© aydindurdu-dreamstime.com Business | June 21, 2013
German companies underestimate risk of European stagnation
A Roland Berger restructuring study for Germany shows: 80% of companies expect to grow in the next two years However, two-thirds of those surveyed assume Europe will stagnate or even possibly slip into recession
In terms of their own competitiveness, German companies are looking optimistically into the future: According to the "Restructuring study 2013" by Roland Berger Strategy Consultants, about 80% of respondents think that they will continue to grow until 2015. The study revealed that German companies consider themselves to be competitive compared to other European players. However, they were less optimistic about the rest of Europe. Two-thirds of those surveyed expect the European economy to stagnate or even slip into recession in the next few years. "German companies are well positioned overall, and that's why they're internationally competitive," says Max Falckenberg, Partner at Roland Berger Strategy Consultants. "However, they appear to underestimate the economic risks in Europe significantly." After all, the German economy is very export oriented. "If neighboring EU countries slip into recession, this will negatively impact German companies too," explains Falckenberg. "They need to be ready should this happen!" Europe – The big risk German companies consider the single market one of the big advantages of the EU. However, should the economic situation deteriorate throughout Europe, German companies would be faced with a drop in intra-European exports. Furthermore, this would most likely be accompanied by greater unemployment and weaker consumption across Europe. However, German companies are still convinced that they can grow over the next two years – especially because of their international market access (21%), broad and high-quality product portfolio (19%) and strong innovation (17%). "Their good financial situation also gives German managers reason to be optimistic as liquidity has become less tight at many companies," according to Roland Berger restructuring expert Jakob Rüden. "Many companies have been able to strengthen their equity base since the last economic crisis in 2008/09." Using scenario planning to deal with volatile markets Nevertheless, German companies need to keep a close watch on the volatile economic environment – especially in Europe – and ideally base their planning on various economic scenarios. Almost 80% of the study participants already use scenario planning when setting up their strategies. Just as important for them is to permanently restructure their own company (86%). "Only those companies that regularly review their own strategy and take appropriate actions will be able to remain competitive long term and successfully operate in volatile markets," says Falckenberg. Therefore, it's no surprise that 65% of those surveyed are contemplating changing their strategy or business model. In 2012, only 44% considered doing so. Making costs more flexible (76%), such as by outsourcing, also plays a key role. However, as in previous years, in 2013 German companies intend to focus on growth and sales initiatives (80%) to further improve their competitiveness. Securing financing Over 60% of the study participants view their liquidity situation as better than average. Therefore, 90% of German companies are planning to finance their future growth using own resources. "They plan to focus on direct working capital actions such as optimizing inventories and payment terms," says Rüden. To secure outside finance, companies are relying on bank loans (50%). In most cases companies are planning to renew existing credit lines (32%), expand them (19%) or apply for new lines (18%). In contrast, the capital market plays a lesser role: Only 9% of the companies surveyed plan to issue bonds or search for external investors; no more than 3% consider SME bonds. "Alternative forms of financing play hardly any role for weaker companies – especially for SMEs," says Falckenberg. "This is because after the expiration of standard mezzanine programs, new mezzanine solutions have become quite expensive. On the other hand, SME bonds bear a certain placement risk and mean the company must be really fit for the capital market."
JEOL Ltd. acquires Integrated Dynamic Electron Solutions JEOL Ltd. , manufacturer of semiconductor equipment and other industrial instruments and equipment, announced the acquisition of Integrated Dynamic Electron Solutions Inc. (IDES), an entrepreneurial venture specializing in technologies related to transmission electron microscopy (TEM).
NEXT receives major order for Indian government program NEXT Biometrics has received an order for UIDAI and STQC certified fingerprint biometric readers in India with a value of USD 750,000.
Cadence completes acquisition of AWR from NI Cadence Design Systems, Inc. has completed the acquisition of AWR Corporation from National Instruments Corporation.
