EU Competitiveness Bench marking Report

1. BENCHMARKING REPORT
2015

2. Foreword – Europe at a glance 03
EU COMPETITIVENESS
Economic growth 04
EU’s R&D intensity gap 05
EU-US competitiveness gap 06
Uneven competitiveness in the EU 07
Patent filings 08
Labour productivity vs labour cost 09
Industry production 10
Loan flows to non-financial firms 11
EU governments’ debt 12
ENERGY & CLIMATE
Energy prices 13
Primary consumption by fuel type 14
Energy intensity & emissions 15
Carbon pricing systems worldwide 16
DIGITAL ECONOMY
Telecommunication infrastructure 17
Machine-to-Machine communication 18
ICT-related patents 19
Devices online 20
Fostering start-ups development 21
Venture capital investments 22
EMPLOYMENT, SKILLS & EDUCATION
Europe’s unemployment 23
Digital jobs: vacancies and graduates 24
Education performance 25
TRADE & INVESTMENT
Structure of EU trade balance 26
EU share of global exports 27
Foreign direct investments 28
Rare earth in the modern economy 29
FINANCIAL KPI’S
Revenue 30
EBIT 31
R&D expenses 32
Bibliography and Glossary 33
ERT Members 34
Overview
ERT BENCHMARKING REPORT 2015 | 2

3. Europe at a glance
FOREWORD
As Chairmen and CEOs of leading European multinationals,
Members of the European Round Table of Industrialists (ERT) see
the business world changing. Competitive pressure on European
industries is increasing.
If we are to lay the foundations of our future competitiveness
and prosperity, Europe must offer an attractive environment for
investment to maintain a vibrant and innovative manufacturing
base in Europe, as well as to create jobs. Last year, ERT published
Industrial Renaissance – ERT Agenda for Action 2014-2019, which
called on political leaders to step up progress for the completion
of the Single Market. It also presented key recommendations in all
policy areas covered by ERT.
The 2015 edition of the Benchmarking Report takes stock of
the economic reality and tracks progress towards a competitive
industry in areas identified as key for Europe: competitiveness,
energy/climate, the digital economy, employment/skills and
trade/investment.
This report is also the opportunity to highlight – and be proud
of – the strengths of the European Union which are recognised
worldwide. The Union is indeed the first economic power in terms
of trade. We are also a top economy in terms of wealth creation.
Our work force is highly educated and skilled. Our sophisticated
products and services are appreciated for their quality. Last but not
least, we also benefit from political stability provided by democracy
and rule of law.
Industry remains the backbone of the European economy,
notably in terms of exports and R&D. However, a certain number
of imbalances could jeopardise our future. Markets and legal
frameworks in Europe are still highly fragmented. Unemployment
is high. We do not sufficiently invest in innovation and new
technologies. Other regions of the world are already implementing
strong industrial policies, including energy and competition policies
that serve their strategic interests. Global competitors are rapidly
expanding the digitisation of their economies, with increases in
innovation and productivity expected to follow.
As a result, growth is taking place outside Europe. Thus, European
leaders need to take action to ensure that Europe stays a top
business location. European climate policy should not jeopardise
the competitiveness of the European industry and urgent measures
are needed to enable the Internet of Things.
We trust you will find this report useful.
Yours sincerely,
Kurt Bock
Chairman of the ERT Competitiveness Working Group
Chairman of the Board of Executive Directors, BASF SE
December 2015
It is of vital interest for Europe’s prosperity that the growth
and strengthening of the European industrial base remain
at the heart of the political agenda, both in Brussels and in
Member State capitals.
ERT BENCHMARKING REPORT 2015 | 3

4. -2
0
2
4
6
2.12.0
1.5
0.9
4.5
3.4
0.6
2.5 2.4
7.6
1.8
0.1
4.7
1.7
-0.1
10.6
7.8
7.3
10.3
5.1
7.3
2.2
-0.4
-0.8
8
10
12
%
Gross domestic product, volume (percentage change on preceding year) - 2010 | 2012 | 2014
2015
(Forecast)
EU-28
1.9%
Russia
-3.8%
Euro Area
1.5%
US
2.6%
Brazil
-3.0%
Japan
0.6%
China
6.8%
India
7.3%
Economic growth
SOURCE: IMF
While the EU has been recovering from the 2012 slowdown, it is far from the levels of growth
observed and forecasted in India, China or even the US.
Since economic growth is mostly taking place
outside Europe and in particular in emerging
countries, EU companies’ export and growth
opportunities depend on the effective opening of
those markets.
EU COMPETITIVENESS
ERT BENCHMARKING REPORT 2015 | 4

