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Deloitte Belgium CFO Survey ReportOutlook 2018 Edition
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CFO Survey | Outlook 2018 Edition
Outlook 2018: Ready for another solid year2017 was a good year for the Belgian corporate sector. CFOs had started the year with renewed optimism and had budgeted for growth with enthusiasm. At the end of the year close to half of CFOs reported their companies’ financial performance was even better as budgeted – significantly more than we have been able to report since the launch of the survey in 2009. Based on the results of the Outlook 2018 edition of the CFO survey, we conclude that 2018 will likely outperform the previous record year. But as always, there are a few things to carefully monitor as well throughout the year.
A solid platform for growth One year ago CFOs had a positive outlook for 2017. The initial shocks brought about by the unexpected Brexit vote in the UK and the US election results had subdued and companies had turned again to growth ambitions. The vast majority of CFOs expected top-line growth and higher profits, and they have not been disappointed: CFO optimism on the financial prospects of their organization remained significantly higher than in 2016 throughout the year. Reported levels of financial and economic uncertainty dropped to an historic low. And optimism was justified, as 48% of our survey panel reported 2017 performance has beaten the budgets.
The business environment evolved positively throughout the year. The National Bank of Belgium, the European Commission and the OECD increased their economic growth projections. Continued central bank’s quantitative easing policies kept interest rates low, and external funding attractive. After a sharp drop at the end of 2016 corporates gradually regained confidence in the current government’s ability to set the right priorities for financial and economic policy making and implement. As compared to one year ago, CFOs appreciation of taxation and labor market policies – the two most important policies for the future success of businesses according to CFOs - have surged.
2018: Better than 2017?
Our survey results indicate 2018 has the potential to outperform the previous year. Today, most of the CFO surveys growth indicators are higher than they were one year ago. Corporate growth plans are far from completed.
For a record 85% of CFOs, implementing expansionary strategies has priority over defensive strategies. Organic growth, productivity and digitalization are the top business priorities for 2018. Half of survey participants expect to (further) increase capital expenditure. 70% expect headcount to (further) increase over the next 12 months.
On average survey participants expect their companies’ turnover to grow by 4.1% in 2018. As such, CFOs are more bullish for the growth potential of their own organization as they are for the economy as a whole.
Things to watch out for Promising intentions are not without risk, and signs of trouble should be closely monitored and managed. As compared to the previous quarters, CFO optimism went down. Based on our Outlook 2018, here are 4 things to watch out for throughout the year that might hinder the realization of our outlook.
As growth plans are overall aggressive, CFOs biggest concern today is shortage of skilled labor to fuel that growth. As Central banks’ announced reduced quantitative easing, long term interest rates are likely to increase. Our survey results illustrate that credit conditions have already started to turn for the first time in years. Although CFOs look very favorably towards Belgian financial and economic policy making (and more in particular taxation and labor market policy), much of what is announced for 2018 still needs to pass the vote in the Parliament. Upcoming (local) elections might further complicate financial and economic policy making and implementation. In the fourth quarter optimism declined somewhat and uncertainty rose noticeably compared to the previous quarter. And although perceived uncertainty remains low, the list of international events for which the outcome is unpredictable remains long (German government coalition, Brexit, US and Chinese policy, Iran, migration, parliamentary elections in Hungary, Italy, Latvia, Luxembourg…).
The quarterly Deloitte CFO survey will continue to monitor these evolutions. In the Chinese year of the dog, we will let you know if these fleas appear in its fur.
