500 Empresas Para El Futuro (peyber, Etc...)

MARKET500. eu The magaziNe for eUrope’s fasTesT growiNg compaNies

exclusive european ranking

the 500 fastest growing companies

JUIN 2005

MARKET500.eu

p. 18



N° 1 jaN / feb  /  mar  2007 eUr 6.-

award winner

opinion | profiles | management | human resources | technology | investment | lifestyle

letter from the President e u r o p e ’ s 5 0 0

Entrepreneurs on the Growth Track Europe’s 500 – Entrepreneurs for Growth was founded in 1996 and publishes the annual Europe’s 500 Listing, bringing together the strongest growth companies.

MARKET500 no1 | January / February / March 2007

T

he

association’s

sustained continuous growth since 1992.

primary goal is to develop a European network of highgrowth companies to provide a forum for the exchange of experience, the development of new business possibilities, as well as recommendations to the EU on how to improve the framework for growth and more employment. The association aims to offer its experience and ideas to European and national policy-makers in order to improve the general business conditions which should encourage more growth and employment. In other words, the group does not want to get tied down in discussions about the employment situation, but rather to take concrete measures for the creation of more jobs.

The 2006 Europe’s 500 listing reveals for the first time an impressive number of new winners from Eastern Europe and the Baltic states.

Martin Schoeller, President of Europe’s 500 creation is a particularly critical issue in Europe today.

Fortune 500 and Fortune 1000, for example, are both well established and recognised measures of business performance. Large companies in the US are proud to have the accolade of being among the 500 or 1000 top firms in the country, not only to enhance their prestige but also to attract investment. However, size is only one, and a rather static, indicator of success.

We research small and mid-sized companies in 28 European countries (the 25 EU member states, plus Switzerland, Iceland and Norway) and invite them to submit their turnover and employment data for the three previous fiscal years. Once the data are verified, these fast growing, jobcreating companies are ranked to find the top 500 who form the annual listing. The winners are honoured at an awards ceremony and gala dinner held in a different

With Europe’s 500, the annual listing of Europe’s top fast growing companies, we wanted to take a more dynamic approach to measuring success by identifying companies that have shown growth in employment as well as turnover as job

European city each November (in Vienna 2006). Over the years a number of companies have qualified for more than one listing by demonstrating sustained growth over four or more years, but only two firms – both Italian - have won each year since the first listing in 1996, meaning they have

Of course the Europe’s 500 Listing does not exist merely to allow entrepreneurs to pat each other on the back and congratulate each other on winning the “Oscar” of entrepreneurship. As a Europe-wide network of the strongest growing companies, they aim to exchange experience as well as seek new business opportunities and pass on the benefit of their experience and best practice to European and national policy-makers to help create better conditions for more growth and employment. These entrepreneurs do not only want to discuss employment; they also want to do something to create more paid job opportunities in Europe. This last aim coincides directly with the EU’s Lisbon Agenda, which aims to make Europe the most dynamic knowledgedriven economy in the world and to create more and better jobs by 2010. Of course everyone wants this – politicians, organisations and also clever unions. Europe’s 500 provides the evidence that it is these fast growing companies which are at the forefront of job creation in Europe – witness the nearly 150,000 new jobs created by the 2006 Europe’s 500 winners over the past three years. Also, as Chairman of Schoeller Industries, which has more than 2,000 employees (www.schoellergroup.com), I am convinced continued on page 80



w w w. a c - m a r k e t s . c o m

editor’s note

W

here can you find successful European companies? Who are they? Why are some competitors growing faster in other countries than in your own? Do you know any mid-sized European companies? How many firms do you know abroad? There are so many questions we might ask ourselves about this new market: Europe. Most entrepreneurs are experts in their local market but it is more difficult to know about the pan-European corporate world. Of course, we can get information about the most important corporations every day in the leading media, but it remains hard to find a real pan-European one which is not American or related to a particular European country. A pan-European business approach Market500.eu aims to help you, our readers, better understand this complex and multi-cultural market through in-depth business stories and articles. In addition, our columns aim to provide to strong opinions and analysis in order to promote European ideas for stronger entrepre-

neurship. While covering high-potential emerging markets such as India, China or Brazil, we clearly highlight the amazing performance and potential of European companies. We also focus the positive effects EU enlargement is having on European economic growth rates. A Strategic Partnership Our access to the most successful European companies is our strength, thanks to our exclusive partnership with Europe’s 500, officially publishing their ranking of fast growing European companies. We also participate in Europe’s 500 key events throughout Europe, capturing the essence and outcomes as a real pan-European media channel. In a reflection of the needs of leading entrepreneurs and companies across Europe, market500.eu, the publication and the website, aim to be interactive. Our online portal provides information ranging from a quarterly survey of leading entrepreneurs to a company listing. In addition, a new version of the European Business Portal will be rolled-out this spring. Let the entrepreneurial spirit spread around Europe as fast as it can. Raphael Dana [email protected]

MARKET500 no1 | January / February / March 2007

Creating the new European



business link

Bullish At t itude

A d v a n c e d M o b i l e Tr a d e r The new generation in online trading It enables you to access your account with your mobile phone, monitor your account, check prices and open and close positions. ACM, worldwide leader in the online trading of currencies and precious metals, offers technologically advanced high quality trading platforms. Make profits when buying and selling and enter your orders with a mouse click, real-time, 24 hours a day. Contact us right away T +41 22 319 22 00 [email protected]

contents

23 europe’s 500 ranking

18

gameloft award winner

68 case study: Barceló

76 growth is east

n 01 o

January / February / March 2007

Letter from the President

3

HUMAN RESOURCES

Editor’s note

4

Recruitment Finding the right players

Entrepreneur’s Survey Defining the trends of 2007

8

Highlights

11

Press review Top 10 predictions in 2007

TECHNOLOGY

16

Europe’s 500 Ranking

yachting

Ideas Europe 2.0

Introduction Listing Winners’ profiles Award Winner No 1 - Gameloft No 2 Avion Group No 3 Assystem No 4 CPL No 5 Spreadshirt No 8 Webhelp No 13 Centric No 14 Puma No 17 ntercentros Ballesol No 21 Ryanair No 22 New Wave Group No 26 DC Holding No 30 EngroTUS

19 22

Opinion Editor

54

23 27 30 33 37 39 40 43 45 46 48 51 52

66

CASE STUDY Barceló Group Family succession

Management

90

64

68

EUROPE’S 500



European Growth Summit 2007 Growth is East

76

A short history of Europe’s 500

78

Policy framework for growth and jobs

79

INVESTING The Mid-Cap way Investing in a medium-sized European company

82

A selection of European small and mid-cap investment funds

84

LIFESTYLE

Focus Managerial pitfalls to avoid

56

Learning CEO-Collaborative Forum

61

Yachting 16th Monaco Yacht Show

90

Hot products A high-tech, stylish selection for a winter full of colour

96

s u r v e y trends

survey Entrepreneur’s



Dedicated to the most successful businessmen, the survey is fast and easy to use directly through our website (www. market500.eu, click on “Survey”). Our survey has only 5 questions and takes less than one minute to complete. If one of the subjects captures your interest or if you have a trend you would like us to investigate in a future survey, please contact [email protected]. Our first survey aims to capture the general trends for 2007 through the following questions:

How would you define your company’s prospects for 2007?

o o o o o

Bullish Confident Average Worried Pessimistic

Do you believe there will be a global economic recession by the end of the year?

o o o o

Yes Probably No It does not affect me

Are you worried about the growing strength of the Euro?

Do you expect the real estate market to decline in 2007?

o o o

o o o o o o

Yes No It does not affect me

Are you worried about political risk in 2007?

o o o o

Yes A little bit No It does not affect me

Yes, for sure Probably 50% chance I do not think so No way It does not affect me

Helping others gives success true meaning. Nicolas Cage and Montblanc

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We invite you to interact with us in each issue of market500.eu through the “Entrepreneur Survey“. Your participation will help us better understand you, your views and the latest business trends across Europe.

MARKET500 no1 | January / February / March 2007

Dear Readers,

new york london paris rome tokyo hong kong barcelona moscow vienna amsterdam berlin singapore

Building Community

highlights

Creative Productions Meetings and Events Performance Improvement Programs Communications

Visa cards in

MCAE Market

Bulgaria was the fastest growing market for Visa bank cards in Europe according to data from July to September 2006. Visa Bulgaria said that the number of cards issued in the country increased by 74%, reaching the amount of 890,000 at the end of the period.

Last September, 01consulting released a report called MCAE Market Europe 2006. According the report, the MCAE Market, which grows at 15% annual rate, represents almost €1 billion. It is one of the most attractive segments of the PLM market with strong and solid future development prospects and has been recording a steady growth for the last 30 years.

Bulgaria

Association Management Services

Europe 2006

PCO and Exhibitions Management Destination Management Services

In today’s high speed performance-oriented economy, companies focus on and invest in corecompetencies. Their strategy and supply chain rely on outsourced expertise, creativity and processes.

✔

Nutricosmetics

MCI understands this and will

trend

help you enhance the performance and outreach of

An increasing number of companies worldwide are targeting the fast-growing nutricosmetics industry products that aim to provide beauty “from within” creating their own product lines. A recent survey by Klein & Company values the global nutricosmetics market at $1 billion. The company says this figure is set to double over the next five years. Nutricosmetics are taken orally to improve health and beauty.

your organisation by:

helping you to communicate with your target audiences through live communication and creative events.

✔

supporting your business objectives through performance improvement and knowledge transfer programmes.

✔

building an influential community around your company and your brand through cross marketing and strategic association.

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supporting your processes with expert meeting, conference, and incentive travel management knowledge.

and Fortune 500 clients, across 5 continents, MCI is a full-service agency with a world of experience. We are convinced that our solutions are BARCELONA BERLIN BRUSSELS DUBAI GENEVA LYON MADRID PARIS PETERSFIELD/LONDON PRAGUE SINGAPORE STOCKHOLM STUTTGART VIENNA ZURICH

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powerful in retaining the attention of, and building strong relationships with, target audiences as well as improving their performance. For more information, please contact: MCI- HQ Office 75 rue de Lyon CH–1211 Geneva 13 Phone +41 (0)22 33 99 500 Fax +41 (0)22 33 99 501 E-mail: [email protected]

MARKET500 no1 | January / February / March 2007

With 300 staff delivering projects for small to medium sized companies

The market has already seen serious innovation, such as the partnership between L’Oreal and Nestlé and their Inneov line of nutritional supplements for hair and skin, and German cosmetics company Christine Schrammek with its dermaneutrics range targeting skin ailments. The survey pinpoints skin care as the main market, but those for hair, nail and sun care are growing. However not all countries are picking upon the trend. In the USA, according to Carrie Mellage from Klein & Company, potential customers are used to buying their healthcare products from pharmaceutical companies and are sceptical of beauty companies.

Bulgarians consumers are also using their Visa cards more and more often for trade transactions. Nearly one million payments in trade centres were completed this way by the end of September 2006, a 185% increase from September 2004 to September 2005. Bulgarians carried out 5.2 million transactions through Visa cards between September 2005 and September 2006. Romania, which entered the EU at the same time as Bulgaria, also increased its number of Visa cards by 38%.

This report ranks the top 11 software vendors in Europe, through several criteria and provides analysis per industry and country, spotlighting current trends. The report highlights the fact that a few mergers and consolidations should be expected in the near future as bigger vendors lag in technology development, preferring to acquire existing technology that has been validated by smaller vendors.

11

highlights

Audemars Piguet Awards

MySQL develops and supports a family of high-performance, affordable database products. The “Next Gem Award”, another prize from the watchmaker, was awarded to Icera, a pioneer in wireless soft modem platforms for next generation mobile phones and wireless terminals. This prize rewards the company that shows the most promise for the future.

Chip sales As global sales of semiconductors reached $225.1 billion for the first 11 months of 2006, 9.4% more than for the same period in 2005, sales in Europe were up 4% to $3.7 billion in November 2006, according to the Semiconductor Industry Association (SIA). Those in the Americas declined by 0.5% to $4 billion, while Asia Pacific grew by 4.4% between to reach $10.8 billion, with Japan showing a 2.6% rise to $4.25 billion. Despite its results, Europe remains the poorest performer in 2006, with year to year sales to November up only 4.3% to $3.7 billion. Asia Pacific grew at the strongest pace, up 15% to $10.8 billion, with chip sales up 6.6% in the Americas to $4 billion.

Biorefinery Research

At the end of October, the European Conference on Biorefinery Research, which aims to present industrial perspectives on current and potential opportunities for and synergies between European stakeholders, took place in Helsinki, Finland. This conference concluded that the Finnish forest-based industry should expect growing demand for biomassbased, non-food products. Considering the situation, the government has decided to strengthen research into this area, most specifically into the development of second-generation biofuels. As a first step, the Finnish Funding Agency for Technology and Innovation (Tekes) has started a Europe-wide ERA-Net programme called Woodwisdom-Net, together with seven other European countries. Furthermore, it is preparing a new ‘BioRefine’ technology program, to begin in 2007.

MARKET500 no1 | January / February / March 2007

12

Last November in Geneva, Swedish CEO Mårten Mickos of MySQL AB, a software enterprise, received the “Changing Times Award” from famous Swiss watchmaker Audemars Piguet. This prize was created to recognize the European entrepreneur whose private company has had the biggest impact on the largest number of people over the last three years.

First Fusion Tourbillon Mono Pusher Chronograph 18K Red Gold, Ceramic and Rubber.

“Grand Prix d’Horlogerie de Genève”

170 New Bond Street • W1Y 9PB • London • Tel. 0207 290 65 00 • Hublot live TV on: www.hublot.com

MARKET500 no1 | January / February / March 2007

14

The AIM market Owned and operated by the London Stock Exchange, AIM is the world’s leading market for smaller growing companies. These range from young venture capital businesses to more established businesses searching for finance and liquidity to expand their operations. Since 1995, more than 2,500 companies have joined, raising more than $4.5 billion. AIM companies come from 37 sectors and 26 countries. 25% of international companies are in the mining sector, the next largest being the oil and gas sector followed by finance. As of early October 2006, some 350 new companies had been admitted and the junior market has seen a vast increase in the number of US companies.

IT DOESN’T JUST P U S H T H E E N V E L O P E.

New investment for Hymite A/S

With a total of €€9 million, the DanishGerman technology company Hymite A/S has announced closure of its Series Preferred B financing. Among the new investors are TVM Capital, InnovationsKapital, Dansk Kapitalanlaeg, Vaekstfonden and IVS. These new investment are intended to strengthen the sales organisation of the company and build up its manufacturing infrastructure with the use of external foundries. Hymite A/S supplies advanced wafer level packaging products for electronics, micromechanical and optoelectronics components. Chief executive officer Claus Jorgen says that the company will be able to consolidate its position in the flourishing

LED (Light Emitting Diodes) and MEMS (Microelectromechanical Systems) markets: “With key customers in both high-brightness LED and MEMS, our wafer level packaging solutions have proven their potential in high volume, high growth […]. New requirements from the markets such as a smaller footprint and higher performance are bringing business in our direction. Wafer level packaging is a clear industry trend and we are supporting this with a low-cost, reliable solution that adds value for customers.”

I T R I P S I T.

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highlights

“10 Predictions for 2007” use of VoIP programmes, among other things, mobile phones will be affected by computer viruses. Nevertheless, the multitude of current operating systems could reduce their impact, but only in the beginning.

16

T

o continue with their tradition of annual predictions started three years ago, journalists of the Red Herring, an American magazine specialising in technology industry and innovation, have put forth their forecasts for 2007 (vol. 4, No 1). In this special issue, journalists came with 10 specific events or developments, whether good or bad, that they feel will likely happen in 2007. Next year, a score box will be run on how well they did! Brain Gets Wired 2007 will see advances in cures for depression or blindness thanks to electrical devices implanted in their head or eye. The first company to watch is Medtronic, which has built a “brain pacemaker” delivering electrical pulses to treat depression and obsessive-compulsive disorder. On blindness, Europe-based Intelligent Medical Implants has been working on an electrode implanted in the retina to help blind people see light and simple patterns. Attack of the Mobile Virus! In 2007, people will fall victim of a global cell phone virus attack. With the increasing

Mega Buyouts In 2007, private equity will enter the tech sector. 2006 already saw mega-buyouts between firms, the next year could be the one where everything is possible. Among other possibilities, keep an eye on EMC, leader of hardware storage, Dell, the computer maker, or Internet giant Yahoo!. TV Grab In 2007, look for Google to invade the world of TV advertising. The on-line ad king used to boast of wanting to be everywhere advertising is and has already jumped from the on-line world and established itself in newspapers and radio. “Google becoming a TV ad broker isn’t a predication; it is a foregone conclusion.” Nanotech Will Heat Up 2007 will be the year of nano developments -- a revolution in the scientific world. Indeed nanotechnology, will be present in medicine under nanotech cancer drugs, but we might also use it in water filtration. Nevertheless, this technology will be certainly submitted to more regulation, a fact companies have to know to succeed in this field. SOX Gets a Makeover In 2007, SOX will be less burdensome, at least for micro and small companies. In fact, to keep US stock exchanges attractive the Securities and Exchange Commission (SEC) will have to reduce

IPOs if it does not want to see companies going public abroad. HD-DVD and Blu-Ray: DOA In 2007, the war between HD-DVD and Blu-Ray will almost lose its senses. As consumers will not be able to choose between two incompatible formats, the trend towards Internet downloading (without any physical support) will be confirmed. Hewlett-Packard and Apple have already launched a device for this purpose. Rollins Booted Out at Dell 2007 will not be kind to Kevin Rollins. In fact, Dell’s chief executive officer is at the head of a firm that has been accumulating bad results for a few years and which has been recently dethroned by its main competitor, Hewlett-Packard. His next mistake may well cost him his job. Solar Gets Simpler 2007 will be the year of “solar”. The solar industry is coming to maturity thanks to the impending end of a worldwide shortage of solar-grade silicon. Lower prices and easier access will enable more and more people to be equipped with solar technology. Mergers and consolidations within the solar industry will also boost the market. New Year, New Jobs In 2007, new needs will create new types of activities. First, there will be a need for people to bring online social networking to those over 50. Secondly, after the boom of YouTube, the next user-generated content website might be about games, revealing the talents of new games makers. Thirdly, the expansion of solar technology will put solar finance specialists on top.

MARKET500 no1 | January / February / March 2007

p r e s s r e v i e w red herring

OPENING SOON: TOKYO G E N E VA - G S TA A D - H O N G K O N G - K U WA I T - L O N D O N - M O S C O W M Y K O N O S - N E W Y O R K - PA R I S - P O RT O C E R V O - R O M E - S T M O R I T Z

w w w. d e g r i s o g o n o . c o m

ranking e u r o p e ’ s 5 0 0

Europe’s 500

“European growth” is not an oxymoron “Entrepreneurs for Growth”, a Belgian not-for-profit organization which represents 2,000 entrepreneurs, has published its Europe’s 500 ranking of fast growing companies. This ranking, supported by Microsoft and KPMG, is built from data provided mainly by companies, which declare their turnover and number of employees for 2002 and 2005. Their performance is analysed over a three-year period.

MARKET500 no1 | January / February / March 2007

T

o participate in the ranking, these companies must be based in Europe, that is to say in the European Union and/ or European Free Trade Area (EFTA). Public and private companies can compete, but must have been created before 2003 and meet various criteria. They must not have had more than 5,000 employees in 2002, and not less than 50 in 2005. Growth is measured by turnover progression and the equivalent number of full time employees. The ranking uses the Birch Index, by David Birch, Director of Neighbourhood and Regional Change at the Massachusetts Institute of Technology (MIT), to measure employment growth. This index weighs absolute and relative job growth by industry and company size in order to determine the real employment generation of each company.

19 The key findings of this 2006 edition are the following: Geographically, the five largest European countries represent 59% of the 500 fastest growing companies. But Central and Eastern Europe surprisingly rank before the Nordic countries, showing the potential of this region. The Baltic countries together are 10% of the overall sample. Breakdown by stock exchange and average 2005 turn-over Number of companies

EURONEXT (Paris, Lisbon, Amsterdam, Brussels) British Stock Exchange German Stock Exchange Italian Stock Exchange Austrian Stock Exchange Swedish Stock Exchange Other Swiss Stock Exchange Norwegian Stock Exchange Greek Stock Exchange NASDAQ Spanish Stock Exchange Irish Stock Exchange Icelandic Stock Exchange Total

Despite their nationality, companies with fast growth rates are finding their greatest growth opportunties beyond their home market, exporting and thus capturing market shares abroad.

Average turnPercentage over (EUR m.)

38

31%

174.5

23

19%

382.2

14 7

12% 6%

694.0 1143.7

5

4%

878.9

5 5 4

4% 4% 3%

145.1 469.0 820.1

4 4 3

3% 3% 2%

160.6 225.0 572.7

3

2%

925.0

3

2%

1649.9

3

2%

636.6

121

Germany ranks first in number of companies in the top 500, despite its sluggish GDP over the last three years. Its ranking proves that its Mittelstand is still doing well. The UK, which has strived economically over the course of the same period, is ranked a distant second, just before France.

Sector-wise, IT services have the lion’s share (23%) of the sectors, showing the maturity of information technologies and their “rippling effect” throughout the economy. Once infrastructures are set up and running, companies willing to leverage them are blossoming and gaining ground fast. Remarkably, the other sectors are relatively equal, holding between 5 and 7% of the total. This shows that fashionable sectors such as biotechnology

details.ch

e u r o p e ’ s 5 0 0 ranking

Geographical breakdown of the Europe 500’s companies 2% 3% 2%2% 3%

21%

4% 5% 5% 6%

20

13%

38 companies. The impact of the launch of Alternext, created to offer a relay of financing to mid-sized and high-growth companies, will probably increasingly be seen in the future editions of the challenge. The average turnover of Europe’s 500 companies per stock exchange varies significantly. Nordic stock exchanges and Euronext have the lowest average, whereas small (Ireland, Switzerland) and Southern markets (Italy, Spain) seem to have a higher threshold. In a context of stock exchange convergence, it is interesting to see that further consolidation could have an impact by easing the financing on companies situated in markets with higher admittance criteria.

Gameloft comes back to the roots of video games, where the pleasure of the customer is key, whereas Eletronic Arts and other American and Asian video game makers offer merely technical

Sector breakdown of the Europe 500’s companies

3%

3%

4% 23%

4% 4% 4%

5% 7% 6% 7%

8% 6%

11% 9%

Germany

Austria

UK

Greece

France

Netherlands

Italy

Ireland

Spain

Switzerland

CEE

Baltic

Nordic

Other

Belgium

Services represent nearly 46% of the overall sample, thus confirming the positioning of Europe in the worldwide economy. As for financing, 4 of the top 5 companies are currently listed, but most of them (73%) are not. Growth financing is thus mainly a matter of private equity (3i Group being cited as an active investor in the sample, with CVO and Intercentros Ballesol) and other private means of funding. Euronext is the stock exchange which is the most represented in the sample, with

The only Eastern and Central Europe stock exchange represented is Budapest (one company), which proves that local financing mechanisms still need to be found. The fact that venture capital firms are massively investing in this area should boost exits and thus may promote local stock exchanges. The NYSE and NASDAQ welcome only four companies from Europe, which shows that the attraction of the American markets tends to be limited. Overall, this 2006 edition of Europe’s 500 shows that not only can European companies achieve high growth, just like their American and Asian counterparts, but also that they offer successful alternatives to dominant models. DoubleCoffee (DC Holding) offers high-quality coffee, as opposed to the Starbucks model of multiple flavours added to American coffee. Puma proposes fashionable and trendy footwear where Nike and Reebok compete to offer only sports shoes. Webhelp successfully provides call centre services when the trend towards contracting with low-cost outsourced call centres in India seems irreversible.

6% 6%

6% 6%

6%

IT Services

IT Manufacturing

Biotech/Health

Construction/Real Estate

Consulting

Food/Beverages

Transport/Logistics

Retail

Steel/Metals

Energy/Mining Utilities

Automotive

Financial/Legal Services

Support Services

Tourism

Consumer Goods

Other

prowess and visually impressive scenes. EngroTUS reverses the trend of low-cost and cut-throat retailing by putting forward its values and the quality of its products, challenging the Wal-Mart assumption that customers always want lower prices and nothing else. Europe can thus be a source of valuable examples for those who think outside the box.             Cyril Demaria [email protected]

MARKET500 no1 | January / February / March 2007

and healthcare are not producing more fast-growing companies than traditional sectors such as automotive, for example. It is thus possible to succeed in almost any economic sector, although textiles and chemicals are below 2%.

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e u r o p e ’ s 5 0 0 listing

winner’s profile e u r o p e ’ s 5 0 0

Europe’s 500 Listing Europe’s only independent, pan-European Listing of high growth, job-creating companies.

Methodology

Selection of the Final Europe’s 500

The Europe’s 500 search process combines a unique mix of proactive

Companies which qualified for the initial list and passed the verification

targeting and searching for the best companies.

process are ranked according to their Birch Index. The top 500 Birch scores

1

define the final Europe’s 500. The methodology used comprises four key phases: •

Compilation of the universe

Ranking

•

Selection of initial list

The Europe’s 500 focuses on employment creation. Companies which have

•

Independent review

successfully met the criteria and verification process are ranked according

•

Selection of the final Europe’s 500

to their growth performance via the David Birch Employee Growth Index.

AR AW

This index focuses on employment creation combining both relative and Compilation of the universe

absolute growth and is used to rank and quantify the companies’ perfor-

Europe’s 500 researches, targets and pre-selects high-growth companies

mance.

from across the 28 countries covered. The Europe’s 500 growth performance Birch Index represents:

In addition, spontaneous nominations are sought through media announce-

The absolute difference in employment between the upper (End 2005)

ments and third party organisations.

and

Mezzanine View on Success

the lower (End 2002) reference year Selection of initial list

multiplied by

Upon closure of the nomination process (15 July 2006), all data is analysed

Employment in the upper reference year

and a first list of companies that meet all seven criteria established.

divided by

Independent review

employment in the lower reference year.

Company data as submitted by the Nomination Form may be verified with

Example: if a company grew its employment from 200 employees in 2002 to

the legal auditor, on an as needed basis. Checks are also carried out with

800 employees in 2005, the Birch index would be:

national experts who visit selected nominated companies to independently

= (800-200) x (800/200) = 600 x 4 = 2400

Gameloft is proof that until the game is over, there is hope for success. Weathering the storm of mobile gaming, it emerges as number 1 in Europe – on top of both the ranking and its sector.

review their application. At this stage a company may be rejected from the initial list, if a review raises doubts about the company’s eligibility.

