Industry Report Construction of buildings 2018 BULGARIA seenews.com/reports This industry report is part of your subcription access to SeeNews | seenews.com/subscription CONTENTS I. KEY INDICATORS II. INTRODUCTION III. REVENUES IV. EXPENSES V. PROFITABILITY VI. EMPLOYMENT 1 SeeNews Industry Report NUMBER OF COMPANIES IN CONSTRUCTION OF BUILDINGS I. KEY INDICATORS INDUSTRY BY SECTORS SECTOR 2018 2017 2016 The Construction of buildings industry in Bulgaria was CONSTRUCTION OF RESIDENTIAL AND NON- 7,320 7,165 7,139 represented by 8,070 companies at the end of 2018, RESIDENTIAL BUILDINGS compared to 7,855 in the previous year and 7,764 in 2016. DEVELOPMENT OF BUILDING PROJECTS 750 690 625 The industry's net profit amounted to BGN 396,832,000 in 2018. The industry's total revenue was BGN 7,242,353,000 in III. REVENUES 2018, up by 11.92% compared to the previous year. The total revenue in the industry was BGN 7,242,353,000 in The combined costs of the companies in the Construction 2018, BGN 6,470,781,000 in 2017 and 5,219,265,000 in 2016. of buildings industry reached BGN 6,786,455,000 in 2018, up by 11.42% year-on-year. Total revenue Net sales revenue The industry's total revenue makes up 7.32% to the country's Gross domestic product (GDP) in 2018, compared 8,000,000,000 to 6.74% for 2017 and 5.63% in 2016. 7,242,353,000 7,000,000,000 6,470,781,000 A total of 55,895 people were employed in the Construction of buildings industry in 2018, compared to 6,000,000,000 54,245 in 2017 and 50,608 in 2016. 5,219,265,000 5,843,459,000 5,000,000,000 5,406,010,000 Most of the companies in the industry are based in Sofia, followed by Varna and Plovdiv. 4,000,000,000 BGN 4,128,291,000 II. INTRODUCTION 3,000,000,000 In 2018 the companies in the Construction of buildings 2,000,000,000 industry numbered 8,070, distributed in 2 sectors. 1,000,000,000 0 INDUSTRY STRUCTURE BY SECTORS AND NUMBER OF COMPANIES 2016 2017 2018 The companies in the Construction of buildings market of Bulgaria earned combined net sales revenues of BGN 5,843,459,000 in 2018. In annual terms, sales marked a growth of 8.09% compared to 2017. In comparison to 2016 they grew by 41.55%. In 2017 750 sales rose by 30.95% year-on-year. The Construction of buildings industry total revenue make up 7.32% to the country's GDP in 2018, compared to 6.74% for 2017 and 5.63% in 2016. 7,320 Construction of residential and non-residential buildings Development of building projects In 2017 there were a total of 7,855 companies operating in the industry. In 2016 their number totalled 7,764. 2 SeeNews Industry Report Share in GDP 8 INDUSTRY'S NET SALES REVENUE STRUCTURE BY SECTORS 7.32% 7 6.74% 5.63%6 5 4 3.51% 3 96.49% 2 1 0 2016 2017 2018 In 2018 the Construction of buildings industry contributed to GDP BGN 6,135,164,000 in Gross value added (GVA) Construction of residential and non-residential buildings accounting for 3.36% of the total for the country's economy. Development of building projects In the previous year, the industry's GVA amounted BGN 5,428,316,000, accounting for 3.19% of the total for the The highest growth, of 10.35%, was recorded by Construction country in 2017. In 2016 the GVA of the Construction of of residential and non-residential buildings, while buildings was BGN 4,266,210,000, or 2.80% of the GVA for Development of building projects registered the sharpest the country's economy. decline, of 30.85%. GVA BY SECTORS TOP COMPANIES' REVENUE BY SECTORS SEGMENT COMPANY TOTAL REVENUE NET SALES RANK SECTOR BGN SHARE OF THE (BGN) REVENUE (BGN) COUNTRY'S GVA (%) CONSTRUCTION OF RESIDENTIAL AND NON-RESIDENTIAL BUILDINGS 1 CONSTRUCTION OF RESIDENTIAL AND 5,814,798,000 3.18 GLAVBOLGARSTROY AD 153,635,000 131,217,000 NON-RESIDENTIAL BUILDINGS MIKS CONSTRUCTION OOD 125,837,000 123,239,000 2 DEVELOPMENT OF BUILDING PROJECTS 320,366,000 0.18 PLANEX EOOD 84,970,000 71,518,000 DEVELOPMENT OF BUILDING PROJECTS PLANEX INVEST OOD 22,722,000 13,731,000 We expect, based on the trend in the last three years, the total revenue of the Construction of buildings industry to change YAVOR AD 15,954,000 4,765,000 at a compound annual growth rate (CAGR) of 17.80% in 2019. SOFIA OFFICE CENTRE EOOD 15,382,000 22,000 