Thierry Van SchoubroeckPartner
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CFO Survey | Outlook 2018 Edition
Based on CFO expectations on key financial metrics: 2018 has the potential to outperform the previous year
Outlook 2018: Ready for another solid year Outlook 2017: CFOs regained confidence
0% 20% 40% 60% 80% 100%
Increase with more than 5%
Increase between 2% and 5%
Increase between 0% and 2%
Same Level
Decrease between 0% and 2%
Decrease between 2% and 5%
Decrease with more than 5%
Financing costs
Discretionary spending
Headcount
Operating margins
Profit before taxes
Capex (adjusted to scale)
Revenues
0% 20% 40% 60% 80% 100%
36%
34%
34%
15%15%25%
40%9% 9%
12%
12%
12%
14%
14%
18%
18%
18%
23% 23% 25%
25%
21%
21%
22%14% 14%41%
42%
53%
63%
35%
35%
28%
9%
9% 11%
9%
9%4% 4%
5%
5%
4%
4%
4%
4%
4% 4%
4%
4%
4%
4%
4%
4%4% 4%
3%3%6%
6% 10%
10%
10%
12%
12% 25% 25%
24%
18% 29% 22%
22% 16%
16%
16% 20%
20%
16%
41%
67%6%
2%
2%
2%2%
2%
2%
2%
2%
4,1%
Average increase Breakdown Average increase Breakdown
2,7%
2,2%
2,1%
2,0%
0,5%
0,0%
3,4%
1,8%
2,1%
1,7%
0,6%
-0,1%
0,0%
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CFO Survey | Outlook 2018 Edition
Things to watch out for in 2018Shortage of skilled Labour • 70% expect headcount to (further) increase over the next 12 months • The European Commission projects the Belgian unemployment rate at 7,3% for 2017 and this is expected to drop to 7,0% in 2018. For the Eurozone the unemployment rate is projected at 9,1% for 2017 and is expected to drop to 8,5% in 2018
• Shortage of skilled labour is now the biggest concern for CFOs; 98% of CFOs report concerns about shortage of skilled labour. This is up 30pp. compared to one year ago
• Eurostat reported the average Eurozone job vacancy rate at 1.9% in Q3 2017. The Belgian job vacancy rate was 3,6%, the second highest in the EU
Financial and economic policy making • After a sharp drop at the end of 2016 corporates gradually regained confidence in the current government’s ability to set the right priorities for financial and economic policy making
• Over the last year perceptions on appropriateness of taxation and labour policy have surged, whereas perceptions on appropriateness immigration policy, infrastructure policy and education & training policy have fallen
• However, much of what is announced for 2018 still needs to pass the vote in the Parliament
• Upcoming (local) elections might further complicate financial and economic policy making and implementation
Credit conditions • CFO appreciation of credit conditions was at its best this in 2017. In the second quarter perception of the overall costliness of new credit reached a new low, followed by a new high in perception of availability of new credit in Q3
• However, at year-end this trend seems to have turned. There is strong consensus among CFOs that interest rates will rise over the next 12 months
• Central banks have announced or are implementing tightened monetary policy
International eventsThis brief, non-exhaustive list of international events with unclear or unpredictable outcomes illustrates the uncertainties that corporates face and that could influence their business prospects: • German government coalition; at the date of writing there is strong skepticism about a new grand coalition in Germany
• Brexit, the focus has shifted from divorce terms to the future relationship between the UK and the EU
• Parliamentary elections in 2018 in Hungary, Italy, Latvia, Luxembourg • North America: stability of free trade agreements; US mid-term elections; • Tensions in the Korean Peninsula • The Iran–Saudi Arabia proxy conflict
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Click on the dashboard frames to see a detailed overview
CFO Survey | Outlook 2018 Edition
The macroeconomic backdrop to the Deloitte CFO Survey Q4 2017
The global recovery picked up pace in the second half of 2017, driven by faster growth in developed economies. The euro area saw a broad-based acceleration in growth across member nations, while Japan grew for the seventh successive quarter, its longest period of growth since 2001. Business and consumer confidence rose in the developed world, particularly in the euro area and the US.
Unemployment continued to decline globally, with the EU’s unemployment rate reaching its lowest level in nine years. Despite falls in unemployment, wage growth has picked up only modestly.
Central banks continued to tighten monetary policy during the final quarter of 2017. The European Central Bank announced that it would slow its quantitative easing programme. In moves which were widely anticipated by financial markets, the Bank of England raised interest rates for the first time in a decade and the US Federal Reserve raised rates for the fifth time since 2015.
Following elections in Germany, Angela Merkel’s ruling CDU/CSU coalition and the Social Democrats are in talks of a renewed ‘grand coalition’. Brexit talks achieved a breakthrough with the UK and EU agreeing a deal on the ‘divorce’ payment, paving the way for talks over future trading arrangements.
