CETOP500 2011 Final

Central Europe 2011
Thegame changers of 2011 in Central Europe are Growth, Performance and Innovation.
Itgives me great pleasure to welcome you to the2011 Deloitte CE Top 500 ranking and report. Itprovides anat aglance overview of thewhole Central European region and is full of rich content and insight for you to use and return to whenever you need it. Iwould also like to acknowledge and thank Rzeczpospolita for their continued support and cooperation with theranking. This years analysis of Central Europes leading 500 companies sees abusiness community across 18 countries and seven main industries united by one factor: concerns about revenue growth. After three years of downturn and fragile recovery, characterised by cost-cutting that has left little corporate fat, thefocus now is on increasing revenues. And thequestion is: how? Itmakes little difference whether companies are from those economies showing some signs of recovery, like Poland, theCzech Republic and Slovakia, or from those such asRomania, Hungary and Croatia whose economies are still struggling to recover. They face thesame issues: consumers are limiting their spending; businesses are keeping atight rein on costs; and slowing Western economies are threatening export opportunities. This year, in interviews we carried out with 72 senior business executives from across theregion, theimportance of having sound growth, performance and innovation strategies was aconstantly recurring theme. These, they felt, are thepowerful game changers that every business will need asthey chart theway ahead through continuing difficult times. Michael J. Barrington Chief Executive Officer Deloitte Central Europe Developments on theCE and global markets, where we see renewed uncertainty, would indicate that competitiveness and efficiency, both at micro and macro levels, are key elements of success. Innovation is themost critical element of competiveness in developing and developed economies. Ibelieve that 2011 will be seen astheyear when innovative responses to changes in demand, financing conditions and theoperational environment truly became thenew norm. Iam confident that, whatever challenges lie ahead, Central European companies will successfully create some great new opportunities to generate growth, making this years report acause, if not for celebration, then certainly for optimism.
Ranking overview
Foreword Ranking Insights The5 major findings Overview of theleaders Upwardly mobile companies
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Ranking
Theregions leading companies have thewill and expertise to recover from even thedeepest of crises.
This report is published at atime when thelikelihood of adouble-dip recession is increasing in developed economies across theworld, driven by factors including slow Western growth figures, concerns about public debt levels and thecrisis facing theeuro. Itis therefore possible that we might in thefuture come to see 2010 asamoment when theworld paused to draw breath after thecrisis of 2008 and 2009, before areturn to renewed difficulties in 2011 and beyond. Theperformance of theCentral European regions leading companies during this period, however, was highly encouraging, with an11% average growth in revenues across theregion in 2010, astrong contrast with thenearly 12% average fall in revenues experienced in 2009. Itonly remains to be seen whether this increase was atemporary recovery or anindication of alonger term return to growth. Such aperformance shows that theregions leading companies have thewill and theoperational and strategic expertise to support arecovery from even thedeepest of crises. These strengths continue to be important assets across theregion in this time of continued uncertain growth and economic concern.
Tomasz Ochrymowicz Partner, Financial Advisory Deloitte Central Europe
Central Europe TOP 5002011
Ranking Insights
Even themost cursory glance at thelist of this years 10 largest companies in theCE Top 500 ranking reveals that there has been little change in order since last years report. This year, asthen, shows atop 10 dominated by theregions oil&gas and power companies, which occupy seven places between them including numbers one (PKN) and two (MOL), both of whose revenues rose by just over athird. One of theonly three exceptions is Skoda, which rose to third place, having slipped to fourth in 2009 following a12% slide in its revenues. This year, however, theCzech automotive company started to see thebenefits of its new growth strategy which has helped itachieve a22.4% growth in revenues. Its profits also increased more than twofold. One faller in this years top 10 was another Czech company, thestate-owned CEZ, which fell from third to fifth place due to arevenue increase of 5.9%, lower than those companies around itin theranking. CEZ, which remains theregions most valuable company by capitalisation, is currently focused on increasing theefficiency and cost-effectiveness of its key power generation operations. Thefurthest faller in thetop 10, however, was Polish power company PGE, which slipped from sixth to ninth on theback of arevenue increase of 2.6% asitsimplified its operations and focused on modernising its conventional power-generation capabilities. Theonly new entrant, Polish/Portuguese retailer Jeronimo Martins Dystrybucja (whose revenues rose by 30.3%), can be expected to move up thetable even further in years to come asitimplements anintensive store-opening programme. For fuller details on thetop 10, please see page 23 of this report. Those making thebiggest move This years report features for thefirst time aspecial focus on those 20 companies that have moved furthest up theTop 500 ranking since 2010. Heading this category is Sharp Manufacturing Poland, which according to its President Nobuo Harada successfully leveraged thesales opportunities afforded by the2010 World Cup finals to grow its 2010 revenues by 65% and move from place 430 in 2009 to 143.
Amongst theremaining three highest jumpers, Ukrainian iron ore producer Ferrexpo moved from 383 in 2009 to 175 on theback of a109.8% revenue increase, while Polish fuel exporter Polski Koks took advantage of sliding Chinese coke exports to grow revenues by 94.2% and move from 408 to 211. See page 26 of this report for details on therankings biggest jumpers. Thetrends at play in 2010 Thelast year has seen companies and countries across Central Europe fighting to overcome thecontinuing impact of 2008s global economic slowdown.
Thesevere downturn in economic activity experienced in 2009 was replaced by amore positive upswing toward economic growth in 2010. Some countries in theCEE region benefited from theongoing strength of German exports, which was also related to strong growth in fast growing economies like China or Brazil.
Ludk Niedermayer, Lead Economist, Deloitte Czech Republic Some countries have been more successful than others. Strengthening GDP growth over thelast year in Poland, theCzech Republic and Slovakia has not been matched in other countries such asCroatia, Romania and Bulgaria. And following therecent announcement of flat-lining figures in Germany and France, thetwin powerhouses of theEurozone, there continues to be amixed picture for the18 Central European countries featured in the2011 edition of theCE Top 500.
That said, indications of improving business confidence have been visible during thelast year across theregion, astracked in Deloittes Business Sentiment Index and Private Equity Confidence Survey. Both surveys track thesentiments and opinions of business leaders across theregion and from within thePrivate Equity community on anumber of issues affecting their businesses. Their responses in thelatest editions reflected areturn to amore positive outlook. This followed apositive upswing towards economic growth in 2010 following thedownturn of 2009. Italso coincided with astrong period of export by Germany to fast-growing countries including China and Brazil, which in turn benefited some countries in theregion. 2010 saw arecovery in exports by key economies in theregion. While Poland and Slovakia both saw adecline in exports during 2009 (by 6.8% and 15.9% respectively) they both recovered in 2010 to post arise of 10% (Poland) and 17.7% (Slovakia). Similarly some other countries that saw asteep decline in their overall economic activity in 2009 returned to growth in 2010; Estonia, for example, which saw adecline of 13.9% in its GDP in 2009 posted growth of 4.4% in 2010.
Graph 1: Median% revenue change - Q1 2011 vs. Q1 2010 35%
Companies performing well globally and locally Western European and US companies improved results in 2010 versus 2009. In theUS, of the232 companies on theStandard and Poors 500 index that reported earnings by early August 2011, net income had risen by 18% in theyear to thesecond quarter. In Western Europe, meanwhile, earnings were up by 15% in the139 Euro Stoxx 600 firms that had reported at thesame time. Themedian revenue change in euros among theCE Top 500 companies was 17%, demonstrating that in Central Europe too, revenue growth by companies was strong across most countries. Only in two countries (Croatia and Bulgaria) did thetotal revenues of featured companies slip, while by way of contrast those in Slovenia and Slovakia saw total revenues rise by animpressive 32% and 33% respectively.
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Central European economies have recovered very quickly after theglobal crisis and growth continues to be fairly buoyant. However, there are clear differences in thestrength of recovery and therisks that lie ahead.
Violeta Klyviene, Senior Baltic Analyst, Danske Bank, Lithuania
TheCzech Republic accounted for 16%, or 80 companies in theranking. This represented asignificant increase over 2010, when 73 Czech companies made thetop 500 ranking. This underlines thesuccessful development of thecountry asawhole and thestrong fundamentals of its economy. Another country to show anincreased representation in theranking was Romania, whose companies share of thetop 500 rose from 6% to 8% (arise from 32 to 38 companies), reflecting theongoing pace of economic development, particularly in industries such asconsumer business and transportation and energy and resources. Of all theindustry sectors featured in thereport, theone that had thegreatest increase in number of companies included within theranking was Manufacturing. Not only did thenumber of manufacturers featured in theranking increase by 16 over 2010 to 117, their 23% median growth in euros over theyear was also substantially ahead of thenext best industry (energy & resources, 13%). This was due among other factors, to theexport growth to CEs biggest neighbouring economy Germany, aswell asstronger local industrial demand.
Polands entries comprised adominant 35% of theranking with 173 companies. This was, however, adecline of seven companies since the2010 report was published, due to adegree of consolidation in industries including energy & resources aswell astechnology, media and telecommunications. In addition, thenumber of Polish consumer business and transportation companies in theranking declined by 10 to 63, making this thesector to lose themost entrants overall during theyear. However, at atotal of 157 across theregion, consumer business and transportation is still well ahead of its total of 149 companies recorded in 2008.
Graph 2: Top 500 broken down by country by number of companies - 2010, 2009
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Value by capitalisation CEZ is theregions most valuable company by market capitalisation. At theend of July 2011, itwas approximately 50% larger than its nearest rival Polish bank PKO BP. Thebiggest riser in this category was Polish metals company KGHM, whose 55% year-on-year earnings increase significantly exceeded analyst expectations to make itastock market darling and increase its capitalisation by over 80% from theend of 2009 to theend of July 2011.
Table 1: Top companies by market capitalisation # Company County Market capitalisation Asof 31.12.2010 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 EZ PKO BP PGE Pekao KGHM PZU MOL PGNiG Komern banka TPSA Telefnica Czech Republic OTP Bank Petrom PKN Orlen BZ WBK JSW ArcelorMittal Kryvyj Rih BRE Ferrexpo Group Tauron ZABA T-HT Group ING Handlowy Richter Gedeon Czech Republic Poland Poland Poland Poland Poland Hungary Poland Czech Republic Poland Czech Republic Hungary Romania Poland Poland Poland Ukraine Poland Ukraine Poland Croatia Croatia Poland Poland Hungary 16,693 13,683 10,949 11,858 8,737 7,751 7,795 5,319 6,680 5,514 4,869 5,043 4,429 4,946 3,965 3,874 3,230 2,933 2,907 2,169 3,201 2,937 3,085 2,846 Asof 31.07.2011 19,337 12,810 10,816 10,416 9,515 8,156 7,873 6,234 5,903 5,805 5,695 5,691 5,027 4,986 4,353 3,921 3,554 3,341 3,129 2,813 2,795 2,779 2,756 2,682 2,607 16% -6% -1% -12% 9% 5% 1% 17% -12% 5% 17% 13% 14% 1% 10% N/A -8% 3% 7% -3% 29% -13% -6% -13% -8% Change
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Company ownership While there has been little overall change in thebalance of foreign, private local and state ownership among theregions 500 largest companies, there are some clear patterns at anindividual industry level. So while there is just one more foreign owner, one more local owner and two fewer state owners than in last years ranking overall, local ownership in theenergy & resources sector has risen from 26 over 2010 to 31 companies while state ownership has declined from 60 to 54. Thedecline in company numbers in theconsumer business & transportation sector, on theother hand, has been at theexpense of foreign and local owners (down respectively by five and eight companies), while state ownership rose by one to 20. Theincrease in state ownership was clearer in thegrowing manufacturing sector, rising substantially in percentage terms from six in 2009 to ten in 2010. Over thesame timeframe, foreign ownership rose from 73 to 79 and local ownership from 22 to 28.
Table 2: Breakdown of ownership by industry Status 2010 Consumer Business and Transportation Energy and Resources Life Sciences and Health Care Manufacturing Public Sector Real Estate Technology, Media and Telecommunications Total Non CE private sector 91 63 15 79 9 30 287 CE private sector 46 31 8 28 2 4 119 State owned 20 54 10 5 5 94 Total 157 149 23 116 5 11 39 500
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Growth
What do senior executives in Central Europe consider to be most important for their organisation to grow? 1. Thehighest proportion of senior executives responded that acquiring new customers is themost important factor. 2. Increasing revenue with current customers; and 3. Expansion of product/service portfolios. Themost significant secondary priority for senior executives was thedevelopment of new sales channels.
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The5 major findings
This latest report must be viewed in thecontext of renewed fears of adouble dip recession asdeveloped countries across theworld fail to deliver theGDP growth for which governments and markets are looking. Just ascompanies across thewestern world have successfully reduced their debt levels through effective cost-cutting measures, so governments are becoming increasingly mired in themesh of burgeoning austerity measures.
In other words, itwould be unwise to presume that therecent trong performance of Central Europes top 500 companies means anend to theregions economic woes. While developing this report, Deloitte identified five key trends at play and which will continue to have aneffect on theCE regions performance over thenext 12 to 24 months.
Over themedium-term economic growth in theCentral European region will decelerate due to theneed for fiscal tightening and expected slowdown in external demand. Therisks to thebaseline forecast scenario appears to be balanced. Positive risks related to animproved confidence could cause stronger than-expected investment growth, while downside risks relate to aslow reduction in unemployment and more negative external outlook. Global growth will take anextra hit from therecent financial shock, but still we donot expect anew recession.
Violeta Klyviene, Senior Baltic Analyst, Danske Bank, Lithuania
Rising commodity prices Thefirst of these is commodity prices. In Central Europe, most of thelargest companies in theregion and in individual countries are theformer state-owned power companies. Theprices that they and their western counterparts charge for their services have seen significant increases (theoverall revenues of CEs energy & resources companies increased by 13% in euros during theyear and manufacturing by 23%). So this upward trend in power prices is at theheart of thegrowth experienced over thelast 12 months by many companies at or near thetop of this years ranking. Ironically, however, italso contains theseeds of slower future growth among companies large and small across theCE region and further afield. Ascommodity prices continue to soar, they are already placing pressure on theprofit margins of businesses that have already achieved theeasy wins in reducing their costs. Indeed, themost recent Deloitte survey of CFO sentiment in theUK demonstrates astrong expectation that growth will slow over thenext year asincreases in costs outpace their revenues during thenext year. We believe we can expect to see asimilar sentiment from CFOs in Central Europe in thenear future. Asecond risk arising from high commodity prices is their impact on inflation. Any move by central banks to adapt monetary policy through increasing interest rates will damage companies growth prospects through areduced ability to borrow and invest in growth capital. Itis expected that thecurrent commodity super cycle will continue to fuel ongoing increases in thecosts of power and other commodities for afurther two to three years.
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Public Debt Thenext key issue affecting thefuture growth of companies in theregion is public debt. In many countries within theregion, public debt totals have started to reduce asgovernments implement austerity programmes with fiscal restructuring measures. In Central Europe, thecritical public debt to GDP ratios (measuring theproportion of total economic output that is accounted for by government borrowing less repayments) are much healthier than in many of theworlds powerhouse economies. In Japan, for example, that ratio ascalculated by theInternational Monetary Fund (IMF) stands at 225.8%, in France at 84.2% and in Germany at 74.3%. Hungary alone in Central Europe is in this league (at 78.4%), followed by Poland (55.2%), Latvia (42.2%) and Slovakia (41.8%). Reducing public debt is seen asaparticular challenge for Poland to restore fiscal stability. Despite being theonly CE country that did not fall into recession in 2009, its current combination of growth standing at 3.9% and anEC forecast suggesting adeficit of 6% shows aneed for substantial fiscal correction. We can look at theissue of public debt also from theperspective of state ownership in theeconomy. Theneed to cover budget deficits often leads state authorities to pay out more funds from their owned companies asdividends, which can undermine their future growth potential. Out of 500 companies classified in theRanking, 94 (19%) belong to thestate with thehighest number in energy & resources (54), Poland. Markets continue to demand that public debt is driven down. This has anassociated impact on private businesses aspublicly funded projects and contracts are cancelled. However, astheIMF states in its Economic Outlook update from June 2011: In theeuro area periphery, there is no way around ambitious structural reforms to boost competitiveness and revive employment growth, along with front-loaded fiscal adjustment and balance sheet repair to restore market confidence and ameliorate thepressure on sovereign and bank spreads.
While public debt in Central Europe is not in general at thecritical level experienced by some Western economies, itis likely that constrained spending by governments across theregion will continue to restrict GDP growth in several economies for some years to come. Polish and other Central and Eastern European countries large national enterprises in theconstruction sector may be particularly affected if government and EU spending is reduced after 2012. However, thecurrent experience of thePIIGS (Portugal, Italy, Ireland, Greece and Spain) countries asthey seek to balance past overspending through theimplementation of extreme austerity measures in theface of public opposition highlights thepotential difficulties involved in corrective action after theevent.
Mergers and acquisitions While there are signs that M&A is back on theagenda across Central Europe, itappears that expansion by acquisition is not currently front of mind for themajority of its individual companies. In therecent Deloitte CE CFO survey, close to 60% of respondents say that expansion is not apriority. But ascash-rich western companies see slower growth emerging asone of thedominant factors in their own economies, analternative route for their future growth exists by adding to their own capabilities through strategic investments in other companies. To this end, cross-border opportunities are aparticularly attractive means of cost-effectively accessing new markets. This is similar for CEE companies, banks and insurance companies where CEOs have agenerally lower appetite for M&A and will pursue iton aselective basis where clear long and short term benefits are visible.
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Turning to Private Equity, themost recent edition of theDeloitte CE Private Equity Confidence Survey (May 2011) showed thehighest levels of optimism at any time since thepre-crisis days of April 2007. However, there was also asignificant rise in theproportion of professionals expecting themost competition among investors to be for growing medium-sized companies. This suggests anincreased appetite for risk that may lead PE professionals away from themore defensive opportunities provided by theregions 500 largest companies.
In Central Europe, meanwhile, theneed to maintain and drive growth in FDI is pressing. Romania, for example, is working hard to regain investors trust and to stimulate growth by demonstrating stability on both aneconomic and alegislative level. Theforeign companies investing in theCE region in 2010 in many cases saw areturn to revenue growth following ayear of substantial decline. Thetop four companies are thesame aslast year, with overall leader Volkswagen seeing a23.8% increase in revenues replace afall of -24.9% in 2009. E.ON, Metro and RWE also saw areturn to revenue growth. Thebiggest mover, however, is Lukoil, which replaced a-37.3 decline with a26.4% increase in revenues to move up from tenth to seventh place. Despite its recovery from -45.4% in 2009 to post a29.2% revenue gain, theworlds largest steel company ArcelorMittal (which was second in theregions FDI ranking in 2007) slips to tenth place this year.
Global influence In atruly global market place, itis inevitable that major events elsewhere in theworld will have animpact on theeconomies of CE. Aswestern economic activity continues to grow slowly, itis possible that companies in emerging nations will be positioned to take up theslack left by thewest. This means that for CE companies, particularly those in countries experiencing improved economic growth, opportunities for international expansion may emerge in thenear future. Itdoes not appear, however, that thevarious economic shocks of thelast year, which include theJapanese earthquake and tsunami, uprisings across theArab world and Australian flooding will have had more than atemporarily disruptive effect on GDP, company output and supply chains. For example, theindications are that Japanese output figures over theyear will be only marginally affected by thenatural disaster that hit thecountry in March.
So far theeffect of European debt crises on CEE states is mostly indirect. Thekey concern at present is aslowdown of EU growth that will undoubtedly put downward pressure on countries growth prospects.
Ludk Niedermayer, Lead Economist, Deloitte Czech Republic
Foreign Direct Investment Itis possible that declining interest in investing into certain key developed markets may increase thepotential for Foreign Direct Investment (FDI) into Central European countries and companies and there are signs of improvement in some industries. Figures released in thesummer of 2011 for example, indicate that theUK has fallen from its position astheworlds third-largest recipient of FDI to number seven, with a-35% drop in its investment inflow. While other major west European economies, including France and Germany, saw little change, itis expected that they too will see declines asinvestors are discouraged from entering countries with low growth forecasts.
Central Europe TOP 5002011 17
Table 3: Largest foreign investors in CE - 2010, 2009 No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Company Volkswagen E.ON Metro RWE OMV Samsung Electronics Lukoil Tesco Deutsche Telekom Arcelor Mittal Foxconn Nokia France Telecom Renault Fiat REWE Kaufland BP British American Tobacco Philips Eni Shell U.S. Steel Carrefour Lidl Revenues 2009 (mln EUR) 16,912 10,244 9,461 7,848 7,311 7,209 6,432 6,936 7,332 5,415 4,403 5,459 5,693 4,113 5,261 4,670 3,798 3,784 3,357 3,048 2,909 2,868 2,234 2,846 2,736 Revenues 2010 (mln EUR) 20,929 10,591 9,597 8,668 8,301 8,191 8,132 7,360 7,257 6,997 5,785 5,756 5,673 5,053 5,041 4,908 4,288 4,175 3,819 3,772 3,371 3,297 3,239 3,209 3,005 Change (%) 23.8% 3.4% 1.4% 10.4% 13.5% 13.6% 26.4% 6.1% -1.0% 29.2% 31.4% 5.4% -0.4% 22.9% -4.2% 5.1% 12.9% 10.3% 13.7% 23.8% 15.9% 15.0% 45.0% 12.7% 9.8%
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Graph 6: Thepercentage of companies with revenue increase vs. decrease - 2010 vs. 2009 by country
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Graph 8: Thepercentage of companies with revenue increase vs. decrease
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This years ranking indicates animprovement in theresults of non-financial companies in particular, mainly asaresult of theoverall economic revival and higher prices of raw materials. Thehighest growth was recorded by thesector that in 2009 had been hit by theeconomic slump thehardest, namely manufacturing. Theenergy and resources companies grew, too, whereas many businesses from theconsumer business and transportation sector dropped out of theranking asaresult of their relatively lower growth. Thetechnology, media and telecommunication industry remained unaffected by theeconomic revival.
Increasing sales revenues among theregions largest companies are also apparent in theproportion of companies that earned higher revenues than theyear before: 78.8% (394 companies) in 2010 compared with just 16.2% (81 companies) in 2009. This trend continued into thefirst quarter of 2011, underlining Central Europes economic revival. Thepositive trends observed in 2010 continued in most of thecountries in theregion throughout Q1 2011. All that remains now is to wait and see if and how thelatest turbulences in thefinancial markets will impact theranking next year.
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Performance
What are your organisations priorities in the next 12 months in order to improve performance? Responses focused on thebelief that thekey drivers of performance are: 1. Growing revenues 2. Focus on improving profitability 3. Cutting and managing costs
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Overview of theleaders TheTop 10

