Business Friendly Slovakia Get to Know Slovakia as Your Investment Destination

Content 1 Success Stories 2 Key Numbers 3 Human Resources 4 Infrastructure 5 Key Sectors 6 Innovation Potential 7 Investment Incentives 8 SARIO

Success Stories in Slovakia

Great Brands Gather in Slovakia

Source: SARIO, 2013

Defence industry

Chemistry Electrical equipment

Machinery equipment

Automotive industry, supplier sector

Medium-High Technology: Manufacturing

Other transport

equipment

Medical and dental

instruments

Great Brands Gather in Slovakia, Medium High-Tech

High-Tech Services: Knowledge Intensive

Creative, movie, TV industry and

ICT

Scientific research and development

(biotech, medical, engineering etc.)

High-Technology: Manufacturing

Computer, electronic and

optical products

Pharmacy Air and spacecraft industry

Great Brands Gather in Slovakia, High-Tech

SPAIN

GERMANY

FRANCE

KOREA

JAPAN

TAIWAN

CHINA

Slovakia: Success Stories from around the World

USA

PSA Peugeot Citroen, Dalkia,

Orange, Bourbon, CCN, Alcatel R&D

Siemens, Volkswagen, T-Systems, Continental

Aluminiuim Cortizo, Jobelsa, Cikautxo,

OHL, O2

US Steel, Emerson, DELL EMEA Centre

of Excellence, Whirlpool, IBM, HP

European IT Operation Centre, Johnson Controls AT&T, Accenture,

Amazon

KIA Motors, Samsung,

Hyundai Mobis

Panasonic, Sanyo SIIX, SEWS, Misuzu,

Minebea, Trim Leader, Brother

Industries, Yazaki, U-Shin, Makino,

Takenaka, Tamura, Yamagata, Taisei

AU Optronics, ESON, Foxconn, Delta Electronics

Lenovo

UK

SPC International, KMF, BOXPERFECT, Amylum, Hi-Tech

Mouldings

ITALY

Magneti Marelli, Brovedani, SISME,

CAME, ZANINI

SWITZERLAND

Swiss RE, Schindler, Holcim, Novartis,

Vetropack, Slovaktual, Franke

Source: SARIO, 2013

AUSTRIA

OMV, Mercedes-Benz, Schenker,

Erste Group

BRAZIL

Embraco

MAGNA SLOVTECA, KraussMaffei Technologies,

Martinrea Slovakia Fluid Systems,

Slomatec

CANADA

I Central European hub & favourable geographic location with great export potential

I Safe investment environment: political and economic stability

I Official currency EURO as one of a few countries in CEE

I Fastest growing Eurozone member within the last 10 years (CAGR)

I 10 Year CEE Leader in DB 2004 – 2013 /World Bank/

I 6 Year CEE Leader in Physical Property Rights Security in 2008 – 2013 /PRA/

I CEE leader in labor productivity and in TOP 10 hard working countries /OECD/

I High adaptability of labor force to different culture management styles

I Lowest Tax Burden in Visegrad group

I No 9 worldwide in adapting to new technologies & high innovation potential

I Large selection of industrial land & offices

I Attractive investment incentives

TOP Reasons Why to Invest in Slovakia

Key Numbers

Slovakia: Strategic Position with Export Potential

Source: World Resources Institute

300 million

clients in radius of 1 000 km

600 million

clients in radius of 2 000 km

Slovakia: EURO Zone Member - One of a Few in CEE

Euro (€) since 1 January 2009

EURO IMPLEMENTATION IMPACT:

