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WHILE MUCH OF the attention of investment bankers and fund managers involved in emerging Europe tends to concentrate on the country that dominates the region, Russia, it is businesses from nations closer to the heart of Europe that take many of the lead slots in Euromoney’s latest survey of the best-managed companies in central & eastern Europe. Leading firms from the most developed countries in the region – such as Poland, the Czech Republic, Hungary and Turkey – grasped the need for advanced investor relations strategies many years ago, and these have clearly been reaping some benefits.
The top-ranked company in this year’s survey is utility CEZ, which according to our poll of 63 analysts covering the region, is not only the best-managed company in CEE but also scores as having the highest standard of corporate governance, the most convincing and coherent strategy and the most transparent accounts.
It’s something of a clean sweep for the Czech-based group, whose chairman and chief executive, Martin Roman, appears well on the way to achieving his goal of making CEZ “the leader in power markets of central and southeast Europe”.
CEZ already ranks among the 10 biggest power companies in the whole of continental Europe. It has the eighth-largest number of customers, at 9.3 million, and has a market capitalization of about €18 billion. It has the highest ebitda margin of any of the top-10 European power companies, at 44%, and the lowest leverage level at just 1.5 times net debt/ebitda, compared with an industry average of 2.9 times.
CEZ’s biggest market remains its homeland, the Czech Republic, where it has a 74% market share of generation. But it has also built energy assets in Poland, Albania, Romania, Turkey and Bulgaria, and trades in most of the countries in the region. It has also established a small foothold in the German market.
Leading Hungarian companies such as OTP Bank and utility MOL maintain their usual strong showing in the survey, despite some of the financial difficulties of the country as a whole.
Polish oil refiner PKN Orlen is one of the big risers in the survey, moving into the top five overall. Romania’s Petrom, also from the oil and gas sector, is voted the most improved company.
Russian companies figure strongly but it’s not the biggest state or oligarch-owned businesses that find favour with analysts. Steel producer NLMK, led by chairman Alexey Lapshin, makes a big play of its clear management and governance structure, as well as its impressive financial performance, and secures second place overall in the survey. And just to prove Russia is not all about energy businesses, Magnit, the country’s largest food retailer, breaks into the top five companies overall.
