Optimism among Belgian CFOs remains high and translates in good results

Deloitte Belgium publishes results of its third 2010 CFO Survey: More than 80% of CFOs say that their organisations' financial results are on budget, 40% exceeding expectations
28 Oct 2010

Brussels, 28 October 2010 – Maintaining this year's trend, Belgian CFOs have a strong sense of optimism. This is one of the findings of the third-quarter Deloitte CFO Survey, "Deloitte Belgian CFO Survey; Optimism confirmed by good results", conducted between 15 September and 1 October, and published today. The dominant themes in the first half of the year have persisted into the second half of 2010: financial optimism among CFOs remains strong and credit conditions continue to improve. Expansion through mergers and acquisition remains high on the agenda. Coming out of the recession, the survey also looks further into the CFO role and priorities. CFOs want to spend significantly more time influencing the company's overall direction, and instilling a financial mindset to execution and risk-taking throughout the business.

A buoyant outlook

Financial optimism dipped slightly in the third quarter, but remains strong. Belgian CFOs almost unanimously expect a sustained albeit sluggish recovery. Most anticipate a pick-up of demand for products and services by the second half of 2011, with a third already claiming acceleration now. Not all countries are so sanguine. CFOs in the UK reported a significant decline in optimism for the third consecutive quarter, with 34% expecting a double-dip recession.

For the first time since the launch of the survey, more CFOs have rated bank borrowing as being "cheap" instead of "costly". "The credit crunch seems to be at an end as well: perceptions of credit availability rose sharply in the third quarter. The increased optimism seems to be translated in good actual results" said Thierry Van Schoubroeck, Partner, Deloitte CFO Services, who conducted the survey.

M&A: from talk to walk

Although M&A talk has been bullish for the past 18 months, it hasn't translated into a very active M&A market. This might change. Over the next 12 months, 40% of the CFOs are considering an acquisition or merger, while 10% are looking into strategic alliances. With cheap debt and strong cash positions, companies plan to finance M&A by means of existing debt facility, new bank loans or cash.

After some optimism following the elections, CFO confidence in domestic politics and economic policy plunged in the third quarter. Over 80% of CFOs would like more government action to stimulate the economy, and two-thirds expect the political uncertainty to have a negative impact on their business.

New role for the CFO

With the recession, CFOs spent over half their time protecting assets. The focus was on transactional processing, regulation, control and governance, risk and capital, and data sourcing and information. Going forward, CFOs want to tilt the balance and spend more time influencing company direction. New priorities include organising an efficient finance function, delivering performance and decision support, and assisting strategy and execution. Already, for 95% of respondents the CEO is an important sounding board. Other executives in the firm are frequently consulted as well.

In addition to finance roles, many CFOs carry additional responsibilities that have little or nothing to do with finance, such as human resources (30%) and information technology (40%). "It shows that it's not easy for CFOs to keep all the balls in the air," Thierry Van Schoubroeck remarked.

Highlights of the third-quarter 2010 CFO Survey

About the survey

The 2010 third-quarter edition of the Deloitte Belgium CFO Survey was conducted between 15 September and 1 October. A total of 66 CFOs took part. Covering a variety of industries, 25% of the participating companies have a turnover of over €1 billion, 51% earn €100 million to €1 billion, and 24% earn less than €100 million.

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