2010 DS100 Summary: Companies Absorb Financial Crisis Shock
The 7th Annual DS100 continues to benchmark the corporate environment of the 57 OIC (Organization of Islamic Conference) member countries.
The 2010 DS100 ranking, which is based on end-of-year (EOY) 2009 revenue data of the top 100 Companies of the OIC member countries, fully shows the impact of the 2008/09 financial crisis. As expected, EOY 2009 revenues were down for all sectors represented on the DS100 compared to EOY 2008. The silver lining has been that sectors such as finance, consumer goods, and utilities absorbed the shocks, still showing single digit growth, although down from double digits growth experienced in the previous year.
With USD 1.12 trillion in total revenues, the 2010 DS100 list of companies recorded a 26.47% overall decline in annual revenue over the previous reporting period. Conversely, 44 companies on the list grew in revenue, with 19 showing double digit growth.
The fastest revenue growing companies on the 2010 DS100 were YTL Corp. (+85.48%, Malaysia,) PT Adaro Energy (+48.89%, Indonesia,) Savola Group (+29.64%, Saudi Arabia,) Etihad Airways (+29.15%, UAE,) Proton (+26.20%, Malaysia,) Bank Rakyat Indonesia (+26.02%, Indonesia,) BIM Birlesik (+25.48%, Turkey,) Public Bank (+24.30%, Malaysia,) Selçuk Ecza Deposu (+24.28%, Turkey,) and Pakistan State Oil (21.48%, Pakistan.)
The 19 Integrated Oil & Gas Companies on the list continue exerting their revenue dominance, representing 64% of the total DS100 company revenues. However these 19 companies showed a 38% drop in yearly revenue from the previous term. This was mostly due to the significant drop in oil prices from their dramatic peaks in 2008 ($94.4/barrel ’08 OPEC reference basket price) back down to norms of previous years ($61/b in ’09.) As we publish this analysis however, 2011 oil prices are back up in the $90/b range.
The important and sizeable Finance sector recorded a 6% increase in EOY 209 revenues while Utilities, Consumer Cyclical, Telecom and Retail sectors all recorded a 7% increase during the same term. All these sectors had recorded double digit growths in the previous term.
Companies from 20 out of the 57 OIC member countries are on the DS100. The minimum threshold to be on the 2010 DS100 list was USD 2.67 billion in annual revenues.
Globally, the DS100 companies in 2010 represent 10.4% of the USD 10.8 trillion in revenues attributed to the top 100 global companies from Fortune magazine’s 2010 Global 500 list.
SABIC (Saudi Arabia) and KOC Holding (Turkey) are the only two DS100 companies on the Fortune 500 Global list. Meanwhile, no brands from OIC member countries made it to the BW/Interbrand Top 100 Global Brand list.
Saudi Aramco, the world’s top oil producer, continues to lead the DS100 list as the largest business enterprise of the Muslim world. However, during the term of this ranking (EOY 2009) Saudi Aramco recorded an estimated 42% decrease in its revenues from the year before. This drop, however, is almost a complete reversal of the estimated 47% increase in revenue experienced in the previous term (EOY2008).
Overall, the Energy sector continues to confirm its dominance by number of companies on the list (19) and, more significantly, by revenue size (US$ 642 billion.) Indeed 9 out of the top 10 companies on the list are all state-owned Integrated Oil & Gas companies. From these top 10 companies, Petronas (#3 rank) recorded the smallest decrease in annual revenue growth, of -18% as compared to the previous term.
After the Energy sector, the diversified companies represent the second largest sector on this year’s DS100 list (18 of 100 companies); with the Turkish family-owned conglomerates Koc Holding, and Sabanci Holding representing the largest and second largest diversified companies, respectively, followed by Astra International (Indonesia), and Sime Darby (Malaysia). The diversified sector also registered a contraction in annual revenue growth of -7.43% over the previous year.
The third largest sector represented in the 2010 DS100 ranking is Financial Services (17 of 100 companies) with Turkish banks IsBank (#19), Ziraat Bank (#24), Akbank (#31), leading the list, followed by Malaysia’s Maybank Group (#37).
Bank Melli Iran (#57), Al Rajhi Bank from Saudi Arabia (#85), and Kuwait Finance House (#100) are the leading full Islamic banks within the financial services sector.
