990.5
999.9
999.9
1,000.0
1,000.6
1,001.8
1,015.6
1,019.6
1,023.7
1,026.2
1,028.7
1,032.6
1,043.0
1,065.7
31.7
2007-2008
2008
1,066.4
Revenue
change (%)
Revenue from
sales
17.5
16.9
2.2
9.1
N/A
37.1
91.8
-68.0
N/A
6.0
165.5
-0.2
155.9
-167.0
N/A
29.8
N/A
N/A
5.3
N/A
74.5
2008
Net income
N/A
35.2
N/A
N/A
112.8
N/A
N/A
4.6
4.7
4.2
34.9
-4.0
N/A
11.4
6.2
20.1
5.4
17.7
0.7
2008
Net income
-94.5
32.0
-58.1
1.7
N/A
16.3
68.6
N/A
N/A
-15.1
22.4
-137.8
17.3
N/A
N/A
N/A
N/A
N/A
-77.4
N/A
7.8
2007-2008
Net income
change (%)
N/A
145.2
N/A
N/A
-38.2
N/A
N/A
130.6
N/A
15.9
-36.1
76.2
N/A
N/A
29.0
-18.5
-80.8
-76.9
N/A
2007-2008
Net income
change (%)
N/A
N/A
222.0
N/A
N/A
68.0
N/A
118.1
N/A
N/A
N/A
N/A
245.0
N/A
116.2
144.0
N/A
N/A
N/A
N/A
182.0
Q1 2009
Revenue
from sales
N/A
N/A
N/A
N/A
244.0
N/A
N/A
N/A
N/A
147.5
N/A
N/A
N/A
N/A
N/A
13.7
N/A
228.6
N/A
Q1 2009
Revenue
from sales
N/A
N/A
3.2
N/A
N/A
-31.3
N/A
-55.2
N/A
N/A
N/A
N/A
0.3
N/A
0.7
-21.2
N/A
N/A
N/A
N/A
-20.0
Q1 2008-Q1 2009
Revenue
change (%)
N/A
N/A
N/A
N/A
6.8
N/A
N/A
N/A
N/A
-8.2
N/A
N/A
N/A
N/A
N/A
-20.1
N/A
-21.5
N/A
Q1 2008-Q1 2009
Revenue
change (%)
88
89
Poland
OMV
Samsung Electronics
Celsa Huta Ostrowiec
Vodafone Czech Republic
Asseco Poland
260
261
262
E.ON Gaz
Phoenix Pharma
256
257
258
PSE-Electra
255
259
Latvenergo
Synthos
253
Transelectrica
252
254
HSE
Grupa Muszkieterów
250
251
Poland
Czech Republic
Poland
Poland
Bulgaria
Hungary
Romania
Poland
Poland
Latvia
Romania
Poland
Slovenia
Poland
Poland
Poland
Slovenia
Hungary
Poland
Hungary
Selgros
Budimex Dromex
241
Poland
249
Basell Orlen
240
Hungary
Michelin
Sanmina-SCI Magyarország
Elektronikai Gyártó
239
Slovenia
248
Telekom Slovenije Group
238
Romania
PLL LOT
Romtelecom
237
Poland
247
Unilever
236
Slovenia
Krka
Merkur
235
Poland
246
Hyundai Motor
234
Romania
Continental group
Selgros
233
Hungary
245
Metro
232
Hungary
PKP PLK
Alcoa-Köfém
231
Hungary
244
Electrolux Lehel
Hűtőgépgyár
230
Slovakia
Michelin Közép-Európa
Kereskedelmi
Stredoslovenská energetika
229
Hungary
243
Borsodchem
228
Czech Republic
Slovakia
Ferona
227
Hungary
Orange Slovensko
Emfesz
226
Poland
242
Energa-Operator
225
Hungary
Country
Auchan Magyarország
224
Czech Republic
Rank Company name
Slovnaft Česká republika
223
Slovenia
Romania
Romgaz
OMV Slovenija
221
222
Country
Rank Company name
Technology, Media
Technology, Media
Manufacturing
Technology, Media
Life Sciences
and Health Care
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Life Sciences
and Health Care
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Technology, Media
Industry
Real Estate
Manufacturing
Manufacturing
Technology, Media
Technology, Media
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Industry
Technology
Telecommunications
Process Industries
Technology
Oil and Gas
Life Sciences
Oil and Gas
Power and Utilities
Process Industries
Power and Utilities
Power and Utilities
Retail
Power and Utilities
Wholesale
and Distribution
Automotive
Transportation
Life Sciences
Automotive
Transportation
Wholesale
and Distribution
Telecommunications
Subindustry
Construction
Companies
Process Industries
Industrial Products
and Services
Telecommunications
Telecommunications
Consumer Product
Companies
Retail
Automotive
Retail
Consumer Services
Process Industries
Consumer Product
Companies
Power and Utilities
Process Industries
Wholesale
and Distribution
Oil and Gas
Power and Utilities
Consumer Services
Oil and Gas
Oil and Gas
Oil and Gas
Subindustry
2007-2008
793.4
795.7
797.8
802.9
805.6
806.1
806.8
808.8
810.2
811.5
811.9
817.2
819.3
824.5
825.0
825.7
826.2
826.2
829.1
830.2
134.0
15.4
18.9
21.0
40.3
2.9
120.9
N/A
64.7
57.7
13.5
21.8
-11.1
13.6
-2.4
4.7
20.3
N/A
7.4
-14.9
11.8
2008
830.8
Revenue
change (%)
29.6
N/A
-37.3
8.0
-10.0
-1.0
-6.8
47.2
4.4
0.9
-25.3
-2.9
19.0
-15.6
4.5
22.6
-24.3
6.1
13.6
77.9
Revenue from
sales
833.4
836.0
838.3
842.4
845.0
850.2
851.7
856.1
858.5
860.2
861.8
867.7
870.9
871.6
874.6
875.4
877.5
881.3
883.3
890.4
-9.2
2007-2008
2008
891.2
Revenue
change (%)
Revenue from
sales
113.7
111.9
N/A
11.0
4.3
10.6
11.9
N/A
26.0
18.5
13.7
N/A
53.8
28.9
-14.3
-170.8
161.1
99.8
27.3
0.3
191.6
2008
Net income
17.1
N/A
7.1
86.0
1.1
33.4
26.5
6.0
N/A
21.8
65.8
29.9
94.0
-35.8
13.1
24.2
N/A
-2.9
5.2
13.3
146.0
2008
Net income
125.6
167.1
N/A
-18.5
-46.9
-18.9
-47.1
N/A
-80.1
37.8
-27.5
N/A
N/A
-9.6
-127.0
N/A
27.4
N/A
N/A
-26.3
10.9
2007-2008
Net income
change (%)
N/A
N/A
N/A
-2.7
-95.4
-40.7
-13.5
-2.4
N/A
N/A
89.3
N/A
17.0
N/A
-32.0
79.8
N/A
48.2
106.6
12.7
-4.5
2007-2008
Net income
change (%)
157.9
N/A
N/A
219.7
137.0
N/A
N/A
N/A
134.6
N/A
162.0
N/A
N/A
N/A