5. 0
1
2
3
4
5
%
Gross domestic spending on R&D as a % of GDP 2010 | 2013 (top third countries and EU average)
Israel Korea Japan US China EU-28
Within the EU-28, only 3 countries comply
with the EU2020 R&D target 2013
Finland : 3.3%
Sweden : 3.3%
Denmark : 3.1%
EU2020 R&D TARGET:
3% of GDP to be invested
in R&D by 2020
EU’s R&D intensity gap
China has now overtaken the EU in terms of R&D spending (as % of GDP). Only Finland, Sweden,
Denmark and Austria have reached the EU2020 target (3%).
SOURCE: OECD
Underinvestment in R&D hampers the long-term
competitiveness and health of the entire EU
industrial value chain.
EU COMPETITIVENESS
ERT BENCHMARKING REPORT 2015 | 5

6. EU-28 (2014):
GDP/capita: $36,317
GDP/hour worked: $50
US (2014):
GDP/capita: $54,630
GDP/hour worked: $67
Investing in innovation, in new technologies and
implementing the EU Single Market are ways to
gain a competitive advantage.
EU-US competitiveness gap
While being our main commercial partner, the US is also a more competitive economy,
ahead of any EU country. Such competitiveness gap between the EU and the US translates
into a persistent income gap.
SOURCE: OECD, World Bank, WEF
EU COMPETITIVENESS
ERT BENCHMARKING REPORT 2015 | 6

7. 8
5
9
5
4 Ranking top non-EU countries
1 Switzerland
2 Singapore
3 United States
6 Japan
7 Hong Kong
11 Norway
13 Canada
14 Qatar
15 Taiwan
16 New Zealand
10
29
51
Global Positions
1-10
11-20
21-40
41-70
>70
Structural weaknesses in the European
economies should be tackled. Greater
coordination and alignment of policies by
the EU and its Member States with industrial
objectives are needed.
Uneven competitiveness in the EU
Addressing Europe’s internal competitiveness gap is instrumental for increasing growth and jobs.
SOURCE: WEF
EU COMPETITIVENESS
ERT BENCHMARKING REPORT 2015 | 7

8. 40
35
30
25
20
15
10
5
0
Country shares as a percentage of total patent filings 2007 | 2012
%
South
Korea
FranceItalyNetherlandsSwitzerland UK JapanGermany US EU-28China
* PCT: Patent Cooperation Treaty
* EPO: European Patent Office
Patent filings
in 2012:
325,905
(PCT+EPO)*
As shown by its decreasing share in total patent
filings, the EU’s overall R&D position continues
to decline thus weakening its competitiveness.
Patent filings
The ambitious R&D policies of China, Japan and Korea have led to
bigger global shares of patent filings worldwide (PCT + EPO)*.
SOURCE: OECD
EU COMPETITIVENESS
ERT BENCHMARKING REPORT 2015 | 8

9. 4
3
2
1
0
-1
Percentage change from 2004 to 2014
% KoreaJapan USEU-28Euro Area
GDP per hour worked Unit Labour Costs
Labour productivity vs labour cost
Between 2004 and 2014, unit labour costs in the EU have in average increased
faster than labour productivity.
Although key external competitors also see
their labour costs increasing (including China),
improving the EU’s labour productivity will remain
crucial to ensure the EU’s competitive edge in a
globalised economy.
SOURCE: OECD, The Economist
EU COMPETITIVENESS
ERT BENCHMARKING REPORT 2015 | 9

