Brazil’s 500 biggest companies sold more than 1.2 trillion dollars in 2010 and had the highest profits in 38 years of EXAME’s BEST AND BIGGEST.
THE COUNTRY’S BUSINESS ELITE TOOK In good advantage of the economy’s exceptional moment in 2010, when Brazil’s GDP grew 7.5%, the biggest expansion since 1986. Last year, Brazil’s 500 biggest companies earned more than 1.2 trillion dollars and profited more than 80 billion dollars according to preliminary data from the BEST AND BIGGEST, EXAME’s special edition that hits newsstands on July 7. Total profits were the most recorded since 1974, when the publication was first launched. "We have records in several indicators, and that is the result of 2010’s heated economy plus an appreciated real,” says Ariovaldo dos Santos, technical coordinator at the University of São Paulo’s Institute of Accounting, Actuarial and Financial Research Foundation (Fipecafi), responsible for BEST AND BIGGEST analyses.
One of the records that call attention is the number of companies with earnings greater than 1 billion dollars. That’s 50 more than the year before. A total of 291 companies reached that mark – 57 for the first time. Most of the new billionaires work in sectors that saw strong growth thanks to expansion of credit supply and higher income. The most benefited sectors include the car industry, retail, construction and services. Marcopolo, from Rio Grande do Sul, manufacturer of bus chassis, is among those companies debuting in the group of billionaires. Ascension of a new middle class drove highway tourism and encouraged bus companies to renew their fleets. In 2010, Marcopolo produced 27 500 buses, 42% more than the year before. Earnings reached 1.5 billion dollars, for a real growth of 38%. "It was the best performance in our 62 year history," says José Rubens de la Rosa, general director of Marcopolo. Sales to the Brazilian market were responsible for 65% of earnings, reversing the situation that existed seven years ago when exports represented two-thirds of all revenues. "We have tripled our production abroad since 2003, but it is in Brazil that we manufacture higher value buses,” affirms De La Rosa.
In a year highlighted by the strength of the domestic market, the retail sector was one of the most vigorous. Hermes, a chain from Rio de Janeiro, changed levels, for example. Working with door-to-door and Internet sales, it earned 1.2 billion dollars, 73% more than the year before. Its growth rate is one of the highest among those companies analyzed by the BEST AND BIGGEST. Seventy percent of Hermes’ earnings come from e-commerce through its virtual store Comprafacil. "The popularization of computers and the increase in the population’s access to the Internet are the main leverages for our growth,” affirms Gustavo Bach, the executive who took over as Hermes’ CEO two months ago.
After stimulating consumers to buy more in 2010, the government started the year by pulling back on the reins, increasing the basic interest rate to contain inflation. The first effects of this monetary belt-tightening have been felt at Hermes, although still mildly.
In April, its earnings fell 10% compared to the average for the first three months of the year. This drop, however, occurred in comparison to the high base: Hermes’ sales in the first quarter were 60% higher than they were for the same period of 2010. Even if the economy slows down, Bach maintains his plan to increase the number of sales reps from 600 000 to 700 00 this year. “Our goal is to grow 70% this year,” says Bach. “We are confident we will continue growing.”
