A vision for growth_Sep 2014_FINAL_EN

A vision for growth
Business outlook survey – Mid-year edition
Romania 2014

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 2014. This is the mid-year edition.
This EY report is based on a survey of 305 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 2014. The
questionnaire was open during the period 28 July – 8 August 2014. This slide deck shows comparative data
between February and August 2014 findings.
5 main
findings
1
In general terms, the perspective of turnover growth has declined during the last 6-7 months, with a larger
number of companies envisaging negative growth values (12% in Aug vs 2% in Feb). However, the percentage
of companies anticipating a turnover growth rate of 10-31% has increased from 28% in Feb to 37% in Aug
2014.
Companies’ expectations regarding profit growth largely stayed the same in August compared to
February 2014. If at the beginning of the year 84% of respondent companies were expecting an
increase in profits, in August the percentage reached only 81%. However, 8% of respondents still say
that they expect their profit to grow by more than 31% in 2014.
Companies’ expectations with regards to the evolution of their employees number are quite different
in August compared to February 2014. While in Aug 2014, 18% of companies expect a 5-10%
increase in personnel numbers, only 5% said so at the beginning of the year. Also, 22% say now that
they will have no new staff this year compared to 37% in Feb 2014.
When it comes to financing investments, companies continue to use mostly bank loans (54% in February vs.
49% in August), followed by share capital increase (10% in February vs. 22% in August). There was a steep
reduction in the “own resources, intercompany loans and reinvested profit” segment, down to 16% in August
from 34% in February 2014.
More than half of the respondent companies (51% in August) predict a growth in salary level of 5-10%,
while 30% of them (a 9% increase) continue to anticipate higher growth rates of 10-21% in salaries
during this year.
2
3
4
5
Business outlook survey – 2014 Mid-year edition

A vision for growth
Business outlook survey
Mid-year edition – Romania 2014
Our survey findings show the increased
focus companies have on coping with the
challenging business environment in a way
that secures their potential for growth.
Bogdan Ion, Managing Partner, EY Romania

Please indicate the main three elements that
you use to define success.(multiple answers)
Question 1
Usually, companies measure their success by a combination of financial results, market share, and brand awareness. In
the second half of 2014, the financial results and market share elements a mild decrease while, criteria such as number of
years in the market, customer satisfaction, and brand awareness go up significantly.
Total Respondents: 305
(Skipped this question: 0)
9%
7%
7%
39%
63%
78%
96%
2%
3%
5%
18%
42%
50%
82%
88%
0% 20% 40% 60% 80% 100% 120%
Other
Going public (IPO)
Number of employees
Number of years on the market
Brand awareness
Market share
Customer satisfaction
Financial results
Aug-14
Feb-14

How much do you expect your turnover
to grow in 2014? (one answer)
Question 2(a) – All answers
In general terms, the perspective of turnover growth has declined during the last 6-7 months, with a larger number of
companies envisaging negative growth values (12% in Aug vs 2% in Feb). The percentage of companies that expect
a 1-5% turnover growth decreased also by 19%. However, the percentage of companies anticipating a turnover growth
rate of 10-31% has increased from 28% in Feb to 37% in Aug 2014.
2%
3%
37%
30%
19%
7%
2%
1%
1%
2%
5%
3%
5%
18%
27%
22%
10%
6%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Exceeding -31%
-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 31%
Aug-14
Feb-14

How much do you expect your turnover
Question 2(b) – Split by industry sectors
14% of responding companies in Food & Beverages / Agriculture industry sector, 9% in Services, and 8% in Retail &
Wholesale, Pharmaceuticals, and Transportation sectors expect a turnover growth rate of more than 31%.
14%
6%
8%
6%
8%
9%
8%
6%
14%
13%
21%
25%
4%
5%
14%
8%
15%
12%
23%
30%
21%
47%
28%
50%
33%
15%
14%
8%
22%
29%
19%
16%
37%
15%
10%
67%
50%
31%
14%
46%
35%
26%
5%
22%
14%
15%
17%
12%
14%
58%
38%
12%
6%
5%
6%
10%
7%
9%
4%
9%
10%
3%
7%
4%
6%
5%
4%
15%
6%
25%
9%
4%
3%
17%
2%
5%
6%
7%
14%
3%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Construction / Real Estate
Food & Beverages / Agriculture
Industry / Manufacturing
Information Technology (IT)
Pharmaceuticals / Healthcare
Power / Energy / Mining
Publishing & Printing
R&D / New technology
Retail & Wholesale trade
Services
Telecommunication / Media
Tourism
Transportation
Exceeding 31%
+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 -31%

