deloitte cfo survey q22013 web

7/27/2019 Deloitte CFO Survey Q22013 Web

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The CFO Survey

Q22013

Just when you thought it was safe to go back in the water


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Contents

The Deloitte CFO Survey targets the CFOs o major Australian listed companies.

It has been conducted on a quarterly basis since the third quarter o 2009. This survey

covers the second quarter o 2013 and took place between 26 June 2013 and 12 July

2013. 54 CFOs participated, representing businesses with a combined market value

o approximately $220 billion or 16% o the Australian quoted equity market.

The Deloitte CFO Survey 04

Confdence rocked by slowdown in China 06

Impact o uncertainty 08

Falling dollar and interest rates provide some relie 11

Credit cheaper and more available 14

Appendix 16

Contact us 18


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Contacts

Keith Skinner

Chie Operating Oicer

Tel: +61 2 9322 7580

email: [email protected]

Stephen Gustason

Partner

Tel: +61 2 9322 7325


Following three quarters o escalating optimism, conidence among Australian CFOs

has taken a dive, reaching its lowest level since 2009 when we irst conducted the

Deloitte CFO survey.

In stark contrast, CFOs in North America and the United Kingdom continue to ride a

wave o improving conidence, enjoying their highest levels o optimism in recent years.

CFO sentiment has previously tracked in line across the three regions; this is the irst

time we have seen a signiicant divergence.

So why have Australian CFOs become so glum?

Respondents pinpointed the slowdown in China as the most negative impact on

optimism. But should Chinas 7.5% growth ring alarm bells or Australian businesses?

This certainly conirms that conidence levels are ragile, and is likely to continue to

impact strategic decision business making.

Australian Government policy uncertainty also continues to dampen CFO optimism.

However, this d id not low through to business decisions, with the majority o

CFOs reporting that the orthcoming election was not inluencing their plans or

acquisitions, divestments, hiring or capital expenditure.

This quarters survey also ollowed continued commentary about Australias economic

challenges post the mining investment boom, a series o proit downgrades or major

corporates and soter economic data around exports, imports and manuacturing.This may help to explain why CFOs are less positive than they were three months ago.

Although optimism is down, the beneits o the lower dollar and interest cuts are

slowly starting to emerge. While close to 50% o CFOs said that interest rates and

the value o the dollar were having a positive inluence, they still view the multi-speed

economy as hurting businesses, which indicates that the dollar may continue to drop.

Overall, while we have seen a heightened interest in M&A, and although credit is

becoming cheaper and more available, CFOs are still waiting or more certainty beore

they consider getting back in the water.

Keith Skinner


For additional copies o this report pleasecontact Kirstie Williams on +61 2 9322 3881or email [email protected]


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The Deloitte CFO SurveyJust when you thought it was

sae to go back in the waterKey points rom the CFO Survey

CFOs net optimism has allen to its lowest

level since the survey began, ollowing

three consecutive quarters o positive

growth

The slowdown in China has had the

biggest negative impact on CFOs

optimism, edging out the previous

ront-runner, Australian Government

policy uncertainty, which continues to

have a signiicant negative impact

Appetite or risk has dipped again; only

a quarter o CFOs believe now is a good

time to take risk onto the balance sheet

More than hal o the CFOs surveyed

showed renewed interest in M&A, while

organic growth remains the leading

business strategy or the year ahead

Expectations or the value o the

Australian dollar have shited signiicantly;

hal o the respondents expected it to all

beneath US$0.90, compared to zero who

expressed the same expectation in the last

survey

More than hal o CFOs said the

depreciation o the Australian dollar

had improved their companys inancial

prospects while the majority agreed

that it improved Australias global

competitiveness

Views on interest rates shited

signiicantly; two-thirds o CFOs

expected rates to all urther below2.75%, compared to 8% who predicted

this in the last quarter

While the upcoming Federal election

is impacting business conidence,

it was generally not seen as a reason or

deerring capital expenditure, acquisitions,

divestments or hiring

CFOs reported that credit is cheaper and

more available now than any other time in

recent years, but companies continue to

be cautious in their approach to gearing.

