CE CFO Survey 2021 Baltics Download the Report

CE CFO Survey 2021 Baltics The inflation rate (for the Consumer Price Index) over the next 12 months

In the Euro area 1.8% Central Europe countries* Looking into the inflation rate for the In their country 2.7% Consumer Price index, it seems that in general Central Europe countries are expecting a smaller inflation rate in the 0.9% Estonia Eurozone than in their countries. 1.1% Looking more closely into the Baltics, it seems that Estonia expects relatively 1.3% small inflation rate, both in the Latvia 1.7% Eurozone and in the country itself.

1.4% Lithuania 2%

*Overall results of Albania, Bulgaria, Bosnia and Herzegovina, Croatia, the Czech Republic, Estonia, Hungary, Kosovo, Latvia, Lithuania, Montenegro, North Macedonia, Poland, Romania, Serbia, Slovakia and Slovenia. **Please note that due to the limited number of responses from CFOs in Albania, Kosovo, Lithuania, North Macedonia, Slovakia and the Public Sector, data concerning those areas in this report need to be Member firms and DTTL: Insert appropriate copyright Presentation title 2 interpreted[To edit, click View with > Slide caution. Master > Slide Master] [To edit, click View > Slide Master > Slide Master] TOP 5 factors to pose a significant risk to business over the next 12 months

60% Estonia 58% Latvia Reduction in Overall* 52% Comparing Baltic results with the peers 30% Lithuania demand (domestic) from Central Europe countries, it 15% seems that peers are the most 36% Shortage of 33% concerned about reduction in domestic 60% skilled professionals and, then, foreign demand. Baltics are 45% sharing the concern in reduction in 42% 50% Economic domestic demand with 60% of Estonian 50% outlook/growth CFOs seeing it as a significant risk to 30% business over the next 12 months. 40% 39% Reduction in 30% demand (foreign)

35% *Overall results of Albania, Bulgaria, Bosnia and Herzegovina, Croatia, the Czech 19% 22% Republic, Estonia, Hungary, Kosovo, Latvia, Lithuania, Montenegro, North Macedonia, Increasing 22 Poland, Romania, Serbia, Slovakia and Slovenia. 30% regulations **Please note that due to the limited number of responses from CFOs in Albania, Kosovo, Lithuania, North Macedonia, Slovakia and the Public Sector, data concerning those areas Member firms and DTTL: Insert appropriate copyright Presentation title 3 in[To this edit, click report View > Slideneed Masterto > Slidebe Master]interpreted with caution. [To edit, click View > Slide Master > Slide Master] Attractiveness of different sources of funding

Interestingly enough, the most 80% attractive form of funding for the Baltic CFOs is internal financing. Actually, 80% of Lithuanian CFOs find this type

58% of financing to be the most attractive. Across all three countries, almost 40%

45% 45% of CFOs find bank borrowing as an 40% 40% 39% 40% equally attractive source of funding.

20% 21%

10% 5%

Internal financing Equity Bank borrowing Corporate debt

*Please note that due to the limited number of responses from CFOs in Lithuania data concerning this area in this report need to be interpreted with caution. Is mental health openly talked about in your organization?

70% COVID-19 pandemic has put an enormous 63% stress on our mental health, hence, the organizational openness about it is very 55% important. In Estonia and Lithuania, more than half of the respondents believe that 45% their organizations are open about mental 37% health. In comparison, 63% of CFOs in 30% Latvia believe that mental health is not talked about openly in their organizations.

Yes No

*Please note that due to the limited number of responses from CFOs in Lithuania data concerning this area in this report need to be interpreted with caution. Over the next 12 months how do you expect levels 80% of unemployment to change?

