Estonia’s most valuable company is Swedbank with a corporate value of at nearly 2 billion euros

18.11.2024 TLN

In the ranking compiled by Prudentia, Nasdaq Tallinn Stock Exchange and law firm Triniti based on the data as at the end of 2023, the top three enterprises in the ranking are Swedbank Eesti (valued at 1.96 billion euros), Luminor Bank (valued at 1.74 billion euros) and Eesti Energia (valued at 1.62 billion euros).

For Swedbank Eesti it is the third consecutive year to be ranked the highest in the TOP101. “Competition is tough and we are delighted for each award. First and foremost, banking is about trust and money, and we are working very hard to make sure that our customers are satisfied. If your customer are dissatisfied, they will not give you a second chance, and you will not be able to maintain or grow your value,” said Olavi Lepp, Chairman of the Management Board of Swedbank Eesti, when he accepted the award of the most valuable company in Estonia. “We continue to finance companies and people in Estonia, and welcome any cooperation and assistance from the society and the state since the words “financial sector “and” over-regulation” are already becoming synonyms. Reduction of bureaucracy in all areas of life is also the biggest boost that politicians and officials can give to the Estonian economy and business to continue growing.”

According to Illar Kaasik, Managing Partner of Prudentia who leads the compilation of both TOP101, ranking of Estonia’s most valuable enterprises, and TopTech, the ranking of most valuable technology companies, these two benchmarks are like an X-ray image of the Estonian economy, which enables to comprehensively analyse which segments are the largest and are developing the most dynamically. “These rankings reflect our attention and respect to all Estonian entrepreneurs for their hard work and creation of value. Analysis of the data in the ranking tables enables us to identify general trends in different sectors of the Estonian economy, and this in turn makes it possible to assess whether changes in one company are rather an exception or reflect deeper processes that are taking place throughout the sector,” he noted. Kaasik says that in the coming years, Swedbank’s most likely contender for the top spot in TOP101 will be mobility platform Bolt that is registered in Estonia and is preparing for an IPO. In this year’s TopTech, Bolt was estimated to be worth 5.5 billion euros.

According to Kaarel Ots, CEO of Nasdaq Tallinn Stock Exchange and Nasdaq Baltic Stock Exchanges, both this year’s TOP101 and the TopTech ranking of Estonia’s most valuable technology companies, there has been a radical change in the development of company  value and the confidence of investors in recent years. “Unlike in the fairytale world where we have lived in the past few years, money still has a price in Estonia, Europe and in the rest of the world, and this is clearly influencing the value of companies and the prospects of a given economic sector. Companies themselves have become more pessimistic in their outlook for the economic situation. Persistently high inflation and interest rates, various tax hikes and the general challenges facing the economy of Europe are reflected in the TOP101. One recipe for achieving growth in the coming years is to list parts of the majority of state-owned companies or even their majority holdings on the stock exchange. This would make the picture in the economy more transparent and help the state to focus on what is important,” Ots noted.

Ots added that the ranking of Estonia’s top 101 most valuable companies differs from other similar rankings of enterprises compiled in Estonia because when identifying the best, compilers of TOP101 take into account more than just revenue, profit and growth: “The ranking also gives companies clear feedback on how the society, the environment and financiers regard and value them. When compiling the TOP101 ranking, the Nasdaq Tallinn Stock Exchange provides an assessment of the company’s transparency through the Corporate Governance Score whose weighting in the company’s final value is up to a fifth,” he noted.

According to Tõnis Tamme, partner and attorney-at-law of Triniti, a law firm that participated in the compilation of the ranking for the first time this year, TOP101 shows that Estonian entrepreneurs are increasingly using mergers and acquisitions (M&A) to expand their business internationally and increase corporate value. “In this year’s ranking, an example in case is AS Infortar, which is listed on the main list of the Tallinn Stock Exchange, is active in passenger shipping, development of commercial real estate and in the energy sector. In the next year’s ranking we should see the impact of the recent acquisition of Technopol Ülemiste, the largest business campus developer in the Baltics, by Mainor and new co-investors as well as the privatisation of Operail by the owners of Tartu Mill, and the successful MBO transaction of TREV-2 from French capital by Sven Pertens, long-time CEO of TREV-2,” added Tamme. According to Tamme, transaction activity is also noticeable in some other economic sectors, such as agriculture, where the sale of (family) business is often driven by the change of generations. “The descendants of founders and current owners may not always be interested in continuing the business founded by their parents, and so they sell the family business. This is clearly affecting the transaction market and is also reflected in the ranking of more valuable enterprises.”