N/A
N/A
216.0
N/A
N/A
N/A
N/A
Q1 2009
Revenue
from sales
N/A
N/A
22.1
196.0
N/A
N/A
N/A
N/A
N/A
N/A
N/A
144.3
N/A
N/A
N/A
N/A
N/A
N/A
134.2
N/A
223.1
Q1 2009
Revenue
from sales
36.1
N/A
N/A
41.5
-20.3
N/A
N/A
N/A
-34.1
N/A
-24.2
N/A
N/A
N/A
N/A
N/A
2.8
N/A
N/A
N/A
N/A
Q1 2008-Q1 2009
Revenue
change (%)
N/A
N/A
-93.2
5.3
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-30.7
N/A
N/A
N/A
N/A
N/A
N/A
-29.5
N/A
-22.5
Q1 2008-Q1 2009
Revenue
change (%)
90
91
Lukoil Baltija
Strabag
Elko
Penny Market
TEVA Gyógyszergyár
Continental Automotive
Czech Republic
Kulczyk Tradex
Maspex
297
299
300
301
302
303
304
BILLA
296
298
Lek
295
Bulgargaz
291
LEO
Jihomoravská plynárenská
290
294
Makeevsky Metallurgical
Plant
289
Galnaftogaz
Koksownia Przyjaźń
288
Polska Energia Pierwsza
Kompania Handlowa
SrbijaGas
287
292
Pannon GSM
286
293
Lidl Česká republika
285
Poland
Poland
Czech Republic
Hungary
Czech Republic
Latvia
Czech Republic
Lithuania
Czech Republic
Slovenia
Lithuania
Poland
Ukraine
Bulgaria
Czech Republic
Ukraine
Poland
Serbia
Hungary
Czech Republic
Poland
ISD Huta Częstochowa
284
Poland
Country
Zaklady Koksownicze
Zdzieszowice
283
Slovenia
Czech Republic
Poland
Poland
Poland
Ukraine
Slovakia
Hungary
Poland
Ukraine
Romania
Hungary
Estonia
Czech Republic
Poland
Poland
Poland
Poland
Rank Company name
Pražská energetika
Kaufland Polska Markety
280
Gorenje
BSH
279
281
Lekkerland
278
282
Ferrexpo Group
277
ABC Data
274
Porsche Hungária
Kyivenergo
273
Eustream
Kaufland
272
275
Magyar Posta
271
276
Bosch Diesel
Tallink
269
Anwil
268
270
Węglokoks
Kompania Piwowarska
Skanska
265
266
Robert Bosch Elektronika
Gyártó
264
267
Czech Republic
Česká pošta
263
Hungary
Country
Rank Company name
Consumer Business
and Transportation
Manufacturing
Manufacturing
Life Sciences
and Health Care
Consumer Business
and Transportation
Technology, Media
Real Estate
Consumer Business
and Transportation
Life Sciences
and Health Care
Manufacturing
Technology, Media
Consumer Business
and Transportation
Manufacturing
Industry
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Public Sector
Consumer Business
and Transportation
Manufacturing
Manufacturing
Consumer Business
and Transportation
Real Estate
Technology, Media
Consumer Business
and Transportation
Industry
Consumer Product
Companies
Automotive
Automotive
Life Sciences
Retail
Technology
Construction
Companies
Oil and Gas
Retail
Life Sciences
Power and Utilities
Power and Utilities
Oil and Gas
Oil and Gas
Power and Utilities
Process Industries
Oil and Gas
Oil and Gas
Telecommunications
Retail
Process Industries
Subindustry
Process Industries
Consumer Product
Companies
Power and Utilities
Retail
Consumer Product
Companies
Wholesale and
Distribution
Mining
Oil and Gas
Automotive
Consumer Product
Companies
Power and Utilities
Retail
Postal services
Transportation
Automotive
Process Industries
Consumer Product
Companies
Mining
Construction
Companies
Technology
Consumer Services
Subindustry
2007-2008
715.4
716.4
718.4
718.6
719.0
719.1
719.4
721.2
721.6
729.2
730.0
730.9
731.8
732.7
734.6
734.9
738.6
744.1
749.7
752.4
16.6
N/A
-2.5
1.4
14.0
-3.7
2.3
21.5
128.7
-1.2
N/A
260.8
51.4
28.8
32.6
15.8
46.6
19.4
-2.2
45.9
2.7
2008
754.1
Revenue
change (%)
N/A
-8.1
26.8
N/A
7.3
14.8
51.0
9.1
6.2
15.8
15.8
21.2
6.2
3.4
-4.8
5.6
7.7
8.2
-0.7
-5.2
Revenue from
sales
760.1
764.1
764.2
766.7
766.8
767.0
772.2
774.0
776.0
776.4
777.6
778.5
786.0
786.6
787.0
788.9
790.8
791.0
791.5
791.6
26.3
2007-2008
2008
792.2
Revenue
change (%)
Revenue from
sales
N/A
N/A
10.0
N/A
24.3
8.7
8.3
N/A
N/A
67.4
N/A
4.6
-48.6
-46.3
29.5
-79.7
12.0
35.6
176.5
-2.1
5.5
2008
Net income
N/A
12.0
87.0
N/A
45.6
N/A
216.5
82.1
-10.6
N/A
-63.9
3.7
31.2
N/A
50.1
48.0
185.9
13.1
38.3
47.5
11.8
2008
Net income
N/A
N/A
-73.8
N/A
-4.3
-62.7
38.3
N/A
N/A
-15.5
N/A
110.4
N/A
N/A
-29.7
N/A
-71.9
53.1
-5.2
-35.4
-88.6
2007-2008
Net income
change (%)
N/A
-9.4
-1.7
N/A
-42.1
N/A
120.5
-11.9
-188.0
N/A
N/A
-76.4
50.7
N/A
-55.0
-13.4
1.5
-53.7
46.5
-46.2
-50.0
2007-2008
Net income
change (%)
N/A
N/A
N/A
N/A
N/A
112.2
N/A
93.4
N/A
N/A
228.0
N/A
N/A
254.1
N/A
N/A
N/A
N/A
147.2
N/A
N/A
Q1 2009
Revenue
from sales
N/A
145.0
211.2
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
186.6
99.3
163.2
N/A
142.1
N/A
N/A
N/A
Q1 2009
Revenue
from sales
N/A
N/A
N/A
N/A
N/A
-53.5
N/A
-36.0
N/A
N/A
N/A
N/A
N/A
20.7
N/A
N/A
N/A
N/A
-15.1
N/A
N/A
Q1 2008-Q1 2009
Revenue
change (%)
N/A
-26.1
1.9
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-3.7
-54.2
-20.8
N/A
-22.8
N/A
N/A
N/A
Q1 2008-Q1 2009
Revenue
change (%)
92
93
Mercedes-Benz
IBM
Anthousa (Furshet)
Johnson Controls
