1. Main findings of Finpro 09 Pulse Survey
Executive Summery in Machinery sector
Finpro CSE
January-February, 2009

2. 1. Background & investigated areas
Background
• Finpro CSE has contacted the relevant associations and major companies in
• Construction,
• Logistics &
• Machinery sector
• The geographical coverage was Central and Southeast Europe, as in following countries
• Austria
• Czech Republic,
• Slovakia
• Hungary
• Slovenia
• Croatia
• Serbia
• Romania
• Bulgaria
• Turkey
• Around 100 managers were interviewed
• The phone-based survey was conducted in February 2009.
• Special note: the Survey is not based on representative primary research, it just gave some
“feelings” & summarize some subjective thoughts from market players` point of views.
© Finpro ry / 2009

3. 2. Main findings from Finpro Pulse 09 survey
Pulse 09: Machinery
6,0
5,0
4,0
3,0
2,0
1,0
0,0
Performance Openness
Notes:
• Scaling at sector performance from 1 (deep recession) to 7 (healthy growth)
• Scaling at sector openness from 1 (no opportunities to launch new technologies & business model)
to 7 (lucrative business to come up with new technologies & business models)
© Finpro ry / 2009

4. 3. Major comments from the region
Country Sector performance Major problem in the Major opportunity in your
sector sector
Strongly linked to the building happening. The fall in exports to Building economically , i.e.
Romania, Bulgaria, Ukraine, utilizing the advantages of the
Expect among other things initiatives from Poland and Hungary steel structure compared to
the public institutions for economic massive construction and timber
recovery. So far the extent of utilization of construction.
the companies is still satisfying.
Austria By substantial conversion to
Strong break-downs of building activity international regulations and
particularly in the new EU states are standards (EURO CODE)
however expected. reducing of the competition of
cheap suppliers from south and
Eastern European states
Dramatic situation, expect it to be much Lack of projects Very difficult to say, investors
worse then 2008 Demand of steel has gone are scared, but infrastructure
down in several industries. remains an option
Whole industry is suffering and probably
this will continue until the end of 2009 Automotive sector is Surprisingly construction sector
Czech affected the worst. seems to have still steady
Republic demand due to infrastructure
projects
© Finpro ry / 2009

5. 3. Major comments from the region
Country Sector performance Major problem in the sector Major opportunity in your
sector
Extremely difficult times. They monthly Market is over saturated with all No real opportunities at the
TO is EUR 30 000 and they need EUR kinds of products, industries are moment
120 000 just to survive, and not let go too dependent on one another
people. They are not the only Qualified & cheap workforce,
company in that situation. Instability, dead market but no real opportunities
Slovakia Extremely difficult for companies
whose business depends on the
automotive sector. They still have work
to do, but it all comes from Hungary,
companies with only Slovak customers
have no new projects coming. Nothing
happening in the market
Majority of Hungarian companies Lack of quality labour (engineers), Open to the Russian market,
working as sub-contractors for lack of quality material Acquisitions on the market:
Western companies (many Small companies are in the
Scandinavians as well), 30-40% Problems at Clients in Western target
capacities would be free EU, Hungarian machinery sector
strong linked with German & Consolidation, EU-fund driven
-15-20% decrease Austrian markets construction works
Hungary -20-25% free capacities will be
avalable Deeper recession, company Cleaning the market &
bankruptcies at underfinanced or consolidation --> cost efficient &
-35-40% free capacities will be strongly bank-linked companies reliable companies will survive
available, SME`s financial problems
Clients have financial program to Consolidation as cleaning the
get loan from banks market & acquisitions
© Finpro ry / 2009

6. 3. Major comments from the region
Country Sector performance Major problem in the sector Major opportunity in your
sector
Don't know. Maybe government helps
No orders, no work to do, 30-40% drop
Really bad. Members estimate a drop
financially some projects that influences
in employment
of 40-60%.
positively to this sector as well.
Lack of orders. Sales drops.
Slovenia Generally markets go down. This
Going down maybe 20%.
company tries to survive the first wave
of companies collapsing and when there
are fewer players on the market it is
easier to get orders.
-50% drop, Clients (German, Austrian, Financial problems at Austrian & More activities outside EU (e.g. Arabia,
French) in problem German Clients Iran)
-20 % drop, end-clinets troubles in No orders Market consolidation & new markets in
Croatia Germany (70-80% of Croatiaq export) the 2nd half 2009
Increasing orders from major export
market (Germany) EU financed projects, market
consolidation
Nothing much happening in the sector Foreign investors may decide to cease A lot of companies to be privatized:
at the moment, waiting for the operation due to the crisis (Fiat might FAP, 14 oktobar…
privatization to take place partially close down from March, US
Steel as well) Further privatization
Sector is pretty dead, for example: last
Serbia year 750 new freight railway carriages Law and legislation is the biggest
were bought, but 0 plans for this year, 0 problem, especially extremely strict HR
plans for production as well laws where privatization is concerned.
CEO is Slovak, he says they are much
stricter then in the rest of the Europe
© Finpro ry / 2009

7. 3. Major comments from the region
Country Sector performance Major problem in the Major opportunity in your sector
sector
The number of the equipments delivered Financial problems (cash 4 billion Euro will be available till 2013 from
in 2008 increased only by 7% compared to flow) UE funds to be invest in infrastructure projects
2007, the same situation will be also in (roads and railways)
Orders from the strategic
2009
clients will drop in the first Diversifying the products and establishing new
We expect good performances. Our sector half of the year. partnerships with the clients we had to refuse
is not affected directly by the economical earlier.
lack of subcontracting work
crises. We do not depend on certain
Romania opportunities for foreign
clients or sectors. no real opportunities at this moment in the
international companies; lack
machinery sector;
General recession (30- 40% drop due to of liquidities;
the decreasing orders from major foreign
New highways - his clients will sell more
non-paid invoiced and late
clients); focusing on revitalizing the sales
machineries and also spare parts will be
payment, difficult to take
channels;
needed
loans
30% less orders in 2009 compare to 2008
Sector is mainly export oriented and there Less orders, which will lead Ideal time for well established foreign
is decrease in order stock from foreign to closing down of some investors to begin new operations in Bulgaria
partners. factories and increase of due to more predictable cost structure. Easier
unemployment. to find outsourcing partner due to free
20-30% free capacity production capacities.
Decrease in orders, definitely Restructuring of the sector, more efficient
there will be some
Machinery sector is very dependent on operations.
Bulgaria bankruptcies of smaller
export, so it will experience serious
companies. Development of new products; restructuring of
difficulties in 2009.
the sector and consolidation. Only good and
Slowdown in construction and efficient companies will survive.
related sectors will lead to
less orders. Finding new markets and partnerships.
It will be difficult to keep the Healthy companies will manage the problems
employees in house due to of the global economic slowdown.
decreasing orders.
© Finpro ry / 2009

8. 3. Major comments from the region
Country Sector performance Major problem in the Major opportunity in your
sector sector
Expecting to keep 2008 level Demand shortage and Positive enlargements in
suspend in investments Russia and Central Asian
It is expected that the Turkish Countries
machinery export will slow Shrinking of domestic
down in 2009 due to the and foreign demand The movement in the
global financial crisis. There markets of the neighbor
Turkey
will be a downturn of 25% in countries.
internal market. But in the Willingness of the Turkish
second half of 2009 it will companies to produce high
take an upward trend and technological and value
could catch the performance added products.
of 2008 in 2010 and 2011.
© Finpro ry / 2009