The other major sectors represented are Basic Materials Manufacturing, Services (Telecom and Retail), and Transportation. A fast maturing sector, the Telecom space has become increasingly competitive regionally, and is led by Saudi Telecom (#31), Etisalat (#27), and Zain (#28.) Telecom continues to be the most exciting sector with a flurry of acquisitions, market expansion and technology innovation. Although not the fastest growing sector, Basic Material Manufacturing is emerging as a major area of opportunity and investment. SABIC (#11 – chemicals), IMIDRO (#23, metals/mining), are the leading players in this sector.
Publicly Listed vs. Government and Private Companies
The 2010 DS100 list had 56 publicly traded firms from 11 countries compared to the previous year’s (2009) 58 firms from 13 countries.
Turkey-based Koc Holding–a diversified electronics, automotive, energy, finance, and retail giant, is the largest publicly traded company on the list. It is followed by SABIC (#8, chemical), and Saudi Telecom Company (#13, services).
While a majority of the companies on the DS100 are publicly traded, the bulk of the total revenue (64%) is attributed to the 31 government-owned companies on the list, signifying their powerful roles in the respective economies. This trend remained mostly the same from the year before. Additionally, it should be noted that some of the ‘Listed’ companies still have majority government ownership and are at different stages of privatization drives.
In regards to privately held companies, the ranking this year has 13 private enterprises. Data for these companies was available through public sources. Sabanci Group (#16, Turkey) leads this list, followed by Saudi Oger (#29, Saudi Arabia), and ETA – Ascon Group (#39, UAE). Even though there is a small representation of private companies on the list, there are many firms for whom data was not available and therefore were not included in this report.
Turkish, Malaysian, Saudi and Indonesian Companies lead the List
Turkish companies continue to set the benchmark for OIC economies, evidenced by the fact that Turkey has more companies on the 2010 list (20 companies) than any other country. Subsequently, the Turkish companies also present the widest and most diverse sector representation of any other country in this year’s ranking. This should come as no surprise, given the fact that Turkey has the largest OIC economy, as measured by GDP output.
Malaysia has the second highest number of companies (16 companies) on the DS100. This is quite impressive, as Malaysia is only the 5th largest OIC economy (by 2009 GDP est.) Indonesia, the second largest OIC economy, had 11 companies represented. Reflective of their growing potential, this number has increased from 9 Companies represented on the previous DS100 ranking.
13 Saudi Arabia based companies are on the list. Other major representations include 8 from both UAE and Iran, and 6 from Kuwait. Other countries represented included Algeria Brunei, Egypt, Jordan, Kazakhstan, Morocco, Nigeria, Oman, Pakistan, Qatar, and Syria
Ranking Purpose & Challenges
The purpose of the DS100 (in its seventh year) is to portray as close a picture as possible of the leading domestic business activities in the OIC (Organization of Islamic Conference) member countries while providing its corporate managers and strategists with a tool to benchmark trends and identify opportunities.
The DS100 aims to recognize companies that are leading the charge in the global competitive landscape and are making a significant impact on the well-being of their communities. The ranking is based purely on the 2009 end-of-year annual revenue figures (as EOY 2010 data has not been released by most as yet).
More than half of the list is comprised of publicly listed companies (56 of 100) from the growing public markets of the Muslim World. At the same time, the ranking continues to include government and private enterprises to reflect their disproportionately significant role in the Muslim world economies. Only those private and government enterprises are included for whom data could be estimated or verified through various media sources. Acquiring this verification continues to be a challenge, given limited financial disclosure practices. However, a visible positive trend towards better corporate governance, transparency practices, and privatization is facilitating a clearer view of the corporate environment in the Muslim World.
Top 10 Companies of the Muslim World
1. Saudi Arabian Oil Co. (Saudi Aramco)- Saudi Arabia
2. National Iranian Oil Company- Iran
3. Petroliam Nasional Bhd. (Petronas)- Malaysia
4. Kuwait Petroleum Corp.- Kuwait
5. Sonatrach- Algeria
6. PT Pertamina (Persero)- Indonesia
7. Qatar Petroleum- Qatar
8. Nigerian National Petroleum Corp.- Nigeria
9. Abu Dhabi National Oil Co.- UAE
10. Koc Holding A.S.- Turkey