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Key messages
• Internationalization is key for the survival of Portuguese
companies and Portuguese economy as a whole
• Central Eastern Europe, in particular Poland, is an actractive
market due to size, proximity and existing opportunities
• Although there are plenty of opportunities, there are also some
obstacles and mistakes have to be avoided
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Agenda of the meeting
• Why?
• Where?
• How?
20m
40m
1h 30m
2h 30m
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Internationalization is key for companies, special those in
declining markets
Source: McKinsey Research, CEIS
100%
71%
More successfulcompanies
Less successfulcompanies
Importance of internationalization focus
% of companies that rely on
international growth /
expansion for success
Advantages of internationalization (not exhaustive)
• Bigger market / Increased revenues
• Optimized production and capacity
• Better negotiation power with suppliers
• Dilution of fixed costs
• Optimization of risk
• Access to other sources of finance
• 9
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Internationalization of businesses is also a matter of survival for Portugal
CAGR*. Percentage
* At 2005 pricesSource: McKinsey Research, Global Insight; OCDE “OECD Economic Outlook”; EIU
Portuguese GDP Growth GDP growth levers
Private consumption
Government spending
Investment
Trade balance
3.6
0.7
1993-2000 2000-2010 2010-2020
3.31.3
3.61.6
7.5
-2.6
-13.0
0.9
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Portugal should be able to act on the trade balance lever, following
the example of European pears
World export quota*
* Normalized by the populationSource: McKinsey & Company, IMF; International Trade Center; Global Insight
0.4%
1.4%1.5%
1.7%
2.1%
2.7%
Portugal Sweden Austria Switzerland Denmark Belgium
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Agenda of the meeting
• Why?
• Where?
• How?
20m
40m
1h 30m
2h 30m
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The CEE market is huge and offers strong potential.
15 34 47
GDP (Current Prices),
Trillion $
4
11
14
CEE WE* USA USAWE*CEE
268
307313
Population,
Million
GDP
Per Capita (Thousand $)
2010
* Countries belonging to WE: Austria, Belgium, France, Germany, Ireland, Luxembourg, Netherlands, Portugal, Spain and United KingdomSource: World Bank & Central Intelligence Agency (The World Factbook) 7
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.and there is still space for credit-fuelled growth
USAWECEE
39
70
59
DEBT/GDP (%)
Source: Central Intelligence Agency (The World Factbook)
2010
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Poland is already a big market in Europe.
2010. Current prices
Germany
Spain
Netherlands
Czech Rep.
France
Poland
Ukraine
Portugal
Source: World Bank; Central Intelligence Agency (The World Factbook)
Countries
GDP
(Billion USD)
2,960
1,376
680
263
2,160
725
306
247
Germany
Spain
Netherlands
Czech Rep.
France
Poland
Ukraine
Portugal
Countries
Population
(Million)
82
47
38
11
65
45
17
10
Netherlands
France
Czech Rep.
Poland
Germany
Spain
Portugal
Ukraine
Countries
GDP per capita
(Thousand USD)
41
33
26
19
36
30
23
7
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.and will soon level its economy with EU peers
GDP Growth. 2005-2010, %
Source: World Bank; Central Intelligence Agency (The World Factbook)
Ukraine Poland Czech Rep. Portugal Spain Netherlands Germany France
29%
19%
16%
5%4%
~1% ~1%~0%
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Poland, basic info
Source: PAIiZ 11
Area
Population
Capital
Administrative divisions
Legislative Branch
Executive Branch
Judicial Branch
Time zone
312,679 km2
38.1 m
Warsaw agglomeration: population 2.5 million
16 Voivodships, 314 Poviats, 2478 Municipalities
Sejm (460 representatives),Senat (100 representatives)
President (5 year term),Council of Ministers (4 year term)
Supreme Court, common courts, administrative courts, military courts
GMT +1
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Poland, basic info – Cont.
Source: PAIiZ, GUS, NBP, World Bank 12
• 9being robust and resilient to external shocks –mainly due to the country’s significant internal
market and diversified export structure
• 9offering safe environment for undertaking economic activity and long-term planning (stable prices, permanent GDP growth)
• 9having very low risk of a financial crisis (public sector debt amounts to 55 % GDP while the EU 27 average equals 80% GDP)
• 9offering investment possibilities resulting from modernization of infrastructure and implementing modern technologies in corporations
• 9being driven by a large number of agile small
and medium enterprises (over 3 000 000 registered entities)
Poland is characterized as. Main financial numbers
5.3
3.6
6.26.8
5.1
1.8
3.9 4.3
2004 05 06 07' 08 09 10 2011
GDP Growth PLN. %
GDP 2010
Unemployment rate 2010
Inflation 2010
Min. salary
Avg. salary 2011
469 Billion USD (2x Portuguese: 229)
12.4%
2.6%
1.500 PLN (~375€)
3.416 PLN (~850€)
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Wages in Poland are following the growth of the economy.