Concern "NIKO"
Kite
Okta
Evraz Vítkovice Steel
Szerencsejáték
339
340
341
342
343
344
345
346
Engrotus
330
338
Benzina
329
Procter & Gamble
Mobiltel
328
337
Action
327
Grupa Empik
Rank Company name
336
Eesti Energia
326
Toyota Motor
Kronopol
325
335
Everen
324
Rimi
AB
323
334
Grupa ITI
322
Démász
Police
321
333
Alstom Power
320
Hidroelectrica
SF Holding
319
RWE Stoen
Poland
Vattenfall Distribution
Poland
318
331
Country
P&G Trading Ukraine
317
332
Estonia
Égáz-Dégáz
316
Bulgaria
Hungary
Czech Republic
Republic of
Macedonia
Hungary
Ukraine
Czech Republic
Ukraine
Hungary
Poland
Poland
Poland
Poland
Latvia
Hungary
Poland
Romania
Slovenia
Czech Republic
Bulgaria
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Poland
Ukraine
Hungary
Poland
Petrol
Elektrownia Rybnik
Poland
314
Impexmetal
313
Slovenia
Poland
Poland
Czech Republic
Hungary
Poland
315
Vattenfall Trading Services
Swedwood
310
SIJ
Česká společnost pro
platební karty
309
311
MÁV
308
312
Elektrolux Poland
307
Poland
Poland
EnergiaPro
Puławy
305
306
Country
Rank Company name
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Technology, Media
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Technology, Media
Consumer Business
and Transportation
Industry
Manufacturing
Consumer Business
and Transportation
Technology, Media
Manufacturing
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Manufacturing
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Industry
Tourism, Hospitality
and Leisure
Process Industries
Oil and Gas
Consumer Product
Companies
Wholesale
and Distribution
Automotive
Wholesale
and Distribution
Technology
Automotive
Consumer Product
Companies
Retail
Automotive
Wholesale
and Distribution
Power and Utilities
Power and Utilities
Power and Utilities
Retail
Oil and Gas
Telecommunications
Wholesale
and Distribution
Subindustry
Power and Utilities
Process Industries
Power and Utilities
Wholesale
and Distribution
Media
Process Industries
Industrial Products
and Services
Consumer Product
Companies
Power and Utilities
Consumer Product
Companies
Power and Utilities
Power and Utilities
Oil and Gas
Process Industries
Industrial Products
and Services
Power and Utilities
Process Industries
Consumer Product
Companies
Transportation
Consumer Product
Companies
Process Industries
Power and Utilities
Subindustry
644.9
647.1
648.2
650.2
650.3
654.4
655.4
656.1
656.3
656.5
659.8
661.6
661.6
661.9
662.1
663.9
664.9
666.4
666.7
9.2
N/A
32.2
24.4
40.3
N/A
28.3
-8.6
-2.0
N/A
57.4
27.9
17.1
11.5
36.9
7.4
14.7
19.1
3.8
40.4
2007-2008
2008
667.2
Revenue
change (%)
16.2
7.8
83.3
41.1
49.1
41.9
57.9
10.2
N/A
72.8
26.4
83.4
-1.3
-18.2
3.5
91.9
N/A
22.0
-2.9
15.2
22.3
Revenue from
sales
667.5
667.6
669.1
672.7
684.2
684.4
686.1
687.0
688.4
689.4
693.6
697.3
698.2
698.8
702.9
705.9
707.4
709.0
710.5
712.1
712.8
N/A
2007-2008
2008
713.2
Revenue
change (%)
Revenue from
sales
24.1
N/A
22.5
7.8
-39.5
N/A
50.2
0.8
-6.0
N/A
34.4
13.6
20.5
47.5
N/A
17.7
8.1
9.2
166.4
10.2
2008
Net income
86.9
24.4
N/A
4.1
N/A
8.2
11.5
-2.4
N/A
520.3
5.7
29.3
-115.6
-47.3
37.9
6.4
N/A
20.5
74.6
-12.7
94.2
N/A
2008
Net income
N/A
N/A
39.2
-30.2
N/A
N/A
N/A
-98.4
-115.9
N/A
56.6
163.2
N/A
48.5
N/A
12.2
-56.0
99.3
4.5
74.5
2007-2008
Net income
change (%)
121.5
-47.8
N/A
9.0
N/A
-84.9
-61.8
-180.5
N/A
52.7
-64.3
32.1
N/A
N/A
-36.7
N/A
N/A
105.9
N/A
N/A
174.1
N/A
2007-2008
Net income
change (%)
N/A
N/A
N/A
N/A
N/A
N/A
121.2
N/A
N/A
N/A
126.9
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
103.7
Q1 2009
Revenue
from sales
190.8
N/A
N/A
164.6
N/A
115.2
111.3
N/A
N/A
N/A
N/A
114.7
104.3
92.0
109.3
209.8
N/A
N/A
N/A
N/A
143.7
N/A
Q1 2009
Revenue
from sales
N/A
N/A
N/A
N/A
N/A
N/A
-16.3
N/A
N/A
N/A
6.0
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-33.2
Q1 2008-Q1 2009
Revenue
change (%)
39.5
N/A
N/A
-9.4
N/A
-41.8
-28.4
N/A
N/A
N/A
N/A
17.5
-31.7
-54.4
-42.1
40.2
N/A
N/A
N/A
N/A
-28.5
N/A
Q1 2008-Q1 2009
Revenue
change (%)
94
95
Hungary
Philip Morris Magyarország
PKP Energetyka
TRW Poland
Grupa Can Pack
Pliva
Plzeňský Prazdroj
Euro-Net
Zakhidenergo
ACP Pharma
Foxtrot
Palink
Mostostal Warszawa
Polomarket
Nestle
Strabag
Železiarne Podbrezová
Overgas
Agropol Group
Slovnaft Petrochemicals
347
348
349
350
351
352
353
354
355
356
357
358
359
360
361
362
363
364
365
PBG
Esppol
MOL România
Salbatring
Electrocentrale
382
383
384
385
Achema
380
381
KDWT
Vítkovice
375
379
Sitronics IT
374
Indesit
Maxima
373
378
Avans International
372
Black Red White
Rossmann
371
Cargill
Kruszwica
370
376
Centrenergo
369
377
OMV România
Dniproenergo
367
Romania
Slovenia
Romania
Poland
Poland
Lithuania
Poland
