Department for Innovation, Universities and Skills
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UK companies continue to outperform Europe's
The largest UK owned companies continue to dominate their European counterparts when it comes to the creation of wealth.
The Department for Innovation, Universities and Skills 2008 Value Added Scoreboard, released today, shows that the top 185 UK companies continue to be more efficient at creating value, or wealth, than their European peers.
The annual scoreboard uses 'Value Added' by companies to measure the amount of wealth they create. This is particularly important as it reflects the ability of companies to provide their customers with what they want and are prepared to pay for. It shows almost 23 per cent of all European 'Value Added' came from UK companies, more than any other country.
Minister for Science and Innovation, Ian Pearson, said:
"The UK continues to be one of the best places in the world to do business. As we set out in our White Paper 'Innovation Nation' the Government can help ensure we have an environment that enables businesses to grow, innovate and invest for the future.
"I would like to congratulate those UK companies that have performed so successfully in this year's Scoreboard and look forward to working with the business community to build on this success and to achieve even greater Value Added for the future".
The Scoreboard lists the value added, or wealth created, by the top 750 European Companies and the top 800 UK companies. It provides a broader perspective on a company's economic contribution than operating profit.
Key findings include:
* The Value Added by the UK 800 has increased by 9.6 per cent in the last year amounting to some £646 billion;
* The top ten sectors contribute 62 per cent of the UK's Value Added;
* The E750 companies generated Value Added of £2,027 billion and this was concentrated in three countries: the UK, France and Germany;
* The E750 includes the 185 UK Companies which added the most value in the last year.
Notes to Editors
1. This is the seventh annual edition of the Value Added Scoreboard. The Scoreboard can be found at http://www.innovation.gov.uk/value_added along with an online value added calculator for companies.
2. Value added (VA) is defined as the difference between sales and the cost of bought-in materials, components and services. An alternative but equivalent formula is used to calculate it from company accounts:
Value added
Operating Profit + Employee costs + Depreciation & Amortisation/impairment
3. US and Japanese companies are not included in the Scoreboard because they do not give enough information in their annual reports to allow VA to be calculated.
4. Financial markets tend to reward companies showing consistently high value added performance with a high market capitalisation to value added (MC/VA) ratio, which represents expectation of future value.
5. The Scoreboard doesn't say that value added is the only or best measure of company performance, or that it is a complete set of value added information - it only includes the largest companies.