- Limitation of Foreign Exchange Risk

- Lowering Transaction Costs

- Growth in Foreign Trade

- Increased Financial Stability

-5

0

5

10

15

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013f 2014f

European Union (EU-27)Slovak Republic

2008 2009 2010 2011 2012 2013

Real GDP growth 6.4% -4.7% 4% 3.3% 2% 0.9%

Labour productivity growth

2.3% -2.3% 4.4% 2.2% 2.4% -

HICP Inflation 4.6% 1.6% 0.7% 4.1% 3.6% 1.9%

Unemployment 9.6% 12.1% 14.4% 13.6% 14.0% 14,2%

Average monthly gross salary, €

723 744.5 769 786 805 824

Real GDP growth

GDP Prediction

by Ministry of Finance

of the Slovak Republic

2013f 0.8 %

2014f 2.2 %

2015f 2.9 %

2016f 3.1 %

Slovakia: Macroeconomic Overview

2013f 2014f

Germany 0.4% 1,8%

Slovakia 0,9% 2.3%

Poland 1.6% 2.9%

Czech Rep. -1,2% 1.8%

Hungary 1.1% 2,1%

Source: European Commission, winter 2013

Source: European Commission, winter 2014

Slovakia: Fastest Growth in Eurozone, 2003-2012

Source: European Commission, Eurostat 2013

-2,00 -1,00 0,00 1,00 2,00 3,00 4,00 5,00

Greece

Italy

Portugal

EUROzone

France

Spain

EU

Netherlands

Belgium

Finland

Ireland

Germany

Slovenia

Austria

Cyprus

Luxemburg

Malta

Estonia

Slovakia

-1,30

-0,28

-0,15

0,84

0,85

0,89

1,00

1,13

1,20

1,29

1,33

1,45

1,49

1,63

1,76

2,10

2,13

2,88

4,50

CAGR (Compound Annual Growth Rate)

Slovakia: Lowest Indebtedness in Eurozone (%, GDP)

0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

300

320

340

360

380

400

State Company Household

Source: Eurostat, 2011, the most recent data as of August 2013

50 % Slovak state debt among the

lowest in EURO Zone

Slovakia - the lowest indebtedness in

EURO Zone (126%)

0

50

100

2002 2004 2006 2008 2010 2012

SK HU CZ DE PL Developed European Economies FR UK

Source: UNCTAD STAT, 2014

Export of Goods to GDP index, 2012

Slovakia: Most Open Economy in Europe

88 %

Slovakia: Simple & Fair Tax System

Source: Eurostat, Data from the year 2011 as the latest available in November 2013

0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0 40,0

Hungary

Czech Republic

Poland

Slovakia

37,4

34,6

32,3

28,8

Slovakia: Lowest Tax Burden in Visegrad group

Total Tax Burden to GDP ratio (%)

COUNTRY RATINGS

(Sovereign foreign

currency ratings)

SLOVAKIA CZECH

REPUBLIC HUNGARY POLAND BULGARIA ROMANIA

A

stable

AA-

stable

BB-

negative

A-

stable

BBB

stable

BB+

stable

A2

stable

A1

stable

Ba1

negative

A2

stable

Baa2

positive

Baa3

stable

A+

stable

A+

positive

BB+

stable

A-

positive

BBB-

stable

BBB-

stable

A+

stable

A

stable

BBB

negative

A

stable

BBB

stable

BBB-

stable

A

stable

A

stable

BBB-

negative

A-

stable

OECD

Country risk 0 0 0 0 4 4

Slovakia: Best Country Credit Ratings in CEE

Source: www.standardandpoors. com,www.moodys.com, www.fitchratings.com, www.jcr.co.jp, www.r-i.co.jp, www.oecd.org

DOING BUSINESS The World Bank Project

•Analyzes the business regulations in 185 countries •Clasifies economies in 10 areas of business regulations

6

Registering property

Paying taxes

Enforcing contracts

Protecting investors

Insolvency resolution

Construction permits

Starting & Closing Business

Trading across borders

Getting credit

Electricity acquirement

Slovakia: 10 Year CEE Leadership in DB 2004 - 2013

SK

RO

Source: WORLD BANK GROUP Doing Business Report 2005 - 2013

No1 CEE countries

INTERNATIONAL PROPERTY RIGHTS INDEX (IPRI) – Physical Property Rights 1st international comparative study analysis of

• 130 countries • 97% of world GDP

No

1 2

4 5

6

Physical Property Rights • Protection of Rights • Registering Property • Access to Loans

3

SK

HU

BG PL

CZ RO

Slovakia: 6 Year CEE Leadership in Physical Property Rights Security 2008 - 2013

Source: PROPERTY RIGHTS ALLIANCE (SK 6.5, CZ 6.4, RO 5.9, HU 5.9, BG 6.0, PL 6.0 out of 10 points)

