Financial repair, economic uncertaintyDeloitte CFO Services publishes results of the first quarter 2010 Belgian CFO SurveyDOWNLOAD |
Brussels, 25 May 2010 – The first 2010 quarter Deloitte CFO survey suggests that Belgian CFOs are anticipating a sluggish recovery. Nevertheless, while remaining focused on cost and cash flow management, CFOs see the financial environment improving. They are thinking beyond the crisis and starting to plan for growth.
The first 2010 edition of the Deloitte Belgium CFO Survey,“Financial Repair, Economic Uncertainty”, conducted from 15 March to 10 April, is published today. It continues on from last year’s quarterly poll exploring the changing attitudes of CFOs in this country as their firms cope with this particularly challenging period.
Still haunted by uncertainty
The first-quarter survey shows that after rising abruptly last year, business optimism has stabilised in response to uncertainty about the pace of recovery. Three months ago, 65% of CFOs expected the recovery to accelerate in 2010. Now less than half think so. “Expectations on the timing of the accelerated demand for products and services have been pushed back towards 2011,” remarked Thierry Van Schoubroeck, Partner, Deloitte CFO Services, who conducted the survey. “And deteriorating cash flow expectations suggest the possibility of a second dip for some corporates.”
CFOs definitely see risk ahead. And the current euro crisis, which accelerated after the survey was completed, might already prove them right.
Good news too
Yet the poll also revealed favourable indications. With CFOs reporting improved cost and availability of bank credit, the attractiveness of bank borrowing has seen the biggest jump since the survey began. Risk reduction seems to be drawing to a close. Crisis management measures, such as headcount reduction, marketing cuts and reducing capital spend, are no longer as universal as they were a year ago. On the other hand, CFOs are expressing increasing interest in delocalisation as a structural measure of cost reduction.
In another positive finding, Thierry Van Schoubroeck noted that, in 2009, few CFOs focused on strategic planning or on developing new products and services. “Now, however, revenue growth is again a top priority for almost three quarters of survey respondents,” he observed.
Highlights of the first 2010 CFO Survey
- Uncertainty about the pace of Belgian economic recovery persists. Following strong progress in the second half of 2009, CFO optimism has stalled and has stabilised through the first quarter of 2010.
- CFOs expect a sluggish recovery. Expectations on the timing of accelerated demand for products and services have been pushed back towards 2011.
- Credit and financial conditions for corporates are improving. Bank borrowing remains costly, but is regaining popularity as a source of funding. All three forms of finance – bank borrowing, corporate bonds and equity – are rated as attractive by CFOs.
- Corporates have significantly reduced the financial risk on their balance sheets over the past twelve months, but this process seems to be drawing to a close. Appetite for financial risk remains low, but is gradually increasing.
- Quarter after quarter, delocalisation continues to gain in importance as a strategic approach to cost reduction. More and more corporates are considering shifting support or production functions nearshore or offshore.
- Although tough cost and liquidity management remains important, typical crisis management measures are less universal than they were a year ago. For a vast majority of CFOs, growth has again become the top priority.
About the survey
The 2010 first-quarter edition of the Deloitte Belgium CFO Survey was conducted from 15 March to 10 April. A total of 48 CFOs took part, 50% representing listed companies with the rest representing privately held firms. Covering a variety of industries, 41% of the participating companies had a turnover of over €1 billion, 36% earned €100 million to €1 billion, and 23% earned less than €100 million.
For more details on the results, please visit www.deloitte.com/be/cfo-survey
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Financial repair, economic uncertainty
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CFO Survey Q1-2010 - Financial repair, economic uncertainty
First-quarter edition of the Deloitte Belgian CFO Survey
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