Gameloft SA Rank Company

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Gameloft SA Avion Group Assystem Cpl Resources Plc Spreadshirt AG EVN AG Kögun HF Webhelp Groupe Open SA pharmexx GmbH Integrated Cleaning Management Ltd Q-Cells AG Centric Puma AG Rudolf Dassler Sport Intec Telecom Systems Plc Marquard & Bahls AG Intercentros Ballesol SA Mears Group Plc I. K. Hofmann GmbH United Internet AG

Company Business Sector Headquarters

Website

France Iceland France Ireland Germany Austria Iceland France France Germany United Kingdom Germany Netherlands Germany United Kingdom Germany Spain United Kingdom Germany Germany

www.gameloft.com www.aviongroup.com www.assystem.com www.cpl.ie www.spreadshirt.net www.evn.at www.kogun.is www.webhelp.fr www.groupe-open.com www.pharmexx.de www.icmltd.uk.com www.q-cells.com www.centric.nl www.puma.com www.intecbilling.com www.mbholding.de www.ballesol.es www.mearsgroup.co.uk www.hofmann.info www.united-internet.de

IT - Manufacturing Transport, Logistics IT Services, Information and Communication Technologies Consulting, Management S Retail Energy, Mining, Utilities IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Consulting, Management Services Support Services Energy, Mining, Utilities IT Services, Information and Communication Technologies Textiles, Clothing, Footwear - Manufacturing IT Services, Information and Communication Technologies Energy, Mining, Utilities Support Services Support Services Consulting, Management Services IT Services, Information and Communication Technologies

Birch Index

44994 25634 22872 20622 19800 13480 11453 9860 9101 8436 7417 6407 6015 5770 5137 5108 4680 4460 4102 4066

continued on page 32

MARKET500 no1 | January / February / March 2007

22

These companies are invited to confirm their nomination and agree to all data..

T

ransform your mobile phone into a video game station; that is the target of Gameloft. With Qualcomm introducing its BREW technology in Europe, even 3D games will soon be accessible on compatible phones.

The winner of the Europe’s 500 challenge develops, markets and sells video games

Key facts & figures Ranking: 1st | Industry: Software | Turnover growth (2002-2005): 1,460% | Employment growth (2002-2005): 2,307% | Listed (Paris), with a market capitalisation of EUR 0.29 billion

for mobile phones, using Java and BREW technologies. At its creation in 1999, Gameloft – then a subsidiary of Ubisoft Entertainment – focused on the development of games for mobile phones, the Internet and digital television. Gameloft was a bit too early for the market. Following its merger with Ludigames in February 2002, Gameloft took the opportunity to focus exclusively on the mobile gaming market. “One of our main strengths was that we had a very strong shareholder

basis, willing to invest on the long term. This has allowed us to be able to wait for the market to switch to Java/BREW compatible mobile phones,” says Alexandre de Rochefort, CFO of Gameloft. This move proved to be successful and has allowed it to expand dramatically since then. Gameloft is now developing 40 new video games through 6 studios in the US, Canada, Romania, France, Japan and China. “Our key differentiator was the choice of doing everything by ourselves.

23

winner’s profile e u r o p e ’ s 5 0 0

Hofburg, Vienna, 24 November 2006, Michel Guillemot, President and CEO of Gameloft (France) receives the Europe’s 500 Champion of Growth award bestowed on the No. 1 company for 2006.

has disposed of jeuxvideo.com, to only focus on mobile gaming. This extra cash will allow Gameloft to compete with Jamdat Mobile, which was recently

acquired by the American leader of the video game sector Electronic Arts (EA) for USD 100 million. The company so far offers 80 titles, costing EUR 3 to 5, over 600 handsets and is capitalising on branding (notably with Ubisoft Entertainment) and franchise agreements to develop games which could attract a target wider than its traditional teenager customer base. Its next titles draw directly from successful TV sitcoms, reality shows and movies such as “Lost”, “Desperate Housewives”, “Mission Impossible”, “Open season” and “Newport Beach”. Users download some 100,000 games per day from Gameloft and 25 of the company’s titles have gone over the 1 million downloads mark.

Gameloft PAR (11/28/2003 - 11/27/2006) Datastream 220.0% 200.0% 180.0% 160.0% 140.0% 120.0% 100.0% 90.0% 60.0% GFT-FR SBF 120

Through mobile phones, Gameloft can target the dream audience of Sony, Nintendo and Microsoft: the general public, which so far has mainly remained out of reach. By 2008, it is expected that 2.5 billion customers will own a mobile phone supporting the download of video games.

This was the only way to deliver and guarantee the quality of our products,” says Alexandre de Rochefort. The force of the company lies in the agreements it has signed with more than 130 mobile operators throughout the world, covering 65 countries. This means that Gameloft has to adapt each title it produces to the specifications of the handsets and the mobile operators. Thanks

to these partnerships, subscribers can download games on their mobile phone. 90% of mobile games are purchased through mobile phone operators. “Our past growth was fuelled by the signature of new partnerships every week and growing market share. Going forward, it should be based only on market share growth, which will normalise our growth rate, but nevertheless stay in the high double digits,” says Alexandre de Rochefort.

With a turnover of EUR 47 million in 2005, some 70 million for 2006 and 110 million in 2007, Gameloft is number 2 worldwide for mobile gaming, and number 1 in Europe. It remains a small player in the video game market, which has seen a wave of consolidation recently with editors acquiring studios. To face this movement and finance its high fixed costs and investments in human capital the company

MARKET500 no1 | January / February / March 2007

1.00 0.50 0 04 Volume

05

06

EUR Millions Source: Datastream

Gameloft’s summarised profit and loss statement (2001-2005) EUR (millions)

Sales EBIT Net Income

2002 3 (67) (67)

2003 3 (16) (17)

2004 10 6 2

Source: Thomson One Banker

2005 23 6 2

2006 47 2 1

Will Gameloft be able to defy the highly cyclical video game sector by further growing? The fact that its customer base is free to use any mobile phone, unlike Sony Playstation or Microsoft X-Box customers who are stuck to their hardware, should soften the cycles. However, its successes are still conditioned by the

franchising and branding agreements it can sign, thus competing head to head with EA which has locked in key sports franchises. Michel Guillemot has learned from his 20 years at UbiSoft Entertainment, a leading French game developer and editor that he created with his four brothers. He knows how to manage the ups and downs of a challenging but rewarding market. Back in 1986, the personal computer was hardly a gaming platform and noncompatible machines were king. These platforms required the adaptation of each title and the ability to provide “game play” to players, as graphical and sound features were basic. Fast forward 20 years, same questions and same answers, but Guillemot has designed his company to face such challenges, recruiting talent worldwide, even at the expenses of his gross margins. Developers accounted for 2,100 of the 2,400 total staff in 2006. Gameloft perceives its staff as its main asset. After a massive recruitment effort (+200% in 2004, +160% in 2005), it is willing to capitalise on its production base to develop its products. The expected rhythm of recruitment is thus a maximum 25% in 2006 and 5 to 10% in 2007. C.D.

25

winner’s profile e u r o p e ’ s 5 0 0

See Beyond Historical Performance

Second Logi(sti)cally

Avion has transformed a national symbol of insular independence into a global logistics services force, taking over competitors and streamlining entire industries.

2

Standard & Poor’s Fund Management Ratings For more than 15 years Standard & Poor’s have been assisting investors to see further - uncovering the qualitative factors behind funds that lead to consistent results year after year. Evaluated by a team of analysts whose independence and expertise is renowned throughout the global investment industry, the achievement of a Standard & Poor’s Fund Management Rating is the culmination of a rigorous and demanding process involving in-depth research, face-to-face interviews and careful deliberation.

MARKET500 no1 | January / February / March 2007

Isn’t it time you asked Standard & Poor’s to help you see beyond historical performance?

Copyright© 2006 The McGraw-Hill Companies, Limited trading as Standard & Poor’s. All rights reserved. The analytic services and products provided by Standard & Poor’s are the result of separate activities in order to preserve the independence and objectivity of each analytic process. Each analytic product or service is based on information received by the analytic group responsible for such product or service. Standard & Poor’s has established policies and procedures to maintain the confidentiality of non-public information received during each analytic process. S&P and Standard & Poor’s are trademarks of The McGraw-Hill Companies, Inc. which are registered in the United States of America and other countries and in which all rights are reserved. Analytic services and products provided by Standard & Poor’s are the result of separate activities designed to preserve the independence and objectivity of each analytic process. Standard & Poor’s has established policies and procedures to maintain the confidentiality of non-public information received during each analytic process.

Key facts & figures Ranking: 2nd | Industry: Business Logistics | Turnover growth (2002-2005): 627% | Employment growth (2002-2005): 570% | Listed (Reykjavik), with a market capitalisation of EUR 0.6 billion

27

Encompassing traditional equity, bond and managed funds, as well as alternative strategies such as funds of hedge funds and absolute return funds, this unique benchmark is recognised by the investment industry as an unrivalled guide to fund selection.

To learn more, visit www.sandpfundservices.com or access fund ratings and analysis free of charge at www.funds-sp.com

AR D AW Avion Group (Hf. Eimskipafélag Íslands)

A

vion Group was formed in January 2005 to invest in the transportation industry. The Company controls an international network of air and sea transportation companies providing transportation solutions. The mother company is dedicated to investments, aircraft trading and asset management. Its three divisions are: Eimskip (shipping and logistics), Air Atlanta (aviation services) and Excelairways & Star (charter and leisure). Avion is focusing on aviation services, and has been striving to be a premier

europe’s 500

winner’s profile

Wherever you go...

Avion believes it will be able to sustain a high level of growth going forward, capitalising on the trend it has identified and targeting mid-sized assets.

Avion Group (HFEIM) stock price evolution in 2006

To further expand, the company went public on 20 January 2006 as the largest initial public offering on the Iceland Stock Exchange. It is the fourth largest company listed on the ICEX. Its progression has been based on acquisitions of profitable companies which could prove to be complementary in the strategy of Avion, the latest being Star Airlines (France) and Kosmar Holidays (Greece).

45.0 42.5 40.0 37.5 35.0

Even though the company was created in Iceland, Avion has a global reach through its 174 locations worldwide. It opened its

...EuroNews is there.

32.5 30.0 01.04.06

Avion owns Eimskip, which is the oldest Icelandic shipping company. This company is a national symbol, as it was widely associated with Iceland’s fight for independence. There were 14,000 company, or 15% of the population. The date of its creation is a national holiday in Reykjavik.

first Chinese operations in 2004. It has 9,500 employees and operates 30 aircraft and 30 vessels.

01.07.06

01.10.06

Source: Iceland Stock Exchange Avion Group’s summarised profit and loss statement (2001-2005) EUR (millions)

Sales EBIT Net Income

2001 N/A N/A N/A

2002 N/A N/A N/A

2003 187 (-12) (-12)

2004 363 11 10

Fiscal year ends on 31 Dec. for 2003 and 2004, and 31 Oct. for 2005 Source: Thomson One Banker

2005 1,130 65 33

The approximate organic growth for 2006 was 36%, from USD 1,400 million (EUR 1,069 million) to USD 1,900 million (EUR 1,451 million). The EBIT increased by 67% from USD 61 million (EUR 46 million) to USD 102 million (EUR 78 million). This proves that the industrial logic of this investment group is working well, leveraging synergies between its portfolio companies. Avion believes it will be able to sustain a high level of growth going forward, capitalising on the trend it has identified and targeting mid-sized assets. C.D.

MARKET500 no1 | January / February / March 2007

28

outsourcer for cargo and passenger customers, covering key components of the value chain such as aircrafts, crew, maintenance and insurance services. It is also focusing on engineering and airport handling services. Its charter and leisure businesses are divided between airline and aviation (providing chartered airline services) and tour operating (booking and charter seat broker services). Shipping, logistics and supply chain management services for domestic and international customers complete the offering.

Contact EuroNews Sales: Olivier de Montchenu - Managing Director > T: +33 (0)1 53 96 50 11 London > T: +44 (020) 7240 8717 Paris > T: +33 (0)1 53 96 50 12 Frankfurt > T: +49 (0) 6196 9994 220 www.euronews.net

On TV, on the web, on the move

europe’s 500

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Acing, Booming, Consulting

a specialist, and is thus able to add process and products engineering to the value chain. Assystem - PAR (11/28/2003 - 11/24/2006) The Group published its 3rd quarter 2006 170%which were well above expectafigures, tions160% with sales at EUR 159.3 million, up 150% 18.4% organically, but partly conditioned 140% by a130% one-off effect (part of revenues 120% came from projects successfully closed 110% in advance). France grew by 17.3% orga100% nically90%and international operations by 80% 20.5%. The group disposed of its Spanish 70% and 60% Canadian operations. 2006 sales 50% approximately reached EUR 675 million SY.FRat EUR 736 SBF 120 and are expected million 0.40 in 2007, with an EBIT of EUR 41.1 and 0.20 million respectively. Net results EUR 48.5 should 0reach EUR 24.3 and EUR 31 0.4 0.5 0.6 million respectively. Source: Datastream

Assystem has been able to differentiate itself in a business that is fast commoditising: consulting. Technological expertise and opportunistic developments form the matrix of its development.

30

A

s s y s t e m (formerly known as Assystem Brime) provides consulting, advisory and services in the field of engineering. It is active in the following sectors: aeronautical and spatial (28%); automotive (13%); energy and nuclear (10%); technologies and systems; network and telecom; facilities; industries; and pharmacies. In 2005 Assystem opened a new office in Shanghai and acquired Inbis in the UK and Atena in Germany. It created Assystem France.

Assystem SA Key facts & figures Ranking: 3rd | Industry: Consulting | Turnover growth (2002-2005): 283% | Employment growth (2002-2005): 276% | Listed (Paris), with a market capitalisation of EUR 0.32 billion

develop itself along other vertical markets and geographic regions. To do so, it acquired companies and accelerated

170% 160% 150% 140% 130% 120% 110% 100% 90% 80% 70% 60% 50% SBF 120

0.40

Assystem (then Atem) was created in 1966 as an engineering and high-tech consultancy company, mainly dedicated to the French market and its nuclear activities. In 1994, it absorbed its nuclear subsidiary Alphatem, and the group listed in 1995. When difficulties affected nuclear markets in the 1990s, Assystem started to

0.20 0

0.4

0.5

0.6

Source: Datastream

Assystem’s summarised profit

andexpansion loss statement (2001-2005) its in 2003 by merging with Brime Technologies, a small consultancy 2001 Sales 120 EBIT 11 Net Income 7 EUR (millions)

2002 148 8 2

2003 163 (42) (47)

Source: Thomson One Banker

2004 465 18 7

2005 568 41 27

Assystem’s summarised profit and loss statement (2001-2005) 2001 Sales 120 EBIT 11 Net Income 7 EUR (millions)

Assystem decided to dispose of ERP integration to focus its positioning on technological expertise. The group has managed a development program which has transformed it into a strong competitor for Altran and Alten in the lowend R&D subcontracting market. To go beyond its French reach (70% of sales), the company addressed the German and British markets in 2005. That year, the Group booked EUR 568 million in sales (up 10.3% organically), with a total of 8,290 staff members. It is now active in 16 countries worldwide. In 2005, international sales reached 29% of total revenues, and 34% in 1H06.

Assystem - PAR (11/28/2003 - 11/24/2006)

SY.FR

focused on ERP integration and high-tech consulting.

Its expansion throughout Europe and overseas should further fuel the growth of the company, leveraging its client portfolio and its solid expertise in multiple areas. Thanks to its project orientation and its R&D focus, Assystem has developed the capacity to impose itself as

2002 148 8 2

2003 163 (42) (47)

2004 465 18 7

2005 568 41 27

Source: Thomson One Banker

MARKET500 no1 | January / February / March 2007

3

AR D AW

Assystem is still clearly positioned as a recruiter in France (+11.7% for the first 9 months vs. organic growth of 10.9%), which points to improved confidence in the progression of its margins in that region. The company, as a high-growth business, has room to improve (integration of IT systems and cash management). Its stock price has varied wildly on the prospect of acquisitions, as well as on difficulties with profit warnings. However, having delivered stellar performance, could its ability to reach new levels lead this challenger to the top spot next year? C.D.

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e u r o p e ’ s 5 0 0 listing

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21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88

Ryanair Holdings Plc New Wave Group AB Caffè Nero Group Plc Wincor Nixdorf AG SIA Elvi DC Holding AS BCW Group Plc Ferretti Group Nuova Pansac SpA EngroTUS d.o.o. Bechtle AG ILIOTEC Solar GmbH International Power Plc Conergy AG Götz-Gebäudemanagement West GmbH & Co KG RPS Group Plc Alumil Milonas - Aluminium Industry SA Metrovacesa Inspecs Group Plc Sécuritéfrance Schoeller Industries GmbH Sophos DCC Plc Sword Group Dynafix Group BV GN Store Nord A/S Mariella Burani Fashion Group SA Ranger SpA AT&S Austria Technologie und Systemtechnik AG IAWS Group Plc Holroyd Howe Ltd Andritz AG Cisalfa Sport SpA Scanfil Oyj Coloplast A/S Fonebak Plc April Group Photel Communications Inc (Teleperformance Hungary) Soitec Phonak Holding AG Naturex Normaction SA Bennet SpA C1 Group Axon Group Plc Teltonika UAB Össur Hf Umeco Plc Dreams Plc Fast Search & Transfer ASA Esterbauer & Windisch Personalservice GmbH Joyéria Tous Engineering Ingegneria Informatica SpA Grupo ISN Ipte NV CompuGROUP Holding AG Plantasjen ASA Palfinger AG Creston Plc Straumann Holding AG Creditinfo Group Ltd Aliplast NV S&B Industrial Minerals SA SII Europastry ITS SEEVIA Group Omega Pharma Cistoca d.o.o.

Company Business Sector Headquarters

Website

Ireland Sweden United Kingdom Germany Latvia Latvia United Kingdom Italy Italy Slovenia Germany Germany United Kingdom Germany Germany United Kingdom Greece Spain United Kingdom France Netherlands United Kingdom Ireland France Netherlands Denmark Italy Italy Austria Ireland United Kingdom Austria Italy Finland Denmark United Kingdom France Hungary France Switzerland France France Italy Germany United Kingdom Lithuania Iceland United Kingdom United Kingdom Norway Germany Spain Italy Spain Belgium Germany Norway Austria United Kingdom Switzerland Iceland Belgium Greece France Spain France Belgium Slovenia

www.ryanair.ie www.nwg.se www.caffenero.com www.wincor-nixdorf.com www.elvi.lv www.doublecoffee.com www.bcwgroup.com www.ferrettigroup.com www.nuovapansac.com www.tus.si www.bechtle.com www.iliotec.de www.ipplc.com www.conergy.de www.goetz-dienste.com www.rpsgroup.com www.alumil.com www.metrovacesa.es www.inspecs.com www.securifrance.com www.schoellergroup.com www.sophos.com www.dcc.ie www.sword-group.com www.dynafix.com www.gn.com www.mariellaburani.com www.ranger.it www.ats.net www.iaws.com www.holroydhowe.co.uk www.andritz.com www.cisalfasport.it www.scanfil.com www.coloplast.com www.fonebak.com www.aprilgroup.com www.photel.hu www.soitec.com www.phonak.com www.naturex.com www.normaction.com www.bennet.com www.c1-group.de www.axonglobal.com www.teltonika.lt www.ossur.com www.umeco.com www.dreams.co.uk www.fastsearch.com www.esterbauer-windisch.de www.tous.es www.eng.it www.grupoisn.com www.ipte.com www.compugroup.de www.plantasjen.no www.palfinger.com www.creston.com www.straumann.com www.creditinfo.com www.aliplast.com www.sandb.com www.sii.fr www.fripan.com www.itsseeviagroup.fr www.omega-pharma.be www.cistoca.si

Transport, Logistics Textiles, Clothing, Footwear - Manufacturing Tourism, Leisure, Gastronomy - Services IT Services, Information and Communication Technologies Retail Tourism, Leisure, Gastronomy - Services Financial Services, Legal Services Consumer Goods - Manufacturing Chemical, Plastics - Manufacturing Retail IT Services, Information and Communication Technologies Energy, Mining, Utilities Energy, Mining, Utilities Energy, Mining, Utilities Support Services Consulting, Management Services Steel, Metals - Manufacturing Construction, Real Estate Textiles, Clothing, Footwear - Manufacturing Support Services Chemical, Plastics - Manufacturing IT Services, Information and Communication Technologies Consulting, Management Services Consulting, Management Services IT Services, Information and Communication Technologies IT - Manufacturing Textiles, Clothing, Footwear - Manufacturing Automotive - Manufacturing IT - Manufacturing Food, Beverages - Manufacturing Support Services Steel, Metals - Manufacturing Retail IT - Manufacturing Biotechnology, Health IT Services, Information and Communication Technologies Financial Services, Legal Services IT Services, Information and Communication Technologies IT - Manufacturing Biotechnology, Health Food, Beverages - Manufacturing IT Services, Information and Communcation Technologies Retail IT Services, Information and Communication Technologies Consulting, Management Services IT Services, Information and Communication Technologies Biotechnology, Health Support Services Retail IT Services, Information and Communication Technologies Support Services Retail Consulting, Management Services Support Services IT - Manufacturing IT Services, Information and Communication Technologies Retail Automotive - Manufacturing Consulting, Management Services Biotechnology, Health Financial Services, Legal Services Steel, Metals - Manufacturing Energy, Mining, Utilities Consulting, Management Services Food, Beverages - Manufacturing IT Services, Information and Communication Technologies Biotechnology, Health Support Services

Birch Index

3739 3632 3545 3484 3233 3192 3069 3046 3000 2915 2868 2663 2492 2415 2367 2288 2286 2225 2178 2154 2129 2113 1974 1973 1972 1881 1879 1862 1828 1770 1745 1733 1713 1656 1648 1633 1564 1512 1500 1499 1487 1480 1462 1446 1396 1331 1320 1286 1250 1226 1224 1197 1179 1129 1123 1120 1118 1113 1073 1059 1050 1047 1041 1041 1025 1022 986 939

continued on page 36

Full Throttle Capitalising on the advent of the “knowledge economy”, CPL Resources has become a role model for human resources management.

4

MARKET500 no1 | January / February / March 2007

Rank Company

winner’s profile e u r o p e ’ s 5 0 0

C

apitalising on the boom of the “European tiger”, CPL Resources has made employment its bread and butter. The Group’s provides employment services, specialising in the placement of candidates in permanent, temporary and contract positions. CPL also offers human resources consultancy services. The Group focuses on the areas of technology, accounting and finance, sales, engineering, light industrial, healthcare/ pharmaceutical, and office administration.

CPL (Dublin) RD AResources AW DUB (11/28/2003 - 11/24/2006 Datastream CPL Resources Plc Key facts & figures 1000.0% Ranking: 4th | Industry: Business Training and Employment Agency | Turnover 900.0% growth (2002-2005): 279% | Employment growth (2002-2005): 687% | Listed 800.0% 700.0% (Dublin), with a market capitalisation of EUR 0.2 billion 600.0% 500.0% 400.0% 300.0% 200.0% 100.0% 0 D Q5 DB

SE OVERALL Created inIRELAND 1989, the company has fully benefited from its home country boom, 4.00 but its success does not only lie on macro2.00 economic reasons. CPL went public in 0 1999 and 04 benefited from 06 in tech 05 the boom Volume recruitment specialists. It then diversified into finance, accounting and manufactu-

EUR Millions Source: Datastream

CPL Resource’s summarised profit and loss statement (2002-2006) EUR (millions)

Sales EBIT Net Income

2002 27 1 1

2003 52 2 1

2004 74 3 2

2005 105 5 5

2006 148 11 9

Fiscal year ends on 30 June Source: Thomson One Banker

ring. After 2001, the recruitment services slowed down, but CPL started to offer its

clients payroll administration, workforce management and performance development services. CPL Resources was able to react fast and refocus itself to face the market needs. This was done without any slowdown in growth and CPL has even been able to be the best-in-class in profit generation. With 41% in fee growth converted to a profit growth of 83% before tax, CPL has even beaten the analysts’ predictions by 12%. CPL’s force comes from its ability to generate fees from permanent placements (53%) and temporary placements (47%) whether in IT, finance or telecoms. The company generated 9% of its fees from its outsourced services to large

33

europe’s 500


 



winner’s profile

  

CPL has thus succeeded in imposing itself in the recruitment landscape, taking on Adecco, Hays or Michael Page.
    

 

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EUR Millions Source: Datastream

CPL Resource’s summarised profit and loss statement (2002-2006) accounts. The forecast for 2007 is an 18% 2002 at 2003 2005 and 2006a EUR (millions) growth in fees EUR 2004 33.8 million Sales 27 52 74 105 148 15% growth in profits at EUR 12.2 million. EBIT 1 2 3 5 11 1

1

2

5

9

The number of CPL Resources consulFiscal year ends on 30 June tants has increased by 18%, from 145 Source: Thomson One Banker to 171, over 6 months. Its ability to leverage its model also shows that the fees generated per consultant have increased from EUR 55,000 to EUR 77,000. In 2006 it approximately reached 180 and EUR 80,000 per consultant.

CPL has thus succeeded in imposing itself in the recruitment landscape, taking on Adecco, Hays or Michael Page. It is now a dominant player in the IT, telecoms, finance, engineering, pharmaceutical and office support verticals. The company has built its business on attention to customer relationships, refunding clients who are not satisfied within the first six months

C.D.










MARKET500 no1 | January / February / March 2007

06

05

The company is thus positioned to be a market leader, holding a 10% share of a very fragmented market, and has the firepower to make acquisitions to further strengthen its position. Its cash reserves are EUR 21.3 million, which the company is increasing regularly. In March 2006 CPL acquired Nursefinders in the UK. Over the next three years, its CEO Anne Heraty aims to expand to Britain and Eastern Europe, where GDP is growing fast and recruitment is following. This should pave the way for further impressive growth for CPL.