10. Gap to EU target (20% of GDP)
Gross value added by manufacturing (% GDP)
Share of total industry in GDP (%)
20%
42.6%
23.7%2014
2014
2013 20.5%
13.9%
2014 13.7% -6.3%
2000 16.8% -3.2%
%
Industry production
EU industry contributes to a quarter of wealth production and also plays an important role in terms of
jobs and innovation. Wide differences throughout Europe can be observed, e.g. in Eastern Europe, the
share of industry is still around a third of GDP. Nonetheless, in general it has faced a continuous decline
(as measured below by manufacturing). Such trend can also be observed in other developed economies.
SOURCE: EUROSTAT, WORLD BANK
The 20% of GDP goal for the EU manufacturing
sector must be respected and achieved through
adequate policy measures (e.g. in the energy
and climate change sector).
EU COMPETITIVENESS
ERT BENCHMARKING REPORT 2015 | 10

11. 0
1
2
3
4
-1
-2
-3
%
Euro Area lending to non-financial firms Loans to governments versus to non-financial firms
4.0
4.5
3.0
3.5
2.5
1.5
2.0
1.0
5.0
Total loans in stock (€ trillion)% change on a quarterly basis
Loans & Securities General Government
Loans to Non-Financial Firms,
Non-Government Securities
2004Q1
2005Q1
2006Q1
2007Q1
2008Q1
2009Q1
2010Q1
2011Q1
2012Q1
2013Q1
2014Q1
JAN 2005 = 100 JUL 2015
2003Q1
0
20
40
60
80
100
120
140
160
180
200
Loan flows to non-financial firms
Non financial firms have been hit by the financial crisis in terms of access to capital. Total lending
provided has not yet recovered from their 2007 levels. By contrast, loans to governments have
followed a steady increase.
In absence of sufficient funding from banks, an
effective European capital market is needed, in
particular for SMEs. Unintended consequences of
regulations designed for the banking sector must
also be avoided in order to not undermine industry
capacity to invest in productive assets.
SOURCE: ECB, BRUEGEL
EU COMPETITIVENESS
ERT BENCHMARKING REPORT 2015 | 11

12. General gross government debt (% GDP)* 2011 | 2014
*Only countries/areas above the threshold are represented
0
%
20
40
60
80
100
120
140
160
180
‘Maastricht Criteria’: debt-to-GDP ratio must not exceed 60%
BEDE IE GRESFRHR ITCYHUMTNL AT PTSI UKEU-28 Euro Area
EU COMPETITIVENESS
EU governments’ debt
In 2014, government debt in the EU reached an average of 86.8% of GDP, i.e. 26.8% above the
Maastricht criteria. Cyprus, Portugal and Spain also presented severe budget deficits (i.e. at least
twice the 3% Maastricht target) while others (Germany and Estonia) managed to generate a surplus.
In some Member States, high government debt
may endanger their capacity to fulfill their public
service mission (education, infrastructure,
social...) which could in the long term threaten
their competitiveness , in particular when coupled
with excessive deficits.
SOURCE: EUROSTAT
ERT BENCHMARKING REPORT 2015 | 12

13. Average retail electricity and gas prices for industrial consumers 2012
Gas
40-60 €/MWh
20-40 €/MWh
0-20 €/MWh
Electricity
100+ €/MWh
75-100 €/MWh
50-75 €/MWh
25-50 €/MWh
Energy prices
In general, industrial consumers in Europe pay higher electricity and gas prices than in other
regions of the world. Individual policy decisions have become an important driver of price gaps
within the EU thus also contributing to an increasing price differential with other economies.
Access to energy sources at a competitive price
is key for Europe’s industry. Policy measures
should consider the impact on energy prices
so as not to enlarge the gap with EU’s major
competitors and reflect the direct production
and access costs of energy.
SOURCE: EC
ENERGY & CLIMATE
ERT BENCHMARKING REPORT 2015 | 13

