The document discusses the impacts of COVID-19 on the liquidity and cash management of advanced manufacturing and mobility companies. It notes that companies are searching for short-term solutions to issues securing liquidity to fund operations as the global economy falls due to actions taken in response to the pandemic. It provides an overview of various challenges companies may face, such as cash shortages, credit squeezes, supply chain disruptions, and reduced access to capital. The document also outlines some measures companies can take to enhance short-term liquidity.
Global Capital Confidence Barometer | How can you reshape your future before ...EY
The Global Capital Confidence Barometer gauges corporate confidence in the economic outlook, and identifies boardroom trends and practices in the way companies manage their Capital Agendas — EY framework for strategically managing capital. It is a regular survey of senior executives from large companies around the world, conducted by Thought Leadership Consulting, a Euromoney Institutional Investor company. Our panel comprises select global EY clients and contacts and regular Thought Leadership Consulting contributors.
IBOR transition: Opportunities and challenges for the asset management industryEY
EY Wealth & Asset Management explores the practical implications and the way forward for the transition to the new risk-free rates. This presentation aims to help asset managers and asset owners explore IBOR transition strategies that are compliant and future-focused.
Is your energy investment strategy built on the best evidence?
As the energy sector transforms, capital and investment plans must adapt too. Is it time to review your strategies in light of global utilities investment trends? Our latest Power transactions and trends report offers insight and evidence into the major themes and emerging trends driving global power and utilities M&A. Updated quarterly, the report delivers deep insights into each major region.
TMT Outlook 2017: A new wave of advances offer opportunities and challengesDeloitte United States
Important trends continue to shape the technology, media, and telecommunications (TMT) industry. What developments should you anticipate in 2017? https://subscriptions.deloitte.com/default.aspx?eventid=1323075
The COVID-19 crisis is threatening the lives and well-being of the global community. Health, political, societal, and business leaders must drive an integrated response to navigate, manage, and lead through it.
Summary: Even in a time of high biopharma valuations, adopting an activist mentality adds rigor to capital allocation and strategic decision-making, improving not just returns to shareholders but long-term value creation. Therefore, biopharma management teams and boards of directors should proactively assess the “fitness” of their capital allocation strategies and their alignment with operational performance goals by taking an outsider’s view of the business even when times are good — and before a material stumble provides a compelling reason for an outsider to act. For more on this topic, go to http://www.ey.com/GL/en/Industries/Life-Sciences/EY-vital-signs-how-fit-is-your-capital-allocation-strategy.
Global Capital Confidence Barometer | How can you reshape your future before ...EY
The Global Capital Confidence Barometer gauges corporate confidence in the economic outlook, and identifies boardroom trends and practices in the way companies manage their Capital Agendas — EY framework for strategically managing capital. It is a regular survey of senior executives from large companies around the world, conducted by Thought Leadership Consulting, a Euromoney Institutional Investor company. Our panel comprises select global EY clients and contacts and regular Thought Leadership Consulting contributors.
IBOR transition: Opportunities and challenges for the asset management industryEY
EY Wealth & Asset Management explores the practical implications and the way forward for the transition to the new risk-free rates. This presentation aims to help asset managers and asset owners explore IBOR transition strategies that are compliant and future-focused.
Is your energy investment strategy built on the best evidence?
As the energy sector transforms, capital and investment plans must adapt too. Is it time to review your strategies in light of global utilities investment trends? Our latest Power transactions and trends report offers insight and evidence into the major themes and emerging trends driving global power and utilities M&A. Updated quarterly, the report delivers deep insights into each major region.
TMT Outlook 2017: A new wave of advances offer opportunities and challengesDeloitte United States
Important trends continue to shape the technology, media, and telecommunications (TMT) industry. What developments should you anticipate in 2017? https://subscriptions.deloitte.com/default.aspx?eventid=1323075
The COVID-19 crisis is threatening the lives and well-being of the global community. Health, political, societal, and business leaders must drive an integrated response to navigate, manage, and lead through it.
