A_vision_for_growth_EN_28 June

A vision for growth
Business outlook survey – Mid-year edition
Romania 2013

A Vision for Growth 2013Page 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
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

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

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
(Skipped this question: 5)

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.
(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

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.
(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 +

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.
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

(one answer)
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.
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%
IT
Services
Telecom / Media
Tourism
Transportation
Other

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%.
(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 +

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
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

Staff growth of more than 10% is envisaged to happen mostly in the manufacturing industry.
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%
IT
Services
Telecom / Media
Tourism
Transportation
Other

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.
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 +

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
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

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
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

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
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

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
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

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.
47%
51%
2%
32%
66%
2%
0%
10%
20%
30%
40%
50%
60%
70%
Stay the same Somewhat change Change dramatically
June
January

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

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

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.
40%
33%
41%
47%
19%
20%
0% 20% 40% 60% 80% 100%
June
January
Brand positioning
No impact
Moderate impact
High impact

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.
41%
36%
49%
54%
10%
10%
0% 20% 40% 60% 80% 100%
June
January
Organizational structure
No impact
Moderate impact
High impact

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.
35%
23%
44%
53%
22%
24%
0% 20% 40% 60% 80% 100%
June
January
Innovation strategy
No impact
Moderate impact
High impact

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.
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

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.
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

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.
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

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.
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

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.
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

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.

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

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
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

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/Managi
ng director
CFO/Treasurer/Controll
er
January
June

Next edition will be
issued in January
2014. Thank you!

A_vision_for_growth_EN_28 June

Recommended

Recommended

More Related Content

What's hot

What's hot (19)

Viewers also liked

Viewers also liked (14)

Similar to A_vision_for_growth_EN_28 June

Similar to A_vision_for_growth_EN_28 June (20)

More from Constantin Magdalina

More from Constantin Magdalina (20)

A_vision_for_growth_EN_28 June