Romania Business Outlook Survey - June 2013
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Transcript of Romania Business Outlook Survey - June 2013
A vision for growth Business outlook survey – Mid-year edition
Romania 2013
A Vision for Growth 2013 Page 2
What is “A vision for growth”?
“A vision for growth” explores perceptions of top executives from major companies operating in
Romania regarding the business outlook for 2013. This is the mid-year edition.
This Ernst & Young report is based on a survey of 103 C-suite level executives from companies in various
sectors, who provided a perspective on how the domestic business environment is perceived at the middle of
2013. The questionnaire was open during the period 1-14 June 2013. This slide deck shows comparative
data between January and June 2013 findings.
5 main
findings
1
The perspective of turnover growth has declined during the last 6 months, however the numbers
stay strong, with 69% of respondents thinking that their turnover will grow during 2013. The
percentage of companies that expect a growth of 5-10% has decreased by 5 pps, while the
percentage of companies anticipating a negative growth of -5-10% has increased by 5 pps.
Companies’ expectations regarding profit growth remain largely the same in June
compared to January. If in January 68% or respondent companies were expecting an
increase in profits, in June the percentage decreased by only 2 pps.
More than half of the companies (53% in June) predict a growth in salary level of 5-
10%, while many of them continue to not anticipate any change (45% in June) in
salaries during this year.
Regarding the industry sector that respondent companies are active in, the trust in its
potential has decreased significantly between January and June, the proportion of the
companies “not at all confident” going up by 17 pps, while the percentage of somewhat
confident companies decreased by 12 pps.
In June, new products, cost reduction and talent acquisition are trending as reaction to the
business environment during the last year, while improving productivity and restructuring saw
a declining importance.
2
3
4
5
A Vision for Growth 2013 Page 3
A vision for growth Business outlook survey
Romania 2013 - Mid-year edition
Although 2013 is a challenging
year in many respects, companies
keep positive on their expectations
to grow.
Bogdan Ion, Country
Managing Partner
A Vision for Growth 2013 Page 4
Please indicate the main three elements that you use to define success. (multiple answers)
Question 1
The importance of the financial results has remained constant. The interest regarding market share
and brand awareness has increased by 8 pps and 12 pps, respectively, while customer satisfaction as
an indicator of success has decreased by 16 pps.
Total Respondents: 103
3%
6%
8%
50%
61%
72%
94%
38%
77%
64%
93%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Going public (IPO)
Number of employees
Number of years on the market
Brand awareness
Customer satisfaction
Market share
Financial results
January
June
A Vision for Growth 2013 Page 5
How much do you expect your turnover to grow in 2013? (one answer)
Question 2
The perspective of turnover growth has slightly declined during the last 6 months. The percentage of
companies that expect a growth in turnover of 5% to 10% has decreased by 5 pps, while the
percentage of companies anticipating a negative growth of -5% to -10% has increased by 5 pps.
2%
1%
2%
9%
16%
46%
11%
9%
3%
3%
4%
17%
51%
13%
12%
0% 10% 20% 30% 40% 50% 60%
Exceeding -31%
-20 to -30%
-10 to -20%
-5 to -10%
0%
+5 to 10%
+10 to 20%
+20 to 30%
Exceeding 31%
January
June
Total Respondents: 98
(Skipped this question: 5)
A Vision for Growth 2013 Page 6
Question 2(a) – By industry
It seems that companies in Manufacturing, Pharmaceuticals/Healthcare, and Retail are more
positive and expect their turnover to grow during 2013.
Total Respondents: 98
(Skipped this question: 5)
How much do you expect your turnover to grow in 2013? (one answer)
6%
4%
33%
13%
2%
9%
11%
13%
22%
18%
100%
100%
11%
19%
11%
18%
56%
33%
6%
7%
11%
6%
9%
27%
34%
50%
13%
11% 22%
6%
7%
33%
13%
9%
50%
22%
4%
11%
2%
6% 25%
4%
18%
11%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Exceeding -31%
-20% to -30%
-10% to -20%
-5% to -10%
0%
+5 to +10%
+10 to +20%
+20 to +30%
Exceeding 31% Chemicals
Construction / Real Estate
Food & Beverages / Agriculture
Industry / Manufacturing
IT
Pharmaceuticals / Healthcare
Power / Energy / Mining
Publishing & Printing
Retail and Wholesale trade
Services
Telecom / Media
Tourism
Transportation
Other
A Vision for Growth 2013 Page 7
Question 2(b) – By company revenues
67% of respondents that expect to have a turnover growth of more than 31% are from
companies with revenues exceeding EUR 100M, the other 33% being from companies with
turnover of less than EUR 1M.
