Cassandra Worrall, Partner Clients and Marketing.
The 2023 Deloitte Top 200 Index reveals significant growth across several key metrics, reflecting the resilience and adaptability of New Zealand’s largest businesses.
Total revenues for Top 200 companies increased 12.4 per cent from $204,058 million in 2022 to $229,313m in 2023. This compares to a 9.8 per cent increase between 2021 and 2022.
Underlying earnings (Ebitda) increased from $29,917m in 2022 to $32,330m in 2023. This is an increase of 8.1 per cent, compared to a 16.8 per cent increase in 2022.
However, the Ebitda margin, an assessment of operating profitability as a percentage of total revenue (total Ebitda/total revenue) decreased slightly between 2022 (14.7 per cent) and 2023 (14.1 per cent).
Total profits after tax have increased from $11,358m in 2022 to $11,817m in 2023. This is a 4.0 per cent increase year-on-year, compared to a 54.6 per cent increase in 2022. Net profit margin (profit after tax/total revenue) decreased between 2022 (5.6 per cent) and 2023 (5.2 per cent).
Total assets have increased from $284,196m in 2022 to $298,159m in 2023 — a 4.9 per cent increase, compared to a 9.0 per cent increase in 2022.
The number one spot in the Top 200 Index has been held by Fonterra since its formation in the early 1990s. This stronghold continues, with an increase in revenue of 7.1 per cent during the year to reach $24,580m. This increase is mainly due to an increase in sales volumes for continuing operations.
The 200th-ranked entity on the Top 200 Index in 2023 is automation equipment maker Scott Technology, with revenue of $222m. Last year’s 200th ranked company, Strait NZ, had revenue of $208m. This is a 6.7 per cent increase in revenue between 200th-ranked companies year-on-year.
Transtasman healthcare and animal care products supplier Ebos Group has maintained its number two ranking, increasing its revenue by 16.9 per cent from $11,439m in 2022 to $13,370m in 2023.
Ebos continued to increase its revenue through organic growth and prior year acquisitions which generated a full year of revenue in FY23, contributing to revenue growth in the healthcare and animal care businesses. The revenue gap between the top two companies has remained fairly constant, slightly decreasing by 2.6 per cent.
The revenue of third-ranked Fletcher Building decreased by 0.3 per cent from $8498m in 2022 to $8469m in 2023.
The top 10 has seen some movement, with Air NZ re-entering in sixth place (17th in 2022) and BP NZ re-entering in ninth place (14th).
Z Energy has remained seventh, although it is worth noting their revenue for the current period is a nine-month figure due to a change in its balance date.
Mainfreight has moved down to eighth (sixth) and Foodstuffs NI has dropped to 10th place (ninth). The result of these movements sees Zespri move down from eighth in 2022 to 11th in 2023, and Meridian Energy moving from 10th in 2022 to 17th in 2023.
The top profit for 2023 was $1241m, reported by Fonterra (ranked first in the Top 200 Index), representing a 79.1 per cent increase in the top profit figure year-on-year. Fonterra was ranked second for profit in 2022 with a profit after tax of $661m.
Last year’s top profit was held by retirement village operator Ryman Healthcare (90th in the Top 200 Index), reporting a net profit of $693m in 2022. Ryman Healthcare’s profit after tax in 2023 decreased to $258m, which sees them in 12th place this year.
The average profit after tax across all 200 companies in the Deloitte Index increased from $56.8m in FY22 to $59.1m in FY23, a 4.0 per cent increase. Spark (13th) has moved up to second place in 2023, from sixth in 2022, with profit after tax increasing by 176.8 per cent from $410m in 2022 to $1135m in 2023. The 2023 profit included a gain on sale of $583m associated with Spark’s sale of Connexa.
2degrees (37th) is a new entrant to the Top 200 in 2023 and is ranked third in the top profits index with a profit after tax of $665m. The 2023 profit included a gain on sale of $620m associated with the sale of its passive mobile telecommunications tower assets to Connexa.