70%

Looking at the upcoming 12 months,

majority of the respondents expect an 47% increase in the levels of unemployment. The least optimistic about the employment levels are Lithuanians and Estonians (70% 29% and 80%, respectively). Latvian CFOs are a 24% bit more optimistic than their peers from 20% other Baltic countries with 47% of them expecting an increase in unemployment. 10% 10% 10%

Decrease No change Increase

*Please note that due to the limited number of responses from CFOs in Lithuania data concerning this area in this report need to be interpreted with caution. Based on the information you have so far, when do you expect your company to return to a pre-crisis level of revenues generation?

60% Looking at the pre-crisis level of revenue generation, majority of the 47% CFOs in the Baltics say that they are 45% already operating at or above pre-crisis level. However, 30% of respondents in

30% 30% Estonia expect their companies to come back to pre-crisis level at 2022 or later. 22%

15% 11% 10% 8% 8% 5% 5% 3%

0% 0% 0% 0%

Estonia Latvia Lithuania

Already at or Q1 2021 Q2 2021 Q3 2021 Q4 2021 2022 or later above pre- crisis level

*Please note that due to the limited number of responses from CFOs in Lithuania data concerning this area in this report need to be interpreted with caution. What percentage of work in your organization will be done remotely over the next 12 months?

40%

33% Looking at the CFOs expectations 30% 30% for the upcoming 12 months the

wide majority expect that at least a 25% 25% 25% quarter of the work within the organization will be done remotely. 19% 20% 30% of CFOs in Estonia and 15% Lithuania expect that the remote 14% work will take a quarter to half of all 10% 8% the work done, in Latvia 25% of peers expect this. 5%

Estonia Latvia Lithuania

5% or less 6 - 25% 26 - 50% 51 - 75% 76 - 95%

*Please note that due to the limited number of responses from CFOs in Lithuania data concerning this area in this report need to be interpreted with caution. What would be the most valuable to your executive team within the next 12 months, given the current pandemic?

6%6% Access to better technology 6% to facilitate remote work 10% We have asked CFOs their opinion on what would be the most valuable for Alignment on how to view 0% their executive teams within next 12 remote work and lead remotely 29% 10% months. Out of the given choices, 44% of Estonian CFOs and 40% of 25% Lithuanian CFOs believe that an New business opportunities created by the pandemic 23% understanding of the change in 20% customers’ needs and habits would be the most appreciated by their executive Understanding of customers' 44% team. Interestingly, only 17% of Latvian needs and habits change 17% 40% CFOs share this view.

Estonia 25% Hybrid work Latvia 26% Lithuania 20%

Member firms and DTTL: Insert appropriate copyright Presentation title 9 *[ToPlease edit, click note View >that Slide Master due >to Slide the Master] limited number of responses from CFOs in Lithuania data concerning this area in this report need to be interpreted with caution. [To edit, click View > Slide Master > Slide Master] Would CFOs expect bigger Government support in order to overcome Covid-19 effect?

50% 50%

45% The support from government is very important 42% to overcome effects of the pandemic, thus we asked Baltic CFOs if they would expect bigger 35% government support for that? 50% of peers 30% from Latvia would expect a bigger support, while 50% Lithuanian and 45% Estonian effects would not expect a bigger support. 20% 20%

Yes No Don’t have negative effect

*Please note that due to the limited number of responses from CFOs in Lithuania data concerning this area in this report need to be interpreted with caution. The most attractive forms of Government support

50% 50%

We have asked respondents which form of 43% 43% the government support is the most attractive. 43% and 50% of Estonian and Lithuanian CFOs find Financing and Reduction of payroll taxes the most 28% 28% appealing form of support. However, Latvian peers do not hold the same 17% 17% sentiment for reduction of payroll taxes 14% and would rather like to have 11% postponement of tax payments. However, they are sharing the view of financing as a

very good form of governmental aid with 0% 0% 0% 0% 0%

Estonia Latvia Lithuania

their peers from Estonia and Lithuania. Participation Financing Postponement Reduction of Liberalization of in equity of tax payments payroll taxes COVID-19 related regulations

*Please note that due to the limited number of responses from CFOs in Lithuania data concerning this area in this report need to be interpreted with caution. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.

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