Sector Analysis on Romanian Call Center Market(B.P.O) The sector is composed from the following NACE CODES: 6110,6311,8220,8291

Transcription

1 Sector Analysis on Romanian Call Center Market(B.P.O) The sector is composed from the following NACE CODES: 6110,6311,8220,8291

2 Content Summary Introduction Sector Overview Shareholders Market distribution Financial information Financial Ratios Competitors of COMDATA SERVICE Methodological notes

3 Summary: This analysis contains information about companies that declared financial data and one of the following activity: Wired telecommunications activities Data processing, hosting and related activities Activities of call centers Activities of collection agencies and credit bureau. At December 2013 were 4,399 companies that declared one of the above activity at Ministry of Finance. In Romania, currently, about 28,800 employees are working in call centers and similar activities. The number of call centers and support centers increased from 2009 to present. The Sector is composed by 91% of Micro companies and only 2% are Large and Medium companies. In the first 7 th months of 2014, 9 companies were closed because of bankruptcy. These companies recorded in 2013, a total number of employees of 39 and only 5.5 mill. lei Turnover. Between , the total Turnover recorded by the analyzed companies increased from 2,246 mill. lei to 3,785 mill. Lei(68.56%). There are only 3 companies that recorded, each of them, Sales grater than 100 mill. Lei. At the end of 2013, half of the companies recorded Operating Profit while 36.58% of them recorded Operating Loss. 40% of the companies were located in Bucharest-Ilfov region while only 4% are located in South-West Oltenia Region. 3

4 Number of companies RECOM and Insolvency Status (2014) There are 16 companies with Bankruptcy status, 9 of them were registered in All of them are Micro companies. 364 companies have activity temporary interrupted and out of them only one is a Small company. According to the new legislation, a company's reorganization plan will last three years and may be extended for one year. Only 86 companies have insolvency proceedings. Source: RECOM

5 Radiated companies ( ) If we consider the annual evolution of radiated/dissolved companies it is noticed that the percentage increased from a year to other. In 2009, when the economic crisis started, only 2% of companies were closed while in 2013 the percentage of these companies increased to 40%. Source: RECOM

6 Market distribution(2013) Number of companies and employees 40% of the companies were located in Bucharest and Ilfov counties. These companies recorded at December 2013 around 15,200 employees. North-WEST is the second region by, number of companies, 539 with almost 2,500 employees and is followed by the Center region with 466 companies and around 2,100 employees. Source: Ministry of Finance and RECOM

7 Market distribution (2013) Type of companies 1/2 Even if is not a characteristic for this sector, 91% of companies are Micro and only 2% are Large and Medium companies. Most Large companies are located in Bucharest. None Large companies are located in South East and South Muntenia regions. Region/Type of companies Large Medium Small Micro North-EAST North-WEST BUCHAREST- ILFOV ,597 CENTER SOUTH-EAST SOUTH-MUNTENIA SOUTH-WEST OLTENIA WEST Total ,021 Source: Ministry of Finance and RECOM

8 Shareholders structure (2013) In 2013, 93% of shareholders were individuals and only 7% of them were companies % of companies are owned by unique shareholderscompanies and 30.16% of them are owned by unique shareholders-individuals. There are no significant differences between the percentage of Foreign companies and Local companies that owned the call Centers companies in Romania. Source: Ministry of Finance and RECOM *78 individuals have not declared the country

9 Turnover recorded by the Sector Between , the total Turnover recorded by the analyzed companies increased from 2,246 mill. lei to 3,785 mill. lei. Half of them recorded values of Turnover smaller than 39,961 lei, and more than a quarter did not recorded Turnover. Source: Ministry of Finance and RECOM There are 3 companies that recorded, each of them, Sales grater than 100 mill. lei: PRIMESOFT SRL (declared as activity - Data processing, hosting and related activities), COMPUTER GENERATED SOLUTIONS ROMANIA SRL and NEXTGEN COMMUNICATIONS SRL.

10 Predictions and Trends Turnover Operating Profit Call center activities will register a positive development in the next period. The prediction is calculated based on the financial data history. The economic crisis cause companies to look for permanent solutions for optimize the costs and retain existing customers. Outsourcing is a viable solution and Call center companies that offering personalized requirements to customer can mark a significant economic value in many areas. One of the challenges facing small Call centers is the problem of keeping and motivating the employees. High dynamic workforce in this sector is a factor which must be considered. Source: Ministry of Finance, RECOM and KeysFin

11 Profitability per employee / years Type of companies Average Average Average Average Average Micro , ,632 1,330 4,856 2,000 5,006 3,138 Small 7,314 2,148 1,815 1,818-15,537 1,854-2,240 12,828-21,342 1,477 Medium -8,148 1,626 7,242 2,966 5,016 2,790 12,167 3,851 9,181 3,270 Large -10, ,158 1,176-3,875 2,271 4,776 4,821 5,198 5,290 Sector , ,856 1,490 4,851 2, ,711 Source: Ministry of Finance and RECOM (lei) Half of the analyzed companies recorded in 2013 values of Productivity smaller than 2,711 lei.