14. World primary energy consumption by fuel type 2014*
(Million tonnes oil equivalent)
Total world consumption for all fuel types: 12,928 *All data is for main consumers
Share
4,211 (33%) 3,066 (24%)
3,882 (30%)
574 (4%)
879 (7%)
317
(2%)
China 18% 6% 66% 1% 8% 2% 23%
US 36% 30% 20% 8% 3% 3% 18%
EU-28 37% 22% 17% 12% 5% 7% 12%
Russia 22% 54% 12% 6% 6% 0% 5%
India 28% 7% 56% 1% 5% 2% 5%
Japan 43% 22% 28% 0% 4% 3% 4%
Canada 31% 28% 6% 7% 26% 1% 3%
Brazil 48% 12% 5% 1% 28% 5% 2%
Australia 37% 21% 36% 0% 3% 3% 1%
World 33% 24% 30% 4% 7% 2%
Primary consumption by fuel type
In 2014, the world was still predominantly relying on oil and coal in terms of
primary energy consumption and will do so for the next decades.
Facilitating innovation and technology develop-
ment remains essential, as well as ensuring that
the value chain for providing low carbon solutions
remains in Europe. The EU should also focus on
sustainable domestic energy production, while
diversifying supply sources and developing
required energy infrastructure.
SOURCE: BP
ENERGY & CLIMATE
ERT BENCHMARKING REPORT 2015 | 14

15. 0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
10
12
8
6
4
2
0
Primary energy consumption per GDP 2000 | 2013 CO2 Emissions 2000 | 2013
Russia China
Toe/GDPconstant2011thousandUSD
EU-28 USChina EU-28 RussiaUS
BillionsofTonnes
Energy intensity & emissions
Russia and China consume more energy per GDP than the US and the EU. In addition,
although their energy intensity is lowering, total CO2 emissions continue to grow, contrary to
the US and the EU.
The EU must push for an ambitious international
agreement on climate change. Engaging with EU
trading partners is a key success factor towards
such agreement.
SOURCE: BP, World Bank, EC-JRC
ENERGY & CLIMATE
ERT BENCHMARKING REPORT 2015 | 15

16. Alberta Manitoba
Ontario
Iceland
Oregon
California RGGI
Québec
Washington
New Zealand
Mexico
Chile
Brazil
Rio de Janeiro
South Africa
Thailand
China
KazakhstanUkraine
Turkey
EU
Japan
UK
France
Denmark
Sweden
São Paulo
British
Columbia
Carbon tax implemented or scheduled for implementation
ETS implemented or scheduled for implementation
ETS or carbon tax under consideration Carbon tax implemented or scheduled, ETS under consideration
ETS and carbon tax implemented or scheduled
ETS implemented or scheduled, tax under consideration
Tianjin
Hubei
Chong-Qing
Rep.
Korea
Kyoto
Tokyo
Saitama
Beijing
Shanghai
Shenzhen
Guangdong
Switzerland
Slovenia
Portugal
Ireland Poland
Latvia
Estonia
Finland
Carbon pricing systems worldwide
Different concepts of carbon pricing systems are developing worldwide. The existing prices
vary significantly from less than 1 to 130 USD/tCO2e. However, 85% of emissions are priced at
less than 10 USD/tCO2e.
Carbon pricing mechanisms are a basic tool to
promote the most efficient clean technologies,
but essential provisions have to be aligned to
avoid distortions of competition.
SOURCE: World Bank Group
ENERGY & CLIMATE
ERT BENCHMARKING REPORT 2015 | 16

17. Investment in public telecommunication in the US and main EU economies 2013
US$percapita
300
250
200
150
100
50
00
PolandGermanySpainItalyUKFranceOECD averageUS
$276
$162
$146
$131 $131
$113
$104
$71
In main European economies, investments in public telecommunication
infrastructure are below the US and OECD average.
SOURCE: OECD
Public and private investments in tele-
communication infrastructure are essential for
the deployment of digital economy.
Market consolidation in Europe is needed to
keep up with global competitors.
DIGITAL ECONOMY
Telecommunication infrastructure
ERT BENCHMARKING REPORT 2015 | 17

18. M2M /embedded mobile cellular subscriptions: Top OECD countries 2014
BelgiumNorwayNetherlandsKoreaGermanySwedenItalyFranceJapanUS
Numberinmillionunits
35
30
25
20
15
10
05
00
The “Internet of Things” as measured by the number of M2M SIM cards in use, is quickly expanding.
Scandinavian countries are particularly well positioned (per capita). However, with more than 30
million units used, the US takes the lion’s share.
SOURCE: OECD
Given the huge potential of connected
machines, including for the Industrial Internet,
and the speed of technological changes, urgent
policy measures are needed in the EU.
DIGITAL ECONOMY
Machine-to-Machine communication
ERT BENCHMARKING REPORT 2015 | 18

