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Key Results

In order to qualify for the 2007 Europe's 500 Listing, companies had to demonstrate at least 30% growth in both employment and turnover during the three-year reference period (from 31 December 2003 to 31 December 2006). All 500 winning companies fulfilled this and the other eligibility criteria.

The dynamic businesses that qualified for the 2007 Europe’s 500 show a buoyant pan-European picture demonstrating high and sustained growth, across a broad mix of activities and sectors.

These fast growing, high performing, mid-sized companies come from 24 countries. They collectively increased employment over three years by close to 300.000 jobs (an average per year, per company of just under 200 positions). This impressive 26% annual growth rate in employment was sustained by an equally strong annual turnover growth rate of 28%.

The findings from the 2007 edition of Europe’s 500 (in its eleventh year of publication) show a positive recovery from the bleaker, early years of the 2000s. At no stage in the publication of the Listing has the employment creation been so high. The closest was in the 2001 edition when the 500 companies created collectively just over 250,000 jobs.

Page Chapters

Companies per Country

The annual Europe’s 500 Listing identifies 500 of the most innovative, growth-focused and entrepreneurial, mid-size companies from across 28 European countries: 25 European Union Member States plus Iceland, Norway and Switzerland. Companies from Bulgaria and Romania will be eligible for the 2008 edition. (The 10 Member States that were new to the EU in 2004 have been considered since the 2005 edition).

Companies from all 28 eligible countries were considered in the research and selection process resulting in 24 countries being represented in the final Listing. No companies from Cyprus, Luxembourg, Malta and Slovakia were able to meet the full eligibility criteria.

• The United Kingdom, Sweden and Germany dominate the Listing: the United Kingdom and Germany continue to be amongst the leading nations with 76 companies (15.2%) from the UK and 71 companies (14.2%) from Germany but they have been joined for the first time by 74 companies from Sweden (14.8%).
  
  
• Lithuania shows impressive growth performance: 23 companies from Lithuania are amongst these top performing companies, a dramatic increase from the 4 companies listed last year.
  
  
• The newer EU Member States are well represented: 43 companies from 7 of the newer Member States countries are amongst Europe’s top performers.
  
  
• France boasts the Number 1 company for the third year running: 3 different French companies – all from within the IT, Electronics sector – have found themselves at the head of the Europe’s 500 Listing since the 2005 edition.
  
  
• 7 countries are represented within the top 10: 2 companies from Finland and Germany join the 2 from France, the remaining 4 companies come from Austria, Denmark, Sweden and the UK
  

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Employment Growth

Europe's 500 uses the David Birch Employee Growth Index, which combines absolute and relative job creation, to rank the 500 companies. With its consideration for both absolute and relative growth the Birch Index allows small, medium and large sized companies to be fairly compared.  For example, the top two Europe’s 500 companies ended the year 2006 at different stages in their growth cycle. The No.1 company, Webhelp, could be considered “large” (more than 1.000 employees in 2006). It increased employment with 3.750 positions (in absolute terms) substantially more than the No. 2 company GCI Management (a medium-sized company) who increased employment with 823 positions. However the relative growth of GCI (from 18 – 841 full time employees) is considerably more impressive at 4572%, over the three years, compared to that of Webhelp (1071%). The Birch Index creates the common denominator that recognizes both.

Absolute Employment Growth
Together the 500 companies created 297.455 jobs between 2003 and 2006, bringing their total collective work force of full time employees to 598.796 in December 2006. This represents a vibrant and healthy increase of almost 100,000 positions per year, or an average of 198 jobs created per company, per year.

Job growth was particularly impressive in Austria (565 per company, per year) and Finland (396 per company per, year) where larger, more established, industrial companies can be found often operating within the manufacturing sector.

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Relative Employment Growth
When relative employment growth is studied the picture changes – it is the emerging economies such as Hungary, Latvia and Lithuania that are producing the top performers. In these countries it is the younger, smaller companies often operating in the more modern business sectors (such as various services, or retail and manufacturing of consumer goods) that dominate.

The five companies in Hungary increased employment by an incredible average of 64.2% annually (over three years), those in Latvia (5 companies) by 53.1% annually and the 23 companies in Lithuania by 48.1% annually.
Collectively the 500 growth companies increased employment by an average of 99% over the three years, maintaining this at an impressive average annual rate of 26%.

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Turnover Growth

Another sign of exceptional performance and growth is the financial strength of these companies.  Together, the 500 companies were responsible for generating €134.5 billion in sales in 2006, an increase over the three years of €69.7 billion.
On average, the 500 companies increased their turnover by more than €46 million each year, representing an average annual turnover growth rate of 28% (or 108% over the three years).  