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PKN ORLEN still at thetop Once again confirmed asCentral Europes largest company, Poland-based PKN ORLEN specialises in processing crude oil into fuels, lubricants and petrochemicals and is amajor fuel retailer, with production facitilities and service stations in Poland, theCzech Republic, Lithuania and Germany. Thecompanys key achievements during this year include completion of abillion euro expansion project in thepetrochemicals segment. Other recent initiatives have been theacquisition of 56 service stations in Germany aswell asinvestments in energy generation and shale gas production. Thekey focus remains on defending market share in key markets and improving profitability despite stiff competition and volatile economic environment.
Continued strategic investment in core operations and expansion into new and growing services and markets are two key characteristics shared by many of Central Europes 10 largest companies.
Thecompany intends to expand strongly into international markets, with afocus on thefast-growing economies of Russia, India and China. Itinvested heavily in 2010 in preparing to manufacture new models and in expanding capacity at its Czech plants.
MOL driving growth from cashflow TheHungarian Oil & Gas Company Plc (MOL) is theregions leading oil and gas enterprise. Ithas around 1,000 filling stations and production facilities in eight countries across Europe, theMiddle East, Africa and theformer Soviet CIS states. Thecompany carries out upstream, downstream, petrochemical and gas transmission operations in over 40 countries. Many exploration projects undertaken in recent years have already moved to production, while further new field exploration and development projects are on thehorizon in countries including Russia, Kazakhstan, Pakistan and theKurdistan region of Iraq. Projects of this nature are crucial to thecompanys ability to meet thestrategic objectives of increasing its reserve base and ensuring further production growth beyond 2013.
Naftogaz using strength to develop new markets Naftogaz of Ukraine is avertically integrated oil and gas company, with operations ranging from gas and oil field exploration and development to drilling and production transport, storage and thesupply of natural gas and LPG to consumers. Itproduces over 90% of Ukraines oil and gas. Its strategic goals for thenext few years include strengthening even further its vertically integrated structure. In addition, thecompany plans to enter theretail petroleum market and thepetrochemical industry. Italso intends to hold its position asthemain operator of thetransit of natural gas in Europe.
Skoda new models to increase global sales Thegrowth strategy launched by Czech Republic-based Skoda in 2010 has paid dividends for thecompany with an81.5% increase in profits announced in thesummer of 2011. According to Chairman Prof.Dr H.C. Winfried Vahland, thecompany is vigorously pursuing thegoal of increasing its worldwide sales to aminimum of 1.5 million units each year until 2018.
CEZ Group preparing for future challenges CEZ Group, Central Europes largest public company, is aCzech Republic-based conglomerate of electricity generation and distribution businesses. Its most important shareholder is theCzech Republic itself, which owns close to 70% of thecompanys share capital. CEZ is theCE regions most valuable company by capitalisation. Successful acquisitions of distribution companies and power plants in Bulgaria, Romania and Poland have enabled CEZ to access new markets, and therecent economic crisis has led CEZ to rethink its strategic focus on to increasing theefficiency and improving thecost effectiveness of its key processes.
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Metinvest adding value to raw resources Ukraine-based Metinvest is avertically integrated coal and steel producer that controls theentire value chain from mining to theproduction and sale of rolled steel products via its own global sales network. Thecompanys strength in raw materials is behind thedevelopment of anew strategy up to 2020 that will see itprocess all its iron ore into high-value steel products under a$6 billion investment programme. In 2010, Metinvest was thehighest climber in thetop 10, up from ninth place in 2009.
PGE consolidation simplifies disparate operations With amarket share of more than 40% of thePolish domestic electricity market and adistribution network of over 270,000 kilometres, PGE owns and operates over 40 power (including thermal and renewable sources) and combined heat and power plants. During 2010, thecompany consolidated 40 disparate operations into four primary subsidiary businesses under theheadings Conventional, Nuclear, Renewable, Distribution and Retail. Asavertically integrated business with its own mining operations, ithas theopportunity to exercise considerable control over its environmental impact, and is currently investing PLN 38.9 billion in modernising its conventional power generation capacity. PGE is also in charge of construction of thefirst nuclear plant in Poland.
Energorynok thehub of theUkrainian power market With aname that means Power Market in Ukrainian, Energorynok is thestate-owned company that operates thecountrys wholesale power market asits only buyer of power. Large thermal generating companies compete to sell power to Energorynok, while thecost of therenewable and nuclear energy itbuys is set by theNational Electricity Regulatory Commission (NERC). Energorynok then sells iton to regional electricity companies (known asoblenergos) and large industrial companies. PGNiG key strategy focus Polish gas conglomerate PGNiG has increasing shareholder value asits key strategic objective from 2011 - 2015. PGNiG Group believes that this may be achieved through six strategic areas including: strengthening trade position, securing reliable gas supplies, broadening exploration and production activities both home and abroad, securing new oil and gas reserves, increasing of gas storage capacities, improving of distribution profitability aswell asincreasing of value chain through developing gas-fired power generation in Poland. Realising strategic objectives by 2015 will be achieved through investments totalling PLN 25-32 billion.
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Jeronimo Martins focused on theexpansion trail Poland-based Portuguese retail operator Jeronimo Martins Dystrybucja is planning to expand theBiedronka discount chain by some 200 outlets ayear to total 3,000 stores by 2015. In addition, according to general Director Pedro Pereira da Silva, thecompany will upgrade some 120 existing stores each year. But its focus is not on Biedronka alone. Italso plans to develop other segments of thePolish retail market, and has already launched thecosmetics chain Hebe with asingle store in Warsaw. Aswell astargeting profitable growth, apublicly stated key priority for thebusiness is to accelerate its cashflow generation to fund expansion, dividends and debt reduction.
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Talent
Managing talent was critical for companies to succeed during and after the financial crisis. Executives interviewed viewed thetop 3 priorities as: 1. Strengthening staff development and training 2. Performance management processes 3. Reward and recognition of top performers
Industries
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Upwardly mobile companies Thetop 20 jumpers