Total Respondents: 98
(Skipped this question: 5)
How much do you expect your turnover to grow in 2013? (one answer)
6%
9%
11%
33%
50%
33%
31%
20%
18%
11%
50%
100%
50%
33%
13%
31%
45%
56%
50%
6%
16%
9%
22%
33%
44%
24%
27%
67%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Exceeding -31%
-20% to -30%
-10% to -20%
-5% to -10%
0%
+5 to +10%
+10 to +20%
+20 to +30%
Exceeding 31%
Less than 1 M EUR
1-10 M EUR
10-50 M EUR
50-100 M EUR
100 M EUR +
A Vision for Growth 2013 Page 8
How much do you expect your profit to grow in 2013? (one answer)
Question 3
Companies’ expectations regarding profit growth largely stayed the same in June compared to
January. If in January 68% or respondent companies were expecting an increase in profits, in June the
percentage decreased by 2 pps. However, in June 11% of respondents say expect their profit to grow
by more than 31% in 2013.
Total Respondents: 98
(Skipped this question: 5)
3%
1%
2%
5%
22%
34%
16%
5%
11%
3%
6%
23%
37%
22%
9%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Exceeding -31%
-20 to -30%
-10 to -20%
-5 to -10%
0%
+5 to 10%
+10 to 20%
+20 to 30%
Exceeding 31%
January
June
A Vision for Growth 2013 Page 9
How much do you expect your profit to grow in 2013? (one answer)
Question 3(a) – By industry
In terms of profit growth, a good mix of companies by industry sector appear positioned
in the 5-10%, as well as in the 10-20% range.
Total Respondents: 98
(Skipped this question: 5)
3%
13%
20%
9%
9%
6%
9%
18%
12%
19%
27%
33%
100%
50%
20%
27%
18%
13%
60%
27%
14%
6%
9%
9%
9%
19%
9%
33%
5%
9%
13%
20%
50%
20%
6%
6%
18%
9%
15%
33%
20%
6%
6%
20%
5% 5%
12%
20%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Exceeding -31%
-20% to -30%
-10% to -20%
-5% to -10%
0%
+5 to +10%
+10 to +20%
+20 to +30%
Exceeding 31% Chemicals
Construction / Real Estate
Food & Beverages / Agriculture
Industry / Manufacturing
IT
Pharmaceuticals / Healthcare
Power / Energy / Mining
Publishing & Printing
Retail and Wholesale trade
Services
Telecom / Media
Tourism
Transportation
Other
A Vision for Growth 2013 Page 10
Question 3(b) – By company revenues
In terms of revenue segmentation, companies with less than EUR 1M revenue do not expect a
decrease in profits during 2013. However, only companies with revenues exceeding EUR 10M
expect to register high growth profit rates, of over 31%.
Total Respondents: 98
(Skipped this question: 5)
How much do you expect your profit to grow in 2013? (one answer)
14%
3%
13%
20%
33%
50%
20%
18%
30%
19%
20%
33%
100%
50%
40%
36%
27%
25%
20%
45%
33%
20%
5%
9%
6%
40%
27%
20%
27%
30%
38%
27%
0% 20% 40% 60% 80% 100%
Exceeding -31%
-20% to -30%
-10% to -20%
-5% to -10%
0%
+5 to +10%
+10 to +20%
+20 to +30%
Exceeding 31%
Less than 1 M EUR
1-10 M EUR
10-50 M EUR
50-100 M EUR
100 M EUR +
A Vision for Growth 2013 Page 11
Companies’ expectations with regards to the evolution of employees number are similar in June
compared to January 2013: in both editions, 26% of respondents expect a growth in number of
employees, while 55% in June, versus 56% in January, will not hire new staff during 2013.