The largest sectors in the 2024 TOP101 ranking are as follows: the share of financial service providers is 21.9 percent, the share of real estate companies is 16 percent, the share of utilities is 14.5 percent, the share of transport companies is 9.3 percent, and the share of energy producers is 9.2 percent. In comparison with the 2023 ranking the number of companies operating in the economic sectors of financial services, utilities and energy production have increased, while the share of manufacturing companies declined from 10.6 percent in 2023 to 5.5 percent in 2024. It should also be noted that for four consecutive years, also the ratio of the combined value of companies in the TOP101 ranking to Estonia’s gross domestic product in current prices has declined. It is important to take into account the fact that the GDP-linked value, ie the value adjusted for inflation, has been falling, but in current prices the growth of GDP has been significant.

The clear winners of this year’s TOP101 ranking are banks and the car trade sector, while the value decreased most in enterprises operating in the wood sector as well as Synlab AS and Icosagen AS, which increased their sales revenue during the COVID-19 pandemic period. Surprisingly, even the value of Estonia’s leading industrial manufacturers Ericsson Eesti AS has decreased as its sales to Sweden have fallen by almost 100 million euros over the year. Another company that saw its value fall like a rock was Tavid AS, but one should add that as a result of a combination of different risks, its corporate value went up by 127 percent in the 2023 ranking and decreased 65 percent in the 2024 ranking. Some companies that should be singled out for their strong performance in generating corporate value include Veho Baltics OÜ, GO Group AS , Elisa Eesti AS, Mootor Grupp AS, Maxima Eesti OÜ, Elke Grupi AS and Adole Invest AS. The value of these enterprises ranged from 40 to 84 percent. The increase in value was also posted by grocery and consumer goods retailers Maxima Eesti OÜ, OG Elektra AS and Rimi Eesti Food AS.

The corporate value in the TOP101 ranking, totalling 31 billion euros, did not increase significantly and has remained essentially unchanged compared to the previous year. The minimum value for the company to be included in TOP101 was 81.8 million euros in 2024, and this threshold decreased by 2.5 million euros over the year. In the 2024 TOP101, there were nine companies whose value exceeded one billion euros. It is the same number as in the 2023 ranking. Due to the change in the ranking methodology, several companies are also back in the TOP101, the largest of which are Viru Keemia Grupp, Sportland International Group and Circle K Eesti.

Companies are ranked in TOP101 based on the assessment of the value of their business, i.e. how much value the company creates for both its owners and creditors through its business activities. It should also be taken into account that the value of the company’s business operations is not always equal to its total corporate value as this method does not take into account all the assets of the company, which often generate not operational, but financial income and since financial income is not included in the calculation of EBITDA. One of the most prominent examples in this situation is the company NOTORIOUS OÜ. At the end of 2023 the assets of NOTORIOUS exceeded one billion euros, but the company did not qualify for the TOP101 ranking because the majority of the assets held by NOTORIOUS are shares of Wise and NOTORIOUS belongs to Taavet Hinrikus, one of the founders of Wise.

It is the sixth year that Prudentia Tallinn, in cooperation with the Nasdaq Tallinn Stock Exchange and law firm Triniti, has compiled the TOP101 ranking of the most valuable enterprises in Estonia. The mission behind TOP101 is to promote the Estonian capital market and the contribution of Estonian entrepreneurs to the sustainability of the Estonian economy. Estonian entrepreneurs are creating new jobs and generate the tax revenue for the functioning of the country. The total value of the 101 most valuable enterprises and its changes shows how the country’s economy is doing and what may lie ahead for us.

The full list of the top 101 most valuable enterprises in Estonia in 2024 is available at www.top101.ee. Comprehensive presentation of the ranking, together with additional analysis and interviews, will also be published in the dedicated TOP101 section of Delfi Ärileht and in the magazine MAGNAAT.