technology fast 50 technology, media & telecommunications industry now is the time when winners...

Technology Fast 50

Technology, Media & Telecommunications Industry

Now is the time when winners stand out

2 © 2009 Deloitte Central Europe

Technology Fast 50 Introduction

• The Technology Fast 50 competition focuses on the technology industry, identifying the fastest growing companies.

• The goal of the program is to recognise and draw attention to these fast-growing technology companies in Central Europe.

• This project differentiates Deloitte from its competitors as no other Big 4 firm has been able to introduce a similar or competitive program.

CE Technology Fast 50


Technology Fast 50 Background

• The Deloitte Technology Fast 50 program was started in Silicon Valley, California in 1995 and has expanded into a Technology Fast 500 in North America, Asia-Pacific and Europe.

• This program operates independently in 17 countries outside of the United States and in one region - Central Europe.

• The Central European Fast 50 ranks fast-growing technology companies in the Czech Republic, Hungary, Latvia, Estonia, Poland, Slovakia, Bulgaria, Romania, Serbia, Croatia, Slovenia, Bosnia and Herzegovina and Lithuania.

• We are now announcing the results of the 10th Deloitte Technology Fast 50 program in Central Europe which had the highest growth rate* of the ranked companies in history of the program.

* Growth rate is calculated in local currency. Growth rate is calculated based on revenue growth between 2004 and 2008.



Technology Fast 500 EMEA

• The Technology Fast 500 programs are organised in three regions – North America, Asia/Pacific and EMEA. The cluster of Central Europe falls under the EMEA region and companies registering for the CE competition are automatically registered for the EMEA ranking.

• The Deloitte Technology Fast 500 EMEA 2009 awards ceremony take place on Tuesday, 24 November 2009 at Stanford Bridge, Chelsea Football Club, London (http://bluewing.chelseafc.com)

• The invitations to companies that have made the Fast 500 EMEA ranking will be sent out by the Fast 500 EMEA management team during October.


http://bluewing.chelseafc.com/


2009 CriteriaMain Category: Technology Fast 50• Entrants must have been operating for a minimum of five years, with turnover of at least

50,000 Euros* from 2004 to 2008 (Revenue must be accounted on consistent basis throughout the period of 5 years).

• Entrants can be public or private companies and be located in Central Europe

• The major business of an entrant must be based on technology innovations developed or owned by an entrant

• Subsidiaries of strategic (industry) investors/parents do not qualify.

* Exchange rates are based on annual average given by the central bank of the company’s respective national currency



2009 CriteriaSubcategory: The Rising Stars Category• This Technology Fast 50 subcategory is to recognise technology companies that are quickly

making a name for themselves.

• They have meet the same criteria as the main category companies with the exception of lower base year revenues and less years in operation, ie for Rising Stars the criteria are:

• Having been in business for less than five years, but at least three years. For the 2009 competition, 2006-2008

• Having base-year operating revenues of at least EUR 30,000*

* Exchange rates are based on annual average given by the central bank of the company’s respective national currency



2009 CriteriaSubcategory: The Big 5 Category (new category)• This Technology Fast 50 subcategory is to recognise technology companies that are still

growing fast but are too large to compete for the top spots

• They have meet the same criteria as the main category companies with the exception of the 2008 revenues which:

• Have to exceed EUR 25 million* in the 2008 fiscal year.

* Exchange rates are based on annual average given by the central bank of the company’s reporting currency


Results


Ranking Outcome

Percentage of firms in the Fast 50 ranking by business sector

Business sector 2004 2005 2006 2007 2008 2009

Software 67% 54% 58% 48% 48% 52%

Internet 17% 28% 26% 37% 36% 32%

Communications/Networking 13% 8% 4% 2% 6% 12%

Semiconductor Equipment 3% 4% 8% 4% 6% 2%

Computers/Peripherals - 6% 4% 6% 2% 2%

Life Sciences - - - 2% 2% -

• Software companies strived again throughout 2008, beating our expectations.

• However, three out of the four fastest growing companies belong to the Internet business sector indicating that the Internet sector has very high growth potential. Last year, three of out of the top four were software companies.

• Internet companies posted higher 2008 revenue on average; EUR 8.7m vs. EUR 7.5m

• This year’s Fast 50 total revenue is down from EUR 497m in the previous year to EUR 434m, a decrease of 13%.