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36

89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157

D. Masoutis SA Kago-Kamine-Kachelofen GmbH & Co Deutsche Wärmesysteme KG Avl List GmbH Mellon Collection Services SA Banco Pastor SA Heisterkamp Transport BI-LOG AG Reiwag Facility Services GmbH Süd-Chemie AG Novabase - S.G.P.S. SA Plaisio Computers SA ClinPhone Group Ltd Aircom International paragon AG msg systems AG Zollner Elektronik AG Inoplast Eurofins Scientific IMO Momentenlager GmbH Peyber Hispania Empresa Constructora SL Ted Baker Plc Town & Country Haus Lizenzgeber GmbH Parrot Società Cattolica di Assicurazione - Società Cooperativa Interhyp AG Redur SA (Group) SICK AG De Vizia Transfer SpA Panda Software Business & Decision Fontana Pietro Societa Servizi Socio Culturali Cooperativa Sociale Onlus FOKAS AVE SA TM Software Zaklady Drobiarskie Kozieglowy Sp Z O O Beluga Shipping GmbH Buongiorno SpA TANDBERG Television ASA PC-Ware Information Technologies AG Bitzer Kühlmaschinenbau GmbH & Co. Holding KG Central Trust Plc Esprinet SpA Wolfson Microelectronics Plc Brain Force Holding AG North Midland Construction Plc Passage Fitness NV Sinfonika Kraft Malerwerkstätten GmbH Grupo Pevafersa Instalaciones buw Unternehmensgruppe Direct Wines Ltd Poas Mantenimiento SI SDL Plc Vanco BrainLAB AG Poco Holding GmbH Mürdter Dvorak lisovna, spol.s.r.o The Listening Company Ltd Forez s.r.o. EUROGRAPHICS AG Precimed SA innocent Ltd Option Huntleigh Technology Plc Tandberg ASA FreeSoft Plc Reichhart Logistik Gruppe Creganna Ltd Typsa

Company Business Sector Headquarters

Website

Greece Germany Austria Greece Spain Netherlands Germany Austria Germany Portugal Greece United Kingdom United Kingdom Germany Germany Germany France France Germany Spain United Kingdom Germany France Italy Germany Spain Germany Italy Spain France Italy Italy Greece Iceland Poland Germany Italy Norway Germany Germany United Kingdom Italy United Kingdom Austria United Kingdom Belgium Slovenia Germany Spain Germany United Kingdom Spain United Kingdom United Kingdom Germany Germany Czech Republic United Kingdom Czech Republic Germany Switzerland United Kingdom Belgium United Kingdom Norway Hungary Germany Ireland Spain

www.masoutis.gr www.kago.de www.avl.com www.mellongroup.com www.bancopastor.es www.heisterkamp.nl www.bi-log.de www.reiwag.at www.sud-chemie.com www.novabase.pt www.plaisio.gr www.clinphone.com www.aircominternational.com www.paragon-online.de www.msg-systems.com www.zollner.de www.inoplast.fr www.eurofins.com www.imo.de www.peyber.es www.tedbaker.co.uk www.franchisepartnerschaft.de www.parrot.biz www.cattolicaassicurazioni.it www.interhyp.de www.redur.es www.sick.com www.deviziatransfer.it www.pandasoftware.com www.businessdecision.com www.fontana-group.com www.sssc.it www.fokas.gr www.t.is www.zd-kozieglowy.pl www.beluga-group.com www.buongiorno.com www.tandbergtv.com www.pc-ware.com www.bitzer.de www.centraltrust.co.uk www.esprinet.com www.wolfsonmicro.com www.brainforce.com www.northmid.co.uk www.passagefitness.com www.sinfonika.eu www.arta.de www.pevafersa.com www.buw.de www.laithwaites.co.uk www.poas.net www.sdl.com www.vanco.com www.brainlab.com www.poco.de www.muerdter.cz www.listening.co.uk www.eurographics.de www.forez.cz www.precimed.com www.innocentdrinks.co.uk www.option.com www.huntleigh-technology.com www.tandberg.net www.freesoft.hu www.reichhart.net www.creganna.com www.typsa.es

Retail Consumer Goods - Manufacturing Automotive - Manufacturing IT Services, Information and Communication Technologies Financial Services, Legal Services Transport, Logistics Consulting, Management Services Support Services Chemical, Plastics - Manufacturing IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Biotechnology, Health IT Services, Information and Communication Technologies Automotive - Manufacturing IT Services, Information and Communication Technologies Transport, Logistics Automotive - Manufacturing Biotechnology, Health Steel, Metals - Manufacturing Construction, Real Estate Retail Construction, Real Estate IT - Manufacturing Financial Services, Legal Services Financial Services, Legal Services Transport, Logistics Automotive - Manufacturing Construction, Real Estate IT Services, Information and Communication Technologies Consulting, Management Services Automotive - Manufacturing Support Services Retail IT Services, Information and Communication Technologies Food, Beverages - Manufacturing Transport, Logistics IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Consumer Goods - Manufacturing Financial Services, Legal Services IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Construction, Real Estate Tourism, Leisure, Gastronomy - Services IT Services, Information and Communication Technologies Construction, Real Estate Energy, Mining, Utilities Consulting, Management Services Retail IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Biotechnology, Health Retail Automotive - Manufacturing Consulting, Management Services Steel, Metals - Manufacturing Consumer Goods - Manufacturing Biotechnology, Health Food, Beverages - Manufacturing IT - Manufacturing Biotechnology, Health IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Transport, Logistics Biotechnology, Health Consulting, Management Services

Birch Index

921 916 895 894 888 871 852 830 812 812 809 796 763 759 759 754 747 747 743 740 721 683 673 655 647 626 601 596 596 594 591 587 583 582 581 578 573 552 548 532 531 527 516 513 513 500 489 479 462 461 455 453 451 449 444 443 432 409 404 404 401 400 400 393 392 389 388 386 378

continued on page 38

The Right Motto (http://www.spreadshirt.com) Spreadshirt leverages a simple idea with modern tools – and it works. Far from the go-go days of business concepts, this shoebox start-up proves that execution is key to success.

5

MARKET500 no1 | January / February / March 2007

Rank Company

S

preadshirt, a German upstart, has made it simple for everyone to design and market their own t-shirts. Capitalising on the personalisation trend, Spreadshirt offers its clients a simple way to use the tools that it has set up: through the Internet. The concept goes beyond simple slogans to be printed on tshirt. Spreadshirt supports the marketing and sales of the t-shirts designed by its visitors. In that way, everyone can design t-shirts and Spreadshirt takes care of the sales and commissioning. Spreadshirt was conceived as a low-cost t-shirt retailer, enabling visitors to leverage a simple retail law: get paid upfront, pay

AR D AW

Spreadshirt Key facts & figures Ranking: 5th | Industry: Retail | Turnover growth (2002-2005): 13,733% Employment growth (2002-2005): 9,900% | Not listed, backed by private equity firms

the suppliers in 30 days. In that respect, the two founders, Lukasz Gadowki and Matthias Spiess, launched the company without capital. As a typical Internet startup, they did it from their university dorm room. Unlike typical Internet start-ups, they did it from Leipzig (Germany) and in 2002, after the Internet bubble burst. More than 200,000 visitors have designed t-shirts online and are marketing them through Spreadshirt’s channels (“shops”). Spreadshirt proposes an integrated service to its visitors, from shirt production management, to shipping and even customer service. The company has signed partnerships with small- and

medium-sized businesses to help them offer this option on their website and customise t-shirts for their customers. The company has been profitable since its inception and its turnover has progressed from EUR 60,000 in 2002 to EUR 8.3 million in 2005. It has now subsidiaries in the US, France and Canada, and is progressively launching other customisable products such as coffee mugs. To support its growth, Spreadshirt has knocked on the door of one of the most famous venture capital firms in the US: Accel Partners. The fund has invested a few million to offer Spreadshirt the opportunity to support its target: double its sales every year, and thus compete with other personalisation specialists such as CafePress. C.D.

37

e u r o p e ’ s 5 0 0 listing

38

158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226

Elite Service Partner A/S First Call Global Solutions Zucchetti Tsakos Energy Navigation Ltd (TEN Ltd) Melexis NV BWT AG ICOS Vision Systems Corporation NV Formel D GmbH HiQ International Altea SpA CVO Group Michielsens Kranen NV Boss Media AB Der Beck GmbH GL Trade SA Advanced Digital Broadcast Holdings SA Environmental Waste Controls Plc Waterman Group Plc Laboratoires Arkopharma SA Pankl Racing Systems AG Neurones Faktab Finans AB JSC Salinta Eltete Ltd Realtime Technology AG Raiffeisen Informatik GmbH Atlanta Capital Consulting GmbH Testo AG Capelle Serono SA Cavotec Group Etnoteam Grainger Trust Plc Systeam AB South Lakeland Caravans Ltd Solucom Westcoast Ltd Opera Software ASA B.B.R. Service Srl MCI Group Holding SA Sipro Sicurezza Professionale Srl Jahn GmbH Workcenter Servicios Globales De Documentacion SA Wavelight AG ACP Gruppe Cuddy Group Walkers Shortbread Ltd Degetel Group Sunways AG Roularta Media Group NV/SA Komsa Kommunikation Sachsen AG Muehlbauer Holding AG & Co KGaA TQ-Systems GmbH ADVA AG Optical Networking Optisport Exploitaties Formula Servizi Società Cooperativa A Responsabilità Limitata Control Risks Group Holdings Ltd Grupo Tecnologico e Industrial GMV SA Ferri Elettroforniture Srl Ikm Gruppen AS (Incl. Ikm Laboratorium AS) Proservia Iris Cleaning Services SA Isra Vision Systems AG Cadtech Iberica S.A. - Grupo CT Epsilon Net SA XAPT Hungary Kft Medical and Health Science Centre UD Devoteam Chiltern International Holdings Ltd

Company Business Sector Headquarters

Website

Norway United Kingdom Italy Greece Belgium Austria Belgium Germany Sweden Italy Hungary Belgium Sweden Germany France Switzerland United Kingdom United Kingdom France Austria France Sweden Lithuania Finland Germany Austria Germany Germany France Switzerland Netherlands Italy United Kingdom Sweden United Kingdom France United Kingdom Norway Italy Switzerland Italy Germany Spain Germany Austria United Kingdom United Kingdom France Germany Belgium Germany Germany Germany Germany Netherlands Italy United Kingdom Spain Italy Norway France Belgium Germany Spain Greece Hungary Hungary France United Kingdom

www.elite.as n/a www.zucchetti.it www.tenn.gr www.melexis.com www.bwt.at www.icos.be www.formeld.com www.hiq.se www.alteanet.it www.cvogroup.com www.michielsens.be www.bossmedia.se www.der-beck.de www.gltrade.com www.adbholdings.com www.ewc.eu.com www.waterman-group.co.uk www.arkopharma.com www.pankl.com www.neurones.net www.faktab.se www.salinta.lt www.eltete.com www.rtt.ag www.raiffeiseninformatik.at www.atlanta-capital.de www.testo.de www.transports-capelle.com www.serono.com www.cavotec.com www.etnoteam.it www.graingertrust.co.uk www.systeam.se www.southlakeland-caravans.co.uk www.solucom.fr www.westcoast.co.uk www.opera.com www.bbrservice.com www.mci-group.com www.grupposipro.it www.jahngmbh.de www.workcenter.es www.wavelight.com www.acp.at www.cuddy-group.com www.walkersshortbread.com www.degetel.com www.sunways.de www.roularta.be www.komsa.com www.muehlbauer.de www.tq-group.com www.advaoptical.com www.optisport.nl www.formulaservizi.it www.control-risks.com www.grupogmv.com n/a www.ikm.no www.proservia.fr www.iris.be www.isravision.com www.ctgrupo.com www.epsilonnet.gr www.xapt.com www.dote.hu www.devoteam.com www.chiltern.com

Support Services IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Transport, Logistics Automotive - Manufacturing Energy, Mining, Utilities IT - Manufacturing Support Services IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Support Services Transport, Logistics IT - Manufacturing Food, Beverages - Manufacturing IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Support Services Consulting, Management Services Biotechnology, Health Automotive - Manufacturing IT Services, Information and Communication Technologies Financial Services, Legal Services Chemical, Plastics - Manufacturing Transport, Logistics IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Financial Services, Legal Services Automotive - Manufacturing Transport, Logistics Biotechnology, Health Energy, Mining, Utilities IT Services, Information and Communication Technologies Construction, Real Estate IT Services, Information and Communication Technologies Tourism, Leisure, Gastronomy - Services IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Support Services Consulting, Management Services Support Services Steel, Metals - Manufacturing Retail Biotechnology, Health IT Services, Information and Communication Technologies Construction, Real Estate Food, Beverages - Manufacturing IT Services, Information and Communication Technologies Energy, Mining, Utilities Media IT Services, Information and Communication Technologies Consumer Goods - Manufacturing IT - Manufacturing IT Services, Information and Communication Technologies Tourism, Leisure, Gastronomy - Services Support Services Consulting, Management Services IT Services, Information and Communication Technologies Energy, Mining, Utilities Energy, Mining, Utilities Consulting, Management Services Support Services Automotive - Manufacturing IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Biotechnology, Health IT Services, Information and Communication Technologies Biotechnology, Health

Birch Index

377 375 369 364 355 354 350 348 344 334 333 331 324 318 315 315 310 310 305 305 302 299 298 294 294 291 289 287 285 283 281 278 277 277 274 268 264 260 260 253 249 244 243 242 240 238 237 236 232 231 228 226 224 224 220 219 218 218 211 211 209 208 203 203 202 200 200 199 198

continued on page 42

Offshore buoy Surfacing in the top ten of the ranking, Webhelp proves that outsourcing and offshoring can rhyme with quality. The stock exchange lighthouse is in sight.

8

Webhelp SA

W

ebhelp is an offshore call centre pioneer. O l i v i e r Duha and Frédéric Jousset created Webhelp in 2000, operating a French online portal that provides a live, human-assisted Internet search service. The market is a business-to-business, web-based customer support solution delivered in real time, supported by human chat.

MARKET500 no1 | January / February / March 2007

Rank Company

The two founders identified the potential that outsourcing call centres in cheaper areas was offering. The company employs 3,300 staff, 2,400 in Morocco, 250 in Romania and 550 in France. Its target is to deliver quality services to its customers, large French and international companies. It is the only ISO 9001-2000 certified call centre in France. According to its President Frédéric Jousset, Webhelp’s success is attribu-

Key facts & figures Ranking: 8th | Industry: IT Services | Turn-over growth (2002-2005): 973% | Employment growth (2002-2005): 580% | Not listed, backed by private equity companies

table to its positioning in a high-growth market that has benefited from new technologies. “Historically, the 250,000 people who were working in customer relationship were based in France. Today, there are 20,000 in North Africa,” among them Webhelp’s staff, says Jousset. This has fuelled its growth, their revenues having tripled over the course of the last three years. The company aims to continue this trend for the next three years. This explains how the company raised a total of EUR 15 million, through venture capital, expansion and LBO rounds in 2000, 2001 and 2005. Alven Capital, Europatweb, Jet Innovation, Avenir Finance and Barclays Private Equity are the company’s financial backers. The company plans to reach a turnover of EUR 60 million this year and continue this trend. “This growth is sustainable, as the fundamentals (growing market, attractive positioning, increasing brand awareness, quality of the team) are getting stronger,” declares Jousset. On the French market, which counts 200 companies, Webhelp has progressed from 50th place in 2003

to 14th in 2005, and 4th in 2006. They expect to be second in 2007, behind French leader Teleperformance. “Beyond this progression, a lot of sectors should open to outsourcing of client relationship management under deregulation and competition in the public sector, health, electricity, et cetera,” says Jousset.

39

Jousset mentions three main challenges to managing growth: staff, processes and financial resources. As a high-growth business, Webhelp has chosen to “over dimension its management team since the beginning” when planning its growth. Processes are key at Webhelp, as they are outsourcing call centres with an ISO level of quality. Jousset’s advice to entrepreneurs is “think big”, and make your company scalable in order to be ready for growth. Then “involve the staff in the growth challenge by giving them a financial incentive. […] Details are key and execution is critical. […] Luck is also important, and we must admit that we had some in our development.” C.D.

winner’s profile e u r o p e ’ s 5 0 0

europe’s 500

Is your company one of Europe’s high growth, job-creating champions?

winner’s profile

Revolution

A Stellar

40

C

entric was created in 1991 by G e r a r d Sanderink a n d weathered the 20012002 crisis without any losses. This simple fact shows how stable and resilient the performance of this company, dedicated to IT services, is. Centric is debt free, and finances all its developments with its own resources. It has reinvested all profits in the business, which has further generated growth. According to Centric IT Director Karim Henkens, “this has given Centric the ability to make independently its own choices.” Not only has the company remained independent, but it has also avoided fundraising from third parties. Its strategy has been to spread its activities between the profit (financial services and wholesale) and not-for-profit sectors (local government, housing associations). Its turnover is evenly generated by these two markets. This gives real stability to the company, and if the economy declines, the resilience of the not-for-profit sector will buoy the company. Centric has also developed multiple lines of business, from software development

Find out how you measure up against the best in Europe by submitting your company for the 2007 Europe’s 500 Listing – the only independent pan-European ranking of high growth, job-creating companies across all business sectors.

Centric Key facts & figures Ranking: 13th | Industry: IT Services | Turnover growth (2002-2005): 55% Employment growth (2002-2005): 107% | Not listed

|

2007 Europe’s 500 Listing Any small and mid-sized company headquartered in one of the 25 EU member states, plus Switzerland, Norway and Iceland, can apply to be considered. Nominations are free and without obligation. Altogether, the high growth companies that qualified for the 2006 Europe’s 500 Listing: • created some 150,000 new jobs across Europe

(vertical markets or custom made) to infrastructure, including consultancy, IT Solutions, e-business, software engineering, systems integration, managed ICT services and training. Centric is thus able to design, develop, maintain, implement, and, if necessary, run the software it supplies.

Centric’s profit and loss statement (2001-2005) EUR (millions)

Sales Net profit

2001 215 11

2002 228 9

2003 235 14

2004 274 16

2005 353 23

Source: Centric

To grow, the company has applied the same stability focus and prudent approach. It has taken over competitors who went bankrupt and thus financed its acquisitions only at the best price possible. The company made acquisitions amounting to EUR 350 million in 2005 and EUR 600 million in 2006. This has been one of its largest moves and it aims to grow at a rate of 10 to 15% per year at least, mostly organically. “We do not plan to go on the stock exchange or change our strategy and call banks to finance us. We want to develop by ourselves and remain free to make our own choices,” says Henkens. This also saves a lot of time and allows the management to focus on challenges,

• increased their turnover by €36.9 billion

such as integrating the acquisitions (integrating small acquisitions can represent a lot of work). Finding the right management can also be difficult, as some acquisitions come with an adequate staff, and others not.

• recorded an impressive average annual job growth rate of 16% over three consecutive years. Europe’s 500 winning companies receive significant media exposure giving recognition to their achievements, helping to motivate and reward staff and attract investment. The winners are honoured at an Awards Ceremony and Gala Dinner held in a different European city each November.

According to Henkens, the high growth of Centric has been a “coincidence”. “Our target is to build long-term, stable and sustainable growth.” In that respect, Centric has been very cautious in its international expansion. It took Centric three years to go to Belgium; it is now using that approach as a blueprint for its internationalisation. Norway, Germany and Switzerland are now on the radar. Henkens’s advice to entrepreneurs would be to “take the steps that you think you can handle. If it is not financially possible, then do not do it.” Planning is also crucial, especially before the acquisition, not afterwards. Centric now has 7,200 employees, but 40% of the time of the management is spent with customers. According to Henkens, this is what allowed Centric to be so successful. The management is able to listen to and understand customers. By meeting 10 customers per month, the management has a deep knowledge of the market. C.D.

Europe's 500 - Entrepreneurs for Growth is a pan-European association of high growth entrepreneurs which advocates measures to improve business conditions for growth and jobs at EU and national level

www.europes500.com

MARKET500 no1 | January / February / March 2007

13

Built on prudence and independence, Centric has set itself up for meteoric performance. It is a gravity centre for European IT RD A AW Services, through consolidation.

To register your interest and to be alerted when nominations for 2007 open in April, please e-mail your contact details to

[email protected]

Gain visibility, recognition and market share… Published by Entrepreneurs for Growth

1 0 th A n n i v e r s a r y 1 9 9 6 - 2 0 0 6

Supported by

winner’s profile e u r o p e ’ s 5 0 0

e u r o p e ’ s 5 0 0 listing

42

227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296

Flamel Technologies SA Local Contract Hire & Leasing Ltd Real SA Gestión Técnica de Montajes y Construcciones GTM SA Incanto Group Srl Fortakas Etud Integral Corporación Alimentaria Guissona Chipidea-Microelectronica SA Putzteufel Reinigungsgesellschaft mbH Forum Media Group GmbH Arthur McKay & Co Ltd Radiall SA Delcam Plc Group Rovi Econcern BV HP Pelzer Group Avanquest Software SILIKO d.o.o. Sturm Holding GmbH Korres SA Wenglor Sensoric GmbH Lynn`s BEST GmbH GTG Gummidichtungstechnik GmbH & Co KG Ioniki Sfoliata SA Inter Contract Wbc s.r.o. Micronic Laser Systems AB Alternative Networks Plc Sigma Pharmaceuticals Plc PAA Laboratories GmbH Loacker Recycling GmbH MarketXS Cramer M. J. Eriksson A/S Jokey Plastik GmbH Clarkson Evans Ltd MetalCom-R Ltd Ognibene SpA Johann Dettendorfer Spedition Ferntrans GmbH & Co KG Athinaiki Bed Mattress Manufacturer SA (Media Strom) Spoldzielnia Mleczarska Ostroleka Simon, Kucher & Partners GmbH Native Instruments Software Synthesis GmbH Thomann Mindjet GmbH mG miniGears SpA ACTANO GmbH Rödl & Partner IQ Intelligentes Ingenieur Management GmbH Loyalty Partner GmbH Tubacex Arkitema K/S Mobile Ambulante Pflegepartner GmbH & Co KG GEALAN Formteile GmbH Prodrive Holdings Ltd Schreiner Group GmbH & Co KG Soflog-Sofembal I.R.I.S. Callataÿ & Wouters Italtrans SpA Harlekin Spiel- u. Unterhaltungsautomaten Betriebs GmbH Bruder Straubinger Gebäudereinigung GmbH Hör Technologie GmbH Allando Trailways A S Comoli Ferrari & C. SpA Euroskilt AS Odyssey Asset Management Systems SA Freedom Finance Plc PSW automotive engineering GmbH Thomas & Piron SA

Company Business Sector Headquarters

Website

France United Kingdom Poland Spain Italy Lithuania France Spain Portugal Austria Germany United Kingdom France United Kingdom Spain Netherlands Germany France Slovenia Germany Greece Germany Germany Germany Greece Czech Republic Sweden United Kingdom United Kingdom Austria Austria Netherlands United Kingdom Denmark Germany United Kingdom Hungary Italy Germany Greece Poland Germany Germany Germany Germany Italy Switzerland Germany Germany Germany Spain Denmark Germany Germany United Kingdom Germany France Belgium Belgium Italy Germany Germany Germany Estonia Italy Norway Luxembourg United Kingdom Germany Belgium

www.flamel.com 197 www.1car1.com 194 www.realsa.pl 189 www.gtmsa.es 189 www.incantodivani.com 186 www.fortakas.lt 185 www.etud-integral.fr 184 www.cag.es 180 www.chipidea.com 179 www.putzteufel.at 176 www.forum-media.com 173 www.arthur-mckay.com 173 www.radiall.com 172 www.delcam.com 172 www.rovi.com 170 www.econcern.com 169 www.pelzer.de 169 www.avanquest.com 168 www.siliko.si 166 www.sturm-gmbh.de 165 www.korres.com 164 www.wenglor.de 164 www.Lynns-BEST.de 160 www.gtg-group.com 159 www.ionikigr.com 159 www.intercontract.cz 154 www.micronic.se 152 www.alternativenetworks.com 152 www.sigpharm.co.uk 152 www.paa.com 151 www.loacker.at 149 www.marketxs.com/ 149 www.cramer.com 148 www.mjeriksson.dk 148 www.jokey.com 148 www.clarksonevans.co.uk 147 www.metalcom.hu 145 www.ognibene.com 144 www.dettendorfer.de 144 www.mediastrom.gr 143 www.sml-ostroleka.pl 142 www.simon-kucher.com 142 www.native-instruments.com 142 www.thomann.de 141 www.mindjet.de 141 www.minigears.com 140 www.actano.com 139 www.roedl.de 137 www.iq-nbg.de 136 www.loyaltypartner.com 132 www.tubacex.com 131 www.arkitema.dk 128 www.mobile-ambulante-pflegepartner.de 126 www.gealan.com 123 www.prodrive.com 122 www.schreiner-group.com 122 www.soflog.fr 122 www.irislink.com 122 www.cw-thaler.com 120 www.italtrans.com 119 n/a 118 n/a 116 www.hoer-technologie.de 116 www.allando.com 115 www.comoliferrari.it 115 www.euroskilt.no 114 www.odyssey-group.com 112 www.freedomfinance.co.uk 112 www.psw-konstruktion.de 110 www.thomas-piron.com 109

Biotechnology, Health Transport, Logistics Food, Beverages - Manufacturing Construction, Real Estate Consumer Goods - Manufacturing IT Services, Information and Communication Technologies Automotive - Manufacturing Food, Beverages - Manufacturing IT Services, Information and Communication Technologies Support Services Media Construction, Real Estate Steel, Metals - Manufacturing IT - Manufacturing Biotechnology, Health Energy, Mining, Utilities Automotive - Manufacturing IT Services, Information and Communication Technologies Chemical, Plastics - Manufacturing Steel, Metals - Manufacturing Consumer Goods - Manufacturing IT - Manufacturing Biotechnology, Health Automotive - Manufacturing Food, Beverages - Manufacturing Textiles, Clothing, Footwear - Manufacturing IT - Manufacturing IT Services, Information and Communication Technologies Biotechnology, Health Biotechnology, Health Steel, Metals - Manufacturing IT Services, Information and Communication technologies IT Services, Information and Communication Technologies Construction, Real Estate Consumer Goods - Manufacturing Construction, Real Estate IT Services, Information and Communications Technologies Automotive - Manufacturing Transport, Logistics Consumer Goods - Manufacturing Food, Beverages - Manufacturing Consulting, Management Services IT - Manufacturing Retail IT - Manufacturing Automotive - Manufacturing Consulting, Management Services Financial Services, Legal Services Consulting, Management Services Consulting, Management Services Steel, Metals - Manufacturing Construction, Real Estate Biotechnology, Health Steel, Metals - Manufacturing Automotive - Manufacturing IT - Manufacturing Transport, Logistics IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Transport, Logistics Consumer Goods - Manufacturing Support Services Automotive - Manufacturing Transport, Logistics Consumer Goods - Manufacturing Transport, Logistics IT Services, Information and Communication Technologies Financial Services, Legal Services Automotive - Manufacturing Construction, Real Estate

Birch Index

continued on page 44

2000s

The roaring Sport and fashion are converging and redesigning an entire industry under new marketing rules. This cat, or Puma, is landing on its paws and racing to grab market share.

14

A

dd fashion to footwear and you will get a big cat in your growth engine. Puma has redesigned itself from a typical sports footwear manufacturer to a fashion and luxury footwear brand with four collections per year.