19. 30
20
25
15
05
10
0
%
ICT-related patents under PCT* (Top OECD countries and EU) 2010-2012
EU-28
*PCT: Patent Cooperation Treaty
World ICT-
related patents:
217,042
NetherlandsCanadaSwedenUKFranceGermanyKoreaChinaJapanUS
ICT-related patents reflect the important role of ICT innovation in the digital economy.
As reflected by other patent-related indicators, most EU countries are lagging behind other
economies, including in the ICT sector. This reflects the lower portion of R&D investment in this
area (e.g. compared to the US and Japan).
SOURCE: OECD
Urgent action is needed at EU level to enable
the digitisation of the European economy, in
particular to encourage R&D investments in ICT.
DIGITAL ECONOMY
ICT-related patents
ERT BENCHMARKING REPORT 2015 | 19

20. 0
5
10
15
20
25
30
35
40
Devices online (Top 10 OECD countries) 2015
Denmark Switzerland US Netherlands Germany Sweden Spain France PortugalKorea
UK 13.0
Italy 10.2
Japan 8.2
Poland 6.3
China 6.2
Other countries of interest
Numberper100inhabitants
With the digitisation of the economy, the number of devices connected to the internet (i.e. with an
individual IP address) is increasing. However, some countries like Korea, Denmark or Switzerland are
much more “connected” than others. Important differences can also be observed within Europe.
The expected global boom of connected devices
will make the “Internet of Things”. For this to
become a reality, strong telecommunication
networks are necessary.
SOURCE: OECD
DIGITAL ECONOMY
Devices online
ERT BENCHMARKING REPORT 2015 | 20

21. % 02 04 06 08 10 12 14 16
UK5.1
US6.0
China11.0
Israel5.0
Japan8.0
Korea3.0
EU-284.9
Cost (% of income per capita)Number of procedures required Paid-in minimum capital (% of income per capita)
UK
Ireland
Lithuania
Lowest cost:
Hungary
Slovenia
Germany
Highest cost:
Cost of starting a business and the number of procedures involved
SOURCE: World Bank Group
Although the cost of starting a business (fees and capital) is particularly low in some EU Member States
(UK, Ireland, Lithuania) and comparable to the US, on average such cost remains much higher in the EU
than in other key economies.
Efforts should be made by policy makers to
ensure that the EU develops the start-ups scene
required to enter in the digital economy era.
DIGITAL ECONOMY
Fostering start-ups development
ERT BENCHMARKING REPORT 2015 | 21

22. Venture capital investments top 10 countries (flows, % GDP 2014)
%
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
Israel US Canada Sweden Korea Finland Ireland Japan UKSouth
Africa
France 0.03
Germany 0.02
Spain 0.01
Italy 0.00
Other countries of interest
SOURCE: OECD
DIGITAL ECONOMY
Venture capital investments
With the exception of Israel and the US where venture capital markets are well developed, in other
countries only a very tiny proportion of GDP is used to support entrepreneurship.
The absence of a genuine EU capital market
remains an obstacle for the development of
Europe based start-ups.
ERT BENCHMARKING REPORT 2015 | 22

23. Unemployment rates 2014
NODE
7.8
5.0
9.7
5.6
AT
15.5
5.9
LU
19.0
6.1
CZ
21.1
6.1
UK US OECD
Youth Unemployment Total Unemployment
15.5
6.2
16.2
7.3
DK
13.1
6.6
EE
17.9
7.4
NL
7.4
11.0
SE
8.0
23.6
FI
8.7
20.0
SI
9.7
21.6
EU-28
23.5
10.2
IE
11.3
29.6
IT
12.7
40.0
ES
24.4
55.5
GR
26.5
58.3
9.2
3.5
SK
13.2
33.6
PT
13.9
38.1
FR
10.3
23.9
PL
9.0
27.3
BE
8.5
23.7
HU
7.7
26.6
0
10
20
30
40
50
60
%
EMPLOYMENT, SKILLS & EDUCATION
Europe’s unemployment
On average, almost a quarter of the economically active population in the EU younger than
24 was without a job in 2014.
SOURCE: OECD
Youth employability is essential to secure and
improve Europe’s innovation and growth in an
ageing society.
ERT BENCHMARKING REPORT 2015 | 23