The20 Central European companies that have made thelargest leap up theTop 500 ranking in 2011 are clustered in Poland, Ukraine and theCzech Republic, with Hungary and Slovenia contributing one entry each. While several are subsidiaries of major global parent organisations, many are local organisations, emphasising theregions strengths in natural resources businesses such asenergy and metals.
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KGHM is one of theworlds largest producers of copper and silver. In theyears second quarter itachieved a57% year-on-year increase in earnings to PLN2.36 billion, afull 10% ahead of analyst expectations and leading to better than expected full-year results. TheNikopol Ferroalloy Plant is Ukraines largest manufacturer of silicon manganese and ferromanganese. Thecompany is meeting consumer demand through product and process innovation including more cost-effective and secure freight transport. Ukraines Gazprom sbut Ukraina successfully maintained growth in its gas marketing business during 2010 to help its production indicators recover steadily to pre-crisis levels. Export opportunities during theyear were boosted by therecovery in themacro-economic environment and other regions. With close to 800 employees, BAT Polska (British American Tobacco Polska) is Polands largest cigarette manufacturer with brands including Pall Mall, Lucky Strike, Golden American, Viceroy, Kent and Vogue. Thecompany sells around 30% of its total production in Poland and exports theremainder to 14 mainly European markets. Slovenian Steel Group SIJ is amajor exporter to markets in theEU and North America, and is pursuing anactive and accelerating investment strategy to develop its global business. This is building on thegrowth achieved in 2010 thanks to recovery of theGerman economy, particularly in theautomotive and and energy engineering industries. TheCzech subsidiary of Taiwans Inventec company is part of aglobal business targeting a30% increase in its annual revenues, based on its established strength in notebook PCs and increasing diversification into mobile devices including smartphones, smart tablets and smart books.
According to Nobuo Harada, President of Sharp Manufacturing Poland, We experienced very high demand during theyear thanks to the2010 Football World Cup and to our reputation asareliable manufacturer with highly competent employees. These qualities will serve us well aswe seek continued dynamic growth in theface of adeclining LCD TV market in Europe. Iron ore producer Ferrexpo, which operates in Ukraine, bases its growth and ability to deliver stakeholder value on its low cost-base, significant reserves and established infrastructure. Its future focus is on investments in production facilities and logistics to reduce therisks of cost inflation and fluctuation. Polski Koks is Polands largest exporter of coking coal and Poland is world-leader in coke exports, having taken over from China in 2009. According to thecompanys annual report, 2010 saw asubstantial increase in exports asdemand increased from thesteel industry.
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Ferona, theCzech Republics largest wholesaler of metallurgical products saw astrong return to profit in 2010, posting asurplus of Kc 200 million following aKc 1.5 billion loss theprevious year. This was based on a15% increase in sales to Kc 13.2 billion thanks to stable demand during thefirst half of theyear. Poland-based Impex Metal is implementing plans to expand its value further by restructuring and modernising its assets to focus on themost promising segments within themetals sector, such ascopper and aluminium. Ukrainian filling station operator PAT Galnaftogaz saw its profits more than double in 2010 asitsuccessfully increased its sales and cut its costs. Its publicly stated strategic goals are to cement its position among thecountrys three leading operators while improving theeffectiveness and quality of its core product, services and systems. Poland-based Synthos, which also has amajor presence in theCzech Republic, is Europes second-largest synthetic rubber and polystyrene producer. According to analysis by Erste Bank, thecompany could be poised to increase utilisation of its rubber production capacity from 84% in 2009 to anannual average of 93% between 2010 and 2014. Polands Petrotank is planning to maintain current levels of crude oil throughput, processing efficiency, sales and market share in theface of strong competition and pressure on its retail margins. Polish dairy company SM Mlekovita regards maintaining its position asdomestic market leader asone of its key strategic objectives. Itis also focused on boosting its exports, particularly to theCzech Republic where itis targeting 10% growth and adoubling of its product range.
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TheMaspex Wadowice Group achieved sales revenues in 2010 of some $828 million, placing itamong Polands leading food producers. Over thelast two decades, thecompany has achieved growth through strategic acquisitions. Today, foreign sales account for around 35% of its turnover. BASF opened two new Polish production facilities in late 2010, adding around 100 jobs to thecompanys existing 250-strong Polish workforce in aninvestment worth ZL40 million. One of theunits will produce dry mortar for theconstruction industry and theother polyurethane systems for theconstruction, automotive and refrigeration industries. Both facilities will primarily target thedomestic marketplace. Hungarys GDF SUEZ Energia Magyarorszag companys 200 million euro investment in its Dunamenti power plant is designed to enhance thecountrys energy security through increasing its total installed electricity production by close to 20%. Its use of thelatest technologies will also significantly reduce theplants environmental impact, particularly its CO2 emissions. Ukraines Donetskstal Metallurgical plant has completed acomprehensive restructuring of its debt totalling $820 million. According to thecompany, this strengthens its competitive position and creates asturdy financial foundation that will allow itto focus on its strategic goals. Foxtrot Household Appliances, one of Ukraines leading vendors of audio, video and other appliances, signed aco-operative contract with theDutch Euronics International Group. This is part of thecompanys substantial expansion plans, which include increasing its net goods turnover by 50% and amajor store-opening programme.
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Industry Insights
Financial Services Energy and Resources Manufacturing Technology, Media and Telecommunications Consumer Business and Transportation Real Estate and Construction Life Sciences and Health Care
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Industries Industries
Across theregion, companies that are able to best adapt to changes in demand, financing conditions and theoperational environment will perform most strongly.
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We spoke with anumber of Deloitte professionals and business leaders from across Central Europe who provided insights to seven key industries in theregion. These in-depth conversations reveal aregion of two halves. Northern economies such asPoland, theCzech Republic and Slovakia are among thehealthiest in Europe and are experiencing increases in local consumer demand that will fuel growth in sectors including retail and construction. Countries in thesouth of theregion and non-consumer intensive industries, meanwhile, are on avery different path: any growth that is to be achieved will depend on export, and is inextricably linked to theeconomic performance of Western European countries, especially Germany. Across theregion, companies that are able to best adapt to changes in demand, financing conditions and theoperational environment will perform most strongly. This will not be easy. Most companies in theregion have already achieved major efficiency gains through cost-cutting following theglobal financial crisis. Now itremains to be seen whether they will be able to overcome thekey challenges they face in sourcing new revenue growth opportunities following three years of slow growth. Looking ahead, we see theneed to innovate askey to thesurvival of firms across several industries. These specifically include financial services and technology, media and telecommunications, where already ultra-competitive markets are becoming saturated. Only themost innovative and desirable products and services will stand out in aregional marketplace where expectations of areturn to thenormal conditions of thepast, have been all but dispelled. Bla Seres Managing Partner, Financial Advisory Deloitte Central Europe
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Financial Services
Using people and technology to drive innovation is thekey to growing revenues for Central Europes financial institutions. Otherwise revenues and market share will shrink. Some three years after thecollapse of Lehman Bros, organisations in Central Europes Financial Services industry (FSI) continue to face anumber of competitive, technological, cultural and regulatory challenges asthey struggle to move on from aperiod of slow growth and depressed markets. Recent stress tests undertaken on some of theregions biggest financial players suggest that they are largely in good shape to meet these challenges, with theliquidity and capital they need to prosper. Threats to growth That is not to say, however, that all FSI institutions in all CE countries will still be here in five or even two years time, due to thepotential for takeovers of domestic or foreign assets by larger foreignowned institutions, leading to sector consolidation astheleading players strengthen their positions. Trends are also underway that may see certain organisations opt to leave theregion. These include alow interest rate environment that for some years has been pushing down banking revenues and limiting growth in certain countries financial services sectors. In addition, thetypical Central European consumer remains financially stressed and without theconfidence to take on any further borrowing.
Furthermore, there is no guarantee that business confidence will rise anytime soon. Stalling growth in Germany and France is coinciding with afall in confidence in theUK , while uncertainties continue over thelong-term future of theEU. Theimportance of Western Europe asanexport market means that any decline in growth or confidence there will have animpact on CE asawhole. Adding to thechallenges is thefact that theCE banking industry is heavily polarised in many countries, being typically dominated by three to five large banks with asecond tier made up of anumber of smaller organisations.
Thebanking and insurance sectors in Croatia are relatively saturated. Such environment does not favor smaller institutions and could jeopardize their business models.
Ivan Fabijani, Assistant Director, Financial Advisory Services, Deloitte Croatia
Theimpact of thefinancial crisis has caused problems in servicing loans for many companies, making itimperative thatbanks and other lenders now need to restructure and refinance their debt portfolios.
Nada Sui, Partner, Business Advisory Services, Deloitte Serbia
In some overbanked markets, including Croatia, theCzech Republic and Slovakia, this structure is aprimary cause of saturation which is already making thebusiness model for smaller players questionable. This may ultimately cause anumber of theforeign groups that own members of that second tier to consider selling their central European assets and withdrawing from theregion. After all, why should they be content with alowly ranking in acomparatively small country where theloans and insurance markets are already mature? This will also create opportunities for new entrants or companies on theexpansion trail to acquire businesses in these markets. Indeed, there is significant potential for organisations from other industries, such asthetelco and brokerage sectors, to enter themarket to provide mobile banking and insurance solutions.
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Innovation is thekey What form should action take? There is abroad consensus among theregions banks and insurers that innovation will be thekey to future prosperity and in some cases, thesurvival of theregions FSI players. Before focusing on product innovation, many established institutions need to spend heavily on updating their systems to improve their data analytics and gain asingle, holistic view of each customer, so enabling increased value to be created through crossselling opportunities. In many institutions, customers with more than one product are currently regarded asmore than one person, thereby preventing such cross-selling opportunities. Addressing this situation is key to increasing revenues. For banks, aprimary focus is to make up for thedecreases in revenues from deposits that they have experienced since 2008, and to address those limitations on lending revenues that result from astricter risk approach. In addition, internet and mobile banking are also depressing transaction fee levels and restricting therevenues available from single products. Theonly way for banks to increase revenues per customer, therefore, is to increase thenumber of products that individuals use. Relationship banking For some institutions, there are also cultural barriers to innovation that need to be addressed. These sometimes relate to thelength of service of key employees, who are often reluctant to change. For this reason, anumber of banks and insurers are creating development or incubator teams made up of young employees with abrief to create products for more sophisticated customer groups using online and mobile technology platforms and distribution channels. These could in time form thecore of anew generation of financial institutions, offering more buyer-driven product portfolios to meet theemerging needs of younger, more savvy and connected customers. This focus on theneeds of emerging customers effectively means that ashift is underway asadual focus emerges on thecustomer of thefuture while simultaneously seeking to generate more from existing customers.
For asbanks increasingly recognise thelower costs involved in leveraging existing customers rather than attracting new ones, they are seeking new means of retaining their older traditional customers and opportunities to develop their loyalty and value. This is asignificant move away from thebusiness model of thepast, in which revenues were derived through transactions fees and banks were largely content to see customers churn from one provider to thenext. Today, therefore, banks are making investments in quality to improve customer loyalty at thesame asreducing risk through more robust approaches to credit process design and operational excellence. Despite thechallenges they face, there are significant opportunities for CE players to accelerate theexecution of such strategies through building on theexperience of their more developed Western counterparts to develop new communication and distribution channels. Their advantage, in fact, is that they can avoid some of theblind alleys that theinitial pioneers encountered. Regulatory change Another source of potential competitive advantage is regulatory compliance; with forthcoming changes arising from new directives including Basel III, MiFiD II, Solvency II and FATCA (thenew US Foreign Account Tax Compliance Act), those companies that adapt and innovate rapidly to comply will glean clear benefits from early compliance, such asalack of disruption to their operations when thenew rules come into force.
Thefinancial industry in Croatia is likely to remain stable and largely focused on challenges arising from changes in regulatory compliance environment (Basel III, IFRS 9, Solvency II, IFRS 4 etc.).
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In certain countries, thebiggest challenge under Basel III will be to meet theexpected new liquidity ratios, in particular thenet stable funding ratio. This is because themortgage portfolios of many banks in theregion, often sold in foreign currencies, are usually funded by local deposits, so increasing liquidity risks. Unlike in Western Europe, theuse of long-term instruments such asdebentures to fund such portfolios is restricted. Under FATCA, due to come into effect in January 2013, financial institutions will have to enter anagreement with theUS IRS to report information on their American account holders, creating anadditional reporting process to manage potential risks associated with compliance. This will require significant system and process changes among financial institutions. In some CE countries there is aview that burgeoning EU regulation is in fact softer touch than thedomestic frameworks itreplaces. There is therefore anexpectation that arelease from theshackles of over-restrictive regulation will generate anew wave of product innovation. Institutions will need to be careful, however. Asthey work to resolve legacy issues while introducing new products and services, there will be aneed for tight operational expenditure management at atime when costs could spiral out of control. This is particularly true following aperiod of intensive concentration on cost-reduction; once thebrakes are off there is adanger of overcompensation.
Leveraging human capital
Akey priority for us is to strengthen our leadership pipeline through theearly identification and development of our next generation of leaders.
Luigi Lovaglio, CEO, Bank PeKaO, Poland
In theimmediate aftermath of thefinancial crisis, companies across theregion including banks and insurers needed to ensure that their talent management strategies effectively put theright people in theright place, now and into thefuture. This has now evolved further, and there is ashared appreciation among theregions financial services institutions that abetter trained and rewarded workforce, led by thebest available management, is thekey to growth and improved performance in anuncertain future. There is therefore widespread agreement that theHR function is becoming increasingly important to ongoing competitive strategies. Training and development initiatives are seen asfundamental requirements, with succession-planning, reward and performance management programmes increasingly recognised astop priorities for theregions institutions. This is asignificant shift from thetime when reducing employee headcount was theoverriding priority for many. But astheFSI landscape shakes out over theyears to come, expect to see change. There will be winners and losers, and those that emerge ahead will be theones that innovate best across many areas. These areas will comprise product portfolio and sales channels, structure and systems, culture and agility, people and management. Thechallenges are demanding but therewards will be great for those that get itright.
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Country Insights Hungary
Authority and responsibility have been largely taken back from theHungarian banks by their mother companies asthey seek to centralise what they can.
Andrs Flp, Partner in Charge, Financial Advisory Services, Deloitte Hungary
Romania In Romania, thepriority today is to build external investors confidence in thehealth of thenational economy. Foreign Direct Investment, historically thecountrys primary source of growth, has fallen off sharply in recent years; Romanias success to date in abiding by its IMF agreement is sending theright signals and there is hope that thedomestic financial services industry is set to gain by supporting new investments. However, any ability to grow will also be dictated by thebanks ability to manage bad debts and therisks associated with lending in avolatile environment.
Growth is not on theagenda for Hungary, for example, where thefocus remains on efficiency and performance asparent companies remove executive authority from local management teams. Akey challenge facing thecountrys financial institutions is summed up in areport from theHungarian National Bank showing that 76% of private sector transactions are carried out in cash. There are however opportunities for new market entrants, which unhindered by legacy issues, could concentrate on building trust among consumers and corporates. Poland In Poland, thepicture is very different: stable domestic and foreign demand for goods and services are driving growth and there is anexpectation that companies will need to invest in new capacity to meet their obligations. Revenue growth is thetop priority for thecountrys banks, some of which would not be averse to making strategic acquisitions given theappropriate rationale and valuation. According to Violeta Klyviene, Danske Bank, Lithuania, in thePolish economy we would expect growth to start moderating in thecoming quarters and into 2012, given only slight signs of slowing activity in global manufacturing. Polish monetary policy tightening has already been initiated and thelikely tightening of fiscal policy may occur later this year. We therefore expect Polish growth to be slightly over 4% for 2011 asawhole and well below 4% in 2012.
Romanian financial institutions have put thelast three years of crisis to good use they have improved their ability to tell between good and bad business, to identify opportunities and to find more innovative and safe financing options. However, there is still room for improvement and thecurrent financial environment will not allow any complacency.
Andrei Burz-Pinzaru, Partner, Legal, Deloitte Romania
Croatia In Croatia, itis expected that thefinancial services industry will remain largely stable despite limited growth prospects arising from ahigh level of indebtedness at all levels of society. There is also afocus on responding to thedemands of anew regulatory regime and minimising thecosts involved with compliance. Theinsurance sector is set to remain driven by non-life business, astheslow pace of economic recovery continues to hold back any improvements in thelife sector.
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Ranking table and commentary While thebalance of power among theregions banks remains largely unchanged since 2009, significant rises in themarket capitalisation values of top-placed PKO and fifth-placed Pekao, both from Poland, emphasised thecontinued regional strength of Polands banks. Thepolarised nature of theCzech banking market is emphasised by thepresence of three of thecountrys banks in thetop six and then no more until number 22. With theexceptions of OTP and K&H (which remain at numbers two and 16 respectively) thebiggest fallers in theyear were Hungarian banks.
Table 4: Top 50 banks in Central Europe 2010 - Based on 2010 total assets
Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Company name PKO BP OTP Bank SOB esk spoitelna Pekao Komern banka BRE NLB Group BCR ING ZABA BZ WBK Millennium Bank Privatbank BRD K&H Slovensk sporitea Kredyt Bank Getin Noble VB Erste Bank Hungary UniCredit Bank CR MKB PBZ Handlowy BPH
Country Poland Hungary Czech Republic Czech Republic Poland Czech Republic Poland Slovenia Romania Poland Croatia Poland Poland Ukraine Romania Hungary Slovakia Poland Poland Slovakia Hungary Czech Republic Hungary Croatia Poland Poland
LY Rank 1 2 3 4 5 6 8 7 9 11 10 12 17 32 13 16 14 23 29 21 18 20 15 22 25 28
Rank 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
Company name Swedbank Baltic BGK CIB Tatra banka Raiffeisen Bank Hungary Raiffeisenbank CR BG Erste Croatia Raiffeisen Bank Polska Ukreximbank eskomoravsk stavebn spoitelna SEB bankas Hypoten banka Nordea Bank Swedbank Latvia NKBM Group RBA Unicredit Bulbank SOB Slovakia Swedbank Lithuania GE Money Bank Unicredit Bank Hungary Oschadbank Raiffeisen Bank Aval
Country Estonia Poland Hungary Slovakia Hungary Czech Republic Poland Croatia Poland Ukraine Czech Republic Lithuania Czech Republic Poland Latvia Slovenia Croatia Bulgaria Slovakia Lithuania Czech Republic Hungary Ukraine Ukraine
LY Rank 24 30 19 26 27 33 41 34 39 new 40 31 38 new 35 45 43 42 44 37 46 36 49 new
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Themost noticeable trend during theyear is thestrengthening grip of Polish insurers on theupper echelons of theindustry in Central Europe, with both STU Ergo Hestia and Aviva Polska climbing upwards within thetop ten.
The biggest jumper, however, is Nordea Polska, which moves 13 places from 25th to 12th.
Table 5: Top 50 insurance companies in Central Europe 2010 - Based on 2010 gross written premium
Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Company name PZU esk Pojiovna Kooperativa pojiovna Warta Zavarovalnica Triglav Allianz Polska Allianz Hungaria STU Ergo Hestia Aviva Polska Allianz - Slovensk poisova ING Polska Nordea Polska Generali Providencia Kooperativa Slovakia Uniqa Polska Croatia osiguranje Generali Polska Allianz pojiovna SOB Pojiovna Pojiovna esk spoitelny Komern pojiovna Generali Pojiovna Groupama Amplico Life Aegon Hungary
Country Poland Czech Republic Czech Republic Poland Slovenia Poland Hungary Poland Poland Slovakia Poland Poland Hungary Slovakia Poland Croatia Poland Czech Republic Czech Republic Czech Republic Czech Republic Czech Republic Hungary Poland Hungary
LY Rank 1 2 3 4 5 6 7 10 11 9 8 25 12 13 16 15 14 17 18 27 37 20 22 19 23
Rank 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
Company name ING Hungary InterRisk Adriatic Slovenica Zavarovalna Druba Zavarovalnica Maribor Astra PP AXA Polska Allianz-Tiriac HDI Polska Vzajemna Lietuvos draudimas Omniasig ING ivotn pojiovna Compensa TU Uniqa Hungary Uniqa pojiovna Generali Slovensko Aegon Polska Groupama Komunlna poisova Europa Euroherc osiguranje Allianz Zagreb Dunav Osiguranje ING Asigurari
Country Hungary Poland Slovenia Slovenia Romania Czech Republic Poland Romania Poland Slovenia Lithuania Romania Czech Republic Poland Hungary Czech Republic Slovakia Poland Romania Slovakia Poland Croatia Croatia Serbia Romania
LY Rank 24 38 29 26 35 31 41 21 34 30 new 28 32 40 36 39 33 44 new 46 new 45 48 42 new
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Akey distinguishing characteristic for companies is their ability first to spot opportunities and emerging trends, and then to convert them rapidly into marketable services that generate areturn. Innovations are constrained with todays market sentiment but also with current regulatory regime within banking and other financial industry, i.e. innovation wave will likely emerge upon countrys addition in EU.
Constantly improving thequality of our customer service is akey factor in our future development, and we work consistently to modernise our offer and our image. This is driven by innovation, which aswell asenhancing service quality also enables us to reduce operating costs. We place particular emphasis in developing thecompetencies of our employees on improving management leadership skills and on identifying and motivating those people with thegreatest potential.
Zbigniew Jagiello, PKO Bank Polski, Poland
We expect that theimprovement on thelabour market will effectively support retail lending.
Cezary Stypukowski, CEO, BRE Bank, Poland
One can no longer avoid risk and stay in business. However, risk can be properly assessed and managed, and theability to manage risk will be what distinguishes between successful and unsuccessful Financial Services Industry players. Thecurrent economic environment is in itself thebest innovation driver. Companies across all industries face thesame challenge Innovate or die!
Andrei Burz-Pinzaru, Partner, Legal, Deloitte Romania
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M&A activities Thelast year has been arelatively active period for M&A in theCE region. Smaller transactions were driven by large European players such asAllianz and Dexia seeking to rationalise their portfolio or asareaction to EU regulations (asin thecase of WestLB). Larger deals were mainly focused on Poland, which proved particularly attractive thanks to its relatively strong economic performance and large market size. Some of Europes largest banking groups were already investigating Polish opportunities before thecrisis, but alack of available large targets prevented any significant deals at thetime. Now, though, international investors facing difficulties in their domestic markets or regulatory pressures are once again turning to Polish assets. Theinsurance sector too is showing asimilar pattern to banking, albeit on asmaller scale and with something of atime lag. Here too, international players are rationalising their presence in theregion, while thelargest are waiting for entry points to emerge in Poland. Looking Ahead Whatever theshort-term challenges and priorities they face, theregions most successful banks and insurance companies will be those that continue to invest in understanding their customers and most critically in how their buying habits will change in thefuture. No financial services business model is sustainable without such anunderstanding, for itwill increasingly be thelynchpin around which these companies cultures will revolve. These players will increasingly understand theneed to be distinctive in terms of their image, their product portfolio and their routes to market. Achieving this will require innovative management of themanner of change; but gradually thecharacter of all institutions will change entirely aslong-term employees retire to be replaced by ageneration focused on meeting more complex and sophisticated financial expectations. So, in theimmediate future expect to see banks and insurance companies take on akind of short-term split personality. On theone hand, there will be afocus on maximising theopportunities represented by their diminishing pool of traditional customers. At thesame time, they will also concentrate on meeting theneeds of thenew generations of connected, mobile and tech-savvy consumers.
While our primary focus is on organic growth through increasing revenues, we may also consider growth through acquisition provided therationale and valuation match our criteria.
Luigi Lovaglio, CEO, Bank PeKaO, Poland
Buyers participating in smaller deals tended to be local investors recognising anopportunity to take advantage of current uncertainties in thebanking sector to enter themarket with amore focused or innovative strategy than thecurrent incumbents. Consolidation is expected in most markets, but this is currently being slowed down by concerns about theasset side of banking balance sheets. In addition, larger players are currently playing awaiting game, using their economies of scale to force smaller market players either out of themarket or potentially to change their strategies to focus on niche markets.
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Energy and Resources
In theenergy market carbon dioxide is very much in theair, most notably asanissue dividing theEU and some of its New Member States in Central Europe. According to Wojciech Hann, Regional Energy Partner for Financial Advisory Services in Deloitte, theallocations of CO2 emission permits announced in early August represent aclear threat to lead to ahike in electricity prices. Thepreliminary allocations are approximately half of what was requested, Hann says. This is asector where if theregulatory framework is not everything, then its alot. Theother major factor for theindustry is thepotential effect of another economic contraction on regional energy use. If we are entering thesecond dip in themacro economy, obviously electricity consumption follows GDP growth in all CE countries and there would be adrop in demand, Hann says. Consulting Partner and Energy and Resources Industry Leader in Deloitte Poland, Piotr Sokolowski, adds that carbon emissions regulation is themajor driver of future growth or future collapse in thesector. Everyone is waiting to see what theEuropean regulations will be, and then here in Poland, what thePolish regulations will be, Sokolowski says. Theregulatory uncertainty, coupled with current concerns over thestate of theglobal economy, have made itdifficult for energy companies to carry out thekind of large-scale investments necessary to pursue expansion and maintenance strategies, especially in countries like Poland, where coal-powered plants generate over 90% of thecountrys electric power. For Dariusz Lubera, CEO at Tauron Polska Energia, feasible regulatory objectives are not only vital to theindustry but to theability to supply sufficient electrical power. Implementation of thecurrent provisions of thepackage has already led to uncertainty of investment in coal energy. Theprice for anassigned amount unit cannot be predicted which, considering lack of new investment in coal energy, can lead to apower deficit in theelectrical power system. In spite of theuncertainties thesector fared well in general with anannual median revenue change of 13% being second to only manufacturing across thewhole of CE. PKN Orlen has solidified its position asthelargest regional energy company, increasing revenues by animpressive 33% to almost 21 billion
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in 2010, followed in theoil and gas sector by Hungarys MOL with over 15 billion. In thepower and utilities sector theCzech company EZ has maintained its long-time leadership position with over 7.8 billion in revenues followed by Polish PGE with 5.3 billion. In themining subsector, Polish copper giant KGHM led with 4.3 billion in revenues in 2010. This was followed by coal miners Kompania Weglowa 2.6 billion, newly listed JSW 1.8 billion and theCzech coal giant OKD with 1.7 billion. In themeantime companies have anumber of avenues to explore. Renewable energy sources such aswind, solar and hydroelectric farms have become agrowing feature of thesector landscape. Renewables will see thegreatest amount of innovation currently thefield is wide open for new entrants staking their claims. Wind and biomass are likely to prove most attractive in Croatia, says Ivica Krei, Director, Financial Advisory Services, Deloitte Croatia, adding that thecountry still has significant hydro potential to be developed aswell. Carbon capture and storage (CCS) is another potential response to theemissions issue, yet Deloittes Sokolowski says thehuge capital investments required will prove prohibitive without government support. Innovation is also akey in thepursuit of clean coal technologies and unconventional gas sources. Taurons Lubera cites thecompanys cooperation with universities and research institutes to develop clean-coal technologies. PKN Orlen, Polands largest refiner, having secured eight licenses for theexploration of shale and tight gas has been aggressively searching out unconventional gas sources. Polish oil and gas company PGNiG is launching commercial mining in Norway but on its home market will be focusing on shale gas prospecting and prospecting in deep underground geological structures. We also intend to extend our involvement in thepower sector, which should prepare us for theopening of thegas market in Poland, says Michal Szubski, CEO of PGNiG. Although shale gas extraction is mostly focused in Poland there are anumber of CE countries getting in on theact, including Hungary, Romania and with early stage research on deposits taking place in theCzech Republic aswell. To make shale extraction cost effective and efficient will require significant technological advances, afeature which companies active in thepractice have stressed is anon-going priority of their research and development.
Country Insights Poland Theintegration of regional gas markets is proceeding, with Polish natural gas pipeline operator Gaz System announcing aninterconnector with Czech company Net4Gas that will open in September 2011. Increasing interconnection capabilities between countries will vastly increase opportunities to import power. There are projections that Gaz System will further establish links with German, Slovak and Lithuanian gas operators over thecoming years. Slovakia Foreign demand is key says Oszkr Vilgi, General Director and Chairman of Slovnaft, thecountrys largest refiner. From anexternal point of view, we consider continuous demand from foreign markets themost important growth driver, where we export 70% of our production, Vilgi says. Government reductions of solar subsidies passed July 1 have led to arush by investors to finish construction of solar power plants. According to figures in Bloomberg, asmany as514 companies have requested official permission to operate solar generators in 2011 compared to 299 in 2010. Ukraine Thecost of modernizing thepower supply is amajor obstacle throughout CE, though perhaps nowhere more so than in Ukraine, which has lagged behind in keeping its power generation efficient and up-to-date. Recent studies by some of theinvestment banks estimate that thermal power plants in Ukraine operate at only 35-40% capacity because of their age and technology. Investment is needed across thesector to build new coal and gas power blocks with new technology that is more efficient, and to upgrade thedistribution network to include smart metering, and better quality transmission infrastructure to reduce leakage from thesystem, says Justin Bancroft, Partner in Deloitte Ukraine. Hungary High level talks have taken place to have Hungarys electricity grid connected to theintegrated electricity market of theCzech Republic and Slovakia sometime by themiddle of 2012. This would be thenext step in thecreation of asingle CE electricity market, putting theregion in theforefront of theEUs long-term goal of creating asingle European electricity market.
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Ranking table and commentary E&R companies maintain their traditionally dominant position at thetop of theTop500, with only some small shift in position among theregions energy giants. PKN Orlen and MOL again hold the1st and 2nd overall ranking respectively, while the3rd and 4th ranked E&R companies round out thetop five. Among thebiggest risers at thetop of thelist are Ukraines Energorynok, which moved from 16th place last year to 6th among E&R companies and 7th overall.
Table 6: Top 10 in theEnergy and Resources within Central Europe (All revenue and net income figures are in EUR million) Rank Top 500 Rank Top 500 Rank LY Company name Country Revenue from sales 2010 1 2 3 4 5 6 7 8 9 10 1 2 4 5 7 8 9 11 13 14 1 2 5 3 16 8 6 19 15 25 PKN Orlen MOL Naftogas EZ Energorynok PGNiG PGE Lotos RWE Transgas Petrom Poland Hungary Ukraine Czech Republic Ukraine Poland Poland Poland Czech Republic Romania 20,915.1 15,530.5 8,643.7 7,861.6 5,346.2 5,327.5 5,126.0 4,926.8 4,677.5 4,421.9 Revenue change (%) 2010 - 2009 33.2% 33.9% 25.4% 5.9% 10.1% 19.3% 2.6% 48.9% 21.1% 16.5% Net income 2010 665.5 392.8 -2,029.9 1,864.4 6.8 635.2 908.5 169.9 -192.1 520.1 Net income change (%) 2010 - 2009 137.7% 22.1% N/A -4.9% -34.4% 119.8% -8.5% -20.8% -132.0% 164.5% 2,329.1 1,960.0 1,784.6 1,847.7 1,651.5 1,610.0 Revenue from sales Q1 2011 5,743.7 4,352.4 Revenue change (%) Q1 2011 Q1 2010 31.5% 33.7% N/A 11.9% 25.2% 7.4% 38.7% 68.6% 28.9% N/A
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In order to be able to manage acompany in this turbulent environment one has to learn how to adopt unconventional solutions and how to respond to change. In other words, those businesses that are able to adapt to thechanging environment and extended periods of economic slowdown will succeed in thelong run.
Jacek Krawiec, CEO, PKN Orlen, Poland
Investors dont want to invest in abusiness where their partner is unreliable or not interested in growth.
Justin Bancroft, Partner, Audit, Deloitte Ukraine
We expect that thegrowth of gas infrastructure is bound to intensify thecompetition and during thenearest months we will need to adjust to thenew circumstances of amore liberalised market.
Michal Szubski, CEO, PGNIG, Poland
Unfortunately, theprovisions of theAct on thescheme for greenhouse gas emission allowance trading are not clear and transparent. Thebiggest interpretation problems are related to installations which will be part of thesystem only from 2013 and which plan to file motions for emission allowances free of charge.
Dariusz Lubera, CEO, Tauron Polska Energia, Poland
Theability to successfully navigate thecurrent maze of regulations, permits and particular interests in order to bring projects to thebankable stage will be key. There are indications that there will be asignificant lightening of theregulatory burden in 2012, which should enable easier project development and result in more investment.
Ivica Krei, Director, Financial Advisory Services, Deloitte Croatia
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M&A activities Thehighest profile example of adeal hinging on regulatory approval is theacquisition of Gdask-based Energa by Polish power giant PGE pending adispute resolution at theanti-monopoly court. Acase awaiting thefinal decision of interested parties can be seen in Vattenfalls recently signed transactions of their Polish asset portfolio comprising adistribution company being acquired by Tauron and ageneration/CHP asset being acquired by PGNIG, aswell asthecase of theCity of Warsaws ongoing sale of their heat distribution plant SPEC. Grupa LOTOS, thePolish oil and gas player, currently itself undergoing privatization, has in 2011 successfully completed theacquisition of aninteresting upstream asset AB Geonafta in Lithuania. Other sector deals include: Thesale of a70% stake in CHP Bialystok by E.On to ENEA for anestimated 101 million (June 2011) Thesale of 73% of Maritsa East III by Enel to US-based ContourGlobal for 230 million in cash plus theassumption of 160 million of debt (June 2011)
Looking Ahead Increasing decentralisation and liberalisation of energy markets is well underway and has companies adjusting their business practices for increased specialisation and broader services. Thefuture shape of thesector in CE, aselsewhere in Europe, still hangs in theregulatory balance, though due to higher emissions output of former Eastern Bloc countries theissue has taken on aregional focus. Thebusiness environment is very unstable and no one is really sure what is going to happen in thenear future, says Jacek Krawiec, CEO of PKN Orlen, reflecting ahigh degree of uncertainty felt throughout theenergy sector. One of themain sector challenges is thehuge wave of investment needed for capacity maintenance, which in Polands case translates into anestimated 1.5 billion of annual sector investment over thenext 20 years. In theoil and gas sector thetrend illustrated by acompany like MOL to acquire more assets, either regionally or outside of Europe. Thetrend of investing in hydroelectric power in countries in South-eastern Europe such asCroatia will continue, extending to even less developed markets such asMontenegro and Macedonia. Thequestion is whether international investors, especially those from Germany, will remain committed to investing in these more remote locations when their situation is in jeopardy at home.
Sailing is not only about watching thetension of theropes and wind direction. First of all, you need to know where you are headed and you have to be flexible in your response to theconditions. For that reason, theManagement Board should be expected to have multiple scenarios of thecompanys development.
Jacek Krawiec, CEO, PKN Orlen, Poland
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Manufacturing
Manufacturing at theforefront of innovation Asthecountries of Central Europe (CE) continue on their transition from efficiency-driven to knowledgebased economies, themanufacturing sector needs to adjust its approach to avoid being left behind and to tap into thetremendous potential available in their home markets. Thedays of CE manufacturing relying on theeasy advantages of lower labour costs and proximity to Western Europe have passed through anevolution that thefinancial crisis only brought to aquicker conclusion. To achieve success in thecurrent economic and increasingly globalised environment, manufacturing in CE has to shift its emphasis to take advantage of its skilled and well-educated workforce. Of course developing talent requires foresight aswell asinvestment and if CE manufacturing companies want to differentiate themselves from thegrowing international competition thetime to make those investments is now. Among thereasons why companies should increase their efforts at differentiation is thefact that manufacturing costs across theregion have reached their low point. Add to this thefact that many companies are underinvested and undermanaged in Research & Development (R&D) and that they need to attract aswell asdevelop new talent, and itis clear that manufacturers need to position themselves at theforefront of innovation. CE manufacturers should position themselves ascapable of taking on more responsibility so they are not one day in asituation where parent companies leave theregion because of cheaper wages/lower cost of labour elsewhere. CEs added value is thebrainpower to doR&D, says Bronislav Pnek, Partner at Deloitte in theCzech Republic. Thecore elements necessary to taking on alarger R&D role can already be found in theregion: alarge pool of talent and education systems with astrong track record in science and technology. Yet theinitiative needs to be taken by manufacturers to harness these features and turn CE into themanufacturing R&D hub itis capable of becoming. Concrete steps that can be taken to achieve this goal include better cooperation with universities aswell asinitiatives to equip graduating students with theskills required to pursue innovation in themanufacturing sector. Speed and flexibility need to be stressed so that companies can respond faster to thechanging needs and demands of customers and theoverall market. Its more important to have theproduct on themarket quicker than competitors rather than cheaper, though thecost vs. time equation always has to be carefully balanced, Pnek says. Pnek adds that itis not only customers that have to be convinced of CE manufacturers expanded capabilities, but chiefly their parent companies. Regional companies will not be given this responsibility. They have to take itby showing they can doitfaster, better, and at lower cost. This process will not happen overnight but itis time for regional manufacturers to start making their case that they can take on R&D work just aseffectively and at alower cost than their parent companies and Western European counterparts.
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Country Insights Hungary German auto manufacturer Audi laid thefoundation stone for theexpansion of its plant in Gyr on July 7. Investment in theplant will total over 900 million and thenumber of employees following theexpansion should reach 2,100. Theexpansion will comprise anew press shop, aswell asplans for abody shop, paint shop and assembly line. Theannual output capacity will expand to 125,000 vehicles asof 2013, with thefirst cars being ready in theautumn of 2012. Daimler AG is proceeding with theconstruction of its EUR 800 million Mercedes plant in Hungary asscheduled, thecompany will employ 2,000 people by theend of 2011. Thefirst car for sale will roll out of thefactory in thefirst quarter of 2012. Up to February Mercedes-Benz hired 720 Hungarian workers and itwill have asmany as2,000 by theend of theyear, 1,700 of which are planned to be locals. After its launch, theplant will provide nearly 10,000 jobs. Romania In August, automotive system and component supplier Cooper Standard announced plans to establish anew manufacturing facility in Craiova, Romania. Thesite will house thecompanys manufacturing operations and offices and will eventually employ 150 people. Thenew location will support Ford automotive manufacturing aswell asproducing sealing and fluid handling products. Regionally, theAmerican company also has operations in Poland and theCzech Republic. Ranking table and commentary Themovement of manufacturing companies in theleading positions of theTop500 was more varied than in most other industries. Auto maker koda moved from the4th spot to 3rd in this years overall ranking while Polands Fiat experienced asignificant drop from 7th in 2010 to 20th this year. Ukraine Metinvest jumped thehighest in thetop 10 from 9th to 6th this year. One of themost dramatic rises was also anautomotive manufacturer, with Kia Motors Slovakia moving from 71st to 36th place.
Table 7: Top 10 in theManufacturing within Central Europe (All revenue and net income figures are in EUR million) Rank Top 500 Rank Top 500 Rank LY Company name Country Revenue from sales 2010 1 2 3 4 5 6 7 8 9 10 3 6 12 16 20 21 25 29 32 33 4 9 14 22 7 28 26 31 37 21 koda Metinvest Audi Hungaria Foxconn CZ Fiat Volkswagen Slovakia GE Hungary Samsung Electronics Magyar Unipetrol Samsung Electronics Slovakia Czech Republic Ukraine Hungary Czech Republic Poland Slovakia Hungary Hungary Czech Republic Slovakia 8,698.1 7,057.2 4,758.1 4,358.6 4,107.0 4,040.0 3,667.4 3,568.4 3,398.8 3,250.0 Revenue change (%) 2010 - 2009 22.4% 59.8% 23.0% 37.7% -9.1% 37.2% 21.8% 28.0% 33.4% 2.6% Net income 2010 349.5 730.0 591.8 15.1 -20.5 75.2 585.1 13.4 37.0 118.1 Net income change (%) 2010 - 2009 166.9% -0.2% 103.2% -23.9% -110.8% 32.6% -47.3% -90.1% N/A -50.2% 946.7 1,123.0 Revenue from sales Q1 2011 2,689.7 Revenue change (%) Q1 2011 Q1 2010 32.8% N/A N/A N/A -5.2% N/A N/A N/A 35.9% N/A
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In many countries universities donot produce enough skilled people who are ready to join manufacturing companies (in engineer, design, construction) at theend of their education gap between what is being taught in university and required to work in industry. Remove theadministrative burden from anorganisation that is lean and smart with agood motivation system and you will be able to innovate cheaper and more efficiently: significantly increase power of R&D, shorten theitem, achieve abetter result.
Bronislav Pnek, Partner, Consulting, Deloitte Czech Republic
Support of public transport, either direct with governmental support in each country, or indirect, through taxation and prices of fuel, environmental pressures, will be vital to manufacturing growth in thenear term. We can see thefirst improvements in theprivate sector market aswell asin theindustrial sector. Theindustrial sector is more or less on thesame level asbefore thecrisis. Thesituation is much more problematic for development. Developers at themoment would rather invest on thewesterns markets. Even in Poland thesituation is much better than on theCzech market. Idonot expect significant construction of offices or shopping malls in theCzech Republic until 2012.
Pavel Pachovsk, CEO, Iveco Czech Republic
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M&A activities Asignificant revival of M&A activity in diverse segments of theCE manufacturing sector took place, with a50% increase in M&A transactions in 2010 over 2009. Thetransaction flow continued through thefirst half of 2011, with asignificant number of smaller businesses going up for sale. Transactions tended to be cross-border and undertaken by strategic investors in order to enter new markets, diversify their portfolio or strengthen their global footprint. Distressed disposals became less common although there were significant exceptions. At thetop of thelist was Chinas Wanhua Industrial Groups acquisition of aminority stake in theHungarian based plastic raw materials business BorsodChem. Wanhua subsequently exercised its call option for theremaining 58% equity interest for 1,230m in February 2011 from private equity funds Permira and Vienna Capital Partners. Financial investors realised 1/3 of thedeals in themanufacturing sector, thelargest being acquisitions of non-core assets from corporates that had reviewed their strategies. These deals include IK Investment Partners acquiring 99% shares of Poland based fruit products manufacturer Agros Nova for 245 million and Advent International agreeing to acquire Provimi Pet Food for anenterprise value of 188 million. Several regional industry players acquired peers to strengthen their market position, realize synergies and increase production capacity. Notable examples include thelisted Polish metallurgy firm, Alchemia and their acquisition of both thesteel pipe plant of ISD Huta Czestochowa and pipe rolling company Przedsiebiorstwo Walcownia Rur RUREXPOL. There was also acquisition of MMK Illicha steel producer by Metinvest. Other examples include Zaklady Azotowe Pulawys investment in fertilizers and chemicals producer Gdanskie Zaklady Nawozow Fosforowych Fosfory.
Looking Ahead Manufacturing will come under increasing pressure from therising costs of raw materials, energy and wages. Companies that manage to streamline their processes, cut costs, remove waste, and create efficiencies will have thelong-term advantage. Thespeed at which markets will change will increase in thefuture. Manufacturing companies flexibility and ability to adapt to such change will be very fundamental to their success in thefuture. Most CE countries are manufacturing for export because their internal markets are not big enough. Thesuccess of CE manufacturing companies is still strongly linked to production in Western Europe.
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Technology, Media and Telecommunications

