Croatian economy in 2013 Croatian entrepreneurs generated total revenue of €81 billion and total expenditure of €80 billion
Banks in 2013 The banking saga in Croatia over the past five years of recession may be summed up in five key points
Croatian insurance market Total written premiums of insuring property and private individuals reached €1.2 billion
PAGES 2-7
PAGES 8-11
PAGES 12-14 2008 2009 2010 2011 2012
Croatian Business & Finance Monthly Established in 1953 Monday / 6th October / 2014 Year VII / No 0240 www.privredni.hr
S U P P O R T E D
B Y
T H E
pvinternational pv international C R O A T I A N
C H A M B E R
BUY CROATIAN
LOCAL PRODUCTION FUNDAMENTAL 350 entrepreneurs and over 2,000 products on show during the campaign to promote Croatian products Krešimir Sočković companies, the highest number since the start of the Buy Croatian campaign, showed over 2,000 high quality Croatian products at promotional prices this year. According to Luka Burilović, President of the Croatian Chamber of Economy, this clearly indicates a wide interest and high demand from both Croatian entrepreneurs and the general public for similar campaigns. He also added that the promotion of Croatian products does not discriminate against those of foreign origin, as it aims to enhance the importance of local production and raising awareness of the importance of local products. He pointed out the fact that the support of local producers, who need to be considered as true heroes against the backdrop of a contracting economy, strive to preserve jobs and ensure the future. Milan Bandić, Mayor of Zagreb, also expressed his support for the campaign, inviting the public to a grand “thank you” to the Croatian Chamber of Economy that organised the event, as well as all the Croatian producers providing high quality local products.
350
More often and longer “Borovo is the largest footwear producer in Croatia, with over 80 years of tradition. We are aiming to promote the popularity and increase Borovo footwear brand awareness amongst the general public. If every seventh member of the public purchased at least one pair of footwear annually, they would provide significant assistance to the reconstruction of Vukovar, as well as help to preserve jobs, economic development and the prosperity of the entire community”, emphasised Gordan Kolundžić, Management Board President of Borovo, the factory which during the Buy Croatian campaign showed a new product range of modern leather ankle boots for men and women. Furthermore, the Buy Croatian campaign is extremely important
for small producers, as it attracts new customers, pointed out Andrija Kunić, the representative of Horizont, a Koprivnica-based goat cheese producer. Nevertheless, the campaign needs to be organised more frequently and for a longer period of time. “Our customers often inquire about the length of the campaign and are normally disappointed upon learning that the campaign would end on the same day. They always express their wish for a longer campaign”, highlighted Kunić. Anita Peršin, of Hedon, a company involved in the production and sale of chocolate, stressed that similar campaigns provide excellent opportunities to producers for direct communication with customers. “We are provided with an opportunity for our pres-
O F
E C O N O M Y
entation eventually resulting in sales, which is vital”, concluded Anita Peršin. Extended campaign Tomislava Ravlić, Project Manager for Buy Croatian and Director of Sales Department at the Croatian Chamber of Economy stressed that the campaign has greatly developed over the last 17 years as a result of the participation of large entrepreneurs and a large number of small entrepreneurs and farm representatives, showing the high level of interest in appearing at this event. “We are planning to lengthen the campaign, due to the high level of interest expressed by both consumers and the general public and in accordance with the level of interest expressed by companies. Exhibitions of local products will be held in over 20 cities. A longer campaign is fundamental for all concerned. The length could certainly be extended for several days, especially in large cities. We will certainly consider the wishes and the opinions of the public, as the campaign primarily focuses on them”, pointed out Tomislava Ravlić. The Croatian Chamber of Economy has been promoting high quality Croatian products (primarily the holders of prestige labels of Croatian Origin and Croatian Quality), through the Buy Croatian campaign since 1997, in order to raise awareness, to enhance the general competitiveness of the Croatian economy, as well as the preservation of national identity. 169 products and 3 services have been awarded the label of Croatian Quality thus far, whilst 106 products and 2 services have been awarded the label of Croatian Origin.
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Privredni vjesnik Year VII No 240
CROATIAN ECONOMY IN 2013
An arduous year, although profitable According to data provided by the Financial Agency, during the business year 2013 Croatian entrepreneurs, with the exception of banks, insurance companies and other financial institutions, (or more specifically 101,191 employers employing 830,928 staff), generated total revenue of €81 billion and total expenditure of €80 billion. The positive final results achieved by state-owned entrepreneurs with revenues of €0.22 billion must be highlighted Darko Buković, Privredni vjesnik ost companies consider 2013 as another highly challenging year. The crisis and the problems it caused greatly affected even traditionally resilient and propulsive sectors. According to data released by the Financial Agency, during the business year 2013 Croatian entrepreneurs, with the exception of banks, insurance companies and other financial institutions, (or more specifically 101,191 employers employing 830,928 staff), generated total revenue of €81 billion with total expenditure of €80 billion. Interestingly, both revenue and expenditure saw a 1.7% increase over the previous
M
year and, even more surprisingly, 2013 saw €0.46 billion nett profit, implying a significant 27.1% increase year-on-year.
Of the €81 billion in total revenue generated, €12.86 billion was via exports, 0.5% down compared with 2012 According to further data elaboration of total nett profit, 2013 saw 61,730 entrepreneurs generating €4.02 billion nett profit, whilst 39,461 entrepreneurs or 39% of the total number showed a loss of €3.56 billion. Hence,
almost two thirds of entrepreneurs showed profits, albeit one third of entrepreneurs saw losses almost identical to total profits generated by the remaining entrepreneurs. Nevertheless, the number of those employed over 2012 rose by 2.7%, and a 1.1% decrease in profits was followed by a 3.9% decrease in losses. Of the €81 billion in total revenue generated, €12.86 billion was via exports, 0.5% down compared with 2012. In addition, 13,321 or 13.2% of entrepreneurs exported goods and services, whilst the value of imports was €11.7 billion giving a trade surplus of €1.16 billion. The average nett monthly salary per employee was €632, a nomi-
nal 0.2% down compared with the previous year. The Financial Agency explained it as a 2.3% decrease in real prices against a backdrop of a 2.2% increase in consumer prices. Small enterprises showing positive results According to size, large enterprises are still dominant – generating a nett profit of €0.45 billion in their consolidated financial statements, medium-sized entrepreneurs generated €10.58 million, whilst small-sized entrepreneurs €21.96 million in 2013. Consequently, Croatia saw a €0.46 billion total entrepreneurial nett profit for 2013. In 2013, the small-business
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Number of entrepreneurs in the trade sector in relation to the total number of entrepreneurs in Croatia - 2008 -2013 Description Total number of entrepreneurs The number of entrepreneurs in the trade sector The share of of entrepreneurs in trade in the total number of enterprises (%)
2008. 89.656 27.208 30,34
2009. 91.320 27.262 29,85
2010. 96.758 27.955 28,89
2011. 98.530 27.717 28,13
2012. 97.254 26.491 27,24
2013. 101.191 26.342 26,03
Source: Fina
Entrepreneurial revenue in the trade sector in relation to entrepreneurial revenue in Croatia 2008 -2013 Description Total income of the entrepreneurs in Croatia Total income of entrepreneurs in the trade sector Share of income of entrepreneurs in the trade sector in total income entrepreneurs in Croatia
2008. 709.827 256.472 36,13 percent
2009. 613.367 215.578 35,15 percent
2010. 598.187 211.733 35,40 percent
2011. 624.807 219.968 35,20 percent
2012. 610.376 211.711 34,68 percent
2013. 612.441 213.484 34,86 percent
Source: Fina
employees with a share of 10.2% of total revenue, 11.1% of operating profit, 6.3% of operating loss and 47.4% of nett profit. Those employed in state-owned businesses received the highest average monthly nett salary of €810, some 28.3% up in relation to the average entrepreneurial salary.
sector accounted for 98.4% of businesses, having 49.9% of the number employed, 33.8% of total revenue, 43% of operating profit, 48% of operating losses and 33.5% of investment in long-term assets. In 2013, small-sized businesses employed 414,507 staff generating revenue of €27.37 billion. Moreover, they generated €1.73 billion in operating profit, €1.71 billion of operating losses, and €21.96 million in nett profit. In addition, they saw an 8% increase in employment, total revenue rose by 8.9% and total expenditure increased by 7.6% compared with 2012. Furthermore, operating profit soared by 25.9%, whilst operating losses dropped by 4.7% and overall generated nett profit. The impact of ownership structure Entrepreneurs in both private and state-owned sectors were considerably more successful in 2013 than 2012; entrepreneurs in the co-operative sector and those in mixed ownership operated less successfully. The final result showing a plus of €0.22 million by state-owned entrepreneurs must be particularly highlighted, whereas in 2012 they operated with negative results - a nett loss of €0.14 billion. This was primarily due to positive results of the largest state-owned companies that in 2013 operated positively in relation to 2012. The Financial Agency pointed out that production by HEP, the national electricity supplier, generated a revenue of almost €79.4
Every fourth entrepreneur in trade According to the structure of Croatian economy, the largest number of entrepreneurs operates and is registered in the trade sector. 2013 saw 26,342 of 101,191 entrepreneurs or 26% operating in this sector, whereas in 2012 26,491 of 97,254 entrepreneurs or 27.2% operated in the trade sector. The number of entrepreneurs in the trade sector in 2013 decreased by 866 compared with 2008, whilst million (in 2012 it saw a loss of €0.79 million), Croatian Radiotelevision (HRT) with a profit of €5.69 million (against a loss of €3.84 million in 2012), as well as Zagreb Holding generating a profit of €4.10million (against a €48.28 million loss in 2012). Furthermore, state-owned companies employed 109,057 staff, and generated total revenue of €8.28 billion, €0.45 billion of operating profit, €0.22 billion of operating losses and €0.22 billion in nett profit. State-owned businesses reduced the number of employees by 0.3%, increased total revenue by 8.5%, raised operating profit by a creditable 121.6%, showed operating losses of 34.9% and generated nett profit of €0.22 billion in the final financial results.
