Planning for growth in 2011

Deloitte Belgium publishes results of its CFO Survey for the fourth quarter of 2010
16 Feb 2011

Brussels, 16 February 2011 – As they enter 2011, CFOs are positive on the outlook for revenues and margins and are focused on growth opportunities. This is one of the findings of the fourth-quarter Deloitte CFO Survey, "2011 outlook: CFOs planning for growth", conducted between 23 December 2010 and 14 January 2011 and published today. Slow but sustained growth, better than expected financial results and two years of financial repair have boosted CFO confidence. This has enhanced the appetite for risk and set the scene for a year in which companies shift from defensive to expansionary strategies.

Forget double dip

Growth is expected to be slow, but sustained. So surveyed CFOs no longer fear a double dip scenario. Financial results for 2010 were good and for the majority of CFOs even better than expected. "If 2010 was the year of balance sheets and cost cutting, 2011 looks set to be the year in which corporates restart spending," says Thierry Van Schoubroeck, partner at Deloitte who conducts the quarterly survey.

On one hand, the world economy and the changed economic environment are creating a good moment for some companies to exit the market. On the other hand, they're making expansion possible through organic growth or acquisitions. "Confidence remained high and appetite for risk increased markedly in the fourth quarter. This seems to have led corporates to shift from more defensive to expansionary strategies. Introducing new products or services or expanding into new markets is high on the priority list," commented Thierry Van Schoubroeck.

The fruits of financial repair

Whereas the world economy offers opportunities for CFOs, it also remains the source of biggest worry. In November there were renewed fears of debt contagion and damage to the European banking system. Going forward, cost control, cash flow management and credit continue to be high on the CFO agenda.

Yet the financial repair that has taken place over the past two years, with corporates strengthening balance sheets and cutting costs, has worked. Profitability has risen, debt levels have declined and many companies have generated cash flow increases. From this position, the evidence from this quarter's survey shows that corporates are increasingly planning for growth in 2011.

The competitive environment in Belgium remains an important concern and CFO confidence in domestic politics is still low. "The CFO wish list for the government is clear: manage the public deficit, focus on the labour market and increase the active labour force," Thierry Van Schoubroeck remarked.

Highlights of the fourth-quarter 2010 CFO Survey