Infratil (42nd) has moved up to fourth place in 2023, from 33rd in 2022, with profit after tax increasing by 430.3 per cent from $106m in 2022 to $562m in 2023.
One NZ (22nd) is a new entrant to the Top 200 in 2023. It is ranked fifth in the top profits index with a profit after tax of $557m. The 2023 profit included a gain on sale of $444m associated with the sale of its passive tower assets.
Fletcher Building (third), Meridian Energy (17th) and Mercury (18th) in 2022 have moved out of the top five profits for 2023, but remain relatively highly ranked at 14th, 36th and 32nd place respectively.
The biggest loss for 2023 was reported by KiwiRail (ranked 53rd in the Top 200 Index), with a loss of $771m. KiwiRail also had the third biggest loss in 2022 and second biggest loss in 2020.
Kiwi Property (169th) posted the second biggest loss for 2023, with a loss of $228m. This is driven by fair value movements in its investment property portfolio, which had an adverse impact on profit of $353m.
CPB Contractors (179th) had the third biggest loss in 2023, which is reasonably consistent with the fourth biggest loss position the construction firm occupied in 2022.
Xero (33rd) and Oregon Group (94th) respectively hold the fourth and fifth biggest losses in 2023. In 2022, Air New Zealand (sixth) reported the biggest loss of $591m. This has been turned around in 2023 with a profit of $412m. This is reflective of the improved recovery of the air travel industry in the airline’s FY23 results.
CablePrice (ranked 176th in the Top 200 Index) recorded the most improved profit out of all the entities on the Top 200 index. The importer of industrial machinery and distributor of commercial vehicles saw a 25,292 per cent increase from a $13,000 loss in 2022 to a $3.3m profit in 2023. One NZ (22nd) has the second most improved profit, recording a profit of $557m in 2023, an increase of 4783 per cent.
Tourism Holdings (77th) holds third place for most improved profit, with an increase of 2453 per cent. In the current year, Tourism Holdings recorded a profit of $49.9m, compared to a 2022 loss of $2.1m.
Amazon Web Services (121st in the Top 200 Index) reported the most improved revenue for 2023. Its revenue increased to $372m in the current year compared to $94m in 2022. The uplift in revenue has meant Amazon Web Services is a new entrant to the Deloitte Top 200 Index in 2023.
Several other new entrants feature in the top five most improved revenue positions for 2023. Emirates Airlines NZ (122nd) increased its revenue by 205.4 per cent to $371m in 2023 to place second for most improved revenue. 2degrees (37th) increased its revenue by 163.8 per cent to $1253m in 2023 to place third. Tesla NZ (99th) increased its revenue by 116.5 per cent to $500m in 2023 to be fifth.
Air NZ (sixth) has also seen a strong increase in revenue, an increase of 131.5 per cent from $2734m in 2022 to $6330m in 2023 to place fourth. Wilmar Trading (74th) held the most improved revenue in 2022 and maintained a place in the 2023 most improved revenue list, at 18th.
ExxonMobil (12th) and Kia Motors NZ (115th) are the only other companies to be included in this index for two years in a row. Simsmetal Industries NZ (154th), Robert Walters (156th), Bakels Edible Oils (171st), Shell NZ (172nd) and Nokia (193rd) are new entrants to the Deloitte Top 200 Index in 2023 that also feature on the most improved revenue index in 2023. Tourism Holdings, 2degrees, Wilmar Trading, Emirates Airlines NZ, Tesla NZ, City Care and Infratil are included in both the most improved profit and most improved revenue index in 2023.
Return on assets (ROA) provides an indication of how efficiently a company manages its assets in order to generate earnings. It is calculated by measuring profit against the total assets reported.
Emirates Airlines NZ (122nd in the Top 200 Index) holds the top spot for return on assets, with a ROA of 325.1 per cent. Lotto (31st) has returned to the Index and occupies second place for ROA with 178.8 per cent. TAB (125th) has dropped from first place in 2022 to third this year. TAB has maintained a strong ROA of 68.6 per cent in 2023 compared to 81.4 per cent in 2022. Ingram Micro (66th) is in fourth place with a ROA of 43.9 per cent and Aurecon (173rd) is fifth with a ROA of 41.6 per cent.