Source: World Bank, Property Rights Alliance

Slovakia: Best Investment Climate in CEE, 2013

DOING BUSINESS

PHYSICAL PROPERTY

RIGHTS

Slovakia

RO

CZ HU

BG

PL

Germany

CEE

complex

risky

easy

secure

Slovak Labor Force Our People - Our Treasure

Slovak Employees: Perception by Foreign Investors

Source: SARIO, 2013

Luiz Henrique da Silveira, 2013 „Slovak people are highly creative and disciplined.“

Veit Dengler, General Manager, 2009 „Among the important factors were the legal system, the state of the economy, the business climate and the quality of governance. The number one criterion, however, were the people. It was they who had the greatest impact on our company’s growth. In 2001, we didn’t say we’d be employing 2 000 employees here by 2008. “

Raquel Cortizo Almeida, Supervisory Board, 2012 „Slovak people work very hard, they are modest, value the security and stability with desire to work, improve themselves and can easily adopt to new working environment.“

Country of origin: USA Field: SSC – DELL Business Centre Bratislava

Country of origin: SPAIN Field: Metal Processing Aluminium

Country of origin: BRAZIL Field: Manufacture of electrical equipment

Dr. Andreas Tostmann, Former CEO Volkswagen Slovakia, 2011

„Slovak employees gained the Lean production & Green Efficiency Award for VW Slovakia through innovation, excellent performances, application of lean production tools/workshops.“

Country of origin: GERMANY Field: Automotive

Slovakia: German Quality & Slovak Price Perception by Foreign Investors

Source: SARIO, 2013

Yasuo Hayashi, Former General Director, 2012 „We were happy to foind in Slovakia German quality and Slovak price. We thought of Slovakia as “the 17th Bundesländer” of Germany, Bundesrepublik Deutschland. People come to Slovakia with some sort of a fear, yet afterwards they get very satisfied and nicely surprised; same happened to me. Slovak management was very initiative coming with great ideas, which was very helpful during the decision making process. I appreciated their patience and trust. Radoslav Pastorak, General Manager, 2013 „Slovak technical employees are very experienced and apt – if encountered a technical problem, they provide re-design solution to R&D colleagues in Germany – standardly these solutions are implemented. We can easily hire new employees if needed – 2 days for operator positions and 3 months managerial level. Slovak workforce is highly qualified with great multilingual competencies; English or German are not problem at all. As to the Japanese style of decision making process, it seemed to us a bit long or longer than necessary, yet Slovak management has always been an integral part of all the relevant discussion and in the end the decision made by my Japanese supervisor was thought over and smart. The implementation of the decision was fast and very efficient. “

Country of origin: JAPAN Field: Electrotechnical

OECD: Slovakia in TOP 10 Hard Working Countries 2013

MEXICO USA JAPAN

SLOVAK REPUBLIC

Source: OECD, July 2013. Data reflect wage and salary workers, not the self-employed.

96% of Slovak employees work more than 40 hours a week. Part-time work is practically non-existent in Slovakia.

Slovakia: Multilingual Competencies & Education

Source: Special Eurobarometer 386: Europeans and their languages, June 2012

- 80% of Slovak people speak foreign language

6,75%

40,39%

37,17%

15,68%

No education

Elementary school

Secondary General School

Secondary Vocational School

University education

- one of the highest proportion of secondary educated people, 77% in EU

- university education, 16% on the growth

Slovakia: Slovak Managers Are Best Viewed By Expats

SK

decisions acceptance ✔

flexibility/adaptability ✔

initiative ✔

teamwork ✔

taking responsibility ✔

less bureacracy ✔

company loyalty ✔

cooperation in working process

✔

deadline acceptance ✔

organized management

✔

Source: TARGET International Executive Search, Henley University of Reading, UK, 2009

How do senior expatriate managers view management culture in Slovakia, Czech Republic, Hungary and Poland?

