EY used its knowledge of the field that it has acquired over the past 29 years as well as its network in Hungary to assist the Budapest Stock Exchange in selecting these fifty companies and compiling the publication.

The following is a brief analysis of the group of this year’s fifty companies. We explore both their common and specific characteristics, as the latter are at least as important as the former. One of the most important things that can be learned from the histories of these companies is that there are many ways to success, as is reflected in the diversity of the BSE50 2018 companies.

The comparison with last year’s publication revealed two key changes.

  • One is that “young” businesses founded around or after 2010 played a more significant role this year. This is well demonstrated by the fact that the number of new-generation, medium-sized businesses is growing, and they are getting stronger and stronger alongside successful twenty- or thirty-year-old companies. These companies are usually characterised by dynamic growth and conscious business development.
  • Last year’s selection focused on the food industry, which was of special significance in Hungary. While this year’s list also includes many companies from this sector, the most represented industry is IT, which is also a key sector in the economy.

This year’s Fifty in the Hungarian economy

elemzes1The combined turnover of this year’s Fifty was HUF 437 billion in 2017. These companies produced this considerable value with the contribution of a total of 7,687 employees.

The median turnover of the BSE50 2018 companies was HUF 3.5 billion in the last year. Data from Opten Company Information Services show that the midpoint value of the turnover of Hungarian companies with a turnover greater than HUF 1 billion is HUF 2.1 billion. Profitability (EBITDA margin, 9% in 2017) of this year’s Fifty is equal to the average profitability of Hungarian companies with a turnover over HUF 1 billion.

In recent years, the growth rate of the BSE50 companies was higher than the growth rate of the economy and the average growth rate of companies with a turnover greater than HUF 1 billion. The midpoint value of their turnover increased by 14% between 2015 and 2016 and by 10% between 2016 and 2017. Their average EBIDTA, i.e. profits before amortisation and interest, increased by 20% and 8%, respectively. Their export turnover increased at an even higher rate: Exports generated by the BSE50 companies increased by more than 50% between 2015 and 2016.


Small, medium, and large enterprises

This year, we had the same goal as last year: we wanted to present successful Hungarian companies in the broadest possible spectrum of company size. Accordingly, we have included small, medium, and large enterprises.

The largest group consists of medium-sized enterprises with a turnover higher than HUF 3 billion. (This category also includes commercial and manufacturing companies with a turnover of a big corporation but with an employee headcount of less than 300.)

This year’s brochure shows a considerable number of small businesses (with a turnover under HUF 3 billion), but it also has examples of successful corporations from the more classical big company model. The latter category has exemplary, privately owned Hungarian companies which are key market players on the international scene as well (HELL ENERGY, KÉSZ Group, Tungsram Group).

New and well-established enterprises

While in the last two years, the majority of businesses were ones that were started at the time of the political changes of the early 1990s, this year’s BSE50 has more of the younger generations. These companies were founded in or after 2010; however, such a short period has proved to be enough for sustainable success. Such businesses are, for instance, CodeCool, BlackBelt, W.UP, CyBERG Corp. and AImotive.

In addition to them, BSE50 also includes start-ups which are most likely to step on the path of dynamic growth in the coming years (Turbine and Barion Payment).

What these businesses have in common is that they have always had the goal to appear on the international scene and they are actively using the opportunities offered by the capital market.

Medium-sized businesses that are now 25-30 years old are still a significant group. They have typically always been family businesses and were founded after the political changes of the early 1990s (a good example of this category are Marso and Regio). The average age of this year’s Fifty is 17 years.


Represented industries

The composition analysis in terms of industry of these successful Hungarian companies shows that the number of companies in manufacturing (13), IT (11), trade (9), and the provision of services (11) was virtually unchanged in the 2018 sample. This year’s BSE50 includes six successful businesses from the food processing sector.

As we have already mentioned above, the sector which was in the spotlight last year was the food industry, as, on the one hand, it determines the success of both the Hungarian economy and exports, and, on the other hand, Hungarian medium-sized Hungarian companies play a key role within it. This year focuses on IT, because it is a key determinant of the future of the country and is also characterised by small and medium-sized Hungarian companies.


