Highlights first-quarter edition
Deloitte Belgian CFO Survey Q1-2010
The first 2010 quarter CFO survey suggests that Belgian CFOs remain cautious about the economic recovery. The majority of CFOs anticipate a sluggish recovery and do not expect demand for their products and services to accelerate until 2011.
Corporates stay focused on cost and cashflow management. But they also start to think beyond the crisis: typical crisis management measures such as reducing headcount or marketing and adverstising spent, or delaying recruitment have become less universal.
Delocalisation is gaining importance quarter after quarter as means to reduce costs. More and more corporates consider structural measures to cost reduction by shifting production or support functions (ICT, HR, finance) offshore. Where delocalization was only on the radar screen of 15% of survey respondents in the first quarter of 2009, this percentage has increased quarter after quarter to 40% now.
The good news from the first quarter survey is that the financial environment is continuing to improve. Credit availability is up and the CFO survey shows a sharp improvement in the attractiveness of bank borrowing. All forms of financing – bank borrowing, corporate bonds and equity – are now rated as attractive.
Over the last year CFOs have significantly reduced the financial risk on their balance sheet, but this process seems to be drawing to a close – or is at least slowing down.
Financing conditions for the corporate sector are however not back to normal. Even among the large, quoted companies, which form the core of our survey panel, most continue to rate credit as “costly”. Few CFOs believe it’s a good time to issue debt or equity despite its current attractiveness.
But as we have observed in the past, much of the value of this survey data lies in flagging changes in direction and momentum. What emerges from this quarter’s CFO survey is that financing conditions for larger companies are getting better. That still leaves corporates with plenty to worry about in terms of the pace of the recovery. CFOs see risk ahead. The current Euro crisis might already prove them right.