Technology, Media and Telecommunications (TMT) covers three segments that share many points of intersection but have equally distinct areas of specialisation. Reflecting global trends, Central European (CE) telecommunications companies are going through aphase of consolidation, with smaller operators merging to form more competitive companies. Therapidly growing potential of CE-based software development is amajor opportunity for theregional technology sector, while thetransition to digital TV in CE is changing themedia landscape. Telecommunications Faced with thelimits of anexpanding customer base in ahighly saturated market, telecom operators in CE are facing aprocess of industry consolidation that could redraw thesector map. Thegreatest momentum for consolidation is coming from market players too small to compete with thedominant operators on their own. Merging with other telecom companies improves acompanys market position and allows itto provide alarger variety of services to anexpanded customer base. One place where this trend is not welcome though is among anti-monopoly authorities, who see itasareduction in competition. One could argue, however, that consolidation of weaker players actually strengthens thelevel of competition in themarket. Innovation in thesector has changed immensely since therise of mobile phone use in the90s, with niche services now being offered almost entirely by smaller start-ups. Big players, with significant revenue streams coming from traditional products, rarely experiment with niche services and donot push them until they get popular, thus letting smaller players test thewaters first. Exceptions include services that can not be launched without already having alarge customer base. Media TheCE media landscape is currently undergoing abroad transformation caused by theincreasing penetration of digital TV in households throughout theregion. Growing digital TV use presents athreat to cable operators, particularly among their lower-income customer base, who will start to gain free access to channels that cable operators charge for. Cable operators will have to provide even more premium channels to differentiate themselves from thefree digital offerings. Going digital and theincrease in high definition television also opens up new financial opportunities. In Romania, one of thekey challenges is likely to be how to increase revenues. Over thelast two years, television has been affected by thedecreasing trend of budgets from theadvertisers. Thesteady migration to high definition should provide significant opportunities for up-selling to premium television subscribers, says Ahmed Hassan, TMT Leader for Deloitte in theBalkans. Technology Themigration of software development from developed countries to less developed countries represents atremendous opportunity for theCE tech sector. Though software development is nothing new in CE, there is increasing potential to take on more of thehigh-level software design work. This trend has been greatly accelerated by theavailability of high-speed data transmission and cloud computing, allowing development teams to collaborate from diverse locations across theglobe. Amethodology such asAgile software development, which requires constant step-by-step collaboration between software developers and users, demands constant interaction and puts CE countries at adistinct advantage over locations in Asia due to thefact that itis in thesame or similar time zones astheir European parent companies. Add to this thecultural similarities so helpful to asuccessful collaborative process and theavailability of agrowing, skilled ITlabour force and therecent decisions such asCadburys to outsource its digital platform supporting consumer engagement activities to aMoldovan and Romanian based company may prove to be increasingly common.
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Country Insights Poland The4.5bn acquisition of Polands second-largest mobile phone operator Polkomtel in June 2011 was thefirst transaction of this size in CE where amedia player acquired atelecom company. Theend of ashareholders conflict at PTC (Polska Telefonia Cyfrowa) was followed by its rebranding of Era to T-Mobile. Digital television is finally taking off with arising part of thepopulation being covered by broadcasting of adigital TV signal. Czech Republic In view of industry conditions and competition, telecommunication companies are consolidating their infrastructure in order to reduce their own service provision costs. They are seeking to differentiate themselves through content and by shifting towards client project supplies outside theframework of standard telco services. Generally, itis clear that most entities in IThave succeeded in achieving thebasic task and have built more or less sufficient ERP solutions no significant changes should be expected (without any additional impulses such asmergers, etc). Thenew topic involves utilising stored information effectively to gain acompetitive edge both for business analysis and simulation purposes and to supply information to theconsumption site on mobile equipment. Thetopic also entails finding amethod for storing and handling large volumes of data while maintaining thecost vs. benefit balance. Hungary At thebeginning of August, Hungarian communications authorities announced atender allowing afourth mobile operator in the900 megahertz frequency. Thecurrent operators on themarket are local units of Deutsche Telekom (Magyar Telekom Nyrt), of Norways Telenor and of theUKs Vodafone Group. Registrations are expected by Oct. 20, with thetender closing on Dec. 12. Romania In Romania overall turnover within theIT&C sector exceeded 8.8 billion last year, 6% more compared to 2009 and 3.3% less compared to 2008, according to astudy developed by theInstitute for Computer Science (ITC). Thehardware and electronic equipment sectors were theprimary influences on thepositive results of theIT&C turnover, according to thestudy. They registered agrowth rate of 16% in 2009 and 43% in 2010 mostly due to exports by theNokia platform that added in thelast two years over 1 billion to thesector turnover in thelast two years. Thenumber of subscribers to high speed mobile internet services increased in thesecond half of last year by 380,000, up to 2.23 million clients, according to data released by theNational Authority of Management and Regulation in Communications (ANCOM). On thefixed line internet market, thenumber of users increased by 90,000, up to 3 million. At theend of 2010, thebroadband Internet penetration rate was 14% per 100 inhabitants and 36.8% per 100 households. More than 90 percent of Romanias 3,600 white spaces will be connected to theinternet by 2015 at thelatest, according to theRomanian Minister of Communications and Information Society Valerian Vreme.
Companies which embrace convergence and add value to their services by using complementary industries will maintain or increase their market share. Two major technological drivers powerful portable devices such assmartphones and availability of high speed connectivity - are transforming theindustry and creating new sources of revenue.
Ahmed Hassan, Partner in Charge, Audit, Deloitte Balkans
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Ranking table and commentary Thetelecom sector represented in theTop500, with theexception of afew players, has experienced shrinking revenues partly due to theongoing and intense competition in theregions saturated markets and partly due to theoverall global crisis-driven attitude of their customers. This is particularly visible in thecase of leaders of theTMT industry in Central Europe, large well-established incumbents in both fixed and mobile sectors like TPSA in Poland, Magyar Telekom in Hungary, Telefnica in Czech Republic and numerous mobile operators belonging to T-Mobile, Orange, Vodafone and others. The16 telecom operators ranked in thetop half of theTop500 list are classified lower than last year by anaverage of 23 positions which demonstrates therelative weakness of theTMT industry vis--vis other industries. Itshould be noted that even if some of theoperators demonstrated increased euro revenues in 2010 compared to 2009 (i.e. Polish operators), itis aneffect of more favourable exchange rates astheir revenues expressed in local currencies for themost part decreased. Polish Telecom (TPSA) remains thehighest ranked TMT company for another year, in spite of dropping from the17th to the22nd spot in theTop500. Polish telecom companies make up four of thetop seven TMT companies in thelist, with Centertel, Polkomtel and PTC rounding out thelist. Theperformance of smaller players was clearly better, at least taking into consideration their top line numbers, which can be explained by either aggressive growth strategies resulting from their late entry to themarket (Play in Poland, Cosmote in Romania) or consolidation processes that let smaller operators achieve asufficient scale of operations.
Table 8: Top 10 in theTMT within Central Europe (All revenue and net income figures are in EUR million) Rank Top 500 Rank Top 500 Rank LY Company name Country Revenue from sales 2010 1 2 3 4 5 6 7 8 9 10 22 26 56 57 69 70 73 92 104 135 17 11 43 42 63 61 66 new 56 124 TPSA Nokia Komrom Telefnica Czech Republic Magyar Telekom Centertel Polkomtel PTC Nokia Romania Panasonic AVC Networks Czech Siemens Group R Poland Hungary Czech Republic Hungary Poland Poland Poland Romania Czech Republic Czech Republic 3,934.1 3,649.9 2,202.6 2,202.3 1,930.4 1,920.8 1,838.7 1,606.3 1,522.4 1,180.7 Revenue change (%) 2010 - 2009 2.8% -8.1% -2.8% -4.1% 7.9% 6.9% 4.3% 56.4% 4.5% 4.1% 123.7 277.6 355.5 Net income 2010 20.3 111.2 485.5 279.5 Net income change (%) 2010 - 2009 -93.3% -28.2% 10.0% 1.0% N/A 23.0% 9.7% N/A N/A N/A 446.1 439.6 528.9 526.9 Revenue from sales Q1 2011 944.6 Revenue change (%) Q1 2011 Q1 2010 -2.6% N/A -1.0% -3.8% N/A -2.8% -0.1% N/A N/A N/A
LY data used due to unavailability of 2010 data
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We are positive that high living standards can be reached in Ukraine only on thecondition that innovative communication technologies, services and solutions are integrated in every field of business activity and everyday life. Furthermore, widespread innovations in society helps develop innovative thinking, which is akey factor for national economic growth and theintegration of Ukraine into theglobal economy and open network society of thefuture.
Vasiliy Latsanych, CEO, MTS Ukraine
Clearly its thedemand for faster access to information that is driving industry innovation. Clients are seeking on-line services more and more and they dont want to be limited at work or in their free time. On-line conferences, films, music, books, parking tickets, travel tickets, tickets to other events, all these are clear examples that will be supplemented by new services.
Ivan Luica, Partner, Consulting, Deloitte Slovakia
TP Group wants to be theleader in all key telecom market segments (fixed-line and mobile services, broadband Internet), and win asignificant position in theTV segment. We hope to benefit from thedevelopment of ICT and machine-tomachine services in thebusiness services segment. At thesame time, theGroup is focusing on cost cutting through synergies from strategic partnerships, and optimisation of our processes and distribution channels, among others, Maciej Witucki, Chairman & CEO of Telekomunikacja Polska S.A.
Maciej Witucki, Chairman & CEO, Telekomunikacja Polska S.A., Poland
Ithink were on thethreshold of anew era. Both business and commercial sectors, will be more and more virtual. Essentially this means that theapplication vendors will be less and less tied to aparticular type of terminal equipment and theuser will be able to run anapplication on any type of computing device.
Zdenk Kek, Partner, Audit, Deloitte Czech Republic
When you talk about digital TV you are talking about along-term game. Its development will take years and will be exposed to strong competition from more flexible cable and satellite offerings.
Dariusz Nachyla, Partner, Consulting, Deloitte Poland
Themain TMT drivers in Pannon Adria will be consumer services that are related to fixed and mobile broadband, mobile applications, digital television, m-commerce aswell asnew business services related to connectivity and cloud computing. These will generate revenue for TMT players that they are currently losing with thedecline of traditional services.
Dejan Ljutina, Director, Business Advisory Services, Deloitte Croatia
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For us talent management means advancing thepersonal development of our middle management aswell astheknow-how of our technical experts. Its aprocess where we aim to recognize, develop in order to retain thetalent that will keep our company highly competitive.
Ranko Ili, Director of theStrategy Function, Telekom Srbija, Serbia
M&A activities TMT was among thesectors worst-hit by thefinancial crisis because itis traditionally highly leveraged. Some pre-crisis regional TMT companies (media and telecoms in specific) were highly geared, taking on enormous debt / leverage burdens. Thefinancial crisis hit them very hard. Donot expect M&A activity to return to previous levels. Itwas avery hot sector in the2001-09 period, but is not very attractive to acquisitions in thecurrent business climate. In order for thesituation to change, fundamentals would need to improve: better spending, more revenue, cheaper financing, none of which are happening yet. Telco companies are under tremendous pressure: cannot increase prices despite growing volume, constantly cut operating expenses, carry huge burdens of debt. Not one component of this equation is improving yet. Media companies are struggling with questioning of traditional model of media: advertising revenues collapsed in 2009 and are not returning, publishers can not increase content revenue because they are competing with free online content. Circulations are shrinking.
Looking Ahead In thenext 12 month there will be aconstant increase in demand for data highways, in terms of exchanging and sharing data. New channels of communications will be built aswell asnew applications created to allow connection to thedata source needed without being concerned where thedata is stored and also to connect no matter where we are, when we connect or through which device (computer, phone, TV, car computer). Telecom innovation may be spread out among agrowing field of small start-up companies but thedemand for new ideas will generate significant momentum going forward. New start-ups will come in even bigger numbers. There is alarge pipeline of new initiatives. Cellular broadband will increasingly revolve around specific uses and users, and focus on these could help boost margins and reduce thegap between volumes carried and revenue generated. Mobile datas appeal asanalternative to fixed broadband may recede if theequivalent fixed broadband offer is cheaper and/or offers higher performance. Thenumber of households that have cut their fixed connectivity cord may reduce assome formerly mobile-only households revert to fixed lines for broadband and voice access. Television technology shows continuous improvement. Thegrowing penetration of large flat-panel televisions should increase thevisual impact of programming and advertising. Also 3D technology may provide anadditional revenue stream in themedium to long term.
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Consumer Business and Transportation