24. 7,200,000
7,000,000
2013 2014 2015 2016 2017 2018 2019 2020
7,400,000
7,600,000
7,800,000
8,000,000
8,200,000
8,400,000
8,600,000
8,800,000
9,000,000
Jobs total Total potential demand
7,325,000
7,594,000
8,809,000
Gap: 825,000
7,984,000
Digital jobs: vacancies and graduates
By 2020, Europe might face a shortage of 825,000 ICT professionals.
SOURCE: EC and EMPIRICA
To embrace the full potential of the digital
economy, ICT skills are needed in Europe.
This will benefit not only the industry but also
growth and innovation in almost all sectors of the
EU economy.
EMPLOYMENT, SKILLS & EDUCATION
ERT BENCHMARKING REPORT 2015 | 24

25. Mathematics, reading and science mean score of 15-year-olds 2012
450
470
490
510
530
550
570
590
610
630
SpainItalyUKFranceGermanyKoreaChinese
Taipei
HongKong
China
SingaporeShanghai
China
Mathematics Reading Science
< 5 T O P A C H I E V I N G C O U N T R I E S M A I N E U C O U N T R I E S ( P E R G D P ) >
OECD
average
Education performance
The top 5 performers in mathematics, reading and science (average score at the PISA test)
are all situated in Asia.
No student should leave school without a basic
set of STEM and ICT skills, which are essential to
operate in a fully digitised information society.
SOURCE: OECD
EMPLOYMENT, SKILLS & EDUCATION
ERT BENCHMARKING REPORT 2015 | 25

26. EnergyTrade Balance Manufacturing Services Agricultural
Net imports and exports in key sectors (€Billions)
2005
2014
2005
-800 -600 -400 -200 0 200 400 600
-547.8Bn
-617.4Bn
-59.3Bn
+101.5Bn
2014
SOURCE: EC, OECD, US Government, CBS
Besides bringing revenue, international trade
also contributes to millions of jobs in the EU.
Therefore the EU and Member States should
remain committed to international negotiations
in view of reaching effective agreements for
trade, energy and climate issues.
TRADE & INVESTMENT
Structure of EU trade balance
The EU trade balance is strong thanks to a large surplus in manufactured goods and in commercial
services (2014). However, Europe is also increasingly relying on energy imports. By contrast, the US,
(our main commercial partner), although remaining a heavy importing economy, has reduced their
energy imports (partly due to the shale gas reserves).
ERT BENCHMARKING REPORT 2015 | 26

27. 23
Total global trade in goods and services 2004 | 2014*
% Share of world trade: 2004 | 2014*
*Estimates
19.5
16.5
17.5
13.8
7.6
13
7.6
EU-28 US China
2004
2014
€13.7 Trillion
€28.4 Trillion
SOURCE: Eurostat
Facilitating market access, the elimination of
trade and investment barriers and adherence to
a rules-based global trading system are crucial
to strengthen the EU economy and to remain
globally competitive.
EU share of global exports
The EU remains the main trading power. However, over the last decade, its share of global trade has
decreased (like the US and other advanced economies), while China has become a significant actor.
TRADE & INVESTMENT
ERT BENCHMARKING REPORT 2015 | 27

28. 200
€Bn
0
400
600
800
1,000
1,200
1,400
FDI inflows and outflows 2007 | 2014 FDI inflows FDI outflows
EU-28 Asia (East and South-East) US
SOURCE: UNCTAD
Europe’s capacity to attract investments is
essential to its economic and technological
development.
Foreign Direct Investments
The global share of FDI flooding in and out of Europe and the US is following a downward
trend. The significant decline in Europe has followed the crisis in 2007.
TRADE & INVESTMENT
ERT BENCHMARKING REPORT 2015 | 28

