CISEx traditionally conducts annual analyses of the business results of our member companies. In our analysis, we use data that is publicly available at that moment in the FINA database (info.BIZ) for current members of the association. Given that the membership structure changes every year (usually our number of members increases), we provide multi-year indicators for the current membership each year. This way, we have objective and comparable indicators of the business operations of our member companies.
The first year of COVID-19 is behind us, which was full of uncertainty. In spring, everything somehow came to a halt, many foreign and domestic buyers stopped investing in IT solutions almost overnight, and many sectors suffered drastic financial losses, which, of course, reflected on the IT sector and orders. Therefore, last year, for the first time, we conducted a survey among our members in the middle of the year and asked them for estimates of revenue, exports, and the number of employees for 2020. We have previously written about the methodology of this survey and the application of the results from the surveyed sample of 50 companies to all CISEx members, and below we present the eagerly awaited results.
CISEx in numbers – business in 2020 breaks records again
We analyzed the financial data for 2020, which, like every previous year, was record-breaking in absolute values of revenue, exports, number of employees, and all other essential business indicators. The analysis covers 267 member companies of CISEx whose financial reports were publicly available at the time of this analysis, which means that the total figures are somewhat higher as we lack data for some members.
EXPORT OF CISEx MEMBERS GREW BY 30 PERCENT (2.8 BILLION KUNA)
The total revenues of our members (excluding related companies) exceed 5.6 billion kuna, while revenues from abroad reached 2.8 billion kuna in 2020. The growth of revenues from abroad is 30 percent compared to 2019. It is particularly pleasing that the share of exports in sales revenue is for the first time greater than revenue in the domestic market, amounting to 53 percent of sales revenue.
The average share of exports in the revenue of the IT industry in Croatia is 38 percent. At the same time, if we look at the indicators of all approximately 140 thousand companies in Croatia for which annual reports are available, the average share of exports in the business revenues of our economy is, unfortunately, a modest 21 percent.
CISEx members opened 920 new jobs last year and ended the year with an average of 8,196 employees, which is an annual growth of 13 percent.
The achieved results are better than expected, as evidenced by the comparison of the achieved results and those that emerged from the survey we conducted in mid-2020. Below is a comparison of the planned and achieved for 2020:
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CISEx members are absolute champions in investing in new innovative products and services, and part of that investment is also visible in 2020 in the balance sheet under the item “Development Expenses.” In 2020, CISEx members recorded as much as 722 million kuna as fixed assets created through their own development (42 percent more than in 2019), which represents 39 percent of total development expenditures in all of Croatia! The future certainly lies in development, innovation, and selling their own solutions in the global market, and it is evident that our members understand this very well.
The net margin is rising to 11 percent (it was 10 percent in 2019, and 9 percent in 2018) as a result of strengthening exports, but also investments in research, development, and innovation. Additionally, the growth of the net margin is partially a result of the reduced effective corporate income tax rate among CISEx members, which averages 10 percent for 2020!! In previous years, it ranged from 13-15 percent, and now it is significantly lower as CISEx members have finally begun to massively utilize incentives under the Investment Promotion Act and the State Aid Act for research and development projects. Let us remind you – CISEx has been advocating for R&D incentives for years, and we have successfully negotiated more adequate conditions for IT under the Investment Promotion Act. Therefore, we are pleased to see that our members, as well as all other entrepreneurs, are increasingly utilizing this.
