Belgian CFOs confident in growth path

Deloitte Belgium publishes results of its second 2010 CFO Survey "Confidence grows"
29 July 2010

Brussels, 29 July 2010 – Countering the prevailing sombre international mood, Belgian CFOs are optimistic halfway through 2010 about the prospects of their organisations. This is one of the findings of the second-quarter Deloitte CFO survey "Confidence grows", conducted from 13 June to 30 June 2010 and published today. Still proceeding with caution and their budgets under control, CFOs are looking for growth again.

Financial optimism at highest level in two years

The latest CFO survey shows a clear rise in confidence. "The net balance of respondents reporting greater optimism, has increased from 25% to 44%," said Thierry Van Schoubroeck, Partner, Deloitte CFO Services, who conducted the survey. "This is the highest level of optimism since we started the survey two years ago."

The average CFO only sees a 20% probability of a "double dip" – a renewed period of contracting economic activity. A vast majority expects the economy to further recover, though very slowly. Thierry Van Schoubroeck: "After the second quarter of 2010, 80% of CFOs report their organisation's financial results are on track. "42% even exceeded their expectations and have outperformed the budget."

This increased Belgian CFO confidence is somewhat inconsistent with the cautious mood in international financial markets, as well as increasing international concerns about renewed economic weakness. It also inconsistent with the latest Deloitte CFO surveys in the UK and the Netherlands, where financial optimism decreased for the second consecutive quarter.

Focus on costs remains, expansion and acquisitions gain importance

Belgian CFOs are still maintaining a focus on costs. For example, the first quarter survey reported that almost 40% of CFOs were considering to shift production or support functions offshore. According to the latest poll, this consideration is still on the mind of CFOs, mainly for cost reduction purposes. Yet capital spending, new market expansion, and the launch of new products and services have moved up the priority list. In addition, most CFOs expect M&A activities to increase during the next year. A quarter of the CFOs are currently negotiating acquisitions, while nearly 70% of the respondents are investigating potential acquisition targets.

Recent turbulence on the financial market, is making CFOs much more cautious about equity financing. Corporate debt and bank borrowing are more popular despite higher reported borrowing costs. 70% of respondents believe the proposed Basel III regulations might have a (limited) unfavourable impact on the cost and availability of bank credits.

Summing up the second-quarter survey results, Thierry Van Schoubroeck concludes: "The past years have been a period of exceptional volatility. CFOs are not convinced the problems are over but are looking more confident for opportunities that lie ahead."

Highlights of the second 2010 CFO survey

About the survey

The 2010 second-quarter survey took place between 13 June and 30 June 2010. A total of 52 CFOs completed our survey. The participating CFOs are active in a variety of industries. 26% of participating companies have a turnover of over 1 billion, 44% of between 100 million and 1 billion and 26% of less than 100 million.

For more details on the results, please check www.deloitte.com/be/cfo-survey