MARKET500 no1 | January / February / March 2007

Rank Company

Puma designs, manufactures and markets sporting goods, mainly footwear. Its activities are organised around three divisions: footwear, apparels and accessories. The footwear department designs, manufactures and markets mainly sports shoes. The apparel department is dedicated to the production and marketing of sportswear-related articles. The accessories department focuses on luggage and other sports-related goods. The Group operates and sells in Europe, North and Latin America, Africa and Asia. The company has shown 39% average yearly growth since early 2001, with a leading position in the upscale market. Its brand is its main asset and the company has shown an impressive capacity to build

AR D AW

Puma AG Key facts & figures Ranking: 14th | Industry: Footwear | Turnover growth (2002-2005): 95% | Employment growth (2002-2005): 113% | Listed (Frankfurt), with a market capitalisation of EUR 4.58 billion

upon it and be associated with champions and events. Even though highly dependent on the European market for its sales (62% in 2005), Puma has room to expand in North America, where Nike and Reebok are leading the pack, and Asia, which is strong prospect.

Puma - FRA (11/21/2003 - 11/17/2006) Datastream

43

270.0% 250.0% 230.0% 210.0%

Is the big cat able to hold its breathe and continue to run as fast? Analysts appear to doubt it: they lowered their forecasts and do not count on double digit growth rates for earnings going forward (as gross margins are declining). However, the company still has some assets and expects double digit growth in sales in 2007, notably with an organic growth rate above 15%. Will Puma make it to the 2007 ranking and improve its positioning? With Asia growing above 100%, the US at almost 50% in Q3 2006, and Europe at 10%, the prospects are good. But currency movements and high marketing and distribution costs are putting some pressure on the management. If customers are loyal to the brand, Puma will be able to show its claws and aggressively catch a greater market share. C.D.

190.0% 170.0% 150.0% 130.0% 110.0% 90% PUM - FF DAX 30 PERFORMANCE

0.02 0.01 0

04 Volume

06

05

Source: Datastream

Puma’s summarised profit and loss statement (2001-2005) In EUR (millions) 2001

Sales EBIT Net Income

598 61 40

2002 910 127 85

2003 1274 266 179

End of fiscal year: 31 March Source: Thomson One Banker

2004 1530 372 257

2005 1778 409 286

e u r o p e ’ s 5 0 0 listing

44

297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360 361 362 363 364 365 366

Semcon AB HPS Ltd Vitronic Dr.-Ing. Stein Bildverarbeitungssysteme GmbH Ecm (Vehicle Delivery Service) Ltd Msource Medical Development Eckert & Ziegler Strahlen- und Medizintechnik AG Volz Luftfilter GmbH & Co KG Groupe Silicomp Altia Consultores SL Coffee Connection SA Coffeeway Fokas Odysseus SA Bogdol Verwaltungs- und Immobilien GmbH Michel Baule SA NV Joris Ide Defim SpA Geoffrey Robinson Ltd Bott Ltd Ridderikhoff Groep BV SMI SpA GENESIS Pharma SA MorphoSys AG P to P IT Consulting Soft Computing Qbranch AB Seissenschmidt AG Protecta SA Ajkai Elektronikai Gyarto Es Szolgaltato Korlatolt Felelossegu Tarsasag CASON Engineering Plc Fussl Modestraße Mayr GmbH Parcours SA Ceuta Healthcare Group Of Companies Autonomy Corporation Plc Samhammer AG Schmack Biogas AG QUMAS Eiffel Econet Futbol Club Barcelona Brack Electronics AG Expo Biro LM IT Services AG Artizian Catering Services Ltd Doppstadt Calbe GmbH Przedsiebiorstwo Produkcyjne Uslugowo-Handlowe Beko Holding AG Cobra Beer Przedsiebiorstwo Wielobranzowe Eltar Sp Z O O Kloiber GmbH Artwork Systems NV JSC Dzintars Prigo d.o.o. Brezovica Soudal NV Amlin Plc Siac Butlers Steel Ltd Reinsch Speditions- und Kontraklogistik Labor L+S AG Grenkeleasing AG L A International Computer Consultant Ltd E.C.S. Electronics BV Axesor, Grupo Infotel Empire Direct Plc Xsil Ltd Drukkerij Verstraete NV/SA Plan-Net Services Plc Hirsch Servo AG Arginta Prangl Gesellschaft mbH BUG Computer Components AG Restaurants At Work Cassis SA

Company Business Sector Headquarters

Website

Sweden Hungary Germany United Kingdom Belgium Germany Germany France Spain Greece Greece Germany France Belgium Italy United Kingdom Germany Netherlands Italy Greece Germany Sweden France Sweden Germany Greece Hungary Hungary Austria France United Kingdom United Kingdom Germany Germany Ireland Netherlands Spain Spain Switzerland Slovenia Germany United Kingdom Germany Poland Austria United Kingdom Poland Germany Belgium Latvia Slovenia Belgium United Kingdom Ireland Germany Germany Germany United Kingdom Netherlands Spain United Kingdom Ireland Belgium United Kingdom Austria Lithuania Austria Germany United Kingdom Belgium

www.semcon.se www.hps.hu www.vitronic.de n/a www.msource-cro.com www.ezag.de www.volzfilters.com www.silicomp.fr www.altia.es www.coffeeway.com www.fokas.gr www.bogdol-dienstleistungen.de www.baule.com www.joriside.be www.defim.com www.geoffreyrobinson.ltd.uk www.bottltd.co.uk www.ridderikhoff.com www.smigroup.it www.genesispharma.com www.morphosys.de www.ptop.se www.softcomputing.com www.qbranch.se www.seissenschmidt.de www.protecta.gr www.ajkaelektron.hu www.cason.hu www.fussl.at www.parcours.fr www.ceutahealthcare.com www.autonomy.com www.samhammer.de www.schmack-biogas.com www.qumas.com www.eiffel.nl www.econet.es www.fcbarcelona.com www.brack.ch www.expobiro.si www.lm-ag.de www.artizian.co.uk www.doppstadt.com www.prosper.biz.pl www.beko.eu www.cobrabeer.com www.eltar.com.pl www.kloiber.com www.Artwork-Systems.com www.dzintars.lv www.prigo.si www.soudal.com www.amlin.com www.siacbutlers.ie www.reinsch-spedition.de www.Labor-LS.de www.grenkeleasing.com www.lainternational.com www.ecs-electronics.nl www.axesor.es www.empiredirect.co.uk www.xsil.com www.verstraete.be www.plan-net.co.uk www.hirsch-gruppe.com www.arginta.lt www.prangl.at www.e-bug.de www.restaurantsatwork.co.uk www.cassis.be

IT Services, Information and Communication Technologies Consulting, Management Services IT Services, Information and Communication Technologies Transport, Logistics Biotechnology, Health Biotechnology, Health Energy, Mining, Utilities IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Tourism, Leisure, Gastronomy - Services Retail Support Services Chemical, Plastics - Manufacturing Steel, Metals - Manufacturing Steel, Metals - Manufacturing Construction, Real Estate Consumer Goods - Manufacturing Support Services Food, Beverages - Manufacturing Biotechnology, Health Biotechnology, Health IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Steel, Metals - Manufacturing Consumer Goods - Manufacturing Automotive - Manufacturing IT - Manufacturing Retail Transport, Logistics Biotechnology, Health IT Services, Information and Communication Technologies IT - Manufacturing Energy, Mining, Utilities Financial Services, Legal Services Financial Services, Legal Services Consulting, Management Services Tourism, Leisure, Gastronomy - Services IT Services, Information and Communication Technologies Tourism, Leisure, Gastronomy - Services IT Services, Information and Communication Technologies Support Services Energy, Mining, Utilities Food, Beverages - Manufacturing IT - Services, Information and Communication Technologies Food, Beverages - Manufacturing Construction, Real Estate Transport, Logistics IT Services, Information and Communication Technologies Consumer Goods - Manufacturing Transport, Logistics Chemical, Plastics - Manufacturing Financial Services, Legal Services Steel, Metals - Manufacturing Transport, Logistics Biotechnology, Health Financial Services, Legal Services Consulting, Management Services Automotive - Manufacturing Consulting, Management Services Retail IT - Manufacturing Consumer Goods - Manufacturing IT Services, Information and Communication Technologies Chemical, Plastics - Manufacturing Steel, Metals - Manufacturing Transport, Logistics IT - Services, Information and Communication Technologies Tourism, Leisure, Gastronomy - Services Retail

Birch Index

109 108 107 105 105 105 102 102 102 100 100 100 100 99 99 98 98 97 97 97 97 96 94 94 92 91 91 90 89 89 89 88 88 87 87 87 86 86 86 82 81 79 79 78 78 76 76 76 75 74 74 73 73 72 71 71 70 70 70 69 68 67 66 65 65 64 63 63 62 61

continued on page 50

enjoying it

Aging and

Retiring can be a luxurious experience, even more so if the residence is comparable to a four star hotel in the number two destination in the world for tourism.

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MARKET500 no1 | January / February / March 2007

Rank Company

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Intercentros Ballesol Key facts & figures Ranking: 17th | Industry: Services | Turnover growth (2002-2005): 138% | Employment growth (2002-2005): 260% | Not listed, backed by the private equity firm 3i

apitalising on aging. Created in 1980, Intercentros Ballesol is dedicated to providing hosting services to retirees, mainly through the building and management of residences. Starting in Madrid and Valencia, the company soon expanded to Andalusia, Aragon, Asturias, Catalonia, Castilla-Leon, Galucia

average 65 employees for 100 retirees), guaranteed by solid training and a permanent medical team based in each centre. The cost of a retiree is roughly EUR 22,000 per year.

and Murcia. The company offered 5,000 places for retirees at the end of 2005 and plans to grow it organically to 7,000 by the end of 2007.

50 million in 2005 and approximately EUR 70 million in 2006.

The positioning of the company is rather upscale, with high-quality service (on

This success was partially funded by the private equity firm 3i, which bought 20% of the company in 2001 for EUR 18 million, and Morgan Stanley (through its subsidiary Lar). It also counts the founders (35%) and the Hermandad Nacional de Arquitectos (18%). This has fuelled the growth of the company, from a yearly turnover of EUR 20 million in 2001 to EUR

supporter of Grupo Ballesol’s development. To offer an attractive profile, the company does not exclude some targeted acquisitions, thus playing a consolidation role in a very fragmented market (15 companies control less than 2% of the market). The company is now looking to offer an exit path to its private equity backers and gain new support, probably from Spanish insurance groups (Santa Lucia is said to be in advanced negotiations), to further develop. The company is targeting a listing on the Spanish Stock Exchange within two to four years. C.D.

The Spanish Law on Dependency, in which the Spanish Government will invest EUR 26 million until 2015 to help dependent elders, will probably be an active

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Low cost, flying high Ryanair has shown that low cost is more than just a fad, and that operating under budget constraints can make an entire industry move towards efficiency

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yanair is defying the law of gravity through low fares. The Irish cowboy has successfully imported low-cost air travel, following in the footsteps of Southwest and Jetblue in the United States: While most of the American airlines were under bankruptcy protection in the United States, low-cost airlines defied the sector, growing fast at the expense of incumbent airline operators, and opening new routes. Ryanair operates from 16 European bases (Ireland, UK, France, Sweden and Italy), bringing together 123 airports and 366 routes.

Ryanair PLC Key facts & figures Ranking: 21st | Industry: Airlines | Turnover growth (2002-2005): 171% | Employment growth (2002-2005): 113% | Listed (NASDAQ), with a market capitalisation of EUR 7.57 billion

The company has shown a 34% average Ryanair - DUB (11/21/2003 yearly growth- 11/17/2006) rate since early 2001 Datastream using aggressive marketing techniques. Profitability is exceptional, ranging from 190.0% 18% in 2005, despite high gas prices, 170.0% to150.0% 24% in 2001, when the cost of oil was lower. The company is said to have the 130.0% lowest breakeven load point of the sector 110.0% and has the luxury of setting its own prices in a90.0% context of growing traffic. 70.0%

The50.0% Irish airline not only grows organically, RYA DB but also plans to expand aggressively. It IRELAND SE OVERALL thus offered to buy its national competitor 10.00 Aer 5.00 Lingus for EUR 1.48 billion a year ago, in a move which shocked the sector. Aer 0 05 for a few 06days and 04 only listed Lingus was Volume20% of it in a week to posiRyanair bought

190.0% 170.0% 150.0% 130.0% 110.0% 90.0% 70.0% 50.0% RYA DB IRELAND SE OVERALL

10.00 5.00 0 04

05

06

Volume

Source: Datastream

The strength of the Group does not only lie in its ability to make its bookings grow in a very competitive market – even Air France KLM is looking to open a low-cost alternative -- but also to diversify its income from other sales such as hotel bookings, car rentals, etc. In Q2 2006, the company even surprised analysts by reporting better results than expected.

Ryanair - DUB (11/21/2003 - 11/17/2006) Datastream

Source: Datastream Ryanair’s summarised profit and loss statement (2001-2005 EUR (millions)

Sales EBIT Net Income

2001 624 192 150

2002 843 295 239

2003 1074 276 207

End of fiscal year: 31 March Source: Thomson One Banker

2004 1337 353 267

2005 1693 413 307

tion its hostile takeover bid. Even though Ryanair’s summarised profit andoffer lossis statement (2001-2005 the not expected to succeed, this shows that Ryanair is willing to pursue not EUR (millions) 2001 2002 2003 2004 2005 Salesorganic624 843opportunities, 1074 1337but 1693 only growth also EBIT 192 295 276 353 413 acquisitions going forward. Net Income 150 239 207 267 307 End of fiscal year: 31 March

C.D. Source: Thomson One Banker

MARKET500 no1 | January / February / March 2007

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Surfin’ Sweden New Wave Group could have been a band of blond Swedish pop singers, but once again, the revolution comes from marketing, design and selling – this time in the clothing industry.

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New Wave Group AB Key facts & figures Ranking: 22nd (59th in 2004) | Industry: Clothing and Accessories | Turnover growth (2002-2005): 77% | Employment growth (2002-2005): 179% | (Stockholm), with a market capitalisation of EUR 2.94 billion

New Wave Group ‘B’ STO (11/21/2003 - 11/17/2006) Datastream

48

49

270.0% 230.0%

footwear retailers. New Wave’s brands are Clique, Harvest, Grizzly, Craft, Seger, Mac One, DAD and Umbro. After acquiring Joman Workwear in 2004, a maker of high-quality work clothes, the Group acquired Dahetra and Orrefors Kostaboda in 2005.

The Swedish group has an original distribution model, combining a businessto-business and retail approach. Its business-to-business division is specialised in the marketing of promotional

The company has shown a 44% average yearly growth rate since the early 1990s, focusing on quality clothes and special niches, rather than on fashion like H&M, Zara or Mango. Its production is located in Asia, and New Wave sells in 15 countries, mostly in Nordic countries, Germany, Benelux and Italy. “The best margins are achieved in Italy,” says CEO Torsten Jansson. This proves that

clothes, shoes, gifts and textiles. New Wave designs, purchases, stores and markets promotional wear and gifts.

New Wave’s business model is not only adaptable but very successful outside of Nordic countries.

The Group also sells products using its brands and other licensed trademarks to retailers, notably sports and

Jansson attributes New Wave’s success to its corporate culture, where people “want to do their best”. These “soft

values” are key to achieving and maintaining such a high level of growth. In that respect, finding the right people is the main challenge that Jansson has identified over the years and he has spent a lot of time on it. “It’s a constantly changing business, as it is a high growth environment. You have to like it to succeed in this kind of company.” Client focus is also key: it is important to take care of existing clients and grow with them. Its growth potential is well appreciated by the market, as it is trading at a 20% premium based on market capitalisation/EBITDA, but still at a 10% discount based on its P/E multiple as its earnings per share grow faster than for its peers. “We still have a low market share, with a lot of space to grow organically in the North of Europe, but also in Asia and the US,” says Jansson. “Selective acquisitions may help as well.”

210.0% 190.0% 170.0% 150.0% 130.0% 110.0% 90% NEW AB - SK AFFARSVARLDEN GENERA

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MARKET500 no1 | January / February / March 2007

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ven the autumn heat wave which has affected Europe hardly slowed down New Wave’s growth rate. Analysts have lowered their projections, but it seems that the warm garments of the highly successful brands of the Group will still be in high demand at the end of the year.

250.0%

0

04 Volume

06

05

Source: Datastream

New Wave’s summarised profit and loss statement (2001-2005) EUR (millions)

Sales EBIT Net Income

2001 140 15 9

2002 186 20 11

2003 207 23 15

2004 253 28 17

2005 337 33 22

End of fiscal year: 31 March Source: Thomson One Banker

C.D.

winner’s profile e u r o p e ’ s 5 0 0

winner’s profile e u r o p e ’ s 5 0 0

e u r o p e ’ s 5 0 0 listing

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367 368 369 370 371 372 373 374 375 376 377 378 379 380 381 382 383 384 385 386 387 388 389 390 391 392 393 394 395 396 397 398 399 400 401 402 403 404 405 406 407 408 409 410 411 412 413 414 415 416 417 418 419 420 421 422 423 424 425 426 427 428 429 430 431 432 433 434

Interware Plc Gold Club Valor Consultants Opacmare SpA Llentab AB MR Datentechnik Vertriebs - u Service GmbH Errecinque Srl Sadiel SA Luoman Oy Independent Specialist Technology Ltd Breyer Gebäudereinigung GmbH Antica Ditta Marchisio SpA Koopman Holding BV Loch Fyne Restaurants Ltd denkwerk GmbH G2 C Environnement Maschinenbau Silberhorn GmbH In Tech Medical ILOG SA Prolainat Mürdter Dvorak nastrojarna, spol.s.r.o. Technosert Electronic GmbH B.V. Gerritse Groep Stichting Sint Maartenskliniek Hickman Industries Ltd Central Telecom Uk Ltd Dino Lift Oy Creuzot Michel SA Dibaq-Diproteg SA CS Trans s.r.o. Hiolle Industries Scaltel AG Kistenpfennig AG 3 Step It Oy Strama-MPS Maschinenbau GmbH & Co KG TTTech Computertechnik AG SCP Holding BV Soc De Transports Routiere International Eustema SpA Sabaf SpA S & L Mediengruppe Doll Fahrzeugbau GmbH Endress + Hauser Wetzer GmbH & Co KG Primavera Business Software Solutions SA Targetti Sankey SpA Autointermediates Ltd t/a UKIP Media & Events nicko tours GmbH Adu Oktatási Központ Version One Ltd Tilman M and M Direct Ltd Contec Steuerungstechnik u. Automation GmbH i-level Ltd NexTReT Newsphone Hellas SA StatPro Group Plc S2M Société De Mécanique Magnétique Compin Sum Syncera BV Gebr. van ´t Hek BV KDL Trans NV Automobiles Dangel Trepesch GmbH Optima Srl ARCONT IP Emailvision BSC Praha, spol. s.r.o.

Company Business Sector Headquarters

Website

Hungary Slovenia France Italy Sweden Germany Italy Spain Finland United Kingdom Germany Italy Netherlands United Kingdom Germany France Germany France France France Czech Republic Austria Netherlands Netherlands United Kingdom United Kingdom Finland France Spain Czech Republic France Germany Germany Finland Germany Austria Netherlands France Italy Italy Germany Germany Germany Portugal Italy United Kingdom Germany Hungary United Kingdom Belgium United Kingdom Austria United Kingdom Spain Greece United Kingdom France France France Netherlands Netherlands Belgium France Germany Italy Slovenia France Czech Republic

www.interware.hu www.gold-club.si www.valor.fr www.opacmare.com www.llentab.se www.mr-daten.de www.errecinque.it www.sadiel.es www.luoman.fi www.1stsoftware.com www.k-breyer.de www.mattioligioielli.it www.koopman.nl www.lochfyne.com www.denkwerk.com www.g2c.fr www.maschinenbau-silberhorn.de www.intech-medical.com www.ilog.fr www.prolainat.com www.muerdter.cz www.technosert.com www.gerritse.nl www.maartenskliniek.nl www.national-hickman.com www.central-telecom.co.uk www.dinolift.com www.mcreuzot.com www.dibaq.com www.cstrans.cz www.hiolle-industries.com www.scaltel.de www.kuki.de www.3stepit.com www.strama-mps.de www.tttech.com www.scpartners.com www.prevoststri.com www.eustema.it www.sabaf.it www.slmedien.de www.doll-oppenau.com www.wetzer.endress.com www.primaverabss.com www.targetti.com www.ukintpress.com www.nicko-tours.de www.adu-csepel.hu www.versionone.co.uk www.tilman.be www.mandmdirect.com www.contec.at www.i-level.com www.nextret.net www.newsphone.gr www.statpro.com www.s2m.fr www.compin.com www.sum76.fr www.syncera.nl www.vanthek.nl www.kdltrans.be www.dangel.com www.trepesch.de www.mec3.it www.arcont-ip.si www.emailvision.com www.bsc.cz

IT - Services, Information and Communication Technologies Consumer Goods - Manufacturing Consulting, Management Services Consumer Goods - Manufacturing Construction, Real Estate IT - Services, Information and Communication Technologies Automotive - Manufacturing IT Services, Information and Communication Technologies Consumer Goods - Manufacturing IT Services, Information and Communication Technologies Support Services Steel, Metals - Manufacturing Transport, Logistics Tourism, Leisure, Gastronomy - Services IT Services, Information and Communication Technologies Consulting, Management Services Steel, Metals - Manufacturing Biotechnology, Health IT Services, Information and Communication Technologies Food, Beverages - Manufacturing Automotive - Manufacturing IT Services, Information and Communication Technologies Construction, Real Estate Biotechnology, Health Construction, Real Estate IT Services, Information and Communication Technologies Steel, Metals - Manufacturing Financial Services, Legal Services Food, Beverages - Manufacturing Transport, Logistics Support Services IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Steel, Metals - Manufacturing IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Transport, Logistics IT Services, Information and Communication Technologies Steel, Metals - Manufacturing Consulting, Management Services Automotive - Manufacturing IT - Manufacturing IT Services, Information and Communication Technologies Consumer Goods - Manufacturing Media Tourism, Leisure, Gastronomy - Services Education, Training - Services IT Services, Information and Communication Technologies Biotechnology, Health Retail IT - Manufacturing Consulting, Management Services IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Automotive - Manufacturing Transport, Logistics Automotive - Manufacturing Consulting, Management Services Construction, Real Estate Transport, Logistics Automotive - Manufacturing Support Services Food, Beverages - Manufacturing Steel, Metals - Manufacturing IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies

Birch Index

60 60 59 58 58 57 56 55 55 55 55 54 54 54 53 53 52 52 52 51 51 51 50 50 50 49 49 49 49 47 47 47 46 45 44 42 41 41 41 41 41 41 40 40 39 38 38 38 37 37 37 36 35 35 35 35 34 34 34 34 33 32 32 32 32 31 31 31

continued on page 53

The Latvian

Alternative

Coffee? Yes, a Latvian one. Synonymous with quality, in a world where Nespresso has imposed this beverage as a luxury, Double Coffee is master of the Baltic region. Europe next?

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DC Holding A/S (“Double Coffee”): Key facts & figures Ranking: 26th | Industry: Retail | Turnover growth (2002-2005): 2,500% Employment growth (2002-2005): 700% | Not listed

|

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Rank Company

atvia, with a population of 2.2 million and situated between Russia, Estonia and Lithuania, is a challenger to the United States, at least in the coffee chain market. Double Coffee is the largest chain in the Baltic area and is the local answer to Starbucks. However, Nick Ustinov, the CEO of Double Coffee, remains modest with what appears already as a success. “Success is something we will be referring to after four or five more years of operations. Do not forget we are only four years old, so it’s a little bit too early to speak about ‘success’.” Nick Ustinov and Sergei Pushnoy founded Double Coffee in September 2002 in Riga, and rapidly extended their reach to Lithuania and Estonia. “The factors which have helped us to achieve that, besides the hard work we have invested, could be being in the right place at the right time. The market was ready for a chain of high-

level service coffee shops,” says Ustinov. This explains the rapid development of Double Coffee, with now 45 shops covering the Baltic region. The company grew to 457 employees in 2005, with a turnover of EUR 4.6 million in Latvia. The potential for further growth is high. “The only way to ensure proper expansion from our point of view is to look at new European markets. The Baltic region is too small and we don’t see much expansion possibilities here,” explains Ustinov. The competition is rising. Italian Illy has also identified the need for a high-quality coffee chain and is rolling out its 120 Espressamente Bars in Western countries. However, Double Coffee is targeting a different region. “Our geographical location allows us to easily manage the Ukrainian market. We see a lot of potential there. At the beginning of 2007 we will open our first outlet in Belarus as well. The plan is to open over 80 coffee shops

in Ukraine and Belarus in next the next 4 to 5 years,” declares Ustinov. Double Coffee offers 50 different types of coffee, as well as cakes, cocktails, breakfast and snacks. The company is willing to deliver quality and an atmosphere to its customers. “There are many challenges of course, and they differ from country to country,” says Ustinov. The main preoccupation of the management is thus to ensure this quality by always bringing on board good employees and excellent locations. Double Coffee is first and foremost proof that when there is a challenge and the will to rise to it, then there is room for success. Ustinov’s advice to would-be entrepreneurs is “...never give up, of course, the main asset in any business is the will to achieve something and to do something. If you do not have a ‘battery’ powerful enough to finish the job, you will never achieve anything - neither in growth or your life.” C.D.

europe’s 500

listing e u r o p e ’ s 5 0 0

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Sustainable

Rank Company

retail

Making retailing synonymous with best in class stakeholder management seems to have been the aim of EngroTUS. The pay out? Triple digit growth and a ranking at 30th.

52

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lovenia, population 2 million, has a fast growing retailer ranked in the top 30 of Europe’s 500 fastest growing companies. The company opened its first store in 1989, the year the Berlin Wall fell. Since then, EngroTUS has grown with a unique motto: customer satisfaction. In a country still belonging to former Yugoslavia, where customers had to line up to buy meagre supplies of goods and food, this has been a revolutionary policy. The mission statement of the company is as simple as the execution can be complicated: “to offer customers a wide range of products at the best possible value, high-quality goods and kind service.” The

EngroTUS d.o.o. Key facts & figures Ranking: 30th | Industry: Retail | Turnover growth (2002-2005): 105% | Employment growth (2002-2005): 109% | Not listed

group started as a retailer, but soon also became the owner of its shops and developed shopping malls to offer an all-in-one location for shopping. Planet Tuš, in Celje, offers 3,500 m² of shopping space, 45 shops and 8 cinema halls. To achieve these targets, the company puts the quality of its relations with its employees and customers first. The social aims of the company are even mentioned explicitly on its website to show that EngroTUS is committed to its stakeholders, as a non-listed company: “We would like to create a flexible system for individuals as well as our business.” Learning from Western retail marketing techniques, EngroTUS has developed its own private label for goods: Aneta and Tus. This allows EngroTUS to capture further value from the sale of products by colonising the value chain.