Absolute Turnover Growth
The absolute annual turnover growth per company was particularly high in Portugal where the five companies listed collectively increased their sales by an average of €91 million per year. Three of these companies operate in the IT, Information and Communications Technologies sector and two within the construction, real estate sector. The 32 companies in Finland also had a high average turnover increase per company, per year (€77.7 million), corresponding to their high absolute job creation.

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Relative Turnover Growth
The 2007 Europe's 500 winners showed a remarkable average turnover growth of 28% annually .
Concurrent with the relative employment growth, it is the companies in Hungary, Latvia and Lithuania that show exceptionally high average turnover increase. The five companies in Hungary increased turnover by an incredible average of 81.3% annually (over three years), those in Latvia (5 companies) by 55.4% annually and the 23 companies in Lithuania by 53.2% annually.

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Size of Companies in Listing 2007

Europe’s 500 studies high growth of mid-size companies. Entrepreneurial companies naturally start small, but it is the focus on growth that distinguishes the Europe’s 500 companies from the traditional SMEs (which typically do not grow beyond some 250 employees). To qualify for the Listing companies must not have more than 5.000 employees at the beginning of the reference period (31 December 2003) but must have at least 50 employees by the end of the reference period (31 December 2006).  When determining the size of a company, the Europe’s 500 definition is based on the number of employees at the end of the reference period.

The majority (61.8%) of the 2007 Europe’s 500 companies are mid-sized with between 101 and 1.000 employees, while 28.8% are larger companies with more than 1.000 full-time-equivalent employees at the end of 2006. The smaller companies (up to 100 employees), which account for the most impressive employment growth rates, represent 9.4% of the Listing.

This confirms the trend that has emerged from previous Listings – that, crucially, it is the mid-sized companies with between 101 -1.000 employees that are most likely to deliver and sustain high growth and job creation in Europe’s exciting business and economic environment.

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Company Size and Employment Growth
The combination of absolute and relative employment creation is vital in identifying Europe’s champions of growth:

• The smaller the company, the lower the absolute (real) employment growth but the higher the relative growth
  
• The larger the company the more real jobs are created but relative job growth is lower

For example: a small company that grows from 50 to 100 employees in three years adds only 50 new jobs but grows by 100%. A mid-sized company that adds 350 real jobs, growing from 450 to 700 in these three years, creates more employment but shows slower growth as the relative job growth over three years is 66%. This becomes more pronounced in the case of a larger company which creates the most real jobs - for example, one taking on 1.000 new staff to grow from 3.000 to 4.000 employees will show a significantly lower relative growth rate of 33%.

Europe's 500 identifies the European champions of growth by combining both these facets through the David Birch Employee Growth Index.  The defining characteristic of the winning companies is that their rapid and aggressive growth in the early phase, while technically still small, continues as they expand to medium size and does not stop as they get bigger. Not only do they continue to grow quickly but they manage to sustain growth – in the case of the 2007 winning companies at an impressive annual average rate of 26% (over a three year period).

The graphs below clearly illustrate the dynamic balance between absolute and relative job creation among the 2007 Europe's 500 high growth companies. It is clear that the larger companies create more real jobs (an average of 515 per company, per year) but that the smaller companies grow faster at a remarkable 73% annually.

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The same dynamics are observed with reference to turnover increase, with the larger companies creating more absolute wealth but the smaller companies growing more significantly in relative terms.

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Sector Overview

Once again, the Europe’s 500 Listing proves that dynamic, entrepreneurial, growth-focused companies can exist in any business sector in any country in Europe. It is not the sector or the business environment of the country that facilitates the rapid growth of these pan-European champions, but the management style, the vision and the commitment to growth.

Companies per Business Sector and Category*
Europe’s 500 high performing, growth companies are found in industries as diverse as Biotechnology/Health, Transport/Logistics or IT Manufacturing. For the sake of classification, the 500 companies can be divided into 34 different business sectors. Chart 12 below shows a breakdown of all the individual sectors represented within the 2007 Europe’s 500, clearly demonstrating that the most dominant sector is IT Services, Information and Communication Technologies with 90 companies followed by the sector of Construction and Real Estate with 42 companies. 

When the individual activities are taken as a whole (see chart 13) the Service industry dominates (195 companies, 39%) underlining the importance of the service sector in modern economies, but it is interesting to note that both the Manufacturing and Retail sectors are highly represented within the Europe’s 500 Listing with 115 and 66 companies respectively. 

Note: The classification “Other” is too diverse to consider it as a representative “sector”. It comprises all activities not specifically classified as Services, Manufacturing or Retail (such as: Biotechnology/Health; Construction/Real Estate; Energy/Mining/Utilities; Media; Transport/Logistics).

The list below shows the individual sectors that have been grouped under the 4 “category” headings in charts 13-17.