The private sector had a vital rôle in entrepreneurial activity in 2013 with a 98% share of entrepreneurs, 75.7% of the number employed, 73.8% of total revenue, accounted for 76.5% in operating profit, 73.9% in operating loss, 57.9% in investment and generated 96.6% of total nett profit of Croatian entrepreneurs. Nevertheless, those employed in the private sector received salaries considerably below the average monthly nett salary. Consequently, in 2013 the average monthly nett salary in the private sector stood at €584, 7.6% down in relation to the average entrepreneurial nett salary of €632. On the other hand, state-owned businesses in 2013 accounted for 0.8% of entrepreneurs, 13.1% of the number of
The private sector had a vital rôle in entrepreneurial activity in 2013 with a 98% share of entrepreneurs, 75.7% of the number employed, 73.8% of total revenue, accounted for 76.5% in operating profit the percentage of entrepreneurs operating in the trade sector saw a drop from 30.3% for 2008 to 26% in 2013.Consequently, the number of entrepreneurs within this sector stagnated between 2008 and 2011 and also saw a drop in 2012 and 2013.
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Privredni vjesnik Year VII No 240
Processing industry creates the largest number of jobs The largest number of jobs, 223,597 or 26.9%, was created by the processing industry, as this trend was started during previous years, followed by trade with 179,126 (21.6%), construction with 77,129 (9.3%), although transportation and warehousing created 63,122 jobs (7.6%). In relation to 2012, the total number of those employed (based on hours worked) increased considerably in the four above areas. Hence, the number of people employed in processing rose by 2.7%, trade and transportation and warehousing by 1.6% and construction 0.2% up, indicating a slightly positive shift in construction which has been the most severely affected by the financial crisis. Trade generates the highest revenue The largest share of the €81 billion of total entrepreneurial revenue and €80 billion of total expenditure was generated in the trade sector – trading revenue
stood at €28.24 billion or 34.9%, and expenditure was €28.19 billion or 35.2%. In relation to 2008, revenue of entrepreneurs involved in trade dropped from €33.93 billion to €28.24 billion. Moreover, whilst the percentage of their revenue in 2008 stood at 36.2%., in 2013 it was 34.5%. According to data shown, entrepreneurial revenue in the trade sector dropped significantly during the period 2008 to 2010, whilst 2013 showed a growth by €0.22 billion. According to generated revenue and expenditure, trading is followed by processing with revenue of €20.74 billion (25.6%) and €20.46 billion in expenditure (25.6%) and construction with €5.77 billion revenue (6.8%) and €5.69 billion expenditure (7.1%). Zagreb continues its domination According to business results of entrepreneurs per county in 2013, Zagreb ranks first yet again. 33,329 entrepreneurs, employing 335,381 staff, generated €43.56 billion in total revenue, operating
profit of €2.12 billion and operating loss of €1.84 billion, hence generating a nett profit of €0.28 billion. Split-Dalmatia County ranks second with 11,436 entrepreneurs and 69,209 employed, generating total revenue of €5.05 billion, €0.33 billion operating profit and €0.28 billion in operating loss with a consequent nett profit of €0.05 billion. According to the same data, Požega-Slavonia
County, with 674 entrepreneurs employing 7,431 staff, saw the fewest number of entrepreneurs in 2013. Total revenue stood at €0.44 billion, operating profit at €19.78 million and operating loss of €13.92 million, resulting in a €5.86 million nett profit. For Lika-Senj County, entrepreneurs within the total entrepreneurial results for Croatia is again small, according to data on entrepreneurial activity in 2013.
Financial results of entrepreneurial activity in Croatia in 2013 according to ownership structure Description The number of entrepreneurs The number of people employed The total revenue The total expenditure Income tax Operating profit Operating loss Consolidated financial results – operating profit or loss Investment in new long-term assets Average monthly nett salary expressed in kuna The number of entrepreneurs The number of people employed The total revenue The total expenditure Income tax Operating profit Operating loss Consolidated financial results – operating profit or loss Consolidated financial results – operating profit or loss Average monthly nett entrepreneurial salary Source: Fina
Total
State-owned
101.191 830.928 612.441 604.998 3.914 30.392 26.862 3.529 37.489 4.778 Indices 2012 = 100,0 102,7 101,7 101,7 95,7 98,9 96,1 127,1 114,0 99,8
Private
– in millions of kuna
Co-operative
775 109.057 62.622 60.515 433 3.375 1.701 1.674 9.982 6.128
99.192 629.209 452.038 445.340 3.289 23.256 19.846 3.409 21.705 4.415
6.722 18.566 13.288 13.500 44 233 499 -266 166 36.011
99,7 108,5 103,1 353,5 221,6 65,1 -153,0 108,3 100,8
104,0 102,6 102,3 112,3 100,0 94,4 115,0 114,4 100,2
89,0 84,8 85,1 92,0 89,4 101,4 78,7 103,2
Mixed ownership 5.552 90.806 96.453 97.792 188 3.738 5.265 -1.527 5.786 5.700
98,5 94,3 98,2 18,2 63,0 123,4 124,1 99,0
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Corporate ranking
TOTAL REVENUE
1 INA D.D.
(HRK 000)
PROFIT
(HRK 000)
26.424.216
1 HT D.D.
1.431.246
2 HEP D.D.
13.701.238
2 HEP D.D.
756.590
3 KONZUM D.D.
13.391.375
3 BRODOSPLIT D.D.
721.711 597.099
4 HT D.D.
6.606.027
4 HEP-PROIZVODNJA D.O.O.
5 PRIRODNI PLIN D.O.O.
6.303.492
5 HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O.
590.609
6 HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O.
5.122.300
6 ENI CROATIA B.V.
442.763
7 HEP-PROIZVODNJA D.O.O.
4.904.815
7 PLIVA HRVATSKA D.O.O.
435.846
8 ZAGREBAČKI HOLDING D.O.O.
4.616.884
8 ADRIS GRUPA D.D.
390.421
9 PETROL D.O.O.
4.399.789
9 HOPS D.O.O.
349.005
10 CRODUX DERIVATI DVA D.O.O.
3.685.042
10 JAMNICA D.D.
336.173
ASSETS
(HRK 000)
CAPITAL AND RESERVES
(HRK 000)
1 HRVATSKE CESTE D.O.O.
70.270.388
1 HRVATSKE CESTE D.O.O.
60.901.028
2 HRVATSKE AUTOCESTE D.O.O.
45.329.619
2 HRVATSKE AUTOCESTE D.O.O.
21.584.436
3 HEP D.D.
30.726.837
3 HEP D.D.
21.526.114
4 INA D.D.
25.171.543
4 INA D.D.
13.328.744
5 AGROKOR D.D.
18.269.587
5 HT D.D.
10.820.394
6 ZAGREBAČKI HOLDING D.O.O.
17.339.533
6 HŽ INFRASTRUKTURA D.O.O.
7.797.089
7 HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O.
16.239.297
7 ZAGREBAČKI HOLDING D.O.O.
6.798.305
8 HT D.D.
12.783.570
8 ADRIS GRUPA D.D.
6.457.378
9 HŽ INFRASTRUKTURA D.O.O.
12.726.878
9 PLIVA HRVATSKA D.O.O.
4.186.784
10 KONZUM D.D.
11.624.710
10 HOPS D.O.O.
3.715.966
IMPORTS
NUMBER OF PEOPLE EMPLOYED
(HRK 000)
1 PLIVA HRVATSKA D.O.O.
1.558.425
2 HEP D.D.
1.524.113
3 BOXMARK LEATHER D.O.O.
1.505.040
4 M SAN GRUPA D.D.
1.503.438
5 KONZUM D.D.
1.285.807
6 PETROL D.O.O.
1.239.672
7 LIDL HRVATSKA D.O.O. K.D.
1.207.268
8 CRODUX DERIVATI DVA D.O.O.
1.080.284
9 PORSCHE CROATIA D.O.O.
915.189
10 LUKOIL CROATIA D.O.O.
880.366
EXPORTS
(HRK 000)
1 ZAGREBAČKI HOLDING D.O.O.
11.216
1 INA D.D.
8.324.126
2 KONZUM D.D.
11.130
2 PLIVA HRVATSKA D.O.O.
2.193.811
3 HP D.D.
9.693
3 BOXMARK LEATHER D.O.O.
1.922.608
4 INA D.D.
8.401
4 PETROKEMIJA D.D.
1.625.714
5 HRVATSKE ŠUME D.O.O.
8.123
5 CROATIA AIRLINES D.D.
1.015.275
6 HEP-OPERATOR DISTRIBUCIJSKOG SUSTAVA D.O.O.
7.920
6 ERICSSON NIKOLA TESLA D.D.
968.489
7 HŽ INFRASTRUKTURA D.O.O.
5.789
7 ENI CROATIA B.V.
907.899
8 HT D.D.
5.232
8 PODRAVKA D.D.
811.324
9 TISAK D.D.
4.019
9 TLM-TVP D.D.
748.784
10 SOKOL MARIĆ D.O.O.
3.438
10 KONČAR-ENERGETSKI TRANSFORMATORI D.O.O.
745.514
Source: Bonitet.hr
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Privredni vjesnik Year VII No 240
Leading Croatian exporters in 2013 (top 400) Export
Name
Location
Exports
Share of exports in total revenue
1
INA D.D.
