study on state asset management in the eu...437 (14.3%) 1 control 99 (3.2%) 97 2 fully public 2,318...
TRANSCRIPT
Written by KPMG and Bocconi University February 2018
Study on State asset management in the EU
Final study report for Pillar 1 – Bulgaria
Contract: ECFIN/187/2016/740792
EUROPEAN COMMISSION
Directorate-General for Economic and Financial Affairs Directorate Fiscal policy and policy mix and Directorate Investment, growth and structural reforms European Commission B-1049 Brussels
Bulgaria
1. PSHS IN THE BULGARIAN ECONOMY
This Country fiche presents a quantitative overview of the mix of equity owned by the
Bulgarian General Government.
The Bulgarian Government has stakes in 3,063 firms1. Overall, the Government has
very tight control of these firms, as more than three quarters of them operate as fully
enterprises (100% owned by the State).
The contribution to the Bulgarian economy is about 4.9% of total weighted assets of the
country. In the Financial sector, the Government is also involved, with a weighted quota
of Shareholders’ funds equal to 16% of the Economy.
Figure 1 Breakdown of PSHs by level of ownership, 2015
Source: KPMG and Bocconi University calculations on Orbis (BvD) database.
1 For Bulgaria, the promotional bank Bulgarian Development Bank was considered for this Study but since it is an entity fully owned by the public administration of the Member State; and Orbis reported consolidated accounts, its holdings were treated as separate PSHs and the promotional bank itself excluded from the sample. See Methodological Notes for more details.
156
436
2,000
2,500
3,000
3,500
1,500
1,000
500
0
n°
of PSH
s
Level of ownership
NO DATA on shareholders
stakes
50(1.6%)
50
159(5.2%)
3
Influential
437(14.3%)
1
Control
99(3.2%)
97 2
Fully public
2,318(75.7%)
2,318
Total
3,063(100%)
3,057
6
0
Minority
UnlistedListed
Country fiches
Bulgaria
4
Figure 2 Breakdown of PSHs with no ownership data by sector, 2015
Source: KPMG and Bocconi University calculations on Orbis (BvD) database.
Figure 3 Breakdown of PSHs’ total assets by level of ownership, 2015, weighted
Source: KPMG and Bocconi University calculations on Orbis (BvD) database.
(1) Values have been weighted by stake(s) owned by the Public sector into PSHs.
Figure 4 Non-financial PSHs contribution to the Bulgarian economy, 2015, weighted
0
1
2
3
4
5
6
7
8
9Nr
20
396
5,000
1,000
3,000
7,000
9,000
11,000
2,000
8,000
6,000
10,000
0
4,000
20(0.2%)
223
Control Influential
557(5.2%)
139
Fully public
10,792(100.0%)
7,793
9,939(92.1%)
22
7,361
2,578
Total
2,976
276(2.6%)
273
Minority
Level of ownership
Weig
hte
dassets
(Mn E
ur)
Non-financial unlistedNon-financial listed Financial unlistedFinancial listed
132,092
8,548
1,538
68
94.1% 5.9%
EmployeesEmployees (% economy)
7,361
161
273
20
95.1% 4.9%
Total assets (Mn Eur)
Total assets (% economy)
Country fiches
Bulgaria
5
Source: KPMG and Bocconi University calculations on Orbis (BvD) database; Eurostat. (1) Values have been weighted by stake(s) owned by the Public sector into PSHs. Value added has been
scaled by GDP (GDP data retrivied from Eurostat). (2) Market capitalization is considered only for listed companies while shareholders’ funds are considered only
for unlisted companies. (3) Market capitalization is reported as of 6th March 2017. (4) For some countries, with respect to the variables “Employees” and “Value added”, the coverage provided
by our Source (Orbis) might not be comprehensive. Furthermore, possible discrepancies between our data and other studies with respect to these specific variables are also likely to be originated by the fact that these variables are presented in this Study on an ownership-weighted basis.