12 Return on investment per years Type of companies Average Average Average Average Average Micro 2.22% 8.26% % 3.62% 24.53% 15.98% 30.36% 21.02% 28.03% 28.65% Small 27.20% 12.17% 6.67% 12.67% % 9.39% -7.40% 10.90% % 6.59% Medium % 6.85% 22.18% 15.59% 14.21% 9.39% 31.54% 12.03% 22.62% 7.85% Large % -1.07% 4.08% 3.31% % 6.40% 13.44% 13.79% 13.30% 10.52% Sector 2.22% 8.26% 5.74% 5.74% -9.80% 13.80% 15.42% 17.00% 1.54% 19.30% Source: Ministry of Finance and RECOM The cost of employee management technology is actually an investment in employees. Half of the analyzed companies recorded in 2013 good levels of ROI, grater than 19.30%.

13 Return on Equity per years Type of companies Average Average Average Average Average Micro 0.43% -0.17% -3.03% 0.00% 2.10% 0.00% 2.93% 0.00% 2.33% 0.00% Small 4.76% 3.98% 1.05% 4.08% -6.46% 3.45% -0.95% 3.95% % 2.90% Medium -7.25% 5.03% 5.58% 6.28% 4.08% 7.17% 9.77% 9.28% 6.05% 7.31% Large % -3.28% 3.54% 3.54% % 12.55% 12.29% 20.88% 13.40% 20.36% Sector 0.43% -0.17% 1.44% 0.00% -2.22% 0.00% 3.89% 0.00% 0.41% 0.13% Source: Ministry of Finance and RECOM A Call center with a high return on equity is more likely to be one that is capable of generating cash internally. Compared with the Sector average (0.41%), Large companies recorded a good level of average ROE. Note: Are included companies with Profit and Loss Net and companies with negative values of Shareholders` Equity.

14 Productivity/employee Top 10 Turnover Companies with similar declared activity (8220 Call centers activities ) Company Turnover No of employees Productivity/ employee (lei) COMPUTER GENERATED SOLUTIONS ROMANIA SRL 133,419,600 2,590 51,513 STEFANINI ROMANIA SRL 77,662, ,392 ARVATO SERVICES SRL 65,569, ,727 XEROX BUSINESS SERVICES ROMÂNIA SRL 57,989,356 1,164 49,819 WEBHELP ROMÂNIA SRL 56,646, ,943 SYKES ENTERPRISES EASTERN EUROPE SRL 49,548, ,872 BOSCH COMMUNICATION CENTER SRL 41,922, ,749 MEDIUM RED SRL 39,116, ,005 GLOBAL REMOTE SERVICES SRL 21,477, ,959 BUW ROMÂNIA SRL 16,156, ,859 Companies / sector (CAEN 6110,6311,8220,8291) Company Turnover No of employees Productivity/ employee(lei) PRIMESOFT SRL 315,006, ,772,828 COMPUTER GENERATED SOLUTIONS ROMANIA SRL 133,419,600 2,590 51,513 NEXTGEN COMMUNICATIONS SRL 101,140, ,907 NET-CONNECT INTERNET SRL 96,705, ,670,520 GTS TELECOM SRL 85,036, ,349 INFOTREAT SRL 78,805, ,134,183 STEFANINI ROMANIA SRL 77,662, ,392 ARVATO SERVICES SRL 65,569, ,727 COMDATA SERVICE SRL 78,793,422 1,487 52,988 COMBRIDGE SRL 58,568, ,722,591

15 Methodological notes regarding the data analysis 1/5 This analysis takes into consideration the financial data of December 2009, December 2010, December 2011, December 2012, December 2013 as it was declared by the companies and registered by the Official Authorities: Trade Registry, Ministry of Finance and ANAF. The analysis was conducted only on companies that declared financial data. In order to calculate the financial indicators for each category of enterprises and the entire Sector, there have been excluded from the calculation the companies which presented content errors, as well as any other exceptions which might have changed the real image of the Sector. The Average values and the values were calculated considering the whole Sector, in order to reflect the real and complete image of this Sector of economical activity. Specific notes have been made where there was something considered atypical. The is the value that divides in two the series of data, sorted (ascending or descending), so that half of the values of the series are larger than the and half are smaller Trend was calculated using the Linear Approximation. This method calculates a trend that is based upon two sales history data points. Those two points define a straight trend line that is projected into the future. RECOM and Insolvency status is updated at August 2014.