Poland
Poland
Poland
Czech Republic
Ukraine
Latvia
Poland
Poland
Poland
Ukraine
Ukraine
Romania
Croatia
T-mobile
366
368
Country
Rank Company name
Slovakia
Czech Republic
Bulgaria
Slovakia
Poland
Poland
Poland
Poland
Lithuania
Ukraine
Poland
Ukraine
Poland
Czech Republic
Croatia
Poland
Poland
Poland
Country
Rank Company name
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Manufacturing
Technology, Media
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Technology, Media
Industry
Consumer Business
and Transportation
Manufacturing
Real Estate
Consumer Business
and Transportation
Consumer Business
and Transportation
Real Estate
Consumer Business
and Transportation
Consumer Business
and Transportation
Life Sciences
and Health Care
Consumer Business
and Transportation
Consumer Business
and Transportation
Life Sciences
and Health Care
Manufacturing
Manufacturing
Consumer Business
and Transportation
Industry
Power and Utilities
Wholesale
and Distribution
Oil and Gas
Transportation
Industrial Products
and Services
Process Industries
Wholesale
and Distribution
Consumer Product
Companies
Consumer Product
Companies
Process Industries
Industrial Products
and Services
Technology
Wholesale
and Distribution
Retail
Retail
Consumer Product
Companies
Power and Utilities
Power and Utilities
Oil and Gas
Telecommunications
Subindustry
Oil and Gas
Consumer Product
Companies
Oil and Gas
Industrial Products
and Services
Construction
Companies
Consumer Product
Companies
Retail
Construction
Companies
Retail
Retail
Life Sciences
Power and Utilities
Retail
Consumer Product
Companies
Life Sciences
Industrial Products
and Services
Automotive
Power and Utilities
Consumer Product
Companies
Subindustry
612.6
587.9
591.0
591.9
593.8
595.5
598.4
599.2
601.0
605.5
605.8
606.1
606.5
606.6
607.8
609.6
610.2
611.3
611.8
-13.2
923.3
12.2
17.1
60.1
43.1
N/A
29.9
14.6
24.2
14.4
8.0
20.3
N/A
47.9
24.4
23.0
10.3
22.3
7.8
2007-2008
2008
613.3
Revenue
change (%)
-8.4
21.8
56.1
31.4
8.2
29.2
23.3
23.5
15.7
29.6
47.0
20.9
N/A
12.4
-9.2
11.0
0.5
17.4
Revenue from
sales
616.1
618.2
620.5
623.4
624.4
624.7
626.4
629.6
630.4
630.8
632.4
634.3
634.5
635.0
635.4
636.8
637.0
642.6
6.1
2007-2008
2008
643.0
Revenue
change (%)
Revenue from
sales
-93.9
2.0
12.0
1.6
54.1
32.9
N/A
20.4
12.5
60.3
30.8
N/A
22.7
N/A
N/A
37.6
-25.9
-2.1
16.5
171.0
2008
Net income
N/A
17.7
8.9
23.8
26.3
53.0
N/A
26.3
N/A
2.0
N/A
-11.7
N/A
N/A
-36.0
61.1
15.9
-3.7
5.4
2008
Net income
N/A
47.0
-33.9
4.7
71.0
26.9
N/A
45.3
1.9
14.3
-46.6
N/A
11.3
N/A
N/A
N/A
N/A
-111.8
0.7
-16.8
2007-2008
Net income
change (%)
N/A
21.1
-2.6
-42.5
43.7
45.0
N/A
69.6
N/A
-88.7
N/A
N/A
N/A
N/A
-136.1
44.5
-60.1
-143.0
-17.7
2007-2008
Net income
change (%)
N/A
49.4
N/A
N/A
77.6
78.8
N/A
N/A
N/A
102.2
N/A
59.5
N/A
N/A
N/A
117.2
N/A
N/A
N/A
133.6
Q1 2009
Revenue
from sales
N/A
N/A
158.0
40.2
N/A
N/A
N/A
126.9
N/A
N/A
N/A
N/A
N/A
N/A
164.2
N/A
N/A
139.2
N/A
Q1 2009
Revenue
from sales
N/A
-32.1
N/A
N/A
-12.4
-45.8
N/A
N/A
N/A
-21.7
N/A
-55.5
N/A
N/A
N/A
-23.1
N/A
N/A
N/A
4.8
Q1 2008-Q1 2009
Revenue
change (%)
N/A
N/A
23.4
-41.6
N/A
N/A
N/A
8.6
N/A
N/A
N/A
N/A
N/A
N/A
6.6
N/A
N/A
-3.7
N/A
Q1 2008-Q1 2009
Revenue
change (%)
96
97
Romania
CEZ Electro
Mlekpol
Mažeikių Nafta
415
416
417
AGC Flat Glass Czech
Mobis Slovakia
TVN
Denso Gyártó
Magyarország
Lear Corporation
421
422
423
424
425
Philip Morris
Coca Cola
414
420
Penny-Market Kereskedelmi
413
Renault Industrie Roumanie
Anwim
412
Obolon
AT Cargill
411
418
MHP
410
419
Toyota Motor
Manufacturing
409
Hungary
Hungary
Poland
Slovakia
Czech Republic
Romania
Ukraine
Romania
Latvia
Poland
Bulgaria
Romania
Hungary
Poland
Ukraine
Ukraine
Poland
Poland
Ukraine
BOT Elektrownia Turów
Ukraine
408
Alro
Concern Stirol
404
405
Poland
Philip Morris Ukraine
Volvo Polska
403
Poland
407
Kopex
402
Poland
Poland
Telewizja Polska
401
Hungary
Philips Polska
Vodafone
400
Poland
406
Avon
399
Slovakia
Country
T-Mobile Slovensko
398
Poland
Bulgaria
Hungary
Czech Republic
Romania
Poland
Czech Republic
Manufacturing
Manufacturing
Technology, Media
Manufacturing
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Consumer Business
and Transportation
Industry
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Technology, Media
Technology, Media
Consumer Business
and Transportation
Technology, Media
Manufacturing
Real Estate
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Hungary
Consumer Business
and Transportation
Consumer Business
and Transportation
Consumer Business
and Transportation
Industry
Hungary
Poland
Rank Company name
Energokrak
397
ŽPSV
394
Paksi Atomerőmű
CFR Calatori
393
Stomana Industry