How much do you expect your number of employees to grow in 2013? (one answer)
Question 4
Total Respondents: 98
(Skipped this question: 5)
2%
3%
13%
55%
17%
5%
2%
2%
4%
14%
56%
21%
2%
3%
0% 10% 20% 30% 40% 50% 60%
Exceeding -31%
-20 to -30%
-10 to -20%
-5 to -10%
0
+5 to 10%
+10 to 20%
+20 to 30%
Exceeding 31%
January
June
A Vision for Growth 2013 Page 12
Question 4(a) – By industry
Staff growth of more than 10% is envisaged to happen mostly in the manufacturing industry.
Total Respondents: 98
(Skipped this question: 5)
How much do you expect your number of employees to grow in 2013? (one answer)
4%
6%
67%
9%
6%
50%
8%
19%
12%
23%
19%
18%
80%
100%
50%
15%
4%
6%
33%
15%
6%
18%
50%
15%
6%
6%
2%
15%
7%
50%
7%
12%
20%
9%
6%
2% 2%
8%
6%
12%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Exceeding -31%
-10% to -20%
-5% to -10%
0%
+5 to +10%
+10 to +20%
+20 to +30%
Exceeding 31% Chemicals
Construction / Real Estate
Food & Beverages / Agriculture
Industry / Manufacturing
IT
Pharmaceuticals / Healthcare
Power / Energy / Mining
Publishing & Printing
Retail and Wholesale trade
Services
Telecom / Media
Tourism
Transportation
Other
A Vision for Growth 2013 Page 13
Question 4(b) – By company revenues
Again, the higher growth rates, of more than 20% in terms of number of employees, will be seen
at large companies, with revenues exceeding EUR 10M.
Total Respondents: 98
(Skipped this question: 5)
How much do you expect your number of employees to grow in 2013? (one answer)
8%
6%
18%
15%
24%
24%
40%
100%
67%
23%
31%
35%
50%
50%
15%
11%
12%
20%
50%
33%
38%
28%
12%
40%
50%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Exceeding -31%
-10% to -20%
-5% to -10%
0%
+5 to +10%
+10 to +20%
+20 to +30%
Exceeding 31%
Less than 1 M EUR
1-10 M EUR
10-50 M EUR
50-100 M EUR
100 M EUR +
A Vision for Growth 2013 Page 14
More than half of the companies (53% in June) predict a growth in salary level of 5-10%, while
many of them continue to not anticipate any change (45% in June) in salaries during this year.
How much do you expect the salary level in your company to grow in 2013? (one answer)
Question 5
Total Respondents: 93
(Skipped this question: 10)
1%
45%
53%
1%
1%
42%
55%
2%
0 0.1 0.2 0.3 0.4 0.5 0.6
-10 to -20%
-5 to -10%
0%
+5 to 10%
+10 to 20%
January
June
A Vision for Growth 2013 Page 15
The level of trust in the industry sector that respondent companies are active in has decreased
significantly between January and June, the proportion of the companies “not at all confident” going
up by 17 pps, while the percentage of somewhat confident companies decreased by 12 pps.
How confident do you feel regarding the growth of your industry for the next 6 months? (one answer)
Question 6
Total Respondents: 93
(Skipped this question: 10)
33%
40%
23%
4%
16%
45%
35%
4%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Not at all confident
Slightly confident
Somewhat confident
Very confident
January
June
A Vision for Growth 2013 Page 16
If in January only 3% of respondents were not at all confident about the growth of their company, in
June this percentage has gone up to 15%, while the proportion of very confident companies has gone
down to 15%, from 25% in January.
How confident do you feel regarding the growth of your company for the next 6 months? (one answer)
Question 7
Total Respondents: 93
(Skipped this question: 10)
15%
31%
39%
15%
3%
32%
40%
25%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Not at all confident
Slightly confident
Somewhat confident
Very confident
January
June
A Vision for Growth 2013 Page 17
The importance of low cost as competitive advantage has increased, while the one of partnerships
has decreased by 9 pps. Strong brand awareness continues to be perceived as the main strength of
competitors.
