UK companies beat European rivals in wealth creation efficiency: Report

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According to the 2008 Value Added Scoreboard released by DIUS, the top 185 UK companies are more efficient at creating value or wealth, than their European counterparts.

Value added (VA) is defined as the difference between sales and the cost of bought-in materials, components and services.

The annual Scoreboard uses VA 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.

The US and Japanese companies were not included in the Scoreboard because they did not give enough information in their annual reports to allow value added to be calculated.

The Scoreboard, which lists the VA, or wealth created, by the top 750 European companies and the top 800 UK companies, reveals that the VA by the UK 800 has increased by 9.6 percent in the last year amounting to some £646.3 billion, whereas the European 750 companies (including the 185 UK companies which added the most value in the last year) generated VA of £2,027 billion, increasing by 11.7 percent over the last year. This was concentrated in three countries, the report said: the UK, France and Germany.

The top ten of the UK's 39 sectors contributed 62 percent to the country's total, with the largest three areas being banking (value added worth £75.7 billion), oil and gas production (value added worth £64.8 billion), and mining (value added worth £34.8 billion), the report noted.

Of the top 750 European companies, the report showed, 24.7 percent were from the UK, 14.1 percent from Germany and 13.1 percent from France.

The report also shows that almost 23 percent of all European VA came from UK companies. In second place was Germany (19.7 percent) and in third place, France (18.5 percent).

While Royal Dutch Shell, BP, HSBC, Vodafone and the Royal Bank of Scotland (RBS) were the UK's top five wealth generators, the leading non-UK companies were DaimlerChrysler (ranked 2nd), French oil firm Total (3rd) and Russian energy giant Gazprom (5th).

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