EngroTUS believes its path to success is made of: 1. an ambitious investment strategy 2. a reasonable level of debt 3. the import of best practices from abroad and adapting them to the local environment 4. the recognition and adaptation to regional distinctiveness by caring for the local needs of customers 5. an openness to ideas which are emerging from within the company. These principles have helped this retailer, addressing a market the size of a city in other countries, to achieve a turnover of EUR 453 million in 2005. C.D.

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435 436 437 438 439 440 441 442 443 444 445 446 447 448 449 450 451 452 453 454 455 456 457 458 459 460 461 462 463 464 465 466 467 468 469 470 471 472 473 474 475 476 477 478 479 480 481 482 483 484 485 486 487 488 489 490 491 492 493 494 495 496 497 498 499 500

Gruppo Manni HP HMS Networks AB Transports Logistique Services SA Barkawi & Partner GmbH & Co KG Phönix SonnenStrom AG Vetreria Etrusca Srl Occasio d.o.o. Scilm SpA Ind.I.A. SpA Omr SpA Agricultural Poultry Cooperative Of Arta Llc Haas & Czjzek - Prvni Porcelanova Manufaktura v Cechach, spol. s r.o. Comptoir Vendeen De L´Artisan Plombier Keros Ceramica SA Kürt UC4 Software GmbH SBB Accountants & Adviseurs Modus Group Ltd G.S.E. Ground Support Equipment Srl Janavalo Oy Mediteam/Visit Ambulante Pflege GmbH & Co KG/FPB Aktiengesellschaft NICOMATIC William Cox Ireland Ltd Logos Group Stagecoach Theatre Arts Plc ATEME Era A.S. ConSol Software GmbH SIV.AG Unicer - Distribuição De Bebidas SA Roxtec AB B&T SpA Karl Krestel Gastronomische Betriebe eK Autostop SA Okregowa Spoldzielnia Mleczarska W Sokolowie Podlaskim AUBEMA Crushing Technology GmbH B + S Ingenieur AG Technocover Ltd IBITEC AB Izoterm - Plama D.D. Bruyerre SA Nabaltec GmbH Pieron GmbH Zech Gruppe Alacer Mas SA ANAGNOSTARAS Bros SA Sinfo Pragma Spa Ifr France Cybit Holdings Plc Tibard Ltd Dragenopharm Apotheker Püschl GmbH Agrico SA Alessanderx SpA Riviere Transports United Labels AG Sulpasteis - Comércio e Industria Produtos Alimentares Congelados, Lda Harrow House International College (Swanage) Ltd Videor Technical E. Hartig GmbH Bertin Technologies UNIMERCO GROUP A/S SAS De Buyer Industries Itesoft Coremain SL Akaba SA Housing Cooperative Nasz Dom Hologram Industries

Company Business Sector Headquarters

Website

Italy Sweden Belgium Germany Germany Italy Slovenia Italy Italy Italy Greece Czech Republic France Spain Hungary Austria Belgium United Kingdom Italy Finland Germany France Ireland Italy United Kingdom France Czech Republic Germany Germany Portugal Sweden Italy Germany Greece Poland Germany Switzerland United Kingdom Sweden Slovenia Belgium Germany Germany Austria Spain Greece Italy France United Kingdom United Kingdom Germany Poland Italy France Germany Portugal United Kingdom Germany France Denmark France France Spain Spain Poland France

www.gruppomanni.it www.hms.se www.tls-be.com www.barkawi.com www.SonnenStromAG.de www.vetreriaetrusca.it www.sonchek.com www.scilm.it www.arteferro.com www.omrspa.com n/a www.haasczjzek.cz www.covap.fr www.keros.com www.kurt.hu www.uc4.com www.sbb.be www.modusgroup.com n/a www.janavalo.fi www.mediteam.de www.nicomatic.com www.williaamcox.ie www.logos.net www.stagecoach.co.uk www.ateme.com www.era.cz www.consol.de www.siv.de www.unicer.pt www.roxtec.com www.dorelan.com www.sudhausnuernberg.de www.autostop.gr www.osmsokolow.pl www.aubema.com www.bs-ing.ch www.technocover.co.uk www.ibitec.se www.izoterm-plama.si www.bruyerre.be www.nabaltec.de www.pieron.de www.zechfenster.com www.alacermas.com www.anagnostaras.gr www.sinfopragma.it www.ifr.aero www.cybit.co.uk www.tibard.co.uk www.dragenopharm.de www.agrico.com.pl www.magniflex.com www.riviere-transports.fr www.unitedlabels.com www.harrowhouse.com www.sulpasteis.com www.videortechnical.com www.bertin.fr www.unimerco.com www.debuyer.com www.itesoft.com www.coremain.com www.akaba.net www.naszdom.radom.pl www.hologram-industries.com

Steel, Metals - Manufacturing IT Services, Information and Communcation Technologies Transport, Logistics Consulting, Management Services Energy, Mining, Utilities Consumer Goods - Manufacturing Tourism, Leisure, Gastronomy - Services Consumer Goods - Manufacturing Steel, Metals - Manufacturing Steel, Metals - Manufacturing Agriculture, Fisheries Consumer Goods - Manufacturing Construction, Real Estate Consumer Goods - Manufacturing IT Services, Information and Communcation Technologies IT Services, Information and Communication Technologies Financial Services, Legal Services Construction, Real Estate Transport, Logistics Steel, Metals - Manufacturing Biotechnology, Health IT - Manufacturing Construction, Real Estate IT Services, Information and Communication Technologies Education, Training - Services IT Services, Information and Communication Technologies IT - Manufacturer IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Food, Beverages - Manufacturing Chemical, Plastics - Manufacturing Consumer Goods - Manufacturing Tourism, Leisure, Gastronomy - Services Automotive - Manufacturing Food, Beverages - Manufacturing Steel, Metals - Manufacturing Construction, Real Estate Support Services IT Services, Information and Communication Technologies Consumer Goods - Manufacturing Food, Beverages - Manufacturing Steel, Metals - Manufacturing Steel, Metals - Manufacturing Construction, Real Estate Retail Construction, Real Estate IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Textiles, Clothing, Footwear - Manufacturing Biotechnology, Health Food, Beverages - Manufacturing Consumer Goods - Manufacturing Transport, Logistics Retail Food, Beverages - Manufacturing Education, Training - Services IT Services, Information and communication services Biotechnology, Health Consumer Goods - Manufacturing Steel, Metals - Manufacturing IT Services, Information and Communication Technologies IT Services, Information and Communication Technologies Consumer Goods - Manufacturing Construction, Real Estate IT - Manufacturing

Birch Index

30 30 30 28 27 27 27 27 26 25 25 25 25 25 25 25 24 24 23 23 23 22 21 21 21 21 20 20 20 19 19 19 18 18 17 16 16 16 15 15 14 14 13 13 12 11 10 9 9 9 8 8 7 7 6 5 5 5 5 5 3 3 3 2 2 1

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europe’s 500

ENTREPRENEURS:

START YOUR ENGINES tage lies in their expertise in sectors such as biotech, electrical engineering or specialty machinery. Other areas in which we see high growth rates is in the design and production of automotive and alternative energy technologies, as well as in consumer and luxury goods. Alongside these companies have appeared growing numbers of consulting and IT firms catering specifically to these sectors and drawing on the same human capital to develop and expand.

Forging Ahead

54

The geographical diversity of the companies that make up this year’s list is a clear representation of

Analysing the trends in Europe’s fast growth

IT and consulting companies make up the lion’s share of the companies on the list. European companies, however, are active across a wide spectrum of sectors, most notably, biotech, engineering and the automotive sectors.

e u r o p e ’ s 5 0 0 Opinion editor

The geographical diversity of the companies that make up this year’s list is a clear representation of Europe as a whole, with the five largest economies making up more than 60% of the list and bringing in 65% of 2005 turnover. The new members of the community to the East and others are a varied lot, although many demonstrate some strong characteristics in terms of productivity per employee and job growth. Germany remains the heavyweight with 109 companies and EUR 25 billion (26.8% of the total) in sales in 2005. The UK with its 72 companies comes second, although its sales at EUR 12.5 billion come in just below Italy whose 44 companies turned over EUR 13 billion. French companies number 55, more than Italy’s,

yet their sales lagged behind the UK’s at just under EUR 5 billion. Ireland, although only having 9 (1.8%) companies in the list, came in punching above its weight with EUR 6.7 billion, representing 7% of total sales. The Europe’s 500 growth companies seem to be debunking much of the conventional wisdom about the malaise of many of its members, most notably Germany, France and Italy. It seems entrepreneurs in biotech, IT, and service businesses of all kinds have picked up the slack left by many of the family-owned manufacturers facing the fiercely competitive pressure of the emerging economies of Asia. Entrepreneurs from these countries have decided that their comparative advan-

MARKET500 no1 | January / February / March 2007

I

n this year’s Europe’s 500, we see the resurgence of the IT sector in Europe. Web 2.0 is here to stay. It shows us that while IT and consulting are considered a sector apart, they have become an integral part of every organization, from “old economy” sectors such as transportation and agriculture, to new economy stalwarts such as biotech.

Europe as a whole.

The key ingredient to the success of these companies, whether in life sciences, engineering, IT or consulting, seems to be the rich human and intellectual capital available to them. Although much has been said about the ailments of the educational establishment in Europe and more definitely needs to be done to improve the risk taking nature of today’s European university students, we continue to see cutting edge European firms. It is by harnessing these strengths that Europe’s 500 growth companies will be able to profit in today’s global economy and become tomorrow’s leaders.

We are the catalyst that enables Europe’s top entrepreneurs to learn and grow. The Entrepreneurs’ Organization (EO) – for entrepreneurs only – is a global community that enriches members’ lives through direct peer-to-peer learning, connections to experts and once-in-a-lifetime experiences. EO is the catalyst that enables entrepreneurs to learn from each other, leading to greater business success and an enriched personal life.

A global network EO has chapters in eight European countries and 6,400 members in 41 countries worldwide.

Daniel J. Macias [email protected]

For more information on EO or to apply for membership, +49 30 280 998 31 visit www.eonetwork.org or call +1.703.519.6700.

m a n a g e m e n t focus

focus m a n a g e m e n t

Sustaining growth Some managerial pitfalls to avoid *

I

There are no identical companies. Nevertheless, all businesses face the same type of problems which go beyond their size or their stage of growth, and all are subject to big transformations as they evolve. Companies may grow or not, get into a high-growth period, experience transitory crises and stop growing,

and then grow again and experience decline, more than once during their life cycle. Also many companies spend long periods in a stagnant or static situation. A stagnant situation does not generate any value, employment or wealth whatsoever. But it might well be an opportunity for many companies to seek and find a possible path to future growth. The fact

High-growth entrepreneurs know well how to decipher the signals they receive from their employees and their customers and respond to their needs and wants.

that a company shows low growth or no growth during a long period of time does not necessarily mean that it is not capable of growing again in the future. Whatever happens the reasons for not growing may be multiple, ranging from

the lack of ambition of their owners or decision-makers, to unfavourable conditions in the market or segment where the firm operates, or a limited management team or the pressure of competition, etc. Stagnancy cycles can be present in any of the stages of development of a company. But “not moving” during a lengthy period of time may ultimately mean putting the whole project on the edge of collapse (as may be the case for a young company), or to enter a stage of progressive decline while others take advantage of the opportunities in the market (as may be the case for more established companies). The real problem with no growth or low growth is that it is not a good strategy in the long run. For most companies the growth challenge is there to stay. There is no a “supernatural” force that allows a firm to grow and survive over time. In practice firms have to be able to make progress and grow if they intend to stay in the market. Frequently this challenge may develop into a reality check between “grow or exit”, or even “grow for not exiting”, depending on the firm’s context and peculiarities. Still for many young and established firms, the “grow-or-go” trade-off, far from being a di-lemma, can be —under determined circumstances— an opportunity to study an exit option through a sale process well before being forced to “go” with low or no

57 value at all. While there are many unambiguous reasons to grow, there may also be many reasons to sell (often not sufficiently distinguished or explicitly assumed by the decision-makers involved). In the end there is no such trade-off as grow or go (or sell): if firms mean to grow, they should be able to grow well, and if they mean to sell, they should be able to sell well, but what they should never do is both not grow and not sell.

MARKET500 no1 | January / February / March 2007

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n all likelihood a majority of smalland medium-sized enterprise owners and decision-makers have asked themselves at least once “do we really need to grow?” Asking “what if we do not?” is not so frequent. Neither all businesses nor all entrepreneurs want to grow or are capable of doing so. However, in today’s flat and “small” world, in a progressively more extensive global community where the central differential factor in comparison with other precedent times of profound paradigmatic change are the challenges that arise from the speed of change and the level of interconnectivity, two main issues come into view as possible consequences. One is the most likely increase of the relative vulnerability of the business vis-à-vis its current and potential competitors as well as in the eyes of its customers. The other is the higher probability of a progressive decline of the firm’s ability to respond to market signals and innovate, thus establishing a negative dynamic that may well lead to its exit from the market.

If we turn our attention to the managerial challenges specifically connected to high growth, we see that it is not only tough to achieve but extremely difficult to maintain. Leaving aside environmental conditions, growth success is greatly influenced by internal factors such as strategy, access to resources, leadership style and management approaches and performance. While there is no unique managerial approach to address this type of problem, it is clear that high growth calls for the need to accomplish substantial transformations in structures, systems and competences to deal with the high

complexity that is triggered in the organization as a result of this. The literature on high growth firms’ attributes and performance, particularly focussing on the internal factors directly affecting their capability to generate and sustain fast growth, reveals that these companies are especially effective in addressing many of these difficulties. This ca-pability is generally linked to factors primarily associated with the profile of their founders or management teams, with particular business practices, with specific organizational and culture attributes of the firm, and with people management. A first insight is that leading a firm to rapid growth can be seen as a management challenge equivalent to other managerial challenges that decision-makers may face along a specific development path. In the end, sustainable and profitable growth has little to do with management fads and trends at certain points in time. The observation of the experience of

many entrepreneurial firms in light of high-growth forums and networks all over Europe and much of the existing research in the field point out the importance of keeping focus on the creation of value for shareholders, employees and clients if companies want to meet their growth dreams and sustain it over long periods of time. High-growth entrepreneurs know well how to decipher the signals they receive from their employees and their customers and respond to their needs and wants. This in turn leads to the creation of higher value in the long run. They are masters in combining a focused strategic business approach with the ability to move fast enough to take advantage of business growth opportunities and address those problems that may be a threat to the firm’s sustainability in the long run. To achieve it they pragmatically assess what the existing businesses can deliver and what level of management attention they need, and they are simultaneously able to perform a clear-headed assessment

* A full version of this article, “The ‘growth dream’: Challenges and managerial pitfalls to avoid” by Juan Roure and Luis Segurado, is to be published in Entrepreneurship in the Netherlands: Ninth Edition, EIM Business & Policy Research, 2006 (currently in press).

m a n a g e m e n t focus

While it can be said that many existing businesses can not grow forever, the perception is that a great number of companies (often more than would be desirable) are not able to achieve their full growth potential. The observation, knowledge and information exchange between high-growth firms in different programs, forums and networks of entrepreneurial dynamic en-terprises such as the European Growth Plus Association or the Entrepreneur of the Year Award, as well as the contributions of some specific research work and surveys based on different entrepreneurial firms, reveal that there seem to be some managerial pitfalls that may have an impact on the ability of firms to follow the path to growth generation and sustainability. Some of the observed highly interconnected managerial deficits mostly have to do with the lack of entrepreneurial ambition, the lack of focus, the lack of an internalized opportunity screening process, the lack of a proactive growthdriven approach to funding, the lack of a superior management team, the lack of an active governance system, and the lack of a flexible approach for implementing new growth options and ownership structures.

firms have become themselves a target of public policy

how completed and balanced the current management team for growth is, how active the governance process that adds value to the strategic choices is; and how flexible they are to approaching new growth options other than organic growth as well as different ownership structures to implement them. The real challenge for every company to sustain growth over time lies in the ability of either would-be directors or existing corporate directors of growth firms to avoid these managerial pitfalls and to disseminate knowledge and best practices. In this sense the next Europe’s 500 Growth Summit to be held in May 2007 at IESE Business School in Barcelona is certainly a promising platform to exchange and gain knowledge and information on

Because of their real contribution to employment and wealth creation, dynamic entrepreneurial firms have become themselves a target of public policy agenda of many countries in Europe. Others are increasingly the object of policy-makers’ intention to integrate them as a significant component of their entrepreneurship policy. But entrepreneurial companies can also be a highly effective tool to spread a more conducive culture toward entrepreneurship in society. In this regard there still seems to be a long way to go for both private and public layers in terms of the building of the necessary “intangible” infrastructure to bring cultural change to fruition along with the more “tangible” infrastructure already in place in the policy agenda of many countries. Exchanging knowledge, experiences and information between high growth peers appears to be a highly valuable tool in attaining this decisive goal of continuing cultural change.

o

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Because of their real

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these as well as other related topics from high growth “practitioners” in Europe directly. It will be also a good opportunity to debate once more the importance of quality entrepreneurship at the public and private levels. Examples include how to increase the social recognition of highgrowth entrepreneurial role models and their contributions, how to further increase the current alignment of policy-makers and key social agents to lead the cultural change needed, and how to enhance the direct public support of entrepreneurial high-growth networks and associations in order to increase both the value of the networks themselves and the value and advice their members receive at all levels (for example training in high-growth practices, formal and informal forums of “high growers”, mentoring and funding sources, business transition and transfers, local support services, corporate (and family) governance, corporate entrepreneurship, etc.).

 award winner

N° 1 jaN / feb  /  mar  2007 eUr 6.-

However, while there are many good examples of highly dynamic entrepreneurial companies that have been able to generate and sustain rapid growth, and even to do so in a profitable manner, the real story is they are the exception, not the rule. The growth challenge takes place on a continuum and companies move along it at different speeds as a result of their strategic choices, the impact of the industry structure or a combination of both. But in any case, from an entrepreneurial management perspective, it is as important to recognize where the company actually is along this development continuum as to identify the kind of transformations that are required at the personal and the organizational level to deal with the stage of growth in question.

The chances for success of new growth initiatives in any company are very complex even when they are based on the best business ideas. To accomplish this successfully, high potential companies should move on a more conscious self-assessment of managerial growthrelated fronts. They should start by asking themselves how powerful their ambition is to make that dream real, how focused their business is while selectively exploring new growth options, how effective the tool in place to systematically screen these opportunities on a regular basis is;

MARKET500 no1 | January / February / March 2007

of the opportunities that exist to enter new businesses and to evaluate whether these opportunities fit the firm’s existing resources and capabilities.

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Juan Roure [email protected]

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The MARKET500.EU Banking Awards

Learning m a n a g e m e n t

FORUM CEO-COLLABORATIVE

The EU’s fast lane CEOs find a valuable pitstop.

-

Forex Trading Award

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irtually every profession has a support network; an opportunity to exchange information, contacts, and ideas; a chance to compare notes and worry aloud. But top CEOs need something more—a multilateral, mutually duty-bound group of peers with whom they can talk frankly and express ideas they might not be ready to share with their senior management teams. And these peers must be trustworthy and discreet, experienced and committed. A tall order? Perhaps.

Stocks Trading Award Funds Award Banking Software Award

Discover the winners in MARKET500.EU April 2007 edition MARKET500 no1 | January / February / March 2007

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www.market500.eu

But CEO-Collaborative Forum (CEOCF) founder Dave Darsch has done it anyway. And done it well. His CEO-CF groups bring together the chief executives of high growth companies across the European Union. Darsch and partner Lisa Macdonald accept members based on their company and career profiles and on their potential to offer maximum value to the other participants. This pan-European CEO network—the first of its kind—gives some of the world’s most dynamic chief executives a forum away

from the office to focus on vital goals with world-class peers who have experienced many of the same challenges. Members discuss critical business issues, present specific challenges, and integrate the feedback into their strategies. The basic concept of a CEO forum is not new. More than 10,000 CEOs representing more than one million employees and more than $300 billion in assets participate in forums worldwide. In fact, forums have a formidable track record.

What distinguishes CEO-CF is its refined model. Darsch and Macdonald take extraordinary care in the composition of each of the three distinct groups that comprise CEO-CF, working closely with every member to understand individual goals and the company’s outlook for growth. They also make sure that no two members are marketplace competitors. The intimacy of the CEO-CF experience is unique among such forums. Because the groups are small and tight-knit—12 to

Research shows that companies headed by CEOs who belong to forums grow at five times the average of small-to medium-sized businesses headed by non-forum CEOs.

Research shows that companies headed by CEOs who belong to forums grow at five times the average of small- to medium-sized businesses headed by non-forum CEOs.

14 members in each—the bond between members is strong. The foundation of the CEO-CF model is the Member Challenge, a specific issue that each CEO brings to every forum meeting that receives

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m a n a g e m e n t Learning

personal level, the forum helps individual CEOs design and develop strategy and deliver results in a hyper-competitive

62 “I am very satisfied with the dynamics of the group—the opportunity to get to know each other and discuss deep and significant issues in such an open way without hidden agendas. A lot of personal learning has occurred that will impact my company greatly. This is much more powerful than a three-week session at INSEAD. It is real life.” Jeremy Goulding, ARTiSAN, UK a dedicated hour of intense discussion within the group. It’s co-processing to the twelfth power with an elite peer group. “The best part of being a member of the CEO Collaborative Forum is that we know each other,” notes Rui Paiva, CEO of WeDo Consulting based in Lisbon. “We have forged a connection and a network to exchange ideas.” The forums sustain their impact between face-to-face meetings with the CEO-CF E-Forum™ and Mid Forum Connect™, a global telephone connection during which members make commitments and provide assistance to one another.

marketplace.

These complimentary tools give Darsch and Macdonald the ability to monitor the needs of members and bring in appropriate specialists to address the groups during their three-day forums, which take place every few months in European locales like Mallorca and Budapest. Darsch describes CEO forums as having multiple levels of value. “CEO-CF is a component of the worldwide CEO forum community, which is enhancing both the knowledge and the collaborative spirit of the international community of chief executives. And CEO-CF offers an invaluable lifeline to high-growth CEOs across the EU. On an up-close and personal level, the forum helps individual CEOs design and develop strategy and deliver results in a hyper-competitive marketplace.”

of the members themselves. A full 30% have experienced IPO exits. More than 25% appear on the Europe 500 list of fastest growing compa-

gned just for them allows them to talk over solutions with peers who are facing the same challenges. It’s a lifeline many of them have come to rely on.”

nies. Many have been recognized by Deloitte’s Fast 500 and have appeared on the Inc. 500 list. Several have won or were finalists in the E&Y “Entrepreneur of the Year” program.

Participants attribute much of the value of CEO-CF to the care, skill and passion that Darsch and Macdonald invest in the forums. “CEO-CF has done an outstanding job putting together the group,” says Nicolas Hassbjer, CEO of HMS Industrial Networks AB in Sweden. “I am really impressed by the combined knowledge and experience of our team of CEOs.”

Darsch and Macdonald are able to deliver value to these talented CEOs because they are immersed in their world. Headquartered in Barcelona, Darsch is an internationally respected CEO, board member, business consultant, and advisor and sits on the boards of directors of several companies. He founded and managed a privately held software company in the Washington, DC area from 1979 until its acquisition by a systems integrator in 1996. The firm made the Inc. 500 list of fastest growing companies in America and was widely recognized as one of the few firms in the high-tech market to experience both explosive growth and longevity without external capital.

In this, Hassbjer raises one of CEO-CF’s pivotal benefits—the world-class quality

“While being in this CEO forum may not help me predict the future, it allows me to be able to see it better and be more prepared for it.” Marien van Ouwerkerk, mBalance, Netherlands

MARKET500 no1 | January / February / March 2007

On an up-close and

High-growth, venture-backed CEOs face intense pressure to deliver success, Darsch says. “Giving them a forum desi-

Macdonald, based in the Washington, DC area, is a management consultant for executive level human resources and healthcare administration. With two decades of experience in the healthcare field, including human resources, finance and clinical care, she assists organisations with change management, accelerated growth, and acquisitions and mergers from a human relations perspective. Her healthcare finance background has benefited many member CEOs who are targeting the US market for medical devices or pharmaceuticals. To learn more about CEOCF, visit www.ceo-cf.com. Murielle Delucinge [email protected]

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h u m a n r e s o u r c e s recruitment

recruitment h u m a n r e s o u r c e s

Achieving High ROI

––

by Hiring ”A” Players

the receptionist to a senior manager. What do all these people have in common? What traits? What patterns? What behaviours? Whenever I am speaking at major conferences or in-house seminars for organisations, I ask these questions and always get back different words from the audience.

Are you hiring A Players, B Players or C Players? Are you getting a significant return-on-investment (ROI) from your human capital?

T

raditional human resources strategies do not work! We need to be proactive and not reactive if we are going to hire A Players who give us high ROI.

world. I tracked Google from 1999, when I met Sergey Brin, one of the co-founders, at a technology forum in the UK.

Top talented people are true assets for our business and not simply transactions; forget about the costper-hire and start thinking about the ROI of human capital you will get if you hire the A Player. A Players hire more A Players; C Players hire more C Players – what type of company do you want? In 1999 I started my research to educate and help managers and executives become more human-capital focused.

Looking at these companies less than 10 years later Siebel Systems broke the billion dollar sales mark and then sold out to Oracle – their biggest competitor. As for Google, at the time of writing this article, their share price broke USD 500 per share. I had a chance to meet with Sergey Brin again at a conference in the USA in 2005. This time I was shaking hands with a young man who was worth over USD 7.5 billion dollars, an amount which has nearly doubled since then.

That is when I started to put the pieces together of the Human Capital Lifecycle (HCL). I started assessing top companies around the world like Siebel Systems founded by Tom Siebel, which was growing rapidly and is quoted as one of the fastest growing companies in the

The Human Capital Lifecycle has fifteen key elements in which the CEO of today’s landscape needs to be actively involved and manage in order to build a lean, fast growing and prosperous long-term company.

What did these companies have in common? How did they manage their human capital and seem to hire A Players consistently when their competitors struggled?