ZAGREB
8.324.125.800
31,5
2
PLIVA HRVATSKA D.O.O.
ZAGREB
2.193.811.300
3
BOXMARK LEATHER D.O.O.
TRNOVEC
4
PETROKEMIJA D.D.
KUTINA
5
CROATIA AIRLINES D.D.
6
ERICSSON NIKOLA TESLA D.D.
7 8 9
2013 Rank
Export 2013 Rank
Name
Location
Exports
Share of exports in total revenue
51 ISTRATURIST UMAG D.D.
UMAG
333.828.100
72,85
70,82
52 SAPONIA D.D.
OSIJEK
330.917.300
48,56
1.922.608.500
96,19
53 OMCO CROATIA D.O.O.
MALI TABOR
329.800.000
93,13
1.625.713.704
63,36
54 KRAŠ D.D.
ZAGREB
311.357.666
35,36
ZAGREB
1.015.275.000
61,74
55 AURO DOMUS D.O.O.
RUBEŠI
282.141.000
93,89
ZAGREB
968.489.051
71,96
56 DUROPACK BELIŠĆE D.O.O.
BELIŠĆE
278.077.900
57,48
ENI CROATIA B.V.
ZAGREB
907.898.700
84
57 AGENCIJA ALAN D.O.O.
ZAGREB
275.283.100
86,15
PODRAVKA D.D.
KOPRIVNICA
811.323.900
39,57
58 HOSPIRA ZAGREB D.O.O.
272.233.700
99,66
TLM-TVP D.D.
ŠIBENIK
748.783.900
61,39
PRIGORJE BRDOVEČKO
10 KONČAR-ENERGETSKI TRANSFORMATORI D.O.O. ZAGREB
745.513.900
93,2
59 CALUCEM D.O.O.
PULA
266.188.500
98,8
ZAGREB
259.549.200
96,03 99,96
11 BENETTON TEKSTIL D.O.O.
VINEŽ
742.149.800
85,87
60 INTERENERGO D.O.O.
12 RIVIERA ADRIA D.D.
ŽBANDAJ
715.526.600
84,95
61 GOLD BOX D.O.O.
ZAGREB
254.413.600
68,11
62 BELUPO D.D.
KOPRIVNICA
253.940.200
38,2
ZAJCI
249.398.400
77,19 55,06
13 TANKERSKA PLOVIDBA D.D.
ZADAR
603.347.057
14 HRVATSKA KONTROLA ZRAČNE PLOVIDBE D.O.O. VELIKA GORICA
587.550.800
91,49
63 ROCKWOOL ADRIATIC D.O.O.
15 HS PRODUKT D.O.O.
570.399.200
93,66
64 ALSTOM HRVATSKA D.O.O.
KARLOVAC
249.031.800
97,33
65 HEP D.D.
ZAGREB
239.371.200
1,75
DUBROVNIK
239.285.200
60,86
16 HARBURG-FREUDENBERGER BELIŠĆE D.O.O.
KARLOVAC BELIŠĆE
563.216.900
17 GEN-I ZAGREB D.O.O.
ZAGREB
560.474.900
79,66
66 ATLAS D.D.
18 MAISTRA D.D.
ROVINJ
517.647.200
72,02
67 NESTLÉ ADRIATIC D.O.O.
ZAGREB
239.181.100
46,93
68 JANAF D.D.
ZAGREB
236.648.245
49,74
69 PIK VRBOVEC-MESNA INDUSTRIJA D.D.
VRBOVEC
233.070.100
11,75
- DISTRIBUTIVNI I SPECIJALNI 19 KONČAR TRANSFORMATORI D.D.
ZAGREB
512.884.112
77,12
20 AD PLASTIK D.D.
SOLIN
511.523.400
86,09
70 KRKA-FARMA D.O.O.
ZAGREB
229.010.700
43,03 12,66
21 JGL D.D.
RIJEKA
510.113.800
74,48
71 AGROKOR - TRGOVINA D.D.
ZAGREB
226.338.300
22 ULJANIK BRODOGRADILIŠTE D.D.
PULA
498.715.300
72,01
72 ELKA D.O.O.
ZAGREB
225.473.600
48,07
23 ELEKTRO-KONTAKT D.D.
ZAGREB
490.167.300
91,2
73 TUBLA D.O.O.
ČAKOVEC
225.100.100
93,08
24 EUROCABLE GROUP D.D.
ZAGREB
481.849.700
77,28
25 ALUFLEXPACK NOVI D.O.O.
MURVICA
477.697.100
69,98
26 HSE ADRIA D.O.O.
ZAGREB
474.555.600
99,65
27 VETROPACK STRAŽA D.D.
HUM NA SUTLI
473.851.100
61,47
28 YTRES D.O.O.
DONJI KNEGINEC
469.222.700
93,3
29 CEMEX HRVATSKA D.D.
KAŠTEL SUĆURAC
466.977.300
60,03
30 ĐURO ĐAKOVIĆ TEP D.O.O.
SLAVONSKI BROD
452.093.700
86,88
31 M SAN GRUPA D.D.
BUZIN
445.747.500
31,09
32 CROSCO D.O.O.
ZAGREB
440.946.100
41,95
33 HŽ CARGO D.O.O.
ZAGREB
439.936.200
49,76
74 SLADORANA D.O.O.
ŽUPANJA
214.442.200
45,2
75 KONČAR-GIM D.D.
ZAGREB
210.374.000
63,48
76 DRAVA INTERNATIONAL D.O.O.
OSIJEK
209.230.600
76,02
77 TELEGRA D.O.O.
SVETA NEDELJA
203.743.400
73,64
78 KOKA D.D.
VARAŽDIN
202.636.500
15,39
79 GOLD PARTNER D.O.O.
ZAGREB
201.586.600
82,75 87,2
80 LPT D.O.O.
PRELOG
198.812.600
81 KONZUM D.D.
ZAGREB
196.334.000
1,47
82 JAMNICA D.D.
ZAGREB
194.125.978
11,82
83 FEROIMPEX AUTOMOBILSKA TEHNIKA D.O.O.
LUG SAMOBORSKI
193.949.500
92,91
NOVI MAROF
186.695.400
76,97
34 DALEKOVOD D.D.
ZAGREB
436.110.500
50,22
84 KNAUF INSULATION D.O.O.
35 P. P. C. BUZET D.O.O.
JURIČIĆI
430.339.000
95,42
85 MMM AGRAMSERVIS D.O.O.
ZAGREB
186.432.800
72,67
36 AMEROPA ŽITNI TERMINAL D.O.O.
VRANJIC
428.991.300
73,55
86 VIRO TVORNICA ŠEĆERA D.D.
VIROVITICA
180.341.400
27,92
37 3. MAJ BRODOGRADILIŠTE D.D.