• Last year’s record average growth (arithmetic average of all the growth rates) of 1,271% was not surpassed as the average revenue growth this year was 933%, the third highest in the 10 year history of the program.



Ranking Outcome

Percentage of firms in the Fast 50 ranking by location

Country 2004 2005 2006 2007 2008 2009

Hungary 3% 8% 14% 22% 28% 22%

Poland 27% 40% 28% 18% 20% 18%

Czech Republic 33% 30% 34% 34% 26% 16%

Romania - - - - 6% 12%

Slovakia 23% 20% 20% 18% 8% 8%

Bulgaria - - - 6% 6% 8%

Croatia - - - - 4% 6%

Serbia - - - - 2% 6%

Estonia - - - - 2% 2%

Lithuania - - - - - 2%

• Hungary defended its number one spot from 2008

• Both Romania and Serbia gained significantly

• The Fast 50 ranking is becoming more diverse and therefore segmented

• Although Slovakia is loosing presence in the ranking, Slovakian companies have the highest average revenue, almost EUR 25m (in fiscal year 2008); for comparison, Hungary the country with highest share of companies recorded revenue EUR 7.5m

• Most companies in the ranking are headquartered in Budapest (10), Prague (8) and Warsaw (6)



Fast 50 Ranking1st – 20th place

Rank Company Country Sector Growth

1 Netmedia S.A. Poland Internet 7210%

2 TeamNet International S.A. Romania Software 3317%

3 Kompan.pl Sp. z o.o. Poland Internet 2411%

4 Sunrise System sp. z o.o. Poland Internet 2364%

5 Telerik Corp. Bulgaria Software 2327%

6 Investor.BG AD Bulgaria Internet 2130%

7 Agito S.A. Poland Internet 1744%

8 AROBS Transilvania Software S.R.L. Romania Software 1663%

9 AITIA International Informatics, Inc. Hungary Software 1399%

10 EXECOM d.o.o. Serbia Software 1127%

11 ESET, spol. s r.o. Slovak Republic Software 951%

12 SOITRON, a.s. Slovak Republic Telecommunications/Networking 880%

13 Grupa Pracuj Sp. z o.o. Poland Internet 864%

14 Semilab Semiconduktor Physics Laboratory Co. Ltd. Hungary Semiconductors, Components and Electronics 837%

15 INSIA a.s. Czech Republic Internet 789%

16 Arkon Zrt. Hungary Internet 727%

17 CROZ d.o.o. Croatia Software 691%

18 INVIA.CZ, s.r.o. Czech Republic Internet 686%

19 Millennium 000, spol. s r.o. Slovak Republic Software 670%

20 UNIVERSAL K Ltd. Bulgaria Telecommunications/Networking 664%





21 EXTERNET Nyrt. Hungary Telecommunications/Networking 659%

22 StringData, s.r.o. Czech Republic Software 653%

23 Tau on-line d.o.o. Croatia Internet 622%

24 Carnation Zrt. Hungary Internet 601%

25 eo Networks Sp. z o.o. Poland Software 596%

26 BalaBit IT Security Kft. Hungary Software 562%

27 NET Média Zrt. Hungary Internet 538%

28 Webmedia Group Estonia Software 507%

29 LASTING Software S.R.L. Romania Software 487%

30 M2 NET S.A. Poland Software 480%

31 Infomatix Kft. Hungary Software 469%

32 Trask solutions s.r.o. Czech Republic Software 457%

33 Kancellár.hu Zrt. Hungary Software 456%

34 Interconsult Bulgaria OOD Bulgaria Software 447%

35 THE RED POINT S.A. Romania Software 430%

36 XAPT Hungary Kft. Hungary Software 389%

37 DATASYS s.r.o. Czech Republic Software 389%

38 Advatech Sp. z o.o. Poland Computers/Peripherals 388%

39 MadNet d.o.o. Serbia Telecommunications/Networking 383%

40 KLISING d.o.o. Croatia Software 370%





41 MadNet, a.s. Slovak Republic Internet 361%

42 Mobiliųjų telefonų techninis centras UAB Lithuania Telecommunications/Networking 356%

43 Algotech d.o.o. Serbia Telecommunications/Networking 352%*

44 LMC s.r.o. Czech Republic Internet 352%**

45 Advantage Software Factory S.R.L. Romania Software 350%

46 HáziPatika.com Kft. Hungary Internet 323%

47 Romanian Soft Company S.R.L. Romania Software 312%

48 CYGNI SOFTWARE, spol. s r.o. Czech Republic Software 302%

49 home.pl sp.j. Poland Internet 300%

50 WDF - Web Design Factory, spol.s r.o. Czech Republic Internet 298%


