Czech firms maintain their position among the CE Top 500 despite the Recession

Prague, 11 September 2009 — Czech firms achieved good results in 2008 despite a rapid expansion of the global economic crisis. The results of the CE TOP 500 ranking show that during 2008, the 69 strongest Czech companies increased their revenues in total by 17% to EUR 103 billion. Profitability saw a decline to 5.7% from 6.9% in 2007. However, in the first quarter of 2009, the companies’ results of operations began to fully reflect the impact of the crisis.

As the third consecutive report, this year’s ranking enables easy comparison between the performance of region’s largest companies over the last 12 months with that of previous years. During 2008, 388 companies increased their revenues by an average of 20%. In the first quarter of 2009, 76% of those companies on which Deloitte has financial information saw their revenue decrease by 23% compared with the first quarter of 2008. The picture is similar across a range of industries in the region, with first quarter data for 2009 indicating significant drops in revenue for manufacturing (down by 33%), real estate, (22% decline) and energy and resources (E&R, 17% decrease)

Based on turnover, Škoda Auto is the largest car producer in Central Europe and Skanska is the region’s largest construction company.

As in previous years, the E&R sector was still the most widely represented in the Top 500 in 2008 with 30% of all entries. Manufacturers declined from 27% of the list in 2008 to just 23%, mainly as a result of the reduced export opportunities in Western Europe. With a revenue decline of just 1%, the life sciences and healthcare sector was virtually unique in suffering little or no impact.

Among CE’s countries, Poland was a special case, by avoiding a recession, with GDP growth in the first two quarters of 2009 standing at 0.8% and 1.1% respectively. Alongside this group of one, Deloitte has identified another two sets of countries based on their likely ability to recover quickly from recession The first, comprising those countries that are likely to find recovery more challenging, is made up of Croatia, Estonia, Hungary, Latvia, Lithuania, Macedonia, Serbia and Ukraine. The countries that appear to be in better shape for rapid recovery are Albania, Bosnia-Herzegovina, Bulgaria, the Czech Republic, Moldova, Montenegro, Romania, Slovenia and Slovakia.

This is one broad conclusion of the 2009 Deloitte CE Top 500 report, which as well as ranking the region’s 500 largest companies draws on the views of leading economists, academics and other experts to provide a fascinating and insightful analysis of how a region of 18 very different countries has combated the impact of a once-in-a-lifetime moment of shared crisis. The experts also warns that those companies and countries that have effectively grasped the opportunity to overhaul and reform creaking structures, systems and processes that will emerge in the years to come as the strongest players in the region.

More info: www.deloitte.com/cetop500

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 and Eastern 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.

In cases where revenue for the fiscal year 2008 was not available, we used the reported 2007 revenue as a proxy for 2008. 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.

Quarterly data was collected for a limited number of companies (30% on average) and this is largely unconsolidated data.

Deloitte has sourced the information by individually approaching the companies themselves, from publicly available databases and estimates based on a comparison with last years’ results and our research.

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