study on state asset management in the eu€¦ · cagr revenues 2011-2015 (%) e - water supply;...

Written by KPMG and Bocconi University February 2018

Study on State asset management in the EU

Final study report for Pillar 1 – Portugal

Contract: ECFIN/187/2016/740792

EUROPEAN COMMISSION

Directorate-General for Economic and Financial Affairs Directorate Fiscal policy and policy mix and Directorate Investment, growth and structural reforms European Commission B-1049 Brussels

Portugal

1. PSHS IN THE PORTUGUESE ECONOMY

This Country fiche presents a quantitative overview of the mix of equity owned by the

Portuguese General Government.

The Portuguese Government has stakes in 541 firms1. 42% of PSHs operate as fully

state-owned enterprises, while the rest is quite evenly split across the residual

ownership clusters.

The contribution to the Portuguese Economy ranges from 1% in terms of Value added

to 2.1% of Total assets of the country. A rather marked difference is reported between

the share of total Market capitalization and Shareholders’ funds, witnessing the

economic relevance of unlisted firms in the Portuguese Government’s portfolio. With

only 27 stakes and an average contribution across impact measures of about 1%, the

impact of PSHs holdings on the Financial sector appears to be small.

Figure 1 Breakdown of PSHs by level of ownership, 2015

Source: KPMG and Bocconi University calculations on Orbis (BvD) database

1 For Portugal, the promotional bank Portuguese Development Financial Institution - Instituição Financeira de Desenvolvimento was included in the sample. See Methodological Notes for more details.

534

229

88

138

750

50

100

150

200

250

300

350

400

450

500

550

0

Minority

79(14.6%)

4

Influential

Level of ownership

88(16.3%)

n°

of PSH

s

NO DATA on shareholders

stakes

4(0.7%)

4

Fully public

229(42.3%)

Total

541(100%)

7

141(26.1%)

3

Control

Listed Unlisted

Country fiches

Portugal

4

Figure 2 Breakdown of PSHs with no ownership data by sector, 2015


Figure 3 Breakdown of PSHs’ total assets by level of ownership, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (1) Values have been weighted by stake(s) owned by the Public sector into PSHs.

Figure 4 Non-Financial PSHs contribution to the Portuguese economy, 2015,

weighted

0.0

1.0

2.0

F-Constr. K-Financ. M-Profes. No data

Nr

331

10,000

5,000

20,000

0

15,000

1,084

2,169(11.1%)

Influential

1,597

241

Weig

hte

dassets

(Mn E

ur)

Level of ownership

Minority

3,388(17.3%)

2,866(14.6%)

1,050

1,816

Fully public

11,190(57.1%)

9,848

1,342

Total

19,612(100%)

12,522

5,765

1,325

2,277

Control

27

Non-financial unlistedFinancial unlistedNon-financial listedFinancial listed

47,354

2,367

1,943

656

97.9% 2.1%

EmployeesEmployees (% economy)

9,848

1,0501,839

1,111

98.0% 2.0%

Total assets (Mn Eur)

Total assets (% economy)

Country fiches

Portugal

5

Source: KPMG and Bocconi University calculations on Orbis (BvD) database; Eurostat (1) Values have been weighted by stake(s) owned by the Public sector into PSHs. Value added has been

scaled by GDP (GDP data retrivied from Eurostat). (2) Market capitalization is considered only for listed companies while shareholders’ funds are considered only

for unlisted companies. (3) Market capitalization is reported as of 6th March 2017.

Figure 5 PSHs contribution to the national financial sector, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database; Eurostat (1) Values have been weighted by stake(s) owned by the Public sector into PSHs.

3,487

153

476

1,276

98.6% 1.4%

Revenues (Mn Eur)

Revenues (% economy)

1,502

108

125

131

99.0% 1.0%

Value added (Mn Eur)

Value added (% economy)

16

88298.1% 1.9%

Market cap (Mn Eur)

Market cap (% economy)

Rest of the Economy PSHs Fully public Control Influential Minority

22

206

2

2

99.8% 0.2%

EmployeesEmployees (% economy)

1,342

1,816

331

2,277

99.2% 0.8%

Total assets (Mn Eur)

Total assets (% economy)

74

72

98

220

99.0% 1.0%

Revenues (Mn Eur)

Revenues (% economy)

1,338

419

n.a.

1,651

97.8% 2.2%

Shareholders' fund Shareholders' fund (% economy)

Rest of the Economy PSHs Fully public Control Influential Minority

Country fiches

Portugal

6

(2) Market capitalization is considered only for listed companies while shareholders’ funds are considered only for unlisted companies.

