Deloitte CFO survey: Q4 2010
Welcome to our sixth quarterly survey of Chief Financial Officers of major Irish based companies. The survey was conducted in December 2010, and CFOs of listed companies, large private companies and Irish subsidiaries of overseas multinational companies participated.
It is clear that the economic turmoil and uncertainty of the last quarter of 2010 have severely dented optimism. Some of the key findings from this quarter’s survey can be summarised as follows:
CFOs now focused on revenue growth and maintaining margin
- Working capital management and pensions deficits have replaced cost management as one of the top three financial concerns, reflecting that most companies have been through the cost cutting phase associated with economic downturns. Revenue growth and maintaining profit margins still remain in the top three
- CFO expectations on turnover and profit are still reasonably positive – with 46 percent and 42 percent respectively still anticipating improvements over the next six months - but are significantly down on the Q3, 2010 outlook
- 35 percent of respondents indicated that their company has returned to growth but only 12 percent of CFOs believe the Irish economy has already started to grow. Analysis of the underlying data clearly indicates a divergence between those companies heavily involved in the export of goods and services, and those more reliant on the domestic economy
Use of debt finance is to decrease significantly in the coming year
- 32 percent of CFOs expect their company’s level of debt financing to decrease significantly over the next 3 years reflecting a desire on the part of many corporates to reduce debt exposure, the overall reduction of debt finance available in the market and rising interest rates
- 96 percent of CFOs believe that their company’s ability to service debt will remain the same or improve in the next three years indicating a positive outlook
- 40 percent of respondents expect to see an increase in the availability of credit from Irish banks in 2011
- Market risk is still the key concern of CFOs rising to 60 percent this quarter, placing it as their current number one concern. Continuing volatility and uncertainty surrounding the Irish economy and Government, the impact of Budget 2011, interest rates, foreign exchange rates and price pressures (equity markets) all pose a considerable concern
Reaction to Budget 2011 is strongly in favour of maintaining our corporate tax rate
- 90 percent of respondents see low corporation tax rates as crucial to the retention and attraction of FDI
- 76 percent of our respondents feel that expected VAT increases will have a negative effect on the economy
Read the full PDF report here.
The Deloitte CFO Survey is the only survey that seeks to establish the views of CFOs in relation to the financial markets, economic outlook and business trends on a quarterly basis.
||Shane Mohan, partner T + 353 1 417 2543|