Figure 5 PSHs contribution to the national financial sector, 2015, weighted
2,232
106
31
3
98.2% 1.8%
Revenues (Mn Eur)
Revenues (% economy)
988
5619
1
97.7% 2.3%
Value added (Mn Eur)
Value added (% economy)
699.8% 0.2%
Market cap (Mn Eur)
Market cap (% economy)
3,062
74
199
7
94.6% 5.4%
Shareholders' funds (Mn Eur)
Shareholders' funds (% economy)
169
603
22
98.7% 1.3%
EmployeesEmployees
(% economy)
2,578
396
3
94.5% 5.5%
Total assets (Mn Eur)
Total assets(% economy)
3
17
0.43
99.5% 0.5%
Revenues (Mn Eur)
Revenues(% economy)
1,924
38
2
83.3% 16.7%
Shareholders' fund (Mn Eur)
Shareholders' fund (% economy)
Rest of the Economy PSHs Fully public Control Influential Minority
Rest of the Economy PSHs Fully public Control Influential Minority
Country fiches
Bulgaria
6
Source: KPMG and Bocconi University calculations on Orbis (BvD) database; Eurostat (1) Values have been weighted by stake(s) owned by the Public sector into PSHs. Market capitalization is
reported as of March, 6, 2017. (2) Market capitalization is considered only for listed companies while shareholders’ funds are considered only
for unlisted companies. (3) Market capitalization is reported as of 6th March 2017.
1.1. Distribution of Non-financial PSHs by sector
The most relevant sectors across most measures of economic impact are Transportation
and storage (H), Human health and social work activities (Q). The Water supply and
waste management sector (E), although smaller than the two aforementioned sectors
in terms of weighted assets, represents almost 35% of the entire Industry. Additionally,
this sector generates 40% of the Value added in the Industry as a whole.
Figure 6 Distribution of Non-financial PSHs by sector, 2015, unweighted
0
10
20
30
40
50
60
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,000
% of industryMn EurTotal assets
PSHs Share of PSHs in the industry
0
10
20
30
40
50
60
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
% of industryNr Number of employees
PSHs Share of PSHs in the industry
0
10
20
30
40
50
60
0
100
200
300
400
500
600
700
800
900
% of industryMn EurOperating revenues
PSHs Share of PSHs in the industry
Country fiches
Bulgaria
7
Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (1) A - Agriculture, forestry and fishing; B - Mining and quarrying; C – Manufacturing; D - Electricity, gas,
steam and air conditioning supply; E - Water supply, sewerage, waste management and remediation activities; F – Construction; G - Wholesale and retail trade, repair of motor vehicles and motorcycles; H - Transportation and storage; I - Accommodation and food service activities; J - Information and communication; L - Real estate activities; M - Professional, scientific and technical activities; N - Administrative and support service activities; O - Public administration and defence, compulsory social security; P – Education; Q - Human health and social work activities; R - Arts, entertainment and recreation; S - Other service activities; T - Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use; U - Activities of extraterritorial organisations and bodies
(2) Some sectors are not represented in the graphs above, because of two different, mutually excluding reasons; either because no data on those particular sectors are available in our database; or because there are no PSHs operating in those particular sectors in this country.
(3) Values have been weighted by stake of public ownership of the PSHs.
2. FINANCIAL PERFORMANCE OF PSHS AND MARKET ATTRACTIVENESS
2.1. Non-financial PSHs
At a broader level, Bulgarian PSHs exhibit lower and negative profitability than their
Industry peers, measured in terms of ROA, together with a higher level of Labour costs
as compared to Revenues. Moreover, they exhibit a lower degree of financial leverage
than the Industry.
In terms of market attractiveness, the Transportation (H) sector and Water supply (E)
sector exhibit a positive level of profitability; however, sector E shows a negative growth
rate in Revenues. Please note that for the sector Human health and social work activities
(Q) no reliable historical data are available.