Animex
392
395
ČEPS
391
396
Agip Hungária
BAT Magyarország Dohány
Kereskedelmi + BAT Pécsi
Dohánygyár
Specjał
388
389
Polski Tytoń
387
390
Ukraine
Roshen
386
Poland
Country
Rank Company name
Automotive
Automotive
Media
Automotive
Industrial Products
and Services
Consumer Product
Companies
Consumer Product
Companies
Automotive
Oil and Gas
Consumer Product
Companies
Power and Utilities
Consumer Product
Companies
Consumer Services
Oil and Gas
Consumer Product
Companies
Consumer Product
Companies
Automotive
Power and Utilities
Consumer Product
Companies
Consumer Product
Companies
Subindustry
Process Industries
Process Industries
Automotive
Industrial Products
and Services
Media
Telecommunications
Consumer Product
Companies
Telecommunications
Oil and Gas
Process Industries
Power and Utilities
Construction
Companies
Transportation
Consumer Product
Companies
Power and Utilities
Consumer Product
Companies
Oil and Gas
Retail
Wholesale
and Distribution
Consumer Product
Companies
Subindustry
538.5
538.8
540.2
542.6
543.0
543.4
546.4
546.9
549.0
550.4
550.6
551.2
551.3
551.5
552.9
553.5
556.0
556.9
558.4
19.1
19.9
31.4
22.4
10.8
N/A
8.0
0.5
39.1
15.7
18.3
6.7
5.9
13.7
11.9
59.2
11.3
N/A
11.5
-2.3
2007-2008
2008
560.9
Revenue
change (%)
44.0
-9.2
-11.4
65.5
10.3
1.3
26.1
11.8
84.2
28.5
8.1
29.8
-0.9
4.7
12.8
2.5
65.1
49.3
35.5
Revenue from
sales
561.2
563.8
563.9
564.5
564.8
568.1
568.9
569.3
573.0
573.3
574.2
575.0
579.2
580.2
582.2
582.3
584.8
586.5
586.5
24.4
2007-2008
2008
587.7
Revenue
change (%)
Revenue from
sales
-41.2
30.2
103.5
-19.2
31.6
N/A
-59.1
0.0
2.9
1.6
7.3
66.2
14.1
2.3
N/A
3.6
30.5
N/A
115.0
18.4
2008
Net income
77.3
56.2
8.3
25.7
N/A
12.8
109.8
96.9
0.3
48.9
73.2
17.5
-70.7
-0.9
55.6
-16.1
-4.6
1.3
1.3
N/A
2008
Net income
N/A
144.7
61.0
-194.0
-74.9
N/A
N/A
-102.7
21.9
-85.5
1.1
7.6
-3.5
105.9
N/A
-89.6
102.7
N/A
24.2
14.9
2007-2008
Net income
change (%)
141.5
-50.4
-19.6
-80.6
N/A
-67.7
N/A
5.8
110.8
4.4
137.2
2.4
N/A
-139.7
-19.0
-1.1
N/A
20.5
N/A
N/A
2007-2008
Net income
change (%)
N/A
N/A
96.7
N/A
N/A
N/A
70.3
N/A
N/A
116.2
183.0
N/A
N/A
110.0
N/A
103.7
N/A
N/A
N/A
N/A
Q1 2009
Revenue
from sales
N/A
91.2
N/A
131.8
N/A
N/A
N/A
139.6
N/A
N/A
N/A
N/A
N/A
N/A
144.1
N/A
N/A
N/A
N/A
N/A
Q1 2009
Revenue
from sales
N/A
N/A
-13.9
N/A
N/A
N/A
-36.0
N/A
N/A
-3.8
19.0
N/A
N/A
-10.7
N/A
-11.1
N/A
N/A
N/A
N/A
Q1 2008-Q1 2009
Revenue
change (%)
N/A
-33.0
N/A
19.8
N/A
N/A
N/A
8.7
N/A
N/A
N/A
N/A
N/A
N/A
-4.8
N/A
N/A
N/A
N/A
N/A
Q1 2008-Q1 2009
Revenue
change (%)
98
99
BTC
455
Tech Data
ThyssenKrupp Energostal
PKP PR
Inter Cars
Émász
462
463
464
465
Iveco Czech Republic
460
461
Elektrownia Kozienice
Oil Logistic
458
459
Rafineria Trzebinia
Lifosa
454
HŽ
Podravka
453
456
Stalprodukt
452
457
PAK
Grupa OBI Centrala
Systemowa
Import Volkswagen Group
449
450
Impol
448
451
OHL ŽS
447
Hungary
Poland
Poland
Poland
Poland
Czech Republic
Latvia
Poland
Croatia
Poland
Bulgaria
Lithuania
Croatia
Poland
Poland
Poland
Czech Republic
Slovenia
Czech Republic
Poland
Nokia
446
Poland
Croatia
Sharp Manufacturing
Poland
444
Czech Republic
VIPnet
Alliance Healthcare
443
Bulgaria
445
EVN Bulgaria
Elektrosnabdiavane
442
Czech Republic
Country
Metalimex
441
Poland
Czech Republic
Czech Republic
Czech Republic
Poland
Slovakia
Poland
Croatia
Romania
Hungary
Ukraine
Poland
Poland
Rank Company name
Żabka
440
Geco Tabak
437
Synthos Kralupy
Prosper
436
Severomoravská
plynárenská
Phoenix Zdravotnícke
zásobovanie
435
438
Ferrero
434
439
Oltchim
HEP-proizvodnja
432
Malév
431
433
International Paper-Kwidzyn
Ukrposhta
Żegluga Polska
428
429
Východoslovenská
energetika
427
430
Hungary
IKR
426
Slovakia
Country
Rank Company name
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Technology, Media
Manufacturing
Consumer Business
and Transportation
Technology, Media
Manufacturing
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Manufacturing
Manufacturing
Real Estate
Technology, Media
Technology, Media
Industry
Consumer Business
and Transportation
Life Sciences
and Health Care
Consumer Business
and Transportation
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Life Sciences
and Health Care
Life Sciences
and Health Care
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Public Sector
Manufacturing
Consumer Business
and Transportation
Manufacturing
Industry
Power and Utilities
Wholesale
and Distribution
Transportation
Process Industries
Technology
Automotive
Oil and Gas
Power and Utilities
Transportation
Oil and Gas
Telecommunications
Process Industries
Consumer Product
Companies
Process Industries
Retail
Power and Utilities
Automotive