Summary: Even in a time of high biopharma valuations, adopting an activist mentality adds rigor to capital allocation and strategic decision-making, improving not just returns to shareholders but long-term value creation. Therefore, biopharma management teams and boards of directors should proactively assess the “fitness” of their capital allocation strategies and their alignment with operational performance goals by taking an outsider’s view of the business even when times are good — and before a material stumble provides a compelling reason for an outsider to act. For more on this topic, go to http://www.ey.com/GL/en/Industries/Life-Sciences/EY-vital-signs-how-fit-is-your-capital-allocation-strategy.
MAPS2018 Keynote address on EY report: Life Sciences 4.0 – Securing value thr...EY
Summary: This keynote address presented by Pamela Spence, EY Global Life Sciences Leader (pspence2@uk.ey.com) at MAPS 2018 – the annual meeting for Medical Affairs Professional Society – discusses our latest life sciences report and the industry demands for a customer-focused, data driven approach to health care. We describe the accelerating pace of change as technological advances and the escalating expectations of payers, physicians and patient consumers are combining to disrupt the life sciences business model. Data and algorithms that maximize health outcomes based on individual needs and preferences are becoming the ultimate health care consumable. To create value now and in a future that we call Life Sciences 4.0, life sciences companies must build – or participate in – interoperable information systems that collect, combine and share data. For more on our report, Progressions 2018 – Life Sciences 4.0, please go to www.ey.com/progressions
EY's European Banking Barometer – 2015 identifies the views of 226 senior European bankers across 11 markets regarding their views of the macro-economic outlook and the impact they think it will have on the banking industry in 2015.
For further information visit: www.ey.com/ebb
Apache Hadoop Summit 2016: The Future of Apache Hadoop an Enterprise Architec...PwC
Hadoop Summit is an industry-leading Hadoop community event for business leaders and technology experts (such as architects, data scientists and Hadoop developers) to learn about the technologies and business drivers transforming data. PwC is helping organizations unlock their data possibilities to make data-driven decisions.
China Exit or Co-Investment Opportunities for German PE InvestorsL.E.K. Consulting
L.E.K.'s Karin von Kienlin recently presented at BVK on a study conducted by L.E.K. Munich and Shanghai. They wished to:
- Understand developments in Chinese equity investments in both the domestic China / pan-Asian market and cross-border investments between China and Germany / Europe
- Identify trends in likely future investment behavior and its drivers
- Defining success factors both for Chinese and German investors / corporates as to how to benefit from the potential opportunities of cross-border investments and cooperation
Learn more in the presentation here.
The enterprise software industry is being transformed by substantial investor capital, Cloud 2.0, artificial intelligence, data protection, preferred platforms, and a talent shortage, leading stakeholders of all kinds to make big changes, and big choices.
PwC’s Trends in People Analytics report highlights our recently published 2015 PwC Saratoga US benchmark data, as well as the implications for people analytics functions and key trends for consideration.
EY Price Point: global oil and gas market outlook, Q2 | April 2022EY
The theme for this quarter is rearrangement. The loss, or potential loss, of Russian oil and gas supplies is forcing producers, refiners and traders to rethink the flow of crude oil and refined products from the wellhead to the gas pump in light of sanctions, potential sanctions and the risk of reputational damage. Countries, companies and consumers will all be searching for ways to adapt, and the outcome of the race to bring alternatives to market could alter the global energy landscape for years to come.
It is likely crude oil and LNG prices will remain elevated for some time. The process of diverting Russian oil through countries unwilling to sanction it will take time and there is little indication OPEC members are willing (or able) to increase production to make up for the loss of Russian crude. Spare capacity sat at 3.7 mbpd at the end of 2021, just above where it was in January 2020. Currently, sanctioned Venezuelan and Iranian production (about 3 mbpd below their peak) could fill the gap, but political and commercial obstacles remain. At today’s prices, US shale production is attractive, but the fastest the industry has been able to grow is between 1mbpd and 2mbpd per year. The LNG infrastructure was already stretched before the war in Ukraine and there is little prosect of finding new supplies soon.