*351.9%

**351.5%


Rising Stars Ranking1st – 10th place

Rank Company name Country Sector Growth

1 Multicom d.o.o. Croatia Software 1805%

2 Internet Shop s.r.o. Czech Republic Internet 1137%

3 LiveSport s.r.o. Czech Republic Internet 1088%

4 RAYNET s.r.o. Czech Republic Software 838%

5 Kentico Software s.r.o. Czech Republic Software 710%

6 Sygic, s.r.o. Slovak Republic Software 665%

7 E-Financial S.A. Poland Internet 612%

8 Nav N Go Kft. Hungary Software 384%

9 HAND Ltd. Bulgaria Software 315%

10 EuroTax Sp. z o.o. Poland Internet 253%



Big 5 Ranking1st – 5th place

Rank Company name Country Sector Growth

1 Agito S.A. Poland Internet 1744%

2 ESET, spol. s r.o. Slovak Republic Software 951%

3 SOITRON, a.s. Slovak Republic Telecommunications/Networking 880%

4 Semilab Semiconduktor Physics Laboratory Co. Ltd. Hungary Semiconductors, Components and Electronics 837%

5 Merlin.pl S.A. Poland Internet 208%



Ranking OutcomeFast facts

• Largest company on the Fast 50 ranking in terms of revenue was the Slovak anti-virus company ESET

• Average age of Fast 50 companies is 10 years

• 24 companies made the ranking for their first time

• Average growth (arithmetic average of the five growth rates) of the five fastest growing companies was 3526% down from last year’s 5204%


CEO Survey


Methodology

• Our findings are based on a survey of over 130 CEOs from across Central Europe who applied to enter the Deloitte Technology Fast 50 program throughout May – July 2009 in an online application.

• The Fast 50 is a group of the 50 fastest-growing companies in the region. These companies, which span a wide range of technology sub-sectors, have one objective in common, a strong track record of growth and success.

• For some questions, multiple answers were permitted to capture the more detailed views of the respondents. Multiple responses are portrayed in bar charts and single form responses in pie charts with the exception of the question of “Biggest personal challenges”.

• Not all companies provided response to all questions therefore all responses were always calculated based on the individual question sample size.

CE Technology Fast 50 – CEO Survey


CEO SurveyRespondents• 77% of companies have over 24

employees while 30% have over 100 employees

• Average 2008 revenue of the respondents’ companies was EUR 10.7m

1%

21%

47%

30%

Company size (by number of employees)

1 to 5

6 to 24

25 to 99

100 or more

23%

21%

16%

8%

8%

7%

7%

6%2%

Company location (by country)

Poland

Czech Republic

Hungary

Romania

Bulgaria

Croatia

Slovak Republic

Serbia

Lithuania

Estonia

Slovenia

57%22%

13%

4%3% 1%

Company sector

Software

Internet

Telecommunications/Networking

Semiconductors, Components and Elec-tronics

Computers/Peripherals

Biotech/Pharmaceutical/Medical Equipment



CEO Survey Biggest Personal Challenges• In 2009, the challenges of CEOs have shifted indicating the pressures of the declining

economic and business conditions

• Achieving and sustaining profitability became the number one challenge while the challenge of raising capital increased from 4% to 8% reflecting tighter lending conditions

Achieving and sustaining profitability

Developing leaders and delegating responsibility

Engaging employees in your company’s vision

Managing risk and volatility

Raising capital

Identifying strategic partners

Containing costs

Managing exceptions (board, investors, etc.)

0% 5% 10% 15% 20% 25% 30%

15%

28%

26%

9%

4%

10%

5%

2%

27%

24%

21%

11%

8%

3%

3%

2%

2009 2008



CEO SurveyFactors Contributing to Company Growth• In a high skill environment such as the technology sector, having high quality employees

is critical for ensuring growth and becoming more competitive.