(3) Market capitalization is reported as of 6th March 2017.

1.1. Distribution of Non-financial PSHs by sector

The most relevant sectors across most measures of economic impact are Human health

and social work activities (Q) and Transportation and storage (H). PSHs operating in

these sectors are top-ranked in terms of size, although their relative share is more

modest, but certainly not negligible. With a value of 70% in terms of Assets, the impact

of PSHs in the Public administration and security sector (O) stands out.

Figure 6 Distribution of Non-financial PSHs by sector, 2015

0

10

20

30

40

50

60

70

80

0

500

1,000

1,500

2,000

2,500

3,000

3,500

% of industryMn EurTotal assets

PSHs Share of PSHs in the industry

0

10

20

30

40

50

60

70

80

90

100

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000% of industryNr Number of employees


Country fiches

Portugal

7

Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (1) A - Agriculture, forestry and fishing; B - Mining and quarrying; C – Manufacturing; D - Electricity, gas,

steam and air conditioning supply; E - Water supply, sewerage, waste management and remediation activities; F – Construction; G - Wholesale and retail trade, repair of motor vehicles and motorcycles; H - Transportation and storage; I - Accommodation and food service activities; J - Information and communication; L - Real estate activities; M - Professional, scientific and technical activities; N - Administrative and support service activities; O - Public administration and defence, compulsory social security; P – Education; Q - Human health and social work activities; R - Arts, entertainment and recreation; S - Other service activities; T - Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use; U - Activities of extraterritorial organisations and bodies.

(2) Some sectors are not represented in the graphs above, because of two different, mutually excluding reasons; either because no data on those particular sectors are available in our database; or because there are no PSHs operating in those particular sectors in this country.

(3) Values have been weighted by stake(s) owned by Public sector into PSHs.

2. FINANCIAL PERFORMANCE OF PSHS AND MARKET ATTRACTIVENESS

2.1. Non-financial PSHs

At a broader level, the aggregate performance of the Portuguese PSHs features a good

level of profitability measured in terms of EBITDA, but a poor performance in terms of

reported ROA. Labour costs have a great bearing on state-controlled companies,

accounting, on average, for more than 35% of revenues in 2015. By contrast, gearing

appears to be, on average, significantly lower than that of private benchmarks.

As to market attractiveness, PSHs tend to be positioned in profitable sectors but

Revenues growth rate are negative for some of them.

0

10

20

30

40

50

60

70

80

90

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

% of industryMn EurOperating revenues


0

20

40

60

80

100

0

200

400

600

800

1,000% of industryMn Eur Value added


Country fiches

Portugal

8

Across the five main sectors of PSHs activity, gross profit margins appear to be, on

average, broadly in line to private benchmarks. However, net income values embedded

in the ROA do not provide a rosy picture. The relative operating efficiency of the sector

is also poor compared to private peers, whereas leverage ratios show a quite solid

position compared to the Industry as a whole.

Figure 7 Performance indicators of Non-financial PSHs in comparison to the national

economy, 2011–2015, yearly averages


Figure 8 National market attractiveness of Non-financial PSHs, 2015

0

4

8

12

16

20

24

28

32

2011 2012 2013 2014 2015

% EBITDA Margin (%)

-5

-4

-3

-2

-1

0

1

2

2011 2012 2013 2014 2015

% ROA (%)

0

10

20

30

40

50

60

2011 2012 2013 2014 2015

%Labour costs as % of

operating revenues (%)

0

50

100

150

200

2011 2012 2013 2014 2015

% Debt to Equity ratio (%)

Whole economyPSHs with stake ≤ 50% PSHs with stake > 50%

Country fiches

Portugal

9

Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (1) The Figure shows only the top 5 markets with the largest contribution to the Gross Domestic Product in

terms of Value Added generated by PSHs. Values of Value Added have been weighted by stake of public ownership of PSHs.

(2) The right upper quadrant identifies sectors with high profitability and positive growth, whereas the sectors with low profitability and negative growth tend to be located further down in the left lower quadrant.

(3) Revenue growth rates have been calculated using the Compound Annual Growth Rate of 2011-2015 values; for Value Added and EBITDA margin the value of 2015. For Revenue growth rates estimation, only companies with turnover higher than 50 Mn Eur are considered.

Figure 9 Profitability profile of Non-financial PSHs by sector and level of ownership,

2015, unweighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (1) Some PSHs clusters may not be represented in the graphs above, because of two different, mutually

excluding reasons; either because no data on those particular clusters are available in our database; or because there are no PSHs belonging to those particular PSHs clusters.