As the largest buyer of Russian energy, Europe will be the epicenter. There is a deeply embedded bias there in favor for renewable energy, and the current crisis is certain to result in an all-out effort to accelerate the build-out of wind and solar power. The capacity to add new green energy is limited though by the project pipeline and supply chains for solar panels and wind turbines, and it is likely that much of the shortfall will be made up with the new LNG infrastructure.
The Fourth Annual Global Mobility Study [hyperlink] by L.E.K. Consulting, Vision Mobility and CuriosityCX highlights that there is a much greater uptake of ride-hailing and other new mobility options in India and China than in mature western economies. With relatively low levels of car ownership and less developed public transport systems in these Asian countries, new mobility use is now comparable with and set to overtake traditional transport for a segment of the population.
Local Dynamos – emerging-market companies focused largely on their home markets - are beating both local state-owned companies and multinational corporations, thanks to savvy digital strategies and an ability to meet rising consumer expectations. MNCs need to understand how the Dynamos are rewriting the rules in emerging markets.
The value of digitally influenced spending in emerging markets will approach $4 trillion by 2022, amounting to about 50% of all retail spending in Asia, Latin America, and Africa. But the dynamics will vary widely between markets, requiring B2C companies to “de-average” their offerings in order to succeed.
18th Annual Global CEO Survey - Technology industry key findingsPwC
Tech CEOs are optimistic about the global economy and both near term and future revenue growth. They view strategic alliances, including partnering with competitors, as a primary means to grow their businesses. We invite you to explore the analysis and contact us to discuss how we can help your business capitalise on the new - but challenging - opportunities for growth. Learn more http://pwc.to/1DaolqY
Website: http://www.pwc.com/gx/en/ceo-survey/2015/industry/technology.jhtml
Right Cloud Mindset: Survey Results Hospitality | Accentureaccenture
Looking two years ahead: Functional objectives along with technology related challenges and top five areas of investment for hospitality companies. Learn more: https://accntu.re/3uB9LL1
L.E.K. Consulting recently surveyed more than 200 U.S. brand managers and packaging stakeholders at consumer packaged goods companies to understand their packaging needs and views on trends driving demand.
The survey focused on topics that include:
- Brand trends and their effect on packaging demand
- Shifts within packaging (e.g., new materials, packaging innovations)
- Perspectives on packaging demand (including forecast spend on packaging for their brands)
This Executive Insights analyzes key findings from this proprietary research
Unleashing Competitiveness on the Cloud Continuum | Accentureaccenture
Accenture reports how the cloud continuum creates a seamless technology & capability foundation that meets business needs now and in the future. Read more.
Global banking outlook 2018: pivoting toward an innovation-led strategyEY
Banks are seeking to become digitally mature, completing the transition from regulatory-driven transformation to innovation-led change. EY’s Global banking outlook 2018 survey provides actionable insights for banks as they prepare.
Our Global Chemical Industry Leader Frank Jenner explores the trends and drivers that will shape the chemical industry of tomorrow in our latest Chemical Market Outlook.
MAPS2018 Keynote address on EY report: Life Sciences 4.0 – Securing value thr...EY
Summary: This keynote address presented by Pamela Spence, EY Global Life Sciences Leader (pspence2@uk.ey.com) at MAPS 2018 – the annual meeting for Medical Affairs Professional Society – discusses our latest life sciences report and the industry demands for a customer-focused, data driven approach to health care. We describe the accelerating pace of change as technological advances and the escalating expectations of payers, physicians and patient consumers are combining to disrupt the life sciences business model. Data and algorithms that maximize health outcomes based on individual needs and preferences are becoming the ultimate health care consumable. To create value now and in a future that we call Life Sciences 4.0, life sciences companies must build – or participate in – interoperable information systems that collect, combine and share data. For more on our report, Progressions 2018 – Life Sciences 4.0, please go to www.ey.com/progressions
EY's European Banking Barometer – 2015 identifies the views of 226 senior European bankers across 11 markets regarding their views of the macro-economic outlook and the impact they think it will have on the banking industry in 2015.