Think globally, act locally is theslogan for environmental activism, but for Consumer Business companies active in Central Europe (CE) itis necessary to think locally aswell. One of thekey indicators of success for international players entering thegrowing but competitive markets of theregion is thedegree to which they have been able to adapt to local tastes and sensitivities. Transplanting thedeveloped western model to developing/emerging markets does not entirely work. Emerging markets may be 70-80% similar but companies still need to find the20-30% thats unique to local tastes, says Aaron Martin, Director, Deloitte Consulting. Foremost among these local sensitivities is price sensitivity, and thecompanies that have been able to respond to local markets demand for lower prices have done so through aseries of cost reductions. These include shaving costs by lightening thesupply chain aswell asreducing company headcount. Sourcing local products is another way for retailers to respond to customer demand and maintain lower prices. For companies expanding through M&As athorough and efficient integration is necessary asmany such companies are being run in aseparate, decentralized manner. Retailers also help their case by being able to offer intangible benefits to customers such asFair trade, recycled and low footprint products without adding any additional cost. Streamlining and making thesales process more convenient by using technology aswell asimproving levels of service are other means of attracting more customers. Convenience and proximity are clearly factors of growing importance for consumers, and companies such asTesco are adopting growth strategies that incorporate this priority. At theend of 2010 Tesco announced aCentral and Eastern European expansion aiming to nearly double thecompanys selling space in theregion over thefollowing five years. Theexpansion involves anemphasis on 2,000 4,000 square metres small-format stores aswell astheeven smaller format Express stores. Tesco has aproven track record of success on CE markets such astheCzech Republic in advancing amulti-format strategy that offers low-cost and localized products. Many CE retail markets are split between expanding international players and local companies. Thechallenge for local companies is to protect their existing market share by picking up on thetrends and innovation brought in by foreign competition. This is all themore difficult aslocal players donot have acomparable marketing budget to themultinationals.
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Country Insights Czech Republic At theend of 2010 Tesco acquired aCzech portfolio of 81 abka convenience stores together with 47 Koruna-brand supermarkets from private equity firm Penta Investments for 39.58 million. Thedeal illustrated theUK retailers broad regional expansion strategy that maintains astrong focus on small-format stores asameans of attracting both new customers in larger markets aswell asentering new catchment areas. Thetransaction was approved by Czech anti-monopoly authorities in March 2011. Poland In February, private equity firm Mid Europa Partners purchased Polish convenience store chain Zabka Polska from Penta Investments for thereported amount of around 400 million. Zabka Polska has over 2,400 convenience stores across thecountry along with over 50 small-format Freshmarket stores. - Tesco is engaged in its own Polish retail expansion plans, with plans to open 80 stores by theend of 2011 to add to its 370 already on themarket. Theinvestment in theexpansion is estimated at around $360 million. Ukraine Increasing global demand for food due to arising population offers significant opportunities for theUkrainian Food, Beverage & Agriculture sector. Productivity improvement is crucial asarable land per capita continues to decrease (0.5ha in 1950 to 0.2ha in 2010). Biofuel production continues to compete for farmland. Current mandated biofuel demand is projected to increase from 14million tons in 2009 to 90 million tons by 2022. Agricultural firm Mironovskiy Hlebproduct (MHP) is anexample of acompany taking aninnovative approach and growing its market share and export opportunities. Hungary According to asurvey by Hungarian company Webshop Experts, online retail in Hungary is expected to rise by 30% in 2011. Since 2008 when online retail was 275 million, sales have nearly doubled, with 2010 earnings reaching over 500 million. Visitors at price comparison portals tripled in 2010 asHungarian shoppers become more accustomed to shopping online. Online payment remains less common though. Thepoll estimates that only 30% of online shoppers make their payments online.
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Ranking table and commentary Theleading CB companies on this years Top500 adhered fairly closely to thepositions they held in 2010. Jeronimo Martins, owner of Polands largest retailer Biedronka, was 1st among CB firms and 10th overall, dropping only two places from last year. Metro Group in Poland came in next, having slipped from 13th to 18th on thelist. Thetwo companies that showed improvement on the2011 Top500 were also from Poland, with PKP moving from 46th to 43rd place and Carrefour Polska from 54th to 52nd.
Table 9: Top 10 in theConsumer Business and Transportation Industry within Central Europe (All revenue and net income figures are in EUR million) Rank Top 500 Rank Top 500 Rank LY Company name Country Revenue from sales 2010 1 2 3 4 5 6 7 8 9 10 10 18 19 27 28 39 43 46 49 52 12 13 10 20 18 35 46 40 36 54 Jeronimo Martins Metro Group Ukrainian railway state company Agrofert Agrokor Mercator Group PKP Tesco Polska Vilniaus prekyba Carrefour Polska Poland Poland Ukraine Czech Republic Croatia Slovenia Poland Poland Lithuania Poland 5,061.1 4,289.4 4,239.3 3,642.8 3,634.8 2,781.6 2,680.2 2,539.2 2,408.6 2,278.1 Revenue change (%) 2010 - 2009 30.3% 4.6% 3.2% 12.1% 0.8% 5.2% 19.9% 8.3% -5.5% 25.2% 236.0 22.0 19.9 11.3 Net income 2010 Net income change (%) 2010 - 2009 N/A N/A N/A 67.3% -31.9% 91.4% 107.3% N/A N/A N/A 589.8 Revenue from sales Q1 2011 1,408.2 Revenue change (%) Q1 2011 Q1 2010 24.7% N/A N/A N/A N/A N/A N/A N/A 5.5% N/A
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Agrokor believes that investing in new technologies, tightening thecooperation with theagricultural sector asasubstitute for imports aswell asopening new farms and enlarging theexisting ones will generate further growth. Thecompany has also invested in theenlargement of its retail floor space, which is another sector where thegrowth is expected.
Ljerka Pulji, Senior Executive Vice President, Strategic Business Groups and Marketing, Agrokor Corporation, Croatia
Increased trust in e-commerce is one of thekey drivers for our company over thefollowing 12 months.
Irinel Burloiu, Marketing Director; Irina Bi, HR Director, eMag, Romania
Successful companies are theones that have acomprehensive understanding of thefood value chain -from thecrop to theretail - clearly identifying where values are generated and where there are bottlenecks.
Mykhaylo Melnyk, Partner, Audit, Deloitte Ukraine
Commodity prices, which have been rising on themarket lately, represent thekey factor in our companys short term growth. Beyond this we are focused on improving our overall efficiency and pursuing acquisitions that suit our strategic goals.
Vladimir Gavri, CFO, MK Group, Serbia
We are waiting for thefinal agricultural strategy (EU 2014 directive) and donot have much influence on thefuture. This will be themain driver.
Gza Bvr, CEO, Kite, Hungary
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M&A activities Asin anumber of other industries, there is aclear North/South divide Thenorthern countries (PL, CZ, SK) have much healthier consumer markets: consumer spending is growing, unemployment rates are much lower than in theSouth, disposable income is healthy and growing, households are not overleveraged (there has not been ahuge borrowing/mortgage boom asin other markets), construction is ongoing, banks are lending to both consumers and corporates. Thesector there has been boosted by high market valuations in recent CB transactions In thesouthern countries of CE there is aworse situation for consumer spending; companies outlooks are much weaker, deals are either not happening or happening at much more depressed valuations Consumer industries are very much following thetrends in theoverall health of theeconomy Deals driven primarily by private equity. Corporate acquisitions have not rebounded since the2009 crisis.
Looking Ahead Drivers of consumer business growth are likely to be systemic industry drivers and not macroeconomic drivers. These include rising incomes, theincreasing penetration of western tastes and sustainability. Companies must find away to adapt more sustainability initiatives and communicate them to consumers. Service is another factor gaining importance, and companies that can meet all these criteria in thenext 12-24 months without passing on thecost to consumers will be thewinners. Theexpansion of smaller-format retail chains by major international players will continue to increase thepressure on smaller local retailers, even in markets such asPolands where small retailers make up afairly large proportion (approximately 40%) of thecountrys food retail market.
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Real Estate and Construction
Post-recession sentiment Thesingle word recovery hardly describes thevaried, multi-tiered process taking place throughout CE economies and their real estate markets. If anything, thepost-crisis landscape has seen aneven further widening of thegap between different countries and regions, theprimary and secondary markets, along with differences between public and private sector real estate opportunities. Though investors and developers are turning their sights to CE again thecombination of risk-aversion and apremium on quality has put thefocus on well-located, prime properties in theregions most stable markets such asPoland and theCzech Republic. Business and consumer confidence are also key to recovery reaching full speed. Having passed through their retrenchment and cost-cutting stages companies active in CE are beginning to implement more measured growth strategies than those pursued before thecrisis. This is vital for acommercial property sector that has vastly improved throughout most of CE in thelast 12 months. Thereturn of investment in core CE markets has been awelcome sign, but is still accompanied by ashortage of new development that is not expected to pick up significantly until 2012. Consumers willingness to spend is anecessary step in therecovery of thestill struggling CE residential market. Although residential markets differ across CE even thebest positioned markets are not expected to return to growth until theend of 2012 at theearliest. Public sector construction is similarly stalled until better economic conditions will allow greater government spending. Key business drivers of real estate market in theCentral Europe for thenext few years are: Existing surplus on thereal estate market, in several cities this surplus would be balanced next 2-4 years Post-recession trauma of potential customers, mainly on theresidential market Chronic cost-cutting approach of tenants, expansion strategies were replaced with stabilizing strategies Developers have found that creativity, innovation and green initiatives would help them to survive today ice-age on theR/E markets, new R/E development formats and schemes have appeared on themarket. Speculative development strategy was replaced with sustainable development strategy
We see creativity and innovation asalong term goal. We study trends and changes in society, for instance electricity consumption, because those trends are important to predict where theindustry will go in thefuture. Therefore we have developed expertise in some highly exclusive markets such asmarinas, wind farms, nuclear power plants and airports.
Peter Maronna, Deputy Chairman of theExecutive Board and CFO, Hochtief, Czech Republic
Real Estate Theimbalanced state of recovery across countries has made theability to adapt to changing market conditions more crucial than ever for companies aiming to ride out present uncertainties and be positioned to catch thenext wave. No longer able to rely on ever-rising prices, companies need to be more creative in development opportunities for profit and growth.
Other niche real estate markets that offer opportunity include those for nursing homes and student housing. While western markets have seen alot of activity in these niche sectors in recent years they remain underdeveloped in CE and so offer considerable opportunity for companies looking for areas of growth. But itwill take some time to adapt customers` habits on these new R/E formats.
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Construction Industry Construction industry was affected not only by decline of private investors and customers, but also by fiscal problems of governments in theCentral Europe. Itled to significant fall in both private and public demand. Construction might be atraditional bricks and mortar industry where technical innovation plays alesser role than itdoes in many other industries, but innovation is also ameans of increasing productivity and finding thebest available opportunities for growth. If thefinancial crisis has proven anything itis that real estate firms need to be more flexible and quick to adapt to changing market conditions in order to achieve long-term success. Challenges remain, not least theperception and often reality that innovation does not originate in CE but is aninternational export. In theconstruction sector, innovation such asnew technologies mostly comes from abroad. There is not anenvironment for thedevelopment of new technologies in theCzech Republic, says Petr ek, CEO of Swietelsky in theCzech Republic. In spite of continuing economic uncertainty and its hampering of some areas of market recovery itis clear that there is avery broad consensus of long-term optimism in theprospects of CE real estate. For companies active in theregion itis not aquestion of if, but when. Determining theanswer to that question will be thekey to identifying and harnessing themarket trends of thefuture.
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Country Insights Czech Republic Growing domestic and international investor interest in well-located, prime property has placed theCzech Republic firmly among thecore Central European markets. However, in contrast to its fellow core regional market, Poland, themarkets smaller size has meant lesser availability of product, asituation exacerbated by theon-going development slowdown. Total R/E investment projections for 2011 have risen to over 1.5 billion, with retail being asignificant element following therecent acquisitions of theOlympia Shopping centres in Mlad Boleslav and Teplice by CPI and that of Olympia Brno by ajoint venture of of ECE and Rockspring. In 2010, domestic investors dominated themarket, in 2011 thereturn of foreign investors is expected.
Graph 9: Czech investment market volume (in EUR million)
Poland Not only one of CEs leading markets, Poland has been one of thebest performing real estate markets in Europe asof late. Commercial property transactions have remained robust and low office vacancy and high demand for retail property have led to thepursuit of anumber of new development schemes throughout thecountry. Poland remains theR/E investment star of theCentral Europe, but therisk of surplus on office and retail market and possible decline in demand for anew offices in thenear future due to implementation of alternative workplace strategies across large occupiers could affect thePolish market aswell. Low vacancy rates in theWarsaw office market have caused tenants to focus on non-central locations with lower rents. Retail is also spreading out with themajority of schemes under construction located in small and medium sized cities. Hungary Debt remains asignificant issue on theHungarian real estate market, asconstruction companies in particular are burdened by loans that will need to be restructured if thecompanies hope to survive. Theone Hungarian company with sufficient cash to pursue projects is unable to invest on themarket due to lack of demand. While thedomestic market is expected to remain stagnant with neither publicly nor privately financed projects providing construction firms with significant work, some Hungarian developers have been able to tap into regional CEE markets for new projects, particularly in Russia, Ukraine and Romania. Agrowing number of distressed commercial and residential property assets have fallen into thepossession of banks.
3,000 2,500 2,000 1,500 1,000 500 0

