A vision for growth - Business outlook barometer - Romania 2016

A vision for growth

Business outlook barometer

Romania 2016

What is “A vision for growth”?

“A vision for growth” is a survey that explores the perceptions of top executives from major companies operating in

Romania regarding the business outlook for 2016. In this edition we also provide comparative data with the similar

surveys conducted at the beginning of 2014 and 2015.

This EY report is based on an online survey of 421 C-suite level executives from companies in various sectors,

who provided a perspective on how the domestic business environment is perceived at the beginning of 2016.

5 main

findings

1

In 2016 companies seem to measure their success by a combination of customer satisfaction, financial results, and market

share. “Customer satisfaction” goes up from 78% in 2014 and 72% in 2015 to 83% in 2016. “Financial results” have landed

on the plateau of 68% in 2016 after a 28% fall in 2015, from 96% in 2014. Compared with 2014 (63%) and 2015 (55%),

“market share” goes marginally up from 55% to 56%, while “brand awareness” is on the rise from 41% up to 51%.

According to the results of our survey, 41% of respondent companies foresee a significant growth of +10% to +30%

of turnover in 2016, while 32% expect a growth rate of +5% to +10% in 2016. The forecasts regarding the evolution

of the profit in 2016 are optimistic as well, since 28% of the respondents profit growth rates in the interval from +5%

to +10% and 32% expect the profit of their company to grow between +10% to over 30%.

20% of respondents expect no increase in the employees number in 2016. At the same time, 35% of companies

say they expect their staff to increase by +1% to +5% this year. Moreover, 36% of respondents expect the

number of their employees to grow between +5% and over 30%. These percentages lead us to believe that the

projected expansion of businesses in 2016 commensurate with the optimism of the economic growth.

In 2016, most companies (44%) expect salaries to go up between +1% to +5%, followed by 31% of companies which

expect salaries to go up by +5% to +10% and 12% of companies which expect higher increases of +10% to more than

20%. Still 13% of companies expect no changes in the salary level in 2016.

25% of respondents say they have earmarked investment growth rates of +1% to +5% in 2016 compared to 17% in

H2 2015, followed by 45% who say will increase investments by +5% to +20% vs. 42% in H2 2015, and 11% who

foresees their investments going up between 20% and exceeding 30% in 2016, compared with 17% at in second

half of last year.

2

3

4

5

See here the previous edition of the survey from February 2015.

http://www.slideshare.net/EYRomania20/ey-a-vision-for-growth-2015?qid=25fcd805-6330-4b82-96e4-4f5ee66a73a6&v=&b=&from_search=8

A vision for growthBusiness outlook barometer

Romania 2016

Our survey reflects the increased focus

companies have on sustainable growth in a

business environment which, in spite of the

prospects for a positive economic evolution,

brings both challenges and opportunities.

Bogdan Ion, Managing Partner, EY Romania

Which is your confidence level in the current economic direction of the country? (single answer)

Question 1 – Overall responses

At the beginning of 2016, 63% of the respondent companies show confidence in the current economic direction of the country,

with 13% of them being “very confident” and 2% being “extremely confident”. This majority of responses illustrates the

background of positive business outlook for the current year.

Total responses: 421

(Skipped this questions: 0)


5%

32%

48%

13%

2%

0% 10% 20% 30% 40% 50% 60%

Not at all confident

Somehow confident

Confident

Very confident

Extremely confident

http://www.slideshare.net/EYRomania20/a-vision-for-growth-romanian-business-outlook-baromter-2015

Please indicate the main three elements that you think will define success in your industry? (only three answers)

Question 2 – A 3-year perspective

In 2016 companies seem to measure their success by a combination of customer satisfaction, financial results, and market share.

“Customer satisfaction” goes up from 78% in 2014 and 72% in 2015 to 83% in 2016. “Financial results” have landed on the plateau of

68% in 2016 after a 28% fall in 2015, from 96% in 2014. Compared with 2014 (63%) and 2015 (55%), “market share” goes marginally

up from 55% to 56%, while “brand awareness” is on the rise from 41% up to 51%.


78%

96%

63%

39%

7% 7% 9%

72%68%

55%

41%

15%

7% 6% 4%

83%

68%

56%51%

26%

13%

4%1%

0%

20%

40%

60%

80%

100%

120%

Customersatisfaction

Financialresults

Market share Brandawareness

Number ofyears on the

market

Number ofemployees

Going public(IPO)

Other

2014 2015 2016


How much you expect your turnover to grow in 2016? (single answer)


The outlook for turnover growth is somehow in line with the positive economic growth for 2016. According to the results of our

survey, 41% of respondent companies foresee a significant growth of +10% to +30% of turnover in 2016, while 32% expect a

growth rate of +5% to +10% in 2016.




2%

3%

2%

20%

32%

23%

12%

6%

0% 5% 10% 15% 20% 25% 30% 35%

Exceeding -30%

-20% to -30%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%



Question 3 – By industry sector

According to responses received to fist half-year edition of the survey for 2016, the following are the top 3 industries that

foresee turnover growth rates exceeding 30%: pharmaceuticals industry (17%), IT (16%), and construction/real estate (13%).


Industry sector

Less

than

-30%

-20%

to

-30%

-10%

to

-20%

-5%

to

-10%

-1%

to

-5%

0%

+1%

to

+5%

+5%

to

+10%

+10%

to

+20%

+20%

to

+30%

Over

30%

Industry / Manufacturing 5% 2% 5% 24% 26% 27% 9% 2%

Retail & Wholesale Trade 2% 20% 46% 12% 14% 6%

Services 3% 3% 3% 10% 50% 13% 18%

Information Technology (IT) 3% 13% 22% 30% 16% 16%

Food & Beverages / Agriculture 21% 31% 21% 21% 6%

Construction / Real Estate 6% 9% 13% 22% 31% 6% 13%

Power & Energy 10% 14% 19% 29% 10% 14% 4%

Transportation 5% 26% 48% 16% 5%

Pharmaceuticals / Healthcare 16% 25% 17% 25% 17%

Telecom 9% 9% 9% 18% 37% 18%




These are the industry sectors which received the largest number of answers per industry. Therefore, we show the distribution

of the answers by these six industries for the questions which regard the expected evolution of turnover, profit, investments,

number of employees, salary level for 2016.