-10.0-15.0-20.0 20.0

30

20

15.010.05.0

25

0

-5

-10

0.0-5.0

J - Information and communication

Q - Human health and social work activities

EBITDA margin Industry (%)

B - Mining and quarrying

CAGR Revenues 2011-2015 (%)

E - Water supply; sewerage, waste management and remediation activities

H - Transportation and storage

Positive GrowthHigh profitability

Positive GrowthLow profitability

Negative GrowthLow profitability

Negative GrowthHigh profitability

The size of the bubbles shows weighted value added generated by PSHs scaled by GDP

-20

-10

0

10

20

30

40

50

Q - Human healthand social work

activities

H - Transportationand storage

E - Water supply;sewerage, wastemanagement and

remediationactivities

B - Mining andquarrying

J - Informationand

communication

EBITDA Margin (%)

Fully public Control Influential Minority Industry

-30

-25

-20

-15

-10

-5

0

5

10


activities

H -Transportationand storage




J - Informationand

communication

%ROA (%)


Country fiches

Portugal

10

Figure 10 Operating efficiency of Non-financial PSHs, 2015, unweighted



Figure 11 The leverage of Non-financial PSHs, 2015, unweighted



2.2. Financial PSHs

Our dataset reports only three PSHs operating in the banking sector and two PSHs

operating in the Insurance sector. Obviously, the limited coverage does not allow us to

provide the reader with a conclusive benchmarking with respect to the Financial and

Insurance sector as a whole. Figures suggest that banks appear slightly less profitable

and capitalized than Industry peers. The other 21 state-owned financial institutions

operating in Portugal perform better than their private counterparts in terms of EBITDA

margins.

0

10

20

30

40

50

60

70

80

90


activities

H -Transportationand storage




J - Informationand

communication

% Labour costs as % of revenues


0

100

200

300

400

500

600

700

800


activities

H - Transportationand storage




J - Informationand

communication

% Debt to Equity ratio (%)


Country fiches

Portugal

11

Figure 12 Relevant KPIs for PSHs in the Banking sector in Portugal, 2015, unweighted



Figure 13 Relevant KPIs for PSHs in the Insurance sector, 2015, unweighted



Figure 14 Relevant KPIs for Other financial PSHs, 2015, weighted

IndustryFully public Control Influential Minority


Country fiches

Portugal

12



3. PUBLIC FINANCE EFFECTS OF PSHS

At the aggregate level, while a share of PSHs is profitable, losses generated by the rest

of PSHs lead the balance to the negative side. In 2015, PSHs generated a negative net

income worth 159 Mn Euro. The net financial position of PSHs is positive, with 5.7 Bn

Euro of weighted net worth. Distributed dividends account for 0.2% of GDP while

outstanding liabilities represent, on average, more than 70% of the Portuguese GDP.

Table 1 Public Finance Effects of PSHs, 2015, unweighted

Source: (a) Orbis data (values not weighted for stake of public ownership) and (c) Eurostat. Data retrieved on 19th September 2017. (b) Net Worth value has been weighted by stake(s) owned by the Public sector into PSHs. (d) Total outstanding liabilities of government controlled entities classified outside general government are

considered. (e) Figures in red represent negative numbers


Country fiches

Portugal

Appendix I Portugal

Table A Breakdown of PSHs’ total assets by level of ownership, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (1) Values have been weighted by stake(s) owned by the Public sector into PSHs.

Table B Non-Financial PSHs contribution to the Portuguese economy, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (*) Absolute value. (1) Values have been weighted by stake(s) owned by the Public sector into PSHs. Value added has been

scaled by GDP (GDP data retrivied from Eurostat). (2) Market capitalization is considered only for listed companies while shareholders’ funds are considered only

for unlisted companies. (3) Market capitalization is reported as of 6th March 2017. (4) It must be noted that the total number of PSHs (sum of Number of PSHs Table B and Table C) is lower

than the overall number of PSHs reported earlier in Figure 1, due to missing data on PSHs’ shareholders’ stakes.

Table C PSHs contribution to the national financial sector, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database. (*) Absolute value.

(1) Values have been weighted by stake(s) owned by the Public sector into PSHs. (2) Market capitalization is considered only for listed companies while shareholders’ funds are considered only

for unlisted companies. (3) Market capitalization is reported as of 6th March 2017. (4) It must be noted that the total number of PSHs (sum of Number of PSHs Table B and Table C) is lower

than the overall number of PSHs reported earlier in Figure 1, due to missing data on PSHs’ shareholders’ stakes.