Industrial Products
and Services
Construction
Companies
Telecommunications
Telecommunications
Subindustry
Consumer Product
Companies
Life Sciences
Power and Utilities
Wholesale
and Distribution
Retail
Power and Utilities
Process Industries
Wholesale
and Distribution
Life Sciences
Life Sciences
Consumer Product
Companies
Power and Utilities
Process Industries
Transportation
Postal services
Process Industries
Transportation
Power and Utilities
Consumer Product
Companies
Subindustry
2007-2008
494.8
494.9
494.9
496.8
498.4
498.4
498.6
500.4
501.2
504.4
504.7
506.5
506.7
507.0
507.2
507.4
508.1
508.3
510.8
513.1
11.2
41.1
7.2
5.0
16.7
20.7
0.0
N/A
-0.3
38.0
0.4
89.7
8.3
17.6
29.6
12.2
6.0
-3.7
29.7
N/A
1.0
2008
514.3
Revenue
change (%)
624.8
18.7
27.7
-2.0
23.3
27.7
19.4
8.4
4.2
21.5
10.9
11.5
0.8
-0.7
21.7
4.4
N/A
22.6
Revenue from
sales
514.7
515.5
516.7
518.6
520.3
523.0
524.4
524.4
525.0
525.1
526.0
528.5
529.0
531.3
532.5
534.0
535.7
536.3
29.1
2007-2008
2008
536.6
Revenue
change (%)
Revenue from
sales
39.1
7.2
-22.4
15.5
3.8
55.2
-97.0
N/A
N/A
-16.1
18.9
68.7
7.5
99.3
N/A
34.1
7.1
5.5
11.7
N/A
106.8
2008
Net income
-9.3
4.9
8.7
7.6
N/A
22.3
6.3
11.3
0.3
7.6
11.9
3.3
-63.6
-60.2
4.2
55.1
N/A
81.0
-0.2
2008
Net income
37.6
-52.8
N/A
23.1
48.8
-1.8
N/A
N/A
N/A
N/A
-68.1
7.3
62.8
7.2
N/A
147.9
11.6
22.7
-4.4
N/A
-2.9
2007-2008
Net income
change (%)
-18.7
45.6
-51.0
108.0
N/A
-26.6
-78.5
4.3
115.4
28.3
-5.7
121.6
-121.0
N/A
-10.1
-48.3
N/A
18.0
-108.6
2007-2008
Net income
change (%)
N/A
97.3
N/A
N/A
N/A
N/A
N/A
N/A
104.7
79.0
128.3
80.0
107.7
90.7
N/A
N/A
83.3
N/A
N/A
N/A
N/A
Q1 2009
Revenue
from sales
N/A
116.5
173.3
N/A
101.3
207.2
86.8
N/A
119.4
N/A
N/A
N/A
66.7
N/A
N/A
127.9
N/A
N/A
N/A
Q1 2009
Revenue
from sales
N/A
-11.8
N/A
N/A
N/A
N/A
N/A
N/A
-5.3
-37.2
-0.7
-16.5
0.1
-21.7
N/A
N/A
-33.3
N/A
N/A
N/A
N/A
Q1 2008-Q1 2009
Revenue
change (%)
N/A
-1.2
17.7
N/A
-6.6
18.9
-31.6
N/A
-13.4
N/A
N/A
N/A
-47.4
N/A
N/A
-8.9
N/A
N/A
N/A
Q1 2008-Q1 2009
Revenue
change (%)
100
101
Flextronics
LPP
Lietuvos geležinkeliai
498
499
500
Data from 2007
Johnson Controls
International
497
Allseeds
494
Eles
Colas-Hungária Építőipari
493
Man Bus
CFR Marfa
492
495
Zakłady Azotowe
Kędzierzyn
491
496
Jabil Circuit Magyarország
490
Lithuania
Poland
Poland
Slovakia
Poland
Slovenia
Ukraine
Hungary
Romania
Poland
Hungary
Ukraine
Epicentr K
Ukraine
489
Dneprospetsstal named
after A.N.Kuzmin
487
Poland
Poland
Krajowa Spółka Cukrowa
Polski Cukier
486
Poland
PGE ZE Warszawa-Teren
Toyota Motor Industries
485
Czech Republic
488
Pharmos
484
Ukraine
Country
Zaporizhyaoblenergo
483
Poland
Poland
Poland
Poland
Poland
Poland
Slovakia
Ukraine
Rank Company name
Górażdże Cement
Netto
481
BASF
480
482
BOT Elektrownia Opole
Jabil Circuit
477
Sokołów
OMV Slovensko
476
478
Metro Cash & Carry Slovakia Slovakia
475
479
AvtoKraz
474
Poland
Latvia
Petrotank
Statoil
Poland
472
Gdanska Stocznia
Remontowa
471
Poland
Ukraine
Czech Republic
473
Severodonetsk Azot
Sieć Handlowa Delikatesy
Centrum
469
Inventec (Czech)
468
470
Paramo
467
Czech Republic
Avtomobilni Dorogy Ukrainy Ukraine
Country
466
Rank Company name
Consumer Business
and Transportation
Consumer Business
and Transportation
Technology, Media
Manufacturing
Manufacturing
Consumer Business
and Transportation
Real Estate
Consumer Business
and Transportation
Manufacturing
Manufacturing
Consumer Business
and Transportation
Industry
Manufacturing
Consumer Business
and Transportation
Manufacturing
Life Sciences
and Health Care
Consumer Business
and Transportation
Manufacturing
Manufacturing
Consumer Business
and Transportation
Manufacturing
Consumer Business
and Transportation
Manufacturing
Manufacturing
Consumer Business
and Transportation
Manufacturing
Technology, Media
Manufacturing
Public Sector
Industry
Transportation
Retail
Technology
Industrial Products
and Services
Automotive
Power and Utilities
Consumer Product
Companies
Construction
Companies
Transportation
Process Industries
Industrial Products
and Services
Consumer Services
Power and Utilities
Subindustry
Process Industries
Consumer Product
Companies
Automotive
Life Sciences
Power and Utilities
Retail
Process Industries
Process Industries
Consumer Product
Companies
Power and Utilities
Industrial Products
and Services
Oil and Gas
Retail
Automotive
Oil and Gas
Oil and Gas
Industrial Products
and Services
Retail
Process Industries
Technology
Process Industries
Local or Municipal
Government
Subindustry
2007-2008
461.6
462.1
463.2
463.4
464.1
464.8
465.3
467.3
468.2
469.7
471.0
471.5
13.3
37.2
5.9
53.1
34.1
-9.4
25.5
51.2
-15.0
4.9
-56.9
N/A
N/A
2008
472.0
Revenue
change (%)