Conidence rocked by slowdown in China

Net optimism among CFOs dropped to its lowest level

since the survey began, ollowing three consecutive

quarters o rising optimism.

CFOs are becoming less concerned about U.S. and

European economic issues. But the slowdown in China

has made a major dent in conidence, with 85% o

CFOs citing it as a negative impact, up rom 34% in

Q1 2013. This makes China the biggest concern or

Australian CFOs, relecting the challenges and concerns

that are continuing to emerge post the mining

investment boom.

Not withstanding China, Federal Government policy

uncertainty continued to be a signiicant actor having

a negative impact on 75% o CFOs.

Meanwhile, CFOs in the United Kingdom and North

America continue to report rising optimism relecting

the strengthening o their local economies. While CFO

sentiment in the three regions has traditionally tracked

in line, this is the irst time we have seen signiicant

divergence in conidence levels.


5/205

Impact o uncertainty

CFOs reported that their general levels o economic

uncertainty have crept up again; 83% gauged

economic uncertainty as above normal, up rom 58%

last quarter. Most believe that this will be with us or

more than another year. Appetite or risk also dipped;

less than a quarter o respondents considered this to

be a good time to take risk onto the balance sheet.

These levels o uncertainty were driven to an extent

by the orthcoming Federal election which was having

a negative impact on the conidence o close tohal the CFOs surveyed. But interestingly, CFOs were

not letting the election get in the way o business

strategies such as capital expenditure, acquisitions,

divestments or hiring.

Falling dollar and interest rates provide some

relie

As expected, alling interest rates and the depreciation

o the Australian dollar have had the most positive

impacts on CFO optimism, improving the outlook o

44% and 46% o respondents respectively.

52% o CFOs said the lower dollar has improved theircompanys inancial prospects, while 83% said it has

improved Australias global competitiveness. CFOs

expect the value o the Australian dollar to shit down

signiicantly over the coming year, in the wake o its

recent depreciation.

Similarly, CFOs are expecting interest rates to all

urther. 65% o CFOs expect rates to land below

2.75% in the next 12 months, compared to only

8% who predicted this in the Q1 survey.

Credit cheaper and more available

CFOs stated that credit is cheaper and more available

now than at any other time since the survey began

clearly inluenced by the recent all in interest rates.

Bank borrowing has continued to surge in popularity;

79% o the CFOs surveyed viewed it as an attractive

or very attractive option. Meanwhile, the appeal

o corporate debt, internal unding and equity has

remained airly stable compared to the previous

quarter.

CFOs were divided on the outlook or gearing,

with 28% expecting it to increase and 24% planning to

reduce gearing. This suggests that while debt is more

available and aordable, companies are still exercising

caution and conservatism with their own balance

sheets; a possible orward indicator o things to come.


6/206

Confdence rocked byslowdown in China

Chart 1

Financial prospects

Net percentage o CFOs who are more optimistic about the fnancial prospects o

their company than they were three months ago

Net percentage o international CFOs who are more optimistic about the fnancial

prospects o their company than they were three months ago

Net optimism among CFOs took a sharp dive rom 24%

to -11%, ollowing three consecutive quarters o rising

optimism. This is the lowest level o conidence since the

survey began in 2009. Despite this, more than hal (52%)

o CFOs are broadly unchanged in their eelings about

their companys inancial prospects.

1 The Deloitte CFO Survey (UK): Planning for Growth

(Q2 2013), Deloitte.

2 CFO Signals: what North Americas top finance executives

are thinking and doing (Q2 2013), Deloitte.

These results have bucked the trends shown by CFOs in

North America and the UK, who are continuing on the

trajectory o growing optimism. Net conidence among

CFOs in the UK has risen or the ourth consecutive

quarter to net 18%, which is now above its long-term

average1. This comes o the back o reduced concern

about the risk o a breakup in the Euro area, and

waning perceptions o external macroeconomic and

inancial risk.

For North American CFOs, net optimism continued

to rise, reaching 48% in Q22 up rom 32% in Q1.

This may be attributed to the U.S. emerging rom a

particularly weak period and now showing stronger

signs o growth.This divergence o conidence between Australian

CFOs and their North American and UK counterparts

has not been seen in the past three years as conidence

levels have generally tracked quite consistently across

the three regions.