Average monthly gross wages. PLN
Source: Polish statistical office (GUS)
1,924 2,062 2,133 2,201
2,290 2,380
2,477
2,691
2,942 3,103
3,225
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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.yet low compared with peers
Labour cost per hour in euros. 2010
Source: Eurostat
23
27
41
38 3836
33
3129 29
28 2826
20 20
18
1412
108 8 7 7
6 54
3
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.and inflaction is expected stable and low
Yearly price index for consumer goods and services
Source: Polish statistical office (GUS); forecast by PMR
10.1%
5.5%
1.9%
0.8%
3.5%
2.1%
1.0%
2.5%
4.2%
3.5%
2.6%
3.7%
3.1%2.8%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 F2011 F2012 F2013
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29% of Polish population is concentrated in big cities
Million. 2010
Source: Polish statistical office (GUS)
100%=38 15
23 12
11
Totalpopulation
Ruralpopulation
Urbanpopulation
Cities below100k
Cities above100k
39%
61%
32%
29%
4.5%
2.0%
2.0%
1.7%
1.5%
17.2%
Warsaw
Lodz
Krakow
Wroclaw
Poznan
Other
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Red tape still is a reality in some countries of CEE
Source: Transparency International
Worldwide Corruption Perceptions,
Ranking of Countries
Denmark (1º)
Germany (15º)
UK (20º)
Spain (30º)
Portugal (32º)
Poland (41º)
Hungary (50º)
Czech Republic (53º)
Slovakia (59º)
Croatia (62º)
Italy (67º)
Romania (69º)
Ukraine (134º)
Russia (154º)
9,3
7,9
7,6
6,1
6,0
5,3
4,7
4,3
4,1
3,9
3,7
2,4
2,1
4,6
17
2010
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“The Polish state is more bureaucratic and exercise more
control than rest of Europe.”
António Castro, ex-CEO of Group
Mota-Engil to Central Europe
“Polish bureaucracy is much like the traffic in Warsaw - no end in
sight, but eventually you somehow get through it.”
Tomi Ranta, managing director of
Poland Leinonen Accounting
“We have a good relationship with local authorities and are
careful not to create conflicts.”
José Manuel Cunha, ex-
administrator of ColepCCL Polska
IN POLAND:
Many bureaucracies,
Many places
.1 MONTH.
IN PORTUGAL:
Company at the time:
One place,
One company
24 HOURS
1º Define the type
of society
FILL
FORM
3º Statistical Register
5º Open account
7º Social Security
4º Stamp making
6º Get tax Id & PIN
8º Notary
2º Register company in
the registration district
Bureaucracy also creates bottlenecks in many transactions
in Diário Económico, 2007
In Investing in Poland, 2011
in Diário Económico, 2007
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There are opportunities at all levels
• Mergers and acquisitions
• Green field entry
• Privatizations
• Trade / export of products and services
Entry form Sectors
• Infraestructure (roads, railroads, airports, energy production, transport and distribution, waste management, water, amoung others)
• Services / customer care
• Luxury goods
• Niche markets
• Others
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Agenda of the meeting
• Why?
• Where?
• How?
20m
40m
1h 30m
2h 30m
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Company name Background Possible reasons for exit
Greendays Polska
• Year of entry: 2006• Corebusiness: Collection and transportation of
industrial waste
• Lack of knowledge of the most direct competitors
• Lack of investment• Lack of knowledge of the Polish
market• Problems in developing the company's
business (prospecting for new clients)
FNAC
• European leader in the distribution of technological and cultural assets
• Only brand that offers, in one space, one selection of product literature, music, image, sound and all the technologies
• 145 stores in seven countries: Belgium, Spain, Italy, Portugal, Switzerland, Greece and Brazil
• Lack of knowledge of the most direct competitors (Empik is the leading brand in the Polish market, with a large market share)
Portugalia Shoes• Corebusiness: Import and distribution of
footwear
• Lack of knowledge of the most direct competitors
• Lack of knowledge of the Polish market
• Problems in developing the company's business (prospecting for new clients)
Some companies failed to enter Poland successfully
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IN PORTUGAL:
Pingo Doce
IN POLAND:
Biedronka
- Chain supermarket of Jerónimo Martins
- Serving small residential areas, specially middle class and middle/high class population
- Pingo Doce has the competitive advantage of possessing lower prices regarding the meat, fish, vegetables and fruits
- Chain supermarket of Jerónimo Martins
- One of the main purpose is to satisfy small areas in the suburbs, targeting in particular the middle class and the middle/low class population
- It differs from competitors by its low prices, name, colors and by it's stores location strategy (single buildings and isolated)
There is a cultural and linguistic barrier which makes it
necessary in many cases to adapt business models
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But mainly, mentalities have to be adapted.
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“I am market leader in Portugal. Why should I pay market price for a location in a shopping mall??”
“I want very much export to Poland, but I can not invest in marketing and publicity...”
“This is not how we do business in Portugal...”
“We do not need a market study. Let’s just start and see how it goes...”
“If it sells in Portugal for sure it will sell in Poland...”
REAL COMMENTS, ADAPTED
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“In Poland, we saw a local partner that made us think about investing in the country. As a growing
country, we saw a business opportunity.”