Ian Stewart, Deloitte UK Chief Economist
Deloitte CFO Survey Outlook 2018 Dashboard
For the Outlook 2018 edition we present the key CFO Survey indicators comparing the results from Q4 2017 with Q4 2016.
Financing options
Bank borrowing availability
Attractiveness bank borrowings
Bank borrowing costliness
Attractiveness corporate debt
Interest rate evolution
Attractiveness equity
Financial leverage Attractiveness internal financing
Business priorities
Expansionary focus
Top 3 CFOs’ priorities:
1. Organic growth2. Increasing productivity/
effectiveness3. Digitalisation
Capital expenditure growth
Headcount growth
Discretionary spending
Policies
Appropriateness of financial and economic policies
General environment
Optimism
Top 3 CFOs’ concerns:
1. Shortage of (skilled) labour
2. Current geopolitical risks
3. Competitive position in the market
Economic uncertainty
Risk appetite
Turnover growth
Belgian economic growth
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CFO Survey | Outlook 2018 Edition
Looking back:Outlook 2018: Ready for another solid year
Mor
e O
ptim
istic
Less
Opt
imis
tic
Q4 2009“Diverging fortunes
going into 2010”
Q1 2010“Financial
repair, economical uncertainty”
Q2 2010“Confidence
grows”
Q3 2010“Higher confidence,
good results”
Q4 2010“Planning for
growth”
Q1 2011“Call for caution” Q2 2011
“At a turning point”
Q3 2011“Results under
pressure”
Q4 2011“Outlook 2012:
a very difficult year”
Q1 2012“Anxiety has eased,
but plenty ofrisks remain”
Q4 2012“Outlook 2013:
how CFOs are preparing for 2014”
Q1 2013“Concerns dominate”
Q2 2013“Call for action”
Q3 2012“The New Normal
is here to stay“
Q2 2012“Corporates
are defensive“
Q3 2013“A new mood”
Q4 2013“Growth ambitions”
Q4 2014“Reasonable year, prudent growth”
Q1 2015“Favourable business
conditions give confidence
for expansion”
Q2 2015“Solid mid-year
financials”
Q3 2015“Good performance
amid the haze”
Q4 2015“Cautious
investment towards growth”
Q1 2016“Optimism fades,
but growth ambitions hold”
Q4 2016“Optimism is close
to recent years’ highs”
Q2 2017“Optimistic business
sentiment acceleratesfocus on growth”
Q3 2017“Skilled labour
scarcity threatens growth prospects”
Q4 2017“Ready for another
solid year”
Q1 2017“Favourable business
environment drives expansion”
Q2 2016“Post Brexit
Vote Outlook”
Q3 2016“Persist
focus on investment”
Q1 2014“More appetite
for risk”
Q3 2014 “Amid more uncertainty,
declining optimism”
Q2 2014“Concern over
government policies clouds current
optimism”
Optimism
Looking Back: Favourable business environment drives expansionOptimism is close to recent years’ highs
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CFO Survey | Outlook 2018 Edition
Long term trends Taking a long term perspective we see that CFO expectations about financial metrics have gradualy but steadiliy risen over the last 3 years. CFOs are optimistic about the prospects of their organisations.
However, in the last quarter of 2017 we saw a clear drop in expectations for revenue growth, operating margins and profit before tax. Capex and headcount expectations remained high but the upwards trend is flattening out.
Throughout 2018 the quarterly Deloitte CFO survey will closely monitor these trends.