2007 2008 2009 2010 2011
Domestic investors Foreign investors Source: CBRE, Deloitte calculation
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Slovakia TheSlovak real estate market was one of themost dynamic markets in Europe before economic recession affected thecountry asawhole region. TheSlovak market has seen little activity in 2011 in either development or leasing, though there is some new office space coming to themarket later this year and early in 2012. Slovak developers have been increasingly active on theCzech and Polish markets in finding new projects to undertake. Thecountrys industrial market has seen significant recovery this year and its vacancy rate has dropped below 3%, thelowest rate in Central Europe. Slovak Investment and Trade Development Agency (SARIO) has had asuccesful first half of 2011. Compared with thefirst half of 2010, SARIO managed to attract more foreign investments to Slovakia, during thefirst half of 2011 SARIO executed investment projects with atotal volume of 259.5 million Euros which will probably create over 1500 new jobs in Slovakia, over thesame period last year SARIO completed 8 projects with atotal value of 35.22 million Euros and which resulted in thecreation of approximately 500 new jobs. Thesector was given its biggest boost by CPIs 73 million acquisition of ancar-logistics area in theSlovak town of Lozorno outside of thecapital, Bratislava. Thetransaction was thelargest Slovak real estate deal since 2007.
Romania Thecountrys office market continues to have ahigh vacancy rate at above 16% yet pre-lease deals are being signed for thefirst time since mid-2010, which is apositive indicator that activity is beginning to pick up. Much of thedevelopment pipeline and recent lease deals involve projects delayed from 2010. Romanian retail has also seen athaw in previously frozen projects asinternational retailers are again looking at expanding their presence in thecountrys larger regional towns. Retail growth will come at theexpense of non-performing shopping centres. Croatia Themarket has been characterised by considerable stagnancy in development in leasing though there are indications that thepipeline is beginning to increase somewhat. New office space will likely add to what is now afairly low vacancy rate. Theon-going weakness of thecountrys economy. In which recovery is not expected to occur until next year at theearliest, has prevented significant activity from taking place in its real estate sector.
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Ranking table and commentary TheCzech Republics Metrostav is thetop ranked construction company in theCE Top500 although itdropped from 128th to 146th place. Skanska, Strabag CR and Polimex-Mostostal were among theother top ranked regional real estate companies that fell on this years list. Risers in 2011 included Polands Budimex, which shot up from 204th to 151st place, aswell asEurovia CS and Strabag Polska.
Table 10: Top 10 in theReal Estate Industry within Central Europe (All revenue and net income figures are in EUR million) Rank Top 500 Rank Top 500 Rank LY Company name Country Revenue from sales 2010 1 2 3 4 5 6 7 8 9 10 146 151 155 162 166 182 234 294 412 444 128 204 163 126 221 142 142 247 316 273 Metrostav Budimex Eurovia CS Polimex-Mostostal Strabag Polska Skanska Polska Skanska CR Strabag CR PSV Mostostal Warszawa Czech Republic Poland Czech Republic Poland Poland Poland Czech Republic Czech Republic Czech Republic Poland 1,118.9 1,109.1 1,090.4 1,041.6 1,006.2 944.8 800.2 662.0 479.8 452.0 Revenue change (%) 2010 - 2009 4.2% 45.9% 17.6% 2.5% 38.5% 36.0% -23.5% 4.5% -14.7% 7.6% 6.2 11.4 Net income 2010 25.3 67.0 51.8 27.9 48.7 53.0 30.2 Net income change (%) 2010 - 2009 -22.1% 67.0% 58.7% -46.1% 11.9% 89.1% -45.2% N/A -54.6% -64.5% 5.4 96.6 Revenue from sales Q1 2011 164.3 202.1 119.9 222.8 Revenue change (%) Q1 2011 Q1 2010 -11.2% 39.8% 15.8% 15.3% N/A N/A N/A N/A -13.6% 8.9%
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Itseems that private demand in thefield of civil engineering is back on thesame level asbefore thecrisis. We plan to keep focusing on foreign developers coming to theCzech Republic. However thesituation is different in public sector demand. Iassumed that therecovery in demand will come in 2012, but now itis already clear that this prediction will fail.
Petr ek, CEO, Swietelsky CZ, Czech Republic
Innovation is asource of both competitive advantage and extra revenue. At present, we are in thestage of selecting anew, innovative ITsystem to include theentirety of our business activity: production management, broadly defined sales planning, production, transport, purchases and theentire logistic chain. Additionally, thesystem should include high storage warehouses, full electronic integration with banks, fleet management, maintenance and broad approach to workflow.
Henryk Siodmok, CEO, Atlas Group, Poland
Due to thesituation in theconstruction and development market, we donot expect significant growth in thenext 12 months. We will consider itasuccess if we maintain our current level of performance and profit.
Ji Blohlav, President, Metrostav Group, Czech Republic
Theshort term prospect of theHungarian property industry is generally negative according to themarket players. Thelevel of new construction is below last years and real estate developers have put new projects on hold. Thefew new office developments involve build to suit arrangements.
Attila Kvesdy, Partner in Charge, Tax, Deloitte Hungary
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M&A activities Globally there has been significant return to M&A transactions in theReal Estate space in thepast year asthecrisis caused adrastic gap between cash-hungry firms and cash-rich firms. TheM&A has also been occurring this year in EMEA aswell asin CE. TheM&A trend in CE should continue, with asignificant number of deals in thecoming year. Recent M&A deals among investment, management and real estate advisory companies include: Deloitte buying Drivers Jonas to create Drivers Jonas Deloitte (DJD) last year JLL buying King Sturge Rumoured takeover of DTZ globally by French bank BNP Paribas In CE specific CBRE took over EMCM, amajor retail property management company CBRE buying ING investment management business, creating areal estate investment giant Goodman buys ING Industrial Fund Blackstone buys Valad Prologis and AMB Merger CEE specific Deals like AEW/Tristan buying VGP Parks CA Immo buys Europolis in CE Looking Ahead Asinvestment and take-up increases in CEs strongest commercial property markets throughout 2011 thedevelopment pipeline is projected to begin expanding. Growth and further recovery are highly dependent on theglobal economy proceeding without further contractions. Aslack of available investment product in core CE markets and rising prices will inevitably push investors to look at other regional markets, providing amuch needed spur. Residential markets in CE are expected to begin growing again in 2012.
We can see thefirst improvements in theprivate sector market aswell asin theindustrial sector. Theindustrial sector is more or less on thesame level asbefore thecrisis. Thesituation is much more problematic for development. Developers at themoment would rather invest on thewesterns markets. Even in Poland thesituation is much better than on theCzech market. Idonot expect significant construction of offices or shopping malls in theCzech Republic until 2012.
Peter Maronna, Deputy Chairman of theExecutive Board and CFO, Hochtief, Czech Republic
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Life Sciences and Health Care
In abusiness environment, where tight concerns are imposed on public healthcare spending, growth will mainly come from new drugs which thecompanies will place on themarket or new treatments of difficult diseases that will become available to patients.
Janez Skrubej, Assistant Director, Financial Advisory Services, Deloitte Slovenia
These governmental changes are in some cases both sweeping and game-changing. In Hungary, for example, theaim is reduce thecountrys drug bill by some 450 million euros by 2013, while theCzech government has announced plans to increase co-payments by patients and to accelerate theintroduction of non-branded generic drugs into themarket place. In Bulgaria, meanwhile, new measures announced to promote greater efficiency in thehealth sector include changes to thesystem used to set theprice of drugs, which manufacturers believe will be used to drive prices down. In such anenvironment, growth will mainly come from thedevelopment and introduction of new drugs, particularly those with thepotential to become lucrative brands, and treatments targeting specific diseases. While patients are willing to pay for treatments that they regard asnecessary, there is still alack of confidence in many markets to drive up sales in food supplements and other non-urgent purchases. Business performance is increasingly being driven by theability to invest in theresearch and development that ultimately leads to thelaunch of new products and services. Those manufacturers that have astrong pipeline of new products or aportfolio of drugs that are hard to replace due to consumer loyalty within thelocal market are likely to outperform their competition. In addition, companies are focused on achieving heightened cost-efficiency and enhanced staff effectiveness, through ongoing training activities and by linking performance measurement directly to thereward system. In anincreasingly price-sensitive market, strengthening competition is akey driver of innovation and helps to provide theimpetus for reducing thedevelopment and manufacturing costs of new and existing drugs. Indeed, in anenvironment where manufacturers are experiencing increasing pressure on their margins, such innovation is essential for their continued competitiveness.
Thenumber of Life Sciences and Healthcare companies appearing in theCE Top 500 ranking has increased steadily since 2008, from 19 to todays total of 23. With seven companies each, Hungary and Poland are thecountries with most leading companies in thesector, followed by theCzech Republic which has four. With aglobal reputation for thequality of their scientific research, such countries provide anatural regional focus for theindustry, which perhaps more than any other is driven by innovation in thecontinual search for new, more effective and competitively priced drugs. Thepolitical environment across theregion, however, is thesingle dominating factor that does most to dictate theissues faced by theregions life science companies. Amajor regional priority is healthcare reform, with governments in countries including Bulgaria, Slovakia, Slovenia, Hungary and theCzech Republic taking action to contain rising drug costs in thepublic sector. This means that life science and healthcare companies seeking improved revenues and growth are facing araft of major challenges, which place greater emphasis than ever on theimportance of commercialisation, technology transfer and licensing.
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There is asense in theCentral European life sciences industry that government policy, combined with acontinued lack of consumer confidence is in danger of leading to aperiod of relative stagnation. However, those companies that consistently monitor thewider business environment and use such external influences to help foster innovation throughout their organisation will ultimately benefit by being able to adapt their business models and so continue to improve their competitiveness. Country Insights Hungary In Hungary, anumber of manufacturers have warned that continued healthcare reforms by thestate may lead to their reducing investment levels and even leaving themarket. Due to therecent unfavorable changes in thereimbursement of pharmaceuticals and taxation of pharmaceutical manufacturers, anumber of market players in Hungary have warned that these changes and thedebates on planned healthcare reforms by thestate may lead to their reducing investment levels.
Czech Republic In theCzech Republic, aforthcoming two-stage rise in therate of VAT that is due to be implemented in 2012 and 2013 will see arise in theretail price of drugs. Romania One country which saw healthy growth in its regional drug market in 2010 was Romania, although this growth is expected to slow in 2011 asaresult of limitations on public healthcare spending. Ranking table and commentary With a28% rise in revenue over 2009, GSK is thesectors biggest riser, from sixth to fourth in 2010. This gives Poland aclean sweep of theregions top four life science companies by revenue. Itis noticeable that thelargest rises in revenues are among thebiggest companies, suggesting their enhanced ability to innovate.
Table 11: Top 10 in theLife Sciences & Health Care Industry within Central Europe (All revenue and net income figures are in EUR million) Rank Top 500 Rank Top 500 Rank LY Company name Country Revenue from sales 2010 1 2 3 4 5 6 7 8 9 10 103 110 124 125 138 144 164 169 203 223 97 110 115 150 120 146 159 160 176 224 Neuca PGF Farmacol GSK Chinoin Phoenix lkrensk velkoobchod Krka Group Richter Gedeon Hungaropharma Phoenix Pharma Hungary Poland Poland Poland Poland Hungary Czech Republic Slovenia Hungary Hungary Hungary 1,535.0 1,450.8 1,277.1 1,266.7 1,159.7 1,123.5 1,010.0 994.7 897.8 827.1 Revenue change (%) 2010 - 2009 18.1% 15.7% 7.6% 28.0% 0.1% 11.7% 6.0% 4.4% 4.9% 8.7% 122.2 8.7 172.4 233.5 -5.5 15.8 Net income 2010 9.3 16.2 17.8 Net income change (%) 2010 - 2009 2.4% 11.2% 8.4% N/A 6.9% 17.8% -0.1% 28.6% N/A 22.0% 261.9 Revenue from sales Q1 2011 448.3 425.3 333.0 Revenue change (%) Q1 2011 Q1 2010 12.1% 21.8% -2.6% N/A N/A N/A N/A 11.1% N/A N/A
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Investing in innovation to develop new products and services is our greatest priority over thenext 12 months thepharmaceutical industry cannot survive without innovation. We cannot foresee any significant growth over thenext year we believe that stagnation is coming.
Laszlo Szabo, CEO, Teva, Hungary
Theinnovation in theindustry is driven by new innovative drugs and medical procedures. Their development is theresult of increasing competition, which drives theprices and consequently themargins down. New business models in thedistribution sector, like open store formats of thepharmacies, will be developed asaresponse to new market conditions. Thepharmaceutical manufacturers with strong pipeline of new products and those hard to replace, due to brand recognition or other factors, will do well. Also, thecompanies that constantly monitor thebusiness environment will be better prepared to change their business model if needed.
Janez Skrubej, Assistant Director, Financial Advisory Services, Deloitte Slovenia
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M&A activities Over thelast two years, strategic and private equity (PE) investors have both remained active in theCentral European Life Sciences and Healthcare sector. Two landmark deals characterise activities in thepharmaceutical manufacturing segment. These were theacquisition of Lithuanian generic producer Sanitas by Valeant (who also took over Polands EMO-FARM in 2009) and thetakeover of Nepentes by Sanofi-Aventis. Global players continued to strengthen their position in thegeneric pharmaceuticals market through acquisitions and agreements. Thehigh-growth potential of thebiosimilars segment also led to anumber of transactions. Deals in thepharmaceutical distribution sector, meanwhile, included major strategic investors improving their regional coverage through crossborder transactions. And in thehealth care services segment, arecent prominent deal saw International Dialysis Centers being sold off by Euromedic to global dialysis company Fresenius. Theprivate clinic sector, meanwhile, has seen recent major transactions undertaken by Mid-Europa Partners and PPF. Other PE funds including PinBridge, Advent, Resource Partners and Apex have also made acquisitions in this sector, aswell asin specialised services such aseye surgery, elderly care provision and in-vitro fertilisation.
Looking Ahead Anumber of major strategic investors such asSynlab, Fresenius and Euromedic are set to become highly acquisitive in thenear future, helping to further change thestructure of Central Europes Life Sciences and Healthcare market place. However, itis thecontinuing actions of governments throughout theregion asthey battle to reduce public spending that will continue to have thegreatest impact on thehealth and shape of theindustry across Central Europe. There are new opportunities arising for private health insurance services, but theform these take in particular countries will also be highly dependent on thefuture development of domestic health insurance laws. Those countries where consumer spending remains under pressure are also likely to see growth in experimentation with new retail business models, including open-store formats in pharmaceutical distribution.
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Methodology
TheCentral Europe Top 500 ranking is compiled based on consolidated company revenues for thefiscal year ending 2010. Therankings is based on revenues reported by aparticular legal entity operating in Central Europe. Theranking groups companies by industry and country. We also display theranking of the25 largest Central European companies by market capitalisation asof July 2011 and alist of themajor foreign investors in theregion. Deloitte has sourced theinformation by individually approaching thecompanies themselves, from publicly available sources and estimates based on acomparison with last years results and our research. We have ranked banks and insurance companies by total assets and gross written premium respectively. Thegross written premium of insurance companies includes both premiums from life and non-life operations, despite thefact that in certain areas these companies operate asseparate legal entities. Thelist of major foreign investors in theregion is made up of aggregated revenues of those Top 500 companies controlled by investors. These figures are only approximate, asthey donot include, inter alia, intra-group sales and itis possible that they also donot contain therevenues of all subsidiaries in theregion. Missing data In cases where revenue for thefiscal year 2010 was not available, we used thereported 2009 revenue in local currency asaproxy for 2010. Thelist does not include companies that were invited to participate in theranking, but who informed us in writing or verbally that they would not be taking part this year. This situation regards four entities from Bulgaria and two from Ukraine. Thelist reflects structural changes in Central European economies such asacquisitions, splits, or liquidations of companies. Asignificant change to thelist of companies ascompared to last year is consolidation of theentities operating within large energy groups, which had previously been listed separately (e.g. entities belonging to theTauron Group or Rompetrol).
Revenue calculation Revenue has been calculated in Euros at therelevant average exchange rates for 2009, 2010, and thefirst quarters of 2010 and 2011. Therevenue for subsidiaries of large groups has been shown separately for those subsidiaries which operate in different industries, subsidiaries or countries than theconsolidating entity and are large enough to enter thelist on their own. In our research, we also examined companies from Albania, Moldova and Kosovo. However they have not entered theTop 500 list due to their relatively low revenues. Data gathered from public sources has not been confirmed by representatives of thecompanies themselves. Deloitte is not responsible for theaccuracy or correction of third party data gathered from public sources or provided by thecompany. Therevenue for subsidiaries of large groups has been shown separately for those subsidiaries, which operate in different industries, subindustries or countries than theconsolidating entity and are large enough to enter thelist on their own. Deloitte ranking does not include holding structures or other types of business conglomerates with subsidiaries operating in various industries and different markets, trade strategies and separate management and whose consolidation on holding (conglomerate level) is rather atotal sum of sales incomes of thesubsidiaries acting in therelevant industries and markets. We donot present companies with several business units, out of which none can be treated asthemain one, investment funds, leasing companies or other financial services companies, which are not banks or insurance companies. Russia/Belarus For thepurposes of this analysis, our ranking includes companies in Central and Eastern European countries with theexception of Russia and Belarus. In both cases we were unable to find reliable data that could be used in therankings. Thesize of theRussian economy and some of its major companies also makes industry and country comparisons difficult.
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Thought leadership
Central Europe CFO Survey www.deloitte.com/cecfo TheDeloitte Central Europe CFO Survey provides theCentral European business community with anobjective overview of some of thefactors at play in driving theregions businesses forward. Asthefirst edition of arolling bi-annual survey, itwill also contribute over time to anevolving source of knowledge and insight to thechanging dynamics of theCentral European business landscape.
Technology Fast 50 www.deloitte.com/fast50ce In Central Europe, Deloitte launched its first Technology Fast 50 ranking in 2000. Theprogramme draws attention to Central Europes significant expertise in thetechnology sector. Fast 50 award winners are selected by Deloittes Central Europe Financial Advisory Services division, which is responsible for raising capital and finding strategic partners for emerging companies and working asadvisors to private equity and venture capital funds. Thecompetition is open to companies from Albania, Bosnia & Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Poland, Romania, Serbia, Montenegro, Slovakia and Slovenia. Business Sentiment Index www.deloitte.com/bsi TheBSI is aresearch-based analysis of theopinions of senior executives on anumber of important business-related issues. Theexecutives who participate in theBusiness Sentiment Index represent some of thelargest companies within six countries of Central Europe: Croatia, Czech Republic, Hungary, Poland, Romania and Slovakia. TheIndex is published regularly in order to provide up-to-date information on thelatest views and sentiments across Central Europe.
Investing in Central Europe www.deloitte.com/investince Thekey drivers for investors making cross-border direct investments are usually either to gain access to new and growing markets, or to reduce costs. Thecountries of Central Europe (CE) score highly on both. Thecountries of theCE region comprised in this publication include Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia.
Global Economic Outlook Q3 2011 www.deloitte.com/globaleconomicoutlook Thelatest issue of theGlobal Economic Outlook examines themajor areas of uncertainty in theglobal economy, including thecrisis in theEurozone, thefuture path of monetary and fiscal policy in theUnited States, and thefight against inflation in emerging markets.
More information on our recent publications can be found at www.deloitte.com

