e t

t r e
Impact of COVID-19 on
d s
Business and Technology
r a
B
&
Risk Mitigation Strategies

&
for CIOs

u n
D
March 27, 2020
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CUMULATIVE NO. OF CONFIRMED COVID-19 CASES
The outbreak of COVID-19 in China disrupted the global value chain. With more cases being reported in the

e
USA and European Union, the level of disruption has widen and covering most part of the world economy

300,000

t r e
s
250,000 Confirmed cases
438,749

d
200,000

150,000

r a
B
Recovered cases
100,000
111,895
25.5%

&
50,000

n
-
Deaths
Feb 10, 2020

Feb 20, 2020

Feb 29, 2020

Jan 20, 2020

Jan 30, 2020

Mar 10, 2020

Mar 20, 2020

Mar 24, 2020

u
19,675
4.5%

D
Note: Data as on March 25, 2020
Source: Johns Hopkins CSSE, WHO, CDC, ECDC, NHC and DXY
China Other countries

2
 t
COPING CAPACITY

e
The average overall Global Health Security Index score is 40.2 out of a possible 100. This shows that
collectively, international preparedness for epidemics and pandemics remains very weak

t r e Index Pillars

d s
r a
B
n &
D u Least prepared
Source: NTI , Johns Hopkins, The Economist Intelligence Unit
More prepared Most prepared

3
 t
CHANNELS OF IMPACT

e
Indian companies face strong headwinds both from global and domestic factors. The three major
channels of impact are legal linkages, supply chain and macroeconomic factors

Channels of impact for Indian companies

t r e
d s
a
Global Domestic

Legal Linkages
B r
Trade Macroeconomic

&
(Supply Chain) factors

n
Investment flows

u
Financial Markets

D Currency Markets

4
 t
IMPACT ON GLOBAL ECONOMY

e
Besides the impact on human lives and global supply chain, the pandemic is a severe demand shock

e
Global GDP growth

r
5% (constant prices; market exchange rates)

t
Global Foreign

s
4% Direct Investments

d
3%
5-15%

a
2%

r
1% = US$ 1 tn

B
Global Exports
0%

&
-1% US$ 50 bn

n
-2%

u
-3% Global
unemployment
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: IMF, UN

D Previous Forecasts Revised Forecasts 25 mn people

5
 t
IMPACT ON GLOBAL FINANCIAL MARKETS

e
The pandemic has resulted in acute market volatility across the globe reflecting the unprecedented
uncertainty of the situation

r e
1929 - 2008 - Coronavirus
The Great Depression 1987 crisis Global Financial Crisis outbreak

s t
Peak-to-Trough

ad
r
-36% -37%
(P-T) Decline %
(Dow Jones

B
Industrial Average) -54%

&
-87%

P-T Decline
(Months)

u
6

n 2 17 1.5

D
Recovery to
Peak (Years) 22 2 5 ?

Source: Dun & Bradstreet Analysis, WSJ, fedprimerate.com

6
 t
IMPACT THROUGH TRADE AND LEGAL LINKAGES

e
Implications for Indian businesses via legal linkages and trade remain significant

e
% share of countries (most affected by COVID-19) % share of countries (most affected by COVID-19)
in which Indian entities have legal linkages

r
in India’s import and export basket

t
USA

s
11%
Germany

d
3%
United Kingdom

a
3% 32%

r
4% Japan

B
5% Netherlands

France

&
9% Switzerland
50% 48%

n
China
13%

u
9%
Italy
11%

D
Others
Imports Exports
Note: Others include South Korea, Spain, Sweden, Canada, Belgium, Denmark, Austria, Norway, Malaysia and Iran Severely Impacted countries Other countries
Source: Dun & Bradstreet, Ministry of Commerce & Industry

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COMPARISON OF COMPANIES RESUMING OPERATIONS IN DIFFERENT REGIONS

e
There are some positive signs - Companies across China are resuming operations

4%
11% 12% 14% 14%

t r e
s
28%
38%

ad
96%
89% 88%

B
86%
r 86%
72%

&
62%

u
Southwest China
n
East China South China Northeast China North China Northwest China Central China

