83% of EBA companies experienced a drop in business performance for 2022

83% of companies that are members of the European Business Association experienced a business drop in 2022. This was reported by the association’s press service, noting that, compared to October, the number of companies that felt the impact of missile attacks on their activities has almost doubled.

For reference: The survey was conducted from January 16 to 26, 2023, with 100 top managers of EBA member companies participating.

The war year significantly affected business operations, including financial results. At the end of the year, most companies reported a drop in revenues in US dollars: 29% saw a drop of up to 20%, and 54% saw a drop of 21% or more. Only 6% of respondents reported no changes, and another 11% can boast of revenue growth in such a difficult year.

This result was completely opposite to pre-war business forecasts and expectations: before the full-scale invasion, 83% of EBA companies expected positive business development in 2022. At the end of the year, 83% experienced a decline.

Compared to October 2022, the number of companies, whose operations are affected by missiles, has almost doubled from 47% to 89%. The Russian shelling has led to interruptions in work processes, fewer productive hours, difficulties in planning, employee fatigue, increased costs due to the use of generators, and other negative consequences for the companies’ operations. 

Power outages hold the top position of the anti-rating of current business challenges. Besides, companies also complain about Internet and communication outages, as well as problems with booking employees and travelling abroad. Currently, 88% of companies have employees in the army, of which 73% have up to 10% of their staff mobilized, and another 15% have 10-20% mobilized. In addition, 39% of companies have critical specialists being mobilized, namely IT specialists, engineers and other technical professionals.

Despite the difficulties, all EBA companies that took part in the survey are currently operating, namely 54% in full and 46% with some restrictions. Last October, 44% of companies were fully operational. Among the businesses that are partially operating, 44% have limited the geography of their activities, 23% have closed some offices/outlets/branches, and 14% have moved their activities online.

As a result of the hostilities, 40% of companies suffered direct losses, and 25% have assets in the occupied territories. These are mostly equipment, machinery, real estate, and transportation. Business losses remain quite high: 32% report losses of up to $1 million, 36% report losses in the range of $1-10 million, and 16% report losses of more than $10 million.

At the same time, the number of companies that pay their employees in full is growing  –  89% of them currently do so, of which 25% do so with advance or additional payments. This is an increase from 79% in October. In 2023, 8% of companies will reduce wages, 2% will have to send employees on unpaid leave, and another 5% will resort to layoffs.

Moreover, the financial stability of companies is improving: 27% of companies have financial reserves for six months, 23% for a year, and 36% for a year or more.