For further information visit: www.ey.com/ebb
Apache Hadoop Summit 2016: The Future of Apache Hadoop an Enterprise Architec...PwC
Hadoop Summit is an industry-leading Hadoop community event for business leaders and technology experts (such as architects, data scientists and Hadoop developers) to learn about the technologies and business drivers transforming data. PwC is helping organizations unlock their data possibilities to make data-driven decisions.
China Exit or Co-Investment Opportunities for German PE InvestorsL.E.K. Consulting
L.E.K.'s Karin von Kienlin recently presented at BVK on a study conducted by L.E.K. Munich and Shanghai. They wished to:
- Understand developments in Chinese equity investments in both the domestic China / pan-Asian market and cross-border investments between China and Germany / Europe
- Identify trends in likely future investment behavior and its drivers
- Defining success factors both for Chinese and German investors / corporates as to how to benefit from the potential opportunities of cross-border investments and cooperation
Learn more in the presentation here.
The enterprise software industry is being transformed by substantial investor capital, Cloud 2.0, artificial intelligence, data protection, preferred platforms, and a talent shortage, leading stakeholders of all kinds to make big changes, and big choices.
PwC’s Trends in People Analytics report highlights our recently published 2015 PwC Saratoga US benchmark data, as well as the implications for people analytics functions and key trends for consideration.
EY Price Point: global oil and gas market outlook, Q2 | April 2022EY
The theme for this quarter is rearrangement. The loss, or potential loss, of Russian oil and gas supplies is forcing producers, refiners and traders to rethink the flow of crude oil and refined products from the wellhead to the gas pump in light of sanctions, potential sanctions and the risk of reputational damage. Countries, companies and consumers will all be searching for ways to adapt, and the outcome of the race to bring alternatives to market could alter the global energy landscape for years to come.
It is likely crude oil and LNG prices will remain elevated for some time. The process of diverting Russian oil through countries unwilling to sanction it will take time and there is little indication OPEC members are willing (or able) to increase production to make up for the loss of Russian crude. Spare capacity sat at 3.7 mbpd at the end of 2021, just above where it was in January 2020. Currently, sanctioned Venezuelan and Iranian production (about 3 mbpd below their peak) could fill the gap, but political and commercial obstacles remain. At today’s prices, US shale production is attractive, but the fastest the industry has been able to grow is between 1mbpd and 2mbpd per year. The LNG infrastructure was already stretched before the war in Ukraine and there is little prosect of finding new supplies soon.
As the largest buyer of Russian energy, Europe will be the epicenter. There is a deeply embedded bias there in favor for renewable energy, and the current crisis is certain to result in an all-out effort to accelerate the build-out of wind and solar power. The capacity to add new green energy is limited though by the project pipeline and supply chains for solar panels and wind turbines, and it is likely that much of the shortfall will be made up with the new LNG infrastructure.
The Fourth Annual Global Mobility Study [hyperlink] by L.E.K. Consulting, Vision Mobility and CuriosityCX highlights that there is a much greater uptake of ride-hailing and other new mobility options in India and China than in mature western economies. With relatively low levels of car ownership and less developed public transport systems in these Asian countries, new mobility use is now comparable with and set to overtake traditional transport for a segment of the population.
Local Dynamos – emerging-market companies focused largely on their home markets - are beating both local state-owned companies and multinational corporations, thanks to savvy digital strategies and an ability to meet rising consumer expectations. MNCs need to understand how the Dynamos are rewriting the rules in emerging markets.
The value of digitally influenced spending in emerging markets will approach $4 trillion by 2022, amounting to about 50% of all retail spending in Asia, Latin America, and Africa. But the dynamics will vary widely between markets, requiring B2C companies to “de-average” their offerings in order to succeed.
18th Annual Global CEO Survey - Technology industry key findingsPwC
Tech CEOs are optimistic about the global economy and both near term and future revenue growth. They view strategic alliances, including partnering with competitors, as a primary means to grow their businesses. We invite you to explore the analysis and contact us to discuss how we can help your business capitalise on the new - but challenging - opportunities for growth. Learn more http://pwc.to/1DaolqY
Website: http://www.pwc.com/gx/en/ceo-survey/2015/industry/technology.jhtml
Right Cloud Mindset: Survey Results Hospitality | Accentureaccenture
Looking two years ahead: Functional objectives along with technology related challenges and top five areas of investment for hospitality companies. Learn more: https://accntu.re/3uB9LL1
L.E.K. Consulting recently surveyed more than 200 U.S. brand managers and packaging stakeholders at consumer packaged goods companies to understand their packaging needs and views on trends driving demand.