• Interestingly, proprietary technology ranks seventh, down from third in 2008 which can indicate that companies are switching to a short-term mode and are putting longer term decisions on hold.

High-quality employees

Development of existing product(s) and/or service(s)

Strong leadership

Right timing in the market place

Sound business strategy

Entering new market segment(s)

Proprietary technology

Diversification of product(s) and/or service(s)

Development of complementary product(s) and/or service(s)

Acquisition(s)

Being well-advised

0% 10% 20% 30% 40% 50% 60% 70%

64%

46%

32%

29%

28%

24%

22%

19%

14%

8%

2%



CEO SurveyGrowth and outlook• Four out of five CEOs see their

companies growing through organic growth

• Despite the economic downturn, 76% of CEOs are very or extremely confident in their company growing in the next 12 months

• CEOs expect relatively high growth even in 2009, over half of the respondents expect revenue to grow by 11% to 50%

• Only 9% of respondents expect no growth

• Romania has the highest level of confidence of growth in the next 12 months with 91% respondents being very or extremely confident

80%

11%

5%2% 2%

Organic growth

Acquisition of a company

Merger with a strategic partner

Initial public offering

Other

60%15%

16%

8%

Very confident

Somewhat confident

Extremely confident

Pessimistic

32%

22%

19%

9%

9%

5%3%

11 - 25%

26 – 50%

1 – 10%

No growth

51 – 100%

More than 100%

Don’t know


Confidence level of growth

Expected 2009 revenue growth

Most likely future scenario


CEO SurveyReaction to the Credit Crisis• Even though the majority of technology firms have indicated a positive outlook and expect

growth in 2009, 38% of them have reduced spending on advertising and marketing while 35% have reduced capital spending.

• With such reductions and expectation of growth, companies will need to become leaner and more efficient.

• A number of companies have expressed their focus on increasing marketing spending and hiring staff as advertising costs have declined and the availability of skilled employees has improved.

Reduced discretionary spending

Reduced hiring

Reduced spending on advertising & marketing

Reduced capital spending

Reduced employee numbers

Other

0% 10% 20% 30% 40% 50% 60% 70%

51%

44%

38%

35%

20%

14%



CEO SurveyFactors Contributing to Company Growth in the Next 12 Months

• Entering new market segment(s) will be more important over the next 12 months than in the previous year to continue growth (39% vs. 24%)

• High-quality employees remain of top importance for company growth in the next 12 months

High-quality employees

Entering new market segment(s)

Development of existing product(s) and/or service(s)

Strong leadership

Sound business strategy

Development of complementary product(s) and/or service(s)

Diversification of product(s) and/or service(s)

Right timing in the market place

Proprietary technology

Acquisition(s)

Being well-advised

0% 10% 20% 30% 40% 50% 60% 70%

46%

39%

37%

35%

27%

26%

25%

15%

15%

10%

7%



CEO SurveyBiggest Threats to Growth in the Next 12 Months

• Even the technology sector is not immune to the economic downturn as CEOs express limited access to capital and liquidity as the biggest threats to growth

• Access to skilled labour received 36% of responses confirming a lack of skilled employees in the sector even at time of growing unemployment. Such a market situation indicates systematic problems in the education system in the Central European countries

Limited access to capital

Liquidity

Access to skilled labour

Increased competition from emerging powers

Excessive government regulation

Geopolitical instability in certain parts of the world

Deflationary pressures

Rising interest rates

Insufficient government oversight

Corporate scandals

Financial crisis

Other

0% 10% 20% 30% 40% 50% 60% 70%

44%

44%

36%

31%

26%

22%

16%

14%

14%

4%

4%

3%



CEO Survey Segments That Have the Greatest Potential for Growth Over the Next 12 Months

• The business software segment has the greatest potential for growth in the next 12 months even though the majority of business software buyers such as financial institutions and telecommunications operators have tightened expenditures.

• The energy savings and efficiency segment, sixth on the list last year, jumped to second place with 40% of responses.

Business software

Energy savings & efficiency

Technology outsourcing

Internet/IP-related

Social networks

Communication devices

Cloud computing

Wireless communications services

RFID (tags, readers, software, integration)

Entertainment devices

0% 10% 20% 30% 40% 50% 60% 70%

54%

40%

38%

38%

34%

33%

32%

30%

21%

20%



CEO Survey Segments That Have the Greatest Potential for Growth Over the Next One to Three Years

• Social networks have not yet convinced technology CEOs they are a segment with potential for growth over the next one to three years, indicating that the current business models have not created much confidence.

