The PwC CFO Survey Series: A Catalyst for Change

PwC asked CFOs in Belgium to weigh in on the ways in which the current crisis is driving change, and their plans and predictions for a post-COVID-19 world.

Download the full report

The PwC CFO Survey Series

The fallout from the current economic crisis brought on by COVID-19 is being felt around the world. To gauge the impact on Belgian companies, we’ve launched the PwC CFO Survey Series, consisting of periodic surveys on the effects of the crisis on finance, operations, workforce, supply chains and more. 

Survey 3: A Catalyst for Change

The third edition of the CFO Survey Series explores the COVID-19 crisis as a catalyst for change. PwC asked 23 CFOs of large corporates in Belgium across a variety of sectors to weigh in on ways in which the crisis is driving change, and their plans and predictions for a post-COVID-19 world.

CFOs in Belgium agree that there are important changes to be made to enhance and rebuild revenue streams
  • 70%

    of CFOs in Belgium are maintaining investment plans; just 4% are cancelling them

  • 39%

    of CFOs are focusing on rebuilding revenues by adapting their products and services

  • 26%

    The biggest perceived risks for 2021 are an economic downturn

  • 22%

    find the banks’ willingness to provide credit “deteriorating”

CFO Survey Series barometer questions

Each edition of the PwC CFO Survey Series begins with two barometer questions to gauge CFOs’ predictions about the Belgian economy and company revenues over the course of the surveys. 

CFOs in Belgium predict an economic downturn, but stable revenues

In the latest survey, 48% of CFOs expect Belgian economic growth to decline over the next 12 months, with 13% believing that the economy will contract greatly. Compared to the two previous CFO surveys conducted the weeks of 8 June and 6 July 2020, this suggests growing optimism. 

When asked about the short-term outlook on company revenues, over half of respondents (52%) indicated they expect revenues to remain stable or even increase in the coming six months, while just over a quarter (26%) predict revenues will fall by 10% or less. The latest survey results on revenues, from the week of 24 August 2020, are also more optimistic than CFOs’ predictions in the previous surveys.

 

Survey 3 - September

Survey 2 - July

Survey 1 - June


Do you believe Belgian economic growth will improve, stay the same, or decline over the next 12 months?


Decline greatly
%
%
%

Decline moderately
%
%
%

Stay the same
%
%
%

Improve moderately
%
%
%

Improve greatly
%
%
%

What are your organisation's predictions in terms of revenue in the coming 6 months?


Revenue fall of more than 20%
%
%
%

Revenue will fall within 10-20%
%
%
%

Revenue to fall 10% or less
%
%
%

Stable of increased revenues
%
%
%

There will be no going “back to normal” 

The business climate has sustained irreversible changes. The crippling hit to the economy has sent shock waves rippling across the globe. These extraordinary circumstances have forced companies in Belgium and around the world to face tremendous new challenges.

This survey looks at those challenges through the eyes of CFOs in Belgium and their views on the crisis as a catalyst for change. They provided insights on changes to operational and growth strategies, and speculation on the threats - and opportunities - that lie ahead.

The good, the bad and the budget

Some businesses emerge from crisis situations relatively unscathed, with 70% of CFOs of larger companies in Belgium saying they’re maintaining or increasing their planned investments. Over a third (35%) indicated that their budget plans for next year will remain unchanged. Beyond this apparent optimism, nearly a quarter of respondents (22%) experienced a reduced willingness of banks to provide credit, and almost a third (30%) “somewhat disagree” that the government measures to support businesses are effective.

Which changes will be most important to rebuilding or enhancing your revenue streams? Ranked 1st

A catalyst for change

CFOs in Belgium agree that there are important changes to be made to enhance and rebuild revenue streams. When asked to identify these, 39% cited offering products and services that are better adapted to new market conditions as their top priority, followed by improvement of distribution channels and mergers and acquisitions opportunities, at 13% respectively.

For many organisations, COVID-19 served as a catalyst within what was already a streamlined operation.

