CFO survey: Switzerland ready for rapid growth after lockdown
The results of Deloitte Switzerland's semi-annual CFO survey were not comparably negative in the case of either the euro crisis or the franc shock, a recession is inevitable However, companies in Switzerland seem better equipped to deal with the crisis than elsewhere.
Discussions about the consequences of the lockdown for Swiss companies are increasing. Various economic data point to a recession after the Corona crisis. The CFO survey regularly conducted by Deloitte takes the same line.
CFO survey shows clearly negative expectations...
While the key data from the survey conducted in March has indicated a slowdown for nearly two years, it has now plummeted outright. The results are the lowest ever in the more than ten-year history of the CFO survey: 97 percent of those surveyed after mid-March expect the economy to turn negative over the next 12 months - a good two-fifths (41%) of them even expect strong negative momentum. A good two-thirds (67%) see a negative financial development coming to their company, and only just 15 percent a positive one. 93 percent see the future of their company as less rosy than it was three months ago. A good three-quarters (78%) anticipate a decline in sales and more than half (52%) percent expect staff numbers to fall within the year. The difference between these results and those from the second half of the month - after the school closures and the declaration of the extraordinary situation - is striking, but the data for all 90 CFOs surveyed are also sharply down.
... but somewhat less pessimistic than in Germany
Looking at the survey of CFOs from Germany, also conducted in March, it becomes apparent that there is somewhat less pessimism in Switzerland: Two-thirds of all Swiss CFOs surveyed are more negative about the future of their company than they were three months ago, compared with three-quarters in Germany. Swiss CFOs also tend to view their own economy as more robust than other major economies. While 89 percent expect a recession in Switzerland within the next two years, the figure for the US and UK is 96 percent and for the eurozone 93 percent.
Record high uncertainty
The record high level of uncertainty among CFOs is also evident across the entire survey period. 90 percent of them rate uncertainty as high, up from 67 percent six months ago. When it comes to ranking the risks to their own company, a newcomer has landed squarely and unchallenged in the top spot: COVID-19. The second-ranked risk of weak demand is also directly related to the Corona crisis. The CFOs also rate their supply chain as a greater risk than six months ago.
"Our figures back up the historical comparisons used by many experts: The economic slump is global, comprehensive and came very quickly. It will also leave deep cuts for Swiss companies and greatly accelerate change processes. At present, however, at least for Switzerland, there are indications of a rapid recovery and a countermovement as soon as the lockdown is lifted in the near future. The healthy state budget and the companies, which are constantly forced by the strong franc to optimize their operations, have been caught in a position of strength by the Corona crisis. However, the development is still uncertain and depends heavily on the duration of the lockdown," says Michael Grampp, chief economist at Deloitte Switzerland. He also believes that job losses in Switzerland will probably be limited for the time being thanks to the generous measures for short-time work.
Another result of the CFO survey: a digitization push is expected
Swiss CFOs are actively tackling the crisis: in 91 percent of companies, measures are underway to curb weak growth, with cost savings and revenue generation being cited most frequently. Sales of many companies are at risk in the crisis or simply collapse away, while at the same time a large cost base remains. The speed of the collapse demands a quick response. Companies have to define which activities they stop immediately, which back-office activities they still need or which long-term commitments they selectively downsize.
The vast majority of companies have now taken measures and are working in crisis mode in order to remain in business. "Now it is a matter of quickly working out scenarios for one's own company and regularly adapting them again to the economic, geopolitical and epidemiological conditions. Measures to ensure the company's continued existence, such as government support and liquidity management, must be closely examined. However, the really successful companies are already looking at the post-crisis period: they are examining possible acquisitions or sales of parts of the company and are implementing the necessary internal changes in a targeted manner. I expect a major digitization push as a result of the Corona crisis," explains Alessandro Miolo, Managing Partner Audit & Assurance and responsible for the CFO program at Deloitte.
Source: Deloitte