5%

2%

5%

24%

26%

27%

9%

2%

0% 10% 20% 30%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

Industry / Manufacturing

2%

20%

46%

12%

14%

6%

0% 20% 40% 60%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

Retail & Wholesale Trade

3%

3%

3%

10%

50%

13%

18%

0% 20% 40% 60%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

Services

3%

13%

22%

30%

16%

16%

0% 10% 20% 30% 40%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

Information Technology

21%

31%

21%

21%

6%

0% 20% 40%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding…

Food & Beverages / Agriculture

6%

9%

13%

22%

0%

13%

0% 10% 20% 30%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

Construction / Real Estate

Not shown intervals received zero answers.



Question 3 – By revenues

As shown in this chart, the large companies (those with revenue levels between 50 and 100 M EUR+) are more pessimistic

regarding the evolution of their turnover in 2016. Also interesting are the results shown for SME’s with revenue levels of under

50M EUR which appear to have optimistic prospects for turnover growth in 2016.




33%

20%

11%

11%

15%

10%

12%

8%

34%

10%

14%

8%

6%

8%

8%

11%

20%

34%

29%

25%

34%

30%

19%

40%

22%

36%

38%

37%

36%

34%

22%

10%

33%

10%

14%

13%

14%

31%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

100 M EUR+

50 - 100 M EUR

10 - 50 M EUR

1 - 10 M EUR

Less than 1 M EUR



How much you expect your turnover to grow? (single answer)


In the past 3 years the most important shift in the outlook for turnover growth was from the interval of +1% to +5% which

reached 37% of the responses in 2014, to the interval of +10% to +20% which reaches 35% of the responses in 2016.


2%

2%

20%

32%

23%

12%

6%

2%

1%

3%

4%

17%

26%

35%

7%

2%

3%

37%

30%

19%

2%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Exceeding -30%

-20% to -30%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

2014 2015 2016


How much you expect your profit to grow in 2016?(single answer)


The forecasts regarding the evolution of the profit in 2016 are optimistic as well, since 28% of the respondents expect profit

growth rates in the interval from +5% to +10% and 32% expect the profit of their company to grow between +10% to over 30%.




2%

2%

7%

29%

28%

18%

10%

4%

0% 5% 10% 15% 20% 25% 30% 35%

Exceeding -30%

-20% to -30%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%




In 2016, 12% of respondents from food & beverages/agriculture industry, followed by 11% of respondents from IT industry

foresee a significant increase of over 30% for their company’s profit, in contrast with 19% of the respondents from the power &

energy industry expect a profit decrease of -5% to -10%.


Industry sector

Less

than

-30%

-20%

to

-30%

-10%

to

-20%

-5%

to

-10%

-1%

to

-5%

0%

+1%

to

+5%

+5%

to

+10%

+10%

to

+20%

+20%

to

+30%

Over

30%


Retail & Wholesale Trade 2% 40% 24% 24% 10%

Services 2% 11% 24% 24% 24% 10% 5%


Food & Beverages / Agriculture 3% 18% 46% 12% 9% 12%

Construction / Real Estate 6% 10% 28% 31% 19% 6%

Power & Energy 19% 5% 29% 14% 14% 5% 9% 5%

Transportation 5% 37% 37% 21%

Pharmaceuticals / Healthcare 42% 8% 33% 17%

Telecom 18% 28% 9% 27% 18%




of answers by these six industries for the questions which regard expected evolution of turnover, profit, investments, number of

employees, salary level for 2016.



1%

1%

9%

30%

31%

16%

7%

5%

0% 20% 40% 60%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%


2%

40%

24%

24%

10%

0% 20% 40% 60%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%


2%

11%

24%

24%

24%

10%

5%

0% 20% 40% 60%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

Services

5%

19%

27%

25%

13%

11%

0% 20% 40% 60%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%


3%

18%

46%

12%

9%

12%

0% 20% 40% 60%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%


6%

10%

28%

31%

19%

6%

0% 20% 40% 60%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%






Companies with revenue level of 10-50 M EUR are more optimistic regarding the envisaged profit growth rate for 2016. On the

reserved side are the large companies with revenue levels of 100 M EUR+, which have a large percentage distribution across

the negative level of -5% to -10% interval of the scale.




50%

13%

12%

12%

14%

13%

6%

17%

13%

3%

11%

11%

5%

13%

17%

38%

30%

30%

29%

27%

21%

28%

37%

33%

37%

36%

38%

33%

39%

16%

12%

21%

10%

12%

16%

20%

27%

0% 20% 40% 60% 80% 100%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

100 M EUR+

50 - 100 M EUR

10 - 50 M EUR

1 - 10 M EUR

Less than 1 M EUR



How much you expect your profit to grow? (single answer)


In the past 3 years, companies have reduced their expectations of profit levels exceeding 30%, from 7% in 2014, to 4% in 2016. Still,

the following interval of positive profit growth rates (+20% to +30%) has seen significant increases, but there were slight negative

fluctuation of the percentages in the interval +10% to +20% and +1% to +5%. Also noteworthy is the constant lowering of percentages

of the number of companies expecting 0% profit growth rate.


2%

2%

7%

29%

28%

18%

10%

4%

1%

3%

1%

8%

28%

25%

20%

5%

9%

2%

6%

10%

30%

21%

19%

7%

7%

0% 5% 10% 15% 20% 25% 30% 35%

Exceeding -30%

-20% to -30%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

2014 2015 2016


20% of respondents expect no increase in the employees number in 2016. At the same time, 35% of companies say they expect their

staff to increase by +1% to +5% this year. Moreover, 36% of respondents expect the number of their employees to grow between +5%

and over 30%. These percentages lead us to believe that the projected expansion of businesses in 2016 commensurate with the

optimism of the economic growth.

How much you expect your number of employees to grow in 2016? (single answer)





1%

2%

6%

20%

35%

19%

10%

4%

3%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Exceeding -30%

-20% to -30%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%



Telecom (45%) and IT (32%) are the ones expecting major increases, between +10% and over 30%, in the number of

employees in 2016. However, all the industries foresee an increase in the number of employees of +1% to +10%, this being the

bracket where services, construction/real estate and transportation sectors show the highest percentages.

