Light in a dark year

New Zealand’s Top 200 companies have seen a small increase in revenue, but a dip in earnings and profits, writes Tim McCready

The high-level view of the 2020 Deloitte Top 200 Index shows total revenues for Top 200 companies increasing from $188,561 million in 2019 to $191,580m in 2020 — an increase of 1.6 per cent. This compares to a 4.0 per cent increase in 2019.

Underlying earnings (EBITDA) decreased from $27,027m in 2019 to $25,062m in 2020. This is a decrease of 7.3 per cent, compared to a 5.7 per cent increase in 2019.

The EBITDA margin, an assessment of operating profitability as a percentage of total revenue (total EBITDA/total revenue), decreased slightly between 2019 (14.3 per cent) and 2020 (13.1 per cent).

Total profits after tax have decreased from $10,367m in 2019 to $6,503m in 2020. This is a 37.3 per cent decrease year-on-year, compared to a 6.3 per cent increase in 2019.

Net profit margin (profit after tax/total revenue) decreased between 2019 (5.5 per cent) and 2020 (3.4 per cent).

Total Assets have increased from $230,004m in 2019 to $252,108 in 2020, which is a 9.6 per cent increase and compares to a 4.8 per cent increase in 2019.

The number one spot in the Top 200 Index has been held by Fonterra since its formation in the early 1990s. Its revenue increased by 5.3 per cent during the year to reach $20,282m.

This increase is mainly due to Fonterra’s improved ingredients business pricing and product mix sales.

The 200th ranked entity on the Top 200 index in 2020 is a newcomer to the Index, Airwork, with revenue of $200m. Last year’s 200th ranked company, Juken (the 176th ranked entity for 2020) had revenue of $206m. This is a 2.9 per cent decrease in revenue between the 200th ranked companies year-onyear.

EBOS Group (2nd) has increased in revenue by 25.0 per cent from $7,393m in 2019 to $9,241m in 2020, overtaking Fletcher Building (3rd) whose revenue has decreased by 12 per cent from $8,308m in 2019 to $7,309m in 2020. Fletcher Building had previously held the second-place ranking for four years.

EBOS Group’s increase in revenue is attributed to significantly higher sales volumes in its community pharmacy and institutional healthcare businesses. This results in an 11.2 per cent increase in the revenue of the second-place entity year-on-year, however the revenue gap between the top two companies has remained fairly constant, slightly increasing by 0.9 per cent, as Fonterra (1st) had a revenue increase of 5.3 per cent.

The top 10 has remained quite consistent, with Foodstuffs NI re-entering in tenth place. It had previously dropped from fourth place to 12th place in 2019 due to a change in how revenue was recorded (following NZ IFRS 15 adoption in 2019). Foodstuffs NI’s revenue has increased by 6.3 per cent, from $3,332m in 2019 to $3,543m in 2020. Foodstuffs NI’s re-entry in the top 10 sees Meridian Energy move down from 10th place in 2019 to 11th place in 2020. It reported a 2.5 per cent decrease in revenue from $3,491m in 2019 to $3,405m in 2020.