16 Definition of types of Enterprises 3/5 Definition of types of Enterprises, according to Law 346/2004 about the stimulus of start-up and development of SMEs: Art (1) Small and Medium enterprises, according to the Average yearly number of employees and the Average yearly net turnover or the total assets, are part of the following categories: a) Micro-enterprises have less than 9 employees and a yearly net turnover or own total assets of less than 2 million euro, equivalent in lei; b) Small enterprises have 10 to 49 employees and a yearly net turnover or own total assets of less than 10 million euro, equivalent in lei; c) Medium enterprises - have 50 to 249 employees and a yearly net turnover smaller than 50 million euro, equivalent in lei, or own total assets of less than 43 million euro, equivalent in lei. Large enterprises are those companies not included in any of the above categories.

17 Financial Ratios 4/5 Indicator Formula Description Productivity per employee TURNOVER/NO. OF EMPLOYEES Represent the average contribution of an employee at Turnover Profitability per employee NET PROFIT/NO. OF EMPLOYEES Represent the average contribution of an employee at Profit Cost per employee COST WITH EMPLOYEES/NO OF EMPLOYEES Represent the average cost of an employee Net Profit Margin NET PROFIT/ TURNOVER % Express the profitability of the company's business, the profit considered is influenced by taxes. Return on investment NET PTROFIT/COST WITH EMPLOYEES Measure how profitable is the investment in employees Return on Assets NET PROFIT/TOTAL ASSETS % Return on Equity NET PROFIT/SHAREHOLDERS' EQUITY % Current Liquidity Indebtedness Ratio Payment period of current debts EBIT (Operating Profit/Loss) CURRENT ASSETS/DEBTS<1 YEAR TOTAL DEBTS/SHAREHOLDERS' EQUITY % DEBTS<1 YEAR/TURNOVER X 365 DAYS EBIT = OPERATING INCOMES OPERATING EXPENSES Measure how profitable a company's assets are in generating profit Measures the rate of return on the ownership interest (shareholders' equity), current and unclaimed profit (like reserves and retained earnings). ROE should cover the current interest rate. Measures whether or not a firm has enough resources to pay its current debts ussing the current assets. A good liquidity is considered a value between Measures the short-term, medium and long term indebtedness of a company relative to shareholders' equity. The company should register low level of the indicator. Represents the average period of current debts payment. It is good that the duration of payment to be longer with 5-10 days than the recovery of receivables. Earnings before interest and taxes (EBIT) is a measure of a company's profitability that excludes interest and income tax expense.

18 Geographical organization of Romania 5/5 Geographical organization of Romania - Development Regions & Macro-regions The analysis of companies in Romania uses the Nomenclature of Territorial Units for Statistics as the system of geographical distribution and organization of economic activities analyzed, which is a statistic and structured nomenclature divided into 3 hierarchical levels: Macro-regions, Development regions and Counties. According to the Nomenclature of Territorial Units for Statistics, Romania is divided into 8 development regions, named after their geographical position: Macro-region 1 Macro-region 2 Macro-region 3 Macro-region 4 Nord-West Centre Nord East South-East South - Muntenia Bucharest Ilfov South-West-Oltenia West BIHOR ALBA BACAU BRAILA ARGES ILFOV DOLJ ARAD BISTRITA- NASAUD BRASOV BOTOSANI BUZAU CALARASI MUN BUCURESTI GORJ CARAS SEVERIN CLUJ COVASNA IASI CONSTANTA DIMBOVITA MEHEDINTI HUNEDOARA MARAMURES HARGHITA NEAMT GALATI GIURGIU OLT TIMIS SALAJ MURES SUCEAVA TULCEA IALOMITA VALCEA SATU MARE SIBIU VALSUI VRANCEA PRAHOVA TELEORMAN

19 Thank you! KEYSFIN SRL 19 Dr. Nicolae Staicovici Str, Bucharest, Romania phone / fax: mobile: Disclaimer: This study is the property of KeysFin and cannot be resale or reproduced without any specific agreement between KeysFin and client. Information provided in this study may be used only for the purpose for which it was requested. The information has no official character and is subject to the rules and conditions set by individual contracts, with no legal value.