How much you expect your number of employeesto grow in 2016? (single answer)


Industry sector

Less

than

-30%

-20%

to

-30%

-10%

to

-20%

-5%

to

-10%

-1%

to

-5%

0%

+1%

to

+5%

+5%

to

+10%

+10%

to

+20%

+20%

to

+30%

Over

30%


Retail & Wholesale Trade 6% 28% 42% 14% 4% 4% 2%

Services 5% 5% 40% 26% 11% 5% 5%

Information Technology (IT) 3% 19% 27% 19% 21% 8% 3%

Food & Beverages / Agriculture 3% 6% 15% 18% 21% 24% 3% 3% 7%

Construction / Real Estate 3% 25% 38% 28% 6%

Power & Energy 14% 9% 9% 29% 19% 5% 5% 5% 5%

Transportation 10% 11% 53% 5% 11% 5% 5%

Pharmaceuticals / Healthcare 8% 33% 34% 17% 8%

Telecom 28% 18% 9% 27% 18%





How much you expect your number of employees to grow in 2016? (single answer)



2%

7%

18%

35%

22%

13%

2%

1%

0% 20% 40% 60%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%


6%

28%

42%

14%

4%

4%

2%

0% 20% 40% 60%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%


5%

5%

40%

26%

11%

5%

5%

0 0.2 0.4 0.6

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

Services

3%

19%

27%

19%

21%

8%

3%

0% 20% 40% 60%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%


3%

6%

15%

18%

21%

24%

3%

3%

7%

0% 20% 40% 60%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%


3%

25%

38%

28%

6%

0% 20% 40% 60%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%




Quite interestingly, the companies which have revenue levels between 50-100 M EUR show very conservative prospects

regarding staff growth in 2016 or even expect important decreases in their number of employees. The companies with the most

positive prospects regarding the number of employees increases are those with revenue levels between 1-10 M EUR.

How much you expect your number of employeesto grow in 2016? (single answer)





67%

25%

32%

12%

8%

13%

12%

13%

8%

50%

16%

12%

6%

4%

10%

12%

16%

33%

13%

28%

23%

31%

31%

27%

31%

15%

12%

16%

40%

38%

40%

34%

31%

38%

8%

13%

17%

12%

17%

13%

23%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

100 M EUR+

50 - 100 M EUR

10 - 50 M EUR

1 - 10 M EUR

Less than 1 M EUR



The 3-year perspective on companies’ expectations regarding the evolution of their number of employees show a steep

decrease of percentages for 0% staff number growth, from 37% in 2014 to 20% in 2015 and 2016. The corresponding increase

is seen in the interval +1% to +5% (30% in 2014, 35% in 2016) and in the interval +5% to +10% (5% in 2014, 19% in 2016).

How much you expect your number of employeesto grow? (single answer)



1%

2%

6%

20%

35%

19%

10%

3%

2%

3%

5%

36%

14%

14%

4%

5%

9%

37%

30%

5%

9%

5%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Exceeding -30%

-20% to -30%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

2014 2015 2016


How much you expect your investments to grow in 2016?(single answer)


25% of respondents say they have earmarked investment growth rates of +1% to +5% in 2016 compared to 17% in H2 2015,

followed by 45% who say will increase investments by +5% to +20% vs. 42% in H2 2015, and 11% who foresees their

investments going up between 20% and exceeding 30% in 2016, compared with 17% at in second half of last year.




1%

1%

1%

1%

15%

25%

24%

21%

6%

5%

0% 5% 10% 15% 20% 25% 30%

Exceeding -30%

-20% to -30%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%




The table shows that there are many industries which have earmarked significant investment growth rates for 2016. Moreover,

there are industries such as pharmaceuticals/healthcare, telecommunications, and IT which say their investments for 2016 will

go up by +20% to over 30%.


Industry sector

Less

than

-30%

-20%

to

-30%

-10%

to

-20%

-5%

to

-10%

-1%

to

-5%

0%

+1%

to

+5%

+5%

to

+10%

+10%

to

+20%

+20%

to

+30%

Over

30%

Industry / Manufacturing 1% 1% 1% 15% 23% 27% 21% 5% 6%

Retail & Wholesale Trade 2% 2% 10% 24% 28% 26% 4% 4%

Services 25% 27% 20% 20% 5% 3%


Food & Beverages / Agriculture 3% 7% 18% 33% 24% 6% 9%

Construction / Real Estate 3% 16% 34% 22% 12% 10% 3%

Power & Energy 10% 5% 5% 28% 19% 9% 19% 5%


Pharmaceuticals / Healthcare 8% 31% 8% 31% 15% 7%

Telecom 10% 10% 40% 20% 20%








1%

1%

1%15%

23%27%

21%5%6%

0% 20% 40% 60%

Exceeding -30%-20% to -30%-10% to -20%

-5% to -10%-1% to -5%

0%+1% to +5%

+5% to +10%+10% to +20%+20% to +30%

Exceeding 30%


2%2%

10%24%

28%26%

4%4%

0% 20% 40% 60%

Exceeding -30%-20% to -30%-10% to -20%

-5% to -10%-1% to -5%

0%+1% to +5%

+5% to +10%+10% to +20%+20% to +30%

Exceeding 30%


25%27%

20%20%

5%3%

0% 20% 40% 60%

Exceeding -30%-20% to -30%-10% to -20%

-5% to -10%-1% to -5%

0%+1% to +5%

+5% to +10%+10% to +20%+20% to +30%

Exceeding 30%

Services

8%22%22%

30%8%10%

0% 20% 40% 60%

Exceeding -30%-20% to -30%-10% to -20%

-5% to -10%-1% to -5%

0%+1% to +5%

+5% to +10%+10% to +20%+20% to +30%

Exceeding 30%


3%

7%18%

33%24%

6%9%

0% 20% 40% 60%

Exceeding -30%-20% to -30%-10% to -20%

-5% to -10%-1% to -5%

0%+1% to +5%

+5% to +10%+10% to +20%+20% to +30%

Exceeding 30%


3%16%

34%22%

12%10%

3%

0% 20% 40% 60%

Exceeding -30%-20% to -30%-10% to -20%

-5% to -10%-1% to -5%

0%+1% to +5%

+5% to +10%+10% to +20%+20% to +30%

Exceeding 30%





According to the findings of the current edition of the report, respondents from companies with revenue levels of 1-10 M EUR

are quite positive and expect their investments to go up in 2016, followed by companies with revenue levels of 10-50 M EUR.

The most reserved outlook regarding investments is shown by companies with revenue levels of 50-100 M EUR.




33%

67%

33%

10%

11%

12%

16%

9%

13%

20%

33%

7%

14%

5%

11%

4%

4%

40%

32%

32%

25%

28%

26%

26%

40%

33%

34%

36%

33%

38%

37%

52%

26%

34%

33%

15%

10%

20%

8%

9%

31%

0% 20% 40% 60% 80% 100%

Exceeding -30%

-20% to -30%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

100 M EUR+

50 - 100 M EUR

10 - 50 M EUR

1 - 10 M EUR

Less than 1 M EUR


How much you expect your investments to grow? (single answer)


The chart shows that only 15% of companies expect no increase in investments in 2016 compared to 19% in the previous year.

