1. How would you describe the market in which you conduct your business?
In spite of a generally low level of capital investments, we can say that this year we had good demand for small- and medium-sized compressors, vacuum solutions, industrial tools and assembly systems. Our service business is growing stronger and stronger. We are focusing on creating value for customers while keeping a close eye on efficiency.
Atlas Copco introduced this year several innovative products, including high-performance oil-injected screw compressors, efficient bolt tensioning tools, a speedy surface drill rig for construction applications and small quarries, and an intelligent monitoring system for road construction equipment.
Innovation is in our DNA, and we are committed to offering break-through solutions that help customers become more productive. The Group always strives to create value for customers and deliver higher productivity, smarter ergonomics, enhanced safety and improved energy efficiency.
Continuing to keep our promises for sustainable productivity for our clients’ businesses, we expect our business to grow with 2 digits in 2016.
2. From your perspective, how have the exports and the domestic consumption evolved? Have you had any surprises compared with the initial forecasts? Please detail.
The Romanian economy was, for more than a year, on an increasing trend, the economic and fiscal policies contributing to the consolidation of this trend. The official forecasts show an increase of Romanian GDP in the following two years and, as producers of B2B equipment for strategic industries, we can confirm the increasing appetite. Atlas Copco Romania has budgeted for this year an even higher increase than the one budgeted at the group level. The increase is determined not only by our offer, but mainly by the market demand, which is recovering and diversifying and thus brings internal and external consumption. For example, in Romania, the equipment demand for the automotive industry is augmented this year by other heavy industries, like shipyards.
3. Atlas Copco supports several key industries, such as the food industry, automotive and the oil & gas industry. The economic signs differ from sector to sector (the food industry was supported by the VAT cut, the automotive industry seems to be the beneficiary of more favorable credit conditions, while oil & gas deals with the decrease of the international prices). What are your forecasts for the next years in these industries?
Romania's food and beverage sector will be a regional outperformer over the next five years, driven by an improving labor market, real wage growth and low levels of inflation. The VAT cut on food products from June 2015 provided an additional boost to the sector, with further investment to come as the sector consolidates.
As for the automotive industry, we have forecasted a 14.9% increase in vehicle sales in 2015 on the back of a recovery in the passenger car and commercial vehicle segments. Growing consumer sentiment started translating into an uptick in big-ticket purchases, such as new autos, following a period of reticence from consumers (when reduction of GDP determined people to delay car purchases and weak access to credit determined many businesses to reduce investment). In 2016, we expect to see robust growth in the auto market, as improvements in private consumption translate into improved auto sales.
When it comes to the oil & gas industry, field redevelopments will pop up oil and gas production in 2016, with longer-term growth driven by Black Sea projects. The downstream sector continues to modernize but downsize in order to remain competitive.