Revenue of growth expectations
0%
20%
40%
60%
80%
100%
12 Month Roling Revenues
‘15Q1
‘15Q2
‘15Q3
‘15Q4
‘16Q1
‘16Q2
‘16Q3
‘16Q4
‘17Q1
‘17Q2
‘17Q3
‘17Q4
Profit before taxes expectations
0%
20%
40%
60%
80%
100%
12 Month Roling Profit before taxes
‘15Q1
‘15Q2
‘15Q3
‘15Q4
‘16Q1
‘16Q2
‘16Q3
‘16Q4
‘17Q1
‘17Q2
‘17Q3
‘17Q4
Operating margins expectations
0%
20%
40%
60%
80%
100%
12 Month Roling Operating margins
‘15Q1
‘15Q2
‘15Q3
‘15Q4
‘16Q1
‘16Q2
‘16Q3
‘16Q4
‘17Q1
‘17Q2
‘17Q3
‘17Q4
Headcount expectations
0%
10%
20%
30%
40%
50%
60%
70%
80%
12 Month Roling Headcount
‘15Q1
‘15Q2
‘15Q3
‘15Q4
‘16Q1
‘16Q2
‘16Q3
‘16Q4
‘17Q1
‘17Q2
‘17Q3
‘17Q4
Capital expenditure expectations
0%
10%
20%
30%
40%
50%
60%
70%
12 Month Roling Capital expenditure
‘15Q1
‘15Q2
‘15Q3
‘15Q4
‘16Q1
‘16Q2
‘16Q3
‘16Q4
‘17Q1
‘17Q2
‘17Q3
‘17Q4
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CFO Survey | Fourth quarter 2017 Edition
General environment
Optimism
Economic uncertainty
Risk appetite
Turnover growth
Belgian economic growth
Concerns
Actuals performance vs. budget
CFO Survey | Outlook 2018 Edition
“CFOs remain in an optimistic mood albeit less than in the second half of 2017”
Mor
e op
timis
ticLe
ss o
ptim
istic
Net % of CFOs who are more/less optimistic about the financial prospects for their company
'11 Q1
'11 Q2
'11 Q3
'11 Q4
'12 Q1
'12 Q2
'12 Q3
'12 Q4
'13 Q1
'13 Q2
'13 Q3
'13 Q4
'14 Q1
'14 Q2
'14 Q3
'14 Q4
'15 Q1
'15 Q2
'15 Q3
'15 Q4
'16 Q1
'16 Q4
'17 Q1
'17 Q2
'17 Q3
'17 Q4
'16 Q3
'16 Q2
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
8%
-13%
11%
37%38%
49% 48%
34%
26%
8%
-34%
-42%
-27%
-11%
-29%
-15%
34%30%
39%35%
8% 9%
23%24% 23%27%
12%12%
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CFO Survey | Fourth quarter 2017 Edition
General environment
Optimism
Economic uncertainty
Risk appetite
Turnover growth
Belgian economic growth
Concerns
Actuals performance vs. budget
CFO Survey | Outlook 2018 Edition
“Financial and economic uncertainty: still navigating in calm waters”
% CFOs rating the general level of external financial and economic uncertainty facing their business as high
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
'17Q4
'17Q3
'17Q2
'17Q1
'16Q4
'16Q3
'16Q2
'16Q1
'15Q4
'15Q3
'15Q2
'15Q1
'14Q4
'14Q3
'14Q2
'14Q1
'13Q4
'13Q3
'13Q2
'13Q1
'12Q4
'12Q3
'12Q2
'12Q1
50% 50%
44%
33%
85%
85%
77%
22% 24%30%
82%
88%
79%
66%63%
77%
63% 60%56%
49%
54%
69%
56%
49%
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CFO Survey | Fourth quarter 2017 Edition
General environment
Optimism
Economic uncertainty
Risk appetite
Turnover growth
Belgian economic growth
Concerns
Actuals performance vs. budget
CFO Survey | Outlook 2018 Edition
“Appetite for risk weakens somewhat, but remains high”
% of CFOs who think now is a good time to be taking greater risk onto their balance sheets
0%
10%
20%
30%
40%
50%
60%
70%
80%
31%
39%
41%
69%
52%
45%
23%
31%
41%
28%21%
35% 35%
19%14%
19%
24%22%
13%
30%
8%
21% 21%
35%
41%
33%
40%
38%
42%44%
36% 39%
23%
'17 Q3
'17 Q4
'17 Q2
'17 Q1
'16 Q4
'16 Q3
'16 Q2
'16 Q1
'15 Q4
'15 Q3
'15 Q2
'15 Q1
'14 Q4
'14 Q3
'14 Q2
'14 Q1
'13 Q4
'13 Q3
'13 Q2
'13 Q1
'12 Q4
'12 Q3
'12 Q2
'12 Q1
'11 Q4
'11 Q3
'11 Q2
'11 Q1
'10 Q4
'10 Q3
'10 Q2
'10 Q1
'09 Q4
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CFO Survey | Fourth quarter 2017 Edition
General environment
Optimism
Economic uncertainty
Risk appetite
Turnover growth
Belgian economic growth
Concerns
Actuals performance vs. budget
CFO Survey | Outlook 2018 Edition
“Topline growth expectations are bullish; with close to 80% of CFOs expecting more than 5% topline growth”
How do you expect your turnover/top-line to evolve over the next 12 months?