Also, the most important increase of +8% is seen in the number of companies which expect their investments to grow by +1%

to +5% in 2016, whilst there is a significant decrease in the number of companies which expect investments to grow by +30%.


1%

1%

1%

1%

15%

25%

24%

21%

6%

5%

1%

2%

19%

17%

23%

19%

7%

10%

0% 5% 10% 15% 20% 25% 30%

Exceeding -30%

-20% to -30%

-10% to -20%

-5% to -10%

-1% to -5%

0%

+1% to +5%

+5% to +10%

+10% to +20%

+20% to +30%

Exceeding 30%

2015 2016


In 2016, most companies (44%) expect salaries to go up between +1% to +5%, followed by 31% of companies which expect

salaries to go up by +5% to +10% and 12% of companies which expect higher increases of +10% to more than 20%. Still 13%

of companies expect no changes in the salary level in 2016.

How much you expect the salary level in your company to grow in 2016? (single answer)





13%

44%

31%

10%

2%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Exceeding -20%

-10% la -20%

-5% la -10%

-1% la -5%

0%

+1% la +5%

+5% la +10%

+10% la +20%

Exceeding 20%



No less than 18% of companies in retail & wholesale trade expect major increases in salary level of +10% to +20%. However,

all the industries foresee an increase in the salary level of +1% to +5%, the interval where telecommunications, food &

beverages / agriculture, and retail & wholesale trade industry sectors show the highest percentages.



Industry sector

Less

than

-20%

-10%

to

-20%

-5%

to

-10%

-1%

to

-5%

0%

+1%

to

+5%

+5%

to

+10%

+10%

to

+20%

Over

20%

Industry / Manufacturing 10% 42% 36% 12%

Retail & Wholesale Trade 8% 48% 26% 16% 2%

Services 21% 34% 32% 10% 3%

Information Technology (IT) 11% 41% 35% 11% 2%

Food & Beverages / Agriculture 6% 52% 33% 9%

Construction / Real Estate 19% 44% 31% 6%

Power & Energy 48% 43% 5% 4%


Pharmaceuticals / Healthcare 17% 42% 25% 16%

Telecom 9% 64% 18% 9%








10%

42%

36%

12%

0% 20% 40% 60%

0%

+1% to +5%

+5% to +10%

+10% to +20%

Exceeding 20%


8%

48%

26%

16%

2%

0% 20% 40% 60%

0%

+1% to +5%

+5% to +10%

+10% to +20%

Exceeding 20%


21%

34%

32%

10%

3%

0% 20% 40% 60%

0%

+1% to +5%

+5% to +10%

+10% to +20%

Exceeding 20%

Services

11%

41%

35%

11%

2%

0% 20% 40% 60%

0%

+1% to +5%

+5% to +10%

+10% to +20%

Exceeding 20%


6%

52%

33%

9%

0% 50% 100%

0%

+1% to +5%

+5% to +10%

+10% to +20%

Exceeding 20%


19%

44%

31%

6%

0% 20% 40% 60%

0%

+1% to +5%

+5% to +10%

+10% to +20%

Exceeding 20%




Depending on the industry sector there are SMEs of 1-10 M EUR that seems to be on the optimistic side with high percentages

of expected salary growth rates, while the other companies are more conservative regarding the salary growth rates in 2016.






14%

14%

11%

10%

18%

10%

6%

7%

14%

25%

31%

27%

21%

14%

29%

34%

41%

33%

43%

14%

11%

15%

29%

29%

0% 20% 40% 60% 80% 100%

0%

+1% to +5%

+5% to +10%

+10% to +20%

Exceeding 20%

100 M EUR+

50 - 100 M EUR

10 - 50 M EUR

1 - 10 M EUR

Less than 1 M EUR



Besides the important decrease in the number of companies which expected no salary changes, from 19% in 2014 to 13% in 2015,

there is a even more significant decrease in the number of companies expecting only a 1-5% salary growth rate, from 60% in 2014 to

44% in 2016. The corresponding increase is shown in the number of companies earmarking salary increases of +5% to over 20% both

in 2015 and 2016.

How much you expect the salary level in your company to grow? (single answer)



13%

44%

31%

10%

2%

1%

2%

11%

49%

30%

6%

19%

60%

19%

2%

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7

Exceeding -20%

-10% la -20%

-5% la -10%

-1% la -5%

0%

+1% la +5%

+5% la +10%

+10% la +20%

Exceeding 20%

2014 2015 2016


The level of confidence in industry growth consolidates in 2016, with 42% of “somewhat confident” responses vs 34% in 2015,

and 30% in 2014. The percentage of “very confident” responses increases to 17% in 2016, from 15% in 2015 and 7% in 2014.

At the same time, there is a 5% increase in the “not at all confident” responses, from 7% in 2015 to 12% in 2016.

How confident do you feel regarding the growth of your industry, for the next 12 months? (single answer)



12%

29%

42%

17%

7%

43%

34%

15%

14%

49%

30%

7%

0% 10% 20% 30% 40% 50% 60%


Slightly confident

Somewhat confident

Very confident

2014 2015 2016


In 2016, the top 3 industries “not at all confident” regarding the sector’s growth potential are: power & energy (38%), telecom

(18%), and chemicals (17%), while the top 3 “very confident” industries are: R&D / New technology (50%), IT (36%), and

tourism (27%).

How confident do you feel regarding the growth of your industry, for the next 12 months? (single answer)


Total Respondents 399

(Skipped this question: 22)


17%3%

10% 11% 6% 8%

38%

17% 14% 11%18% 13% 12%

42%

36%30% 23%

17%

33%

19%50%

50%36%

25%27% 40%

37%

33%

41%

42% 37% 51%

42%

42%

43%16%

40%

50% 37% 20% 50%43%

19% 23%15%

36%

17% 17%

50%

10% 14% 18%27%

13% 12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Not at all confident Slightly confident Somewhat confident Very confident


The number of respondents that are slightly confident in the growth of their company drop to 20% in 2016, from 45% in 2015,

and 23% in 2014. At the same time, the percentage of those “somewhat confident” goes up from 19% in 2015 to 42% currently,

and the percentage of “very confident” responses goes up from 32% in 2015 to 25% currently.

