Despite doubts about the timing and the magnitude of the recovery, CFOs have become markedly more optimistic about the prospects for their own companies. Yet there is no expectation that we are on the verge of a strong recovery. CFOs expect activity in their own markets to remain sluggish throughout 2010. Financial conservatism and focus on cost management is in favour, and CFOs seem to think these trends are there to stay also after the recession will have come to an end. Because of the combination of continued limited availability of credit and further backward shifting expectations on the timing of the recovery, companies that start to run out of cash might still face very difficult times in the next three to four quarters.
Financial conservatism is back: disruption in the financial system has changed CFO preferences for financing their business.
The 2009 third-quarter survey took place between 10 September and 30 September. A total of 50 CFOs completed our survey, Two thirds (65%) of the participating CFOs represent a listed company. The rest were CFOs of private companies. The participating CFOs are active in a variety of industries. 35% of participating companies has a turnover of over 1 billion, 45% of between 100 million and 1 billion and 20% of less than 100 million.
We would like to thank all participating CFOs for their efforts in completing our survey. We hope the report makes an interesting read, clearly highlighting the challenges facing CFOs, and providing an important benchmark to understand how your organization rates among peers.
What can we expect going forward? Over the past quarters many companies have taken necessary measures to ensure liquidity, free up cash and cut costs. Though the recovery will be sluggish, many start to see the light at the end of the tunnel and gain confidence that they will be able to manage the coming difficult 3 to 4 quarters. Others however, risk running out of cash. The combination of continued limited availability of credit and further backward shifting expectations on the timing of the recovery, suggests that for these companies the worst is still to come.
It is worth nothing that structural measures to cost efficiency are moving up on the agenda: the percentage of companies planning to shift production or support functions overshore continues to increase each quarter.
The value of the survey data increases with the ability to identify trends and possible turning points. We are looking forward to the 2009 fourth quarter Deloitte Belgian CFO Survey. This next edition will be conducted in the second half of December. If you would like to join our survey panel we kindly invite you to contact us and apply for participation.
Thierry Van Schoubroeck
Deloitte CFO Services, Partner
Tel. + 32 2 749 56 04