Central Europe TOP 5002011 71
Contacts
Client service responsibilities are akey element of our partners roles. Their commitment to quality and integrity in leading client service teams, helps deliver excellence to our clients.
Function leaders Audit Gavin Flook +48 225110896 gflook@deloittece.com Tax Jaroslav kvrna +420 246042636 jskvrna@deloittece.com Consulting Eric Olcott +385 12351945 eolcott@deloittece.com Financial Advisory Bla Seres +36 14236936 bseres@deloittece.com Enterprise Risk Services Zbigniew Szczerbetka +48 225110799 zszczerbetka@deloittece.com CE Top 500 project team Financial Advisory team Tomasz Ochrymowicz +48 225110456 tochrymowicz@deloittece.com Patryk Darowski +48 225110411 pdarowski@deloittece.com Artur Galbarczyk +48 225110526 agalbarczyk@deloittece.com Clients & Markets Matthew Howell +420 234078558 mathowell@deloittece.com Anne Charlesworth +420 246042195 acharlesworth@deloittece.com Industry experts that contributed Croatia Energy & Resources Ivica Krei Director, Financial Advisory +385 12351935 ikresic@deloittece.com Financial Services Industry Ivan Fabijani Assistant Director, Financial Advisory +385 12351936 ifabijancic@deloittece.com Technology, Media & Telecomm. Dejan Ljutina Director, Business Advisory Services +385 12352100 dljustina@deloittece.com Czech Republic Cross industries Ludek Niedermayer Director, Consulting +420 246042667 lniedermayer@deloittece.com Financial Services Industry Peter Wright Partner, Tax +420 246042888 pewright@deloittece.com Manufacturing Bronislav Panek Partner, Consulting +420 246042264 bpanek@deloittece.com Real Estate Diana Radl Rogerova Partner, Audit +420 246042572 drogerova@deloittece.com Technology, Media & Telecomm. Zdenek Krizek Partner, Enterprise Risk Services +420 246042677 zkrizek@deloittece.com Hungary Financial Services Industry Andrs Flp Partner in Charge, Financial Advisory +36 14286937 afulop@deloittece.com Lajos Antal Partner, Security&Privacy +36 14286402 Iantal@deloittece.com Pter Szp Partner, Business Advisory Services +36 14286967 pszep@deloittece.com Energy & Resources Gbor Gion CEO, Deloitte Hungary +36 14286827 ggion@deloittece.com Real Estate Attila Kvesdy Partner in Charge, Tax +36 14286728 akovesdy@deloittece.com
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Tams Horvth Partner in Charge, Audit +36 14286852 thorvath@deloittece.com Technology, Media & Telecomm. Kornl Bodor Partner, Audit +36 14286866 kbodor@deloittece.com Pter Szp Partner, Business Advisory Services +36 14286967 pszep@deloittece.com Latvia Financial Services Industry Roberts Stugis Partner, Audit +371 670704100 rstugis@deloittece.com Igor Rodin Partner, Tax +371 67074100 irodin@deloittece.com Technology, Media & Telecommunications Raimonds Kulbergs Director, Consulting Services +371 67074100 rkulbergs@deloittece.com Lithuania Tim Mahon Country leader +370 52553002 tmahon@deloittece.com
Linas Galvel Assistant Director, Financial Advisory +370 52553022 lgalvele@deloittece.com Poland Energy & Resources Wojciech Hann Partner, Financial Advisory, Regional industry leader +48 225110026 whann@deloittece.com Piotr Sokoowski Partner, Audit, Country industry leader +48 225110054 psokolowski@deloittece.com Financial Services Industry Zbigniew Szczerbetka Partner, Enterprise Risk Services +48 225110799 zszczerbetka@deloittece.com Real Estate Maciej Kraso Partner, Audit +48 225110360 mkrason@deloittece.com Technology, Media & Telecomm. Dariusz Nachyla Partner, Consulting +48 225110631 dnachyla@deloittece.com Romania Maksim Caslli OMP +40 212075217 mcaslli@deloittece.com
Public Sector George Mucibabici Chairman +40 212075255 gmucibabici@deloittece.com Technology, Media & Telecomm. Ahmed Hassan Partner in Charge, Audit +40 212075260 ahhassan@deloittece.com Financial Services Industry Andrei Burz-Pinzaru Partner, Legal +40 212075205 aburzpinzaru@deloittece.com Serbia Financial Services Industry Nada Sui Partner, Business Advisory Services +381 113812113 nsudjic@deloittece.com Slovakia Marin Hudk Country leader +421 258249211 mhudak@deloittece.com Cross industries Vladimr Masr Chairman +421 258249133 vmasar@deloittece.com Financial Services Industry Zuzana Letkov Partner, Audit +421 258249210 zletkova@deloittece.com
Technology, Media & Telecomm. Ivan Luica Partner, Consulting & Enterprise Risk Services +421 258249266 iluzica@deloittece.com Slovenia Life Sciences & Health Care Janez krubej Assistant Director, Financial Advisory +386 13072811 jskrubej@deloittece.com Ukraine Clients & Industries Leader Vladimir Vakht Managing Partner, Audit +380 444909000 x2687 vvakht@deloitte.ua Consumer Business Mykhaylo Melnyk Partner, Audit +380 444909000 x8601 mmelnyk@deloitte.ua Energy & Resources Artur Ohadzhanyan Partner, Financial Advisory +380 444909000 x3618 aohadzhanyan@deloitte.ua Justin Bancroft Partner, Audit +380 444909000 x8660 jbancroft@deloitte.ua
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Appendix: CE Top 500 ranking
Rank Company name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 PKN Orlen MOL koda Naftogas EZ Metinvest Energorynok PGNiG PGE Jeronimo Martins Lotos AUDI HUNGARIA RWE Transgas Petrom Orlen Lietuva Foxconn CZ KGHM Metro Group Ukrainian railway state company Fiat Volkswagen Slovakia TPSA Tauron Rompetrol GE Hungary Nokia Komrom Agrofert Agrokor Samsung Electronics Magyar INA Slovnaft Unipetrol Samsung Electronics Slovakia EZ Prodej SPP Kia Motors Slovakia Lotos Paliwa Petrol Group Mercator Group Philips Industries Magyarorszg Lukoil Neftochim Automobile-Dacia PKP Kompania Wglowa BP Tesco Polska U.S. Steel Koice E.ON Fldgz Trade Vilniaus prekyba DTEK
Country Poland Hungary Czech Rep. Ukraine Czech Rep. Ukraine Ukraine Poland Poland Poland Poland Hungary Czech Rep. Romania Lithuania Czech Rep. Poland Poland Ukraine Poland Slovakia Poland Poland Romania Hungary Hungary Czech Rep. Croatia Hungary Croatia Slovakia Czech Rep. Slovakia Czech Rep. Slovakia Slovakia Poland Slovenia Slovenia Hungary Bulgaria Romania Poland Poland Poland Poland Slovakia Hungary Lithuania Ukraine
Industry LY Rank E&R E&R Mfg E&R E&R Mfg E&R E&R E&R CB&T E&R Mfg E&R E&R E&R Mfg E&R CB&T CB&T Mfg Mfg TMT E&R E&R Mfg TMT CB&T CB&T Mfg E&R E&R Mfg Mfg E&R E&R Mfg E&R E&R CB&T Mfg E&R Mfg CB&T E&R E&R CB&T Mfg E&R CB&T E&R 1 2 4 5 3 9 16 8 6 12 19 14 15 25 24 22 30 13 10 7 28 17 23 70 26 11 20 18 31 32 34 37 21 27 33 71 39 41 35 49 47 48 46 38 45 40 68 29 36 88
Rank Company name 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 Energa Carrefour Polska Fibria Trading International Panrusgz ArcelorMittal Kryvyj Rih Telefnica Czech Rep. Magyar Telekom Slovensk elektrrne ISD Maxima Group Energa-Obrt Tesco-Global E.ON Hungria ArcelorMittal Poland MVM Makro Cash and Carry Polska epro Enea Centertel Polkomtel E.ON Energiaszolgltat Volkswagen Pozna PTC JSW Donetskstal PSE Operator Eni esk republika TPCA Czech OKD Lukoil Bulgaria Lewiatan Ukrtatnafta Barum Continental Eurocash HEP Group Delta E.ON Energie Aurubis PCA Slovakia EZ Distribuce Orlen Petrocentrum Poczta Polska Nokia Romania Moravia Steel TNK-BP Commerce Tesco Stores CR Konzum Lasy Pastwowe NIS
Country Poland Poland Hungary Hungary Ukraine Czech Rep. Hungary Slovakia Ukraine Lithuania Poland Hungary Hungary Poland Hungary Poland Czech Rep. Poland Poland Poland Hungary Poland Poland Poland Ukraine Poland Czech Rep. Czech Rep. Czech Rep. Bulgaria Poland Ukraine Czech Rep. Poland Croatia Serbia Czech Rep. Bulgaria Slovakia Czech Rep. Poland Poland Romania Czech Rep. Ukraine Czech Rep. Croatia Poland Serbia Poland
Industry LY Rank E&R CB&T CB&T E&R Mfg TMT TMT E&R Mfg CB&T E&R CB&T E&R Mfg E&R CB&T E&R E&R TMT TMT E&R Mfg TMT E&R Mfg E&R E&R Mfg E&R E&R CB&T E&R Mfg CB&T E&R CB&T E&R Mfg Mfg E&R E&R PS TMT Mfg E&R CB&T CB&T PS E&R CB&T 57 54 new 60 98 43 42 52 new 44 new 51 53 58 50 69 73 74 63 61 new 62 66 121 167 78 90 55 117 77 96 141 95 81 76 72 84 139 59 102 132 79 new 112 67 65 80 100 109 89
100 Auchan Polska
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Rank Company name 101 JP EPS 102 Magyar Suzuki 103 Neuca 104 Panasonic AVC Networks Czech 105 Ahold Czech Rep. 106 esk drhy 107 Kaufland esk republika 108 Emperia Holding 109 LG Electronics Mawa 110 PGF 111 Foxconn Slovakia 112 Tineck elezrny 113 Real 114 Gorenje Group 115 LG Electronics Wrocaw 116 Petrotel Lukoil 117 Makro Cash & Carry R 118 EFT 119 Flextronics Hungary 120 ArcelorMittal Ostrava 121 Revoz 122 TVK 123 Lidl Polska 124 Farmacol 125 GSK 126 Kaufland Polska 127 Metro Cash & Carry Romania 128 Zaporizhstal 129 Vattenfall Poland 130 BAT Polska Trading 131 Castorama 132 Shell Czech Rep. 133 SPAR Magyarorszg 134 Electrica 135 Siemens Group R 136 Tesco Stores SR 137 PKP Cargo 138 Chinoin 139 MVM Trade 140 T-HT Group 141 BAT Romania 142 T-Mobile Czech Rep. 143 Sharp Mfg Poland 144 Phoenix lkrensk velkoobchod 145 Shell Polska 146 Metrostav 147 Statoil 148 OMV esk republika 149 Hyundai Motor Mfg Czech 150 Kaufland Romania
Country Serbia Hungary Poland Czech Rep. Czech Rep. Czech Rep. Czech Rep. Poland Poland Poland Slovakia Czech Rep. Poland Slovenia Poland Romania Czech Rep. Serbia Hungary Czech Rep. Slovenia Hungary Poland Poland Poland Poland Romania Ukraine Poland Poland Poland Czech Rep. Hungary Romania Czech Rep. Slovakia Poland Hungary Hungary Croatia Romania Czech Rep. Poland Czech Rep. Poland Czech Rep. Poland Czech Rep. Czech Rep. Romania
Industry LY Rank E&R Mfg LS&HC TMT CB&T CB&T CB&T CB&T Mfg LS&HC Mfg Mfg CB&T CB&T Mfg E&R CB&T E&R Mfg Mfg Mfg Mfg CB&T LS&HC LS&HC CB&T CB&T Mfg E&R CB&T CB&T E&R CB&T E&R TMT CB&T CB&T LS&HC E&R TMT CB&T TMT Mfg LS&HC E&R RE E&R E&R Mfg CB&T 75 82 97 56 83 131 91 106 108 110 86 137 111 116 134 196 87 149 114 152 105 161 136 115 150 143 92 184 122 283 125 93 104 new 124 180 151 120 new 119 145 123 430 146 153 128 166 103 new 172
Rank Company name 151 Budimex 152 Nibulon 153 Telekom Srbija 154 Kyivstar GSM 155 Eurovia CS 156 MolTrade-Mineralimpex 157 Lukoil Romania 158 Volkswagen Motor Polska 159 TIGZ 160 Penny Market CR 161 Dneproblenergo 162 Polimex-Mostostal 163 ATB Market 164 Krka Group 165 GDF SUEZ Energia Magyarorszg 166 Strabag Polska 167 Fozzy 168 Philips Lighting 169 Richter Gedeon 170 Vattenfall Energy Trading 171 Ciech 172 KHW 173 ArcelorMittal Galati 174 Orange Romania 175 Ferrexpo Group 176 Synthos 177 Samsung Electronics 178 Globus R 179 Jabil Circuit Magyarorszg 180 Zpadoslovensk energetika 181 Shell Hungary 182 Skanska 183 PKP PLK 184 Grupa Saint-Gobain 185 Slovak Telekom 186 Fiat Powertrain 187 Michelin Polska 188 ISD Dunaferr 189 Carrefour Romania 190 Tele-fonika Kable 191 Media-Saturn 192 Kompania Piwowarska 193 ELM 194 Elektrownia Rybnik 195 Enel Romania 196 ywiec 197 HSE Group 198 OMV Hungria 199 Grupa Muszkieterw 200 Ruch
Country Poland Ukraine Serbia Ukraine Czech Rep. Hungary Romania Poland Hungary Czech Rep. Ukraine Poland Ukraine Slovenia Hungary Poland Ukraine Poland Hungary Poland Poland Poland Romania Romania Ukraine Poland Poland Czech Rep. Hungary Slovakia Hungary Poland Poland Poland Slovakia Poland Poland Hungary Romania Poland Poland Poland Hungary Poland Romania Poland Slovenia Hungary Poland Poland
Industry LY Rank RE CB&T TMT TMT RE E&R E&R Mfg E&R CB&T E&R RE CB&T LS&HC E&R RE CB&T Mfg LS&HC E&R Mfg E&R Mfg TMT E&R Mfg Mfg CB&T Mfg E&R E&R RE CB&T Mfg TMT Mfg Mfg Mfg CB&T Mfg CB&T CB&T E&R E&R E&R CB&T E&R E&R CB&T CB&T 204 192 118 138 163 new 198 202 129 148 213 126 241 159 258 221 135 158 160 218 178 162 94 144 383 288 181 171 205 127 168 142 216 187 154 214 219 243 147 251 165 130 156 191 new 174 190 175 207 164
76
Rank Company name 201 Grupa Can Pack 202 BSH 203 Hungaropharma 204 Nikopol Ferroalloys Plant 205 Merkur Group 206 Everen 207 Lekkerland 208 Kolporter 209 Epicentr K 210 Vodafone Romania 211 Polski Koks 212 Maspex 213 Romgaz 214 Specja 215 Swedwood 216 GDF SUEZ Energy Romania 217 Unilever Polska 218 Telekom Slovenije Group 219 Animex 220 Rossmann 221 OMV Bulgaria 222 Metro Cash & Carry Ukraine 223 Phoenix Pharma Hungary 224 Eustream (former SPPpreprava) 225 Auchan Magyarorszg 226 Galnaftogaz 227 Tu Holding 228 Latvenergo 229 Tallink 230 Asseco 231 MTS Ukraine 232 esk pota 233 FGZ 234 Skanska 235 Kyivenergo 236 Stredoslovensk energetika 237 Billa CR 238 RWE Energie 239 Selgros 240 TEVA Magyarorszg 241 Prask energetika 242 Prirodni plin 243 Boryszew 244 Eesti Energia 245 koda Praha Invest 246 Real - Hypermarket 247 Hidroelectrica 248 Kulczyk Tradex 249 Vodafone Czech Rep. 250 U.S. Steel Serbia
Country Poland Poland Hungary Ukraine Slovenia Poland Poland Poland Ukraine Romania Poland Poland Romania Poland Poland Romania Poland Slovenia Poland Poland Bulgaria Ukraine Hungary Slovakia Hungary Ukraine Slovenia Latvia Estonia Poland Ukraine Czech Rep. Hungary Czech Rep. Ukraine Slovakia Czech Rep. Czech Rep. Poland Hungary Czech Rep. Croatia Poland Estonia Czech Rep. Romania Romania Poland Czech Rep. Serbia
Industry LY Rank Mfg CB&T LS&HC Mfg CB&T E&R CB&T CB&T CB&T TMT E&R CB&T E&R CB&T Mfg E&R CB&T TMT CB&T CB&T E&R CB&T LS&HC E&R CB&T E&R CB&T E&R CB&T TMT TMT PS E&R RE E&R E&R CB&T E&R CB&T LS&HC E&R E&R Mfg E&R Mfg CB&T E&R Mfg TMT Mfg 232 182 176 368 107 199 248 170 246 157 408 309 208 280 254 177 212 179 220 272 264 173 224 215 188 340 new 227 194 231 210 206 217 142 295 186 183 189 233 229 197 new 330 244 new 203 304 240 193 351
Rank Company name 251 Energa-Operator 252 PLL LOT 253 MOL Energiakeresked 254 Lidl esk republika 255 Selgros Cash & Carry 256 Kernel 257 Orange Slovensko 258 Robert Bosch Elektronika 259 Philip Morris Polska 260 Basell Orlen Polyolefins 261 Wglokoks 262 Bumar 263 Achema 264 Polomarket 265 Koksownia Przyja 266 PKP Energetyka 267 Empik 268 AB 269 Romtelecom 270 TRW Poland 271 JP Srbijagas 272 MHP 273 Electrolux Poland 274 PCE Paragon Solutions 275 Magyar Posta 276 Jihomoravsk plynrensk 277 Indesit 278 KGHM Metraco 279 Grupa ITI 280 BorsodChem 281 Spar Slovenia 282 Nestle 283 PBG 284 ABC Data 285 RWE Polska 286 Foxtrot 287 Bosch Diesel 288 Valeo 289 Totalizator Sportowy 290 Slovnaft esk republika 291 Gazprom sbut Ukraina 292 SA 293 Inventec (Czech) 294 Magneti Marelli 295 Strabag CR 296 Engrotu 297 Electrolux Lehel 298 GEN-I Group 299 Metro-Kereskedelmi
Country Poland Poland Hungary Czech Rep. Romania Ukraine Slovakia Hungary Poland Poland Poland Poland Lithuania Poland Poland Poland Poland Poland Romania Poland Serbia Ukraine Poland Hungary Hungary Czech Rep. Poland Poland Poland Hungary Slovenia Poland Poland Poland Poland Ukraine Czech Rep. Poland Poland Czech Rep. Ukraine Czech Rep. Czech Rep. Poland Czech Rep. Slovenia Hungary Slovenia Hungary
Industry LY Rank E&R CB&T E&R CB&T CB&T CB&T TMT Mfg CB&T Mfg E&R Mfg Mfg CB&T E&R E&R CB&T CB&T TMT Mfg E&R CB&T Mfg Mfg PS E&R CB&T Mfg TMT Mfg CB&T CB&T Mfg CB&T E&R CB&T Mfg Mfg CB&T E&R E&R CB&T TMT Mfg RE CB&T Mfg E&R CB&T E&R 256 269 new 226 225 211 185 301 250 321 286 278 169 289 new 276 270 259 195 260 308 342 281 new 249 223 341 474 314 305 261 306 291 317 253 376 367 475 209 262 448 200 418 252 247 255 234 new 230 266
300 Lukoil-Odesa petroleum ref. plant Ukraine
77
Rank Company name 301 Dopravn podnik hl. m. Prahy
Country Czech Rep. Slovakia Ukraine Czech Rep. Hungary Romania Poland Hungary Ukraine Poland Poland Poland Poland Poland Poland Poland Hungary Ukraine Czech Rep. Hungary Poland Romania Poland Czech Rep. Slovakia Estonia Hungary Bulgaria Czech Rep. Latvia Poland Lithuania Slovenia Czech Rep. Hungary Romania Poland Czech Rep. Poland Lithuania Poland Hungary Romania Czech Rep. Poland Czech Rep. Poland Czech Rep. Poland Bulgaria
Industry LY Rank CB&T E&R TMT CB&T CB&T E&R Mfg LS&HC Mfg CB&T CB&T CB&T TMT E&R TMT E&R CB&T CB&T E&R E&R Mfg E&R CB&T E&R LS&HC E&R TMT E&R LS&HC CB&T Mfg CB&T Mfg Mfg E&R E&R CB&T Mfg CB&T E&R E&R CB&T Mfg CB&T Mfg E&R Mfg CB&T CB&T TMT new 373 267 421 284 400 298 new 326 331 332 411 new new 357 319 311 372 333 310 434 300 371 329 new 290 265 294 new 390 328 296 476 363 297 285 361 344 292 new 446 new new 299 new new new 324 420 277
Rank Company name 351 Zagrebaki Holding 352 Sokow 353 D Cargo 354 Toyota Motor Mfg 355 Pharmos 356 Metalimex 357 Rimi Latvia 358 Energokrak 359 Maxima Latvija 360 OMV Slovenija 361 Mediplus Exim 362 Lek Group 363 Slovnaft Polska 364 365 Lidl Magyarorszg Grup Servicii Petroliere
Country Croatia Poland Czech Rep. Poland Czech Rep. Czech Rep. Latvia Poland Latvia Slovenia Romania Slovenia Poland Hungary Romania Czech Rep. Poland Poland Croatia Poland Poland Poland Ukraine Poland Czech Rep. Poland Poland Poland Hungary Czech Rep. Ukraine Poland Poland Czech Rep. Slovakia Czech Rep. Hungary Poland Poland Czech Rep. Poland Poland Lithuania Poland Ukraine Hungary Latvia Poland
Industry LY Rank PS CB&T CB&T Mfg LS&HC CB&T CB&T E&R CB&T E&R LS&HC LS&HC E&R CB&T E&R E&R Mfg LS&HC CB&T E&R CB&T Mfg CB&T E&R Mfg LS&HC Mfg LS&HC CB&T E&R Mfg CB&T CB&T Mfg CB&T E&R CB&T E&R CB&T Mfg E&R CB&T Mfg E&R CB&T CB&T TMT E&R TMT 287 271 346 322 374 new 303 279 307 380 382 238 384 new new 362 338 318 403 new 447 366 133 438 471 354 325 355 345 222 new 414 387 401 364 323 new 402 472 315 new 391 new 483 388 new new 378 424 445
302 Slovnaft Petrochemicals 303 Ukrtelecom 304 Ferona 305 Philip Morris Magyarorszg 306 MOL Romania 307 Anwil 308 Sanofi-Aventis 309 Atlant-M 310 E. Leclerc 311 Mlekpol 312 Mlekovita 313 314 P4 (Play) Gaz-System
315 TVN 316 Elektrownia Kozienice 317 Szerencsejtk 318 Roshen 319 Benzina 320 Paksi Atomerm 321 Impexmetal 322 Transelectrica 323 Inter Cars 324 EPS 325 Zentiva International 326 Baltic International Trading 327 Telenor Magyarorszg 328 EZ Electro Bulgaria 329 esk lkarnick 330 Elko 331 Kopex 332 Palink 333 SIJ 334 Synthos Kralupy 335 Magyar ramszolgltat 336 E.ON Gaz Romania 337 abka 338 Johnson Controls Aut. Soustky 339 Cargill Polska 340 342 343 345 346 347 Lukoil Baltija BAT Magyarorszg Renault Industrie Roumanie Arctic Paper E.ON Distribuce Mondi wiecie 341 PetroTank
366 Dalkia esk republika 367 International Paper Kwidzy 369 Polski Tyto 370 HEP - Proizvodnja 371 Polska egluga Morska 372 Alstom Power 373 CEDC 374 Centrenergo 375 BASF 376 Alliance Healthcare 377 Celsa Huta Ostrowiec 378 ACP Pharma 379 Action 380 EDF Dmsz 381 PEGATRON Czech 382 Cargill A.T.Ukraine 383 LPP 384 Mercedes-Benz 385 Geco Tabak 386 Vchodoslovensk energetika 387 SPAR CR 388 Eni Hungaria 389 Netto 390 Puawy 391 393 Prask plynrensk Police 392 Avon 394 Lietuvos dujos 395 AmRest 396 397 Philip Morris Ukraine TCF Hungary
368 Phoenix Zdravotncke zsobovanie Slovakia
344 Plzesk Prazdroj
348 esk spolenost pro plat. karty 349 Ferrero 350 Mobiltel
398 Latvijas Gze 399 Nokia Poland 400 Okta
Rep. of Mac. E&R
78
Rank Company name 401 Severomoravsk plynrensk 402 CMC Zawiercie 403 Grupa Novartis 404 Michelin Hungria 405 WIZZ Air Hungary 406 PKP Intercity 407 Elektrownia Poaniec 408 Yugorosgaz 409 Podravka 410 koda Auto Polska 411 Philip Morris Romania 412 PSV 413 ACH 414 Kruszwica 415 Penny Market HU 416 418 Azoty Tarnw Motor Sich 417 Zakhidenergo 419 Hrvatske eljeznice 420 Alcoa-Kfm 421 Prosper 422 HEP-Operator 423 OMV Slovensko 424 Esppol 425 TZMO 426 Cosmote 427 Mondi SCP 428 CFR Calatori 429 Import Volkswagen Group 430 Vodafone Magyarorszg 431 Lear Corporation Hungary 432 Kronopol 433 JTI Romania 434 Prvn energetick 435 PAK 436 Electrocentrale Bucuresti 437 Opel Southeast Europe 438 MV 439 BTC (VIVACOM) 440 Furshet 441 442 SE-CEE Schneider Electric Paramo
Country Czech Rep. Poland Poland Hungary Hungary Poland Poland Serbia Croatia Poland Romania Czech Rep. Slovenia Poland Hungary Poland Ukraine Ukraine Croatia Hungary Poland Croatia Slovakia Poland Poland Romania Slovakia Romania Czech Rep. Hungary Hungary Poland Romania Czech Rep. Poland Romania Hungary Hungary Bulgaria Ukraine Hungary Czech Rep. Ukraine Poland Czech Rep. Czech Rep. Slovakia Poland Poland Poland
Industry LY Rank E&R Mfg LS&HC Mfg CB&T CB&T E&R E&R CB&T Mfg CB&T RE CB&T CB&T CB&T Mfg E&R Mfg CB&T Mfg LS&HC E&R E&R CB&T CB&T TMT Mfg CB&T Mfg TMT Mfg Mfg CB&T E&R E&R E&R Mfg CB&T TMT CB&T E&R Mfg CB&T RE CB&T E&R E&R Mfg Mfg Mfg 385 433 new 467 365 397 353 485 360 417 337 316 370 379 359 new 437 new 377 444 392 352 new 334 439 new 428 375 413 339 491 429 423 new 268 410 432 416 347 393 new new 302 273 405 427 404 381 new new
Rank Company name 451 Vipnet 452 Mercator-S 453 Renault Polska 454 Schott Solar CR 455 Vtkovice 456 MAVIR 457 ALRO 458 Anwim 459 461 463 Interpipe NTRP Victoria Group Imperial Tobacco Ukraine 460 Porsche Hungaria 462 AGC Flat Glass Czech 464 OHL S 465 BAT Pcsi Dohnygyr 466 H 467 Stalprodukt 468 KITE 469 eleznice SR 470 Danone 471 Metro Cash & Carry Slovakia 472 JP Elektroprivreda BIH 473 Vertis 474 EGIS 475 477 JTI Mfg Impol Group 476 Billa Slovakia 478 LuK Savaria 479 Kaufland Slovakia 480 Cimos Group 481 Cargill Agricultura 482 RCS & RDS 483 Henkel 484 Coca-Cola HBC Romania 485 Sun Trade 486 487 488 489 490 491 Mercator-H Kriukov car building works Lidl Slovakia BAT Czech Rep. Zaporizhyaoblenergo Continental Automotive
Country Croatia Serbia Poland Czech Rep. Czech Rep. Hungary Romania Poland Ukraine Hungary Serbia Czech Rep. Ukraine Czech Rep. Hungary Croatia Poland Hungary Slovakia Poland Slovakia Hungary Hungary Romania Slovakia Slovenia Hungary Slovakia Slovenia Romania Romania Poland Romania Ukraine Croatia Ukraine Slovakia Czech Rep. Ukraine Romania Latvia Bulgaria Poland Czech Rep. Slovakia Lithuania Serbia Poland Poland
Industry LY Rank TMT CB&T Mfg E&R Mfg E&R Mfg E&R Mfg Mfg CB&T Mfg CB&T RE CB&T CB&T Mfg CB&T CB&T CB&T CB&T E&R LS&HC CB&T CB&T Mfg Mfg CB&T Mfg CB&T TMT CB&T CB&T CB&T CB&T Mfg CB&T CB&T E&R Mfg E&R TMT Mfg E&R Mfg CB&T CB&T CB&T TMT 356 419 498 496 399 431 473 348 new 235 new 454 new 343 350 358 463 369 new 489 409 406 64 436 new 462 new 500 335 482 new 453 468 407 415 new new new new new new 480 398 484 477 442 new new 465 464
Bos. & Herz. E&R
492 Statoil Latvia 493 Cosmo Bulgaria 494 ABB 495 NET4GAS 496 Samsung Electronics LCD Slov. 497 498 Lietuvos geleinkeliai Tarkett
443 P&G Trading Ukraine 444 Mostostal Warszawa 445 Philip Morris CR 446 Severoesk doly 447 Slov. elektrizan pren. sstava 448 Black Red White 449 450 Dbica ZAK
499 L'Oral Polska 500 Telewizja Polska
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CETOP500 2011 Final