The survey focused on topics that include:
- Brand trends and their effect on packaging demand
- Shifts within packaging (e.g., new materials, packaging innovations)
- Perspectives on packaging demand (including forecast spend on packaging for their brands)
This Executive Insights analyzes key findings from this proprietary research
Unleashing Competitiveness on the Cloud Continuum | Accentureaccenture
Accenture reports how the cloud continuum creates a seamless technology & capability foundation that meets business needs now and in the future. Read more.
Global banking outlook 2018: pivoting toward an innovation-led strategyEY
Banks are seeking to become digitally mature, completing the transition from regulatory-driven transformation to innovation-led change. EY’s Global banking outlook 2018 survey provides actionable insights for banks as they prepare.
Our Global Chemical Industry Leader Frank Jenner explores the trends and drivers that will shape the chemical industry of tomorrow in our latest Chemical Market Outlook.
Managing balance sheet liquidity & long term funding Dr Rajeev Jain
Managing balance sheet liquidity and long term funding
• Do the company have the right cash management processes?
• The importance of accurately forecast company cash flow with liquidity management
• Looking at your balance sheet frequently: Do the company has sufficient funding sources?
• Ensuring the right balance of credit and non-credit service utilisation for funding process
• Learning about rebuilding the balance sheet and turning their problem into growth
• Establishing long term stability and security of our funding in turn helps protect our liquidity position in the crisis
• Building necessary tools and methods to achieve properly structured balance sheet
• Managing complex situations precisely through flexible values (general direction), values with longer lifespan than goals or objectives and past and present corporate actions
liquidity decision, an introduction of liquidity decision, the importance of the liquidity decision, estimating the liquidity needs, instruments of liquidity, theories of liquidity decision, liquidity procedure in the banking system
Unlocking Success: The Importance of Cash Management for Your BusinessTraQSuite
Cash management is not just about keeping track of physical cash; it encompasses a range of financial activities aimed at optimizing the use of liquid assets. These activities include monitoring cash flows, forecasting future cash needs, and making strategic decisions about how to allocate funds. Effective cash management involves finding a balance between ensuring there's enough cash on hand to meet short-term obligations and putting excess funds to work to generate returns.
FFA- Statement of Schedule of Changes in Working Capitaluma reur
Statement Of Schedule Of Changes In Working Capital
This statement is prepared with the help of current assets and current liabilities relating to two different periods.
An increase or decrease in respect of each of such items should be recorded to ascertain the net increase or decrease in the working capital.
An increase in the value of current assets between two different periods indicates an increase in the working capital. It is an application of funds.
An increase in the value of current liabilities between two different periods indicates decrease in the working capital. It is sources of funds.
A general presentation about working capital. It gives an overview of the structure, management role, cash management. Solutions to manage working capital aspects.
The theme for this quarter is momentum meets uncertainty. The upward trend in crude oil, natural gas, LNG and refined product prices that began in Q1 continued into Q2. Crude oil markets began the quarter just below $100/bbl and have closed below that level on only two days since late April. As we begin Q3, there are increasing concerns about the health of the global economy and how that might affect oil and gas demand.
Quarterly analyst themes of oil and gas earnings, Q1 2022EY
Financial questions continued to attract the most attention of the analyst community, with major focus on how companies will respond to the war in Ukraine, elevated commodity prices and improved cash flows. Strategic questions focused on how the changing geopolitical environment will affect capital allocation in the short and long term. Operationally, all eyes were on the capacity of companies to step up asset utilization and bring new projects to market quickly. Explore the latest EY quarterly analysts themes.
