Four in five UK CFOs “unprepared” for Covid-19 sales slump – Euler Hermes survey

  • 80% of UK CFOs say they’re not fully prepared to manage the impact of the risk on their business caused by a decrease in sales volumes
  • 62% say a drop in sales volumes is their biggest worry in a post-Covid world compared to 40% pre-lockdown
  • 84% surveyed say they now experience payment delays at least once a month, highlighting the strain British businesses are under

 

LONDON, 20 AUGUST 2020 – Eight in 10 chief financial officers fear their businesses are ill prepared to handle a decrease in sales volumes as the full impact of Covid-19 begins to be felt on the UK economy, according to research from Euler Hermes.

The findings come from its The Finance Leader of Tomorrow survey, which profiles European finance directors’ sentiments and priorities before and after the impacts of lockdowns were felt, as countries found themselves in the middle of the grip of Covid-19. The surveys were carried out in February and at the end of May, offering a view from CFOs both before and during Europe’s lockdowns.

Four in five (80%) of those surveyed in the UK said they’re not fully prepared to manage the impact of the decrease in sales volumes which is expected to kick in during the coming months. Demand is set to remain at historic lows as government support measures are eased, cashflow positions weaken and the impact of Brexit climb up the business agenda.

In a reflection of the parlous state of the economy, UK CFOs report that a decrease in sales volumes is now their biggest worry, up to 62% from its pre-lockdown level of 40%.

Meanwhile, 84% say they now experience payment delays for goods or services at least once a month, laying bare the pressure Covid-19 has put on supply chains and trading relationships.

Steve Scott, Chief Financial Officer, Euler Hermes UK and Ireland, said: “The UK’s chief financial officers are in the eye of the storm, battling challenges they’ve never had to grapple with before and probably never expected to face. Our survey shows a big majority of CFOs – those charged with making their businesses as financially resilient as possible – worry about the ability of their firms to make it through the current crisis.
It’s easy to forget the optimism that greeted the year as the UK welcomed a calmer political outlook and a more stable economy. We’re now in a different world with a new set of challenges and opportunities. Slowing demand and falling sales volumes pose very real threats to firms’ finances. The past few months highlight the importance of maintaining strong relationships with stakeholders and keeping a close eye on signs of pressure to the top and bottom lines.

Confidence among European CFOs has dipped markedly as the pandemic played out. At the beginning of 2020, financial leaders expected better financial performance despite issues such as high political risk, rising protectionism and climate change.

In May, just 36% felt confident about 2020 compared to 50% in February. In February 69% expected turnover to improve this year, compared to just 52% at the end of May. Meanwhile, those reporting being "worried" have almost doubled from 19% to 32%. The number of CFOs saying they are "scared" has more than doubled from 9% to 23%.

More than 1,000 CFOs participated in the survey, which was carried out in February and May to test pre and post-Covid-19 lockdown impacts in four markets - France, Germany, Italy and the UK.

 

Media Contacts: 

Euler Hermes Media Relations
Adrian Russell
+44 (0)20 7860 2728
adrian.russell@eulerhermes.com

Citypress
Callum Brown
+44 (0)161 235 0361
callum.brown@citypress.co.uk

Mar 06, 2024

Allianz Trade launches Allianz Trade pay

Allianz Trade launches Allianz Trade pay, a new range of services fully dedicated to B2B e-commerce activities, brings simplicity, security, flexibility and competitiveness to the e-commerce ecosystem thanks to comprehensive and easy-to-set-up products.

Nov 20, 2023

Allianz Trade appoints Peter Evola as Commercial Director for the UK & Ireland

Allianz Trade has appointed Peter Evola as Commercial Director for the UK & Ireland with effect from 1 December, subject to regulatory process.

Sep 22, 2023

Allianz Trade win Best Trade Credit Insurer at TFG Trade, Treasury and Payments Awards

Allianz Trade, the world’s leading trade credit insurer, has been awarded Best Trade Credit Insurer at this year’s TFG Trade, Treasury, and Payments Awards.

Sep 22, 2023

Allianz Trade joins the Trade Finance Distribution Initiative

Allianz Trade, the world’s leading trade credit insurer, has joined the Trade Finance Distribution Initiative (TFD Initiative) as a member

Sep 20, 2023

Fasanara and Allianz Trade join forces to grow fintech sector

Allianz Trade to use their predictive credit intelligence to instantly underwrite buyer credit risk in Fasanara’s new $1bn B2B e-commerce fund allocation

Jul 20, 2023

Allianz Trade launches Business Fraud Insurance

Allianz Trade has launched a standalone fraud insurance product to help businesses combat the post-pandemic rise in employee fraud and external scams in the UK.

Jun 01, 2023

Allianz Trade 2023 Global Survey

Global insolvencies are set to surge by +21% in 2023 and +4% in 2024, while insolvencies in the UK are expected to increase by +16% and +9% in the same period.

Apr 12, 2023

Allianz Trade insolvency report

Global insolvencies are set to surge by +21% in 2023 and +4% in 2024, while insolvencies in the UK are expected to increase by +16% and +9% in the same period.

Mar 01, 2023

Allianz Chief Economist addresses the world’s ‘trade finance gap’ in keynote speech

The trade finance gap is an issue facing several businesses across the globe, including the UK, with many not aware of the solution trade credit insurance could bring.

Jan 09, 2023

New B2B BNPL partnership

A unique and pioneering global partnership between an insurer, a bank and a fintech. Allianz Trade, Santander CIB & Two partnered to develop a new B2B BNPL solution dedicated to large multinational corporates.