Ит Лидери

Bulgarian IT business is shrinking, the fall in the telecom sector continues

Computer World

By Vladimir Vladkov

3.82 billion BGN (less than 1.95 billion EUR) was the total telecom and ICT revenue in the 2014 edition of Computerworld Bulgaria ICT Top 100 ranking. The turnover for 2014 of the IT sector reached 1.56 billion BGN (797.6 million EUR) and the telecommunications contributed 2.26 billion BGN more (1.16 billion EUR). Preparing the ranking, Computerworld Bulgaria gathered financial data concerning 2014 from IT 105 companies (versus 106 in 2013 and 126 in 2012), while statistics was available about only 7 telecommunication operators.

The total turnover of the ICT companies in the 2014 ranking is close to 1.56 billion BGN, which is a 0,76% drop compared to the total of 1.57 billion BGN revenue in 2013. For the first time two segments – distribution of IT hardware, software and communication products and outsourcing services (incl. cloud services as PaaS, IaaS и SaaS), have almost equal shares of one fifth in the total revenue.

The other lucrative business – software development, also owes its success to foreign clients, and in 2014 it has generated over 18.2% share in the total IT market revenue.

System integration has regained part of the lost positions, as the income from this project-based business makes up 17,4% of the entire IT market turnover in ICT Top 100 ranking for 2014. Many companies with local expertise start to execute successful projects in abroad – from neighbor countries Serbia, Macedonia, Bosnia and Herzegovina, to Germany and Switzerland and even have reached exotic destinations like Malawi and Mongolia.

The IT export revenue marks a humble rise of 10% in 2014 (versus the 36% jump in 2013), the main drivers of the increase being HP Global Delivery Bulgaria Center and Datecs. These two companies are on top of the IT exports list for yet another year, followed by VMware Bulgaria, CSC Bulgaria, and Fadata which has reached the 5th place in this ranking.


The leaders

The market of information and communication solutions and services decreased slightly with 0.76% on Y-o-Y basis, according to the data of the total revenue of the 105 companies which participate in the ICT ranking for 2014. Most Computers did not submit their financial data, but many other companies entered the ranking – huge system integrators like Information Services, Index Bulgaria, and Stanga, export oriented companies like Questers Bulgaria, big hardware suppliers like Konica Minolta BS Bulgaria and Virtualna zona. Large development centers like SAP Labs Bulgaria and VMware Bulgaria traditionally participate in the list, so are the export-oriented firms CSC Bulgaria, Experian Bulgaria, Stanga, Bulpros Consulting, ProxiAD, TBI Info etc. The largest growth of the business in 2014 was achieved by the new entrants DigiMark Studio (408,4%) and OrangeDot (+257%), followed by Lema Trading (165%), Accedia (145%), Prime Distribution (141%) and Bulpros Consulting (almost 91% ). 70 of 105 participants in the ICT ranking for 2014 reported higher earnings compared to 2013, eight companies have single-digit decline, while another 13 show a turn-down of up to 20-21%.

The average efficiency of the companies in the ranking has increased from 97.8 thousand EUR in 2013 to 113.7 thousand EUR for the participants in 2014, indicating that companies are able to find the needed employees (though less in number) to generate more business. The Top 5 leading companies in efficiency are Polycomp, Solytron Bulgaria, Comparex Bulgaria, Mnemonica and CAD R & D Progress Group, showing that high speeds with less staff can be generated not only in the distribution business.

The total profit in the IT sector is 93 million BGN (82,7 million BGN in 2013 ranking).

In absolute value, HP Global Delivery Bulgaria Center has regained its leading position, getting ahead of Datecs. The top five are Sirma Holding Group, Borica-Bankservice and CSC Bulgaria. The top 10 list of the companies with highest accounting profit has Stone Computers, Kontrax, Interconsult Bulgaria, Solytron Bulgaria and SAP Labs Bulgaria.

The most profitable business (profit to turnover ratio in 2014) stands for the new participant OneBit Software, followed by Andik Electronics, APIS Europe, Sirma Holding Group, Optima Electronic, Interconsult Bulgaria, DigiMark Studio, SLS, NG Computers and AS Systems.