2% 4% 9% 9% 40% 36%
Increase between 1% and 5%
Increase between 6 % and 10%
Increase with more than 10%Same level
Decrease between 1% and 5%
Decrease with more than 10%
Decrease between 6% and 10%
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CFO Survey | Fourth quarter 2017 Edition
General environment
Optimism
Economic uncertainty
Risk appetite
Turnover growth
Belgian economic growth
Concerns
Actuals performance vs. budget
CFO Survey | Outlook 2018 Edition
“CFOs expect more bullish growth for their own organisations as they do for the Belgian economy as a whole”
11% 11%
19%
58%
What do you expect the economic growth in Belgium to be?
1% to 1,4%0% to 0,9% 1,5% to 1,9% 1,9% to 2,5%
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CFO Survey | Fourth quarter 2017 Edition
General environment
Optimism
Economic uncertainty
Risk appetite
Turnover growth
Belgian economic growth
Concerns
Actuals performance vs. budget
CFO Survey | Outlook 2018 Edition
“War for talent intensifies, and almost all CFOs are concerned about shortage of skilled labour”
CFO business concerns over the next 12 months
0% 20% 40% 60% 80% 100%
Increasing sovereign risk
Deflation risk
Access to capital/funding
Inflation risk
European Union Stability
China's slow-down
Euro exchange rate
Eurozone stability
Current geopolitical risks
Economic outlook/growth
Impact of Belgian financial & economic policy making
Competitive position in the market
Changes in regulation
Shortage of (skilled) labour
Not a concernSomewhat of a concernStrong concern
12%
43%
29%
14%
12%
30%
41%
28%
10%
4%
14%
33%
10%
4%
4%
2%
53%
55%
56%
60%
58%
66%
49%
72%
84%
51%
24%
50%
20%
32%
2%
35%
15%
26%
30%
16%
66%
46%
33%47%
64%
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CFO Survey | Fourth quarter 2017 Edition
General environment
Optimism
Economic uncertainty
Risk appetite
Turnover growth
Belgian economic growth
Concerns
Actuals performance vs. budget
CFO Survey | Outlook 2018 Edition
“Strong year-end financial performance: half of organisations have performed better as initially budgeted”
Comparison of the surveyed organisations' actuals performance versus budget
‘13Q4
‘14Q1
‘14Q2
‘14Q3
‘14Q4
‘15Q1
‘15Q2
‘15Q3
‘15Q4
‘16Q1
‘16Q2
‘13Q3
‘16Q3
‘16Q4
‘17Q1
‘17Q2
‘13Q1
‘13Q2
‘17Q3
‘17Q4
‘12Q4
Worse than expectedAs expectedBetter than expected
0%
20%
40%
60%
80%
100%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
Net %
Better than expected
38%
43%
57%
47%54% 52%
32%
32%
35%
45%
44%
30%30%
36%37% 41%
30%
30%
32%
44%
21%41%
29%
30%
30%
31%
30%
21%
40%48%
29% 62%
27%17%
35%
8%18%
22%
15%
27%
40%
30% 31% 29%
37%32%
37%33%
37%
22%35%
24%32%
42%
28%
35%
24%
40%
33%
31%30%
26%
33%
35%
-8%
-49%
-29%
-32%
-37%
-5%
8%
-5%
-13%
-9%
6%
-4% -5% -5%-4%
-17%
-9%
7%
-10%
10%
17%
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CFO Survey | Outlook 2018 Edition
Business priorities
Priorities
Capex, headcount and discretionary spending
Capex expectations
Metrics
“For 85% of CFOs expansionary strategies are on top of the agenda”
CFO business priorities over the next 12 months
Not a prioritySomewhat of a priorityStrong priority
0% 20% 40% 60% 80% 100%
Raising dividends or share buy backs
Reducing leverage
Disposing of assets
Increasing operating expenditure (OPEX)
Expanding by acquisition in Belgium
Increasing focus on sustainability programmes
Increasing capital expenditure (CAPEX)
Expanding by acquisition abroad
Cost Reduction
Expanding into new markets
Increasing cash flow
Hiring new talent
Introducing new products/services
On-going cost control