Please describe the main strength of your competitors in the local market, Romania. (one answer)
Question 8
Total Respondents: 93
(Skipped this question: 10)
40% 40%
12%
5% 3%
31%
39%
14% 14%
2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Low cost Strong brand awareness (trust)
Distribution channels
Partnerships R&D
June
January
A Vision for Growth 2013 Page 18
To what extent do you expect your customers' demands to change in the next 6 months? (one answer)
Question 10
In June, more companies compared to January do not expect any change in customer demand,
while 51% assume that it would somewhat change.
Total Respondents: 93
(Skipped this question: 10)
47% 51%
2%
32%
66%
2%
0%
10%
20%
30%
40%
50%
60%
70%
Stay the same Somewhat change Change dramatically
June
January
A Vision for Growth 2013 Page 19
What impact will the change in customers' demand have on your company in the next 6 months? (one answer for each option)
Question 11 (a)
In June, more companies believe that the change in customers demand will have no impact on
their operations. The percentage grew by 12 pps.
Total number of responses:
30%
18%
51%
63%
19%
19%
0% 20% 40% 60% 80% 100%
June
January
Operations
No impact
Moderate impact
High impact
A Vision for Growth 2013 Page 20
What impact will the change in customers' demand have on your company in the next 6 months? (one answer for each option)
Question 11 (b)
In June, more companies believe that the change in customers demand will have no impact on
their marketing efforts.
Total number of responses: 576
29%
21%
57%
60%
14%
19%
0% 20% 40% 60% 80% 100%
June
January
Marketing
No impact
Moderate impact
High impact
A Vision for Growth 2013 Page 21
What impact will the change in customers' demand have on your company in the next 6 months? (one answer for each option)
Question 11 (c)
In June, the percentage of companies that say change in customers demand will have no
impact on their brand positioning increased by 7 pps.
Total number of responses: 576
40%
33%
41%
47%
19%
20%
0% 20% 40% 60% 80% 100%
June
January
Brand positioning
No impact
Moderate impact
High impact
A Vision for Growth 2013 Page 22
What impact will the change in customers' demand have on your company in the next 6 months? (one answer for each option)
Question 11 (e)
In June, more companies believe that the change in customers demand will have no impact on their
organizational structure, with a correspondent decrease in the respondents that believe this change
will have a moderate impact on their organizational structure.
Total number of responses: 576
41%
36%
49%
54%
10%
10%
0% 20% 40% 60% 80% 100%
June
January
Organizational structure
No impact
Moderate impact
High impact
A Vision for Growth 2013 Page 23
What impact will the change in customers' demand have on your company in the next 6 months? (one answer for each option)
Question 11 (f)
In June, same as in January, a little over 20% of the companies believe that change in
customers demand will have a high impact on their innovation strategy.
Total number of responses: 576
35%
23%
44%
53%
22%
24%
0% 20% 40% 60% 80% 100%
June
January
Innovation strategy
No impact
Moderate impact
High impact
A Vision for Growth 2013 Page 24
Which of the following best describes the primary strategy considered by your company for financing its investments in the past year? (one answer)
Question 20
In the June edition, companies expressed an increased consideration for issuing stocks for financing
investments during the last year, but the main financing resource remains the bank loans.
Total Respondents: 84
(Skipped this question: 19)
3%
4%
19%
46%
28%
4%
18%
47%
31%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Our company issued stocks to finance its investment
Our company used venture capital to finance its investments
Our company attracted share capital increase to finance its investments
Our company used bank loans to finance its investments
Other (intercompany loans, own resources, reinvested profit)
January
June
A Vision for Growth 2013 Page 25
Which of the following best describes your company's preferred strategy for financing its investments in the following 6 months? (one answer)
Question 21
The most preferred strategy for financing future investments is through bank loans, embraced by 45%
of companies, in both January and June. 2% of the responding companies plan to issue stocks.
Total Respondents: 84
(Skipped this question: 19)
45%
20%
6%
2%
27%
45%
20%
8%
27%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Bank loans Share capital increase
Venture capital Stocks Other (intercompany
loans, own resources,
reinvested profit)
June
January
A Vision for Growth 2013 Page 26
Which of the following best describes the reaction of your company to the business environment in the past year? (one answer)
Question 22
In June, new products, cost reduction and talent acquisition are trending as reaction to the business
environment during the last year, while improving productivity and restructuring saw a declining
importance.
