Bisnode Analysis: The Slovenian economy is better prepared for a possible new crisis

In the analysis of all economic entities, Bisnode, Europe’s leading provider of business solutions and analytics, raised the question of whether we are ready for a new financial and economic crisis.

The results of the analysis show that since the last financial and economic crisis in 2008, the Slovenian economy has fully recovered and reached the highest values ​​of key performance indicators in the 2018 financial year. Focusing on core business activities, increasing exports and shifting to more developed markets, improving business efficiency, changing the structure of debt sources of financing to equity, and several other measures have led the economic picture to turn for the better after the modest 2009 and 2010. Despite lower revenues until 2017 compared to 2008, we can say that today our economy is based on more financially sound foundations.

An insight into the structure of financing sources (proportion of equity in assets), which indicates the stability of operations in terms of providing sufficient liquidity and solvency in the event of major economic shocks, reveals a better situation in 2018. Therefore, in 2018, companies financed more of their activities with their own resources (49 per cent) and less by borrowing than in 2008 (37 per cent).

Looking at the decline in bank loans over the last 10 years brings positive information to the market, as an increasing part of its business is financed from its own sources.

Bisnode underlines the following key findings of the analysis:

- Through the profitability of assets, we can conclude that the profits generated in 2018 (4.2 per cent) are less volatile and less subject to various external economic factors than was the case in 2008 (1.6 per cent).

- Business efficiency, which can be measured as a turnover of assets, indicates that in 2008, companies generated EUR 0.82 in revenue with one euro of assets and EUR 1.02 in revenue in 2018.

- In 2018, value added per employee amounted to EUR 43,938 and in 2008 to EUR 33,920. This was driven by an increase in gross operating income from EUR 82,556 million to EUR 99,237 million, while at the same time, companies were operating more leanly, as stocks in companies decreased by an average of three times.

- According to the results of the analysis, it is necessary to emphasise the productivity of employees, since in 2008 employees generated EUR 167,507 in revenue per employee, while in 2018 they generated EUR 200,375, which is almost 20 per cent more than in 2008. The profit per employee recorded in 2008 was EUR 3,243 and EUR 8,338 in 2018. A 157 per cent increase in profitability per employee indicates that the economy was more productive and successful in 2018 than it was in 2008.

- Given the trend of the German economy and its slowdown (German GDP has had a negative sign in the last quarter) changes in the economic environment can be expected. With the decline in orders in the automotive industry, the impact will also be felt in Slovenia, as companies in this industry are among the largest exporters. Slovenian statistical data by Slovenian statistics do not yet indicate that there are more layoffs in our country, which indicates a high degree of maturity of the majority of the economy.

- Given the high stability of the Slovenian economy, low debt and continuous repayment of loans, we believe that the Slovenian economy is well and better prepared for a possible crisis.