The gross average monthly compensation for the 2014 for the ICT sector reached 2731 BGN (1396 EUR) and represents a big rise compared to 2013 average wage of 2305 BGN (1178.5 EUR), and in 2012 the average IT salary was even more modest - 1517 BGN (775.6 EUR).

The telecom sector

After a few years of sudden 2-digit falls in telecom services turnover, in 2014 the market begun to get back to equilibrium. The annual revenue goes down some 3%. According to the annual financial statements of the three leading telco operators, BTC (Vivacom) reports the smallest drop of its turnover and profit in 2014. Total 806 million BGN has reached the revenue of Vivacom in 2014, which shows a 0.7% turn-down compared to its income in 2013.



Bulgarian IT business is shrinking, the fall in the telecom sector continues

© Computer World, Computerworld.bg

Earnings before taxes, depreciation and amortization EBITDA reached 334,9 million BGN, or by 3.2% more than for 2013. Just over 370 mln EUR, or about 740 million BGN is Mtel's revenue for 2014, that is 6.3% less than the turnover a year ago. There is an annual decline of 9.8% in the comparable EBITDA profit, according to the data from the financial report of the Telekom Austria Group. Telenor Bulgaria managed to raise its profit before tax, depreciation and amortization (EBITDA) for 2014 by 8,5% to 243,8 million BGN, although the total revenue of the telecom last year fell by 3.7% - from 661.9 million BGN in 2013 to 637.4 million BGN in 2014.


ICT segments

16 companies have generated 323 million BGN turnover from distribution of hardware, software and network devices, so the sector showed 13% annual rise (Most Computers do not participate in this year’s ranking).

The revenue from outsourcing (incl. cloud services) reported by 18 companies has reached almost 308 million BGN.

40 companies participate in the system integration ranking. Their revenue in 2014 amounts to 265 million BGN, so the annual market growth compared to the turnover of almost 245,5 million BGN a year ago declared by 37 companies, is up 7,9%.

The software market reports 363 million BGN in 2014, which marks a 26% Y-o-Y increase. The total software sales includes revenue from software development, ready software products sales, and software system integration.

24% is the growth in Bulgarian software development market. 40 firms have generated 283,4 million BGN income in 2014 in this segment, while 30 software development companies declared a turnover of 228,7 million BGN in 2013.

The total hardware market has experienced sustained decline in the 2014 ranking. The market includes reported sales of computer hardware, office equipment, manufacturing of hardware, delivery of communications products and systems integration (hardware solutions).

Moderate growth is reported by the Bulgarian manufacturers of hardware in 2014. The result is more modest than last year's 14.9 percent, but still very positive, given the 15 percent decline recorded in 2013.

There is quite a stir in the market of office equipment - this is according to the results reported by companies operating in the segment. Computerworld has data about 24 companies that have generated a total of 30.7 million BGN in this area. Last year the number was 23, and reported revenues – 23.1 million BGN. The difference between the two figures is solid - whole 78.9%.



Bulgarian IT business is shrinking, the fall in the telecom sector continues

© Computer World, Computerworld.bg

Business with networking and communication products has recorded a huge leap in 2014. After a slight 4 percent decline in 2013, last year network specialists managed to increase their revenues by almost one fifth (19.2%) to 50 million BGN, returning to the levels of 2012 (50.4 million BGN), but still far from the over 67.6 million BGN reached in 2011.

The consultancy market has 23% Y-o-Y increase. The revenues from this activity from 22 companies amounts to 26,3 million BGN in 2014.

Almost 7,7 million BGN has reached the market of IT training, or nearly 50% growth. This shows the comparison of revenues of the 24 participants in ICT Top 100 2015 compared to the 20 companies in this sector ranking a year earlier (5,1 million BGN).

Only three companies have declared revenue from information and electronic services in the country in 2014. They have generated a total turnover of nearly 2 million BGN. Last year the number of participants was 8, and their turnover - 9,5 million BGN. The direct comparison of the two figures, however, shows that this year's turnover is 79% smaller than the one from 2013.

There is a rise in the revenue from specific services. This category includes specific activities of various companies that are not covered by other general market categories. 38 companies share data concerning turnover in this category, generating a total of 42,2 million BGN. This figure is 45.5% more than the 29 million BGN, reported by almost the same number of companies last year - 37.





© Ай Си Ти Медиа ЕООД 1997-2019 съгласно Общи условия за ползване

X