The first area is about creating a strategic workforce plan and clearly understanding the type of top talented people we need short-term and long-term to achieve our objectives and vision. Only after this is complete can we then focus on other elements like finding & identifying top talent, attracting top talent and interviewing top talent. We will explore these three areas in future issues of Market500. But for now let’s first understand the difference between A Players, B Players and C Players and who you really want to hire. It all starts by understanding the magic hiring formulaT x E2. The first part stands for “Talent”. Would you agree everyone is born with some degree of talent? Some people discover it from a young age, some later on in life between the age of 45 to 55, and some unfortunately keep it hidden and never explore it or use it and then die feeling unfulfilled. Now what about the second part - E2? Think about the most successful people you know at all levels of a company, from

After reaching some 100,000 people over the past five years, I would say that there are over 1,000 words out their that describe “success“. Most of the words used are really describing a form of “energy”. Determination, ambition, hardworking, commitment, enthusiasm, passion and positive are all forms of energy, so the second part of our formula summarizes all these traits with Energy2 or E2 meaning Energy traits and more than one. So we have a final formula – T x E2. Let’s see how this works with the three types of players in the world. MARKET500 no1 | January / February / March 2007

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The C Player is someone who has some (+) (-) Talent but zero (-) (-) Energy2, meaning they lack the self-motivation to ever be successful. But you can sometimes see some glimpses of genius and their talent. These people are the ones you have to keep motivating and the ones that never give you true ROI. In fact, they always cost you more money. The B Player is someone who has some (+) (-) Talent, just like the C player, but has (+) (+) Energy2 in abundance; they have lots and lots of self-motivation and energy,

–+ and sometimes work harder than anyone else in the team as they know they don’t have any serious talent or uniqueness. I remember interviewing former world rally champion, and he said he always felt like a B Player as he always worked harder than everyone else but felt others had more talent than him – but he became world champion. B players are great to have in the company and can give you a healthy ROI. So what about the A players? The A Player is someone who has discovered what their true strengths are inner talents – I call it their DNA – they have unleashed it! It unleashes when someone has tried lots of different jobs, tasks, projects and careers and suddenly wakes up one day and confirms to themselves that this is what they are excellent at and what they want to do – this thing gives them complete fulfilment and personal satisfaction.

++ the world’s population would fall into the C Player category and the remaining 20% in the A and B Player category. This means we have nearly 1.4 billion people to choose from to find and attract into our business who would give us a great ROI. The best companies I have seen are achieving a minimum of 10x the salary they are paying their employees. Imagine paying EUR 20,000 and receiving back EUR 200,000. This is the norm with hiring A Players, as they have the potential and capacity to do this. Now obviously it depends on your type of business and market place, and the margins that are possible; however, saying all that I have still seen A Players achieve miracles in a market place which is tight or over crowded with competitors.

The A players have lots of (+) (+) Talent and they have a tremendous amount of (+) (+) Energy2. That is why these people become the very best at what they do and are in the top 3% of their profession. The

So, from now on, get clear on the type of players you want to be bringing into the business. In future editions of Market500, we will explore the other areas of the Human Capital Lifecycle and how you can effectively find, attract and interview top talent. In the interim, if you have any further questions or would like to enquire

best sales people in the world are in this player category, the best nurses, the best drivers, the best researchers and the best educators.

more about this subject matter, expert speeches and seminars, contact our human capital management specialist, Mr. Reg Athwal.

If we were to apply the 80-20 principle to our player categories, then 80% of

Reg Athwal [email protected]

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t e c h n o l o g y Ideas

Europe 2.0

I

In business the Americans also have some interesting traits. There are optimists and they often have an ability to think big. This is especially true in the Internet industry. From the birth of the Internet the Americans have been taking the lead and the height of ambition for most European entrepreneurs is to be bought by an American competitor. During the dotcom boom we were seduced by the new models and ideas. We started measuring our e-maturity in how many American products and services we consumed rather than in how many European products and services we invented and produced. Then came

the downturn. Fortunes were destroyed, along with the dreams they were backing. Silence reigned. The media and investors lost interest in the bruised and battered industry and the Americans pulled back their troops from the strange continent with so many languages and strange tribes. In the meantime something happened. It happened in the digital mines of Silicon Valhalla in Scandinavia, and in the sharpest minds in the gaming and gambling hub of Gibraltar, and in the waking German web 2.0 scene. It happened in the Mecca of mobile phones – Finland, and in France where the blog movement grew stronger with every blog post, every comment, every user-generated opinion. A new breed of European companies and entrepreneurs (even though many of the heroes of the dotcom boom are back with new, even bolder ideas) started to surface and the companies they have built are no longer built on dreams or US blueprints. They have innovative, often disruptive, ideas. These ideas do not focus on hype and fast cash, like the worst examples of the dotcom boom did, but on making the user a little bit happier or on “delight[ing]

the user”, as Skype puts it. They are European, often global. While building their companies, a new European “ecosystem” started to evolve. An ecosystem I believe will be one of the most important cornerstones of Europe’s digital future. In a not too distant future most of us will be knowledge workers, many of us even digital workers doing such alien tasks as producing digital furniture to sell in online worlds or pursuing athletic careers in the booming digital sports arena. Companies like Skype, Spain’s WiFi company FON, Germany’s openBC, mobile content company Jamba, Finland’s Habbo Hotel or Sweden’s free mobile calls service Rebtel have started to beat the incumbents as well as the Americans at their own game. When serial-entrepreneurs like the Sahmwer brothers in Germany, French blogger Loic Le Mure, Skype founder Nicklas Zenström and many other successful European digital entrepreneurs exchange ideas with new entrepreneurs and each other, something happens. It is the same thing that made Silicon Valley so vibrant: entrepreneurial zeitgeist giving birth to companies like

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have always been impressed by how good the US society is at making people from all corners of the world feel at home and see the US as their new home - the land of opportunity. Regardless of their ethnic origin, skin colour or religious beliefs, you will often hear them say (regularly in broken English), “I am proud to be American”. Have you ever heard anyone say the same in Europe? I have not. On the contrary, I have heard third generation Swedes maintain that they are Turkish or from other ancestral origins.

French Netvibes who in no time gather millions of Europeans and succeed in making even the largest portals tremble. Something significant is happening. We are seeing a new Europe evolving, a Europe focusing on Europe, European entrepreneurs easily manoeuvring through the diverse cultural landscape of Europe

while striking alliances and flirting with the growing Asian titans, India and China. They are leveraging the fact that Europe is ahead of the game in mobile technology and they are bringing their network of European companies with them. For them the question “how can we Europeans compete with the US” is as strange as the

opposite is for an American. This new breed of European entrepreneurs will create jobs and wealth, inspire and make life easier, more fun and a lot of other things with their ideas. Maybe over time they will also make us all say, “I am proud to be European”. Ola Ahlvarsson [email protected]

c a s e s t u d y Barceló

Barceló c a s e s t u d y

Family succession while keeping the entrepreneurial spirit alive

Unattainable goals ?

S

pain-based Barceló Group is a leading international hotel chain. It grew from 37 establishments in 1995 to 108 in 2005. The Barceló Group is a singular case showing how an exemplary family succession — from second generation to third generation — can turn itself into a true agent for the transformation of a family business’ entrepreneurial capabilities in the face of growth challenges. The origins of the company In the early 1930s, with his personal savings and the help of his parents, Simón Barceló bought his first bus for 54 euros and started a regular public shuttle service between Felanitx and Palma de Majorca in Spain. By 1936, he had a fleet of four buses. His sons started to

work with him in 1940, while they were still going to school. By the end of the 1940s, the first tourists started coming to the island and Gabriel and Sebastián helped their father, driving buses for day trips from Palma de Majorca. At the end of the 1950s, the family business started to focus on the travel and hotel businesses. The first step on its route to becoming an international hotel chain years later was the development of the first resort-type hotel in Spain. Since then the Group has experienced extraordinary growth while keeping it all in the family. The third generation of Barcelós is currently leading the business – cousins Simón Barceló Tous and Simón Pedro Barceló Vadell are at the head of the group. Growth opportunity: The role of the second generation When their grandfather passed away in 1958, his sons, Gabriel and Sebastián Barceló, the parents of the

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current leaders, inherited the family’s businesses. This consisted of the bus company and the tourist agency. Their two sisters received properties that were part of the family estate. The family business was split equally between the two brothers. Gabriel took charge of the travel agency and Sebastián ran the transport company. The business grew rapidly in the 1960s, favoured by the high influx of British and German tourists. The capacity to absorb this flow of people was far below demand. This led the brothers to enter the field of hotel management, while keeping the travel agency as their main business. Early in the decade they started to develop an innovative hotel concept in terms of the architectural design and the multiple service format that led to the building of the 360-room Hotel Pueblo in Palma de Majorca. The hotel was opened in 1966. Its concept was to a large extent

the precursor of a type of hotel that would be adopted extensively a few years later and which led to today’s “resort” concept.

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A profile of a family-owned hotel & travel business: The Barceló Group*

At the same time, the brothers created Construcciones Arte, a building company with Sebastián Barceló at its head. The building company’s goal was to develop its own hotels as opportunities arose, thus reducing costs, building time and investment requirements. One of the few tourism groups with its own building company, Barceló was able to develop products and services that helped differentiate the brand from its competitors and at a reasonable cost. In the early 1970s, Barceló consisted of various hotels with a capacity of well over 2,000 rooms. At that time they also started to deploy an opportunistic hotel acquisition policy. Ten years later, they had built five additional hotels and had started the

A key milestone of Barceló’s entire business growth over the last twenty years has certainly been the construction of the 400-room Bávaro Beach Resort

first phase of the business’ international expansion. The expansion was completed in 1997 with the integration into the chain of forty additional hotels worldwide. A key milestone of Barceló’s entire business growth over the last twenty years has certainly been the construction of the 400-room Bávaro Beach Resort (currently Barceló Bávaro Beach) in the Dominican Republican (Punta Cana), the first hotel complex built by the Group in the Caribbean. Operational since 1985,

the success of the Bávaro model led the Group to explore opportunities in other areas of the Caribbean (Costa Rica, Nicaragua and Mexico). The Barceló brothers have always preferred to clearly lead their growth projects, maintaining full ownership control at all times. The integration of hotel construction in the process has enabled them to reduce risks associated with both costs and the design of the final product, preserving the natural environment while incorporating native cultural elements.

™ Source: “The Barceló Group - Family succession while keeping the entrepreneurial spirit alive: Unattainable goals?” Case study prepared by Juan Roure and Luis Segurado, IESE Business School, University of Navarre, Spain, 2006.

c a s e s t u d y Barceló

healthy financial situation and the Bávaro project moving full speed ahead and providing high returns. The transition process was articulated around the following premises: continue with the Group’s professionalisation; establish ownership distribution while maintaining control of the Group’s management among the three sons; increase

During the five-year transition period, the Group had turnover growth of more than 45% generated by the hotels in the portfolio, with EUR 670 million in revenues

it invested. This led to the existence of a large number of companies. In 1995, the company started to plan the transition process, from the second to the third generation. The transition was planned to last between three and five years and posed a serious challenge for the family and the company’s leadership. A Transition Board of Directors was formed since at that time there were no suitable coordination mechanisms in the management structure or between the

the responsibility of the third generation as owners, leaving management of the company to those who work in it, with the exception of the two co-chairmen; and design the exit of the second generation from management. The transition to the third generation was complete by June 2000 and included, among other things, the approval of the holding company’s bylaws. Also, the present co-chairmanship was created, shared by the cousins, Simón, Sebastián’s son, and Simón Pedro, Gabriel’s son.

company’s management and the family. The transition took place during a period of high growth for the company, with a

During the five-year transition period, the Group had turnover growth of more than 45% generated by the hotels in the port-

folio, with EUR 670 million in revenues in 1999. It had gone from 37 hotels in 1995 to just under 90 hotels in 1999, with approximately 6,000 people employed in the hotels, and gross earnings (EBITDA) had increased eleven-fold between 1996 and 1999. Furthermore, significant progress had been made in the company’s structuring and professionalisation, in its governing bodies and also in the company-family relationship. New growth approaches from the third generation: Growing through partnerships In the mid-1990s, the company was in the midst of its transition process, with the third generation implementing and consolidating the Group’s expansion. The main challenges facing the company were to continue opening hotels in Latin America and the Caribbean without neglecting its expansion in the urban hotel segment in Spain and opening new travel agencies. One of the biggest changes that took place in the company was that of the business model, from a vertical integration strategy within the tourism business to a horizontal specialization focus on the hotel management business, through partnerships, if necessary, to improve the Group’s competitive advantage in other business areas. Thus they started to look for European partners to grow the travel and vacation hotel businesses at the end of the 1990s.

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Passing the baton By the mid-1990s, thanks to its active investment policy, the company was a diversified tourism group with hotel businesses, retail and wholesale travel agencies, transport companies, communications media, electrical components and building companies. Traditionally, the Group had created a company for each the businesses and assets in which

Over more than one year, the top management team analysed the different options available to them within Europe and decided to partner with First Choice Holidays. First Choice was a leading European tourism group, with a strong presence in Canada and England, and was listed on the London Stock Exchange. This important strategic initiative concluded in June 2000 with the integration of the Barceló Travel Division (Viajes Barceló) in the British group First Choice. However, at the end of 2003, Barceló announced that it was buying back the retail business (327 retail travel agencies in Spain, Portugal, Argentina and Mexico) from the British company in a move intended to avoid losing a significant presence in the Spanish tourist market through the travel agency network. The buyback of

The second significant strategic initiative was related to the Group’s core business: hotels.  

Barceló Travel Division only involved the travel retail business, and did not include the destination services business, which remained in First Choice’s hands. The second significant strategic initiative was related to the Group’s core business:

hotels. In 1998, the Group signed an important expansion agreement, called Grubarges, with the Spanish banking group Argentaria (currently BBVA) and the Spanish building group FCC. The three companies formed an investment and management firm, with each company owning one-third, which was run by the Barceló Group. The operation was designed to create Spain’s largest hotel group by leveraging the complementary competences of its promoters. Between 1998 and 2000, Grubarges invested EUR 670 million in purchasing existing hotels, developing new hotels and improving facilities, mainly in the US and Mexico. The purchases and holdings obtained through Grubarges enabled 29 hotels to be added to the Barceló Hotels & Resorts portfolio. In October 2003, Grubarges’s

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After the dissolution of Grubarges as a holding company, in 2004 Barceló entered into another “strategic alliance” with FADESA, one of Spain’s leading real estate companies, with the goal of developing hotel investment projects together. The objective of the project was to operate hotels developed by the property firm, with Barceló having the option of managing them. By leveraging the projects generated by the new real estate partner, the alliance sought to ensure continued growth in vacation hotels, urban hotels and complexes with golf courses in two locations that the Group had chosen as priority areas.

considerably, from 28% to 4% in the same period with the aim of keeping full or nearly full ownership particularly when dealing with strategic assets. Another of the Group’s initiatives in recent years has been the acquisition of Crestline Hotels & Resorts, a United States-based hotel manager listed on the New York Stock Exchange. Crestline was bought by

the Group took part, through BCC, in the design and management of Highland Hospitality Corp., a real estate investment trust which was listed on the New York Stock Exchange, and purchased 4.5% of its equity for a total of USD 13.5 million. Four months after going public, Highland had already purchased seven hotels across the US for a total of EUR 165 million. Six of these were subsequently

From 1998-2000, the Barceló Group experienced

With a turnover of more than EUR 1 billion, and an

significant growth in urban hotels, which grew at a

EBITDA of more than EUR 80 million, the Group has

similar rate to vacation hotels.   

become the third largest Spanish international hotel chain in hotel capability.

From 1998-2000, the Barceló Group experienced significant growth in urban hotels, which grew at a similar rate to vacation hotels. In 1997, only 30% of the total number of the Group’s hotels was urban hotels. The development of the urban hotel segment was a priority goal in Spain, Central and Eastern Europe, and the US. The proportion of urban hotels in

means of a tender offer and the company was subsequently withdrawn from the market. After the transaction, the firm was merged with one of the Group’s subsidiaries (which managed Barceló’s hotels in the United States), giving birth to Barceló Crestline Corporation (BCC). In the United States, the value chain in the hotel busi-

managed by Barceló. Highland owns the assets and Barceló Crestline manages the hotels. The real estate trust formula is widely used in the United States by the large chains operating in the industry.

the Group’s total hotel portfolio increased to 42% by the end of 2004, mainly through lease and management agreements since this required fewer resources and the hotels could be developed in less time. Simultaneously the proportion of hotels under minority interest was reduced

ness is clearly segmented, with specialist companies and groups in each link of the chain: ownership, branding, franchises and management. A year and a half after the creation of Barceló Crestline Corp (BCC) and as part of a decided move to increase its presence in the US market,

internal changes had been made to the company. The main goal was to continue improving the level of professionalisation of the management team, create a more decentralized organisation in decisionmaking and optimise customers’ interactions with the chain. The improvements

After 2000, with the new strategy and management focus, a number of major

MARKET500 no1 | January / February / March 2007

three partners announced the cancellation of this cooperation project and the company’s assets were put up for sale.

with a total capacity of 30,000 rooms: 37% in Europe, 32% in Latin America and the Caribbean; 25% in the United States, 2% in Asia and 4% in Africa. In Spain, according to Hostelmarket, it holds fourth place in turnover in the hotel business, it is the second largest Spanish chain in the Americas and the top Spanish chain in the United States, the Dominican Republic and Costa Rica.

were focused particularly on key internal processes, for example, certain aspects of the company’s governance, human resources, information systems, the marketing function, brand development and budgeting processes.

the urban hotels located in downtown areas; and Barceló Comfort, bringing together cheaper hotels which still offer good quality for the price. The results With a turnover of more than EUR 1 billion,

The Group has grown from 37 hotels to 108, of which some 54% are held under management or leased, 40% are fully owned or the Group holds a minority interest, and 6% are franchised. The Group is also the owner of one of Spain’s largest travel agency networks, Barceló Viajes, with more than 380 agencies.

Brand development is an initiative that is worth noting since the Group created a new corporate image after spending more than four years on its development. Thus, three brands have been created: Barceló Premium, bringing together the upmarket hotels and resorts; Barceló, grouping

and an EBITDA of more than EUR 80 million, the Group has become the third largest Spanish international hotel chain in hotel capability, and it holds 32nd place in the world ranking of hotel chains according to Hotels Magazine. The Group operates in 15 countries on four continents,

Entering a new round of growth Ten years after launching the family succession process in 1995, the Group has achieved a reasonable balance on its vacation-urban hotel ratio, and has accomplished significant geographic

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International Lifestyle City Magazines

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The Group’s main challenges ahead are to continue generating growth by optimising the mix between vacation and urban hotels while maintaining an improved balance between hotel ownership and hotel management. It is a tough but challenging task that will require that the top management make important strategic choices on the basis of various alternative growth options, including: choosing geographic areas in which to operate; prioritising primary business areas, whether vacation, urban or golf resorts;

c a s e s t u d y Barceló

The Group’s biggest travel business challenge for the next few years is deciding whether to continue growing the network abroad or to explore a merger.

what growth approaches to adopt, whether organic by purchasing land and building hotels or external development by buying individual hotels or exploring possible acquisitions of hotel chains. To this is added the travel business, consisting of the agency network, with an expansion plan that has been under way since 2004. The network currently has 387 units, of which 307 are located in Spain (45% franchised); 63 are business travel outlets managed through Barceló Business World; and 12 are destination services agencies and international franchises in Portugal, Argentina and Mexico,

with the highest portion of the revenues (+85%) generated in Spain and the rest in Portugal, Argentina, Mexico and the Dominican Republic. The Group’s biggest travel business challenge for the next few years is deciding whether to continue growing the network abroad or to explore a merger. Whatever the decision, the challenges are significant but the potential rewards are promising. Case study prepared by Professor Juan Roure and Juan Luis Segurado, Researcher, as a basis for class discussion. IESE-University of Navarre

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diversification in the hotel business, with the United States and Europe as its main markets. The Group now aims to add 44 hotels over a 2-3 year period to reach 152 hotels by 2007, with a planned investment of EUR 230 million, and expects to reach 200 hotels by 2010.

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e u r o p e ’ s 5 0 0 growth summit

grwoth summit e u r o p e ’ s 5 0 0

2007 Growth European Growth Summit

is East

On 18 May 2007 in Barcelona, Europe’s 500 will hold its annual conference on growth strategies and policies in conjunction with IESE Business School.

M

uch as the World Economic Forum in Davos has become the premier a n n u a l platform for discussing global economic trends, the European Growth Summit allows political leaders and growth entrepreneurs to come together to address the key issues of economic growth and job creation in Europe. Europe is lagging behind the United States and is struggling to meet the challenge set by the European Council at Lisbon in 2000 to become a single, highly competitive market that will deliver “more and better jobs” in Europe by 2010. These Lisbon Agenda targets are still far from being met and in order to deliver jobs and growth, Europe’s entrepreneurs, political leaders and experts need to share best practice and successful strategies, network and learn from each other.

Enhancing the business environment This is already happening in some parts of Europe and was recognised at the last Growth Summit in November 2005 in Barcelona by the presentation of a special award for enhancing the business environment to Austrian Finance Minister Karl-Heinz Grasser. Austria was singled out for successfully managing to lower its budget deficit, reduce unemployment and increase growth while at the same time lowering taxes – all achieved despite strong competition from neighbouring low wage Eastern European countries. Europe’s 500 special award is presented annually to a European politician who is judged to have significantly improved the economic climate. It also serves to highlight the necessity of sharing best practice between European countries. 2005: Climate change One of the key topics addressed at the last Growth Summit in November 2005 in Barcelona was climate change - what it means for the economy and what challenges and opportunities it will provide for entrepreneurs. Former US Vice-President Al Gore delivered a powerful keynote

speech on the perils of disregarding the effects of climate change, a forerunner of the message he has since delivered to a global audience through his film An Inconvenient Truth. Climate change is at the top of the political agenda worldwide, even in the US where it had been controversially sidelined until now. It is increasingly clear that solar and wind energies and alternative fuels will be the booming markets of the future, a view reinforced by the results of this year’s Europe’s 500 Listing of the best performing European growth companies, which saw an increased number of renewable energy companies ranked among the top 20. The Summit aims to identify and address current and upcoming trends and give greater awareness of their economic impact. The conference format, consisting of a main topic, learning from the best and workshops on current priorities, offers a forum for the discussion and generation of political recommendations and improvements at both the EU and regional levels, driven by a policy committee. Participating entrepreneurs

can study opportunities such as publicprivate partnerships, European funding and public tenders, and can also contribute their experience and improvement ideas to the European Commission. This enables them to combine corporate social responsibility, individual business interests and high level contacts.

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Former US Vice-President Al Gore (right) at the 2005 European Growth Summit with Antonella Mei-Pochtler, Senior Vice-President, The Boston Consulting Group and Martin Schoeller, President of Europe’s 500 – Entrepreneurs for Growth

2007: Growth is East The main topic of the 2007 European Growth Summit will be Growth is East. There have been many conferences already about India and China, but this summit will address the whole Eastern European/Asian potential for European entrepreneurs. The emerging regions are not only China and India, but also Russia and Eastern Europe. Several Austrian companies in the service sector have recognised this opportunity earlier than their peers, in banking and real estate to mention just two examples. High-level speakers from India such as Lakshmi Mittal are invited. From Russia

we expect the Finance Minister of the Moscow Region to give an insight into Russia’s business situation and opportunities and to inspire entrepreneurs to seek support to enter the market. There will be a perspective on China from insiders who are successful and there will of course be the new winners of the Europe’s 500 Listing from the Eastern European countries. Renewable energy is still only at the early stage of demonstrating its potential for huge upward growth and will allow plenty of opportunities for entrepreneurs who participate in this sector to help tackle the most urgent problems of our planet. It will be a key topic at the May summit and an apt opportunity for follow-up from the wake-up call that Al Gore gave us last year and through his film. Highlights of the 2007 Summit will include: • Europe’s 500 – Learning from the Best: the winners present their breakthrough strategies

• The regions: Eastern Europe–Russia– India–China • Perspectives from top entrepreneurs and politicians • The growth opportunities: renewables and CO2 reduction • The mega growth trend? Viewpoints from experts and entrepreneurs • Workshops on growth financing–innovation–education–PPP • EU – enterprise policies / Europe’s 500 initiatives • Opportunities for entrepreneurs, politicians and students to network and exchange ideas To register your interest and to receive programme updates, please contact Petra Stadler at [email protected], or visit www.europes500.com. By Martin Schoeller, President, Europe’s 500 – Entrepreneurs for Growth

e u r o p e ’ s 5 0 0 history

Europe’s 500 A short history of

In Europe, the picture was not as clear, so in 1987 a group of European Harvard alumni decided to found EFER, the European Foundation for Entrepreneurship Research, to focus on supporting academia to carry out case studies of entrepreneurs. EFER’s profile was boosted at the annual World Economic Forum in Davos, attracting the support of McKinsey, Deutsche Bank, Rabo, European Venture Capital Association and many successful entrepreneurs. In addition, several leading business schools, including IESE, IMD, LBS, Imperial College, Harvard and INSEAD supported annual research and conferences.   However, it was not until 1995 that the idea for an annual listing of Europe’s fastest growing companies – to be known

as Europe’s 500 – crystallised, following a challenge to EFER from the European Commission’s Directorate-General for Enterprise: where were Europe’s gazelles? EFER, together with DG Enterprise, Ernst & Young and Europe Unlimited, carried out a search to find the fastest growing enterprises in Europe and used Professor Birch’s Employee Growth Index as the ranking tool. Once the 500 winners had been selected, a conference was held at Ghent University (Belgium) in 1996 to highlight their achie-

business environment. EFER concentrates on training teachers in entrepreneurship and research into the role of SMEs and gazelles in driving jobs and growth.

Danuta Hübner, European Commissioner for Regional Policy, presenting the Europe’s 500 awards 2006 in Vienna.

Promoting

An annual conference – the European Growth Summit - is held separately to focus on key trends and topics affecting growth entrepreneurs, and a series of Roundtables for Growth have been established with senior officials from EU institutions and national governments to help develop policies which will foster the best

To mark the 10th anniversary of Europe’s 500, its two co-founders Dr Bert Twaalfhoven (left), Chairman of Twaalfhoven Group and the European Foundation for Entrepreneurship Research (EFER), and Juan Roure, Professor of Entrepreneurship at IESE Business School, Barcelona, were presented with special commemorative silver plates by Association President Martin Schoeller at the 2006 Europe’s 500 Awards Ceremony and Gala Dinner held at the Hofburg in Vienna. vements and discuss the key challenges facing growth entrepreneurs in Europe, including raising capital, succession (in family-run businesses) and the functioning of the stock market.

Günter Verheugen (left), European Commission Vice-President in charge of enterprise and industry, speaking at the second Europe’s 500 Roundtable for Growth in December 2005, with Martin Schoeller, President of Europe’s 500 – Entrepreneurs for Growth.

Since 1996, the Europe’s 500 Listing has been published annually and the winners recognised at an awards ceremony and gala dinner held each November in a different European capital.

the right policy framework for growth and jobs at the EU level

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I

n the 1970s Professor David Birch, an economist at the Massachusetts Institute of Technology (MIT) in the US, was conducting research into the life cycle of companies and found to his - and policy-makers’ - surprise that of the 25 million companies in the US, only 12,000 had more than 500 employees. He also discovered that new companies created 90% of all the new jobs in the US.   Over the next 10 years he refined his research and discovered that a tiny 3% of these new small companies created more than threequarters of all the new jobs and were key to the US economy’s growth. He called them “gazelles”. Professor Birch’s research was hugely influential in helping to change the focus of government policy towards entrepreneurs and how they were tracked, ranked and taught about by universities.