How confident do you feel regarding the growth of your company for the next 12 months? (single answer)



20%

42%

35%

3%

45%

19%

32%

23%

37%

40%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%


Slightly confident

Somewhat confident

Very confident

2014 2015 2016


In 2016, the top 3 industries “not at all confident” regarding the company’s growth potential are: power & energy (14%), tourism

(13%), and telecom (10%), while the top 3 “very confident” industries are: food & beverage / agriculture (57%), chemicals

(50%), publishing & printing (50%) and R&D / New technology (50%).

How confident do you feel regarding the growth of your company for the next 12 months? (single answer)





8% 3% 4%14%

4% 10% 13%8% 16%

10%

21%14% 8%

33%

17%33% 20% 28%

20% 13%24% 21%

34%

52%

33%

39%53%

50%

34%

33%17% 41% 39% 30% 40% 41%

61%

50%

29%

57%

36% 33%42%

19%

50% 50%35% 33%

40% 34% 35%

18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Not at all confident Slightly confident Somewhat confident Very confident


Low cost remains the main strength of the respondents’ competition in the local market despite decreasing from 41% in 2015 to

33% in 2016. Brand awareness (trust) decreases from 37% in 2014, to 29% in 2015 and up to 30% in 2016, and is now on the

second place. A spectacular increase is seen in Partnerships up to 17% in 2016 from only 9% in 2014 and 2015.

Please select the main strength of your competition in the local market (Romania). (single answer)



26%

37%

9%

14%

7% 7%

41%

29%

9%

13%

5%3%

33%30%

17%14%

6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Low cost Strong brandawareness (trust)

Partnerships Distributionchannels

R&D Other

2014 2015 2016


Low cost is still seen as a the main strength of the competition across most of the industry sectors, except for strong brand

awareness in pharmaceuticals / healthcare, publishing & printing, services, and tourism industries, as it is partnerships for the

power & energy sector and R&D in case of new technology sector.

Please select the main strength of your competition in the local market (Romania). (single answer)





3%

37%

13% 17%25%

5%17%

28%

6%18% 20%

6% 6%

33%

52%

20%

31%33% 17%

33%33%

42%

28%

37% 27%44%

36%

8%

26% 20%

17% 3% 25% 38%

17%

8%

17%

27%

20%28%

12%17%

3%3%

7% 17%

5%

50%

3%

9%

3%

42%

16% 20%32% 30% 33%

19%

50%

33%22%

46%

9%

33%22%

43%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Distribution channels Low cost Partnerships R&D Strong brand awareness (trust)


To what extent do you expect your customers' demand to change in the next 12 months? (single answer)


A remarkable 62% of respondents expect their customers’ demand to “somewhat increase” in 2016 compared to only 3%

which expect it to “increase dramatically”. Just 5% believe customers’ demand will “somewhat decrease”, while 30% expect it

to stay the same.




0%

5%

30%

62%

3%

0% 10% 20% 30% 40% 50% 60% 70%

Decrease dramatically

Somewhat decrease

Stay the same

Somewhat increase

Increase dramatically


To what extent do you expect your customers' demand to change in the next 12 months? (single answer)


There is only one industry sector which expect their customers’ demand to decrease dramatically in 2016, namely services

industry sector. The industries that have the highest percentage of respondents who say their customers’ demand will increase

dramatically in 2016 are pharmaceuticals / healthcare and R&D / New technology industries.




3%

3%

4%

3%

17%

5%

17%

2%

3%

64%

58%

61%

67%

60%

75%

42%

57%

17%

67%

60%

58%

64%

80%

67%

21%

42%

39%

27%

33%

17%

41%

33%

50%

16%

32%

28%

27%

20%

33%

12%

3%

3%

5%

5%

33%

6%

8%

9%

3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Other

Chemicals





Pharmaceuticals / Healthcare

Power / Energy / Mining

Publishing & Printing

R&D / New Technology


Services

Telecommunication / Media

Tourism

Transportation

Increase dramatically Somewhat increase Stay the same Somewhat decrease Decrease dramatically


In your opinion, which is the most important obstacle entrepreneurs and managers have to overcome to develop the business? (multiple answers)


According to the respondents to the current edition of the survey, the most important obstacle entrepreneurs and managers

have to overcome to develop the business is bureaucracy (54%) and uncertainty (53%), followed by lack of political stability

and public policy vision (51%), and taxation level (49%).




15%

25%

30%

37%

49%

51%

53%

54%

0% 10% 20% 30% 40% 50% 60%

The state of the local economy

Difficult access to finance

Lack of entrepreneurial education

The state of the national economy

Taxation level

Lack of political stability and public policy vision

Uncertainty

Bureaucracy


On a scale from 1 to 5, please indicate to what extend the following changes in legislation will impact your business in 2016?(1 - lowest impact, 5 - highest impact) (one answer for each option)

Question 13 – By intensity of impact

Respondents say that the following changes in legislation will have the highest impact & high impact in their businesses going

forward: reinvested profit tax exemption (64%), decrease of tax on dividends (58%), and reduction to 20% of VAT (55%).

Total Respondențs: 348

(Skipped this question: 73


17%

17%

20%

52%

42%

19%

25%

17%

19%

25%

18%

20%

23%

26%

32%

27%

25%

14%

18%

23%

34%

17%

25%

23%

10%

14%

23%

11%

17%

12%

7%

6%

6%

12%

4%

0% 20% 40% 60% 80% 100%

Other

Reinvested profit tax exemption

Reduction to 20% of VAT

Change of the tax system for freelancers (PFA/PFI)

Relaxation of taxation regime for micro-companies

Decrease of tax on dividends rate

New developments in the international taxation (BEPS,FATCA, CRS)

Lowest impact (1) (2) (3) (4) Highest impact (5)

58%

55%

64%


Please name other legislative changes for your business operation you expect in 2016?


The number one legislative changes for their business operation that respondents expect in 2015 is the New Fiscal Code (20

responses), followed by salary tax decrease (18 responses), and amended Labor Laws (17 responses).


(Skipped this question: 212


Legislative changes mentioned

by respondents

No. of

answers

Decrease of salary taxes 33

Fewer taxes 28

Labor legislation 24

Corporate income tax decrease 18

Excises legislation 17

Other 16

Simplified access to EU funds 16

Laws to support SMEs 14

Public acquisition law 11

Less bureaucracy 11

Energy laws 9

Tax exemption for the reinvested profit 9

Insolvency law 3

Top 10 legislative changes (%)

18%

15%

13%

10%

9%

9%

9%

7%

5%

5%

0% 5% 10% 15% 20%

Decrease of salary taxes

Fewer taxes

Labour legislation

Corporate income tax decrease

Excises legislation

Other

Simplified access to EU funds

Laws to support SMEs

Public acquisition law

Less bureaucracy


On a scale from 1 to 5, please rate the importance of innovation for the successful performance of your company? (1 - lowest impact, 5 - highest impact)(single answer)


Innovation is seen as having a very high impact & high impact in the successful performance of the company by 74% of

respondents in 2016. Only of companies see innovation as having a “medium impact”, and even fewer (7%) consider

innovation of “low impact”, while just 1% say innovation is of “no impact” on their business agenda.