Digitalisation
Increasing productivity/efficiency
Organic Growth 75% 21%
2%
2%
4%
62% 24%
40%
42% 17%40%
51% 9%
34% 45% 21%
33% 42% 25%
25% 18% 57%
23% 47% 30%
19% 44% 37%
12% 29% 60%
9% 30% 60%
16% 76%8%
41% 53%
13%6%
6%
81%
56% 40%
51% 47%
50% 40% 10%
4%
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CFO Survey | Outlook 2018 Edition
Business priorities
Priorities
Capex, headcount and discretionary spending
Capex expectations
Metrics
“Leading investment indicators remain strong”
Net % of CFOs who expect Belgian corporates' capital expenditure,headcount, and discretionary spending to increase over the next 12 months
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
Capital Expenditure Headcount Discretionary Spending
3%
20% 22%
11%
14%
13%
33% 32%
39%
45%
41%
57% 57%
63%
51% 50% 48%
14%
35%
27%
53%
56%
12%
2%
11%
30%
32%
-7%
2%
28%30%
6%
17%
-11%
0%-5%
5%0%
-9%-10%
-2%
‘14Q3
‘14Q4
‘15Q1
‘15Q2
‘15Q3
‘15Q4
‘16Q1
‘16Q2
‘16Q3
‘16Q4
‘17Q1
‘17Q2
‘17Q3
‘17Q4
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CFO Survey | Outlook 2018 Edition
Business priorities
Priorities
Capex, headcount and discretionary spending
Capex expectations
Metrics
“Two-thirds of CFOs expect to increase capital expenditure in 2018”
Capital Expenditures expectations
4% 2% 6% 25% 30% 11% 23%
Increase between 1% and 5%
Increase between 6 % and 10%
Increase with more than 10%Same level
Decrease between 1% and 5%
Decrease between more than 10%
Decrease between 6% and 10%
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CFO Survey | Outlook 2018 Edition
Business priorities
Priorities
Capex, headcount and discretionary spending
Capex expectations
Metrics
CFOs' expectations on the evolution of the following metrics in the next 12 months
0% 20% 40% 60% 80% 100%
Inventory levels
Financing costs
Discretionary spending, for instance on travel, training and marketing
Levels of cash and cash equivalents on balance sheet
Operating cash flow
Operating margins
Operating costs
Profit before taxes
Headcount
Revenues
DecreaseThe sameIncrease
82% 6%
20%12%
12%
12%
14%
26% 16%
16%
67% 14%
22%20%
65%
63%
59%
25%
24%
16%
12%
70%
69%
58%
41%43%
20%
71% 14%16%
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CFO Survey | Outlook 2018 Edition
Financing options
Financial leverage
Attractivenes of funding sources
Usage of resources
Availability and cost of credit
Interest rates
Euro
Net % of CFOs who think Belgian corporate balance sheets are overleveraged/underleveraged
over
leve
rage
dun
derle
vera
ged
-100%
-60%
-20%
20%
60%
100%
9%2%
-11%-13% -11%
-10%
-10%-3%
-9%
0%
-7%
0%
-4%
0%
-22%
-15%
-17%-9%
-5%-10%
-13%-14%-5%
-19%-25%
-17% -17%
-13%
-14%-14%-8%
11%
‘13Q4
‘14Q1
‘14Q2
‘14Q3
‘14Q4
‘15Q1
‘15Q2
‘15Q3
‘15Q4
‘16Q1
‘16Q2
‘13Q3
‘16Q3
‘16Q4
‘17Q1
‘17Q2
‘13Q1
‘13Q2
‘17Q3
‘17Q4
‘12Q4
‘11Q4
‘12Q1
‘12Q2
‘12Q3
‘11Q3
‘11Q1
‘11Q2
‘10Q3
‘10Q1
‘10Q2
‘10Q4
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CFO Survey | Outlook 2018 Edition
Financing options
Financial leverage
Attractivenes of funding sources
Usage of resources
Availability and cost of credit
Interest rates
Euro
Net % of CFO rating the following sources of funding as attractive/unattractive
-40%
-20%
0%
20%
40%
60%
80%
100%
Internal Financing
Equity
Corporate debt
Bank Borrowings
Attr
activ
eU
natt
ract
ive
‘13Q4
‘14Q1
‘14Q2
‘14Q3
‘14Q4
‘15Q1
‘15Q2
‘15Q3
‘15Q4
‘16Q1
‘16Q2
‘13Q3
‘16Q3
‘16Q4
‘17Q1
‘17Q2
‘13Q1
‘13Q2
‘17Q3
‘17Q4
‘12Q4
‘11Q4
‘12Q1
‘12Q2
‘12Q3
‘11Q3
‘11Q1
‘11Q2
‘10Q3
‘10Q1
‘10Q2
‘10Q4