How much do you expect your profit
Companies’ expectations regarding profit growth largely stayed the same in August compared to February 2014. If at the
beginning of the year 84% of respondent companies were expecting an increase in profits, in August the percentage
reached only 81%. However, 8% of respondents still say that they expect their profit to grow by more than 31% in 2014.
6%
10%
30%
21%
19%
7%
7%
1%
1%
2%
4%
2%
9%
28%
22%
17%
6%
8%
0% 5% 10% 15% 20% 25% 30% 35%
Exceeding -31%
-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 31%
Aug-14
Feb-14

How much do you expect your profit
It is noteworthy that 25% of respondent companies in Tourism sector see a potential profit growth of +31%, followed by
companies in Food & Beverages / Agriculture (14%), and companies in Industry / Manufacturing (10%).
6%
14%
10%
6%
6%
4%
8%
9%
25%
6%
9%
5%
5%
13%
8%
4%
5%
9%
18%
6%
18%
16%
13%
38%
35%
25%
34%
20%
13%
6%
18%
24%
24%
23%
30%
31%
18%
25%
33%
28%
8%
27%
25%
23%
31%
19%
33%
19%
23%
18%
25%
28%
42%
26%
35%
9%
10%
2%
19%
25%
33%
8%
5%
46%
6%
6%
2%
8%
3%
6%
5%
7%
11%
8%
9%
6%
6%
2%
6%
5%
3%
6%
3%
0% 20% 40% 60% 80% 100%
Services
Tourism
Transportation
Exceeding 31%
+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 -31%5%

Companies’ expectations with regards to the evolution of their employees number are quite different in August compared
to February 2014. While in Aug 2014, 18% of companies expect a 5-10% increase in personnel numbers, only 5% said so
at the beginning of the year. Also, 22% say now that they will have no new staff this year compared to 37% in Feb 2014.
How much do you expect your number of
employees to grow in 2014? (one answer)
5%
9%
37%
30%
5%
9%
5%
1%
1%
4%
6%
22%
35%
18%
9%
2%
2%
0% 5% 10% 15% 20% 25% 30% 35% 40%
-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 31%
Aug-14
Feb-14

The industry sectors that expect the highest growth in personnel numbers (exceeding 31%) are the following:
Retail & Wholesale trade (8%), Services (5%), and Transportation (4%).
How much do you expect your number of
employees to grow in 2014? (one answer)
2%
8%
5%
4%
5%
3%
8%
4%
5%
14%
15%
15%
17%
34%
4%
10%
8%
18%
5%
19%
15%
24%
38%
67%
33%
27%
7%
14%
17%
24%
14%
30%
15%
38%
28%
33%
38%
42%
43%
60%
33%
37%
14%
19%
39%
15%
11%
33%
19%
17%
29%
40%
22%
6%
47%
8%
8%
12%
4%
12%
3%
8%
4%
5%
8%
10%
6%
14%
3%
2%
2%
0% 20% 40% 60% 80% 100%
Services
Tourism
Transportation
Exceeding 31%
+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%

More than half of the respondent companies (51% in August) predict a growth in salary level of 5-10%, while
30% of them (a 9% increase) continue to anticipate higher growth rates of 10-21% in salaries during this year.
How much do you expect the salary level
in your company to grow in 2014?(one answer)
19%
60%
19%
2%
1%
1%
17%
51%
23%
6%
1%
0% 10% 20% 30% 40% 50% 60% 70%
-5% to -10%
-1% to -5%
0%
1% to 5%
5% to 10%
10% to 20%
Exceeding 21%
Aug-14
Feb-14