Across key sectors of PSHs activity, a pattern of general underperformance of PSHs
emerges, as compared to the Industry or in the best-case scenario, a performance in-
line with the Industry. In the most relevant sectors and across ownership clusters,
higher costs of Labour (compared, in relative terms, to Revenues) are observed. By
contrast, looking at the degree of leverage, PSHs tend to display levels either
comparable or above the Industry peers.
-10
0
10
20
30
40
50
60
-50
0
50
100
150
200
250
300
350
400
450
% of industryMn EurValue added
PSHs Share of PSHs in the industry
Country fiches
Bulgaria
8
Figure 7 Performance indicators of Non-financial PSHs in comparison to the national
economy, 2011–2015, yearly averages
Source: KPMG and Bocconi University calculations on Orbis (BvD) database
Figure 8 National market attractiveness of Non-financial PSHs, 2015
Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (1) The Figure shows only the top 5 markets with the largest contribution to the Gross Domestic Product in
terms of Value Added generated by PSHs. Values of Value Added have been weighted by stake(s) owned by the Public sector into PSHs.
0
4
8
12
16
20
2011 2012 2013 2014 2015
% EBITDA Margin (%)
-10
-5
0
5
10
2011 2012 2013 2014 2015
% ROA (%)
0
15
30
45
60
2011 2012 2013 2014 2015
%Labour costs as % of
operating revenues
10
20
30
40
50
60
70
2011 2012 2013 2014 2015
% Debt to Equity ratio (%)
Whole economyPSHs with stake ≤ 50% PSHs with stake > 50%
-20,0 -15,0 -10,0 -5,0 0,0 5,0 10,0 15,0 20,0
25
20
0
-10
-5
E - Water supply; sewerage, waste management and remediation activities
H - Transportation and storage
EBITDA margin Industry (%)
CAGR Revenues 2011-2015 (%)
Positive GrowthHigh profitability
Positive GrowthLow profitability
Negative GrowthLow profitability
Negative GrowthHigh profitability The size of the bubbles shows weighted value added
generated by PSHs scaled by GDP
Country fiches
Bulgaria
9
(2) The right upper quadrant identifies sectors with high profitability and positive growth, whereas the sectors with low profitability and negative growth tend to be located further down in the left lower quadrant.
(3) Revenue growth rates have been calculated using the Compound Annual Growth Rate of 2011-2015 values; for Value Added and EBITDA margin the value of 2015. For Revenue growth rates estimation, only companies with turnover higher than 50 Mn € are considered.
(4) Please note that sectors Q, L and A are not shown in Figure 6, as data necessarily to calculate Revenues CAGRs is not available.
Figure 9 Profitability profile of Non-financial PSHs by sector and level of ownership,
2015, unweighted
Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (1) Some PSHs clusters may not be represented in the graphs above, because of two different, mutually excluding reasons; either because no data on those particular clusters are available in our database; or because there are no PSHs belonging to those particular PSHs clusters
Figure 10 Operating efficiency of Non-financial PSHs, 2015, unweighted
Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (1) Some PSHs clusters may not be represented in the graphs above, because of two different, mutually excluding reasons; either because no data on those particular clusters are available in our database; or because there are no PSHs belonging to those particular PSHs clusters
-10
-5
0
5
10
15
20
25
30
H -Transportationand storage
Q - Humanhealth and socialwork activities
E - Water supply;sewerage, wastemanagement and
remediationactivities
L - Real estateactivities
A - Agriculture,forestry and
fishing
% EBITDA Margin (%)
Fully public Control Influential Minority Industry
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
8
H -Transportationand storage
Q - Humanhealth and socialwork activities
E - Watersupply;
sewerage, wastemanagement and
remediationactivities
L - Real estateactivities
A - Agriculture,forestry and
fishing
%ROA (%)
Fully public Control Influential Minority Industry
Country fiches
Bulgaria
10
Figure 11 The leverage of Non-financial PSHs, 2015, unweighted
Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (1) Some PSHs clusters may not be represented in the graphs above, because of two different, mutually
excluding reasons; either because no data on those particular clusters are available in our database; or because there are no PSHs belonging to those particular PSHs clusters
2.2. Financial PSHs
Our dataset includes information only on one PSH in the banking sector, namely,
Municipal Bank Plc, three PSHs operating in the Insurance sector and 14 Other Financial
PSHs. Obviously, the limited coverage does not allow us to carry out any conclusive
benchmarking with respect to the financial and insurance sector as a whole. As far as
Municipal Bank is concerned, in 2015 it showed a higher ROE than the Industry as a
whole, but also a higher quota of Non-performing loans and smaller capitalization. As
far as the PSHs in the Insurance sector are concerned, no clear pattern is to be
identified.