RIJEKA
422.955.800
66,37
87 TVORNICA ŠEĆERA OSIJEK D.O.O.
OSIJEK
180.087.900
31,52
38 PLAVA LAGUNA D.D.
POREČ
419.110.400
82,73
88 UNILINE D.O.O.
PULA
179.387.600
74,24
39 TRINA SOLAR (SCHWEIZ) AG
ZAGREB
404.812.100
99,77
89 BRODOGRADILIŠTE VIKTOR LENAC D.D.
RIJEKA
178.569.800
63,23
40 CE-ZA-R D.O.O.
ZAGREB
403.686.500
63,64
90 DOK-ING D.O.O.
ZAGREB
177.615.900
83,15
41 BILFINGER ĐURO ĐAKOVIĆ MONTAŽA D.O.O.
SLAVONSKI BROD
391.337.500
77,61
91 JEDINSTVO D.D.
MIHALJEKOV JAREK
175.163.300
50,83
42 HT D.D.
ZAGREB
368.959.172
5,59
92 SCOTT BADER D.O.O.
ZAGREB
173.380.700
84,92
43 PETROL D.O.O.
ZAGREB
368.029.300
8,36
93 RUDNAP ENERGIJA D.O.O.
ZAGREB
172.863.000
74,22
44 YINGLI D.O.O.
ZAGREB
357.873.000
98,5
94 VIVERA D.O.O.
GLINA
170.769.000
70,73
45 SAIPEM S.P.A.
ZAGREB
347.472.800
99,4
95 LEDO D.D.
ZAGREB
170.491.184
14,5
46 EXPORTDRVO D.D.
ZAGREB
345.622.500
89,38
96 LIBURNIA RIVIERA HOTELI D.D.
OPATIJA
169.159.800
61,41 51,33
47 ATLANTSKA PLOVIDBA D.D.
DUBROVNIK
343.316.700
93,18
97 CEDEVITA D.O.O.
ZAGREB
167.664.200
48 TDR D.O.O.
ROVINJ
339.328.900
28,35
98 MURAPLAST D.O.O.
KOTORIBA
165.348.800
77,78
49 SAME DEUTZ-FAHR ŽETELICE D.O.O.
ŽUPANJA
338.946.800
93,74
99 GRANOLIO D.D.
ZAGREB
164.165.300
29,16
50 FERRERO D.O.O.
ZAGREB
336.427.500
66,18
100 ZRAČNA LUKA DUBROVNIK D.O.O.
MOČIĆI
162.373.500
74,03
Source: Bonitet.hr
www.privredni.hr Business & Finance Weekly They accounted for 0.7% of the number of entrepreneurs, 0.5% of the number of people employed, 0.3% of total revenue, 0.3% of operating profit and 0.2% of operating loss. Cities and county towns have 64.5% of people employed by entrepreneurs The number of entrepreneurs, the numbers employed and total revenue according to county centres is highest in the city of Zagreb (which is also a county), which is unsurprising. According to the number of entrepreneurs and numbers employed, as well as total revenue, Zagreb city is followed by Split, (the seat of SplitDalmatia County), which ranks second according to the number of entrepreneurs. Concerning the number of people employed by entrepreneurs,
7 Pazin, the administrative seat of Istria County, ranks 19th amongst county seats with 1,978 people employed, whereas Pula has the
The number of entrepreneurs, the numbers employed and total revenue according to county centres is highest in the city of Zagreb highest number of entrepreneurs (2,442) and the highest number of people employed (13,794) in Istria. It also ranks 4th according to the number of entrepreneurs and 6th on the number of people employed amongst 556 cities/municipalities in Croatia. According to the average number of people
employed per entrepreneur, Koprivnica (the seat of Koprivnica_ križevci County), ranks 1st with 18.2 per entrepreneur, followed by Požega (14.9), Krapina (12.6), Varaždin (11.7), Slavonski Brod (11.5), Čakovec (11.3), Vukovar (11.2), Virovitica (10.5), Bjelovar (10.2) and Zagreb (10.1). The remaining county seats on average have less than 10 people employed per entrepreneur, with the lowest average seen in the county seats of Gospić (6.6), Split (5.9) and Dubrovnik (5.4). The presented overview of the polarisation of Croatian entrepreneurs and the number of people employed, is mitigated by the fact that the actual entrepreneurial activity occurs on an area exceeding their administrative seat. It is well-known that all headquarters of large state-owned companies (Croatian Railways –HŽ, Croa-
tian Radiotelevision – HT, Croatian Post, Croatian electricity supplier - HEP, Croatian forests and Croatian water), as well as large retail chain stores, are located in Zagreb and thus their financial results and the number of people employed are shown in Zagreb County rather than in other counties where they also operate. Of 21 cities - county seats - entrepreneurs in 16 generated nett profit, whilst the remaining 5 showed negative results, with losses of €0.13 billion. Entrepreneurs in Osijek saw the largest loss, 44.9% or €60.26 million. According to nett profit for 2013, entrepreneurs operating Zagreb city were the most successful in relation to entrepreneurs in other cities – county seats and they also ranked 1st at country level, followed by entrepreneurs operating in Karlovac and Split.
The number of entrepreneurs and the total entrepreneurial revenue per cities - county seats in 2013 The name of the city/ municipality
City of Zagreb Split Rijeka Osijek Varaždin Velika Gorica3 Zadar Karlovac Dubrovnik Čakovec Koprivnica Slavonski Brod Bjelovar Šibenik Vukovar Sisak Požega Virovitica Krapina Pazin Gospić Total Total in Croatia The share of 21 cities in the Republic of Croatia Source: Fina
The number of entrepreneurs Number Ranking at Ranking at the state the county level seat level 33.329 1 1 6.267 2 2 4.168 3 3 2.284 5 4 1.581 8 7 1.233 10 8 1.879 7 6 995 13 11 1.887 6 5 1.021 11 9 473 28 15 889 16 12 776 18 13 1.005 12 10 390 35 16 659 19 14 297 44 17 269 50 19 241 55 20 291 45 18 182 67 21 60.116 101.191 60,0 percent
The number of people employed Number Ranking at the state level 335.381 37.110 31.207 20.117 1.203 9.879 12.663 9.875 10.118 11.565 8.632 10.206 7.945 6.848 4.351 5.391 4.438 2.818 3.046 1.978 1.203 535.974 830.928 64,5 percent
1 2 3 4 81 11 7 12 10 8 13 9 14 15 24 21 23 38 33 53 81 -
– in HRK’000 Total revenue Amount Ranking at the state level 329.264.956 1 20.525.104 2 16.619.242 3 12.167.384 4 11.866.137 5 9.163.752 6 6.352.762 8 5.937.692 10 5.475.191 11 5.469.141 12 5.108.658 13 4.877.344 14 4.343.664 15 4.197.128 16 3.032.190 22 2.092.539 31 2.045.794 32 1.812.728 35 1.681.707 39 1.165.011 55 452.724 97 453.650.848 612.440.965 74,1 percent
8
Privredni vjesnik Year VII No 240
BANKS IN 2013
Prisoners of the status quo The banking saga in Croatia over the past five years of recession may be summed up in five key points: the banks are highly liquid and solvent; lending quality is deteriorating; there is no significant demand except from the state; savings are growing; profitability is falling Velimir Šonje, Director of Arhivanalitika
2013
• Banks are highly liquid and solvent • Lending quality is deteriorating • There is no significant demand • Savings are growing • Profitability is falling
Five things that do not change The banking saga of Croatia over the past five years of recession may be summed up in five key points
Firstly, the banks are highly liquid and solvent. The adequacy rate of capital for the entire banking system stood at 21.05% at the end of December 2013. Only one bank capital adequacy rate was below 10%. The capitalisation rate is also highlighted in international comparisons. According to data provided by the IMF Financial Soundness Indicators, Croatian banks have one of the highest capital adequacy rates in Europe, which makes them stable and highly resistant to crisis.
– the fifth year of recession or depression – will be marked as the year of few changes in banking products and services. However, big changes happened in the area of bank regulation. It is the regulatory changes actually that led to the statement of the lowest profit level of the banking system over the past 10 or more years.
Secondly, the relatively high capitalisation of the banks is maintained despite the aggravating lending quality. In 2013, the share of partially-recoverable and non-recoverable loans exceeded 15% and continued to grow. Furthermore, the share of partially-recoverable and nonrecoverable loans issued to trade companies exceeded 25% and slowly approached the new limit of 30%. This is the case of historical maxima that substantially limit banks’ tendency of venturing into riskier corporate lending. Thirdly, it is logical that banks avoid risk in a recessionary environment. Liquidity surpluses and the opportunity costs they take with them do not provide sufficient pressure to start a new
credit cycle. Banks do not see any projects in which lending could return a significant volume at an acceptable risk rate. In such conditions, the same situation repeats year into year: there is money, but there are no good projects. The result: the state is the best client during a recession. The fourth element of the recession hibernation is the mild growth in savings. According to CNB statistics, public deposits were 3.9% higher in December 2013 than December 2012. Deposits of trading companies increased 8%. If we add that the banks are highly liquid and frown upon risky lending, one question comes to mind: why even save money, if it does not bring profit? The dilemma may be solved
www.privredni.hr Business & Finance Weekly
9
Consolidated balances (31.12.2013. in HRK’000, in alphabetical order) Bank
Group
Member of the group
Assets of group
Total revenue of group
Number of employees in group
Total equity capital of group
Gross profit of group
Total number Assets of affiliates, under manoffices agement
Erste und Steiermärkische Bank
Grupa Erste & Steiermärkische Bank
ESB Erste DMD Erste nekretnine Erste Factoring Erste Card Club Erste Delta Erste Bank Podgorica
67.854.382
4.526.269
2.551
7.369.919
263.289
150
5.974.282
Hrvatska poštanska banka
HPB Grupa
HPB HPB Invest HPB Nekretnine HPB Stambena štedionica
18.597.787
1.460.259
1.114
966.640
36.368
8 branch offices 42 business offices 10 branches
4.040.000
Hypo Alpe-Adria-Bank
Grupa Hypo Alpe Adria Bank
Hypo Alpe-Adria-Bank Hypo Alpe-Adria-Invest Hypo Alpe-Adria-Nekretnine Hypo Alpe-Adria-Leasing
30.723.450
2.058.969
1.654
5.208.760
(630.637)
74
173.084
Podravska banka
Podravska banka
Podravska banka POBA Faktor
3.099.413
216.274
286
267.500
3.152
27
n.p.
Privredna banka Zagreb
PBZ Grupa
Privredna banka Zagreb PBZ Card PBZ Stambena štedionica PBZ Leasing PBZ Nekretnine Intesa Sanpaolo Card Zagreb - metoda udjela PBZ Croatia osiguranje - metoda udjela
70.116.720
5.233.244
4.087
1.907.477
1.052.058
203
n.p.