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s the only panEuropean organisation promoting the interests of the EU for more European g r o w t h entrepreneurs, Europe’s 500, the association for growth entrepreneurs, launched its first Roundtable for Growth in March 2004. The aim is to provide a practical and informal forum for growth entrepreneurs and senior officials from EU institutions and national governments to identify the EU policies and regulatory initiatives that are stifling growth entrepreneurship and measures which could improve the business environment.

At the first meeting with Erkki Liikanen in March 2004 and the second in December 2005 with European Commission Vice-President Günter Verheugen, the discussions centred on growth entrepreneurship opportunities and the challenges faced by the dynamic mid-cap businesses in Europe - in particular, innovation and growth financing, the single EU market and existing barriers to pan-European entrepreneurship, and entrepreneurial education and mindset in Europe. The entrepreneurs present at these meetings represented companies with around 500 employees – the ones creating most of the growth and jobs in Europe. The 2006 Roundtables were held with Graham Meadows, Director-General of DG Regional Policy in the European Commission and Prof. Danuta Hübner. With a budget of over 300 billion €

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for 2007-2013 - the second biggest in the EU – the key objective of the EU’s recently reformed regional policy is to identify Community priorities for delivering more growth and jobs throughout Europe through the use of its structural and cohesion funds. The Roundtable discussed ways in which structural funds could be used to promote growth entrepreneurship and innovation in Europe and concrete proposals are being followed up. Further Roundtables are planned and if you are interested in joining or want to learn more about future activities, please contact Frédéric Soudain at roundtable@ europes500.com or phone him on +32 2 639 6235.

roundtable e u r o p e ’ s 5 0 0

e u r o p e ’ s 5 0 0 letter from the President

continued from page 3

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However, Europe’s 500 is not interested in joining the blame game about who is responsible for the problems of the European economy: bureaucracy, protectionism, inflexible labour markets and a lack of tax incentives. The public is fed up with hearing this and seeing the snail’s pace of reform. It is more important that growth entrepreneurs contribute to solving the problems: Europe’s 500 focuses on contributing concrete proposals which will make a real difference towards helping businesses grow. With this objective in mind, we bring together entrepreneurs, politicians and policy experts at an annual European Growth Summit (see article on p.76) to discuss upcoming trends and their economic impact and work out practical proposals for improving the business environment. In addition, Europe’s 500 organises regular Roundtables for Growth between growth entrepreneurs and senior EU and national policy-makers to discuss specific policy measures affecting them and to suggest ways of fostering more entrepreneurial activity in Europe. (See article on p.79 for further information).

Europe’s 500 is currently working on five main initiatives: 1. 2. 3. 4. 5.

Growth financing Innovation Non-wage labour costs and a part- time labour model Trade with the developing countries (Fair Wages) Entrepreneurship education.

1. Growth financing This is an area where Europe’s 500 sees a big need for action, especially since the introduction of Basel II (the standards governing the capital adequacy of internationally active banks). In reality this has complicated the supply of credit to medium-sized businesses and private equity is not an adequate alternative as this mostly leads to the sale of the company after a few years. We want to encourage a credit insurance system which would provide, in return for an annual risk fee, a reliable rating system for medium-sized companies and a bank or insurance guarantee to back investment bank loans. This solution can be entirely sustained by the private sector and would remove a huge brake on growth. 2. Innovation In Europe a patent costs about 20 to 30 times as much as in the United States. Currently a new patent has to be legally registered in each European country of operation. This is time-consuming, costly and acts as a huge deterrent to innovation in Europe. Not surprisingly, invention rates lag far behind the level in the US and this has a trickle-down effect on overall economic growth. Our suggestion is obvious: there should be a single European-wide patent which requires only one application and registration fee in the whole of Europe. Patents should only be issued in English to avoid costly and time-consuming translations and there should be a central court of arbitration in Europe to rule on possible infringements.

3. Non-wage labour costs Statistics show that countries with low unemployment rates in Europe have a higher proportion of part-time employment. Despite this, politicians in the countries with the highest unemployment rates Germany, France, Italy – so far have done very little to enact changes in their labour markets to facilitate greater flexibility.

increasing competitiveness in those countries that adopted this system, which in turn would lead to higher growth and more employment. 4. International Trade and Social Standards One of the most challenging problems facing the world today is the wholesale relocation of jobs from high-wage to low-wage economies and the paradoxical high poverty levels which persist in these low-wage countries. Europe’s 500 questions the predominant opinion that the most liberal form of globalisation automatically leads to the best results. It cannot be good for our world that a business can replace employees who are provided with a social safety net with cheap unprotected labourers while simultaneously avoiding tougher environmental regulations.

More part-time employment means that the same available paid work (in hours) gets allocated to more individuals. So what is needed is an incentive for the economy as well as for the employee to offer more part-time employment and for it to be more socially acceptable. Europe’s 500 recommends that the burdensome non-wage labour costs, which cripple competitiveness in many countries, be reduced massively for part-time employment, for example by 80%. The consequence would be that: a) two part-time jobs would cost the employer less than one full-time job. b) the employee with two part-time jobs could earn net more than in one full-time job.

When we see the success of the 2006 Europe’s 500 entrepreneurs from the new EU member states and simultaneously see how much bigger the growth is in the eastern European countries rather than in western Europe, this is not just due, in our opinion, to the huge potential for catching-up that existed in those countries’ economies, but also to their adoption of EU norms in social and environmental standards which the EU demanded from all accession countries.

We recognise, of course, that not every employee would look for two part-time jobs, either preferring a more familyfriendly arrangement whereby one parent works full-time and the other part-time, or because they choose to devote the other half of their time to personal projects or unpaid community or volunteer work. The savings in unemployment benefits could be used to cover the missing contribution to social costs. A portion of unemployment benefits would need to be maintained for part-time workers to make part-time work more favourable to staying unemployed. This would also help in the detection of those unemployed who are unwilling to work and those who abuse the system. Such a measure would not only achieve one of today’s key political goals – reducing unemployment – but would also bring about a reduction in working costs per hour (at higher net earnings), thereby

MARKET500 no1 | January / February / March 2007

that there could be much more growth in Europe if the political and economic conditions only allowed it. I am particularly critical of “old Europe” attitudes which hamper competitiveness through bureaucracy, the lack of a pioneering or entrepreneurial spirit and a raft of political measures constraining business decisions. At the same time, Europe is not sufficiently conscious in its dealings with the developing world of the need to defend or demand the same social and environmental standards which have been established here. Development aid alone is not enough. Specific measures and links to international trade policy are also needed. This would motivate more entrepreneurs in medium-sized businesses to reach for sustained growth in Europe as well. Just look at America, where innovation and growth rates in medium-sized businesses are many times more dynamic than in Europe.

Europe’s 500 is working on a proposal for the EU to link a step-by-step adoption of social and environmental standards by developing countries to their admission to the marketplace. These countries are often overburdened and tend to react exclusively to the demands of the International Monetary Fund (IMF) and the World Bank, which focus too much on savings measures, budget deficits and combating inflation. It is also worth noting that democracies do not automatically develop the know-how or possess the will needed to introduce social systems and environmental systems into a country. In actual fact, it is the one-party, virtual dictatorships like Singapore, China and Russia

(from left) Professor Juan Roure, Jean-Paul Thill, KPMG’s CEO EMA, Alejo VidalQuadras MEP and Martin Schoeller at the European Growth Summit held at IESE Business School, Barcelona in November 2005. which introduce social development much more forcefully and efficiently. We encourage the EU to reward those developing countries which are willing to adopt the requisite social and environmental measures – to let them “join the club” - and gain trade benefits in Europe. Those countries that do not adopt such measures could be prevented from being able to use their cost advantage to adversely affect trade in Europe, thereby slowing the impetus for relocation to low-cost countries and contributing to the fight against poverty by encouraging salary levels to increase to drive domestic demand. This would also result in the export of more technical know-how and machinery from Europe to developing countries as their domestic economies grow and reduce their reliance on export trade with developed countries which has heavy additional costs, such as transport. 5. Entrepreneurship Education In collaboration with the European Foundation for Entrepreneurship Research (EFER – www.efer.nl) of Dr. Bert Twaalfhoven, Europe’s 500 supports the initiative on entrepreneurship education in universities. Compared to the US, our universities concentrate exclusively on the teaching of management. Management starts in principle where there is something to administer and to enhance, the entrepreneur starts with a blank sheet but constantly creates new solutions and processes which have to be managed afterwards. Where entrepreneurship is

taught as a subject at business schools, more entrepreneurship in that country follows – this is certainly the case in the US and is noticeably deficient in Europe. Europe’s 500 board of directors, all of them entrepreneurs who have qualified at least once for the Europe’s 500 listing, as well as a professor of entrepreneurship, bring their experience and know-how to these initiatives. Joining me on the board are Dave Darsch, founder of the CEO Collaborative Forum (Spain), Jordi Galles, Chairman, Europastry (Spain), Declan Ganley, Chairman and CEO, Ganley Group (Ireland); George Gerardos, President, Plaisio Computers (Greece); Dominique Louis, Chairman, Assystem (France); Professor Juan Roure, Professor of Entrepreneurship, IESE Business School (Spain); Dr Ulrich Schwanengel, Managing Director, Consol (Germany); Hendrik teNeues, teNeues publishing company (Germany); Roger Tondeur, President, MCI Group (Switzerland); and Dr Bert Twaalfhoven, Chairman, Twaalfhoven Group, and EFER (Netherlands).

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Europe’s 500’s activities are supported by sponsors who currently include KPMG, Microsoft, Coface, HKB, Sal. Oppenheim, Schoeller Industries and The Boston Consulting Group. By Martin Schoeller, President of Europe’s 500 – Entrepreneurs for Growth

letter from the President e u r o p e ’ s 5 0 0

i n v e s t i n g mid-cap

mid-cap i n v e s t i n g

The Mid-Cap Way

Dj Euro Stoxx Mid

Dj Euro Stoxx Large

360

Investing in a medium-sized, European company

350

440

340 420

330

P

400

310

becoming somewhat rich: in the UK, the FTSE 250 is trading on prospective p/e of 13.9 times 2007 earnings while the FTSE

There are many reasons to believe that mid-cap stocks could continue to do very well in 2007.

We are now in a continuing six-year cycle

100 is rated at 11.8 times. Despite relatively high valuations, large institutional investors, including pension funds, have been increasingly interested in raising their exposure to mid-cap stocks in order to generate additional alpha from equities markets. Should they do it themselves by buying direct holdings or via a specialized fund is they key question. Because

of out-performance relative to European large caps. According to the Euro STOXX Mid 200 Index, the returns on European mid-caps in 2006 outperformed the Euro STOXX Large 200 Index by about 11%, with returns rising by 24%, and despite a sharp correction in May. Valuations are

mid-caps are inherently a specialist’s market, in which you typically want to spread your risk across many positions rather than concentrate it on just a few bets, most investors usually decide to use pooled investment vehicles rather than pick individual securities directly.

The secular case for mid-cap investing is clear: there are over 1,000 mid-cap companies in Europe, so it is always possible for managers to find the diamond in the rough. Ignoring that segment of the market may result more risky than not ignoring it. Most mid-cap companies are only in one business so an investment in their stock is quite pure. Also, several emerging businesses such as renewable energy can only be found in mid-cap land. In general, stock pickers point out that mid-sized companies can grow as quickly as small ones and faster than big ones. Unlike small companies however, mid-size outfits tend to have established products and proven track records of generating earnings. These last two attributes can make mid-size companies “prime” candidates to be acquired by big ones. Managers also like the fact that mid-size companies’ top executives make themselves more accessible. There are many reasons to believe that mid-cap stocks could continue to do very well in 2007: 1) it is a class with higher expected returns (and risk) compared to large caps, 2) investors continue to have a big appetite for risk as witnessed by the current tight credit spreads, 3) M&A activity has been and is forecast to remain very strong, 4) the current economic

380

300 290

360

280 270 260

340 Jan Feb Mar

Apr May Jun

cycle has proven its resilience and its longevity is not in doubt for the moment, and 5) mid-size businesses tend to be more domestic so they are hurt less by a weaker dollar.

MARKET500 no1 | January / February / March 2007

82

ointing at the wide dispersion of returns between top and bottom quartile managers, Yale University’s endowment fund star manager David Swensen shows that midcap stocks constitute an inherently inefficient market. The inefficiency of mid-cap stocks comes from many wellknow factors: relatively reduced scrutiny from investors and brokers, less readily available information and the more fragmented nature of the market itself. Over the last few years however, you did not need to beat the index to do very well. Just buying it would have generated very hefty profits for your portfolio. Not unlike early 2005, many strategists were quite pessimistic in early 2006 about the prospects for mid-cap European stocks. They have been proven wrong again, and 2007 could well be a replay of 2006.

320

Another supporting factor put forward by mid-cap bulls is simply demand. It could continue to be very strong as many investors have missed the rally because the large investment firms advising them have in general a poor mid-cap product offering. Indeed, large firms looking after vast pools of money typically do not find it economical to focus on a market which is relatively small compared to the assets they manage. Boutique investment firms and their clients have profited the most from the boom in mid-cap stocks and they are now attracting the interest of large institutional investors, no longer just private money. Most importantly maybe,

Jul

Aug Sep Oct Nov Dec 2006

private equity sponsors are raising records amount of cash and, as can be seen by the record level of transactions, it is becoming more and more appealing for many public companies to be owned by focused, professional investors with a long-term industrial view rather than see their stock go up or down according to next quarter’s earnings or the unpredictable and volatile mood of stock market investors. The fact that the ECB is raising rates at a reasonable pace could be interpreted as a positive sign for mid-caps since it signals confidence about economic growth. The risk of course is that monetary policy becomes too aggressive and that growth slows abruptly in 2007; that would be particularly bad for mid-cap companies indeed as they have fewer different revenue streams than large caps.

It is not certain either that the mid-cap sector will continue to be a happy hunting ground for managers: valuation anomalies are becoming harder and harder to unearth as the mid-cap space attracts every-increasing attention. The days of finding a dull but worthy industrial company that is deeply undervalued are waning. It is difficult to imagine a midcap stock that has not been sized up by hedge funds, private equity houses, trade buyers and a rising number of more active, traditional fund managers. Almost all carry out computerized, quantitative screening of stocks to seek out bargains on the basis of financial ratios and earnings performance. Many also employ the tactics of traditional stock pickers to seek out primary information such as scouring trade publications and talking to suppliers. Finally, another risk for investors is to invest in large-cap managers disguised as mid-cap ones. Indeed, many mid-cap managers have seen massive asset inflows of late, triggered by their recent historical success. They could slowly be tempted to drift towards investing in large-cap stocks for liquidity reasons and there is a risk that their performance could become more index-like, which would mean of course that their management fees would no longer be justified (a little like beta managers pretending to be providers of alpha, in order to charge higher fees). Investors beware! Nicolas Sarkis [email protected]

83

i n v e s t i n g mid-cap

european Mid-Cap

mid-cap i n v e s t i n g

funds

Fund Name Return Return Return 1 Year 3 Year 5 Year

A selection of small and mid-cap investment funds in Europe filtered by the yearly best performances.

S&P Fund Stars

Manager

Currency Fund Size

Small Companies Italy Fund Name Return Return Return 1 Year 3 Year 5 Year

S&P Fund Stars

Manager

Leonardo Small Caps 17.4 58.8 52.72 Leonardo SGR S.p.A. XEC 41.3 Optima Small Caps Italia 24.43 71.97 72.89 Optima SGR S.p.A. EUR 43.96 Source : Standard & Poor’s Database Name : Pan European Date : 29/12/2006 Calculation Settings : Euro, Nav - Nav, Gross Reinvested.

Currency Fund Size

* Since Launch Performance figures are calculated in fund base currency.

Small Companies France Small Companies Netherlands ABN AMRO Small Comp Neth Fund 39.89 168.03 183.26 ABN AMRO Investment Management Funds BV XNL 126.1 Orange Fund 41.2 154.56 118.05 Kempen Capital Management XNL 141.22 Source : Standard & Poor’s Database Name : Pan European Date : 29/12/2006 Calculation Settings : Euro, Nav - Nav, Gross Reinvested. * Since Launch Performance figures are calculated in fund base currency.

85

Source – © Standard & Poor’s - The McGraw-Hill Companies, Inc.

Small Companies UK

MARKET500 no1 | January / February / March 2007

84

AAZ Challenger 12.61 78.84 ** AAZ Finances EUR 13.72 AEden France Croissance 14.73 84.33 62.74 ** KBL France XFR 30.58 AXA France Small Cap C 30.56 129.42 91.73 ***** AXA XFR 199.49 AXA France Small Cap C 30.56 129.42 91.73 ***** AXA XFR 199.49 BMM France PME P 18.46 86.62 70.55 *** Banque Martin Maurel XFR 24.14 BNP Paribas Smallcap France C 24.64 110.47 83.55 ***** BNP Paribas XFR 79.29 Boscary Mont-Blanc Sélection 37.13 110.25 **** Financière Boscary EUR 26.31 Cambacérès Risques 24.18 102.89 51.27 *** Credit Mutuel Nord Europe EUR 10.13 Cambon Ventures 14.31 57.58 7.67 * Chaussier Gestion XFR 5.94 Centrale Actions Avenir 13.88 69.57 91.02 * CCR XFR 105.6 CFD Small Caps 12.17 CFD Capital Management EUR 1.85 CFD Small Caps 12.17 CFD Capital Management EUR 1.85 Chaussier Croissance 16.13 81.02 69.75 ** Chaussier Gestion XFR 18.9 CIC Euro Opportunités 25.48 87.41 30.16 *** CIC XFR 279.31 CIC Nouveau Marché 12.56 68.26 -10.36 ** CIC XFR 13.83 CIC Sud-Est 21.17 84.39 76.09 ** CIC XFR 59.91 Cogefi Carpe Diem 5.4 53.91 -6.47 * Cogefi XFR 3.39 Cogefi Prospective 9.6 61.86 10.14 * Cogefi EUR 14.46 Découvertes 10.31 75.82 95.36 ** HSBC Private Bank France XFR 42.02 Dexia France Small Caps C 20.54 102.26 89.9 **** Dexia Asset Management XFR 10.86 Dexia France Small Caps C 20.54 102.26 89.9 **** Dexia Asset Management XFR 10.86 Dexia France Small Caps C 20.54 102.26 89.9 **** Dexia Asset Management XFR 10.86 Digital Funds Stars France 23.14 UBS Third Party Management Co S.A. EUR 25.33 Echiquier Junior 10.62 59.13 83.76 * Financière de l’Echiquier XFR 178.92 Fortis France PME 21 84.66 101 *** Fortis Investments XFR 32.33 France Futur C 24.45 100.83 63.52 **** BFT XFR 108.45 France Futur C 24.45 100.83 63.52 **** BFT XFR 108.45 Fructi France Microvaleurs 1.42 Banques Populaires EUR 19.57 Fructi France Smallcap 14.62 61.6 -7.66 * Banques Populaires XFR 27.05 Generali France Small Caps 22.26 100.36 100.32 **** Generali Fin. EUR 49.74 HSBC Small Cap France 26.36 122.46 101.8 ***** HSBC Investments XFR 163.68 IDE France Dynamisme 26.59 71.58 125.14 ** Investisseurs ds l’Entreprise XFR 83.66 IXIS Médianes 17.53 91.8 74.89 *** IXIS Asset Management XFR 186.69 LFI PME 11.44 106.37 59.93 **** Portzamparc XFR 4.59 MCA France 16.81 62.81 50.24 * MCA Finance XFR 7.26 MG Nouveau Marché C 13.59 68.65 -11.53 ** Muta Vie XFR 8.72 MMA Perspectives 25.26 103.25 45.75 **** MMA XFR 147.76 Moneta Micro Entreprises C 34.59 122.03 ***** Moneta Asset Management EUR 122.1 Objectif Small Caps France 13.74 78.76 91.69 ** Lazard Freres Gestion XFR 189.52 Palatine France Midcap 16.49 95.55 35.72 **** Banque Palatine XFR 121.26 Palatine France Small Cap 6.01 73.22 -11.1 ** Banque Palatine XFR 14.52 Pluvalca France Small Caps 27.16 103.9 121.96 *** Financiere Arbevel XFR 31.17 Robeco Small Cap France 4.95 64.45 36 * Banque Robeco XFR 20.95 RP Sélection Mid Cap 13.84 115.1 156.92 **** SPGP EUR 101.15 Saint Germain Opportunités 8.85 43.76 40.3 * Banque Privee Quilvest XFR 9.13 Saint Honoré PME 19.53 95.12 90.87 *** Cie Fin. Rothschild XFR 89.45 SGAM Invest France Sm. Cap C -0.31 55.05 -9.58 * Societe Generale XFR 76.12 Siparex Small Cap Value 30.84 140.3 221.79 Siparex XFR 151.73 Trusteam Microgarp 11.52 TrusTeam Finance EUR 7.57 Vendôme Sélection 25.11 91.89 64.99 *** BGPI XFR 170.77 Source : Standard & Poor’s Database Name : Pan European Date : 29/12/2006 Calculation Settings : Euro, Nav - Nav, Gross Reinvested.

Abbey Natl Smaller Companies 25.84 87.49 36.85 ** Aberdeen UK Emerg Cos A Acc 29.41 77.89 51.23 ** Aberforth UK Smaller Cos 29.61 119.88 140.49 **** AIGLI/M&G Innovator 27.71 114.31 21.26 **** Artemis UK Smaller Cos 19.44 85.29 101.52 *** AXA Framlington UK Sm Cos Inc 20.3 104.98 122.29 **** AXA Rosenberg UK S Cap A 18.94 61.61 76.46 * AXA UK Smaller Companies 24.35 80.29 37.18 * Baillie Gifford BrSmCo A Acc 37.49 127.9 105.75 **** Baring UK Smaller Companies 26.41 80.02 37.67 ** Cavendish AIM Rtl -2.46 Cazenove UK Smaller Cos B 38.5 102.3 48.11 *** CF Canlife UK Smllr Companies 4.22 33.61 24.58 * Close Beacon Investment 9.89 38.64 4.86 * Close Special Situations Fund Credit Suisse Small Companies 34.43 102.72 97.08 *** Dimensional UK Sm Comps Inc 30.3 Discretionary Unit 23.71 79.84 97.58 ** Electra Active Value 5.08 34.23 29.83 * F&C UK Smaller Cos SC1 Acc 30.75 111.27 44.76 **** First State British Sm Cos A 10.58 63.3 86.33 ** Gartmore UK & Irish Sm Co Rtl 20.72 70.43 52.91 * Henderson UK Smaller Cos A 32.56 105.15 28.2 *** HSBC UK Smaller Cos Inc 18.96 64.37 43.48 * Insight Inv UK Sm Cap Rtl Inc 25.02 88.37 70.1 ** INV PERP UK Sm Cos Equity Acc 30.6 119.55 99.74 **** INV PERP UK Sm Cos Growth Inc 13.37 74.1 56.6 ** Investec UK Smaller Cos Acc 34.13 120.83 152.97 **** JPM UK Smaller Cos A Acc 37.73 123.5 101.21 ***** Jupiter UK Smaller Companies 31.28 85.62 64.07 ** L&G UK Smaller Cos E Inc 30.68 96.96 74.65 *** Lazard UK Sm Cos Retail 35.26 114.79 103.27 **** Liontrust Intellectual Cptl 12.8 62.96 71.48 * M&G Smaller Companies A Inc 28.71 123.21 94.57 ***** Marlborough Special Sits 26.82 111.31 152.85 **** Marlborough UK Micro-Cap Fund 28.35 Merrill Lynch UK Sm Cos Inc 30.2 130.72 113.1 *****

Abbey National UT Managers Aberdeen Unit Trust Managers Aberforth Unit Trust Mngrs AIG Life (Ireland) Artemis Fund Managers Limited AXA Framlington Group AXA Rosenberg Mgt Ireland Ltd AXA Fund Managers Baillie Gifford & Co Barings Cavendish Unit Trust Mgmt Cazenove Investment Fd Mgt Capita Financial Managers Ltd Close Fund Management Ltd Close Fund Management Ltd Credit Suisse Asset Mgmt (UK) Dimensional Fund Advisors Ltd Discretionary Unit Fund Mgrs Electra Quoted Management Ltd F&C Fund Management Ltd First State Investments Gartmore Fund Managers Henderson Global Investors HSBC Investment Fds (UK) Ltd Insight Investments Mgmt Ltd INVESCO Fund Managers INVESCO Fund Managers Investec Fund Managers Ltd JPMorgan Asset Management Jupiter Unit Trust Mgrs Legal & General UT Managers Lazard Fund Managers Ltd Liontrust Investment Funds M&G Group Marlborough Fd Mgrs Marlborough Fd Mgrs BlackRock M Lynch Inv Mgrs (UK)

GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP

27.98 186.54 865.03 0.01 633.17 251.25 20.29 139.42 486.35 39.59 9.22 18.79 75.32 17.18 5.21 42.23 48.56 64.41 25.28 71.63 16.7 284.62 155.95 26.88 30.54 435.59 152.86 122.01 264.96 82.5 181.99 97.82 111.55 241.49 136.59 36.36 209.69

i n v e s t i n g mid-cap

Fund Name Return Return Return 1 Year 3 Year 5 Year

S&P Fund Stars

Manager

Currency Fund Size

Fund Name Return Return Return 1 Year 3 Year 5 Year

Source – © Standard & Poor’s - The McGraw-Hill Companies, Inc.

263.37 10.12 42.15 141.11 141.11 13.34 12 239.57 234 39.97 129.71 92.95 78.91 488.35 38.71 38.78 65.88 25.82 228.13 27.84 74.71 676.65 163.35 618.76 41.5 528.89 404.7 196.46

Currency Fund Size

Small Companies Euroland

Small Companies Switzerland Oppenheim Pramerica Asset Mgt S.a.r.l CHF AIG Private Bank Ltd CHF PMG Fonds Management AG CHF Bank Hofmann Fund Mgmt Ltd CHF Bank Hofmann Fund Mgmt Ltd CHF Banque de Luxembourg CHF FidFund Management S.A. CHF Credit Suisse AM Schweiz CHF FidFund Management S.A. CHF Bank Julius Baer CHF Julius Baer Investmt Fd Serv. CHF Lombard Odier Darier Hentsch & Cie CHF Lombard Odier Darier Hentsch & Cie CHF Lombard Odier Darier Hentsch & Cie CHF UBS Fund Management AG CHF Mirabaud Investment Mngt Ltd CHF Helaba Investment (Schweiz) AG CHF Helaba Investment (Schweiz) AG CHF Pictet & Cie CHF Rothschild Fund Management AG CHF Reichmuth & Co Investmentfds AG CHF Sarasin Investmentfonds AG CHF Schroder Investment Mgmt (Luxembourg) CHF Swisscanto Fondsleitung AG CHF Gerifonds SA CHF UBS Fund Management AG CHF UBS Fund Management AG CHF UBS Fund Management AG CHF

Manager

* Since Launch Performance figures are calculated in fund base currency.