The industry sectors in which companies expect a salary increase exceeding 20% are: Power / Energy / Mining (28%),
followed at a great distance by Services (9%), and by Retail & Wholesale trade, Pharmaceuticals / Healthcare, and
Information Technology with 8% each.
How much do you expect the salary level
in your company to grow in 2013?(one answer)
4%
2%
3%
5%
3%
8%
8%
28%
4%
7%
4%
12%
29%
38%
15%
31%
6%
33%
34%
27%
14%
30%
17%
61%
47%
51%
77%
62%
32%
67%
33%
46%
39%
57%
60%
66%
24%
19%
8%
28%
33%
15%
32%
29%
10%
13%
6%
4%
2% 4%
0% 20% 40% 60% 80% 100%
Services
Tourism
Transportation
Exceeding 21%
+10 to +20%
+5 to +10%
1% to +5%
0%
-1% to -5%
-5% to -10%
-10% to -20%
Exceeding -21%
14%

The level of trust in the industry sector in which the respondent companies operate has improved between February and
August 2014. The proportion of the companies “slightly confident” has gone down by 15%, while the percentage of
“somewhat confident” and “very confident” companies increased by 9% and 5% respectively.
How confident do you feel regarding the growth of
your industry for the next 6 months? (one answer)
Question 6
14%
49%
30%
7%
15%
34%
39%
12%
0% 10% 20% 30% 40% 50% 60%
Not at all confident
Slightly confident
Somewhat confident
Very confident
Aug-14
Feb-14

If in February 2014 zero percent of respondents were not at all confident about the growth of their company, in August
2014 this percentage has gone up to 8%, while the proportion of very confident companies has gone down to 32% in
August from 40% in February 2014.
How confident do you feel regarding the growth
of your company for the next 6 months? (one answer)
Question 7
23%
37%
40%
8%
20%
40%
32%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Not at all confident
Slightly confident
Somewhat confident
Very confident
Aug-14
Feb-14

Low cost as the main strength of the respondents’ competition in the local market increased from 26% in February to 38%
in August 2014. Competitors’ brand is not anymore the most important one (27% in Aug vs. 37% in Feb). A notable
increase is seen in the “Partnerships” segment, up to 14% in August from 9% at the beginning of 2014.
Please select the main strength of your competitors
in the local market, Romania. (one answer)
Question 8
38%
27%
14% 14%
6%
1%
26%
37%
14%
9%
7% 7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Low cost Strong brand
awareness (trust)
Distribution channels Partnerships R&D Other
Aug-14
Feb-14

To what extent do you expect your customers'
demand to change in the next 6 months? (one answer)
Question 9
In August 2014, 53% of companies expect the demand from their customers to “somewhat increase” and 36% believe
that it will “stay the same”. However, overall there are no major variations in trends in August compared to February 2014.
August 2014
3%
37%
60%
2%
36%
62%
0% 20% 40% 60% 80%
Change dramatically
Stay the same
Somewhat change
Aug-14
Feb-14
February vs. August 2014
1%
8%
36%
53%
2%
0% 10% 20% 30% 40% 50% 60%
Decrease dramatically
Somewhat decrease
Stay the same
Somewhat increase
Increase dramatically

What impact will the change in customers' demand
have on your company in the next 6 months?
(one answer for each option)
Question 10(a) – Operations, Marketing, and Brand Positioning
Although in decrease, a potential change in customers’ demand seems to impact the most on operations of the
respondent companies (13% in August, in decrease from 21% in February) and not so much marketing and brand
positioning.
Total number of responses: 587
10%
12%
20%
7%
34%
33%
23%
27%
13%
21%
0% 20% 40% 60% 80% 100%
Aug-14
Feb-14
Lowest impact (1) (2) (3) (4) Highest impact (5)
14%
19%
20%
14%
32%
26%
28%
36%
6%
5%
0% 20% 40% 60% 80% 100%
Aug-14
Feb-14
17%
16%
21%
19%
27%
33%
27%
25%
8%
7%
0% 20% 40% 60% 80% 100%
Aug-14
Feb-14
Brand Positioning
Operations Marketing