Raiffeisenbank
Raiffeisen grupa
RBA Raiffeisen Leasing Raiffeisen Invest Raiffeisen mirovinsko društvo.. - OMF Raiffeisen mirovinsko društvo - DMF Raiffeisen osiguravajuće mir. društvo Raiffeisen Consulting Raiffeisen Factoring Raiffeisen Bonus
36.151.772
1.951.471
2.275
3.633.632
383.973
70 bank business offices and 10 leasing business offices
19.587.329
Zagrebačka banka
Grupa Zagrebačke banke
Podružnice u punoj konsolidaciji: Centar Kaptol Istra D.M.C. Istraturist Pominvest Prva stambena štedionica Suvremene poslovne komunikacije UniCredit bank d.d. Mostar ZABA Partner Zagreb nekretnine Zane BH ZB Invest
123.724.152
5.111.454
6.274
6.404.839
920.921
215 35.891.229
Pridružena društva konsolidirana metodom udjela: Allianz ZB, obvezni mirovinski Allianz ZB, dobrovoljni mirovinski Multiplus card
in two ways. Firstly, banks are clearing their debts, following the trend of their clients from the private sector. Since local saving is a relatively cheaper source of financing credit than deposits from abroad, the banks have the opportunity to repay foreign funding taken earlier, and substitute them with local savings. Foreign obligations of Croatian banks reduced by over €0.5 bil-
lion between December 2012 and December 2013 (foreign debt reduced by the same amount). Moreover, banks can replace the original source even if the passive interest rate on deposits is constantly decreasing, since both individuals and companies do not see any other options than to deposit with banks, even if the interest rate is lower. Lower interest rates on deposits are the
main reason why, despite the depression, the interest rates on the loans are decreasing, rather than increasing. Between December 2012 and December 2013, the overall average interest rate on newly approved loans decreased from 6.80% to 5.91%, where the average for private individuals decreased from 7.05% to 6.39%, or from 6.70% to 5.70%. The relatively rapid decrease in
the interest rate for companies, shows that banks are working exclusively with their top clients for whom the interest rate is lower due to the crisis and increased risk sensitivity. It is evident that in a recessionary environment profit cannot grow. The fifth repeating element of the banking recession story is visible in the continuous and long-term falling trend of the profitability
10
Privredni vjesnik Year VII No 240
Ranking of Croatian banks for 2013 Rank
Core capital Bank
2013. 2012.
Equity capital % Change
000 kn
000 kn
% Change
Capital adequacy ratio (%)
Rank
1
1
Zagrebačka banka
15.524.967
-0,92
6.404.839
0,00
1
23,80
2
2
Privredna banka Zagreb
10.958.429
0,71
1.907.477
0,00
4
24,16
3
3
Erste und Steiermärkische Bank
6.600.844
5,44
1.698.418
0,00
5
16,54
4
5
Raiffeisenbank
4.895.776
-1,56
3.633.632
0,00
3
18,73
5
4
Hypo Alpe-Adria-Bank
4.844.985
-9,12
5.208.760
0,00
2
31,08
6
6
Societe Generale - Splitska banka
3.386.496
-5,09
491.426
0,00
9
17,19
7
7
OTP banka
1.514.362
4,49
989.607
0,00
7
16,69
8
9
Hrvatska poštanska banka
1.343.458
3,85
966.640
0,00
8
13,51
9
8
Sberbank
1.331.897
-5,95
1.530.668
0,00
6
20,53
10
17
Croatia banka
476.184
-0,04
474.600
0,00
10
14,00
11
10
Podravska banka
369.406
2,86
267.500
0,00
14
19,12
12
13
Štedbanka
316.018
2,79
250.000
0,00
15
38,67
13
14
Kreditna banka Zagreb
294.655
4,12
230.200
0,00
17
14,88
14
12
Banco Popolare Croatia
280.164
-11,22
370.780
11,35
11
18,52
15
11
Jadranska banka
254.105
-20,60
239.246
0,00
16
12,82
16
16
Istarska kreditna banka
247.337
1,33
162.800
0,00
20
16,71
17
18
BKS Bank
200.427
-4,02
200.000
0,00
19
21,46
18
19
Veneto banka
185.180
-3,09
345.800
12,40
12
16,62
19
20
Slatinska banka
174.467
-0,47
91.897
0,00
23
16,95
20
21
Partner banka
155.116
-0,69
89.100
0,00
24
14,15
21
25
KentBank
130.685
65,71
201.704
59,19
18
19,51
22
22
Imex banka
128.615
8,71
93.127
0,00
22
14,26
23
24
Samoborska banka
84.273
-2,38
47.775
0,29
28
27,19
24
26
Banka Kovanica
64.720
-13,87
291.084
11,63
13
13,93
25
23
VABA
55.884
-52,21
75.020
-57,50
25
6,50
26
28
Banka splitsko-dalmatinska
52.469
11,02
48.602
0,00
27
14,04
27
29
Primorska banka
32.409
7,67
52.907
-1,35
26
25,17
28
31
Nava banka
22.100
61,86
41.909
-42,35
29
14,03
29
30
Tesla štedna banka
15.400
-33,12
37.118
0,00
30
94,56
30
27
Karlovačka banka
(38.250)
-
116.894
-41,72
21
-4,18
Source: Data press
ratio that reached a record minimum at the end of 2013. The fall accelerated at the end of 2013, which may be explained by new regulations. No innovation or structural changes The system is in a state of recessionary hibernation, and it is surviving only seemingly and comfortably due to previously accumulated capital. The question is: can the system shake off this lethargy? With the constant pressure of having to do “something” and contribute to exiting this reces-
sion, the Croatian National Bank introduced in November 2013 a conditional decrease in mandatory reserves. It released (the banks obtained new liquidity) proportionally to newly approved corporate loans. However, not even these measures brought results, which indirectly shows the (quality) demand for loans is highly limited. In a system completely resistant to all types of external stimuli, little is happening in the structural sense. The pace of introducing new products and services is extremely slow compared with the pace during the first part of the
first decade of the 21st century. The number of banks decreased from 31 at the end of 2012 to 30 at the end of 2013 (when one bank merged with another). The percentage of banks in majority ownership of local private shareholders decreased from 5.2% to 5.1% of total assets. The level of banks in majority ownership of foreign shareholders decreased from 90.1% to 89.7%. It is interesting that the level of local state banks increased during the recession (from 4.8% to 5.3%), mainly due to the agile business strategy of the CNB and Croatia banka after the consolidation.
International banks from Austria still hold over 60% of the banking system assets, which will certainly continue if a bank from another country does not buy the Carinthian Hypo Group. In such conditions, there was almost no space for changes in bank ratings that could be classified as structurally relevant. Since Erste Bank decided not to take over HPB, the potential deep-level changes on the market did not happen - or rather they happened at the level of decimals. Zagrebačka banka and Privredna banka traditionally hold the first two places. Since 2011 Erste
www.privredni.hr Business & Finance Weekly
Assets 000 kn
% Change
11 Assets per employee (000 kn)
Rank
Profit before tax
Profit after tax
Number of employees 31.12.
Cost income ratio
Capital/ assets x 100
Profit before/ Profit before/ capital x 100 assets x 100
106.505.340
2,82
1
25.072
575.846
465.335
4.248
48,11
14,58
3,71
0,54
65.617.198
-4,08
2
17.672
782.998
614.686
3.713
46,95
16,70
7,15
1,19
60.124.986
5,42
3
29.706
89.990
68.419
2.024
34,30
10,98
1,36
0,15
33.005.047
-7,17
4
15.822
326.650
275.454
2.086
55,75
14,83
6,67
0,99
30.062.005
-13,35
5
18.801
(621.789)
(501.319)
1.599
79,80
16,12
-
-
27.323.468
3,75
6
18.412
11.351
34.062
1.484
63,00
12,39
0,34
0,04
13.690.689
2,91
8
13.383
80.086
64.839
1.023
62,33
11,06
5,29
0,58
18.357.078
7,69
7
17.076
42.746
42.410
1.075
62,50
7,32
3,18
0,23
9.262.800
12,81
9
18.379
(56.573)
(45.631)
504
78,54
14,38
-
-
2.628.553
32,48
14
9.808
(24.644)
(24.644)
268
111,90
18,12
-
-
3.103.127
1,47
11
11.004
1.875
1.053
282
85,07
11,90
0,51
0,06
1.094.769
-10,06
24
29.588
7.932
6.237
37
42,86
28,87
2,51
0,72
4.096.720
27,92
10
20.484
6.066
4.506
200
73,08
7,19
2,06
0,15
2.238.523
-11,87
16
8.643
(75.523)
(78.934)
259
94,87
12,52
-
-
2.945.984
-3,83
12
11.374
(68.661)
(68.661)
259
76,56
8,63
-
-
2.806.596
4,66
13
12.150
13.632
12.833
231
65,90
8,81
5,51
0,49
1.243.474
3,75
21
20.056
(8.879)
(8.711)
62
79,00
16,12
-
-
1.556.736
20,26
17
15.262
(47.734)
(47.734)
102
101,00
11,90
-
-
1.514.957
5,77
19
8.657
738
398
175
75,80
11,52
0,42
0,05
1.430.508
10,82
20
12.772
1.658
1.389
112
77,98
10,84
1,07
0,12
884.136
46,13
25
7.368
(23.108)
(23.108)
120
131,68
14,78
-
-
2.248.829
6,76
15
15.726
12.115
9.488
143
63,56
5,72
9,42
0,54
485.071
12,14
26
9.511
(896)
(896)
51
100,92
17,37
-
-
1.209.863
13,37
23
9.307
(43.819)
(43.819)
130
n.p.