Chart 12

Chart 13

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Turnover Growth per Business Sector Category
When reviewing financial performance, it is the companies grouped as “Other” (representing the following sectors Biotechnology/Health;Construction/Real Estate; Energy/Mining/Utilities; Media; Transport/Logistics) that rank most highly. Both real turnover figures as well as relative annual growth  are significantly higher than other sectors – with an average turnover increase per company, per year of €72.3 million and an average annual growth rate of close to 32% (see charts 16 and 17). This is largely due to the companies from within the Construction/Real Estate, Energy/Mining/Utilities and Transport/Logistics sectors.

Chart 14

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Turnover Growth per Business Sector Category
When reviewing financial performance, it is the companies grouped as “Other” (representing the following sectors Biotechnology/Health;Construction/Real Estate; Energy/Mining/Utilities; Media; Transport/Logistics) that rank most highly. Both real turnover figures as well as relative annual growth  are significantly higher than other sectors – with an average turnover increase per company, per year of €72.3 million and an average annual growth rate of close to 32% (see charts 16 and 17). This is largely due to the companies from within the Construction/Real Estate, Energy/Mining/Utilities and Transport/Logistics sectors.

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Private and Public Companies

As in previous years, more of the Europe’s 500 companies (57.4%) are private companies (not listed on a Stock Exchange).

Chart 18

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Sustained growth

Sustained Growers included in previous editions of Europe's 500
To qualify for the 2007 Europe's 500 Listing companies must demonstrate that they have sustained growth for at least three years (2003-2006). All companies must have shown at least 30% increase in both employment and turnover during this period.
Fast growing businesses naturally demonstrate a cyclical trend with periods of rapid, accelerated growth followed by periods of consolidation. Their ability to qualify for the Europe’s 500 Listing, or their ranking according to the Birch Index, depends where they are in their growth curve, since the Listing reviews performance over 3 consecutive years. Furthermore, if a company grows too big (more than 5.000 employees at the beginning of the reference period) it is no longer eligible for the Europe’s 500.

This makes the Listing a dynamic selection each year. Some companies qualify for consecutive editions of the Listing. Some have qualified in the early editions of the Listing, fallen off in the middle years and then qualified again. The graph below shows a snap shot of this trend with 33 companies included in the 2007 edition of the Europe’s 500 having been featured in at least 3 of the Europe’s 500 Listings since its inception in 1997 (2007, 2006 and one earlier edition) .

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Two companies from the 2007 Listing deserve a special highlight. Both have featured amongst the winning 500 European companies in nine out of the ten editions showing outstanding performance and growth for more than 14 years.

Background, Criteria, Ranking and Methodology

History
The Europe’s 500 Listing has been published annually since 1997 (with the exception of 2000). It was launched in 1996 as an initiative of the pan-European association also known at the time as Europe’s 500. Initially companies were selected from 18 European countries: the former “EU 15” and Iceland, Norway and Switzerland. As of the 2005 edition companies were also considered from the 10 newer EU Member States.

Purpose
The Listing is intended to focus attention on entrepreneurial achievement and fast growth European companies across Europe. Its unique focus on job-creation and growth in medium-sized enterprises across all business sectors, and 28 European countries distinguishes it from other business rankings. It sets out to highlight the importance and impact of fast-growing companies, rather than those that remain SMEs (250 or less employees) on employment and wealth creation across Europe.

Eligibility Criteria
The 2007 Europe’s 500 Listing judges company performance over three fiscal years (end 2003 - end 2006). Companies must be based in one of the 28 European countries, must be able to demonstrate at least 30% growth in employment and turnover during this period, may not have more than 5.000 employees at end 2003 but must have a minimum of 50 at end 2006, must have been in business for at least three years and may not be part of another Group that owns an equity share of more than 50% of the company.

Ranking: the Birch Index
To quantify the performance of the companies that meet these criteria, Europe’s 500 uses the Birch Employee Growth Index (which combines relative and absolute job creation), devised by David Birch, a former economist at the Massachusetts Institute of Technology (MIT). The companies are ranked according to their Birch Index.

Methodology
The Europe’s 500 Listing is compiled through a combination of research and spontaneous nominations. Over the years companies have been selected from a number of independent databases such as Dun & Bradstreet, Hoovers and for the first time in 2007 from Amadeus, as well as from the core Europe’s 500 database. Companies in all 28 eligible countries were selected from an initial database of approximately 1.5  million, to which the base Europe’s 500 criteria were applied resulting in a selection of almost 2.800 companies for further research and analysis. Companies who submitted their data for consideration through the Europe’s 500 website, or upon request, were also studied. A final list of companies whose data met the Europe’s 500 criteria was compiled and then ranked according to their Birch Index so as to select the 500 pan-European winners: the 500 companies with the highest Birch Index. The Birch Index in the 2007 edition ranges from 43.929 to 163.

1.Europe’s 500 was first published in 1997.  The 2007 edition is the 10th annual Listing (there was no Europe’s 500 Listing in 2000).