-13.0
-5.9
28.7
14.5
14.5
35.1
24.0
5.6
9.1
N/A
N/A
42.9
4.6
14.8
20.7
39.1
32.9
275.8
20.6
-3.4
24.0
Revenue from
sales
472.1
473.6
475.1
475.6
477.1
478.3
480.0
480.6
482.1
482.1
483.5
483.6
484.2
486.6
486.8
487.6
488.3
489.7
489.9
492.5
493.3
1.4
2007-2008
2008
494.0
Revenue
change (%)
Revenue from
sales
N/A
47.7
6.6
5.0
67.5
1.5
-19.9
20.3
-46.0
37.8
-2.4
N/A
N/A
2008
Net income
-21.7
-50.6
21.3
0.5
-3.0
N/A
146.9
N/A
6.9
N/A
N/A
N/A
N/A
13.4
3.1
1.6
12.8
N/A
2.9
1.0
1.5
-2.7
2008
Net income
N/A
33.9
264.2
142.4
135.5
-94.0
N/A
N/A
N/A
16.0
72.6
N/A
N/A
2007-2008
Net income
change (%)
-143.3
N/A
N/A
-6.1
N/A
N/A
52.1
N/A
124.5
N/A
N/A
N/A
N/A
-42.5
-73.8
23.1
-6.2
N/A
-53.5
N/A
-79.7
N/A
2007-2008
Net income
change (%)
N/A
103.0
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Q1 2009
Revenue
from sales
N/A
N/A
18.1
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
18.2
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Q1 2009
Revenue
from sales
N/A
8.4
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Q1 2008-Q1 2009
Revenue
change (%)
N/A
N/A
-18.5
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-84.1
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Q1 2008-Q1 2009
Revenue
change (%)
Appendix 2:
Industry rankings
103
Banking
Rank
Company name
Country
Assets
Assets
change (%)
Net
income
Net income
change (%)
Assets
Assets
change (%)
ROA
(%)
1
OTP Bank
Hungary
2008
2007-2008
2008
2007-2008
Q1 2009
Q1 2008-Q1 2009
2008
35,423.5
6.1
959.5
15.8
32,659.1
-6.4
2
PKO BP
2.7
Poland
32,268.2
6.5
893.8
14.9
29,648.9
-22.4
3
2.8
Česká spořitelna
Czech Republic
32,017.5
4.7
633.9
44.9
31,947.8
-4.1
2.0
4
Pekao
Poland
31,622.3
-8.7
1,008.2
76.4
28,478.1
-18.0
5
ČSOB
Czech Republic
30,615.9
-11.9
43.9
-88.8
32,019.3
6
Komerční banka
Czech Republic
25,957.8
4.4
530.5
31.2
7
Swedbank
Estonia
25,229.3
-2.3
393.8
8
BRE
Poland
19,798.0
26.8
244.1
Rank
Top
500
Rank
Company name
Country
Revenue
from sales
Revenue
change (%)
Net
income
Net income
change (%)
Revenue
from sales
2008
2007-2008
2008
2007-2008
Q1 2009
Q1 2008-Q1 2009
1
7
Grupa Metro w
Polsce
Poland
5,924.0
36.7
N/A
N/A
N/A
N/A
2
18
Ukrainian railway
state company
Ukraine
4,379.6
9.7
-1.4
N/A
627.6
-31.6
3.2
3
21
Agrofert Holding
Czech Republic
4,063.6
35.3
177.6
32.8
N/A
N/A
-3.8
0.1
4
25
Agrokor
Croatia
3,829.7
35.7
33.5
-46.0
739.2
3.7
25,038.5
-6.6
2.0
5
29
Poland
3,642.4
53.1
N/A
N/A
N/A
N/A
-18.5
24,304.4
-6.2
1.6
Jeronimo Martins
Dystrybucja
30.1
17,281.5
0.6
1.2
6
42
Vilniaus prekyba
Lithuania
2,909.1
25.7
243.0
122.1
N/A
N/A
46
Skupina Mercator
Slovenia
2,708.6
10.8
40.8
-7.0
618.0
1.2
N/A
N/A
0.1
7
99.1
16,970.1
-2.1
3.2
8
48
Tesco
Poland
2,662.8
10.9
76.6
29.3
556.7
-12.5
-24.7
14,507.9
-15.1
0.8
9
58
PKP
Poland
2,562.5
2.3
N/A
N/A
N/A
N/A
16.2
N/A
N/A
1.5
10
59
Maxima
Lithuania
2,487.0
24.8
116.0
38.1
N/A
N/A
-7.5
12,735.1
0.0
2.0
425.9
39.3
11,957.9
7.9
3.3
136.8
10.9
10,217.0
-14.7
1.1
25.7
103.4
-28.9
N/A
N/A
0.9
13.7
112.1
-5.7
10,799.3
N/A
1.0
11,292.0
32.5
117.7
-3.5
10,261.1
-23.2
1.0
Revenue
change (%)
11,230.5
32.6
162.7
35.1
9,961.0
18.2
1.4
10,897.4
12.0
28.5
-57.5
N/A
N/A
0.3
9
NLB Group
Slovenia
10
BCR
Romania
17,334.3
-1.2
552.3
11
ING
Poland
16,683.6
14.9
126.8
12
ZABA
Croatia
14,204.7
8.8
212.6
13
BZWBK
Poland
13,862.1
20.2
271.7
14
BRD
Romania
12,777.2
15.4
15
Slovenská sporiteľňa
Slovakia
12,555.0
38.8
16
K&H
Hungary
12,019.4
17
CIB
Hungary
11,476.7
18
Millennium
Poland
19
VÚB
Slovakia
20
MKB
Hungary
18,918.2
3.3
22.8
-83.7
Insurance
Rank
1
Company name
PZU
Country
Poland
Gross written
premium
Net income
change (%)
Gross written
premium
Gross written
premium
change (%)
Rank
Top
500
Rank
Company name
Country
Revenue
from sales
Revenue
change (%)
Net
income
Net income
change (%)
Revenue
from sales
2008
2007-2008
2008
2007-2008
Q1 2009
Q1 2008-Q1 2009
1
1
PKN Orlen
Poland
22,645.7
34.3
-719.4
N/A
3,268.8
-34.8
2
2
MOL
Hungary
14,069.6
36.3
562.1
-46.2
2,147.5
-29.2
3
5
ČEZ
Czech Republic
7,281.7
15.8
1,898.3
23.2
1,931.2
1.6
4
6
Naftogaz of Ukraine
Ukraine
6,609.9
49.7
1,524.4
N/A
N/A
N/A
5
9
PGE
Poland
5,864.7
-3.9
760.3
-39.7
N/A
N/A
6
10
PGNiG
Poland
5,248.1
19.2
246.5
1.8
1,418.3
-4.9
7
13
Mažeikių nafta
Lithuania
5,074.1
98.6
15.9
-38.6
652.3
-37.7
8
15
Lotos
Poland
4,639.5
33.7
-111.0
-151.6
604.0
-39.4
Gross written
premium
change (%)
Net
income
2008
2007-2008
2008
2007-2008
Q1 2009
Q1 2008-Q1 2009
9
16
Petrom
Romania
4,551.3
23.5
277.8
-47.9
711.9
-29.4
6,064.6
50.4
666.7
-30.0
989.0
-25.2
10
17
Energorynok
Ukraine
4,496.8
N/A
N/A
N/A
N/A
N/A
2
Česká pojišťovna
Czech Republic
1,905.0
25.0
62.8
-74.1
231.7
-5.6