5,35
-
-
1.217.629
1,11
22
8.515
(109.449)
(109.449)
143
139,77
4,59
-
-
414.628
19,79
27
5.603
1.352
1.010
74
0,91
12,65
2,58
0,33
257.511
22,26
29
6.777
(7.897)
(7.897)
38
165,00
12,59
-
-
301.582
8,75
28
10.771
(12.383)
(12.383)
28
407,30
7,33
-
-
16.292
-40,47
30
1.086
(7.481)
(7.481)
15
379,86
94,52
-
-
1.555.853
-12,69
18
7.270
(113.128)
(113.128)
214
n.p.
-2,46
-
-
has traditionally become number three, and the biggest change concerns Raiffeisen Bank and Hypo Bank that switched fourth and the fifth places. However, this is not only the case of Hypo continuing to clear its balance sheet through extracting poor assets, so this is a case of another defensive measure. Societe Generale – Splitska banka and OTP banka preserved their traditional sixth and seventh places, and there were changes in the state banks. HPB moved ahead of Sberbank (8th) and Croatia banka suddenly found itself in 10th place, since after consoli-
dation and additional capitalisation it increased its assets by around €79.4 million, becoming (relatively) the fastest growing bank in 2013, together with the small Kentbank. Did we fail to do something? The recession and the stagnating market are the main causes behind the situation of the banks. The banks cannot change this situation with autonomous moves. In spite of this, one question is repeated throughout the entire crisis: did we fail to do something? This was also the central point of
the parliamentary discussion on the CNB annual report for 2013, when one could hear theses on the extreme passivity by CNB and the bank’s unhealthy tendency to avoid taking risks. Notwithstanding, the reality is that our economic problems are deep and structural. If an opportunity for lending at reasonable risk did exist, why would not the banks that are well capitalised and liquid, use it? It is always possible to find a company, especially a small-sized one, with a good perspective, but that does not seem to find a quality response from the banks. Banks do make
mistakes, and sometimes fail to recognise a good project. However, the question is whether this is our main economic problem, and did this occurrence assume massive systematic proportions due to which the economy is in such problems? The response is very likely – no. Our status quo is deep, structural and political, and it is reasonable to conclude the banks, with or without the CNB help, remain its prisoners. In this long development intermezzo we have to be satisfied with small things – the fact our savings are still safe due to capital and caution.
12
Privredni vjesnik Year VII No 240
CROATIAN INSURANCE MARKET IN 2013
In the grip of liberalisation Total written premiums of insuring property and private individuals reached €1.2 billion, 0.4% higher than for 2012. This is the first increase in total premiums since 2008. In 2013, non-life insurance premiums totalled €0.87 billion and life insurance premiums €0.34 billion Vladimir Miletić ata provided by the Croatian insurance office points to a multiyear insurance premium growth, both total and per capita, in the period leading up to 2009, but they also point to a fall during the crisis period between 2009 and 2012. Premium share of GDP decreased from 2.85% to 2.81% in 2008; it stagnated in 2009, and continued decreasing in 2010 (to 2.76%) and in 2011 (to 2.68%). It was not until 2012 that the pre-
D
mium share increased to 2.74%, but this growth was still below the level of 2005. In 2009, premiums reduced 2.8%, in 2010 1.8% and in 2011 it continued to decrease by 1.1%, and in 2012 it reduced by 1.2%. However, the trend reversed in 2013 and grew 0.4%. This slight growth does not promise any recovery, especially since insurance premiums decreased again at the beginning of this year. The premium per capita reached its record level in 2008 (€288.89), but then started to reduce, to €280.15 in 2012, slightly
above the level of 2007. The number of issued insurance premiums has been growing for the past ten years. After the constant growth in damages leading up to 2009, they suddenly decreased in 2010, but since then they have been gradually increasing, so in 2013 they were higher than in 2008. Written gross premiums Total written insurance premium of property and private individuals in Croatia reached €1.2 billion, 0.4% higher than for 2012.
This is the first increase in total premiums since 2008, since when around €79.37 million in gross premiums have been lost. In 2013, non-life insurance totalled €0.87 billion, a 0.6% decrease year-on- year. Life insurance premiums totalled €0.34 billion, up 3.1% compared with 2012, and a 28% share. This growth also enabled growth of total gross premiums. Based on total premiums Croatia with €0.35 million and a 28.92% market share still retains the lead. With premium growth of 8.3%,
www.privredni.hr Business & Finance Weekly
Allianz is second, increasing its share from 12% to 13%. Euroherc is third with a 0.6% premium fall and a 10.7% share. Auto liability insurance Since 1998, when it totalled 36.1%, the percentage of auto liability insurance premiums within the total premiums had been decreasing since 2007, to 30%. It has been slightly growing since then, and premiums were 1.6% up in 2011 over 2010, and its share increased from 31.3% to 32.1%. In 2012, premium increased 0.8% and the share increased from 32.1% to 32.5%. In 2013, the premium increased a further 1.3%, with a 32.8% share. The number of insurance policies decreased from 1.994 million in 2011 to 1.978 million in 2012 (down 0.8%). Last year, this rose to 2.03 million. This is good news, since it means the attempts of the insurers and the Ministry of Internal Affairs in aiming at reducing the number of non-registered and non-insured vehicles has shown positive results. During 2013, the Ministry of Internal Affairs took 63,464 different measures (primarily fines) to decrease the number of these vehicles. Due to these measures, the average premium in 2012 increased from €194.71 to €196.56; in 2013, it decreased to €194.44. The dynamic of movement varies from insurer to insurer, but the changes in the four leading insurers are minimal. The written insurance premiums of auto liability insurance of Croatia osiguranje is 0.9% lower than the year before (it was 0.4% lower in 2012). For Euroherc the premium is 0.2% higher (it was 1% lower in 2012); for Jadransko osiguranje it is 0.3% higher (it was 1% lower in 2012), and that for Allianz increased 1.3% (it increased 8% in 2012). Voluntary car insurance premiums decrease Voluntary car insurance premiums totalled €87.65 million, decreasing again by €7.67 million or 8% after plummeting by €9.26 million to €95.24 million (9.2%) in 2012. The share of voluntary car insurance premiums within total premiums decreased to 7.3% in 2013 from 11.9% in 2008. The average premium de-
13 creased from €261.90 to €241. The five leading insurers Croatia, Allianz, Euroherc, Jadransko and Triglav decreased the premium between 3% and 12% - Croatia (8.4%), Allianz (3%), Euroherc (11.6%), Jadransko (10%) and Triglav (7%). The trend of a fall-off in purchasing motor vehicles is the main cause for the decreased voluntary car insurance premiums. This type of insurance had a stable 12% share in total premium, but reduced to 7% during the past five years. Competition on the market is intense, so the number of insured vehicles in 2013 remained at the level of 2012, but with 8% lower average premiums. A long-term decrease of total and especially average premiums could lead this type of insurance into loss. Life and health insurance The premiums for classic life insurance increased €12.83 million, marking a dramatic success for Croatian insurers. The premium actually increased from 2.13% to 4.5% (€0.29 billion), and the number of insurances written increased by 3,300. The percentage of annuity insurance premiums increased 35%, from €1.08 million to €1.46 million. Other types achieved premiums smaller than in 2012; supplementary insurance was €0.93 million lower (€20.97 million), and the policy fund reduced by €1.98 million (€17.12 million). Life insurance has been suffering a heavy premium fall for the past several years, but since these years are now behind us, there is hope that positive trends will continue. The leader in life insurance, Allianz, increased its premiums by 15%, while Croatia premiums reduced 2.1%. After merging with Helios, Wiener VIG took third place with a 10.6% share. Grawe is fourth with a 9.7% share, and Merkur is fifth with a 9.6% share. In 2013, Croatian insurers earned €60.32 million in profits, which is 12% less than in 2012, and the differences between the insurers are noticeable. There are no heavy losses as in previous years, so the highest loss totals slightly over €1.32 million. Notwithstanding, several large-sized insurers did significantly reduce their profit. Croatia profit decreased from €15.6 million to
Market liberalisation of mandatory auto liability insurance At the end of 2013, market liberalisation of mandatory auto liability insurance was at the centre of attention. After hesitating for several years, market liberalisation came and outshined all other events on the insurance market. The basic principle of adjusting
decreasing to €194.44 in 2013. However, this was only the start of liberalisation. Between January and May this year, when premium reductions were at their peak, written gross premiums for auto liability insurance totalled €0.15 billion, down €20.77 million than in the same period of 2012. This is 12.5% less, whilst the number of insured vehicles increased from 835,000 to 967,000 or 15.8%. Average premium reduced from €198.81 to €150.26 (25%). The increased number of insured vehicles is certainly a positive, but
the premium to an individual insured person sounds reasonable and justifiable, so the bonus increase could be justified for those insured who did not have an accident for years (or never). For many, the premium of auto liability insurance decreased, and this is in the interest of the insured, but to a certain extent. In the marketing campaign there was no mention of those who caused one or more accidents. The movements of premiums are worrying; the average premium increased from €194.71 to €196.56 in 2012,
the questions is whether the newly insured deserved maximum bonuses, or are potential losses hiding somewhere. In 2013, the indicators of the financial insurance position are satisfying. Achieved profits of the insurer would be sufficient for accumulated sources required for future obligations towards those insured. However, the present scope and the effects of liberalisation of insurance premium for auto liability point to caution and mark this year as the year of big challenges.