1%

7%

18%

39%

35%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

No impact

Low impact

Medium impact

High impact

Very high impact


On a scale from 1 to 5, please rate the importance of innovation for the successful performance of your company? (1 - lowest impact, 5 - highest impact)(single answer)


There are very few industry sectors where innovation is seen as having the lowest impact for successful performance. These

are: transportation (7%) and services (6%). The industries where innovation has the highest impact are pharmaceuticals /

healthcare (67%), R&D / New technology (60%), and IT (52%).

Total Respondents: 348



43%

18%

19%

46%

38%

52%

67%

26%

20%

60%

30%

23%

14%

33%

27%

37%

55%

50%

36%

44%

33%

33%

42%

60%

40%

40%

37%

43%

25%

20%

10%

9%

19%

14%

12%

15%

32%

20%

21%

26%

29%

34%

40%

3%

18%

12%

4%

6%

9%

8%

14%

8%

7%

7%

6%

6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Other

Chemicals










Services


Tourism

Transportation

Highest impact (5) (4) (3) (2) Lowest impact (1)


What are the main drivers for innovation in your company? (multiple answers)


The most important driver for innovation is efficiency (66%), followed by performance (62%), people (51%), the need to beat

competition (48%) and cost (47%). Unfortunately, the lowest percentages are recorded by: environment preservation (13%),

technical uncertainty (10%), and diminishing resources (6%).




1%

6%

10%

13%

23%

29%

34%

47%

48%

51%

62%

66%

0% 10% 20% 30% 40% 50% 60% 70%

Other

Fewer resources

Technical uncertainty

Environment preservation

Increased production

Market share

Change

Cost

Competition

People

Performance

Efficiency


What are the main drivers for innovation in your company? (multiple answers)


The most important driver for innovation in publishing & printing sector is lack of people (36%), in R&D / New technology is

performance (21%), in services sector is also performance (20%), and in retail & wholesale trade is efficiency (19%).




1%

5%

3%

2%

2%

3%

2%

4%

3%

7%

5%

9%

13%

7%

8%

8%

12%

8%

9%

16%

9%

7%

10%

10%

5%

11%

11%

14%

15%

12%

11%

16%

10%

15%

5%

13%

11%

7%

10%

14%

2%

9%

4%

9%

12%

2%

4%

6%

7%

5%

1%

5%

7%

7%

9%

4%

5%

9%

7%

5%

4%

10%

8%

8%

7%

13%

8%

16%

18%

17%

16%

15%

19%

16%

17%

14%

16%

19%

19%

16%

15%

18%

13%

7%

14%

11%

12%

12%

20%

16%

14%

11%

14%

8%

13%

12%

14%

17%

13%

17%

10%

16%

18%

12%

14%

14%

21%

18%

20%

17%

18%

13%

1%

2%

1%

2%

2%

3%

4%

5%

2%

7%

2%

5%

5%

4%

3%

4%

1%

8%

7%

2%

1%

3%

3%

16%

18%

12%

14%

9%

15%

8%

8%

36%

21%

14%

15%

13%

10%

13%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Other

Chemicals










Services


Tourism

Transportation

Technical uncertainty Change Cost Increased production

Market share Efficiency Competition Performance

Fewer resources Environment preservation People All of the above


Which of the following best describe your company's primary strategy for financing its investments in the past 12 months? (single answer)


In 2015 companies used mainly intercompany loans, own resources, or reinvested profit to finance investments (43%),

followed by bank loans (34%). Compared to 2014, there is a 9% increase in intercompany loans and own resources and a 10%

decrease in bank loans.




2%

3%

6%

12%

34%

43%

0% 10% 20% 30% 40% 50%

Other

Our company used venture capitalto finance its investments

Our company used share capitalincrease to finance its investments

No investments

Our company used bank loans tofinance its investments

Our company used intercompanyloans, own resources, or reinvested

profit to finance its investments

2016

2%

3%

6%

12%

34%

43%

12%

23%

5%

42%

18%

2%

10%

54%

34%

0% 10% 20% 30% 40% 50% 60%

Other

Our company used venture capitalto finance its investments

Our company used share capitalincrease to finance its investments

No investments

Our company used bank loans tofinance its investments

Our company used intercompanyloans, own resources, or reinvested

profit to finance its investments

2014 2015 2016


Which of the following best describe your company's primary strategy for financing its investments in the past 12 months? (single answer)


In 2015 companies from all industries used mainly intercompany loans, own resources, or reinvested profit to finance investments,

followed by bank loans. Financing by share capital increase appear in the chart only at companies from publishing & printing (20%)

and pharmaceuticals / healthcare (17%). No investments are shown mainly in services (31%) and trade (21%) industry sectors.




27%

64%

38%

39%

37%

36%

33%

26%

20%

20%

35%

31%

29%

17%

33%

43%

18%

50%

43%

45%

52%

50%

48%

20%

80%

37%

23%

71%

67%

47%

7%

7%

11%

3%

17%

5%

20%

5%

9%

3%

9%4%

4%

3%

3%

5%

2%

7%

17%

9%

8%

7%

1%

3%

16%

20%

21%

31%

16%

13%

3%

3%

3%

20%

6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Other

Chemicals










Services


Tourism

Transportation

Our company used bank loans to finance its investments

Our company used intercompany loans, own resources, or reinvested profit to finance its investments

Our company used share capital increase to finance its investments

Our company used venture capital to finance its investments

No investments

Other


Which the following best describes your company's preferred strategy for financing of investments for the following 12 months? (single answer)


Intercompany loans, own resources or reinvested profit will remain companies’ preferred strategy to finance investments in

2016, according to 46% of respondents, up from 13% in 2015. The second preferred financing source will be bank loans (34%),

down from 53% in 2015.