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

51%

25%

45% 45%41%

25%

4%

-10%

-5% -5%

0%

8%

24%

-11%

Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13

Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13Q1-11

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Net % Australia Net % UK Net % North America


7/207

Chart 2

Impact on levels o optimism

Extent to which CFOs net optimism levels have been aected by global and

domestic economic actors

This quarter, conidence levels were most prooundly

inluenced by the slowdown in China, with 85% o

CFOs citing it as a negative impact, up rom 34%

who elt this way in Q1. This makes China the biggest

concern or Australian CFOs. Federal Government

policy uncertainty continued to have a signiicant

negative impact on 75% o CFOs, consistent with the

past ew quarters.

CFOs continue to be less concerned about U.S. and

European economic issues. 48% o respondents elt

the U.S. economy had a positive impact on theirconidence while 28% still elt that the European

economic conditions made them eel less conident.

As expected, alling interest rates and the depreciation

o the Australian dollar also had a positive impact on

CFO optimism, at 44% and 46% respectively. 63% o

respondents elt that the multi-speed economy is still

hurting business, indicating that the dollar may have

urther to all.

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

Q2-12 Q3-12 Q1-13 Q1-13 Q2-13

Positiveimpact

Negativeimpact

U.S. economic uncertainty European sovereign debt Slowdown in China

Q2-12 Q3-12 Q4-12 Q1-13 Q2-13

Value of Aust. doll ar Interest rates Fed. Govt. poli cy uncertainty

Multi-speed economy

Positiveimpact

Negativeimpact

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Deloitte perspective

Is China really to blame or the gloom? The answer may be a mixture oreality and perception. Chinas recent growth rate o 7.5% is well below previousdecades, but is still solid and likely to remain so or some time to come. Despite concerns

about the impact o commodity prices on Australias mining revenues as well as therecent threat o unsustainable credit growth, Chinas impact on Australia in the

past has been signifcantly positive. While this impact may lessen, the underlyingtrend should provide some reassurance to Australian CFOs.

Matt Judkins, Partner, China Services Groups, Inrastructure and Commercial Advisory Lead


8/208

Chart 4

Timerame or uncertainty

CFOs expectations o how long the current levels o uncertainty will last

The largest proportion o CFOs (59%) expected the

current level o uncertainty to last between one and two

years, with another 20% estimating two to three years.However, an optimistic group o CFOs (15%, up rom

11% in Q1) still believe the uncertainty will lessen within

a year.

Chart 3

Financial and economic uncertainty

CFOs views on the general level o external fnancial and economic uncertainty

acing businesses

CFOs general levels o economic uncertainty have crept

up again to the highest levels since this time last year.

83% o respondents regarded economic uncertainty

as above normal, up rom 58% last quarter. Only 17%

classiied the prevailing economic conditions as normal.

Impact o uncertainty


Domestic politics has been driving business uncertainty or several quarters nowand wed hoped the election could provide the trigger o confdence needed to jump

start the economy. People want certainty and rationality and a consistent narrative.But people are still asking i policy will be any more certain ater the election. The recent

decisions on things like 457 visas, carbon tax and Fringe Benefts Tax appear to beaecting business and business confdence.

Proessor Ian Harper, Partner, Deloitte Access Economics

90%

70%

50%

30%

0%

10%

20%

40%

60%

80%

Q2-11

6%

13%

6%

27%

Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13

Very high level of uncertainty High level of uncertainty Above normal level of uncertainty

7%

34%

1%

25%

6%

28%

23%

7%

18%

3%

10%

4%

22%

49%

44%

38%

43%

53%

54%51%

45%

57%

0%

10%

20%

30%

40%

50%

60%

Q2-13Q1-13Q4-12Q3-12

Less thanone year

More thanone year

More thantwo years

More thanthree years

15%11%12%

6%

20%16%

26%24%

4%8% 8%7%

2%

10%

3%4%

59%55%

51%

59%


9/20


10/2010

Although the impending election aected CFOs

conidence levels, the majority did not see it as a

reason to deer key business strategies like capital

expenditure (87%), acquisitions (81%), divestments

(83%) or hiring (85%). This suggests that the corporate

sector is not letting the election inluence their business

decisions.