Energy savings & efficiency

Business software

Cloud computing

Nanotechnology

Communication devices

Data security

Wireless communications services

Internet/IP-related

Social networks

Technology outsourcing

0% 10% 20% 30% 40% 50% 60% 70%

47%

42%

36%

35%

32%

32%

29%

27%

25%

23%



CEO SurveyBiggest HR Challenges• Performance management and improvement as well as development of leadership skills of

line management remains a key challenge for more than a half of respondents.

• With regard to the current economical downturn, employee commitment and talent retention do not seem to be an issue for technology companies.

• However, a third of the companies indicated development and retention of employee potential and know how as a challenge.

Performance management and improvement

Leadership skills of (line) management

Retention of key employees and know-how

Identification and development of high potential employees

Attraction of employees, employer brand

Employee awareness of technology news and trends

Talent assessment, management and retention

Employee commitment

Other

0% 10% 20% 30% 40% 50% 60% 70%

59%

48%

36%

33%

31%

25%

23%

21%

2%



CEO SurveyPeople Related Factors Contributing to Company Growth• Despite the fact that performance management ranked first among the biggest HR

challenges, performance based remuneration is not perceived as a key growth factor by most respondents.

• On the other hand, technology skills, know-how, innovation and creativity, teamwork and engagement contribute to company growth significantly.

Technical skills and know-how of employees

Innovative and creative employees

Focus on teamwork and employee engagement

Investment into employee competency development (business and soft skills)

Clear link between corporate strategy and employee goals

Thorough leadership

Clear link between employee performance/contribution and remuneration

Other

0% 10% 20% 30% 40% 50% 60% 70%

65%

54%

50%

35%

28%

28%

18%

3%



CEO SurveyPeople Related Threats to Company Growth Over the Next 12 Months• The unavailability of appropriate employee skill set as well as of high quality candidates will

represent the main threat in the close future.

• A significant risk area is also related to employee motivation, morale and change adoption.

• In addition to the threats listed, decreasing employee trust in leadership and change in workforce demographics are the emerging issues for technology CEOs.

Unavailability of the right skills portfolio (e.g. balance between technical, business and managerial skills)

Limited availability of high quality candidates – insufficient skills of new hires or problems with new talent acquisition

Lack of employee motivation to work more for less

Resistance to change, slow accommodation to the new economical conditions/situation

Bad employee morale due to the economical downturn

Limited pipeline of future leaders

Inability to attract specific types of talent (e.g. specific domain expertise)

Short term focus of employee goals and objectives (difficult to manage)

Increasing competition on the labour market

Other

0% 10% 20% 30% 40% 50% 60%

53%

41%

30%

29%

26%

21%

20%

19%

13%

20%



CEO SurveyAttracting and Retaining Employees

• Over 60% of technology companies attract and retain employees by providing flexible working hours, interesting work opportunities and/or special benefits.

• Other important retaining components are career growth and development opportunities.

• On-boarding programs as well as corporate culture elements ranked high among “Others”.

Flexible working hours

Interesting work assignments

Special benefits

Career growth opportunities

Special/tailored training and development programmes

Special compensation programmes (e.g. retention bonus)

Additional vacation days

Other

0% 10% 20% 30% 40% 50% 60% 70%

64%

63%

60%

57%

39%

28%

21%

13%



CEO SurveyActivities Used to Develop and Connect Talent• Corporate culture supporting open communication and knowledge sharing represents the

main “talent catcher” in the technology sector.

• More than half of respondents also focus on talent development programs, such as internal trainings or coaching & mentoring.

• Although social networking and virtual workplace may be considered a trend for the future, only a few respondents currently use them to actively connect and engage employees.

Corporate culture – internal communication, informal conversations, knowledge sharing and knowledge transfer

Internal training

Coaching and Mentoring

Special projects (e.g. innovation)

Career and succession planning

Social networking and access to information

Virtual working teams

Other

0% 10% 20% 30% 40% 50% 60% 70% 80%

71%

62%

57%

45%

31%

27%

17%

8%


Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.

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© 2009 Deloitte Central Europe

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