Geographical distribution

Similarly to last year’s brochure, this year’s Fifty also confirms that Budapest is the centre of the Hungarian economy, as it is home to half of the businesses featured.

The other half of these exemplary companies are, however, scattered all over the country. This year’s Fifty are from eight counties in Hungary. Pest County is represented by nine companies, but we can also find successful businesses in Bács-Kiskun, Borsod-Abaúj-Zemplén, Fejér, Győr-Moson-Sopron, Hajdú-Bihar, Szabolcs-Szatmár-Bereg and Veszprém counties as well.

The interviews with the company leaders revealed that many mangers and owners regard social responsibility (Julius-K9, Panzi-Pet, Weinberg ‘93) as a priority, as well as the development up of their immediate environment (Star-Plus). Especially in the case of companies active in smaller towns, the economic, cultural and community-shaping impact of businesses on their immediate environment is clearly visible.


Information economy is a field in which Hungary is a front runner in the region. Since this sector is in the centre of attention among investors, getting the necessary capital has become easier in recent years. As digitalisation becomes ubiquitous in practically all industries, the significance of this sector in Hungary’s national economy is expected to continue increasing.

The eleven IT companies among this year’s Fifty are very different from each other, representing the equally broad range of activities in their sector.

Among them is a company (CodeCool) engaged in IT education – an effort to tackle the shortage of skilled professionals in Hungary, while others offer various business IT solutions. “Solution” seems to be the key word appearing most often in the descriptions of the diverse activities of the IT companies among this year’s Fifty. The companies offering business solutions include an IT security specialist (TR Consult), a corporate software solutions specialist (BlackBelt), industrial automation specialists (Gamma Digital, Transmoduls), a specialist of customer service systems (TcT) and a specialist of business protection network services (Gloster). As these companies offer their products and solutions to business clients, they are known primarily amongst their peers.

Similarly to the majority of Hungarian IT companies, the primary market of the IT companies among this year’s Fifty is also Hungary, but some of them have also dramatically increased their international presence in recent years (BlackBelt, Gamma Digital).

In addition, some of the IT companies among this year’s Fifty specialise in emerging key fields like fintech and artificial intelligence.

Continuous development in financial technologies has made it possible for these businesses to grow dynamically with their innovative solutions from one year to the next and to redefine banking both on the Hungarian and the international markets (Barion Payment, Dorsum, W.UP).

Similarly, companies engaged in artificial intelligence are getting more and more attention, as they continue their stellar performance in the automotive and pharmaceutical industries (AImotive, Turbine). These companies are more active on international markets, and have only become more widely known in Hungary in recent years. Due to the nature of the industry and the market, almost the entire turnover of such businesses comes from outside Hungary.


Among this year’s Fifty are many with a significant volume of exports: AImotive, HELL ENERGY Magyarország Kft., Julius-K9, Megaholz, Olimpia Kerékpárgyártó, Star-Plus and Wellis. The combined export turnover of the BSE50 companies was HUF 127 billion in 2017, meaning that 30% of the total sales turnover was from exports.


It is obvious that in an open economy such as Hungary’s, companies that can sell their goods and services abroad are immensely important. It is also no coincidence that many companies among this year’s Fifty have already stepped outside the borders of Hungary.

For a company to be successful on international markets as well is a great leap. However, it is rarely mentioned that this exposes companies not only to new markets, but also to new competitors, and often a new culture as well.

Many companies achieve results in market segments that only exist on the global scale – this is the case for the AI companies AImotive and Turbine.

Large exporters are those successful companies, well-known in Hungary as well, which can only achieve economics of scale with intensive exporting and professional marketing. An example is HELL ENERGY, whose main sales strategy is becoming the market leader on foreign markets as well, as it currently exports to fifty countries and is the market leader in nine of them. Wellis works together with 400 foreign resellers, primarily in European countries. Another important example is Olimpia Kerékpárgyártó, which exports 85% of the bicycles it manufactures each year. Meanwhile, the world-famous dog leashes of Julius-K9 can now be found in almost every country.


