Leaders of Croatian Companies: Investments Do Not Stop Even in Crisis Times

Leaders of Croatian companies are surprised, but not discouraged by the current trade disputes and political decisions. It seems that after five years of operating under conditions complicated by the coronavirus pandemic, supply chain disruptions, inflation… they have developed a sort of immunity to abnormal occurrences and are ready to adapt their business.

Gordan Kolak (Končar Grupa): We Expect Further Growth in All Business Segments

– In the business plan of the Končar Group for 2025, we have anticipated further extensive investments in expanding production capacities, technology, and the development of new products, as well as investments in people, with CAPEX planned at over 80 million euros. In line with previous achievements, contracted jobs, and market trends, this year we plan to achieve total revenues exceeding 1.1 billion euros, with the main emphasis remaining on export markets, which are expected to account for over 70 percent of sales revenue from products and services. The largest exports are planned for the European Union market, with a focus on Germany, Sweden, Norway, and the Netherlands. Along with further increases in revenue and profitability, one of the key determinants of the continued transformation is precisely the strengthening of the broader global presence of the Končar Group.

When it comes to global economic disruptions, which in recent months have been most associated with news from the USA and new tariffs, as a company primarily oriented towards the European market, we do not currently see significant threats to Končar’s business. The company’s primary market placement is still tied to EU markets. According to recently published unaudited financial reports for 2024, Končar achieved exports of 551.7 million euros in EU countries, representing an increase of 133 million euros compared to the previous year and accounting for 74 percent of total exports. The newly contracted jobs of the Končar Group reached nearly 1.7 billion euros, of which 1.26 billion was contracted for export. The share of EU countries in contracted export jobs is 76.3 percent. For comparison, in 2024, goods and services worth 12.4 million euros were exported to the USA, which represents just over one percent of Končar’s total revenue. Despite the current circumstances, we still consider the US market to be very potent and promising, and we are actively considering strategic partnerships there, as well as the potential for local presence.

However, further positioning and orientation towards European markets remain a priority for us in the coming years. When discussing other global economic challenges, we must not forget that we have actually been continuously operating in crisis times for the past five years and that domestic companies, like many companies across Europe, are now successfully navigating complex global circumstances. Over the past few years, the domestic business community has demonstrated an exceptionally high level of resilience and agility, as evidenced by many business and developmental breakthroughs achieved precisely during times when we continuously face these challenges. During this period, Končar has achieved five consecutive record business years with multiple growths in key financial indicators. Today, the company, with over 5,500 employees, is one of the largest domestic employers and the largest Croatian net exporter with references in over 130 markets worldwide. With excellent contracts for this year and the next, and this strategic framework focused on strengthening a culture of excellence, we expect further growth in all business segments and an even stronger market placement.

Gordana Kovačević (Ericsson Nikola Tesla): We Continue to Invest in Digital Transformation

– Political changes and trade wars have a strong negative impact on business, especially in the context of a globalized economy. This is primarily reflected in supply chain disruptions, reduced exports, and increased import costs, rising prices of final products due to increases in raw material and material prices, financial instabilities, or changes in interest rates, exchange rates, and availability of capital, and consequently inflationary pressures. We are witnessing an intense dynamic of geopolitical situation development, and all current upheavals can cause new rearrangements among existing political and economic blocks, thus affecting some new trade restrictions. Regarding our business, although our customers are primarily within the EU, which means there is no direct exposure to the US market, for some of them, the US market is an important part of their business.

Any disruptions to their business in that market could negatively affect us as well. Additionally, the negative impact may manifest in increased costs due to potential price increases of products from the USA (IT solutions, licenses) and challenges caused by supply chain disruptions. The current situation adversely affects stock prices. The stock market crash does not only affect companies whose stocks are traded but also the overall economy. The consequences are a decline in production and recession. We continuously monitor changes in the business environment in all markets where we operate. As in previous crisis situations, if necessary, we will respond in a timely manner to protect our business interests. We are focused on profitability, cost and operational efficiency, cash flow from business activities, and responsible risk management.

We continue to invest in the digital transformation of our business by introducing new automated tools and optimizing processes using artificial intelligence. We have a strong intellectual and innovative potential that we continuously develop. The focus is on developing employee competencies to enhance skills and adopt new technologies. We nurture a corporate culture based on integrity, ethics, and compliance. By adhering to the highest standards in compliance, we ensure additional competitive advantage and sustainability. Our approach to business, quality execution of obligations undertaken, and partnership cooperation with customers are what we are recognized for and what puts us in a good position for the continuation of stable business and the creation of added value for all our stakeholders.

Adrian Ježina (Telemach): We Diversify Supply Sources to Reduce Risks

– The global geopolitical situation is becoming increasingly complex, with direct and indirect impacts on economies and the business of companies. Major political changes or instability can reduce investor confidence, increase capital costs, complicate access to financing, and cause instability in global stock markets. All of this can lead to increased operational costs and rising prices of products and services. The introduction of tariffs directly increases costs for importers, and the final financial effect on individual countries depends on the structure of their imports and exports. Recent moves by the USA to impose tariffs could strongly hit leading European exporters.

For now, we do not expect major negative consequences for our business because we do not export services and are not directly affected by trade barriers. However, potential challenges may arise due to increased procurement costs if our suppliers feel the impact of changes in international trade. To ensure business stability and long-term sustainability, we timely optimize procurement processes and manage risks in the supply chain. In this way, we can mitigate possible external impacts and maintain operational efficiency. As we saw during the COVID-19 pandemic, the key to success lies in the resilience and flexibility of supply chains. In our case, this relates to investment and customer equipment, which is partially sourced from distant markets.

Therefore, we continuously assess procurement strategies and diversify supply sources to reduce risks associated with changes in global trade. Future business trends will depend on the ability of countries and companies to adapt to new market conditions and geopolitical challenges. At Telemach, we have already proven our agility, resilience, and innovation even in the most demanding circumstances. We will continue to invest in infrastructure development, digitalization, and optimization of business processes to further improve our market position and provide users with a top-notch experience. In challenging times, adaptability and strategic planning make the difference – and we are ready to respond to all challenges.