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CFO Survey | Outlook 2018 Edition
Financing options
Financial leverage
Attractivenes of funding sources
Usage of resources
Availability and cost of credit
Interest rates
Euro
% of CFOs who want to increase the usage of resources
0
20%
40%
60%
80%
100%
Using internal financing
Raising bank borrowings
Raising corporate debt
Raising equity
23% 42% 45% 82%
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CFO Survey | Outlook 2018 Edition
Financing options
Financial leverage
Attractivenes of funding sources
Usage of resources
Availability and cost of credit
Interest rates
Euro
“External financing remains cheap and available, although the positive trend has reversed”
Net % of CFOs reporting the availability and cost of credit
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
Available Costly
‘13Q4
‘14Q1
‘14Q2
‘14Q3
‘14Q4
‘15Q1
‘15Q2
‘15Q3
‘15Q4
‘16Q1
‘16Q2
‘13Q3
‘16Q3
‘16Q4
‘17Q1
‘17Q2
‘13Q1
‘13Q2
‘17Q3
‘17Q4
‘12Q4
‘11Q4
‘12Q1
‘12Q2
‘12Q3
‘11Q3
‘11Q1
‘11Q2
‘10Q3
‘10Q1
‘09Q4
‘10Q2
‘10Q4
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CFO Survey | Outlook 2018 Edition
Financing options
Financial leverage
Attractivenes of funding sources
Usage of resources
Availability and cost of credit
Interest rates
Euro
“Gradually strengthening monetary policy will likely increase interest rates somewhat”
Net % of CFOs expecting interest rates to increase in the next 12 months
0%
20%
40%
60%
80%
100%
32%
55%
48%
54%
38%
29%
46%
54%
81%
45%
47%
36%
30%
14%
20%
69%
51%
61%
40%
26%
43%
85%85%
77%
88%
83%
‘13Q4
‘14Q1
‘14Q2
‘14Q3
‘14Q4
‘15Q1
‘15Q2
‘15Q3
‘15Q4
‘16Q1
‘16Q2
‘13Q3
‘16Q3
‘16Q4
‘17Q1
‘17Q2
‘13Q1
‘13Q2
‘17Q3
‘17Q4
‘12Q4
‘11Q4
‘12Q1
‘12Q2
‘12Q3
‘11Q3
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CFO Survey | Outlook 2018 Edition
Financing options
Financial leverage
Attractivenes of funding sources
Usage of resources
Availability and cost of credit
Interest rates
Euro40%
60%
% of CFOs preferring a weak/strong Euro
Weaker Euro
Stronger Euro
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CFO Survey | Outlook 2018 Edition
Policies
Appropriateness of financial and economic policies
Detailed appropriateness
Importance of government policies
“Corporates gradually regained confidence in financial and economic policy making”
Perception of a net % of CFOs of the way in which the Belgian governmentis setting the right priorities for financial and economic policy making
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
19% 25%31%
25%25%
14%
12%
21%
33%
-3%
64%59%
31% 33%
-52%
-29%
-46% -44%
-63%
-20%
-34% -27%
2017
Q2
2017
Q1
2016
Q4
2016
Q3
2016
Q2
2016
Q1
2015
Q4
2015
Q3
2015
Q2
2015
Q1
2014
Q4
2014
Q3
2014
Q2
2014
Q1
2013
Q4
2013
Q3
2013
Q2
2013
Q1
2012
Q4
2012
Q3
2017
Q4
2017
Q3
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CFO Survey | Outlook 2018 Edition
Policies
Appropriateness of financial and economic policies
Detailed appropriateness
Importance of government policies
“As compared to one year ago, the perception of appropriateness of tax and labour market policies improved significantly”
2017 Q42016 Q4
-80%-70%-60%-50%-40%-30%-20%-10% 0% 10% 20% 30% 40% 50%
Infrastructure
Urban & town planning
Energy policy
Public expenditure
General levels of regulation affecting business
Immigration policy
Labour market
Financial regulation
Taxation policy
Education & training
Monetary policy, including interest rates, inflation and the availability of credit (Eurozone policy)
CFO's net perception about appropriateness of government policies
46%
-24%-6%
12%
12%