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CETOP500 2011 Final

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Central Europe 2011

Tomasz Ochrymowicz Partner, Financial Advisory Deloitte Central Europe

Central Europe TOP 5002011

Cr oa tia Bu lga ria Es to nia

Median revenue change in EUR

Median revenue change in LC

Note: N/A due to unavailibility of data

Technology, Media and Telecommunications Real Estate Public Sector Manufacturing

100 169 157

20% 26% 24%

Graph 5: Median revenue change - annual, 2010 vs. 2009

Median revenue change in LC Median revenue change in EUR

Central Europe TOP 5002011

Central Europe TOP 5002011

The5 major findings

Central Europe TOP 5002011

100% 100% 80% 80% 60% 60%

Increase N/A Decrease No change

Graph 8: Thepercentage of companies with revenue increase vs. decrease

Central Europe TOP 5002011

Overview of theleaders TheTop 10

Central Europe TOP 5002011

Central Europe TOP 5002011

Upwardly mobile companies Thetop 20 jumpers

Central Europe TOP 5002011

Central Europe TOP 5002011

Central Europe TOP 5002011

Leveraging human capital

Country Insights Hungary

Central Europe TOP 5002011

LY Rank 24 30 19 26 27 33 41 34 39 new 40 31 38 new 35 45 43 42 44 37 46 36 49 new

LY Rank 24 38 29 26 35 31 41 21 34 30 new 28 32 40 36 39 33 44 new 46 new 45 48 42 new

Central Europe TOP 5002011

Central Europe TOP 5002011

Energy and Resources

Central Europe TOP 5002011

Central Europe TOP 5002011

Central Europe TOP 5002011

Central Europe TOP 5002011

Technology, Media and Telecommunications

Central Europe TOP 5002011

LY data used due to unavailability of 2010 data

Central Europe TOP 5002011

Central Europe TOP 5002011

Consumer Business and Transportation

Central Europe TOP 5002011

LY data used due to unavailability of 2010 data

Central Europe TOP 5002011

Real Estate and Construction

Central Europe TOP 5002011

3,000 2,500 2,000 1,500 1,000 500 0

Domestic investors Foreign investors Source: CBRE, Deloitte calculation

Central Europe TOP 5002011

LY data used due to unavailability of 2010 data

Central Europe TOP 5002011

Central Europe TOP 5002011

Life Sciences and Health Care

Central Europe TOP 5002011

Central Europe TOP 5002011

More information on our recent publications can be found at www.deloitte.com

Central Europe TOP 5002011

Appendix: CE Top 500 ranking

100 Auchan Polska