EY Price Point: global oil and gas market outlookEY
As the last quarter of the second pandemic year draws to a close, we continue to see heightened contrast
between the medical and economic points of view. While COVID-19 cases are close to their all-time highs, so
are equity prices, and a leading investment bank declared (on 2 December, 2021 after the Omicron outbreak in South Africa) that it was “optimistic about the possibility of a vibrant 2022.” When news of the variant hit in
late November, the markets were rocked by the prospect of yet another round of local mobility restrictions and
an interrupted return to normal international travel patterns, on top of the Biden Administration’s announced
release of 50 million barrels of crude from the US Strategic Petroleum Reserve. So far though, with OPEC
standing by its planned gradual return to normal production, oil prices have stabilized, albeit below where they
were in mid-November. Henry Hub prices, always at the mercy of the weather, responded predictably to a
warmer-than-normal early winter in the US, falling from US$6.60/MMBtu in early October to below
US$4.00/MMBtu by mid-December. In Europe and Asia, following a short reprieve at the start of the quarter,
piped natural gas prices have spiked again on concerns triggered by Russian troop buildups on the Ukraine
border and uncertainties surrounding the Nordstream 2 pipeline. Looking forward, OPEC and the U.S. Energy
Information Administration (EIA) in their last forecasts of the year both projected that 2022 oil demand would
be above what we saw in 2019. Although time will tell if those forecasts are realized and other events could
intervene, the response to new virus outbreaks is well-practiced and the trade-off between public health and
economic reality has tipped toward a cautiously optimistic view.
EY Price Point: global oil and gas market outlook, Q2 April 2021EY
The theme for this quarter is governed. Apparent market balance at prices that could be sustainable is the product of calculated choices by market leaders and the cooperation of those who follow them. Economics played their customary role as well, with capital scarcity in North America taking about 2 million barrels per day out of the market, about half of the remaining gap in demand. While inventories are close to their pre-COVID-19 levels, there is still uncertainty. The resolution of the pandemic is in sight, but timing is unclear. Vaccine distribution in the US is having an impact but Europe is struggling to contain a third wave of infections. The taps have opened on economic stimulus, but it remains to be seen if policymakers have done enough or if they have overshot the mark.
The shape of the crude oil forward curve has fundamentally changed since the end of the last quarter. In late December of last year, the Brent forward curve was gradually increasing while today, the curve is backwardated. This is a clear sign that the market sees a short-term dynamic that is disconnected from the medium-to-long-term fundamentals. The lasting impact of the COVID-19 pandemic remains to be seen. While many have opined that COVID-19 marks a turning point in energy transition, the IEA recently released a five-year forecast of oil demand that shows steady growth, albeit at rates that are below historical expectations.
Gas markets are a paradox. At the Henry Hub and at LNG destinations, demand grows, investment lags and prices will occasionally attract attention. Traders, so far though, are unconvinced and futures prices don’t indicate imminent scarcity at any link in the value chain.
EY Price Point: global oil and gas market outlookEY
We enter 2021 on a note of cautious optimism for global health, the world economy, and the oil and gas markets. The first weeks of December brought approval in the US and the UK of the first of several COVID-19 vaccines. The speed with which vaccine development occurred is unprecedented, but certainly welcome. In the weeks following the early November announcement of 90+% effectiveness by the manufacturer of the first approved vaccine, the price of WTI crude oil increased by US$10/bbl to US$48/bbl, the highest level since early March. Sustainability hasn’t returned yet, and whatever time it takes to get the world to normal, it will take even longer for normalization within the oil and gas markets. Inventories remain at historically high levels and, optimistically, it will take until April before inventory returns to levels observed in the preceding five years. That’s an estimate, and there has obviously been some difficulty properly calibrating the expectations of how balance will return and how long it will take. In late November, OPEC met to adjust its output plans because of the anemic rebound in demand. In mid-December, the IEA lowered its demand forecast for 2021 due mostly to continued sluggishness in aviation fuel demand.
A mild winter has interrupted a recovery in North American natural gas prices after a run-up motivated by curtailed capital expenditures, upstream activity and production. After an initial meltdown, with cargo cancellations and dramatic price reversal, LNG markets have made a remarkable comeback, and the spread between Asia and Henry Hub has reached a level we haven’t seen in almost three years. It may be the case that interruption in FIDs has brought us to the cusp of a balance that can support reliable returns.