Figure 12 Relevant KPIs for PSHs in the Banking sector in Bulgaria, 2015, unweighted
0
50
100
150
200
250
H -Transportationand storage
Q - Humanhealth and socialwork activities
E - Water supply;sewerage, wastemanagement and
remediationactivities
L - Real estateactivities
A - Agriculture,forestry and
fishing
% Debt to Equity ratio (%)
Fully public Control Influential Minority Industry
Country fiches
Bulgaria
11
Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (1) Some PSHs clusters may not be represented in the graphs above, because of two different, mutually
excluding reasons; either because no data on those particular clusters are available in our database; or because there are no PSHs belonging to those particular PSHs clusters.
Figure 13 Relevant KPIs for PSHs in the Insurance sector, 2015, unweighted,
unweighted
Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (1) Some PSHs clusters may not be represented in the graphs above, because of two different, mutually
excluding reasons; either because no data on those particular clusters are available in our database; or because there are no PSHs belonging to those particular PSHs clusters.
Figure 14 Relevant KPIs for Other financial PSHs, 2015, weighted
Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (1) Some PSHs clusters may not be represented in the graphs above, because of two different, mutually
excluding reasons; either because no data on those particular clusters are available in our database; or because there are no PSHs belonging to those particular PSHs clusters.
-20
-10
0
10
20
30% EBITDA Margin (%)
-8
-6
-4
-2
0
2
4% ROA (%)
0
10
20
30
40
50
60% Labor costs as % of Revenues (%)
0
20
40
60
80% Debt to Equity ratio (%)
IndustryFully public Control Influential Minority
IndustryFully public Control Influential Minority
IndustryFully public Control Influential Minority
Country fiches
Bulgaria
12
3. PUBLIC FINANCE EFFECTS OF PSHS
At an aggregate level, PSHs generate profits which are almost equal to losses. In 2015,
PSHs generated a slightly negative net income worth about 5 Mn Euro. Total assets
account for 28% of the size of the GDP, and the net financial position of PSHs is positive,
with more than 11 Bn Euro of net worth (about 9 Bn Euro considering the stake of public
ownership). The distributed dividends account for 0.2% of GDP, while outstanding
liabilities represent around 12% of the Bulgarian GDP.
Table 1 Public Finance Effects of PSHs, 2015, unweighted
Source: (a) Orbis data (values not weighted for stake of public ownership) and (c) Eurostat. Data retrieved on 19th September 2017. (b) Net Worth value has been weighted by stake(s) owned by the Public sector into PSHs. (d) Total outstanding liabilities of government controlled entities classified outside general government are
considered. (e) Figures in red represent negative numbers.
Country fiches
Bulgaria
Appendix I Bulgaria
Table A Breakdown of PSHs’ total assets by level of ownership, 2015, weighted
Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (1) Values have been weighted by stake(s) owned by the Public sector into PSHs.
Table B Non-financial PSHs contribution to the Bulgarian economy, 2015, weighted
Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (*) Absolute value. (1) Values have been weighted by stake(s) owned by the Public sector into PSHs. Value added has been
scaled by GDP (GDP data retrivied from Eurostat). (2) Market capitalization is considered only for listed companies while shareholders’ funds are considered only
for unlisted companies. Market capitalization is reported as of 6th March 2017. (3) It must be noted that the total number of PSHs (sum of Number of PSHs Table B and Table C) is lower
than the overall number of PSHs reported earlier in Figure 1, due to missing data on PSHs’ shareholders’ stakes.
