Despite concerns about the impact of the war in Ukraine on the economies of Central and Eastern Europe (CEE), the region has shown good resilience, even if the energy crisis and rising costs have slowed some countries in the region. economic, Coface research shows.

The oil and gas industry is the leader of the TOP-500 by fields of activity, followed by utilities, automotive and transport.

As a country, Poland is home to the largest enterprises in the region, the total turnover in 2022 increased by 37.9% compared to the previous year.

Business challenges in the CEE region have recently been characterized by a number of industry difficulties, despite the recovery from the Covid-19 pandemic. “Later, the region suffered from Russia’s full-scale invasion of Ukraine, which led to a humanitarian and economic crisis. This has led to rising costs, especially for energy goods, as well as shortages of production components and disruptions in supply chains,” explains Grzegorz Sielewicz, Coface’s regional economist in Central and Eastern Europe. “Despite these challenges, the EEC region managed to achieve solid GDP growth of 4.0% in 2022 (after 6.2% the previous year) supported by rising inventories and robust domestic demand.”

Coface has launched its 15th annual study of the 500 largest companies in CEE, which ranks companies by turnover and analyzes additional factors such as the number of employees, the scope of the companies’ activities, the sectors of activity, the markets, and Coface. credit ratings. Economic indicators of 500 companies serve as a representative indicator of market trends in the region.

Romania takes 3rd place, 60 companies are represented in the rating

The third place on the podium was taken by Romania, which overtook Hungary in this position and has 60 players in the top. The turnover of Romanian companies increased by 44.1% to 112.2 billion euros, and the net profit increased by 142.5%, surpassing all other countries at this level. Minerals, chemicals, petroleum, plastics and pharmaceuticals represent the largest sector with the largest share in turnover (32.0%). It is followed by utilities and communal services, as well as non-specialized trade with a turnover share of 18.7% and 16.3%, respectively.

Poland leads the ranking, and the automotive sector is slowing down

PKN Orlen remains unbeaten in first place, having significantly strengthened its position with a turnover increase of 111% after +52% in the previous year. Other companies such as RWE from the Czech Republic (2nd place), multinational oil and gas company MOL Hungary (3rd place), Hungarian company MVM Energetika (4th place), Skoda Auto from the Czech Republic (5th place), retailer Jeronimo Martins Polska (6th place) and the Polish energy company PGE (7th place) retained their positions at the top of the rating. All of these companies showed higher turnover in 2022 compared to the previous year, and electricity trading companies such as RWE and MVM even reported triple-digit revenue growth. Conversely, the automotive sector was less represented in the top 10 of this edition of the rating.

Some companies outperformed their competitors and showed better results compared to the previous year. These companies reflect the economic situation, namely that they have benefited from the constant increase in commodity prices. These are companies whose business deals with the trading and transportation of electricity, as well as petrochemical companies, such as the Bulgarian energy complex Maritsa Iztok 2 (139th place), which moved up 256 positions thanks to a 199% increase in turnover, the Croatian company Petrol (263rd place), which rose by 231 positions, the Lithuanian company Ignitis UAB (80th place), which rose by 214 positions, and the Romanian company Tinmar Energy (165th place) with +202 steps in the rating.

Industry developments: Changes in the TOP-3

The three key sectors, represented by the largest companies in the region, continue to occupy a significant share of the received revenues – almost 58%. However, the leading industry group has changed. The increase in the prices of raw materials led to positive dynamics of the turnover of companies that produce and trade in energy. Thus, the greatest increase in turnover in 2022 was observed in the spheres of communal economy and communal services, as well as the mineral, chemical, oil, plastic and pharmaceutical industries – by 64.1% and 60.9%, respectively. In addition, prices of agricultural products and various inputs also increased, so all sectors recorded double-digit growth in turnover, except for construction, which reported an increase of 8.1%.

The Minerals, Chemicals, Petroleum, Plastics & Pharmaceuticals sector was once again the best-represented sector in the ECE Top 500. This sector saw the largest increase in net income (+100.5%) as rising oil and natural gas prices opened up opportunities for profit in account of refining margins despite current challenges.

The utilities sector rose from fourth to second position thanks to exceptional revenue growth (+64.1%). Compared to the previous year (2021), this sector increased its representation in the current ranking by 15 companies, achieving the highest growth among all sectors. Many utility and utility companies are state-owned or have the state in their ownership structure.

While the automotive and transportation sectors remain among the leading sectors, they have faced challenges, including a drop in demand due to the pandemic and disruptions in supply chains, which have led to lower revenues despite some growth in turnover and profits. This industry remains dominant in four countries: the Czech Republic, Hungary, Romania and Slovakia.

“The CEE countries maintained their role as active exporters, primarily to Western Europe, and expanded their exports to other destinations through direct transportation and supply chain involvement. However, the main risk in 2023 is the difficult external economic environment in Western Europe, especially in Germany, which may affect CEE countries due to weak economic activity and low level of world trade,” explains Grzegorz Selewicz. “Despite this, a gradual recovery is expected in the coming quarters. Although household consumption has been hit by inflation and rising interest rates, it is expected to gradually support growth as inflation progresses and the labor market remains strong.”

“If the foreign economic situation also improves, the path to recovery will be clear, and the countries of the region will be able to register growth rates that correspond to their potential again. However, corporate liquidity can be affected by a number of issues. Insolvency has already increased after the end of the support measures and exceeded the pre-pandemic level due to the macroeconomic deterioration,” adds Yaroslav Yavorskyi.