“My organization has a high population of young managers who are dedicated and industrious, ” British Manager “My manager colleagues are highly motivated and educated. My Slovak colleagues demonstrate a sharp mind and tend to learn quickly,” German Manager

Slovak Import / Export Infrastructure & Logistics

International Ports around Slovakia

Koper, SI

Hamburg, GERMANY

Rotterdam, NETHERLANDS

Bratislava

Constanta, RO

Izmail, RO

Gdansk, POLAND

Road Railway Waterway

Key Sectors

LEADING SECTORS OF THE SLOVAK ECONOMY

Automotive 1st in world car

production per 1,000 inhabitants in 2013

Electronics Technological

growth driver

ICT/SSC Prestigious and

renowned Slovak and foreign players

R&D Innovative potential

strives for

future R&D hub

Innovation & Information Technologies In-Line with Traditional Industries

Key Sector No 1 in Slovakia: Automotive

Car Production in Slovakia

Source: Slovak Automotive Industry Association ZAP,VW, KIA, PSA-Peugeot, 2012

SLOVAKIA, 2013 Leader in World Car Production

per 1000 inhabitants

181 vehicles /1000 inhabitants

European Union Average 38 vehicles / 1000 inhabitants

215 349

295 390

571 071

575 776

463 140

557 000

630 000

926 938

980 000

0 200000 400000 600000 800000 1000000 1200000

2005

2006

2007

2008

2009

2010

2011

2012

2013

I 52 established ICT and SSCs

I Personnel over 40 000

with college/ university education

excellent language skills

Key Sector No 2: ICT & SSC

Success Story: Virtual Reality Media, Trenčín

I Design, development and production of simulators and training systems since 1995;

I SW/HW engineering, and systems integration:

Military simulators and training systems – both for air and land

Civil aircraft simulators

HW subsystems, SW modules and applications

I Provider of simulation technologies for the needs of the Slovak Army and other customers worldwide to include USA, Africa, Middle East and Asia

Success Story: ESET, Bratislava

ESET – the world leader Designed antivirus solution security software Smart Security and ESET NOD32 for corporations and households to proactively detect the computer threat

CyberSecurity – Inteligent Detection automatically detect and eliminate malicious codes

Innovation Potential

FDI & Technology Transfer Growing Centre of Knowledge & Innovation

FDI AND TECHNOLOGY TRANSFER (ranking out of 139 countries)

Source: Rapport Global sur la Compétitivité 2012-2013

912

18

58

0

10

20

30

40

50

60

70

SK HU CZ PL

Slovakia

No. 9 worldwide in the extent of bringing new technology to host country 1 = not at all; 7 = FDI is a key source of new technology

Corporate R&D Centres in Slovakia

dernières

Success Stories in Automotive R&D

Johnson Controls Engineering Centre

Trenčín

ON Semiconductor Bratislava

Development Centre

R&D LEONI Autokabel

Slowakia Trenčín Technology Lab

Siemens Žilina

ZKW Slovakia R&D Center Krušovice

Continental Automotive Systems R&D Centre

Zvolen

R&D Centres and Universities

45 centres of excellence

- Slovak Academy of Science

- Centres of Investigation

- Universities

7 university cities

Slovak Academy of Sciences Institute: Institute of Materials

I the most successful applied research institute within SAS

I Aluminium foam – the unique technology used through cooperation with Austrian company Alulight International GmbH in Ferrari, Audi and many other manufacturers..

Investment Incentives

ŽILINA REGION 12,51 %

41 376 job seekers

PREŠOV REGION 19,35 %

75 391 job seekers

KOŠICE REGION 17,23 %

63 287 job seekers BANSKÁ BYSTRICA REGION

18,26 % 60 549 job seekers

TRENČÍN REGION 10,74 %

32 122 job seekers

NITRA REGION 12,52 %

43 960 job seekers

TRNAVA REGION 9,16 %

26 630 job seekers

BRATISLAVA REGION 6,17 %

20 910 job seekers

*Represents only the number of seekers registered at the unemployment office. Please note, that many job seekers are not registered.

Source: www.upsvar.sk, annual 2013, updated 2014

Average level of unemployment in Slovakia reached 14,2 % as of 2013.

Total Number of jobseekers:

364 225

Unemployment & Registered Job Seekers