Data in Mn Eur

Ownership cluster Unlisted Listed Total Unlisted Listed Total

Fully Public 9,848 - 9,848 1,342 - 1,342

Control 1,050 - 1,050 1,816 - 1,816

Influential 1,597 241 1,839 331 - 331

Minority 27 1,084 1,111 2,277 - 2,277

Total 12,522 1,325 13,847 5,765 0 5,765

Non-financial Financial

Non-financial PSHsNumber

of PSHs

of which

listed

Employees

(%)

Total assets

(%)

Revenues

(%)

Value added

(%)

Market cap

(%)

Fully Public 223 0 1.9 1.5 0.9 0.8 0.0

Control 83 0 0.1 0.2 0.0 0.1 0.0

Influential 132 3 0.1 0.3 0.1 0.1 0.0

Minority 72 4 0.0 0.2 0.3 0.1 1.9

PSHs' share to the total economy 510(*) 7(*) 2.1 2.0 1.4 1.0 1.9

Financial PSHsNumber

of PSHs

of which

listed

Employees

(%)

Total assets

(%)

Revenues

(%)

Market cap

(%)

Shareholders'

funds (%)

Fully Public 6 0 0.0 0.2 0.2 0.0 0.9

Control 5 0 0.1 0.3 0.2 0.0 0.3

Influential 9 0 0.0 0.0 0.2 0.0 n.a.

Minority 7 0 0.0 0.3 0.5 0.0 1.1

PSHs' share to the total economy 27(*) 0(*) 0.2 0.8 1.0 0.0 2.2

14

Table D PSHs distribution by sector, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database, 2015 [downloaded in December 2016]. (a) Other financial institutions category includes all PSHs which are classified within the NACE K sector other than banks and insurance. (1) NACE sectors “T - Activities of households as employers; undifferentiated goods-and services-producing activities of households for own use” and “U - Activities of

extraterritorial organisations and bodies” are not reported here, since they lack comprehensive financial data, and therefore the aggregate value reported in Figure 4 might slight differ.

(2) For Banks, the value of “total assets” corresponds to the “total earning assets”, and “Operating revenues” corresponds to “Interest and other operating revenues”. (3) For Insurance, the value of “operating revenues” corresponds to the “net premium written”. (4) For Insurance, the latest available data refers to the year 2014. (5) The total number of PSHs reported here does not match the total number reported in Figure 1, because companies for which no data on ownership level and/or financial information

were available have been excluded. (6) Values have been weighted by stake(s) owned by the Public sector into PSHs. n.a.= not available

Sector

Average

public

ownership

Total

Sector

Value

Added

Year 2015

of

which

listed

Average % Mn Eur% of

sectorNr

% of

sectorMn Eur

% of

sectorMn Eur

% of

sectorMn Eur

A - Agriculture, forestry and fishing 7 0 79.8 79 0.8 595 1.1 32 0.7 22 1.7 1,258

B - Mining and quarrying 1 1 8.0 1,023 6.8 543 3.7 1,249 7.6 119 6.3 1,886

C - Manufacturing 31 3 31.9 417 0.5 1,626 0.3 427 0.5 98 0.4 22,228

D - Electricity, gas, steam and air conditioning supply 22 1 24.8 668 0.8 44 0.2 201 0.6 80 0.8 9,760

E - Water supply; sewerage, waste management and remediation

activities45 0 62.6 1,558 20.0 5,286 24.3 381 15.7 210 18.8 1,114

F - Construction 31 0 58.9 354 0.7 385 0.2 22 0.1 12 0.2 7,087

G - Wholesale and retail trade; repair of motor vehicles and

motorcycles4 0 35.4 10 0.0 5 0.0 4 0.0 1 0.0 17,503

H - Transportation and storage 36 0 84.9 3,154 5.4 4,288 3.2 697 3.7 232 3.7 6,223

I - Accommodation and food service activities 15 0 49.4 23 0.1 116 0.1 7 0.1 3 0.1 3,272

J - Information and communication 11 1 59.9 379 1.4 2,181 2.5 261 1.9 115 2.2 5,275

L - Real estate activities 35 0 71.5 1,889 3.8 625 2.2 203 3.7 35 1.7 2,052

M - Professional, scientific and technical activities 29 0 69.3 1,179 2.1 1,136 1.0 69 0.3 17 0.2 7,938