EY Price Point: global oil and gas market outlook (Q4, October 2020)EY
Oil and gas prices have recovered steadily from their lows and are relatively stable, but that stability is supported by the combination of purposeful withholding of production by oil-producing countries and economic stress on upstream independents. Oil prices closed the quarter roughly where they started it, while refining spreads were down slightly. LNG spreads were substantially higher at the end of Q3 than they were at the beginning of the quarter but are still roughly half of what is generally thought of as sustainable.
Going forward, the market will be looking closely at how the economy and demand respond to new developments with respect to a potential COVID-19 vaccine and the US election.
EY Price Point: global oil and gas market outlookEY
As we close the second quarter of 2020, in most of Europe and Asia, the first (and hopefully last) wave of the COVID-19 crisis appears to be abating. In the parts of the US where the virus hit early, the profile has largely matched Europe’s, while in other parts, the urge to reopen businesses has trumped the desire to contain the virus and uncertainty looms. In the developing world, the crisis has just begun, but without the economic headroom and resources necessary to contain it. As the crisis unfolded, the effect on oil and gas demand has been predictable but difficult to gauge precisely and therefore difficult to manage.
Oil prices have crept up steadily as production has been curtailed through coordinated action (OPEC+) and because of economic reality (unconventional oil in North America). That trend has been subject to momentary spasms when bad news hit the market. It would be understandable if traders were nervous, and it seems that they are. Although nowhere near where it was at the peak of the crisis, option implied volatility is still at historically high levels. Gas markets, without the benefit of coordination on the supply side, continue to deal with the market implications of storage at or near capacity. Interfuel competition in power generation has always provided something of a floor, but those lows have been, and will continue to be, tested.
Zahl der Gewinnwarnungen steigt auf RekordniveauEY
Immer mehr deutsche börsennotierte Unternehmen müssen ihre eigenen Umsatz- oder Gewinnprognosen nach unten korrigieren. Im ersten Quartal stieg die Zahl der Prognosekorrekturen auf ein neues Rekordniveau: Insgesamt 77 Gewinn- oder Umsatzwarnungen wurden registriert.
Die Corona-Krise trifft auch die Versicherungsbranche mit voller Wucht. Die Versicherer rechnen mit weniger Neugeschäft. Jeder Fünfte mit Personalabbau und Prämienerhöhungen.
Fusionen und Übernahmen dürften nach der Krise zunehmenEY
Folgt auf die Corona-Krise ein M&A-Boom? Laut Capital Confidence Barometer von #EY hoffen 40 Prozent der deutschen Unternehmen auf sinkende Bewertungen von Übernahmekandidaten.
EY Price Point: global oil and gas market outlook, Q2, April 2020EY
The first quarter of this year has seen some extraordinary events. As if chronic oversupply, prices stuck below sustainable levels, the looming energy transition, and investor pressure to decarbonize weren’t enough, our industry now faces a dramatic, but hopefully temporary, downturn in demand as a result of the ongoing COVID-19 outbreak.
Die Geschäftslage im Mittelstand hat sich leicht verschlechtert, ist in den meisten Branchen aber weiter überwiegend gut - die Einstellungsbereitschaft sinkt.
Deutschlands börsennotierte Unternehmen werden weiblicherEY
Der Frauenanteil in den Vorstandsetagen der DAX-, MDAX- und SDAX-Unternehmen ist seit Juli 2015 kontinuierlich von 5,0 auf jetzt 9,2 Prozent gestiegen.
The theme for this quarter is inorganic. Although prices climbed in the fourth quarter as the balance of supply and demand tilted in favour of demand, OPEC + restraint was fundamental.
