Belgian CFOs move to financial conservatismDeloitte Belgium publishes results of its third 2009 CFO SurveyDOWNLOAD |
Brussels, 28 October 2009 – It is tempting to breathe a sigh of relief at the somewhat positive outlook expressed by Belgian CFOs. Optimism is at its highest so far in 2009. Credit is easing. M&A activity looks to be on the rise. But probe a little deeper and CFOs confess to anxieties about the speed and nature of the recovery and about the post-crisis landscape of which an outline is now emerging.
These are the mixed messages coming out of the third edition of the “Deloitte Belgian CFO Survey: Financial conservatism is back” published today. Since the start of the year, Deloitte’s quarterly poll has explored the changing attitudes of CFOs in this country as their firms cope with this particularly challenging period.
“Not only do these regular reports provide a unique overview and update of the issues facing CFOs,” observes Rik Vanpeteghem, CEO Deloitte Belgium. “They also offer an important benchmark for understanding how companies rate among their peers.”
Confident yet cautious
According to Thierry Van Schoubroeck, Partner, Deloitte CFO Services, who conducted the survey, respondents have become markedly more optimistic about the prospects for their own companies. “To put this in perspective, we can report that the Belgian trend is in line with that of the UK, where financial optimism has reached the highest level since a similar survey began in the fourth quarter of 2007.”
Yet, he warns, there is no expectation among Belgian CFOs that we are on the verge of a strong recovery. They expect activity in their own markets to remain sluggish throughout 2010. Financial caution and focus on cost management is still in vogue. Moreover, CFOs think these trends will be here to stay after the recession comes to an end.
Low confidence in politics
The previous survey showed that 35% of CFOs expected the outcome of the 9 June elections to have a negative impact on economic policymaking. “Today no less than 75% of CFOs are unhappy about the impact of domestic Belgian politics on policymaking” observed Thierry Van Schoubroeck.
Highlights of the third 2009 CFO Survey
- Highest level of optimism this year. Financial optimism is the highest recorded since the beginning of the CFO survey. But respondents foresee a sluggish upturn over the next 15 months.
- Domestic politics still a worry. Three quarters of CFOs report that post-election politics is having a negative impact on economic and financial policymaking.
- Permanent change in financial attitudes. CFOs expect to see greater financial conservatism, lower gearing and less reliance on bank credit in the future.
- Debt levels need further cuts. Along with reducing debt most respondents want to cut further in capital spending, hiring, personnel and other costs.
- Credit is still expensive. It’s not cheap, but a majority of CFOs think credit availability has gradually improved. Yet a minority say that obtaining credit will remain difficult.
- A slight shift away from bank borrowing. The credit crunch seems to change CFOs’ preferences for financing their businesses.
- M&A activity is picking up. The one area where respondents are most positive. The great majority expect M&A activity to rise over the next year.
- Equities getting more expensive. With the Bel 20 third quarter rally (+20%), fewer CFOs are seeing equities as undervalued.
“One thing the third survey shows us for sure,” concludes Thierry Van Schoubroeck. “Financial conservatism in Belgium is back and may be around long after the recession is over.”
About the survey
The 2009 third-quarter survey was conducted between 10 and 30 September. A total of
50 CFOs took part. Two-thirds (65%) represented a listed company with the rest representing privately held firms. Covering a variety of industries, 35% of the participating companies had a turnover of over €1 billion, 45% had €100 million to €1 billion, and 20% had less than €100 million.
For more details on the results, please refer to the Deloitte Belgian CFO Survey.
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Press release NL - Belgische CFO’s grijpen terug naar financieel conservatisme
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