Chart 7

Impact o the upcoming Federal election on business strategies

Extent to which the upcoming Federal Government election was a signifcant driver

in the decision to deer the ollowing business strategies

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Capital expenditure Acquisitions Divestments Hiring

Yes No N/A

6% 7%4%

87%

81%83%

15%17%

0%

6%9%

85%


11/2011

Chart 8

RBAs ofcial cash interest rate

Chart 9

Value o the Australian dollar

Following a cut to the RBAs oicial cash interest rate

in May to an all-time low o 2.75% over 65% o

CFOs expect it to all even urther. This is a signiicant

shit rom Q1, when only 8% o respondents expected

the oicial cash rate to be lower than 2.75% and 67%

expected it to be 3% or higher. In this survey,

only 19% expect it to be higher in a years time.

Expectations or the value o the Australian dollar

have shited signiicantly down by 10 cents in many

cases ollowing its recent depreciation. While over

hal the CFOs surveyed last quarter believed the

Australian dollar would land between US$1.00 and

US$1.05 in a years time, only 2% held that view in Q2.

Now, 50% o CFOs believe the dollar will all below

US$0.90 compared to zero in the previous survey

and 44% believe it will land between US$0.90 and

US$0.95.

Falling dollar and interestrates provide some relie

0%

10%

20%

30%

40%

50%

< 2.5% 2.5% 2.75% 3.0% 3.25% 3.5% > 3.5%

Q1-13 Q2-13

0%

17%

8%

48%

26%

17%15%

34%

18%

4%

13%

0%2%

0%

< U.S. $0.90 U.S. $0.90 $0.95

U.S. $0.95$1.00

U.S. $1.00$1.05

U.S. $1.05$1.10

> U.S. $1.10

0%

10%

20%

30%

40%

50%

60%

70%

50%

3%0%

44%

29%

4%

55%

2%

11%

0%2%

0%

Q1-13 Q2-13


12/2012

Chart 10

Extent to which the recent depreciation o the dollar has improved

companies fnancial prospects and Australias global competitiveness

Chart 11

Australian business metrics

52% o CFOs said that the recent depreciation o the

Australian dollar had improved their companys inancial

prospects, while 83% agree that it has improved

Australias global competitiveness.

Expectations or revenue growth have weakened

slightly compared to the previous two quarters,

with 65% o CFOs expecting an increase. The ocus

remains on improving operating cash lows, with

decreasing discretionary spending and inancing

costs expected also. On the employment ront;

37% o CFOs expect to increase headcount in the

next 12 months, up rom 34% last quarter.

Revenues

Operating margins

Operating costs

Headcount

Discretionaryspending

Financing costs

Operatingcash flow

Levels of cashholdings

Inventory levels

Capital expenditure

Bank borrowing

Bond issuance

Equity issuance

Dividends/

share buybacks

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2% 20% 70% 7%

2%4% 17% 78%

2%17% 81%

2% 35% 41% 20% 2%

6% 22% 44% 24% 4%

9% 69% 22%

31% 43% 22% 4%

4% 50% 24% 20% 2%

2% 19% 37% 43%

17% 39% 37% 7%

4% 33% 30% 33%

4% 56% 15% 26%

28% 35% 33% 4%

13% 52% 17% 4%15%

Increasesomewhat

No change Decreasesomewhat

Decreasesignificantly

Increasesignificantly

0% 20% 40% 60% 80% 100%

ImprovedAustralias globalcompetitiveness

Improved thecompanys

financialprospects

Strongly agree Agree Neutral Disagree Strongly disagree

13%

13%

70% 17%

33% 11% 4%39%


13/2013

Chart 12

Business strategies

Net percentage o CFOs who have identifed the ollowing business strategies as a

priority over the next 12 months

There are signs o renewed interest in M&A among

54% o CFOs, up rom 40% or the irst quarter o 2013,

which relects ongoing consolidation in the economy.