D
Resumed Operations Temporarily closed

Source: Dun & Bradstreet

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 t
RISKS FOR BUSINESSES

e
COVID-19 outbreak poses several organisational risks – supply chain, operational, financial and market.
The sheer size of the shock interconnects all these risks making companies vulnerable to knock-on effects

t r e
d s
r a
B
Market risk
Demand risk
Market interest rate

&
Financial risks Etc.
Supply chain risk Credit risk

n
Raw material availability Investment risk
Input cost fluctuations Etc.

u
Operational risks
Quality risk
Business Continuity risks
Etc. IT risks

D
Compliance risks
Etc.
Source: Dun & Bradstreet

9
 t
INDEX OF INDUSTRIAL PRODUCTION - INDIA

e
Manufacturing activity across the sub sectors was significantly weak in 2019. The outbreak of COVID-19
only prolongs the recovery

e
Trend in growth of Index of Industrial Production

t r
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

s
Textiles

d
Chemicals

r a
Pharmaceuticals

B
Electronics

Electrical equipment

Machinery

Motor vehicles

n &
Furniture

D u
Source: MOSPI, D&B Analysis
Worse than 5 year average Within 5 year average Better than 5 year average

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D&B INDIA BUSINESS OPTIMISM INDEX – SECTORAL INDEX

e
The level of optimism increased across all services sectors and some industrial sectors in Q1 2020

e
Consumer Non-

r
Capital Goods Durable Goods BFSI Other services

t
69 67 68 82

56
58

d s
66
55

r a
B
Q4 2019 Q1 2020 Q4 2019 Q1 2020 Q4 2019 Q1 2020 Q4 2019 Q1 2020

Intermediate Consumer
Goods Durable Goods Construction Basic Goods

&
68 68 82
68 75

u n 64 54 65

D
Q4 2019
Source: Dun & Bradstreet
Q1 2020 Q4 2019 Q1 2020 Q4 2019 Q1 2020 Q4 2019 Q1 2020

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 t
D&B INDIA BUSINESS OPTIMISM INDEX - PARAMETERS

e
The level of optimism increased across all services sectors and some industrial sectors in Q1 2020

e
% of respondents who expect an increase in the corresponding parameters in Q1 2020

r
(Note: the survey was conducted in Dec 19 when there were 0 confirmed COVID-19 cases in India)

s t
Volume of New Orders Net Profits after Workforce
Sales received Taxes Level of Selling Price size

d
61% 33% 58% 6% 45%
Basic Goods

a
68% 36% 60% 20% 32%

r
Capital Goods
57% 39% 65% 9% 39%

B
Intermediate Goods
71% 17% 75% 8% 25%
Consumer Durable

&
63% 33% 71% 0% 38%
Consumer Non Durable

n
81% 30% 41% 0% 22%
Construction

u
62% 36% 67% 3% 41%
BFSI

D
75% 39% 74% 8% 58%
Other services

Less optimistic More optimistic

Source: Dun & Bradstreet

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D&B INDIA CFO OPTIMISM INDEX – SECTORAL INDEX

e
The level of optimism increased across all sectors expect consumer durables goods sector in Q1 2020

r e
Retail

t
Consumer Non-durable Goods

s
IT-ITeS

d
BFSI

r a
Construction

B
Hospitality

Capital Goods

&
Intermediate Goods

Media

n
Basic Goods

u
Consumer Durable Goods

D
0 20 40 60 80 100 120 140 160
Q1 2020 Q4 2019 Index value
Source: Dun & Bradstreet

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IMPACT OF COVID-19: STORY OF RECOVERY HAS BEEN REVERSED

e
The impact of COVID-19 outbreak will be disproportionate – while some sectors will be severely
impacted, some will see a positive impact

e
Key actions points for business continuity

Renegotiate
interest rate
and terms,
Gems & Jewellery
Entertainment

s t r Retail: Non-food items Manage credit

Wholesale trade
terms with
customers,

d
cut down facilitate
costs Hospitality Electronics

a
Severe High remote
working and

r
Transport Banking flexible
production

B
Livestock MSMEs
COVID-19
Tourism Sector Impact

Remote working applications

n & Drugs & Pharma

Stabilize
supply chain
and

u
Over-the-Top Media service Positive Moderate Automotive inventory
management
Online gaming Textile

D
E-education Metals

Source: D&B Analysis

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 e t
e
Thank You!
謝謝
s t r
d
Dankjewel
a
Br
merci
ありがとう

n & ध�वाद

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