What impact will the change in customers' demand
have on your company in the next 6 months?
(one answer for each option)
Question 10(b) – CSR, Organizational Structure, and Innovation
Also in decrease, innovation comes second in the ranking of the areas perceived as having the highest impact as a result
of a change in customers’ demand (14% in August vs 21% in February 2014).
Innovation
CSR (Corporate Social Responsibility) Organizational Structure
31%
40%
31%
28%
27%
23%
9%
7%
2%
2%
0% 20% 40% 60% 80% 100%
Aug-14
Feb-14
17%
21%
20%
28%
38%
28%
20%
21%
5%
2%
0% 20% 40% 60% 80% 100%
Aug-14
Feb-14
12%
5%
16%
16%
25%
23%
33%
35%
14%
21%
0% 20% 40% 60% 80% 100%
Aug-14
Feb-14

The impact of the legal environment on the growth of the company is perceived as relatively stable at the high-end ratings
(21% in February vs 22% in August 2014).
To what extent does the legal, tax and regulatory
environment play a role in the growth of your
company? (one answer for each option)
Question 11(a)
8% 15%
18%
28%
35%
27%
26%
22%
21%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Aug-14
Feb-14
Least important role (1) (2) (3) (4) Highest important role (5)
Legal environment

In August 62% of respondents consider that tax environment plays a high and very high role in the growth of their
company, on increase from 56% in February.
Question 11(b)
Tax environment
7%
2%
8%
14%
23%
28%
31%
19%
31%
37%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Aug-14
Feb-14

The regulatory framework seems to be perceived as of a highest impact in August 27% compared to 23% in February.
Both in August and February, 33% of the respondents agreed that regulatory environment plays a high role in their
company’s growth in 2014.
Question 11(c)
Regulatory environment
7%
2%
11%
9%
22%
33%
33%
33%
27%
23%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Aug-14
Feb-14

Which of the following best describes your
company’s primary strategy for financing its
investments in the past year? (one answer)
Question 12
When it comes to financing investments, companies continue to use mostly bank loans (54% in February vs. 49% in
August), followed by share capital increase (10% in February vs. 23% in August). There was a steep reduction in the “own
resources, intercompany loans and reinvested profit” segment, down to 16% in August from 34% in February 2014.
August 2014
34%
2%
10%
54%
16%
12%
23%
49%
0% 10% 20% 30% 40% 50% 60%
Own resources, intercompany
loans, reinvested profit
Our company used venture
capital to finance its investments
Our company used share capital
increase to finance its
investments
Our company used bank loans to
finance its investments
Aug-14
Feb-14
60%
27%
13% Own resources
Intercompany
loans
Reinvested profit

Which of the following best describes your
company's preferred strategy for financing its
investments in the following 6 months? (one answer)
Question 13
In August as well, companies’ main strategy for financing future investments appears to be through bank loans 48% vs.
49% in February 2014. The “share capital increase” segment is expected to be up to 26% compared to 12% in February.
August 2014
62%
35%
3% Own resources
Intercompany
loans
Reinvested profit
7%
12%
11%
21%
49%
2%
12%
12%
26%
48%
0% 10% 20% 30% 40% 50% 60%
Other
Own resources, intercompany
loans, reinvested profit
Venture capital
Share capital increase
Bank loans
Aug-14
Feb-14

Which of the following best describe the reaction
of your company to the business environment
in the past 6 months? (one answer)
Question 14
In the past 6 months, businesses reacted to the pressures coming from the business environment by increasing
productivity (34% in August vs. 32% in February), by reducing costs (23% in August vs. 22% in February), or by new
products launching (16% in August vs. 17% in February).
5%
2%
5%
2%
15%
17%
22%
32%
2%
1%
3%
4%
6%
11%
16%
23%
34%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Other, please specify
Reduced capital investment
Reduced market coverage
Mergers & Acquisition
Attraction of EU funds
Talent acquisition
Restructure of the organization
New products
Cost reduction
Produtivity increase
Aug-14
Feb-14

