As in previous years, the companies included in this year’s edition were selected primarily on the basis of their Hungarian affiliation, Hungarian ownership and the companies’ success, innovative solutions, and exemplary stories. We looked for companies where business decisions and key strategic decisions are made here in Hungary. What was important was the sales revenue, the profit-generating capacity, the growth achieved so far and the vision of the managers for the coming years.
A total of 9,075 employees are employed by this year’s Fifty, predominantly in the central region, with 6 companies based in Pest County and 26 in Budapest. In terms of age, the majority of companies (16) are over 25 years old and (11) between 10 and 15 years old. Only two of this year’s Fifty are less than 5 years old.
Information technology – IT
The information technology sector in Hungary accounts for 4.9% of Hungary’s GDP and plays a significant role in the economy. According to data issued by the Hungarian Central Statistical Office, IT was one of the fastest-growing industries in 2020, boosted by the rapid digitalisation brought about by the coronavirus pandemic. This year’s edition features ten IT companies. Many of these companies are involved in computer programming and software development. Foreign multinational companies like to work with Hungarian software development companies, especially if they have access to fresh graduates and can therefore provide a high quality service at a lower price point. Examples of companies using this model include the fast-growing AutSoft Zrt., which is in “symbiosis” with the Budapest University of Technology, or InnovITech Kft., which attracts young talent through close university collaborations. This category includes Bravogroup, which trades in information tools and office equipment, and Tigra Computer- és Irodatechnikai Kft. The combined sales revenue of the companies in this category in this year’s edition is HUF 130 billion and their combined EBITDA is HUF 7.4 billion.
In Hungary, the construction sector accounts for 5.7% of total annual GDP. This year’s Fifty includes 9 construction companies with a combined sales revenue of HUF 99.6 billion and a combined EBITDA of HUF 7.6 billion in 2020. These construction, companies include a number of residential and non-residential building contractors such as Bayer Construct, HUNÉP and DVM Group, which have been involved in the construction of many iconic buildings in Budapest and in the country, such as the Puskás Arena, the Nagyerdei Stadium in Debrecen and the Szervita Square Building. Besides them, other construction companies were also included this year’s edition, such as Laki Zrt., an architectural sculpting company, UNITEF’83 Zrt., an engineering service provider, and Orha Művek Kft., a manufacturer of metal structures for industrial halls. The increase in construction material prices brought about by the coronavirus pandemic has not significantly affected these construction companies so far in 2020, partly because some companies cover the entire supply chain themselves, and partly because the market has adjusted to high prices.
Four of the fifty companies are active in the food industry, with a wide variety of specific products/services. The companies with the highest sales revenues were Halker (HUF 17 billion) and Matusz-Vad Kft. (HUF 14 billion), which were originally engaged in the processing of fish and game meat. They are followed by Biopont Kft. (HUF 2.1 billion), which produces other food products (organic products for supermarket chains), and Foodbox and Veresi Paradicsom (HUF 1.5 billion and HUF 1.4 billion, respectively), which produce ready meals and vegetables. In this category, the coronavirus pandemic had a mixed impact on sales revenues but, overall, the sales revenues of companies decreased. This is mainly due to the closure of restaurants and the temporary cessation of tourism during the pandemic restrictions.
This year, three trading companies have been included in the publication, all of them trading in different types of products in Hungary and abroad. Unic Spot Kft. deals in imported products in Hungary and Romania, while Meta-Vulk Kft. exports Hungarian products to many countries around the world. ADIX-Trade is engaged in the wholesale of metal goods and heating equipment. The combined sales revenue of these three companies is HUF 5 billion, and their combined EBITDA is 10% of their combined sales revenue. This represents a slight decrease compared to 2019.
Health spending increased significantly in 2020 due to the coronavirus pandemic, with demand for private health services particularly high. Three of the companies featured in this year’s edition work in the healthcare sector. Two of these, Norma Instruments and Omixon Biocomputing, are involved in healthcare research and development, and one company assembles and sells X-ray machines. This Hungarian company is Control-X Medical; its X-ray machines can now be found on all continents, competing with major global brands. The combined sales revenue of these companies among this year’s Fifty amounted to HUF 6.5 billion and their EBIDTA to HUF 1.3 billion in 2020.
Employment and staffing
Although the number of people employed by this year’s Fifty is down on last year, it is still remarkable, with a total of 9,075 employees. This also shows their positive contribution to the Hungarian economy.
Although the majority of companies either have a long history (60%) or the founders are over retirement age (88%), most companies have tackled intergenerational succession, often within the owners’ families. By generations, there are 7 companies with owners who belong to the so-called “baby boomer” generation, 37 companies whose founders represent Generation X and 6 companies whose founders belong to Generation Y.
Financing and growth strategies
Most of this year’s Fifty started or still operate as family busi- nesses, which are characterised by a conservative financing policy. This is also the case for this year’s Fifty, most of which are still developing from their own resources, with minimal investment loans or public subsidies. The median equity value of the companies is HUF 1 billion, which indicates that they are on a solid footing.
The median of their liabilities is over HUF 1.3 billion. At the same time, there are also some players this year which, in addition to traditional sources, have chosen venture capital (Omixon, Norma, Futurmed) or even bond issues (e.g. DVM, GVC, Infogroup) to realise their growth plans.
Of course, the impact of the coronavirus pandemic on the business environment and growth prospects of individual companies has been very different. Generally speaking, the pandemic did not affect most of these companies in terms of sales revenue or market, and the most of them did not have to lay off staff either. As a result of the digital transformation that has accompanied the pandemic, IT companies have seen a significant increase in sales revenue, up 7.9% in total, equivalent to HUF 10 billion. Chemical companies were able to increase their sales revenues the most amid the coronavirus pandemic, as demand for disinfectants increased significantly. Many food companies suffered a drop in sales revenue due to the shutdown of tourism and restaurants. However, there were also companies that were not affected by the crisis. These companies engage in distribution, the manufacture of diagnostic equipment and the production of steel structures.