Organic growth continued to be a strategic priority

or 63% o respondents, and close to hal identiied

introducing new products and services or expanding

into new markets and renegotiating inance acilities. On

the other hand, it will be a quiet year ahead or capital

raisings and asset disposals, with 80%

o respondents reporting no planned movement in

these areas.


They say you can lead a horse to water...While CFOs are cashed up with cheaperand more available unding, they are still sitting on their hands, reluctant tomake the big investment decisions. CFOs cant see their way clear even though the

conditions are all systems go. The transition rom the investment phase o the mining

boom to the export phase has been bumpier than expected with exports slower to take oand a shortage o business investment.

Proessor Ian Harper, Partner, Deloitte Access Economics

0% 20% 40% 60% 80% 100%

Increasesomewhat

No change Decreasesomewhat

Decreasesignificantly

Increasesignificantly

Introducing new products/services or expanding

into new markets

Leverage

Asset disposal

New capital raising

Renegotiatingfinancing facilities

Organic expansion

M&A 13% 41% 46%

6% 57% 31% 6%

4% 43% 50% 4%

2% 28% 52% 19%

2% 17% 80% 2%

4% 17% 80%

6% 43% 48% 4%


14/2014

Chart 13

Favoured sources o corporate unding

Net percentage o CFOs reporting the ollowing unding sources as attractive

Bank borrowing has continued to surge in popularity

ollowing urther cuts to interest rates; 79% o

participating CFOs viewed it as attractive or very

attractive. The attractiveness o corporate debt, internal

unding and equity remained airly stable relative to the

previous quarter.

Chart 14

Cost and availability o credit

Net percentage o CFOs reporting that credit is available and the net percentage o

CFOs reporting that credit is expensive

Ater the RBA dropped interest rates to 2.75% in May,

CFOs perception that credit is expensive ell to their

lowest level since the survey began 41% said they

ound credit either somewhat or very cheap. The

accessibility o credit also continued to improve; 85%

o CFOs said credit was somewhat or very available and

only 9% ound it hard to get. These results make it clear

that credit is cheaper and more available now than any

other time since the survey began.

Credit cheaper andmore available

Q4-12 Q1-13 Q2-13Q3-12Q2-12Q1-12Q4-11Q3-11

Bank borrowing Corporate debt Equity Internal funding

-60%

-40%

-20%

0%

20%

40%

60%

80%

Cost Availability

-20%

0%

20%

40%

60%

80%

Q3-12Q2-12 Q4-12 Q1-13 Q2-13Q1-12Q4-11Q3-11Q2-11Q1-11Q4-10Q3-10Q2-10Q1-10

Creditcheap

Creditunavailable

Cre

ditcostly

Cred

itavailable


15/2015

Chart 16

Bank lending standards and credit terms

CFOs views on how bank lending standards and credit terms have changed

over the past 12 months

Close to one-third o CFOs reported increases in the

maximum size o credit lines over the past 12 months,

while another 30% indicated that maximum loan terms

were getting higher. 43% o respondents said they were

seeing lower margins over base lending rates a sign

o increasing competitiveness in the corporate lending

market.

More than 70% o CFOs reported no change to loan

documentation requirements, covenant requirements,

liquidity requirements and minimum interest coverage

ratios over the past 12 months.

Chart 15

Level o gearing on Australian corporate balance sheets

Net percentage o CFOs who expect to increase their own company gearing

in the next 12 months

While 50% o CFOs thought Australian balance sheets

were optimally geared, 43% still viewed balance

sheets as under-geared. Only 28% o CFOs expected

to raise their own company gearing levels in the next

12 months, whereas 24% o CFOs expected to reduce

gearing. So, although debt continues to be aordable

and available, companies are still taking a cautious

approach to gearing.

Documentationrequirements

Liquidity facilities

Fees

Covenantrequirements

Margin over baselending rate

Maximumloan term

Minimum interestcoverage ratios

Maximum size ofcredit lines

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

7%57%

31%4%

11%

4%7%

78%

57%9%

4%30%

7%37%

43%13%

9%

11%74%

6%

7%61%

19%13%

11%81%

6%2%

7%76%

4%13%

Higher Lower No change N/A


16/2016

Appendix

A note on methodology

Many o the charts in the Deloitte CFO Survey show the results in the orm o a net balance. For example, this net balance could represent the

percentage o respondents reporting that bank credit is attractive, less the percentage saying bank credit is unattractive. This is a standard way

o presenting survey data. To aid interpretation o the results, this table contains a ull breakdown o responses to some o the questions covered

in this report which have historical signiicance. Due to rounding, responses to the questions covered in this report may not sum to 100.