Which of the following actions will your company
take to increase sales? (multiple answers)
Question 15
In August, 60% of respondents say their company’s strategy to increase sales will consist in introducing new
products/services for existing clients (compared to 80% in February), 33% say they will be increasing investment in
marketing and sales (compared with 24% in February), while 18% will be adapting existing products/service for new
geographic markets (compared to 22% in February).
7%
5%
10%
22%
29%
32%
24%
80%
3%
5%
14%
18%
31%
32%
33%
60%
0% 20% 40% 60% 80% 100%
Merging with and/or acquring competitors to increase market
share
Increasing prices
Cutting prices
Adapting existing product/ service for new geographic markets
Opening new distribution channels/ reorganizing distribution to
use multiple channels
Entering new geographic markets for existing products/services
Increasing investment in marketing and sales
Introducing new products and/or services for existing clients and
to attract new clients
Aug-14
Feb-14

In case of stagnation/decline in the market what
will be the steps your company will pursue in the
next 12 months? (all that apply)
Question 16
Unlike in February, when only 56% of companies said that they would continue to stay on the market if it declined, in
August the percentage increased up to 61%. However, a lower percentage of companies (42% in August vs. 56% in
February) seem to be willing to transform the market through innovative approaches in case such a decline occurs.
5%
10%
10%
56%
56%
4%
5%
13%
42%
61%
0% 10% 20% 30% 40% 50% 60% 70%
Leave the market and seek new ones
Seek external funding to secure our position on the market
Grow on the market through M&A (Mergers & Acquisition)
Transform the market through innovative approaches
Stay on the market until is stable again in order to secure it and
increase the trust level
Aug-14
Feb-14

Demographics
The results of this survey reflect the
responses received to our
questionnaire in the period between
28 Jul. and 8 Aug. 2014, from 305
top executives of major companies
operating in Romania.

Romanian company (Yes/No)
Demographics
Industry sector
8%
2%
2%
4%
4%
12%
17%
4%
2%
10%
9%
26%
1%
1%
1%
2%
4%
4%
5%
4%
6%
7%
9%
9%
11%
14%
22%
0% 10% 20% 30%
Other
Tourism
Chemicals
Transportation
Services
Aug-14
Feb-14
57%
43%
54%
46%
0% 10% 20% 30% 40% 50% 60%
Yes
No
Aug-14
Feb-14

Demographics
Company revenue levelBusiness type
65%
29%
6%
73%
22%
5%
0% 20% 40% 60% 80%
Business to Business
Business to Consumers
Business to Government
Aug-14
Feb-14
4%
15%
29%
15%
37%
5%
21%
33%
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 +
Aug-14
Feb-14

Entity type Job title of respondent
Demographics
3%
5%
36%
56%
2%
7%
14%
77%
0% 20% 40% 60% 80% 100%
Government/State-owned
enterprise
Public Equity / Portfolio
company
Pubicly listed
Privately owned
Aug-14
Feb-14
3%
3%
13%
8%
7%
28%
38%
1%
2%
3%
4%
5%
6%
8%
17%
54%
0% 10% 20% 30% 40% 50% 60%
CIO/Technology director
Other C-level executive
Head of business unit
Head of department
SVP/VP/Director
Board member
Manager
CFO/Treasurer/Controller
CEO/President/Managing
director
Aug-14
Feb-14

Project team members
Elena Badea
Associate Director
Branding, Marketing and Communication
EY Romania
elena.badea@ro.ey.com
Constantin Măgdălina
Senior Associate, Knowledge Management
Branding, Marketing and Communication
EY Romania
constantin.magdalina@ro.ey.com
We would like to thank all the respondents for their contribution
to this survey. A special tank you goes to Diana Dumitrașcu
from doingbusiness.ro for her significant support.

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.
© 2014 EYGM Limited.
All Rights Reserved.
ey.com

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