€2.25 million, Euroherc profit decreased from €18.12 million to €14.02 million, and Jadransko from €10.58 million to €7.80 million.
14
Privredni vjesnik Year VII No 240
Ranking of Croatian insurers for 2013 Rank
Subtotal
Total non-life
Share of individual companies in the total market
Life
2013.
2012.
Insurer
1
1 Croatia osiguranje
2.707.693
2.625.086
-3,05
2.343.874
2.269.035
-3,19
363.819
356.051
-2,14
29,83
28,92
2
2 Allianz Zagreb
1.089.354
1.179.482
8,27
679.339
708.100
4,23
410.015
471.382
14,97
12,00
12,99
3
3 Euroherc osiguranje
976.512
970.271
-0,64
976.512
970.271
-0,64
-
-
-
10,76
10,69
4
4 Jadransko osiguranje
627.319
626.094
-0,20
627.319
626.094
-0,20
-
-
-
6,91
6,90
5
- Wiener osiguranje VIG
591.962
552.317
-6,70
306.192
282.134
-7,86
285.770
270.183
-5,45
6,52
6,09
6
6 Basler osiguranje Zagreb
404.041
401.885
-0,53
203.621
209.619
2,95
200.420
192.266
-4,07
4,45
4,43
7
7 Grawe Hrvatska
391.704
393.633
0,49
140.971
147.667
4,75
250.733
245.966
-1,90
4,32
4,34
8
9 Generali osiguranje
340.452
365.744
7,43
223.173
245.869
10,17
117.279
119.875
2,21
3,75
4,03
9
8 Triglav osiguranje
347.862
355.807
2,28
278.921
290.699
4,22
68.941
65.108
-5,56
3,83
3,92
10 11 Uniqa osiguranje
226.089
278.030
22,97
132.340
150.730
13,90
93.749
127.300
35,79
2,49
3,06
11 10 Merkur osiguranje
285.302
272.394
-4,52
30.505
28.917
-5,21
254.797
243.477
-4,44
3,14
3,00
12 12 Agram životno osiguranje
203.282
205.597
1,14
-
-
-
203.282
205.597
1,14
2,24
2,27
13 13 HOK osiguranje
185.725
195.875
5,47
185.725
195.875
5,47
-
-
2,05
2,16
14 16 Erste osiguranje VIG
115.726
139.302
20,37
-
-
-
115.726
139.302
20,37
1,27
1,53
98.752
129.918
31,56
98.752
129.918
31,56
-
-
-
1,09
1,43
16 15 Sunce osiguranje
168.233
116.835
-30,55
168.233
116.835
-30,55
-
-
-
1,85
1,29
17 19 Velebit osiguranje
65.241
68.418
4,87
65.241
68.418
4,87
-
-
-
0,72
0,75
18 18 BNP Paribas Cardif osiguranje
75.630
52.098
-31,11
75.630
52.098
-31,11
-
-
-
0,83
0,57
19 20 Societe Generale osiguranje
42.063
41.342
-1,71
-
-
-
42.063
41.342
-1,71
0,46
0,46
20 21 Izvor osiguranje
32.116
34.482
7,37
32.116
34.482
7,37
-
-
-
0,35
0,38
21 24 Velebit životno osiguranje
11.124
16.085
44,60
-
-
-
11.124
16.085
44,60
0,12
0,18
6.818
15.282
124,14
-
-
-
6.818
15.282
124,14
0,08
0,17
23 23 KD životno osiguranje
15.849
14.863
-6,22
-
-
-
15.849
14.863
-6,22
0,17
0,16
24 22 ERGO životno osiguranje
20.767
14.335
-30,97
-
-
-
20.767
14.335
-30,97
0,23
0,16
25 25 Hrvatsko kreditno osiguranje
7.678
9.003
17,26
7.678
9.003
17,26
-
-
-
0,08
0,10
26 27 ERGO osiguranje
1.180
2.422
105,25
1.180
2.422
105,25
-
-
-
0,01
0,03
9.038.474
9.076.600
0,42
6.577.322
6.538.186
-0,60
2.461.152
2.538.414
3,14
100,00
100,00
2012. 000 kn
15 17 Croatia zdravstveno osiguranje
22 26 Wüstenrot životno osiguranje
Total: Source: Data press,
2013. 000 kn
% changes
2012. 000 kn
2013. 000 kn
% changes
2012. 000 kn
2013. 000 kn
% changes
2012. %
2013. %
www.privredni.hr Business & Finance Weekly
15
( 21 product groups need to comply with EU standards and Directives
Dragan Sabljić, director of Quality Control Institute
Specialisation and new market penetration There are not many companies in Europe which could cover all the fields of activity, ass such business ness ess activity act activ would be overly expensive and extremely demanding technically Krešimir Sočković he market niche focusing on certification and quality control has been packed with companies aiming to achieve growth, enhance competitiveness and increase profitability. Those companies who have been operating for a long time have been faced with reduced scope of work against the backdrop of the financial crisis, and consequently most of them have resorted to slashing the number of employees. Privredni vjesnik talked with Dragan Sabljić, director of Quality Control Institute and Vice-President of the Croatian Accreditation Agency at the Croatian Chamber of Economy.
T
What is the level of demand for certification services on the Croatian market? Certification services are imperative primarily because Croatia belongs to the European Common Market where most products require certification. Most products on the market are affixed with a CE marking which indicates that the product has met all the requirements required by the market. In addition, CE marking simultaneously provides quality assurance for the customers. A product needs to comply with the EU standards and Directives in order to be affixed with a CE marking which has been awarded to 21 product groups. What are the current circumstances on the Croatian certification market? There are currently around 250 companies that are accredited to
provide certification in various fields. There are not many companies in Europe which could cover all the fields of activity, as such business activity would be extremely expensive and highly demanding technically. Hence, companies opt for specialisation in specific fields of activity in accordance to their interests and the capacity of their laboratories, as well as in line with their expertise. Croatian companies involved in similar activity are under the supervision of the Croatian Accreditation Agency. The Quality Control Institute was founded several years ago in the Croatian Chamber of Economy. What were the reasons behind its establishment? Around 85 active members of the Croatian Chamber of Economy actively participate in the activities of the Institute and we were founded to point out the signifi-
cance of our activity, as well as promote the issues it addresses. We primarily focus on stressing the price of the currently adopted system and the problems we are faced with daily. It is important to highlight that we require extremely professional and qualified staff with experience in production and hence providing such staff is normally a very demanding task. Such people need to be provided with additional education and training. Life-long learning is extremely important, as well as gaining insight into state-of-the-art technologies, innovative methods and contemporary standards, which is highly demanding and costly. Consequently, the Institute advocates these issues before state departments, the Croatian Accreditation Agency and ministries in order to select the most appropriate methods of enhancement of this activity.
What are the mostt ch challenging challe chal cha issues the Instissues the members off tth tute te are facing? ? We are faced with the issues that are currently being addressed throughout the economy. The fall in economic activity is followed by a drop in the gross domestic product and the slump in services, which subsequently results in significantly decreased revenue. Nevertheless, the number of accredited companies has increased over the last several years, since many companies have attempted to increase their effectiveness and revenue through accreditation. We are currently striving for expansion of exports in neighbouring countries. Hence, we are aiming to operate in Italy, Austria, Slovenia, Bosnia and Herzegovina and Serbia. We have the potential to provide the same level of quality, importance or value of services as a company from France, for example, yet our prices are more affordable as our labour costs are considerably lower. The Quality Control Institute has a long tradition. What are your expectations for the future? We were founded in 1957 in order to assist producers to enhance the quality and the safety of their products. We are still operating, albeit against significantly altered technical conditions. We have always been independent and have specialised in issues concerning environmental protection, primarily covering the areas of construction products, health and safety at work, ecology and fire protection. As everyone else, we are currently facing dire conditions. Nevertheless, we believe there is vast potential.
16
Privredni vjesnik Year VII No 240
( €13.8 billion revenue ( €12.1 billion for Altrad Limex in 2013
value of exports
POTENTIAL FOR METALWORKING COMPANIES IN CROATIA
French idea for constructing wheelbarrows Five years ago the company faced severe problems, but currently it is successfully involved in production and exports and thus generating revenue, yet employing almost the same staff as five years ago. Nevertheless, it is currently a successful company, employing 183 people with over 90% of revenue earned through exports Svetozar Sarkanjac he company is involved in production and primarily in metalworking. It operates in Croatia and mainly in Slavonia, producing primarily for the construction sector – concrete mixers and construction wheelbarrows. Against the extremely dire circumstances in the Croatian economy, the company was heading for financial collapse that actually occurred in 2009 when it faced bankruptcy due to long-term liabilities and debts, ineffective company management and the onset of the financial crisis. The Altrad Group, its most severe competitor on the market, with its headquarters in Montpellier, was about to take over the company and subsequently this large multinational company rapidly made a positive impact.
