After breaking all the records in 2022, when their revenue increased by 62% on average, the 100 largest companies in Bulgaria saw their growth slow down in 2023. Company reports show revenue growth at a much more moderate pace and even a decline. On average, the top 100 companies in the Capital 100 (K100) ranking report a 14% decline in revenues for 2023 compared to the previous year. However, this is mainly driven by lower prices and not by the output of the companies. Also, one specific sector drove the decline - the revenues of the electricity and fuel companies returned to normal, which meant a 30%-50% contraction for some of the country's largest firms.
There is also a change of leadership in the rankings. Lukoil Neftochim Burgas owned by Russia's Lukoil, took back its crown. For three years in a row, the oil refinery was operating on a shoestring, reporting only refining fee income and leaving the champion title to copper producer Aurubis. In 2023, Lukoil returned to its old operating model and its revenues shot up again, reaching BGN 8.6 billion (approx. EUR 4.3 billion).
More about the overall numbers for the K100 firms can be found in this KInsights piece.
The new top ten
The perennial leader Lukoil Neftochim Burgas is back at the top, while the wholesaler and retailer from the Russian group - Lukoil Bulgaria - is in third position. Despite last year's lower fuel prices compared to the years before, domestic demand for diesel and gasoline was high in 2023 and exports to Ukraine via other traders did not completely disappear.
The champion of the ranking for 2022, Aurubis, came in second, with revenues slightly squeezed by copper prices. The runner-up for 2022, Astra Bioplant, dropped to fourth place. It is very possible that this configuration will repeat itself in 2024.
The National Electricity Company (NEK) and BA Glass moved ahead mainly because of the decline of electricity and gas prices that drove producers and traders out of the top 10 group - in this case, Maritsa-East 2 Thermal Power Plant (TPP) is now in 17th position and Met Energy goes to 29th place. Another energy trio follows - the state-owned public gas supplier Bulgargaz and Kozloduy Nuclear Power Plant (NPP), and foreign-owned trader Axpo. And while the nuclear plant looks set to remain in the top ten group for a long time, Bulgargaz is starting to face private competition and is likely to descend smoothly in the ratings. This competition comes in the face of private electricity and gas trader Axpo, which remains among the top 10 for a second year in a row and would likely remain there for a while. The company, part of Switzerland's Axpo Group, operates from Bulgaria as a trading hub in 15 European markets and only a very small part of its revenues comes from the country. Because of falling energy prices, Axpo dropped from 5th place in 2022 to 9th in 2023.
Rounding out the top 10 is Kaufland Bulgaria, which has been the largest retailer in the country for years. Lidl, with a turnover of more than BGN 2 billion, is close to it in 11th position. The two chains are owned by Germany's Schwarz Group and have a combined turnover of over BGN 4.7 billion.
Some sectors go up, others go down
Despite the big overall drop in revenue for the top 100, different sectors show a dramatically divergent performance. The numbers sink the deepest in the energy sector where the top 50 companies' aggregate revenue drops by more than 40%. That's because electricity and natural gas prices reached unprecedentedly high levels in 2022 before starting to return back to normal in 2023. When it comes to the performance of the sector's largest companies, it is at 2021 levels. In addition to the decline, there is a clear trend for a decrease in the earnings of the large coal-fired power plants, which are being replaced by dozens of solar farms, of which so far only one makes it into the top 50.
There is a decline in turnover in five more sector rankings. Second on this negative list is the group of clothing and textile companies. They go down 15% because of weak Western markets and a personnel shortage. Seemingly unexpectedly, food and beverage manufacturers also saw an average decline in sales. There, however, only one sub-sector is pulling the score down - the edible oil industry. If the eight sunflower processors are removed from the sector's top 50, the average 10% decline rolls over to a 6% rise. The picture is even more optimistic if flour, bread and corn producers are taken out of the group. Thus, in the remaining 40 food and beverage companies, turnover is up 10%. In the remaining three sectors that mark a decline - metals (-9.5%), fuels (-2.3%) and transport (-1.3%), the reason is also the fall in international prices. There are marked internal variations only in transport, with a crisis in sea and land freight services and a boom in aviation.
A key sector for the economy and exports remains somewhere in the middle. The top 80 - machinery and equipment manufacturers, saw revenue growth of just 4% in 2023. Here the variations are large, but in general factories are suffering massively from the weak European economy. The crash is strongest in bicycle manufacturers, and the problems of automotive cable manufacturers became clearly visible this year - two factories have closed, with the driving reason being wage growth, which had made production uncompetitive. At the other pole are the factories that have business related to renewable energy and energy efficiency products - Schneider Electric, Lemi Trafo and Hitachi Energy.
Retail, software and pharmaceuticals make up the trio of top-growing segments in the economy, averaging 13-14% growth in sector rankings. There is an inflationary driver here too. More interesting is the situation with technology companies, which had a sobering end to 2023 - some firms lost orders, and the first tremors from the slowdown in the West came to them with layoffs. However, there is also a stable group of growing companies in the sector, leading to average growth. While it is a stretch to talk about a crisis, the mood is for a difficult period in the sector.
After breaking all the records in 2022, when their revenue increased by 62% on average, the 100 largest companies in Bulgaria saw their growth slow down in 2023. Company reports show revenue growth at a much more moderate pace and even a decline. On average, the top 100 companies in the Capital 100 (K100) ranking report a 14% decline in revenues for 2023 compared to the previous year. However, this is mainly driven by lower prices and not by the output of the companies. Also, one specific sector drove the decline - the revenues of the electricity and fuel companies returned to normal, which meant a 30%-50% contraction for some of the country's largest firms.
There is also a change of leadership in the rankings. Lukoil Neftochim Burgas owned by Russia's Lukoil, took back its crown. For three years in a row, the oil refinery was operating on a shoestring, reporting only refining fee income and leaving the champion title to copper producer Aurubis. In 2023, Lukoil returned to its old operating model and its revenues shot up again, reaching BGN 8.6 billion (approx. EUR 4.3 billion).