29. Distribution of producing countries in percent 1995 | 2012
China 60.1%
China 86.8%
India - 3.4%
Brazil - 0.5%
Malaysia - 0.6%
FSU* - 7.5%
Others - 0.2%
US - 6.4%
India - 2.6%
Australia - 3.7%
Others - 0.6%
US 27.8%
1995
2012
*FSU : Former Soviet Union
SOURCE: UNCTAD
Since rare earth elements, and raw materials in
general, represent the lifeblood of today’s industry
and given the high concentration of production
in a few third countries, political efforts should be
maintained to secure the supply to EU industry at
competitive terms.
Rare earth in the modern economy
Our modern economies make use of a wide spectrum of technology metals, including rare earth
elements. They have gained an increasing strategic importance for the ICT and defence industries and
for the green economy.
TRADE & INVESTMENT
ERT BENCHMARKING REPORT 2015 | 29

30. -5
0
5
10
15
20
25
%
-10
Average annual change (%) per region*
*calculated for 38 ERT companies representing a total of 77% of total revenue of ERT companies
EuropeRest of the World
2011 20142012 2013
€1,693 Bn €1,823 Bn €1,654 Bn€1,710 BnTotal annual revenue*
SOURCE: ERT
Revenue
FINANCIAL KPI’S
On average, the revenue growth generated by
ERT Member companies has slowed down since
2012. In Europe, it was even negative for two
consecutive years while a rebound could be
observed outside Europe in 2014.
ERT BENCHMARKING REPORT 2015 | 30

31. 0
50
100
150
200
250
2010 2011 2012 2013 2014
Total EBIT of ERT Member companies
EBIT as % of
total revenue
10.7%
11.0%
8.7%
9.6%
8.9%
€208Bn
€237Bn
€202Bn
€212Bn
€191Bn
SOURCE: ERT
The total EBIT generated by ERT Member
companies has recovered from the economic
crisis. However, for many companies, international
competition has increased, thus affecting their
operational earnings. In terms of revenue share, EBIT
has also decreased compared to the 2010 level.
EBIT
FINANCIAL KPI’S
ERT BENCHMARKING REPORT 2015 | 31

32. 2010
€40Bn
2011
€49Bn
2012
€53Bn
2013
€54Bn
2014
€55Bn
R&D expenses
as % of total
revenue
2.1%
2.2%
2.3%
2.5%
2.6%
60
50
40
30
20
10
0
R&D expenses of ERT Member companies
SOURCE: ERT
Around €50 billion are invested each year by
ERT industries in R&D. This amount even shows
a steady increase on a yearly basis, in spite of
increasing pressure on their revenue. For many
European companies, growing global competition
requires them to invest more and more in R&D to
stay competitive.
R&D expenses
FINANCIAL KPI’S
ERT BENCHMARKING REPORT 2015 | 32

