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2015 Q4 Global CFO Signals™

Braced for a bumpy ride

As CFOs enter 2016, there are several specific overhangs affecting outlooks in the eight country/regional reports in this edition of Global CFO Signals, including China, the strength of the US dollar, and uncertainty over oil prices. Still, many CFOs surveyed remain confident about their own companies’ prospects and future growth.

Global CFO Signals - By the numbers

Risk appetite

Risk appetite is being curbed in some countries. In the UK, the proportion of CFOs who think now is a good time to take risk onto the balance sheet dropped to 37 percent, from 47 percent in Q3 2015. Likewise, in Switzerland, risk appetite has fallen since the end of 2014, and now only 20 percent believe this is a good time to be taking greater risk. In both Central Europe and Russia, risk appetite stands at 29 percent, but in Russia that is up from 14 percent in Q1 2015.


Uncertainty continues to be a factor in decision-making. In Switzerland, almost three-quarters (73 percent) say that the level of financial and economic uncertainty facing their business is high, while 52 percent of the Japan’s CFOs see it as high or extremely high. In Russia, however, the aggregate level of uncertainty regarding strategic decision-making rose by 14 percentage points during 2015 and now stands at 74 percent.


Expectations for certain growth metrics remain upbeat. North America’s CFO expectations for revenue growth rose to 5.9 percent, significantly up from last quarter’s 4.4 percent. Among Belgium’s CFOs, the vast majority expect revenues, operating cash flow, profit before taxes, and operating margins to increase in 2016. Swiss CFOs indicated an increased willingness to expand capital spending and hiring. Still, while a majority of UK CFOs still expect corporate revenues to increase, the outlook is at its weakest in two-and-a-half years.

Interest rates

Interest rates are being watched closely. In the UK, though, almost two-thirds of CFOs say rates would have to rise more than 100 basis points before their businesses cut planned investment or employment. Some 56 percent of Switzerland’s CFOs do not expect rates to rise before 2018, and 17 percent believe they will not rise until 2019. In Belgium, 60 percent of CFOs believe the long-term euro rates will increase only slightly in the next 12 months. And in North America, interest rate concerns are substantial, but below where they were a quarter ago.

Corporate strategy

Cost control is being eyed by many. In the UK, for the first time in a year CFOs rate cost reduction as their number one priority for the next 12 months and placing greater emphasis on other defensive strategies such as increasing cash flow and reducing leverage. Among Russia’s CFOs, the top two strategies are restructuring costs and reducing costs. However, in North America, there was a reversal. The last two quarters indicated a shift toward cost reduction, but this quarter shows a slight shift back to growth.

M&A activity

The M&A outlook is mixed. Some 79 percent of the Netherlands’ CFOs expect M&A activity to increase in the next 12 months, and 48 percent expect their own companies to make a deal. For the 63 percent of North American CFOs who expect to complete deals, 60 percent point to scale efficiencies and 54 percent expect to expand into new markets. Among Central Europe’s CFOs, 50 percent expect an increase in activity. In the UK, however, only 19 percent of CFO are prioritizing expanding by acquisition, down from 22 percent last quarter.

View or download the report for more on CFO sentiment
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