Fiat Chrysler and Foxconn plans EV joint venture A new competitor in the industry for electric vehicles are in the making.
Collins Aerospace inks multimillion-dollar space contract Collins Aerospace Systems has signed a contract with Lockheed Martin to provide critical subsystems to support production of NASA’s Orion spacecraft fleet for Artemis missions III through VIII.
Imagination Technologies expands with new European design centre Imagination Technologies has opened a new design centre in Timisoara, Romania. The centre will focus on IP designed for artificial intelligence (AI) and computer vision.
AKI Electronic becomes Schurter Electronics As part of the further integration into the Schurter Group, AKI Electronic spol. s r.o. changes its name to SCHURTER Electronics spol. s r.o.
From Bosch to Silicon Mobility - Kallenbach takes the helm Automotive semiconductor company, Silicon Mobility, has appointed former Robert Bosch GmbH executive Rainer Kallenbach as CEO of the company as of January 6, 2020. The current CEO Bruno Paucard will remain with the company as COO and on the Board of Directors.
NEXT Biometrics reorganises - reduces headcount NEXT Biometrics says it is executing a program to optimise the organisation and cost base with its strategic priorities and market opportunities; which also translates to layoffs
LPKF delivers laser system to semiconductor industry customer In December, LPKF delivered – for the first time – a highly automated version of its LIDE system for integration into a semiconductor fab to an unnamed semiconductor manufacturers.
ROHM company SiCrystal & STMicro ink wafer supply deal ROHM and STMicroelectronics have signed a multi-year silicon carbide (SiC) wafers supply agreement with SiCrystal, a ROHM group company having a top share of SiC wafers in Europe.
Cadence expands collaboration with Broadcom Cadence Design Systems says it has expanded its collaboration with Broadcom Inc. for the creation of semiconductor solutions targeting next-generation networking, broadband, enterprise storage, wireless and industrial applications.
Marvell expands R&D footprint in India Marvell has announced the addition of its new facility in Bangalore, part of Marvell India Private Limited, the company’s second largest research and development (R&D) effort spanning three sites – Bangalore, Pune and Hyderabad.
imec spin-off raises €4,5 million in funding MICLEDI Microdisplays, the latest spin-off of imec, has raised EUR 4,5 million seed capital from imec.xpand, with participation of PMV and FIDIMEC.
Synopsys to acquire certain IP assets of INVECAS The acquisition broadens the company’s IP portfolio and adds a team of experienced R&D engineers to the company’s development department.
Fire at Kioxia's Yokkaichi NAND fab A fire broke out at Kioxia’s Yokkaichi plant – a joint venture facility owned by Kioxia and Western Digital – in Japan on January 7.
New Hella electronics JV starts production in China The joint venture HELLA BHAP Electronics has started production. The company was founded in 2018 by HELLA and BHAP, one of the largest automotive suppliers in China.
European backing for Prodrive's growth plans The European Investment Bank is providing a EUR 50 million loan to Dutch technology company Prodrive Technologies.
Murata acquires 3DHaptics company Murata Manufacturing and MIRAISENS, which offers haptic solutions technology using 3DHaptics technology, have signed an agreement for MIRAISENS to become a wholly-owned subsidiary of Murata Manufacturing.
Diodes updates on Lite-On acquisition Since the initial announcement of the acquisition back in August, 2019, all customary closing conditions have been met, including approval by the Lite-On shareholders. In conjunction, Diodes has been working through the final process of securing the required regulatory approvals in both Taiwan and China.
Grant helps Diodes to grow in Greenock Semiconductor manufacturer Diodes Incorporated has received a GBP 13.7 million funding package from Scottish Enterprise towards a GBP 47 million project enabling its future growth in Greenock, Scotland.
Murata starts construction on new production building Okayama Murata Manufacturing Co., Ltd. (Setouchi, Okayama Prefecture), started construction on a new production building in December 2019.Load more news