Table C PSHs contribution to the national financial sector, 2015, weighted
Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (*) Absolute value. (1) Values have been weighted by stake(s) owned by the Public sector into PSHs. Market capitalization is
considered only for listed companies while shareholders’ funds are considered only for unlisted companies. (2) Market capitalization is reported as of 6th March 2017. (3) It must be noted that the total number of PSHs (sum of Number of PSHs Table B and Table C) is lower
than the overall number of PSHs reported earlier in Figure 1, due to missing data on PSHs’ shareholders’ stakes.
Data in Mn Eur
Ownership cluster Unlisted Listed Total Unlisted Listed Total
Fully Public 7,361 - 7,361 2,578 - 2,578
Control 139 22 161 396 - 396
Influential 273 0 273 3 - 3
Minority 20 0 20 0 0 0
Total 7,793 22 7,815 2,976 0 2,976
Non-financial Financial
Non-financial PSHsNumber
of PSHs
of which
listed
Employees
(%)
Total assets
(%)
Revenues
(%)
Value added
(%)
Market cap
(%)
Shareholders'
funds (%)
Fully Public 2,311 0 5.5 4.7 1.7 2.2 0.0 4.9
Control 96 2 0.4 0.1 0.1 0.1 0.2 0.1
Influential 432 1 0.1 0.2 0.0 0.0 0.0 0.3
Minority 156 2 0.0 0.0 0.0 0.0 0.0 0.0
PSHs' share to the total economy 2,995(*) 5(*) 5.9 4.9 1.8 2.3 0.2 5.4
Financial PSHsNumber
of PSHs
of which
listed
Employees
(%)
Total assets
(%)
Revenues
(%)
Market cap
(%)
Shareholders'
funds (%)
Fully Public 7 0 0.3 4.7 0.1 0.0 16.4
Control 3 0 1.0 0.7 0.4 0.0 0.3
Influential 5 0 0.0 0.0 0.0 0.0 0.0
Minority 3 1 0.0 0.0 0.0 0.0 0.0
PSHs' share to the total economy 18(*) 1(*) 1.3 5.5 0.5 0.0 16.7
Table D PSHs distribution by sector, 2015, weighted
Sector
Average
public
ownership
Total
Sector
Value
Added
Year 2015
of
which
listed
Average % Mn Eur% of
sectorNr
% of
sectorMn Eur
% of
sectorMn Eur
% of
sectorMn Eur
A - Agriculture, forestry and fishing 37 0 66.2 90 1.2 2,553 2.7 34 0.8 15 1.3 1,189
B - Mining and quarrying 10 0 54.3 12 0.4 197 0.6 3 0.2 1 0.1 840
C - Manufacturing 86 2 39.0 41 0.1 1,448 0.2 31 0.1 14 0.2 5,825
D - Electricity, gas, steam and air conditioning supply 19 0 45.1 546 3.3 2,440 6.9 278 3.4 11 1.0 1,128
E - Water supply; sewerage, waste management and remediation
activities74 0 89.5 499 34.3 16,185 45.4 272 30.9 144 40.5 357
F - Construction 37 0 58.1 122 1.1 2,693 1.5 86 0.9 -2 -0.1 1,624
G - Wholesale and retail trade; repair of motor vehicles and
motorcycles42 0 64.8 7 0.0 257 0.0 7 0.0 1 0.0 4,285
H - Transportation and storage 57 0 79.7 4,499 39.8 39,772 22.3 663 9.1 421 21.9 1,920
I - Accommodation and food service activities 37 1 66.3 94 1.9 3,226 2.0 31 1.5 10 1.7 599
J - Information and communication 26 0 65.9 181 2.9 212 0.2 6 0.1 9 0.5 1,745
L - Real estate activities 132 1 52.7 386 2.1 1,598 4.1 36 2.0 19 3.7 516
M - Professional, scientific and technical activities 36 0 77.6 304 3.4 1,096 1.0 41 1.2 11 1.2 930
N - Administrative and support service activities 51 1 77.1 119 3.6 1,464 1.1 11 0.6 4 0.8 543
P - Education 5 0 54.6 0 0.1 60 0.4 1 0.5 0 1.1 43
Q - Human health and social work activities 363 0 96.7 731 48.9 63,870 54.4 857 51.6 396 54.5 727
R - Arts, entertainment and recreation 36 0 45.3 162 12.1 610 2.1 8 0.5 4 1.1 336
S - Other service activities 25 0 76.6 20 1.7 381 1.1 3 0.9 2 3.9 61
INDUSTRIAL 1,073 5 74.6 7,813 4.9 138,061 5.8 2,370 1.8 1,063 4.7 22,667
BANKS 1 0 77.7 396 0.7 603 1.0 17 0.4 n.a. n.a. n.a.
