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Focus on Profitability and Stability will Replace Cost Reductions in 2013


Bratislava, 21 November 2012 – Financial directors are anticipating another difficult period due to the expected slowdown of the Slovak economy and the planned budget measures of the Government. These two factors will have a key impact on the economic results of companies and they will require that financial directors prove and confirm their ability to ensure sustainable profitability and a stable financial situation in their companies. Those are the results of the Deloitte CFO Survey (2nd edition) of financial directors in Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Slovenia and Slovakia.

“For the first time since the turning point in 2008, consumers believe that their purchasing power is going down.”

— Jozef Hýbl,
Audit Senior Manager, Deloitte Slovakia

Sixty per cent of Slovak CFOs expect Despite the mooted general increase in corporate income tax, as well as the existing and possible changes mentioned above, 28% of CFOs believe that the tax burden in Slovakia will still be lower than in neighbouring countries Slovak economy to grow moderately by 1.5 to 3%. This reflects a positive development since the last survey, when only 22% of respondents forecast growth above 1.5%. More than a third anticipates that GDP will stagnate or grow very slowly.

However, export-driven Slovakia is the most optimistic country. In contrast, Slovenia, Croatia and Hungary are expecting a return to recession, and Poland, the Czech Republic, Romania and Bulgaria are expecting 2013 to be a year of a minimal growth and stagnation (0 – 1.5% growth).

Predictions of moderate growth are related to the expected unemployment rate over the next 12 months. Unemployment, however, is not a concern for CFOs in only two out of eight countries, in particular the Czech Republic and Romania. Sixty-eight per cent of Slovak CFOs are worried about a moderate or high increase in unemployment, which would also adversely affect household consumption, a concern shared by the majority of CFOs from the other six countries in the survey. The labour market in Slovakia will also be negatively affected by the upcoming amendment to the Labour Code (according to 72% of CFOs).

The economic stagnation and above-normal economic and financial uncertainty may be reflected in the financial outlook for companies in Central Europe. CFOs in Slovenia are unsurprisingly the most pessimistic, given the country’s worsening economic and financial environment; in contrast, 67% of Bulgarian CFOs are more positive about their prospects. Slovak CFOs are divided into three camps: almost a third with unchanged attitudes, almost a third with negative attitudes, and 36% of respondents expecting a moderate improvement.

“Despite the mooted general increase in corporate income tax, as well as the existing and possible changes mentioned above, 28% of CFOs believe that the tax burden in Slovakia will still be lower than in neighbouring countries,” commented Jozef Hýbl, Audit Senior Manager at Deloitte Slovakia.

The absence of an active Slovak public equity market and the presence of a traditional relationship banking model are the main reasons why companies consider bank debt to be much more attractive than equity financing, which almost has not changed since the previous survey (42%, up from 33% last time). The situation in the Czech Republic is similar. However, the level of gearing should remain unchanged according to 64% of the CFOs.

The main trends for Slovak companies over the next period will be to increase revenues from current markets (44% of CFOs consider this area to be their highest priority), followed by revenue growth on new markets (almost 40%), and reduction of direct costs (20%).

“The spectrum of cost-cutting measures applied in recent years appears to have had a positive effect, and companies are starting to focus more on their top lines, which is a good sign for the economy. However, new investments and expansion into new markets are still not among the highest priorities for CFOs in Slovakia,” commented Branislav Zlatý, Financial Advisory Senior Manager.

CFOs in five out of the eight countries expect levels of M&A activity to increase during 2013. However, this expectation may be due to the very low activity levels in CE M&A markets over the last year, meaning that even a slight hike would represent an increase from previous levels. Croatian CFOs have the highest expectations (64%).


The strategic decision-making of companies is dominated by focusing on human resources and retaining talent.

The great majority of the surveyed CFOs are not worried about a prospective lack of talent and do not expect talent shortages in the finance area in the upcoming year. The only exception is Romania, where 57% of respondents expressed their concern about the issue. In Slovakia, almost a third expressed concern, mainly at the middle management level.

More alarming concerns are stated by 44% of CFOs with the development of future leaders, and 60% who see the sustainability of employee morale as problematic.

Slovak CFOs’ opinions:

  • 60% of CFOs expect that GDP will reach growth between 1.5% and 3%;
  • Increase of the unemployment level over the next 12 months is foreseen by 68% of CFOs;
  • The main business focus within next 12 months is expected in revenue growth on current markets;
  • 44% of CFOs are concerned about development of future finance leaders;
  • 60% of respondents see the sustainability of employee engagement and morale as problematic;
  • 72% of CFOs believe that upcoming amendment to the Labour Code will negatively affect flexibility on the labour market.

The CFO Survey was completed by 362 CFOs across 8 countries: Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Slovenia and Slovakia.

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© 2012 Deloitte Slovakia


Henrieta Kiššová
Deloitte Slovakia
Job Title:
Clients & Markets Leader
+421 2 582 49 158