Total Respondents: 88
(Skipped this question: 15)
3%
1%
1%
2%
2%
5%
8%
22%
23%
33%
5%
1%
2%
4%
13%
16%
28%
30%
0% 5% 10% 15% 20% 25% 30% 35%
Other
Merger and Acquisitions
Reduce capital investment
Attraction of EU funds
Reduced market coverage
Talent acquisition
Restructure of the organization
New products
Productivity increase
Cost reduction
January
June
A Vision for Growth 2013 Page 27
Which of the following actions will your company take to increase sales? (one answer)
Question 23
In order to increase sales, most companies chose, both in January and June, to introduce new products and/or services for
existing clients and new distribution channels. Also, more companies think about M&A as action to be taken in order to
increase sales. Regarding price cutting, we can see a decline of 8 pps between January and June as an action to increase
sales.
Total Respondents: 88
(Skipped this question: 15)
8%
9%
10%
13%
24%
28%
33%
72%
5%
8%
18%
20%
26%
33%
31%
75%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Merging with and/or acquiring competitors to increase market share
Increase prices
Cutting prices
Adapting existing product/service for new geographic markets
Increase investment in marketing and sales
Enter new geographic markets for existing products/services
Opening new distribution channels/reorganizing distribution to use multiple channels
Introducing new products and/or services for existing client and to attract new clients
January
June
A Vision for Growth 2013 Page 28
In case of stagnation/decline in your current markets what will be the step/s your company will pursue in the next 6 months? (all that apply)
Question 24
In case of stagnation/decline of markets, more companies consider seeking external funding in June
compared to the January edition. All the other options are less taken into consideration in June.
Total Respondents: 88
(Skipped this question: 15)
67%
39%
14% 10%
2%
76%
46%
15%
7% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Stay on the market until it is stable
again in order to secure it and
increase the trust level
Transform the market trough
innovative approaches
Grow on the market through Mergers and Acquisitions
Seek external funding to secure our position on the
market
Leave the market and seek new ones
June
January
A Vision for Growth 2013 Page 29
Demographics The results of this survey reflect the
responses received to our
questionnaire in the period between
1 Jun. and 14 Jun. 2013, from 103
top executives of major companies
operating in Romania.
A Vision for Growth 2013 Page 30
Demographics
Romanian company (yes/no) Business type
69%
31%
57%
43%
0%
10%
20%
30%
40%
50%
60%
70%
80%
No Yes
June
January
4%
22%
74%
4%
29%
67%
0% 20% 40% 60% 80%
Bussiness to Government
Bussiness to Consumers
Bussiness to Bussiness
January
June
A Vision for Growth 2013 Page 31
Demographics
Industry sector
Company revenue level
1%
1%
1%
4%
5%
5%
6%
7%
7%
8%
9%
10%
15%
23%
4%
2%
2%
13%
4%
8%
9%
10%
12%
7%
7%
24%
0% 10% 20% 30%
Transportation
Tourism
Publishing & Printing
Chemicals
IT
Other
Telecom/Media
Retail & Wholesale …
Services
Power/Energy/Mining
Pharmaceuticals/Heal…
Construction/Real …
Food & …
Industry/Manufacturing
January
June
7%
21%
33%
12%
27%
7%
14%
38%
12%
29%
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 +
January
June
A Vision for Growth 2013 Page 32
Demographics
Entity type
Job title of respondent
8%
20%
72%
1%
10%
22%
67%
0 0.2 0.4 0.6 0.8
Government/State-owned enterprise
Private Equity Portofolio Company
Publicly listed
Privately owned
January
June
1%
1%
2%
3%
5%
5%
11%
32%
40%
3%
4%
5%
3%
7%
4%
8%
32%
34%
0% 10% 20% 30% 40% 50%
Other
Head of department
SVP/VP/Director
Other C-level executive
Board member
Head of business unit
Manager
CEO/President/Managing director
CFO/Treasurer/Controller
January
June
A Vision for Growth 2013 Page 33
Next edition will be
issued in January
2014. Thank you!