33. EU COMPETITIVENESS
IMF: World Economic Outlook, 2012-2015
OECD data: Gross domestic spending on R&D, 2015
OECD Library: Main Science and Technology Indicators, 2015
The World Bank: GDP per capita, 2015
OECD data: GDP per hour worked, 2015
WEF: The Global Competitiveness Report, 2015-2016
OECD Stat: Patents by technology, 2015
OECD Stat: Growth in GDP per capita, productivity and ULC, 2015
The World Bank: World Development Indicators, 2015
The Economist: Tightening grip - Rising Chinese wages will only strengthen Asia’s hold on
manufacturing, 14 March 2015
European Central Bank Statistical Data Warehouse: Estimated MFI loans to NFCs by
economic activity, 2015
Eurostat: General government gross debt, 2015
BRUEGEL: Capital Market Union, A vision for the long term, April 2015
ENERGY & CLIMATE
European Round Table of Industrialists
BP: Statistical Review of World Energy, 2015
The World Bank Database
Joint Research Center EDGAR: CO2
time series 1990-2013 per region/country, 2015
World Bank Group: Carbon pricing watch, 2015
The World Bank Group: State and Trends of Carbon Pricing, September 2015
DIGITAL ECONOMY
OECD: Digital Economy Outlook, 2015
World Bank Group: Starting a business, 2014
OECD: Entrepreneurship at a Glance, 2015
EMPLOYMENT, SKILLS & EDUCATION
OECD: Unemployment rate, 2015
OECD: Youth unemployment rate, 2015
European Commission and EMPIRICA: e-Leadership in Europe, Demand and supply
forecasts (2015-2020), June 2015
OECD: Pisa 2012 Results in focus, 2012
TRADE & INVESTMENT
European Commission: European Union trade in the world: index, 2015
USDA: US Agricultural Trade, 2015
OECD Stat: International Trade balance (MEI), 2015
United States Census Bureau: US International Trade Statistic, 2015
Eurostat: Trade in goods, by main world traders, 2015
UNCTAD: World Investment Reports 2012 and 2015
UNCTAD: Commodities at a glance - Special issue on Rare Earth n°5, 2014
Bibliography & Glossary
SHORT FORM ISO COUNTRY IDENTIFIERS
EU COUNTRIES OTHER COUNTRIES
Belgium BE
Bulgaria BG
Czech Rep. CZ
Denmark DK
Germany DE
Estonia EE
Ireland IE
Greece GR
Spain ES
France FR
Croatia HR
Italy IT
Cyprus CY
Latvia LV
Lithuania LT
Luxembourg LU
Hungary HU
Malta MT
Netherlands NL
Austria AT
Poland PL
Portugal PT
Romania RO
Slovenia SI
Slovakia SK
Finland FI
Sweden SE
UK UK
Japan JP
Norway NO
US US
ERT BENCHMARKING REPORT 2015 | 33

34. ERT Members
Jean-Paul Agon L’Oréal
César Alierta Izuel Telefónica
Paulo Azevedo SONAE
Ben van Beurden Royal Dutch Shell
Kurt Bock BASF
Jean-François van Boxmeer Heineken
Carlo Bozotti STMicroelectronics
Svein Richard Brandtzaeg Norsk Hydro
Antonio Brufau Repsol
Ton Büchner AkzoNobel
Paul Bulcke Nestlé
Jean-Pierre Clamadieu Solvay
Iain Conn Centrica
Ian Davis Rolls-Royce
Rodolfo De Benedetti CIR
Pierre-André de Chalendar Saint-Gobain
Marijn Dekkers Bayer
SECRETARY GENERAL
Brian Ager
CHAIRMAN
Benoît Potier - Air Liquide
VICE-CHAIRMEN
Nils S. Andersen - A.P. Møller-Maersk
Vittorio Colao - Vodafone Group
Claudio Descalzi Eni
Henrik Ehrnooth KONE
John Elkann FCA
Christoph Franz F. Hoffmann-La Roche
Ignacio S. Galán Iberdrola
Zsolt Hernádi MOL
Heinrich Hiesinger ThyssenKrupp
Timotheus Höttges Deutsche Telekom
Frans van Houten Royal Philips
Pablo Isla Inditex
Leif Johansson Ericsson
Joe Kaeser Siemens
Jacek Krawiec PKN Orlen
Bruno Lafont LafargeHolcim
Thomas Leysen Umicore
Bill McDermott SAP
Nancy McKinstry Wolters Kluwer
Gérard Mestrallet ENGIE
Lakshmi N. Mittal ArcelorMittal
Dimitri Papalexopoulos Titan Cement
Jan du Plessis Rio Tinto
Patrick Pouyanné TOTAL
Norbert Reithofer BMW Group
Stéphane Richard Orange
Kasper Rorsted Henkel
Güler Sabanci Sabanci Holding
Risto Siilasmaa Nokia
Tony Smurfit Smurfit Kappa Group
Ulrich Spiesshofer ABB
Carl-Henric Svanberg BP
Johannes Teyssen E.ON
Jacob Wallenberg Investor AB
ERT BENCHMARKING REPORT 2015 | 34

35. stephensondesign.eu
European Round Table of Industrialists
Place des Carabiniers 18A Karabiniersplein I B-1030 Brussels
Tel. +32 2 534 31 00 I www.ert.eu I @ert_eu I contact@ert.eu
ERT BENCHMARKING REPORT 2015 | 35