Q2

2013

Q1

2013

Q4

2012

Q3

2012

Q2

2012

Q1

2012

Q4

2011

Q3

2011

Q2

2011

Q1

2011

Q4

2010

Q3

2010

Q2

2010

Q1

2010

Q4

2009

Q3

2009

Chart 1: Compared to three months ago how do you feel about the financial prospects for your company?

Signiicantly more optimistic 0% 3% 7% 6% 0% 5% 4% 6% 3% 9% 6% 7% 6% 18% 13% 15%

Somewhat more optimistic 19% 32% 26% 17% 16% 33% 22% 17% 20% 45% 42% 48% 34% 39% 48% 57%

Broadly unchanged 52% 53% 42% 55% 63% 50% 42% 45% 58% 33% 48% 34% 46% 37% 37% 28%

Somewhat less optimistic 26% 11% 22% 21% 21% 13% 29% 29% 19% 12% 2% 11% 11% 5% 2% 0%

Signiicantly less optimistic 4% 0% 3% 1% 0% 0% 3% 4% 0% 1% 2% 0% 3% 1% 0% 0%

Chart 3: How would you rate the general level of external financial and economic uncertainty facing your business?

Very high level o uncertainty 4% 3% 7% 0% 6% 1% 7% 6% 6%

High level o uncertainty 22% 10% 18% 23% 28% 25% 34% 27% 13%

Above normal level o uncertainty 57% 45% 51% 54% 53% 43% 38% 44% 49%

Normal level o uncertainty 17% 42% 25% 24% 13% 26% 19% 20% 33%

Below normal level o uncertainty 0% 0% 0% 0% 1% 5% 1% 2% 0%

Chart 5: Is this a good time to be taking greater risk onto your balance sheet?

Yes 24% 34% 23% 14% 23% 46% 25% 45% 49% 52% 45% 35% 42% 53% 35%

No 76% 66% 77% 84% 78% 54% 67% 55% 51% 48% 55% 60% 58% 47% 65%

N/A 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 5% 0% 0% 0%Chart 13: How do you currently rate bank borrowing as a source of funding for Australian corporates?

Very attractive 20% 15% 8% 6% 4% 5% 4% 0% 8% 6% 8% 2% 2% 4% 2% 12%

Somewhat attractive 59% 52% 49% 44% 46% 39% 36% 51% 49% 34% 34% 35% 33% 39% 37% 31%

Neutral 19% 27% 26% 35% 35% 35% 38% 31% 36% 47% 44% 42% 44% 37% 25% 27%

Somewhat unattractive 2% 5% 12% 11% 13% 20% 22% 15% 8% 12% 15% 19% 16% 19% 33% 27%

Very unattractive 0% 2% 4% 4% 3% 1% 0% 2% 0% 1% 0% 1% 6% 1% 3% 3%

Chart 13: How do you currently rate corporate debt as a source of funding for Australian corporates?

Very attractive 7% 6% 4% 1% 0% 4% 3% 2% 8% 7% 5% 5% 1% 4% 5% 4%


Neutral 31% 40% 33% 46% 51% 35% 41% 51% 38% 42% 50% 41% 46% 37% 30% 33%



Chart 13: How do you currently rate equity issuance as a source of funding for Australian corporates?Very attractive 0% 8% 1% 1% 0% 4% 0% 1% 2% 6% 6% 4% 2% 5% 10% 15%


Neutral 48% 31% 36% 31% 18% 34% 30% 26% 34% 24% 31% 22% 33% 29% 37% 16%



Chart 13: How do you currently rate internal funding (from profits) as a source of funding for Australian corporates?

