STRICTLY CONFIDENTIAL – CONFIDENTIAL – FOR INTERNAL USE ONLY – P UBLIC Valentin Pauna On Labour and HR

© real, How much does it cost a day’s labor in Romania ?  300mio EUR (66% GDP:254 days)  How does this compare? [e.g. CH 500mio EUR per workday] GDP/ worked hours index Valentin Pauna

© real, YOY GDP growth real - election years highlighted Valentin Pauna Est World Bank2% (vs. 2.5% PY)

© real, Avg monthly net salary - both nominal and adjusted for inflation  72% overall  43% between  -4% 2011 vs real terms  Election years? In real terms 7% 2004 vs PY 15% in 2008 Valentin Pauna

© real, Low occupation rate 59% vs 66% EU Active10* mio (15-64) Occupied5.2 mio1.2 miopublic sector 3.4 mioprivate sector 0.6 mioPfA 1 miogrow to eat Informal sector**2.4 mio black / grey market Pensioners5.6 mio Registered unemployed0.7 mio High employment taxes at 44% (for all in 2,000 RON p.m.) Decrease tax on labour Valentin Pauna Disclaimer: all figures before the census

© real, Valentin Pauna Setting up HR 90’s Setting up HR Mainly expat returning to Europe 1-2 jobs away from early retirement PROFILE Market entries Money, not a problem Designated local successor Staffing Learning business vocabulary Some outplacement JOBS TO BE DONE

© real, Valentin Pauna, Human Resorces Director Getting local Late 90’s – early 2000 Getting local 1 st Local directors Inexperienced, but eager to make it Looking good, feeling important PROFILE Expansion (including M&A) Recruit for competencies Train for skills Introduce benefits People satisfaction survey JOBS TO BE DONE

© real, Valentin Pauna Getting ready for EU Mid 2000 Getting ready for EU Fighting for a place at the table Business partner and/ or concierge of CEO PROFILE “War for talent” & People – as m.i.a. then as competitive advantage Process re- engineering HR/ Fin Outsourcing Spiraling wages? Honeymoon of HR JOBS TO BE DONE

© real, Valentin Pauna Living with crisis 2008 Living with crisis Tired of restructuring Money minded Stronger business acumen Crisis fatigue PROFILE Restructuring Cutting cots faster then sales decrease Industrial relations/ T.U. Negotiations Rebuilding some psychological contracts (engagement?) JOBS TO BE DONE

© real, Valentin Pauna Forward looking.. ToFrom Hiring and firing & Managing employment risk Give a sense of purpose & Workforce alignment