The total revenue of the 70 largest machine and equipment manufacturers in Bulgaria exceeded 15 billion levs (7.7 billion euro) in 2022, up 26.3% year on year. Revenue growth accelerated from 22.4% in 2021, which followed a decline in the sector in 2020 caused by the pandemic. The excellent results were driven by restored supply chains and stronger demand in 2022, tough inflation was also a factor: a part of the increase was due to higher producer prices intended to offset rising expenses. Profits were also up, as was profitability.
On the whole, two companies doubled their revenues in 2022, three-quarters grew at a two-digit rate, and only four saw their sales decline.
Owing to a rapid surge in revenue, by more than 87% to nearly 750 million levs, bicycle manufacturer Maxcom took the second place in 2022. The company recently told the Capital Weekly that at the beginning of 2022 orders were three times the capacity of its plant in the city of Plovdiv. Therefore Maxcom embarked on a 60 million levs project to expand its production facility and also started the construction of its own logistic center. The main reason for the jump in revenue however was the shift in its portfolio from conventional bikes to the more expensive electric versions, which now account for 80% of the output.
Third in the ranking is another Plovdiv-based company, BTL Industries, which manufactures electronic medical equipment. Its revenue surged by more than 42%, after doubling the year before. With a profit of nearly 189 million levs and a 28.4% margin in 2022, BTL remained one of the most profitable companies in the sector. "Growth last year was due to the introduction of new technologies in production, as well as higher demand for medical services after Covid-19," CEO Georgi Petkov said. The company's portfolio includes products for cardiology, rehabilitation and aesthetics, with the last group being the main driver of growth in recent years. Aesthetics equipment will be behind the 20% increase in revenue expected in 2023 too.
Automotive sensor manufacturer Sensata Technologies Bulgaria, a part of US-based Sensata Technologies, ranks fourth with a turnover of 615.2 million levs. The company has plants in the cities of Botevgrad and Plovdiv, as well as a big R&D center in Sofia. It is the largest employer among the top 70 companies in the sector.
Fifth on the list is Euro Games Technology, a manufacturer of gambling equipment and software. Its revenue growth of nearly 77% to more than 600 million levs was driven by the boom in the gambling industry in recent years.
The strongest revenue growth - by nearly 124% - was seen by Plovdiv-based automotive lighting manufacturer Odelo Bulgaria. After completing in 2022 the construction of a second factory, for after-sales service, the company expects to see further growth to 70 billion euro in 2023. The plant of Germany's MD Elektronik in the city of Vratsa also doubled its revenue in 2022.
The biggest margin, 47%, was registered by Sofia-based Industrial Software. Set up in 1991 by Bulgarian experts in the field of industrial automation, the company develops and manufactures control equipment.
The leader in terms of staff growth is Pleven-based automotive wiring system manufacturer Leoni Bulgaria, a part of Germany's Leoni. Its number of employees increased by 73% to more than 2,000.
Sixth by revenue is Plovdiv-based refrigerator manufacturer Liebherr-Hausgeraete Marica, which saw a moderate increase of 3.6%, compared to the two-digit hikes registered by most companies in the sector. That is not the only investment of Germany's Liebherr in Bulgaria: top 70 also includes train air conditioning maker Liebherr Transportations Systems Marica, and slightly below the line is Liebherr - Concrete Technology Marica, a producer of concrete and bulk goods systems, which started operating in 2021. The turnover of the German group's companies in Bulgaria totals 720 million levs, which would place it second in the ranking.
Sanitaryware producer Ideal Standart Vidima of international group Ideal Standard stepped down to the 9th position. The company continued growing last year, adding some 10% to its turnover and crossing the half-a-billion-lev line. In the first quarter of 2024 the company is expected to be acquired by Germany's Villeroy & Boch.
Bicycles reaching peak
Bicycle manufacturers have a traditionally strong presence in the ranking. Besides Maxcom, two-digit revenue growth was registered by the other two large companies in the sector: Montana-based Cross and Leader - 96, which has a factory in the village of Rogosh near Plovdiv. They all benefited from increased demand during the pandemic but struggled with disrupted component supplies. Last year the shortage was overcome and their revenues skyrocketed. The switch to the more expensive electric bikes also boosted their results.
The peak however seems to have been reached, as sales slowed down later in 2022. "The war in Ukraine and high inflation hit consumption in the second half of the year," Leader - 96 CEO Dimitar Zlatanov said. In his words, in times of uncertainty people stop buying non-essentials.
Cross's experience was similar. "Sales suddenly stopped in late November and some orders were cancelled. It turned out dealers' warehouses were full to the brim," Lyuben Martinov, CEO and majority owner, said.
The negative trend persists this year and Leader - 96 expects to see a drop in turnover for the first time. A little weaker results are projected by Cross too. Maxcom still predicts a rise of 10 to 15% for the entire year but that is well below the 50% growth in the first half.
The supply chain disruptions that pestered most automotive component manufacturers in 2021 were to a large extent overcome last year. Nearly all companies in the segment, which make up about a third of top 70, increased their revenues in 2022.
Botevgrad-based electronic module producer Integrated Micro-Electronics Bulgaria, part of the IMI group, boosted its revenue by 23.5%. Ruse-based locking system maker WITTE Automotive Bulgaria of Germany's WITTE expanded by 31%. Automotive air-conditioning system manufacturer Behr-Hella Thermocontrol added 10% to its turnover in 2022, the main driver being its re-orientation to more complex products in recent years. Leoni Bulgaria also grew - by 56% - due to increased orders.
Industrial automation device manufacturer Festo Production, part of Germany's Festo, saw another year of two-digit growth in 2022, with its turnover close to 260 million levs. The company reported strong demand for both its core product groups: electronics and electric actuators. The company's plant is currently undergoing its last possible expansion on the site in Sofia and less advanced products were transferred to Festo's plant in Turkey.
Plovdiv-based industrial robot manufacturer Milara International also grew substantially, its turnover rising by 61.2%. The company had more orders last year and larger output volumes.
The top 70 ranking features a strong group of hydraulic system manufacturers, all of them growing rapidly: M+S Hydraulic (45.2%), Kyashif (80.8%), Serta Bulgaria (30.9%) and Hydraulic Elements and Systems (34%). Their total turnover exceeded half a billion levs.
The main risks for machine and equipment manufactures this year ensue from the recession in Europe, their core market. Judging by the forecasts of the largest companies, however, their results will be better in the next ranking too.