What finance leaders are focused on
A new pulse survey from PwC shows how finance leaders across the world plan to react to COVID-19 − and what impacts they expect to see. PwC in Switzerland joined the survey during the week of 23 March, polling CFOs at the largest Swiss companies in diverse industries. The idea is to repeat the survey every two weeks so we can track changing sentiments and priorities among a small but relevant group of finance leaders.
Potential for significant impact to our business operations, and it is causing us great concern
Limited to specific regions in our business currently, but we are monitoring closely
An isolated challenge; not greatly impacting our business currently, but we are monitoring the situation for any change
The measures implemented against the spread of COVID-19 are causing significant concern among finance leaders in Switzerland and around the globe. Although COVID-19 has not achieved its peak yet, three-quarters of respondents in Switzerland believe the outbreak has the potential to significantly impact their business operations, compared with 87% of their counterparts in the US and Mexico.
Only a minority of respondents see the impacts of the pandemic as limited to specific regions in their business or as an isolated challenge without a large impact on the business.
Financial impact, including effects on results of operations, future periods and liquidity and capital resources
Potential global recession
Effects on our workforce/reduction in productivity
Supply chain issues
Decrease in consumer confidence reducing consumption
Not having enough information to make good decisions
Difficulties with funding
Cybersecurity, privacy or fraud risks
Lack of a comprehensive/tested company emergency preparedness plan
Impacts on tax, trade or immigration
The top concern for finance leaders based in Switzerland is the potentially adverse financial impact of COVID-19, including effects on results of operations, future periods and liquidity and capital resources.
That concern is followed by worries that the outbreak of the coronavirus will lead to a global economic downturn and negative effects on the workforce/declining productivity.
The large-scale interruption of business activities and the postponement of various projects will most likely lead to a decline in the financial results of most businesses. Three-quarters of Swiss respondents expect COVID-19 to have a negative impact on revenues and/or profits.
Given that the information and insights on COVID-19 are evolving on a daily basis, it’s unsurprising that 15% of respondents currently have difficulty assessing the impact of COVID-19 on their revenues. To this extent it’s important to remember that these findings are based on a survey in the week of 23 March, since which time things have already moved on.
The three most common actions already implemented by Swiss companies as a response to COVID-19 are cost containment, deferring or cancelling planned investments, and changing company financing plans. In comparison, finance executives based in the US and Mexico are more likely to consider additional cost measures such as changing their M&A strategy – a low priority in Switzerland.
From a deals perspective, however, the picture we get from talking to our clients differs from the survey findings: clients report that while some of their ongoing transactions continue, most of their M&A-related projects have been stopped and/or postponed.
Difficult to assess currently
Not at all
Given that full economic impact of COVID-19 is still hard to assess, only 20% of companies are considering changes to their supply chain and have implemented short-term measures. In the long term, more companies are likely to readjust their supply chain.
Companies are dealing with immense uncertainty as the effects of COVID-19 on their businesses and the economy become more widespread. So how long do finance executives think it would take to recover if the outbreak were to end immediately?
Swiss respondents are cautiously optimistic: 65% say their business would return to normal in less than one month and an additional 25% assume a period of one to three months. Sentiments shared in the US and Mexico are slightly more pessimistic, as roughly 75% say their business would return to normal in one to three months.
As part of a global initiative, PwC Switzerland is monitoring the reaction of the Chief Financial Officers to the outbreak of COVID-19 by carrying out a survey every two weeks with the CFOs of the largest Swiss companies from various industries. This survey was conducted in the week of 23 March. In the first wave, the survey was first introduced in the USA / Mexico and expanded in the second wave to other areas, including Switzerland, the Netherlands, Portugal, Germany, Bahrain, Qatar, the United Arab Emirates, the Philippines and Thailand. A total of 20 territories worldwide are expected to participate in the next survey during the week of 6 April 2020.
Julie Fitzgerald Wieland
Partner and Growth & Markets Leader, PwC Switzerland
Tel: +41 58 792 26 80
Head of Marketing & Communications, PwC Switzerland
Tel: +41 58 792 1885
Partner, Advisory, PwC Switzerland
Tel: +41 58 792 14 19
Leiter Familienunternehmen und KMU, Mitglied der Geschäftsleitung, PwC Switzerland
Tel: +41 58 792 63 63