Very attractive 17% 29% 26% 15% 29% 23% 27% 33%

Somewhat attractive 43% 34% 36% 61% 44% 43% 47% 39%

Neutral 39% 32% 34% 21% 23% 30% 19% 21%

Somewhat unattractive 2% 3% 4% 1% 0% 3% 5% 4%

Very unattractive 0% 2% 0% 1% 5% 3% 1% 2%


17/2017

Q2

2013

Q1

2013

Q4

2012

Q3

2012

Q2

2012

Q1

2012

Q4

2011

Q3

2011

Q2

2011

Q1

2011

Q4

2010

Q3

2010

Q2

2010

Q1

2010

Q4

2009

Q3

2009

Chart 14: How would you rate the overall cost of new credit for Australian corporates?

Very costly 0% 5% 5% 7% 8% 13% 8% 7% 2% 7% 11% 8% 11% 13% 15% 25%

Somewhat costly 20% 26% 36% 42% 50% 55% 56% 51% 49% 59% 56% 73% 64% 49% 68% 58%

Neutral 39% 39% 36% 38% 30% 24% 25% 37% 42% 33% 32% 18% 24% 33% 13% 10%

Somewhat cheap 39% 26% 15% 11% 11% 8% 10% 4% 8% 1% 0% 1% 1% 5% 3% 6%

Very cheap 2% 5% 8% 1% 1% 1% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0%

Chart 14: How would you rate the overall availability of new credit for Australian corporates?

Very available 13% 6% 15% 8% 3% 8% 5% 7% 5% 13% 15% 8% 4% 7% 3% 0%

Somewhat available 72% 61% 45% 46% 61% 59% 45% 60% 53% 41% 52% 48% 49% 54% 40% 43%

Neutral 6% 19% 25% 18% 11% 18% 14% 15% 17% 20% 15% 11% 17% 8% 13% 9%

Somewhat hard to get 9% 10% 12% 25% 20% 14% 30% 17% 15% 25% 16% 31% 28% 24% 35% 42%

Very hard to get 0% 3% 3% 1% 5% 3% 5% 1% 0% 1% 3% 2% 1% 3% 8% 6%

Chart 15: What do you think of the level of gearing on Australian Corporate Balance Sheets?

Over-geared 7% 3% 10% 15% 6% 9% 5% 2% 8% 5% 6% 5% 12% 15% 17% 12%

Optimally geared 50% 58% 52% 46% 54% 48% 53% 49% 50% 47% 48% 53% 48% 53% 58% 76%

Under-geared 43% 39% 38% 38% 40% 44% 41% 49% 42% 48% 45% 42% 39% 32% 25% 12%

Chart 15: What is your aim for your level of gearing over the next 12 months?

Raise signiicantly 2% 2% 1% 7% 4% 8% 10% 12% 8% 8% 3% 6% 9% 5% 4% 3%

Raise somewhat 26% 19% 21% 25% 28% 38% 26% 33% 29% 31% 34% 44% 33% 32% 32% 31%

No change 46% 40% 42% 31% 41% 30% 33% 36% 40% 34% 39% 27% 30% 42% 42% 42%

Reduce somewhat 22% 29% 23% 24% 21% 19% 22% 14% 16% 19% 15% 18% 20% 20% 18% 21%

Reduce signiicantly 2% 8% 7% 6% 3% 6% 5% 4% 5% 4% 3% 5% 2% 1% 3% 3%

N/A 2% 2% 5% 7% 4% 0% 4% 1% 2% 4% 6% 1% 6% 0% 0% 0%


18/2018

Contact us

National/Sydney

Keith Skinner


Tel: +61 2 9322 7580


Brisbane

Richard Wanstall

Partner

Tel: +61 7 3308 7179


Sydney

Stephen Gustason

Partner

Tel: +61 2 9322 7325email: [email protected]

Melbourne

Paul Wensor

Partner

Tel: +61 3 9671 7067email: [email protected]

Adelaide

Jody Burton

PartnerTel: +61 8 8407 7610


Hobart

David Harradine

PartnerTel: +61 3 6237 7016


Perth

Tim Richards

Partner

Tel: +61 8 9365 7248


Western Sydney

Helen Hamilton-James

Partner

Tel: +61 2 9840 7380



19/2019


20/20

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