INSURANCE 3 0 65.3 0 0.0 0 0.0 0 0.0 n.a. n.a. n.a.
OTHER FINANCIAL INSTITUTIONS(a) 14 1 55.3 2,580 4.7 192 0.3 4 0.1 n.a. n.a. n.a.
Number of
PSHsTotal assets Number of employees Operating revenues Value added
15
Table E Top 20 PSHs by Total assets, 2015, weighted
Source: KPMG and Bocconi University calculations on Orbis (BvD) database (1) Values have been weighted by stake(s) owned by the Public sector into PSHs.
Company name Listed/Unlisted IndustryOwnership
stake (%)
Total assets
(Mn Eur)
BULGARIAN ENERGY HOLDING EAD Unlisted K - Financial and insurance activities 100.0 2,463
NATIONAL RAILWAY INFRASTRUCTURE
COMPANY DFUnlisted H - Transportation and storage 100.0 2,098
METROPOLITEN EAD Unlisted H - Transportation and storage 100.0 1,033
TOPLOFIKATSIA SOFIA EAD Unlisted D - Electricity, gas, steam and air conditioning supply 100.0 527
BULGARIAN PORTS INFRASTRUCTURE DF Unlisted H - Transportation and storage 100.0 487
MUNICIPAL BANK PLC Unlisted K - Financial and insurance activities 77.7 396
BULGARIAN STATE RAILWAYS HOLDING EAD Unlisted M - Professional, scientific and technical activities 100.0 219
STATE ENTERPRISE AIR TRAFFIC SERVICES
AUTHORITY DFUnlisted H - Transportation and storage 100.0 219
NATSIONALEN DVORETS NA KULTURATA
KONGRESEN TSENTAR SOFIA EADUnlisted L - Real estate activities 100.0 186
SOFIA AIRPORT EAD Unlisted H - Transportation and storage 100.0 136
STOLICHEN ELEKTROTRANSPORT EAD Unlisted H - Transportation and storage 100.0 127
NAVIGATION MARITIME BULGARE AD Unlisted J - Information and communication 30.0 120
STATE ENTERPRISE RADIOACTIVE WASTE DF UnlistedE - Water supply; sewerage, waste management and
remediation activities100.0 107
NATSIONALNA SPORTNA BAZA EAD Unlisted R - Arts, entertainment and recreation 100.0 100
NATSIONALEN GARANTSIONEN FOND EAD Unlisted K - Financial and insurance activities 100.0 97
TSENTAR ZA GRADSKA MOBILNOST EAD Unlisted H - Transportation and storage 100.0 88
BULGARIAN POSTS EAD Unlisted H - Transportation and storage 100.0 73
TEREM EAD Unlisted M - Professional, scientific and technical activities 100.0 68
SOFIA TEH PARK AD Unlisted N - Administrative and support service activities 100.0 67
GLAVNO UPRAVLENIE STROITELSTVO I
VAZSTANOVYAVANE EADUnlisted F - Construction 100.0 65