Construction of residential and non-residential buildings contributed net sales revenue of BGN 5,638,449,000 or The top 10 companies in terms of total revenue in 96.49% of the total net sales in the industry, and sector Construction of buildings accounted for 10.77% of the Development of building projects - BGN 205,010,000 (3.51%). industry's total in 2018, 11.04% in 2017 and 11.59% in 2016. TOP 10 COMPANIES BY TOTAL AND NET SALES REVENUE IN THE INDUSTRY RANK COMPANY TOTAL REVENUE NET SALE (BGN) REVENUE (BGN) 1 GLAVBOLGARSTROY AD 153,635,000 131,217,000 2 MIKS CONSTRUCTION OOD 125,837,000 123,239,000 3 PLANEX EOOD 84,970,000 71,518,000 4 VDH AD 81,922,000 73,137,000 5 MARKAN EOOD 76,830,000 76,407,000 6 DZHI PI BILD DZZD 67,781,000 63,708,000 7 KOMFORT OOD 54,495,000 51,843,000 8 KALISTRATOV GRUP OOD 45,925,000 41,723,000 9 PIPE SYSTEM AD 44,495,000 44,322,000 10 ARTEKS ENGINEERING AD 44,315,000 36,508,000 The total revenues of the top 10 companies in the 3 SeeNews Industry Report Construction of buildings were 0.79% of GDP in 2018, compared to 0.74% for 2017 and 0.65% in 2016. TOP 10 COMPANIES BY TOTAL REVENUE IN THE INDUSTRY DEVELOPMENT OF BUILDING PROJECTS WERE: The top 10 by assets in the Construction of buildings market COMPANY BGN made up BGN 282,811,000, or 4.84% of the total net sales PLANEX INVEST OOD 22,722,000 revenue. YAVOR AD 15,954,000 SOFIA OFFICE CENTRE EOOD 15,382,000 TOP 10 BY TOTAL ASSETS IN THE INDUSTRY TECHNOIMPORTEXPORT AD 13,530,000 RANK COMPANY BGN EDELWEISS - 3 BOYANA EOOD 12,841,000 1 GLAVBOLGARSTROY AD 173,823,000 HAS INVEST EAD 11,334,000 2 PONSSTROJINJENERING AD 117,335,000 HUS INVEST SOFIA EOOD 11,118,000 3 ARTEKS ENGINEERING AD 101,480,000 BLD MLADOST AD 10,686,000 4 GLAVNO UPRAVLENIE STROITELSTVO I 87,254,000 LAGOUSTRO STVENI STROEJI EOOD 9,667,000 VAZSTANOVYAVANE EAD VEB ELEMENTBAU GMBH - KLON BULGARIA KCHT 9,364,000 5 ULTRASTROY EOOD 86,252,000 6 VICTORIA GROUP VM EAD 82,556,000 7 PLANEX EOOD 82,375,000 The 10 largest companies in terms of total revenue in sector 8 EVROBILD OOD 80,892,000 Development of building projects earned total revenue of 9 TECHNOEXPORTSTROY EAD 78,184,000 BGN 132,598,000 and accounted for 1.83% of the industry's 10 GK BULGARIA EAD 77,519,000 total revenue. TOP 10 COMPANIES WITH HIGHEST ANNUAL GROWTH IN OPERATING REVENUE IN CONSTRUCTION OF BUILDINGS IV. EXPENSES RANK COMPANY Y/Y GROWTH 1 BUILD INVEST BULGARIA AD 483100.00% The combined costs of the companies in the Construction of 2 KAMENITSA HIL REZIDENSIS AD 204900.00 buildings industry reached BGN 6,786,455,000 in 2018. % 3 BULBILD BG EOOD 179250.00% 4 KIS INVEST 3 OOD 175600.00% Total Expenses 5 ASAMBLEYA PARK DIVELAPMANT EOOD 152500.00% Operational expenses 6 KARIZMA CH OOD 147600.00% 7,000,000,000 6,786,455,000 7 TARAMEKS BILDING INVEST GRUP EOOD 145700.00% 8 ATG INVEST OOD 95000.00% 6,091,108,000 6,606,833,000 6,000,000,000 9 SOFIA BILD GRUP OOD 83716.67% 10 ATA DESIGN SMLTD EOOD 71900.00% 5,892,078,000 5,006,975,000 5,000,000,000 4,807,159,000 TOP 10 COMPANIES BY TOTAL REVENUE IN THE INDUSTRY CONSTRUCTION OF RESIDENTIAL AND NON-RESIDENTIAL 4,000,000,000 BUILDINGS WERE: COMPANY BGN BGN 3,000,000,000 GLAVBOLGARSTROY AD 153,635,000 MIKS CONSTRUCTION OOD 125,837,000 PLANEX EOOD 84,970,000 2,000,000,000 VDH AD 81,922,000 MARKAN EOOD 76,830,000 1,000,000,000 DZHI PI BILD DZZD 67,781,000 KOMFORT OOD 54,495,000 KALISTRATOV GRUP OOD 45,925,000 0 PIPE SYSTEM AD 44,495,000 2016 2017 2018 ARTEKS ENGINEERING AD 44,315,000 In annual terms, total expenses increased by 11.42% compared to 2017 and rose by 35.54% in comparison to 2016. The 10 largest companies in terms of total revenue in sector Construction of residential and non-residential buildings The total operating expenses of the companies in the earned total revenue of BGN 780,205,000 and accounted for Construction of buildings industry were BGN 6,606,833,000 10.77% of the industry's total revenue. in 2018. Operating costs went up by 12.13% compared with the previous year and went up by 37.44% when compared to 2016. We expect, based on the trend in the last three years, the total costs of the Construction of buildings industry to change at a compound annual growth rate (CAGR) of 16.42% in 2019.