Yuval Avni, GIZA Venture Capital* managing partner
In Globes Israel’s Business Arena, 2011
* GIZA is an investment fund in several areas: Communications, Semiconductors, Information Technology, Enterprise Software, Life Sciences, CleanTech, Media, Internet & Entertainment
“When we entered the market it was essential to resort to a Polish partner in order to immediately
acquire some of the market knowledge.”9
“Is not required entering in market with a local partner, but you have to have a deep knowledge of
the Polish market.”
Francisco Lacerda, ex-administrator of Millennium BCP
In Diário Económico, 2007
“It is important to have a partner in the field, even if it isn’t a local.”
António Marques Varela, president of Tiner*
* Construction company of Logistics and Distribution Centers, Shopping Malls, Retail Parks, Factory Outlets, Commercial and Residential Buildings
In Diário Económico, 2007
To have the key business contacts and introductions can
make the difference between success and failure
“With the strong development of the transport sector in Poland, there was a necessity to have a local
partner to help us in the company's growth.
Jens Holger Nielsen, CEO of Samskip Multimodal
Container Logistics
In Samskip News, 2009
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Economical opportunity in CEE
• The market is huge and offers strong potential
• The economy is growing at a strong and sustainable pace
• Overall the region resisted well (comparatively) to the credit crunch
• There is still space for credit-fuelled growth
• The age-pyramid is favourable to further growth
• The education system has shown proves of great effectiveness
• There are examples of companies that did not succeeded in entering CEE
• There is a cultural and linguistic barrier which makes it necessary in many cases to adapt business models
• It is hard to do business without appropriate business contacts and introductions
• Red-tape is still a strong reality in some countries of CEE
• Bureaucracy creates bottlenecks in many transactions
Entry barriers for companies
Our Vision
To be the key catalyst and
partner of new and successful
businesses in CEE
Our Mission
To identify and select businesses
that could succeed in CEE and
support them with an integrated
offer as their local partner
CEiS aims to be the key partner of new successful
businesses in CEE
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Start-up
incubator
Legal adviser Tax adviser
Outsourcing
Private
equity/
Business
Angel
Interim
management
Management
consultant
Partner
CEiS offer is the combination of several existing services, with
the added value of being integrated
Know-how
Network
Alignment
• Extensive know-how
and expertise in
management
• Profound knowledge
of CEE market
Broad network of
contacts in a
comprehensive set of
business fields in CEE
Complete alignment
with the client by
establishing a
partnership with
common incentives
Foundations of CEiS value proposition
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Strategy support
Finance
Business origination and sales
Management
and back-office
• Contact clients• Establish, train and manage the
sales force• Introduce sales team to potential
clients and partners• Support business development
initiatives
• Define the entry strategy to CEE– Analyse segments and pricing– Elaborate market studies– Define product and value proposition– Design the business plan
• Support execution of the strategy
• Define corporate finance structure
• Negotiate on behalf or support negotiations for funds raising
• Support project finance design and negotiations
• Perform due diligence• Design metrics and control
mechanisms
• Manage the day-to-day activities• Manage the back office (accountancy,
legal, payroll, HR, etc)• Design and optimize procedures
CEiS offer is based on 4 integrated solutions,
tailored to each clientNOT EXHAUSTIVE
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Who we are - Experience highlights
Bruno
Ferreira
• CEO Central Europe Integrated Solutions• Board member Polish Portuguese Chamber of Commerce• Previously board member EDP Renewables Polska, with
responsibilities in planning and control• Previously consultant with McKinsey & Company• MBA from Insead
• Firm commitment to success
• Solid partnership to grow the business in CEE
• Strong and solid background to guarantee future achievements
João
Rodrigues
• Vice President Central Europe Integrated Solutions• CEO AJR Development• CEO Grill & Co• Board member AJR HD Sp. z o.o. (Haagen-Dazs shops)• Vice President Polish Portuguese Chamber of Commerce• Previously Member of Supervisory Board – FoodCare Sp. z o.o.• Previously Board Member Martifer Gestão Imobiliária (Portugal)
and CEO Martifer Polska• MBA from IEDE/EUDEM
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To guide and advise CEIS is supported by an Advisory
board
• To give guidance to the definition of CEIS’ strategy
• To support the identification of long-term market trends that can affect CEIS
• To evaluate and supervise the quality of the service provided by CEIS to its clients and partners
Responsibilities of the
advisory board
Advisory board
Executive board
• His Excelency the Ambassador of Portugal in Poland, Mr. José Sequeira e Serpa
• Chairman of the Polish Portuguese Chamber of Commerce, Mr. Pedro Silva
• Partner at Law Firm Domański Zakrzewski Palinka, Mr. Marcin Krakowiak
• Secretary General of the Polish Portuguese Chamber of Commerce, Mr. Tiago Silva
• Bruno Ferreira, CEO• João Rodrigues, Vice-President
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Key messages
• Internationalization is key for the survival of Portuguese
companies and Portuguese economy as a whole
• Central Eastern Europe, in particular Poland, is an actractive
market due to size, proximity and existing opportunities
• Although there are plenty of opportunities, there are also some
obstacles and mistakes have to be avoided