* Since Launch Performance figures are calculated in fund base currency.

3V Inv Swiss Small & Mid Cap 26.82 142.76 137.07 **** AIG EF S&M Caps Switzerland A 20.82 Asselsa SM-Caps Switzerland 33.53 99.03 ** Bank Hofmann Swiss Sml Stocks 37.06 115.99 88.19 ***** Bank Hofmann Swiss Sml Stocks 37.06 115.99 88.19 ***** Callander F-Swiss Gr Mid-C C1 26.79 78.91 56.08 * CommCept Swiss Mid&Small Caps 8.79 49.48 * CS EF Small & Mid Cap Switzl 41.23 102.69 82.3 ** Gem Small&Mid Caps Switzerld 26.42 JB Inst Swiss S&M Cap Eq A2 37.62 JB Swiss Small&Mid Cap SF B 35.08 94.37 57.32 *** LODH Opp Swiss Sm & M Caps 35.81 106.13 82.15 *** LODH Swiss Cap ex-SMI I 38.83 LODH Swiss Cap EX-SMI P 38.9 115.62 113.9 **** MI-FONDS (CH) Inst Sm Stock CH MirGest Swiss Small & Mid Cap 37.48 OZ Swiss Equities Optimized 13.76 51.75 26.74 * OZ Swiss S&M Cap Selection Fd 25.72 Pictet (CH) Swiss Mid-Small P 32.11 108.91 91.6 *** RBZ Swiss Small & Mid Caps 39.24 83.64 46.14 * Reichmuth Pilatus 20.84 97.4 104.08 ** SaraSelect 36.69 115.72 126.05 **** Schroder ISF Swi Sm&Mid A Acc 40.25 107.01 *** Swisscanto (CH) EF SMCap CH A 38.15 105.9 94.36 *** Synchrony IF Small Cap CH A UBS (CH) EF-Mid Caps Switzl 33.74 95.86 83.96 ** UBS (CH) EF-Small Cap Switzl 32.82 108.25 99.71 **** UBS (CH) IF-S&M Eq Switz B 35.98 107.68 102.99 ***

S&P Fund Stars

Vontobel Swiss Mid & S-Cap A2 34.08 90.19 55.34 ** Vontobel Fonds Services AG CHF 89.67 Vontobel Swiss Small Companies 34.87 116.35 107.55 **** Vontobel Fonds Services AG CHF 490.34 XMTCH on SMIM® 43.81 Credit Suisse AM Schweiz CHF 584.69 Source : Standard & Poor’s Database Name : Pan European Date : 29/12/2006 Calculation Settings : Euro, Nav - Nav, Gross Reinvested.

New Star GF UK Smllr Cos 11.97 74.68 73.87 ** New Star Asset Mgmt Limited GBP 15.44 Norwich Henderson UK Small Co 33.27 108.22 30.79 **** Norwich Union Intl Ltd GBP 0.44 Norwich Perpetual UK Small Co 31.24 122.14 97.14 **** Norwich Union Intl Ltd GBP 1.05 Norwich Schroder UK Small Co 31.91 85.83 85.77 *** Norwich Union Intl Ltd GBP 3.65 Norwich UK Small Co 26.89 73.43 62.18 ** Norwich Union Intl Ltd GBP 2.78 Norwich UK Smaller Cos 1 26.71 77.7 71.23 * Norwich Union Trust Managers GBP 111.59 Nucleus Sm Securities Trust 7.15 56.41 -4.3 * Smith & Williamson FA Ltd GBP 17.3 Old Mutual UK Sel Sm Cos Acc 40.92 147.94 174.82 ***** Old Mutual Fund Managers Ltd GBP 561.42 OM (Dub) UK Sel UK Smllr Cos 38.91 180.95 ***** Old Mutual Asset Managers (UK) Ltd GBP 105.29 Premier UK Smaller Companies 6.84 64.83 59.69 ** Premier Portfolio Managers GBP 6.67 Premier UK Smaller Companies 6.84 64.83 59.69 ** Premier Portfolio Managers GBP 6.67 Pru Small Companies Trust Inc 28.15 121.6 97.02 **** Prudential Unit Trusts Ltd GBP 244.11 R&M UK Equity Smaller Comp Cl A River and Mercantile Funds ICVC GBP Rathbone Smaller Cos Inc 26.8 97.28 70.21 **** Rathbone UT Mgmt Ltd GBP 48.49 Rensburg UK Micro Cap Growth 21.45 91.11 *** Rensburg Fund Management Limited GBP 29.67 Rensburg UK Smaller Cos 25.26 92.74 60.78 ** Rensburg Fund Management Limited GBP 51.68 Resolution Smaller Cos Inc 38.42 124.67 77.63 *** Resolution Fund Managers Ltd GBP 108.83 Schroder Inst UK Sm Cos 27.83 88.44 102.74 ** Schroder Unit Trusts (UK) GBP 464.8 Schroder UK Smaller Cos Inc 32.05 85.59 88.28 ** Schroder Unit Trusts (UK) GBP 451.34 SG UK Smaller Cos Ret Acc 22.82 Société Générale Investmt Fds GBP 117.18 Skandia GBP InvPe UK SmCo IRL 28.83 111.38 **** Skandia Ireland Limited GBP 0.14 Std Lf UK Smll Cos Rtl Acc 46.44 137.26 106.59 ***** Standard Life Investments GBP 226 SW UK Smaller Cos A 29.97 94.16 74.36 *** Scottish Widows UT Mngrs Ltd GBP 228.09 SWIP UK Smaller Cos A 33.89 96.72 52.73 *** Scottish Widows Investment Partnership GBP 87.63 Threadneedle UK Sml Cos 1 33.61 102.28 77.41 *** Threadneedle Invstmt Services GBP 155.88 UBS UK Smaller Companies A 26.98 96.9 *** UBS Global Asset Mgmt Fds Ltd GBP 69.61 Unicorn UK Small Cos A Inc 31.35 43.06 * Unicorn Asset Management Ltd GBP 3.58 Source : Standard & Poor’s Database Name : Pan European Date : 29/12/2006 Calculation Settings : Euro, Nav - Nav, Gross Reinvested.

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mid-cap i n v e s t i n g

AGF Invest Euro 29.37 AGF EUR 113.18 AXA L Fund Sm Caps Benelux C 25.53 140.67 148.85 ***** AXA-IM / Axabank XLF 13.29 Barclays Small Cap Euro PEA C 15.09 79.32 46.84 ** Barclays EUR 100.65 BG Sicav SC Euro Eqs DXB-C Generali Investments EUR 64.31 Bim Azionario Small Cap Italia 19.38 72.85 ** BIM Intermobiliare SGR S.p.A. EUR 60.94 BK Small & Mid Caps 27.39 93 *** Gesbankinter EUR 207.91 BMM Eurosmallcaps Banque Martin Maurel EUR 2.63 BNL European Small Caps A 27.54 121.01 **** BNL Global Funds PLC EUR 11.1 BNP Paribas Micro Cap Eurol. 13.57 73.61 * BNP Paribas EUR 18.92 BNP Paribas Smallcap Eurol. C 25.69 103.35 97.73 **** BNP Paribas XFR 457.7 CAAM Midcap Euro P 26.87 107.09 83.29 *** Crédit Agricole XFR 121.04 CAAM Midcap Euro P 26.87 107.09 83.29 *** Crédit Agricole XFR 121.04 Capitalgest Small Cap 26.33 51.25 59.04 * Capitalgest SGR S.p.A. EUR 98.13 Centrale Avenir Euro 21.4 CCR EUR 32.35 Dexia Eq B EMU Small Caps C 33.82 120.2 127.89 *** Dexia Asset Management XBF 25.19 Dexia Eq B EMU Small Caps C 33.82 120.2 127.89 *** Dexia Asset Management XBF 25.19 Dexia Eq B EMU Small Caps C 33.82 120.2 127.89 *** Dexia Asset Management XBF 25.19 DWS Euroland Neue Märkte 13.98 70.91 0.06 * DWS Investment S.A. XDM 63.88 Elan Midcap Euro C 30.74 Rothschild Banque EUR 47.65 Elan MS Midcap Euro PEA 23.75 85.6 ** Rothschild Banque EUR 10.52 EuroAction: Midcap 22.54 89.08 51.39 * Union Investment Lux S.A. XDM 242.88 Groupama Avenir Euro I 26.71 100.96 *** Groupama EUR 37.79 HSBC GIF Euroland EqSmCo AC EUR 33.71 114.89 *** HSBC Investment Fds (Lux) SA EUR 42.91 HSBC Microcaps Euro C 11.4 67.93 -21.26 ** HSBC Investments XFR 31.46 Iéna Euro Mid C 17.18 81.22 58.04 ** BFT EUR 41.23 Iéna Euro Mid C 17.18 81.22 58.04 ** BFT EUR 41.23 iShares DJ EURO STOXX Sm Cap 32.22 Barclays Global Investors EUR 193.16 iShares DJ EURO STOXX Sm Cap 32.22 Barclays Global Investors EUR 193.16 IXIS Découvertes 8.2 63.37 13.78 * IXIS Asset Management XFR 44.11 Kairos Partners Small Cap 17.56 67.73 ** Kairos Partners Sgr S.P.A. EUR 683.07 LBPAM Actions Midcap C 37.06 127.06 160.04 ***** La Banque Postale EUR 273.26 LFP Microcaps 9.28 61.64 * La Francaise des Placements EUR 10.46 Lupus alpha Sm Tec Champ C 24.93 75.79 30.29 ** Lupus alpha Asset Mgmnt GmbH EUR 89.43 Lupus alpha Smllr Eur Champ C 27.84 108.67 149.78 *** Lupus alpha Asset Mgmnt GmbH EUR 181.32 Lyxor ETF MSCI EMU Small Cap 25.55 Lyxor Asset Management EUR 78.49 Mellon Small Cap Eurold A EUR 32.29 122.67 **** Mellon Global Investments Ltd EUR 237.38 Natexis Actions Cap. Struct. -9.42 Natexis Equity Management EUR 31.59 Nextra Azioni Pmi Italia 12.32 69.05 80.7 ** CAAM Sgr S.P.A. EUR 202.37 Objectif Small Caps Euro 21.15 76.87 ** Lazard Freres Gestion EUR 225.55 Parvest Euro Small Cap C 24.53 99.69 96.21 ** BNP Paribas Asset Management XEC 110.27 Prévoir Perspectives 17.96 92.54 *** Société de Gestion Prévoir EUR 8.88 SGAM Fund Eq Euroland S-Cap A 30.92 SG Asset Management EUR 149.08 SGAM Index Small Cap Euro 31.11 SGAM Alternative Investments EUR 49.88 SLB EuroSmallCaps Fund 19.06 107.15 86.47 *** Swiss Life Belgium EUR 3.61 Symphonia Comp Az Italia S Co 12.49 58.61 11.18 * Symphonia Sicav S.P.A. EUR 87.03 Synergy Smaller Cies A 22.17 92.74 Sycomore Asset Management EUR 284.24 Zelia Euro Small Caps 19.06 107.15 86.47 ** Zelia Assurances XBF 14.35 Source : Standard & Poor’s Database Name : Pan European Date : 29/12/2006 Calculation Settings : Euro, Nav - Nav, Gross Reinvested. * Since Launch Performance figures are calculated in fund base currency.

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l i f e s t y l e yachting

YACHT SHOW

16th Monaco Monaco Yacht show, is the only International Boat Show dedicated exclusively to luxury yachting. And, attracted by the prestige of this event, top luxury brands, Blancpain, Lanson Champagne, Lenotre, Baccarat, Lalique, Dassault Aviation and Mercedes, enthusiastically join forces with the MYS. Among 91 superyachts, 44% measure more than 40 meters in length. Taking part, 520 exhibitors, 77 shipyards, 29 luxury yacht brokers, 54 naval architects and interior designers, 187 equipment manufacturers and 11 of the world’s top 15 customised yacht builders.

In spite of the astronomical costs, world production of luxury superyachts has been growing at a rate of knots in recent years. At 46.+ meters Lulworth is the world’s largest gaff-rigged superyacht. Discovered virtually abandoned in the Italian sun in 2001, she was bought by a company owned by gregarious Dutch businessman Johan van den Bruele who decided to create “the restoration of the century” using original materials, even managing to track down rare Honduras mahogany for the hull. It takes 20 minutes to hoist the main sail and when Lulworth races there are 28 crew on board. Restored in the boatyards of Viareggio, she even boasts the original silverware and interior features, graciously returned by one of the previous owners. For sale at 19.5€ million and available for select day charters at 15,000€ including crew and skipper Guiseppe Longon.

“The Monaco Yacht Show is a perfect example of an exhibition capable of creating community growth, not only has the Principality of Monaco benefited, but the entire nautical industry worldwide”, said HSH Prince Albert 11 of Monaco. “We Care For the Earth” is the theme throughout MYS. With the collaboration of Camper and Nicholson, Monaco Yacht Show is the first Monegasque event to receive the “Carbon Neutral” award, striving to increase awareness of its participants on global warming issues.

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MARKET500 no1 | January / February / March 2007

Lulworth

Candyscape

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With 23 cutting-edge boats on show the Italians are top of the “Builders Nations” league, holding the keys to the season’s must-haves, followed by The Netherlands with 14, France 11, USA 8, Germany 7, New Zealand 6, Monaco 3, Russia 2, Turkey 2, UK 2 etc.

Blancpain The Yacht Show also supports The Monegasque Association Against Muscular Dystrophy, helping children affected by this serious genetic disease. Each year since 2001, the MYS donates, to AMM, half of each 50€ entry ticket and, sets up fund raisers such as the annual Blancpain “Only One Watch” auction with Prince Albert in the front line. The world’s most exclusive auctioneers of rare timepieces Antiquorum and Osvaldo Patrizzi, raised 110,000€€ this year. “With its 72-hour power reserve the “Only One” watch is unique, the winding rotor, hand carved by Blancpain’s master engraver, bears the image of the Lake Geneva historical sailing vessel La Vaudoise”, explained the auctioneers.

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The brilliant design duo brothers, Nick and Christian Candy, recently refitted, the Benetti built, Candyscape presented by Edmiston with a price tag of 15.5€ million or, for charter at €180,000 - €200,000 depending on the time of year. “This is our first venture into boat design for Candy & Candy. It’s art-deco meets contemporary: a fusion”, explains Candy. It’s certainly no ordinary 6-cabin: 6 bathrooms vessel. Original artworks hang on silk covered walls, platinum and gold leaf coat the ceilings whilst bespoke furniture needs to be admired for its’ elegance. Check out Halle Berry’s knife belts worn in the James Bond film “Die Another Day”. Admire the Louis Vuitton monogram trunk covering one of the guest cloakroom walls, the mahogany dining room table that flips over to become a gaming table complete with roulette wheel.

Impossible to ignore Maltese Falcon,Tom Perkins’ magnificent stateof-the-art sailing-yacht, the largest project to date to come out of Perini Yildiz Tuzla shipyards, Istanbul. In addition to being a superb example of technology and engineering in action, look up! The UK based Insensys company is responsible for the Falcon’s revolutionary rotating mast and the metallic silver rigging resem-

For sale, or to charter, Mirabella V, the 247-foot luxury sailing yacht exhibited by brokers Nigel Burgess. Mirabella is the world’s largest sloop, and is in the Guinness Book of Records having the tallest mast and largest sail. Burgess say it is nimble for its’ size and can reach speeds of upwards of 20 knots under sail. There’s room for 12 guests in six luxurious cabins with en-suite bathrooms, Plasma TV’s, DVD and CD players with 250-hour centralised music system and, of course internet and telephone connections. The master suite on the main deck runs the length of the boat. No excuse to stay cabin side, try the Jacuzzi and pool, the 30-foot tender will whisk you off to your favourite restaurant. Burn off the calories on the jet skis or in the gym. Oh! and there are indoor and outdoor movie screens. Price on application but if you want to charter for a week $300,000 includes the crew of 14.

l i f e s t y l e yachting

From YachtPlus comes the Sea-Sleek Norman Foster customised 100-footer, built from 100% carbon fibre including the sails. It has room for 6 passengers and four crew. Push button sail controls means one person can operate the boat. Their 180-foot mega-yacht features a top speed of 16 knots and an 861-square foot main salon. The glass superstructure floods the interior with sunlight and gives 360-degree views from the upper decks. Price? A mere $75.5 million and from the time you place the order, expect a three year wait: because it’s worth it. I’m not paying that!

MARKET500 no1 | January / February / March 2007

Maltese Falcon (up), Mirabella V (down)

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bles the ribs of an immense prehistoric carbon creature. “We clean it with a Karcher pressure washer with rotating brushes and a very, very long hose, along with two crew in the rig”, says the yacht’s captain, Chris Gartner. The interior is by French architect/ designer Christian Liagre, a combination of classical marine tradition and contempoarary elegance. It’s yours for a mere 100€ million

So, YachtPlus have created Fractional Ownership, a very practical and exciting formula. “We have a fleet of 20 luxury motor yachts built exclusively for our Fractional Ownership Programme”, explains Han Verstraete of YachtPlus. “Clients have the luxury of leaving hectic schedules behind to escape on board their own fully serviced yacht, with crew; where and when they want. The Norman Foster designed boats have 5-cabins, are built by Rodriguez Cantieri Navale. 5 weeks a year in the Caribbean or the Mediterranean will cost approximately £849,000 plus an annual fee of £86,000 which includes crew and servicing.

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Master Bedroom (up) and living room (down) Candyscape

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Riva Vertigo (up), Analiesse (down)

For a larger motor yacht there’s Annaliesse, at 280 feet, shown at MYS by Edmiston. Room for 36 guests, with a crew of 45, including an in-house beautician and personal trainer. This is sea-spa attitude with Jacuzzi, sauna, massage rooms, his and hers hair salons, nail parlour and gym. The price is about $850,000 a week and if you want to make them an offer at the end of the week it will have to be in the region of €€79 million. The Wally Company, created in 1993, was named by owner Luca Bassani’s son after Wally Gator his favourite cartoon character. Bassani, a wealthy Italian economist turned yachting entrepreneur, collaborates with naval architect Luca Brenta to build fast, light, safe, stylish and very expensive carbon fiber sailing yachts. SYTango is the fifth unit of the successful Wally80 design. Combining high performance with interior volumes that are uniquely large considering its’ 24 meter size, there’s flush deck canting keel and three cabins. “The Monaco Yacht Show provides an excellent opportunity to do business, although there is obviously a lot of competition”, explains Rupert Nelson, sales director of Yacht Broker Nigel Burgess. 12 guests and 15 crew make

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Indian Princess one of the Burgess best boats. Definitely the grand piano is an attraction, the games room with 180 degree panoramic view, and the AC3 cinema/theatre, the gym, running machine, cross trainer and oh! so much to enjoy a life on the ocean wave. Phocea is one of the largest privately owned sailing yachts in the world, built in 1976, by Arsenal de Toulon and raced single-handed in the Transatlantic Yacht Race by Alain Colas. She was then converted for Club Med who sold her to French entrepreneur/actor Bernard Tapie. Her transformation into the jetset took place when Mouna Al-Ayoub bought her and spent fortunes on the interior décor, recently transformed by David Linley. Mike Horsley of Edmiston presented Phocea at MYS. “She’s in the region of 19.5€ million to buy. If you want her for charter think 80,000€ per week, including crew, plus expenses”, Horsley quoted.

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Last May, Burger Boat Company launched the 144 foot tri-deck Mirgab V, the largest aluminium yacht in its’ 143year history. The defining focal point is a 1-meter diameter, glass tube pneumatic elevator surrounded by a circular sculpted bronze stairway and illuminated glass treads spanning three stories. This incredible stairway, designed and created by Les Metailliers Champenois, is grounded on all three levels with rare onyx stone. No expense was spared when a high profile executive and 24-hour party person commissioned, from Amels, Lady In Blue. This is the yacht that thinks it’s a resort, read, Aman-on-Sea. There are space for 10 guests and 14 crew, interior design is by Studio Alberto Pinto, featuring a working fire place. There’s plasma TV’s everywhere, discotheque, Jacuzzi, treadmill and the usual tenders and toys. For sale at 35,000,000 USD or charter for 300,000 USD weekly + expenses. The galley would attract a 3-star chef – but Alain Ducasse doesn’t come cheap.

Wally Tango Address Book Monaco Yacht Show www.monacoyachtshow.com MARKET500 no1 | January / February / March 2007

The Autumn Boat Bonanza continues in Monaco, before moving on to Genoa, Barcelona and Paris, with the super sexy Riva63 Vertigo, a must have toy for the likes of Brigitte Bardot and Sean Connery. Founded in 1842, by Pietro Riva in Sarnico, Northern Italy, Riva is the world’s oldest and most renowned boat builder. In the 1950’s Carlo Riva took over the yard, located on the banks of Lake Iseo, and “le tout Hollywood” fell in love with Riva, now part of the Ferretti Group. Production is limited to about 50 boats a year and you’ll pay about €2.05€ million plus tax for the “63” with vee-drive gearboxes. “Expect the best and live the best – Riva”.

Blancpain SA Chemin de l’étang 6 1094 Paudex, Switzerland T: +41 21 796 36 36 www.blancpain.com Edmiston & Company Le Panorama 57 rue Grimaldi, MC98000. Monaco T: +377 93 30 54 44 www.edmistoncompany.com

Perini Navi Via Michele Coppino, 114-55049 Viareggio, Italy T: +39 05844241 www.perininavi.it YachtPlus 161 Brompton Road, London SW3 1QP T: +44 020 3144 0103 www.yachtplus.co.uk Nigel Burgess Group 16/17 Pall Mall London, SW1Y 5LU

T: +44 2077664300 www.nigelburgess.com Riva VIA Predore 30 24067 Sarnico Italy T: +39 0359 10202 www.rivaboats.com Candy & Candy Ltd 100 Brompton Road London SW3 1ER, T: +44 (0) 20 7594 4300 www.candyandcandy.com

Camper & Nicholson International Port Camille Rayon, 06220 Golfe Juan, France, T: +33 (0) 4 97 04 10 50 Amels www.amels-holland.com Burger Boat Company www.burgerboat.com

yachting l i f e s t y l e

l i f e s t y l e hot products

hot products l i f e s t y l e

Techno rabbit

of desire

The

We used to know the Aibo robot dog, who’s no longer with us. Robosapiens with an almost human form but with limited usefulness in everyday life. Today, the most technological animal is a rabbit. Connected to your computer and Internet connection via Wi-Fi, it is capable of reading your e-mail aloud as well as playing music files stored on your PC. Better still: when your friends are connected to an instant messaging client or when you’ve received e-mail, its ears imitate American mailboxes and drop to let you know. Conran shop, Wi-Fi Bunny, € 115

Enough of grey! The trend is towards brightly coloured designer objects, large or small, that you can slip into your pocket or show off in your living room. A hightech, stylish selection for a winter full of colour.

Pocket flower

Music sharing

Love always. It’s been made into perfumes, songs, films, and tragedies... Today, love is also a range of glamorous and subtle mobile phones from Nokia’s designers. Rounded shapes, shades of pink and jasmine, floral patterns... This mobile phone includes a 2 million pixel camera and a 128 Ko microSD format memory card for saving music and photos to take with you. This seductive object conceals the latest quality: the ‘push to talk’ function turns it into a walkie-talkie so you can spend hours chatting with friends without even having to call them. Nokia N7373 Oh l’amour powder pink, € 350

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We used to hear complaints about people listening to their music at full volume and making sure everyone else could hear it through poorly adjusted headphones. Today this will be better or worse, depending on whether you’re a victim of your neighbour’s sonic assaults or whether you generously share your songs with those around you. This dark-coloured personal stereo with touch keys slides to reveal built-in miniature speakers for listening to MP3 and radio in your hotel room or in the middle of the crowd. Samsung YP-K5, €€ 300

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Skiing is not a tourist sport; it’s a state of mind, almost a life philosophy. It’s something within you whose line and materials form the pillars of the soul. Simon Jacomet brought extra soul into sliding sports when he created Zai skis in 2003. Hand made skis

in ash and titanium, all of them numbered. 500 pairs were manufactured last year and 700 will be made this year. Don’t miss these real skiing Berluttis, made by a lover of design and work well done. Zai Odavon, € 2,380

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The spirit of skiing

MARKET500 no1 | January / February / March 2007

Nomadic worker Sometimes, we have to decide to work. If we can conform to this ritual from the place of our choosing, preferably somewhere resembling paradise, the challenge will be easier to overcome. With this true pocket office combining keyboard, touchscreen and broadband telephony that can go online anywhere via Wi-Fi or Bluetooth, you can get your e-mail and work between two flights. Or between two lengths of the pool... Sony Ericsson P990, € 770

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Vital

colours

Find the right business school for you and your company

The appearance of IT takes on colour with the Vaio C series. Each of us has our own lifestyle, colour code and mobile phone to fit into our daily lives. White for cool, green for defenders of nature and pink for fashion victims... Vaio mobile phones were already among the best looking and most compact on the market. Now they’re available in colour with matching pouch and mouse. Sony Vaio C, € € 1,300

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A comprehensive search of business schools providing details on their open-enrollment courses

provides a lifetime of educational and career services to high-achievers

Royal comfort Taking on the steepest slopes in freestyle can also be done with style on a snowboard that’s not content to be like all the others. With its bed of lilies, this snowboard’s elegance is what makes the difference. Now it’s your turn to look good. Rip Curl royal honor, € € 419

Events • Scholarships • Publications • Research • Software

Sabre

laser

l i f e s t y l e hot products

MARKET500 no1 | January / February / March 2007

When you see it you can’t help comparing it with a miniature of a Jedi Knight laser sabre . But no, it is in fact an MP3 reader with the measurements of a cigar and a ring that lets you control all its musical functions. What’s the most original thing about it? Just shake it three times to change the listening mode. Unless you prefer creating jogging playlists that the personal stereo will let you listen to while you’re walking or running. MP3 Sony design personal stereo NW S2003, € 140

The QS team looks forward to meeting you in 2007 at one of our business school events around the world: Europe 3 Mar - 27 Mar

China & India Latin America 7 July - 27 July 27 Aug - 10 Sep

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More info and registration at www.topmba.com

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