Apple has catapulted from 11th to pole position in this year's Top 1000 2018, the definitive database of Ireland's leading companies, after the true scale of its Irish operations were disclosed as part of the European Commission's investigation into its tax affairs.
Responding to this investigation, the US gadget giant and manufacturer of the iPhone and iPad revealed that it is putting sales of some € 119 billion – a year – through its Irish operation, with all global sales outside of the US recorded here.
This means that the US company has been propelled into the top spot, leaving therest of the Top 10 some way behind.
Overall, Top 1000 companies reported grosssales of a staggering € 622 billion in their most recent financial years, up by 27 per cent on last year’s survey, although much of this sharp growth is down to the Apple effect.
Once figures for the gadget giant are omitted, the overall growth rate drops down to 5 per cent. It means however, that sales generated by Top 1000 companies, which include sales transacted from Ireland by multinationals such as Google and Facebook, as well as global sales for multinationals that are headquartered here, such as CRH and Medtronic, are far in excess of the income which Ireland as a country is generating.
Indeed, Irish GDP stood at about € 270 billion in 2017, or about € 56,500 per capita; Top 1000 companies on the other hand, generate sales of about €500,000 per employee.
And they are also very profitable. Profits of Ireland’s leading companies and financial services companies rose to some €36.3 billion in this year’s survey, up by seven per cent on last year’s survey, and by a staggering 62 per cent on 2015. Not only that, but given that so many multinational companies, including the likes of Apple, Penneys, Boston Scientific, IBM and Intel do not report financial figures for their Irish operations, the true profit figure is likely to be considerably north of € 36 billion.
Banks are once again contributing heavily to these profit flows, with the vast majority of the 75 financial institutions (ranked on page 52) firmly in the black. These include a host of formerly troubled institutions including Bank of Ireland, AIB and Depfa Bank. However, a certain proportion of financial services companies – 12 per cent in this year's survey, remain in the red.
The Top 10
There’s a bit of shake-up in the Top 10 this year, on the back of Apple being propelled into the top spot, and given the enormity of the gadget giant’s Irish sales, it’s no surprise perhaps that a recent survey from the International Monetary Fund found that about two per cent, or a quarter of Ireland’s economic growth last year, came from sales of the iPhone.
In fact such is the scale of the iPhonemaker’s Irish sales, that not just a gap, but an ocean has now opened up between the top spot and those that follow.
Indeed last year’s numero uno, Irish construction giant CRH, has slipped back to second place, on sales of some € 27.6 billion, and it continues to be followed closely by pharma giant Medtronic. Having become an Irish company when it acquired Dublin-domiciled surgical supplies group Covidien in a highprofi le $50 billion inversion deal back in 2015, the pharma group is inching in on CRH’s lead, with turnover of some €26 billion in the year to April 2017.
Elsewhere, Google has held onto fourth place, while Microsoft, a former leader in the survey, has slipped again to fi fth, and Facebook has moved up four places to make the Top 10 for the first time, on the back of sales of some € 12.6 billion.
Apart from CRH, the only other inidgenous Irish company in the Top 10 is DCC (7).
Who’s making the most money?
The rich are getting richer; or to paraphase, Ireland’s most profitable companies continue to get even more profitable. And this year there are again nine companies in the exclusive “profit billionaires” gang, each posting pre-tax profits of more than € 1 billion.
Indeed, Ireland’s second largest company, Medtronic, has held on to its tag of the Top 1000’s most profitable company, reporting more than € 4 billion in profits.
Of course just like many of the companies on the list, Medtronic does not generate most of these profits in Ireland; they’re derived from its global business, just like third placed power management company Eaton Corp, headquartered on Dublin’s Pembroke Road, which reported profits of some € 2.7 billion last year.
New on the list of most profitable companies this year is Google, which goes straight in at number seven on the back of profits of some €1.4 billion. It’s the first time the US multinational has posted profits, in excess of € 1bn in Ireland – back in 2007, for example, it recorded a loss of about € 9.5 million for its Irish operation. And how much tax did it pay on these profits you might ask? Well, according to its accounts, it paid out some €163 million – or a tax rate of 12.2 per cent.
Irish construction giant CRH also makes the list (€2 billion), while airline Ryanair continues to fly high (€1.5 billion), and other Irish companies also boasting hefty profits include Kerry Group (€ 691 million) and Smurfit Kappa (€ 576 million).
But it is the banks which make most of an impression on the Top 10 most profitable list, with the Central Bank again close to the top in third place, with record profits of € 2.3 billion in 2016 – about € 1.8 billion of which will make its way into the Government’s coffers. Also enjoying bumper profits are AIB (€ 1.3 billion) and Bank of Ireland (€ 852 million).
And who’s still in the red?
But not everyone is back in the black. Oil exploration group Tullow Oil again racked up the losses in 2017, going into the red for the fourth year in a row.
Losses have, however, narrowed, with the group reporting a loss of some € 243 million for 2017, down from € 833 million the previous year. It was the biggest loss for an Irish company over the past year; but it wasn’t the only company to report a loss.
Horizon Pharma, the Irishfounded specialty pharmaceutical company, saw its losses widen to € 418 million last year, while Amaris Hospitality, Lone Star's hotel investment and hospitality group, responsible for the Jury's Inn chain of hotels before they were sold for £800 million last year to Swedish hotel group Pandox and Israeli group Fattal Hotels, also reported a loss of € 120 million on the back of some steep finance costs.
Elsewhere it was the financial sector where some companies continue to struggle. After turning itself around in 2014 in the aftermath of the financial crisis, Ulster Bank slipped into the red again last year, reporting an operating loss of € 151 million as it increased the amount it set aside to deal with the tracker mortgage scandal.