2%

2%

6%

10%

34%

46%

0% 10% 20% 30% 40% 50%

Other

Venture capital

Share capital increase

No investments

Bank loans

Intercompany loans, ownresources, or reinvested profit

2016

2%

2%

6%

10%

34%

46%

9%

21%

4%

53%

13%

12%

49%

39%

0% 10% 20% 30% 40% 50% 60%

Other

Venture capital


No investments

Bank loans

Intercompany loans, ownresources, or reinvested profit

2014 2015 2016


Which the following best describes your company's preferred strategy for financing of investments for the following 12 months? (single answer)


Intercompany loans, own resources or reinvested profit will remain companies’ preferred strategy to finance investments in

2016 across all industry sectors as well. The second preferred financing source will be bank loans, while share capital increase

will be used by pharma companies (33%), and venture capital will be used by publishing & printing companies (20%).




25%

64%

32%

50%

38%

39%

17%

33%

20%

20%

36%

25%

29%

17%

26%

46%

27%

64%

32%

53%

43%

50%

39%

40%

60%

40%

34%

71%

42%

67%

4%

14%

4%

9%

33%

6%

20%

7%

10%

4%

1%

6%

20%

3%

18%

9%

4%

4%

3%

3%

22%

20%

12%

22%

33%

7%

3%

1%

5%

6%

8%

0% 20% 40% 60% 80% 100%

Other

Chemicals


Food & Beverages /…








Services


Tourism

Transportation

Bank loans

Intercompany loans, ownresources, or reinvestedprofit


Venture capital

No investments

Other


Which of the following factors best describe the reaction of your company to the business environment in the past year? (single answer)


The most important shift in responses is that cost reduction ceases to be the reaction of the companies to the changes of the

business environment (21% in 2016 vs. 30% in 2015). The first position is occupied now by the productivity increase (27% in

2016 and 2015 vs. 32% in 2014), followed by new products (19% in 2016 and 2015 vs. 17% in 2014). Talent acquisition and

access to EU funds show also important percentage increases in the current edition of the survey.


1%

2%

4%

4%

6%

16%

21%

2%

1%

5%

14%

19%

30%

27%

5%

2%

5%

2%

15%

17%

22%

32%

0% 5% 10% 15% 20% 25% 30% 35%

Other

Reduced capital investment

Reduced market coverage

Mergers & Acquisitions

Attraction of EU funds

Talent acquisition

Restructure of the organization

New products

Cost reduction

Productivity increase

2014 2015 2016


Which of the following factors best describe the reaction of your company to the business environment in the past year? (single answer)


Productivity increase was the most important reaction of companies transportation to the business environment in the past year

(47%), while companies in chemicals focused on cost reduction (46%), companies in R&D / New technology focused on

attraction of EU funds (40%) and companies on publishing & printing focused on new products (40%).




4%

7%

4%

9%

40%

9%

9%

18%

46%

36%

25%

17%

9%

17%

33%

20%

20%

19%

16%

43%

8%

20%

4%

4%

7%

3%

6%

20%

7%

3%

14%

28%

18%

12%

14%

22%

12%

33%

17%

40%

26%

16%

14%

25%

7%

25%

27%

20%

25%

32%

37%

17%

11%

20%

20%

26%

22%

14%

42%

47%

9%

4%

1%

2%

1%

5%

6%

8%

7%

16%

18%

20%

18%

16%

27%

20%

12%

25%

20%

14%

12%

3%

12%

6%

3%

3%

15%

8%

6%

17%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Other

Chemicals










Services


Tourism

Transportation

Attraction of EU funds

Cost reduction

Mergers & Acquisitions

New products

Productivity increase

Reduced capital investment

Reduced market coverage

Restructure of the organization

Talent acquisition

Other


In case of stagnation/decline in your current markets what will be the step/s your company will pursue in the next 12 months? (multiple answers)


In case of stagnation / decline of the market 70% of companies will stay on the market until is stable again in order to secure it

and increase the trust level in 2016 compared to 65% in 2015 and 56% in 2014. In 2016, 47% say will transform the market

through innovative approaches and 15% say that will grow on the market through M&A.


2%

7%

10%

15%

47%

70%

1%

2%

8%

12%

47%

65%

5%

10%

10%

56%

56%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Other

Leave the market and seek new ones

Seek external funding to secure our position on themarket

Grow on the market through M&A (Mergers &Acquisitions)

Transform the market through innovative approaches

Stay on the market until is stable again in order to secureit and increase the trust level

2014 2015 2016


In case of stagnation/decline in your current markets what will be the step/s your company will pursue in the next 12 months? (multiple answers)


While companies from all industries will stay on the market until is stable again in order to secure it and increase the trust level,

the top 3 ones that are ready to transform the market through innovative approaches are: food & beverages (41%),

transportation (36%), and pharmaceuticals / healthcare (34%).




43%

60%

52%

34%

49%

42%

33%

42%

38%

28%

49%

54%

67%

61%

52%

10%

6%

7%

6%

2%

3%

12%

4%

2%

8%

26%

28%

30%

41%

34%

33%

34%

19%

38%

27%

29%

33%

22%

31%

36%

10%

6%

9%

16%

7%

8%

33%

20%

12%

18%

10%

9%

8%

4%

9%

6%

3%

2%

4%

15%

16%

27%

8%

2%

11%

2%

0% 20% 40% 60% 80% 100%

Other

Chemicals










Services


Tourism

Transportation

Stay on the market until is stableagain in order to secure it andincrease the trust level

Leave the market and seek newones

Transform the market throughinnovative approaches

Grow on the market throughM&A (Mergers & Acquisitions)

Seek external funding to secureour position on the market

Other


Which the following actions is your company taking to increase sales? (multiple answers)


73% of the companies are introducing new products or services for existing clients and attracted new clients in order to

increase sales in 2015, 41% are increasing the investments in marketing and sales, 40% are entering new geographical

markets, and 38% are opening new distribution channels. Only 14% are cutting prices and 11% are increasing prices.


2%

9%

11%

14%

23%

38%

40%

41%

73%

7%

9%

10%

15%

31%

38%

41%

66%

7%

5%

10%

22%

29%

32%

24%

80%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Other

Merging with and/or acquiring competitors to increasemarket share

Increase prices

Cutting prices

Adapting existing product/service for new geographicmarkets

Opening new distribution channels/ reorganizingdistribution to use multiple channels

Enter new geographic markets for existingproducts/services

Increase investment in marketing and sales

Introducing new products and/ or services for existingclient and to attract new clients

2014 2015 2016


Which of the following actions is your company taking to increase sales in 2016? (multiple answers)


Companies from all industries are planning to enter new geographic markets for existing products/services and also to

introduce new products and/or services for existing clients and to attract new clients. It is noteworthy that 10% of companies

from transportation sector are cutting prices, while 10% of companies in food & beverages are increasing prices.