T
Advantages to business grouping As a result of the takeover, the company changed its name to Altrad Limex; it has also changed ownership, yet it still operates from the same production facilities in Slavonia in Croatia, still producing concrete mixers and construction wheelbarrows and employs primarily the same staff as some five years ago, it now employs 183 staff, and over 90% of revenue is earned through exports. The Altrad Group is extremely dynamic and developmentfocused. When in 2010 Limex became a member of Altrad, it ranked 45th in the Altrad group that currently comprises 95
companies with a turnover of some €900 million. It is the largest global producer of concrete mixers and the largest European producer of professional construction wheelbarrows and scaffolding. It anticipates a turnover of around €1 billion during the forthcoming business year (September to August). Concerning Altrad Limex, it generated total revenue of €13.8 million of which €12.1 million
This year the company is anticipating revenue of around €1.1 million related to exports, irrespective of adverse economic circumstances and the continuous decline in construction activity, both in Croatia and throughout the region. This year anticipated total turnover could exceed €14.55 million, with an expected profit
of between 7% and 8%, or €1.1 million. Similarities between Croatia and Ukraine According to Josip Markovac, Managing Director of Altrad Limex, in addition to the above numerical indicators, and an effective organisation, there are many advantages to operating inside a business group. “We obtain important benefits through joint procurement and are provided with significant assistance in sales, primarily through a co-ordinated appearance on the market. Moreover, as a result of our joining the Altrad Group, we have significantly expanded our product range, since, in addition to our own products, we also sell other products by Altrad Group, primarily Belle and Atika products, or products used in the construction industry, gardening and hobby ranges, stressed
Markovac, adding that the company has introduced a quality management system complying with ISO standards, as well as GS and TUV certification for the safe operation of machinery. As a result of a long tradition and primarily due to the recognised high quality products such as construction wheelbarrows, Altrad Limex is present on a large number of markets. “During the previous business year (September 2013 – August 2014), we saw a sales increase across a wide range of markets, from Bulgaria to Romania, as well as Germany, Russia, France and Bosnia and Herzegovina. Simultaneously, we faced the largest drop in sales in Ukraine due to the currently dire circumstances, as well as in Croatia, which is particularly concerning. It is an absolute disaster, it appears as though the construction sector has ceased to exist”, concluded Josip Markovac.
www.privredni.hr Business & Finance Weekly
17
( 1,500
tonnes of honey a year exported by beekeepers
90% less honey produced
Third catastrophic year for beekeepers Almost all feed areas have been ruined and beekeepers claim this is the worst season for a century Goran Gazdek ue to the warm winter, high levels of rainfall during the flowering period, a sudden cold streak, strong winds and cold spring nights as well as rare sunny days throughout the entire bee feeding season, 90% less honey was produced this year compared with the multi-year average. Almost all feed areas are ruined – acacia, chestnut, linden, Jerusalem thorn, oil seed rape and sage produced just 10% of the usual quantities of
D
Exports of honey almost impossible this year honey, and the feed from amorpha fruticosa, meadows and sunflower was halved. Beekeepers say this has been the worst season for a century. To make matters worse, this has been the third year fraught with disasters. The Apis company from Virovitica normally produces 12-15 tonnes of honey annually; this year they produced barely 3 tonnes. “In 30 years of my beekeeping career, this has been the worst season. Ina normal year, acacia feed would manage to compensate for a poor start to the season. Even if acacia froze, everything was compensated for with natural flower feeds or oil seed rape. This time nothing was left,” says Apis Director, Željko Vrbos, also president of the CCE Beekeeper Group – Virovitica County Chamber and president of the Croatian Beekeepers and
Producers Associations. The situation is the same throughout Croatia. Not even the oldest of producers remember a time they had to additionally feed their bees in the middle of the acacia season, as the bees did not gather enough honey to sustain themselves. Bees use some 120 kgs of honey per hive, and since there was no honey this season, they were fed with melted sugar. Conditions were alarming, but a catastrophe was prevented due to several warnings and advice we gave producers, explains Vladimir Bilek, President of the Croatian Beekeeping Committee. Complete failure throughout the region Furthermore, over a thousand bee communities were hit by floods in Slavonia, and equipment as well as honey and other material supplies were ruined. We had a record drought last year, and we concluded nothing worse could happen, but it did. I wonder when it will stop, commented
Zvonimir Pajnić, President of the Beekeeping Committee of Osijek and Baranja. In some areas, the local administration stepped in and helped. Varaždin rebalanced its budget and provided €26,400 for purchasing sugar; Koprivnica and Križevci provided €39,700. Beekeepers are hoping for help from the state and local community since they regard beekeeping as an important branch of agricultural production whose survival should be supported. If beekeepers give up, this will not be good since without bees, other areas of production could perish. There was a time when local communities helped; it is certain they will offer similar this year – it is only a matter of time, Pajnić says. Due to lower temperatures and heavy rain, the honey yield was very low throughout the entire region. Hungary, Romania, Bosnia and Herzegovina as well as Serbia all quoted 80% lower production. Last year, members of Serbian beekeeping associations
collected 3,035 tonnes of acacia honey. This year they collected a miserly 300 tonnes. The damage is estimated at €10.1 million. Serbian beekeepers lost 1,683 hives (valued at €302,000) in the recent floods. Croatian beekeepers export 1,500 tonnes of honey annually, mainly to the European Union. However, this year exports will be almost impossible. One of the biggest exporters, Slavko Švraka from Virovitica, produced only 34 tonnes of honey instead of his usual 80 tonnes. This is 50% less than my usual exports to Germany, so I had to apologise to my German partners. The supply of 40 tonnes saved me, so I managed to preserve exports to Slovenia, Bosnia and Herzegovina and Hungary, Švraka highlights. Honey producers are worried the lack of honey could result in imitations and cheap honey imported from China, so the Croatian Beekeeper’s Association warns and advises the public to read carefully label declarations of origin.
18
Privredni vjesnik Privredni P Year Year VII No 240 Ye
( 56 partners
encompassed for the Our Beautiful Sava project
COLLECTION OF ECO-LINEN AND SOFT FURNISHINGS
Our beautiful Sava... Mina Petra, designer of linen and soft furnishings made from corn husks, draws her inspiration from Croatian tradition, adjusting eco-linen to market needs with her conceptual designs, shapes and measures Sanja Plješa cological awareness has been becoming more evident recently in various areas of life. Following this trend, the well-known Croatian designer Mina Petra Petričec has designed a collection of ecolinen and soft furnishings under the name “Our Beautiful Sava” (Naša lijepa Sava). This unique collection is made from an ecological material of local origin – corn husks. What are corn husks? It is the biological residue from agricultural production, and is collected on corn fields along the Sava River. In these areas, corn husks have a long tradition for the manufacture of bags, purses, slippers and
E
other usable items. The designer of linen and soft furnishings made of corn husks draws her inspiration from Croatian tradition, adjusting the eco-linen to market needs with her conceptual designs, shapes and measures. Her collection of linen and soft furnishings is part of the same group of socially responsible projects that has been promoted for years by the Ministry of Agri-
culture. The goal of the project is to raise awareness of protecting the River Sava, bringing to life its’ tourist and economic potential based on sustainability, and preserving its deep tradition and heritage. The exclusive collection of ecological linen and soft furnishings shows how agricultural goods may be shown in a modern way, said Deputy Minister of Agriculture Snježana Španjol during the presentation of the collection. Preserving the heritage along the Sava River In 2008, the “Our Beautiful Sava” project was developed with Coca-Cola HBC Hrvatska in cooperation with the former Ministry of
Regional Development, Forestry and Water Management as well as the International Sava Basin Commission. Today, the project encompasses over 56 partners from all levels, from state institutions, non-government associations, tourist boards, small-sized companies and individuals. The goal of the collection of eco-linen and soft furnishings is to promote long-term sustainable economic and tourism potential of the Sava River, contribute to the return of local people to the river and preserve its’ rich tradition and heritage, pointed out Igor Ćutuk from Public Affairs & Communications with Coca-Cola HBC Hr-
vatska. It is important to note the project of manufacturing eco-linen will aid employment in the rural arena since the items are handmade.
::: news trade system of the Zagreb Stock Exchange, Podravka acquired 198,209 of Mirna ordinary shares at an individual price of €13.23; this represents 53.86% of the equity capital of Mirna (53.86% of total number of votes in the Mirna main assembly).
Podravka takeover of Mirna The governing council of the Croatian Financial Services Supervisory Agency (HANFA) issued their approval to the Koprivnica company Podravka for publishing a tender for the takeover of Mirna from Rovinj at €5.03 per share. The obligation for publishing the tender for the takeover was imposed on Podravka on 25th August when, after three public auctions held through the
JGL on Indonesian market JGL, the pharmaceutical company from Rijeka, has recently started operating in the Indo-
nesian market. It took some 18 months for the company to sign the contract and export its products. The process involved included preparing documentation for registration, harmonising packaging in the local language, verifying registration, application to the competent bodies and the registration process itself. The registration procedure ended in February, and the first delivery arrived in July. The company’s most international brand Aqua Maris was launched on the Indonesian market during August 2014.
the Central Bureau for Statistics (DZS), this is the biggest fall since March 2013. At a monthly level, the volume of retail busi-
Retail trade in decline The volume of retail business was 2% lower in real terms in July compared with July 2013. The decrease was the same as the year-on-year level to July. According to data provided by
ness also declined according to post seasonal adjusted data (1.7% in real terms and 1.2% in nominal terms). According to the original and unadjusted indexes, retail showed a real annual decrease of 2.7%