Slovenia’s leading listed companies are capitalising on global mega-trends such as an ageing population, energy transition and financial inclusion, allowing the country’s equity market to deliver one of the strongest performances in Europe in recent years, according to participants in a Ljubljana Stock Exchange (LJSE) event.

Slovenia’s major sectors such as pharmaceuticals, finance and energy, are benefiting from structural shifts in the global economy, Đivo Pulitika, fund manager at InterCapital, told the Slovenian Listed Companies Online webcast organised by the LJSE. 

The pharmaceuticals sector has a weight of around $30 in the LJSE’s blue chip SBI TOP index, thanks to generic pharmaceutical company Krka. There is a substantial exposure to banks and insurers, notably the country’s largest bank NLB, in the range of 35-40%, while the energy sector is represented by Petrol. 

“All these major sectors profit from some mega trends,” Pulitika said. In just two examples, he outlined: “Pharma company Krka focuses on medicine related to the population getting older … Petrol is focussing on green energy solutions, which will be even more important with the geopolitical tensions going on abroad.” 

In the financial services sector, meanwhile, firms with a reach across the former Yugoslavia have access to less developed markets with a strong catch-up story. 

Blue chips 

The SBI TOP index has been marked by consistently low price-to-earnings ratios and high dividend yields, Pulitika added. 

“Slovenia as a capital market is relatively small compared to some of largest global or even European peers,” he acknowledged. The relatively low liquidity is “one reason why we see many investors skipping the opportunity of Slovenia”. However, Pulitika argued, "this opportunity has been, and we believe still is, rather attractive”. 

Pulitika pointed to the annualised average annual growth of more than 16% – about 10% from prices alone and 6.5% from reinvested dividends. “On a global scale Slovenia was barely beaten by Nasdaq, the biggest and fastest growing stock market in the US, and beat the wider US plus most regional peers and Europe in general. 

“The main driver in Slovenia was earnings growth. Slovenian companies on the SBI TOP index had amazing results – pretty much all of them. Earnings were up more than 200% in this period and unlike most global markets, came at a pretty much constant price/equity ratio.” 

Sector leaders

Krka was among the companies to report strong results in 2024. “Krka Group performed successfully in 204 in line with expectations,” David Bratož, a member of Krka’s management board, told the LJSE webcast on March 27.

According to Bratož, the group’s revenue reached €1.9bn, up 6% on the previous year. “Sales increased in all regions expect Western Europe and all product and service groups except OTC. Prescription drugs remained the most important product group and together with veterinary medicines contributed the most increased sales figures.” 

Margins remained high, with a strong Ebitda margin of 27.2%. During the year, the group reported its highest ever operating profit of €408mn and a net profit of €356mn.

“Conditions on the markets are encouraging overall. We are seeing good demand for our products in most of our markets,” said Bratož. If the conditions seen in 2024 continue, Krka’s management expect its performance this year to be “even more outstanding”, with sales expected to exceed the €2bn mark for the first time. 

Krka plans to increase investment by 28% this year to €150mn. "As a provider of affordable, available and deliverable generics we generate savings for healthcare systems and people. Krka is a stable company, on a long term and steady growth path. We are currently 16th in the global market for generics and among the top 10 in Europe. We have grown faster than the global pharma market and are gaining glob market share,” Bratož added.

Regional presence 

In the financial sector, NLB Group, Slovenia’s largest bank, also posted strong results for 2024. 

“The €550mn bottom line result is excellent achievement especially considering we had to absorb the balance sheet tax,” said management board member Archibald Kremser.

While a planned takeover of Addiko Bank fell through, the company recently added Summit Leasing to its portfolio, and Kremser said the group remains open to M&A as it seeks to grow its business aggressively for the rest of this decade.  

“We don’t acquire for the sake of acquiring; we acquire to grow our franchise, top and bottom line. Last year we published a very ambitious strategy. The management team wants to double this bank in the next five years. We are very confident and looking forward to delivering on that strategy,” he said, pointing to strong fundamentals in the region. 

NLB has a presence across the former Yugoslavia, with Serbia its second largest market after Slovenia. “The geographies underpinning our growth are all stable and from a macro point of view healthy. Serbia made it to investment grade last year, was symbolic for the whole region [which] opens so many more opportunities for the country and will unleash further growth. Regional growth visibly above the eurozone average. These are still arguably catch-up economies.”

Insurer Triglav Group also beat expectations in 2024, reporting pre-tax profit of €160mn, supported by strong performance in asset management and higher returns on insurance assets.

“This year we expect similar performance, adjusted for one-offs,” said CFO Ura Shivans, adding that business volume should reach €1.8bn, a new record since the removal of supplementary health insurance in Slovenia.

Industrial recovery

Chemicals company Cinkarna Celje, whose core product is titanium dioxide, reported a recovery in sales and profitability in 2024.

“2024 saw both higher volumes and improved market dynamics compared to previous years. Sales and profits exceeded targets,” said management board member Filip Koželnik. “We made progress on the sustainability front and continued with capital expenditures related to both energy efficiency and operational upgrades.”

However, the company, which holds around 1% of the global titanium dioxide market, has been affected by global developments, most recently, the European Commission decision introduce permanent anti-dumping measures on Chinese pigments at the beginning of 2025. 

There could also be an impact from higher US tariffs on Chinese goods. If there is not enough domestic demand from China’s construction sector to absorb products no longer exported to the US, this could see a hike in Chinese exports to the EU.