15%

18%

16%

14%

19%

20%

14%

23%

31%

18%

10%

18%

26%

8%

9%

30%

36%

30%

24%

30%

27%

33%

28%

23%

28%

35%

29%

26%

21%

30%

18%

10%

23%

17%

13%

15%

20%

16%

23%

18%

19%

15%

7%

21%

15%

11%

7%

5%

5%

12%

16%

5%

8%

24%

3%

7%

27%

8%

12%

16%

18%

12%

18%

12%

14%

13%

13%

8%

12%

20%

15%

25%

15%

4%

2%

7%

4%

4%

13%

5%

5%

3%

7%

4%

4%

7%

10%

3%

2%

7%

4%

7%

7%

9%

6%

7%

5%

5%

7%

2%

7%

10%

4%

4%

4%

18%

2%

0% 20% 40% 60% 80% 100%

Other

Chemicals










Services


Tourism

Transportation

Enter new geographic markets for existingproducts/services

Introducing new products and/ or services forexisting client and to attract new clients

Increase investment in marketing and sales

Adapting existing product/service for newgeographic markets

Opening new distribution channels/ reorganizingdistribution to use multiple channels

Merging with and/or acquiring competitors toincrease market share

Increase prices

Cutting prices

Other


Mention briefly the main challenge that you are noticing now in your industry/field of activity? (number of answers)


There are 3 main challenges respondent companies notice in their industry/field of activity for 2016 are the following: pressure

on margins (46 responses), difficult labor market and demographic conditions (42 responses), and low competitiveness of the

Romanian economy (27 responses).




9

11

11

11

14

14

14

14

17

19

19

27

42

46

0 5 10 15 20 25 30 35 40 45 50

Cash flow management

Cost cutting

Legal framework uncertainty

Managing financial risks

Customer satisfaction

Harsh competition

Poor infrastructure

Sustainable growth

Business development

Corruption

Political instability

Low competitiveness

Labor market and demographics

Pressure on margins


Mention briefly the main opportunity that you are noticing now in your industry/field of activity? (number of answers)


The 3 main opportunities respondent companies notice in their industry/field of activity for 2016 are the following: domestic

market growth potential (48 responses), decreased VAT rate (28 responses), partnerships & alliances (24 responses).




5

6

10

10

10

11

11

12

13

16

20

20

21

24

28

48

0 10 20 30 40 50 60

Cloud technology

Low costs

Access to EU funds

e-commerce

Energy infrastructure

Disruptive innovation (IoT)

Social economy

Market consolidation

Changing business models

Entering new markets

More entrepreneurial businesses

Technological advancements

Growing demand for IT services

Partnerships and alliances

Decreased VAT

Domestic market growth potential


Mention briefly the main potential for investment /development that you are looking at for the next 1-3 years in your industry.


According to the respondents to the survey, the main potential for investment in 2016 is triggered by the need to increase efficiency

(21% of companies), followed by the need to expand the market with new customer segments (17%), and expand the market in new

countries (16%). The need to secure sustainability is mentioned as an area for future development only by 8% of companies.




2%

8%

8%

14%

15%

16%

17%

21%

0% 5% 10% 15% 20% 25%

Other

Secure sustainability

Expand market with new regions (in Romania)

Change/adapt the business model

Expand operations

Expand market in new countries

Expand market with new customer segments

Increase efficiency


DemographicsThe results of this survey reflect the

responses received to our

questionnaire in the period between

26 January and 8 February 2016, from

421 top executives of major companies

operating in Romania.

Romanian company (yes/no) County where the company is based

Demographics


60%

40%

Yes

No

18%

1%

2%

2%

2%

2%

2%

3%

3%

3%

4%

5%

6%

7%

40%

0% 10% 20% 30% 40% 50%

Other

Constanța

Arad

Bihor

Sibiu

Prahova

Bacău

Iași

Argeș

Mureș

Timiș

Brașov

Ilfov

Cluj

București


Demographics

Industry sector Company revenue level (for 2015)


8%

1%

2%

3%

3%

3%

3%

4%

5%

8%

8%

9%

9%

13%

21%

0% 10% 20% 30%

Other




Chemicals

Pharmaceuticals /…

Tourism

Transportation



Food & Beverages /…


Services



14%

35%

28%

10%

13%

0% 10% 20% 30% 40%

Less than 1 M EUR

1 - 10 M EUR

10 - 50 M EUR

50 - 100 M EUR

100 M EUR+


Entity type Respondent’s job title

Demographics


2%

6%

10%

82%

Government/State-ownedenterprise

Private Equity portfoliocompany

Publicly listed

Privately owned

0% 25% 50% 75% 100%

6%

4%

4%

4%

5%

6%

9%

15%

16%

31%

0% 10% 20% 30% 40%

Other

CIO/Technology director

Head of business unit

Other C-level executive

Board member

SVP/VP/Director

CFO/Treasurer/Controller

Head of department

Manager

CEO/President/Managingdirector


We would like to thank all who have responded to our questionnaire and thus made

possible the existence of this mid-year edition of the survey. We have been very

glad to see the increasing interest in this survey reflected in the increasing number

of responses received. A special thank you goes to Diana Dumitrașcu, Executive

Director of doingbusiness.ro for her significant and always prompt support in the

preparation of this survey.

This is a quantitative survey/analysis which aims at showcasing the trends of the surveyed topic and advance working hypotheses

which might be subsequently validated by extensive market research conducted on representative samples. This written material is

accurate to the best of our knowledge at the time of issue. It is, however, meant as a general guide and comes with the

recommendation that professional advice be sought before any action is taken.

Elena BadeaAssociate Director

Branding, Marketing & Communication

EY Romania

[email protected]

Constantin MăgdălinaSenior Knowledge Management

Branding, Marketing & Communication

EY Romania

[email protected]


The project team


EY | Assurance | Tax | Transactions | Advisory

About EY

EY is a global leader in assurance, tax, transaction and

advisory services. The insights and quality services we

deliver help build trust and confidence in the capital

markets and in economies the world over. We develop

outstanding leaders who team to deliver on our promises

to all of our stakeholders. In so doing, we play a critical

role in building a better working world for our people, for

our clients and for our communities.

© 2016 EYGM Limited.

All Rights Reserved.

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A vision for growth - Business outlook barometer - Romania 2016

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Transcript of A vision for growth - Business outlook barometer - Romania 2016