PwC Strategy & Operations Partner Peter Vermeire explains: “For certain omnichannel retailers, for example, the potential for further improvement was brought to light by the crisis as the altered business climate pushed new considerations to the forefront: How do we consolidate the flow of products from certain territories? How do we implement a more efficient distribution strategy? In what ways can we streamline our inbound supply chain? Many organisations were already relatively lean and agile pre-COVID-19. The least agile companies are the most adversely affected, often having to implement drastic and potentially costly changes in a hurry.”

2021: risks and opportunities

Looking ahead, 22% of CFOs indicated that the primary threat for their company in 2021 is further disruption from a potential next wave of infections. Other risks on their immediate horizon are a potential recession or economic downturn (26%), regulatory changes (13%) and a decrease in consumer confidence (9%).

Finance leaders do see a silver lining in the current situation: respondents indicated that the talent they have in-house (30%) and the technology investments they’ve made to handle the crisis (26%) will ultimately make their company better in the long run. Looking at opportunities ahead, most companies expect to tap into digitalisation opportunities (65%), while others are making use of improving their operations (61%) or productivity (52%).

Rudy Hoskens, Risk Consulting and Forensics Partner with PwC Belgium, explained that while COVID-19 is a unique situation, disruption is not: “A crisis like COVID-19 is showing its potential to spin off additional risks, each of which can create its own feedback loop of consequences. Other risks are hiding in plain sight. The cumulative “chain reaction” of this crisis is revealing stress fractures and gaps, but it’s also a good starting point for strengthened defences and interesting opportunities.”



What kind of opportunities do you see in the first half of 2021?


Increased digitisation
%
Operational improvements
%
Workforce / productivity improvements
%
New product and / or service offerings
%
M&A opportunities
%
Attracting talent
%
New / improved business model
%
Optimised supply chains
%
Supply chains improvements
%
Enhanced security of data and privacy
%

Innovation will drive recovery

That the COVID-19 crisis is a major catalyst for change underscores the fact that innovation will be a driving factor during the recovery period.

PwC Partner Peter Vermeire comments: “The disruptions brought on by the pandemic are accelerating existing trends and have been a strong catalyst for change. It’s no longer a standalone issue, but instead it’s forcing companies to rethink the way they operated in the past. Organisations are now having to look for ways to rebuild the top line in an uncertain environment. Driving revenue growth and being agile enough to confront a second wave of COVID-19 will require a multifaceted approach. Companies that adapt their business models, listen to their customers, adjust their offerings and innovate to drive a strong top line will be the ones that succeed.”

We also see that banks are somewhat more risk-averse in granting additional credit, especially for the financing of acquisitions

The long road ahead

Nancy De Beule, Mergers and Acquisitions Partner with PwC Belgium, weighs in on the business climate ahead: “Although many companies have been able to overcome the initial shocks of the crisis, we will not be able to fully assess the economic picture until a good year from now. In fact, in the medium term, companies will also have to deal with indirect effects of this crisis, such as a reduction in consumer spending and the snowball effect of some of their customers being unable to pay outstanding debts."

“Businesses which have had recourse to deferral of payments (as part of the COVID-19 government measures) as well as to the full extension of their credit lines will also have to meet their payment obligations at some point, which may be complicated if the period of uncertainty continues. We also see that banks are somewhat more risk-averse in granting additional credit, especially for the financing of acquisitions. The economic impact is therefore expected to be felt for a longer period of time. However, the survey results show that the situation also gives rise to opportunities for companies, both in terms of acquisitions and in improving their product offering, their way of working and even adapting their entire business model to the new reality in which we find ourselves.”

Contact us

Matthias Reyntjens

Matthias Reyntjens

Managing Partner, Platforms & Industries Leader, PwC Belgium

Tel: +32 476 44 53 92

Nancy De Beule

Nancy De Beule

Partner, M&A Tax Leader Belgium, PwC Belgium

Tel: +32 473 91 02 90

Peter Vermeire

Peter Vermeire

Partner, PwC Belgium

Tel: +32 493 51 87 28

Rudy Hoskens

Rudy Hoskens

Partner, PwC Belgium

Tel: +32 478 66 21 33

Connect with PwC Belgium