Romania

Details

  • Type: Publication series
  • Date: 9/5/2012

KPMG to support SMEs which are at the heart of the Romanian economy 

            

Jacqueline Laye

Director, KPMG Enterprise

Definitions of the SME sector vary between those used by statistics offices, international organizations, segmentations used by banks and companies for their clients etc. with the most common definition of SMEs being that based on the number of employees.

 

 

 

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Starting from the European Commission’s attempt to more relevantly define SME companies throughout Europe by employing additional criteria such as annual turnover or the balance sheet total, KPMG in Romania has conducted a market sizing exercise of the SME sector in Romania based on the annual turnover criterion.

 

European Commission

Classification

Number of or employees

Turnover or Balance Sheet Total

Microenterprises

0-9

≤ € 2 million

≤ € 2 million

Small enterprises

10-49

≤ € 10 million

≤ € 10 million

Medium Enterprises

50-249

≤ € 50 million

≤ € 43 million

Large enterprises

250+

 

Out of 605,000 companies existing in Romania, only 2% are a SME based on the revenue criterion but these entities employ 40.3% of the workforce. As clearly indicated in the table below based on figures as at 31 December 2011 SMEs also represent a significant part of the total turnover of Romanian companies, representing approximately 37%. SMEs are usually more heavily leveraged than larger enterprises.

 

 

Overview of SMEs Ratios in Economy 2011

Categories

Number of Enterprises

Average Number of Employees in 2011

Assets at December 31 2011

Gearing ratio in 2011

Return on Assets in 2011

Turnover  as at December 31 2011

Micro Enterprises

98%

47.5%

49.2%

796.8%

1.1%

21.9%

Small Enterprises

1.6%

30.2%

12.5%

227.1%

-1%

17.8%

Medium Enterprises

0.4%

10.1%

12%

200.2%

-1.5%

19.5%

Large Enterprises

0.1%

12.2%

26.3%

121.6%

-2.5%

40.9%

Total

100%

100%

100%

309.3%

-0.4%

100%

Note : Totals may not add up to 100% due to rounding.
Source : Trade Registry / KPMG Analysis

 

Furthermore if we have a look at the map, we can see that SMEs in Bucharest and Ilfov are more profitable than SMEs located in the other counties but SMEs in Bucharest are even more leveraged, with a Gearing Ratio (Total debt/Equity) of 254% in 2011. The counties with the most and least leveraged SMEs are Caras-Severin and Mures respectively.


One quarter of SMEs are located in Bucharest/Ilfov. Using a classification by CAEN code, the highest number of SMEs are in the following five sectors:

  • Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles 
  • Construction 
  • Manufacturing
  • Professional, scientific and technical activities
  • Transportation and Storage    

SMEs are the engine of the Romanian economy which is logical as in Europe 60% of entities are family or entrepreneur owned and SMEs including micro-enterprises represent 99.8% of the total number of companies.


One of their strengths is their capacity to make key decisions rapidly, to be flexible and to adapt their strategy and production lines to the evolution of the market without having to justify every single move to shareholders or the stock market. On top of that the management of owner managed and family owned businesses are very careful with the management of their financial resources because it is their own cash.
At European level, SMEs are leaders in terms of creation of jobs and are pioneers in terms of innovation. Growth is expected in the sector as large companies continue to restructure and cut jobs.


To support SMEs in Romania, KPMG has launched a new brand, KPMG Enterprise, with professionals devoted exclusively to helping business owners and entrepreneurs to build value into their businesses and grow thriving enterprises. It’s all KPMG Enterprise does.
What does your SME require? A one stop shop, a sort of house doctor who takes care of the books and the cash, who facilitates contacts with banks, who helps you avoid unpleasant surprises from the tax authorities, who can answer most of your questions and concerns and all this, at an affordable price. When you need answers and help with more complex issues whatever the field of expertise is, we make sure that the issue is dealt with by the right person within KPMG to provide you with fast and customized advice. 


KPMG Enterprise offers a broad range of services to support family owned businesses and entrepreneurs at all stages of the business cycle, from start-up to exit strategy:


KPMG Enterprise will be led by Jacqueline Laye who has been a successful entrepreneur for the last ten years in Romania and will now be sharing her experience with SMEs in her new role.

 

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