Return on equity measures how effectively a company can generate income relative to the amount of money shareholders have invested in the firm. It is a useful tool for investors, particularly when comparing firms within the same industry and is calculated by measuring the revenue earned against the average equity held over the past two years — to prevent changes in shareholder contributions from skewing results.
Lotto (31st in the Top 200) has returned to the Index in 2023 and occupies the top spot with a return on equity of 589.6 per cent. Bunnings (25th) has taken second place, moving from up third in 2022, with a return on equity of 488.5 per cent. Emirates Airlines NZ (122nd) is third with a return on equity of 483.6 per cent. Harvey Norman (39th) has dropped from second in 2022 to fourth in 2023 with a return on equity of 423.7 per cent for 2023.
Pacific Aluminium (42nd) moved up from sixth place to fifth with a return on equity of 403.4 per cent.
This year, 22 companies were added to the Deloitte Top 200 Index. This compares to last year when 16 companies were added to the Index.
One NZ entered the Index at the highest rank (22nd) with revenue of $1955m.
Lotto NZ (31st) returned to the Index in 2023 with revenue of $1434m. 2degrees (37th) with revenue of $1253m and Kmart NZ (58th) with revenue of $919m were the third and fourth highest ranked newcomers in 2023.
Compac Holdings (ranked 201st) just missed the cut to appear in the Top 200 Index by less than $1m, with the 200th ranked company (Scott Technology) achieving revenue of $222m. Both Airways (202nd) and Compac Holdings (203rd) were close to breaching into the Top 200 Index in the current year, both achieving revenue around the $220m mark.
The Top 30 Financial Institutions Index sees one new addition to the Index, Suncorp Group NZ (ranked 18th).
The Top 30 financial institutions have again grown their total asset bases, this year by $62,612m from $671,861m in 2022 to $734,473m in 2023. This is a 9.3 per cent increase, broadly consistent with the 5.7 per cent increase seen from 2021 to 2022.
The top bank is once again ANZ, holding assets of $201,134m, up by 8.9 per cent from its 2022 total asset value of $184,769m. ANZ sits comfortably at the top spot with a $65,354m gap in total asset values between first and second place (Westpac). ANZ also outpaces all other banks in terms of profit and equity.
The second place in the Index is now held by Westpac, moving up from third place in 2022, with total assets of $135,780m — an increase of 13.3 per cent from the previous year.
BNZ holds third place, moving up from fourth in 2022 with total assets of $131,420m — an increase of 10.3 per cent from the previous year.
ASB has dropped to fourth place in 2023 from second in 2022, with total assets of $126,896m.
All of the big four banks — ANZ, Westpac, BNZ and ASB — have seen an increase in their total assets in the current year.
Of the big four banks, ASB has both the highest return on assets ratio at 1.3, and the highest return on equity ratio of 15.1.
Kiwibank has retained its fifth-place spot with total assets of $33,838m. Kiwibank’s total assets have increased by 7.3 per cent from $31,547m in 2022.
Cumulative profits for the Top 30 financial institutions have increased by 11.4 per cent from $6969m in 2022 to $7764m in 2023.
All of the top four financial institutions have had an increase in profit year on year. ANZ reported an increase in profit from $1939m to $2289m (18.1 per cent), Westpac reported an increase in profit from $1057m to $1298m (22.8 per cent), BNZ reported an increase in profit from $1322m to $1414m (7.0 per cent) and ASB has increased profit from $1471m to $1559m (6.0 per cent).
Cumulative equity has increased by 5.9 per cent from $61,870m in 2022 to $65,547m in 2023.
The top nine financial institutions have remained the same nine entities from 2022 to 2023.
MUFG Bank has moved up to 10th place from 11th in 2022, which has caused AMP Life to move down one spot to 11th place this year.
It is noted that certain financial institutions may have released unaudited earnings announcements that are not reflected in the indices or commentary above.
Rates for hotels have soared in one tourist hotspot while others have suffered.