3
Warta
Poland
1,407.8
107.2
25.9
-43.2
N/A
N/A
4
Kooperativa
pojišťovna
Czech Republic
1,231.9
17.5
66.1
36.2
321.9
-4.0
5
Commercial Union
Polska
Poland
1,161.8
36.6
141.8
14.8
N/A
N/A
6
ING Polska
Poland
1,103.6
202.1
47.1
8.2
187.2
127.2
7
Allianz Polska
Poland
882.7
1.0
N/A
N/A
N/A
N/A
8
Zavarovalnica Triglav
Slovenia
753.9
6.5
14.9
-65.3
217.8
2.0
9
Allianz Hungaria
Hungary
739.3
1.5
31.6
-51.0
170.7
-26.0
10
Generali-Providencia
Hungary
533.8
-3.0
37.1
43.4
120.1
-16.0
11
Uniqa Polska
Poland
518.2
209.6
2.2
-36.2
109.4
23.1
12
STU Ergo Hestia
Poland
514.0
31.0
32.8
N/A
N/A
N/A
13
Allianz - Slovenská
poisťovňa
Slovakia
511.4
9.9
68.2
-34.0
164.5
11.7
14
Croatia osiguranje
Croatia
497.6
7.1
9.1
-49.6
N/A
N/A
15
AIG Amplico Life
Poland
493.7
-1.1
103.4
35.3
92.5
-18.1
16
AXA Życie
Poland
457.0
352.2
-13.6
-43.3
21.0
17
Kooperativa Slovakia
Slovakia
443.8
18.5
7.7
-73.0
18
Generali Polska
Poland
396.3
59.5
7.7
19
Allianz pojišťovna
Czech Republic
395.4
14.4
20
Nordea Polska
Poland
380.5
63.1
104
Revenue
change (%)
Rank
Top
500
Rank
Company name
Country
Revenue
from sales
Revenue
change (%)
Net
income
Net income
change (%)
Revenue
from sales
Revenue
change (%)
2008
2007-2008
2008
2007-2008
Q1 2009
Q1 2008-Q1 2009
1
120
PGF
Poland
1,450.9
24.4
14.7
-24.8
378.3
-19.6
2
155
Farmacol
Poland
1,199.4
24.0
20.2
4.7
298.2
-0.3
3
171
Torfarm
Poland
1,130.3
30.0
4.1
2.1
291.0
-10.3
4
173
Chinoin
+ Sanofi-aventis
Hungary
1,126.1
17.0
83.8
N/A
N/A
N/A
5
185
PHOENIX lékárenský
velkoobchod
Czech Republic
1,028.7
21.0
6.2
29.0
N/A
N/A
6
196
GSK
Poland
984.6
38.7
N/A
N/A
N/A
N/A
7
204
Lek
Slovenia
955.5
N/A
N/A
N/A
N/A
N/A
8
208
Krka Group
Slovenia
949.9
21.6
155.9
17.3
244.4
0.3
-73.3
9
210
Richter Gedeon
Hungary
939.7
5.6
165.5
22.4
N/A
N/A
151.0
7.1
10
217
913.8
18.1
9.1
1.7
N/A
N/A
N/A
N/A
N/A
Hungaropharma
Hungary
Gyógyszerkereskedelmi
37.7
26.8
119.6
9.3
0.0
-96.5
86.3
-18.8
105
Manufacturing
Rank
Top
500
Rank
Company name
Country
Revenue
from sales
Revenue
change (%)
Net
income
Net income
change (%)
Revenue
from sales
Revenue
change (%)
1
3
MetInvest Holding
Ukraine
2008
2007-2008
2008
2007-2008
Q1 2009
Q1 2008-Q1 2009
9,136.1
60.5
1,938.1
91.3
N/A
N/A
2
4
Škoda Auto
3
8
Audi Hungária
Czech Republic
8,379.0
2.8
433.7
-24.7
1,519.0
-33.3
Hungary
5,908.4
0.0
N/A
N/A
N/A
N/A
4
11
Volkswagen
Slovakia
Slovakia
5,172.9
-9.6
283.2
25.8
N/A
N/A
5
6
20
Fiat
Poland
4,306.3
40.2
88.8
-3.8
1,039.5
-0.4
24
ArcelorMittal
Poland
Poland
3,870.1
N/A
0.0
N/A
N/A
N/A
7
43
ArcelorMittal Kryvyj
Rih
Ukraine
2,891.7
6.0
611.8
11.0
N/A
N/A
8
45
U.S. Steel Košice
Slovakia
2,836.8
-7.7
338.2
-16.7
N/A
N/A
9
49
GE Hungary
Hungary
2,656.5
3.9
351.8
-27.5
N/A
N/A
10
52
Moravia Steel
Czech Republic
2,615.4
17.2
59.7
-48.3
N/A
N/A
Revenue
from sales
Revenue
change (%)
Net
income
Net income
change (%)
Revenue
from sales
Revenue
change (%)
2008
2007-2008
2008
2007-2008
Q1 2009
Q1 2008-Q1 2009
Rank
Top
500
Rank
Company name
Country
1
12
TPSA
Poland
5,172.0
7.2
623.6
3.7
958.7
-24.3
2
14
Nokia
Hungary
5,017.7
N/A
N/A
N/A
N/A
N/A
3
34
Samsung Electronics
Slovakia
Slovakia
3,265.0
-0.7
-29.5
-128.0
N/A
N/A
4
37
Foxconn
Czech Republic
3,059.8
0.6
-44.0
N/A
N/A
N/A
5
47
Magyar Telekom
Hungary
2,678.8
-0.5
420.3
44.6
541.2
-13.7
6
50
Telefónica O2
Czech Republic
2,647.8
15.2
466.2
24.6
568.2
-6.4
7
55
Samsung Electronics
Magyar
Hungary
2,588.0
27.1
22.3
-58.8
N/A
N/A
8
61
Centertel
Poland
2,458.3
15.3
408.3
2.5
N/A
N/A
9
65
Polkomtel
Poland
2,415.1
17.1
387.0
7.9
449.3
-20.8
10
68
PTC
Poland
2,255.0
14.9
N/A
N/A
N/A
N/A
Top
500
Rank
Company name
Country
Revenue
from sales
Revenue
change (%)
Net
income
Net income
change (%)
Revenue
from sales
Revenue
change (%)
2008
2007-2008
2008
2007-2008
Q1 2009
Q1 2008-Q1 2009
1
115
Skanska CS
Czech Republic
1,507.6
16.6
40.6
-4.2
N/A
N/A
2
147
Polimex-Mostostal
Poland
1,224.8
24.3
40.0
29.6
196.1
-23.7
3
166
Metrostav
Czech Republic
1,145.1
14.3
30.1
19.4
N/A
N/A
4
205
Budimex
Poland
953.8
17.3
29.8
N/A
144.0
-21.2
5
215
Eurovia CS
Czech Republic
922.5
19.2
37.1
16.3
68.0
-31.3
6
241
Budimex Dromex
Poland
833.4
29.6
17.1
N/A
N/A
N/A
7
265
Skanska
Poland
791.5
-0.7
38.3
46.5
N/A
N/A
8
298
Strabag
Czech Republic
719.4
2.3
8.3
38.3
N/A
N/A
9
358
Mostostal
Warszawa
Poland
629.6
23.5
26.3
69.6
126.9
8.6
10
361
Strabag
Poland
624.4
8.2
26.3
43.7
N/A
N/A
Real Estate
Rank
Data from 2007
106
107
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Business at a crossroads The right path ahead
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Central European Technology Fast 50
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