-44%
-17%
2%
-2%-19%
4%
-42%-39%
-41%-48%
-49%-31%
-54%-38%
-53%-63%
7%
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CFO Survey | Outlook 2018 Edition
Policies
Appropriateness of financial and economic policies
Detailed appropriateness
Importance of government policies
“Labour market and taxation policies are deemed most important for the future success of business in Belgium”
Net % of CFOs rating the government policies as important
0% 20% 40% 60% 80% 100%
Immigration policy
Urban & town planning
Financial regulation
Public expenditure
General levels of regulation affecting business
Energy policy
Education & training
Monetary policy, including interest rates, inflation and the availability of credit (Eurozone policy)
Infrastructure
Labour market
Taxation policy
90%
92%
73%
75%
49%
65%
77%
61%
60%
31%
43%
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AuthorsThierry Van SchoubroeckPartner, Finance [email protected]
Wim Jansens Senior [email protected]
Thomas Backè[email protected]
Veronika Mü[email protected]
ContactsThierry Van SchoubroeckPartner, Finance [email protected]
Tom Van CauwenbergeFinance Lead, [email protected]
For current and past copies of the survey, please visit:
www.deloitte.be
Profile survey participants
CFO Survey | Outlook 2018 Edition
A note on methodologyNot all survey questions are reported in each quarterly survey. In response to the current financial economic situation survey questions will be selected. In case you participated to the survey and would like to receive information about non-reported questions do not hesitate to contact us. Some of the charts in the Deloitte CFO survey show the result in the form of a net % balance. This is the percentage of respondents reporting, for instance, that bank credit is attractive minus the percentage saying bank credit is unattractive. This is a standard way of presenting survey data.
The 2017 fourth quarter survey took place between December 7th 2017 and January 5th 2018. A total of 53 CFOs completed our survey.
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 organisation rates among peers.
Rules on the dashboard indicatorsThe following methodology was applied for the symbols and indicators used in the CFO survey dashboard: An upward arrow is displayed in case an indicator has increased with 5 or more percentage points since the previous survey. A downward arrow is used in case an indicator has decreased with 5 or more percentage points since the previous survey. The equals signs is used in case the indicator remained stable between these upper and lower thresholds. A green symbol is used in case the indicator, from a business perspective, displays a favourable trend or situation; a red colour is used in case the indicator displays an unfavourable trend or situation; a grey colour is in case of ambiguous or neutral outcomes.
16%
40%
44%
What was your company's approximate turnover last year?
Turnover>€1bn
€100mn < Turnover < €999mn
Turnover < €100mn
Other
Manufacturing
Financial Services
Technology, Media, Telecommunication)
Consumer business
(incl. transport & logistics, leisure&travel)
Life Sciences
Construction
Real estate
Energy, Utilities, Mining
Which category best describes your business?
4%
15%
13%11%
11%
9%
9%
11%
19%
45%
25%
30%
What percentage of revenues does your company derive from outside of Belgium?
0% - 30%
31% - 69%
70% - 100%
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CFO Survey | Outlook 2018 Edition
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