N - Administrative and support service activities 22 0 56.6 262 2.0 361 0.1 54 0.5 42 0.8 4,911

O - Public administration and defence; compulsory social security 15 0 94.7 617 67.9 793 87.1 83 77.9 n.a. n.a. 78

P - Education 28 0 49.9 20 1.5 352 1.2 15 1.5 9 1.5 569

Q - Human health and social work activities 45 0 89.6 2,053 21.0 32,476 28.8 1,609 22.4 886 27.5 3,226

R - Arts, entertainment and recreation 40 1 78.5 127 3.9 1,479 8.1 72 4.8 38 5.8 664

S - Other service activities 5 0 51.2 9 0.1 25 0.1 1 0.0 1 0.0 2,359

NON-FINANCIAL 422 7 64.8 13,821 2.3 52,315 2.1 5,388 1.4 1,860 1.9 97,404

BANKS 3 0 54.1 3,946 0.6 180 0.1 267 0.6 n.a. n.a. n.a.

INSURANCE 2 0 20.0 38 0.0 0 0.0 50 0.1 n.a. n.a. n.a.

OTHER FINANCIAL INSTITUTIONS(a) 21 0 51.8 1,781 0.3 53 0.0 148 0.3 n.a. n.a. n.a.

Number of

PSHsTotal assets Number of employees Operating revenues Value added

15

Table E Top 20 PSHs by Total assets, 2015, weighted

Source: KPMG and Bocconi University calculations on Orbis (BvD) database (1) Values have been weighted by stake(s) owned by the Public sector into PSHs.

Company name Listed/Unlisted IndustryOwnership

stake

Total assets

(Mn EUR)

NORGARANTE - SOCIEDADE DE GARANTIA

MUTUA, S.A.Unlisted K - Financial and insurance activities 2.0 2,275

CAIXA - BANCO DE INVESTIMENTO SA Unlisted K - Financial and insurance activities 99.7 1,671

CAIXA SEGUROS E SAUDE - SGPS, S.A. Unlisted K - Financial and insurance activities 100.0 1,226

ESTAMO - PARTICIPACOES IMOBILIARIAS, S.A. Unlisted L - Real estate activities 100.0 1,169

GALP ENERGIA, S.G.P.S., S.A. Listed B - Mining and quarrying 8.0 1,023

METRO DO PORTO, S.A. Unlisted H - Transportation and storage 43.3 922

CP - COMBOIOS DE PORTUGAL, E.P.E. Unlisted H - Transportation and storage 100.0 726

EEM - EMPRESA DE ELECTRICIDADE DA

MADEIRA, S.A.Unlisted D - Electricity, gas, steam and air conditioning supply 100.0 569

PARUPS, S.A. Unlisted M - Professional, scientific and technical activities 100.0 523

CENTRO HOSPITALAR DO ALGARVE, E.P.E. Unlisted Q - Human health and social work activities 100.0 510

CENTRO HOSPITALAR DE LISBOA OCIDENTAL,

E.P.E.Unlisted Q - Human health and social work activities 100.0 444

APA - ADMINISTRACAO DO PORTO DE AVEIRO,

S.A.Unlisted H - Transportation and storage 100.0 380

RADIO E TELEVISAO DE PORTUGAL, S.A. Unlisted J - Information and communication 100.0 339

APRAM - ADMINISTRACAO DOS PORTOS DA

REGIAO AUTONOMA DA MADEIRA, S.A.Unlisted H - Transportation and storage 100.0 335

NAVEGACAO AEREA DE PORTUGAL - NAV

PORTUGAL, E.P.E.Unlisted H - Transportation and storage 100.0 272

ENMC ? ENTIDADE NACIONAL PARA O MERCADO

DE COMBUSTIVEIS, E.P.E.Unlisted

O - Public administration and defence; compulsory social

security100.0 271

A.R.M. - AGUAS E RESIDUOS DA MADEIRA, S.A. UnlistedE - Water supply; sewerage, waste management and

remediation activities99.6 266

BAIA DO TEJO, S.A. Unlisted L - Real estate activities 100.0 266

AGENCIA PARA O INVESTIMENTO E COMERCIO

EXTERNO DE PORTUGAL, E.P.E.Unlisted M - Professional, scientific and technical activities 100.0 262

CENTRO HOSPITALAR E UNIVERSITARIO DE

COIMBRA, E.P.E.Unlisted Q - Human health and social work activities 100.0 221

study on state asset management in the eu€¦ · cagr revenues 2011-2015 (%) e - water supply;...

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