Family businesses and “professional entrepreneurs”

Reading the reports of BSE50 2018 companies, one cannot ignore the wide range of stories and roads to success. While there are many family businesses, there are also some owners who are so-called professional entrepreneurs who turned many companies into a success over the past decades. Another interesting variation is presented by businesses that combine several companies with the same profile and that coordinate their purchasing and marketing.

Some are growing steadily and continuously, while still others have taken their first steps on the path to success after a minor or major crisis. This year’s fifty stories include examples of where a successful entrepreneur bought a company that faced some challenges, then put it into the track of growth (Cerbona, Helia-D).

Although the companies we have analysed focus on organic growth, the number of companies having already made acquisitions of varying sizes is surprisingly high. Examples of this are Star-Plus, Gerbeaud, Roland Divatház, Protecta, TR Consult, or Gloster. In many cases, current owners have acquired the company by buying out the previous owners (DM-KER, Mobilbox, or Tungsram).

Nevertheless, the most common type of medium-sized companies is the family business. There are approximately twenty family businesses among this year’s Fifty. One of their main characteristics is that leaving a stable and sustainably operating company to the next generation is a priority for them, i.e. they mostly plan for the medium and long term. We consider family businesses to be those where one or more family members of the main owner work with the company.


Capital raising

Most of the small and medium-sized enterprises try to rely primarily on own funds. Their owners show a tangible caution when it comes to the use of external funds, whether it is credit or comes from external investors. This year’s Fifty has many companies whose made it a priority to repay their loans. The goal of many owners and company managers is to keep the family character of the business; hence, retaining family ownership is at the core of their long-term strategy. There are, however, many examples among this year’s Fifty of businesses that managed to take a new track after capital raising, and that have gone on to collaborate harmoniously with their investors.

Raising capital on the capital market is an option that only a few small and medium sized enterprises have used so far; however, many companies are expected to take this option in the coming years due to investors’ demand and the efforts of the BSE to make capital more easily available. There are some among this year’s Fifty who (Megakrán, CyBERG Corp.) are making concerted efforts to prepare for the test of the capital market, as they have begun to prepare themselves for a stock market launch.

Preparation for the stock exchange

An initial public offering (IPO) is one of the most important market tools for getting capital. The global value of these offerings in the first six months of 2018 exceeded their total value since 2015. The international survey of EY shows that there were 660 IPOs in the first six months of this year, and the total value of the capital involved increased by 5%, to USD 94.3 billion.

The positive macroeconomic outlook, the capital requirements of the investment plans of the companies and the market-development measures of Budapest Stock Exchange are making this globally proven way of capital raising available on the Hungarian capital market as well.

In comparison with alternative capital raising, an IPO offers many advantages. The most important ones are:

  • the issuing company gains access to local and international capital markets through the issue of bonds or shares;
  • the option of an additional (second) capital raising through an already known platform;
  • the scope of potential investors becomes wider, because the market of shares is liquid, in addition to the daily valuation of shares;
  • the brand becomes better known and more prestigious among customers;
  • acquisitions of the issuing company may also be executed by paying with own shares;
  • the higher degree of transparency and more frequent information sharing commonly result in higher valuation than in the case of private transactions;
  • the introduction of share-buying and option programmes can strengthen the commitment to the company of key managers and employees.

The first and most important prerequisite for convincing investors is that the company has a firm financial base and a strong plan for the years to come. In addition to finances, project-specific and unique factors also affect a company’s ability to go public. The management’s role and the right business strategy should be emphasised. However, success often depends on a multitude of details, such as how well-prepared the founders are for meetings with investors, when they often have only a few minutes to convince them to invest.

If a company meets these requirements and the timing is good, then it can secure capitalisation on the stock exchange for many years ahead. Greater attention and market recognition can strengthen its brand as an employer. Accordingly, a successful IPO can help Hungarian medium-sized enterprises to keep talent, as well as gain access to and implement new technologies.

At the same time, however, being prepared to enter the public stock market is a complex challenge for a privately held company. Going public is a process: preparation should be started at an early stage, and should include the examination of how the business, organisation, or company culture need to be changed.

We believe that some of the BSE50 companies could be already ready to go public or need only a short time to do so.