The market is conscious of downside pressures that loom. OPEC + has announced production cuts through to the end of the first quarter. Beyond the first quarter, there is a risk that OPEC + grows weary of supporting the market and reverts to a strategy of growing production, protecting market share and placing pressure on the economics of unconventional producers. Production growth in Brazil and Norway has the potential to consume a significant portion of demand growth expected in 2020. Whether, or the extent to which, US shale output growth continues despite escalating financial strain across the E&P sector will be key in determining whether OPEC + cuts will be sufficient to balance the market in 2020.
In the longer-term, focus remains on the energy mix of the future and its impact on the demand for petroleum products. A number of significant uncertainties remain, including electric vehicle (EV) penetration. EY’s ‘Fueling the Future’ analyzes the outlook under four distinct scenarios. The analysis shows that an inflection point in EV penetration is required by 2022 if the terms of the Paris Accord are to be met.
Liquidity for advanced manufacturing and automotive sectors in the face of Covid-19
1. Reshaping results
Liquidity and cash management
for advanced manufacturing and
mobility companies
Response to the COVID-19 crisis
6 April 2020
2. Reshaping resultsPage 2
What we are seeing related to COVID-19 liquidity issues
With a global economy in free fall due to actions taken in response to the COVID-19 outbreak, companies
are searching for near-term solutions to these issues.
► Securing short- and long-term liquidity to fund
business operations
► Conducting cash forecasting under crisis
scenario
Cash
shortage
► Vendors requiring scheduled payments,
customers not paying – thereby driving hasty
behavior under duress to shore up liquidity
Credit
squeeze
► Allocating liquidity buffers and identifying
essential business operation activities
Cash
management
► Sector-based challenges emerging; refinancing
uncertainty; insurance policy review
Access to
capital
► Governments around the world are formulating
various ways to support businesses and to
maintain economic stability; tax relief and
stimulus
Government
support
► Abrupt sales decline and uncertainty resulting in
need for cost cuts/revised guidance/scenario
planning
Contingency
planning
► Reduced headroom, limited ability to access
new/existing capital
Covenant
compliance
► Distressed suppliers requiring special assistance
impacting liquidity
Supply chain
disruption
3. Reshaping resultsPage 3
A reliable cash flow forecast creates transparency over our clients’ cash flows
and forecasting processes and allows for the deduction of insights and measures
Short-term
cash flow
forecast
Forecasting
processes
Key
considerations
Measures
Key
results
► Elaboration of relevant considerations
concerning:
► Liquidity situation and financing
requirements
► Significant cash in- and outflows
► Potential internal/external financing
sources
► Certainty over director duties with
regard to liquidity position, covenants,
liabilities and insolvency-specific
regulations
► Deduction of measures with impact on
cash position, such as:
► Renegotiation of payment terms
► Collection of accounts receivable
► Negotiations concerning deferral
interest/debt repayment
► Setup of cash office for stringent
controlling of all cash in- and outflows to
preserve liquidity position (spend control)
► Setup of a reliable short-term cash flow forecast via the:
► Review and validation of existing forecast with regard to methodology and accuracy
► Creation of bottom-up indirect/direct 13 WCFC model
► Creation of transparency across all cash in- and outflows via overview of, for example:
► Perform a risk assessment and plan for various scenarios:
► Carry out E2E risk assessments across all functions
► Conduct scenario planning to identify medium-term potential impacts
► Identify key intervention actions, mitigation and contingency plans
► Available liquidity
► Trapped cash
► Pledged cash
► Foreign accounts
► Single entity level
► Key cash drivers
► Methodological and technical evaluation of currently applied
cash flow forecasting processes
► Deduction of procedural and methodological improvements
to current cash flow forecasting process
4. Reshaping resultsPage 4
A liquidity quick scan is the first step to assess the financial resilience of the
company and can highlight the necessity for a proper cash office
Typical insights
Potential quick
win improvements
Potential longer-term
improvement measures
Cash flow
forecasting
► Cash flow forecasts are produced on an
intermittent basis and are not compared
with actual cash flows
► Company does not predict periods of
negative cash flow correctly and therefore
incurs costly overdraft charges
Working
capital
management
► Aged debtors are high and the company
has no process in place to chase debtors
and encourage prompt payment
► Suppliers are regularly paid within agreed
payment terms without early payment
discounts
Cash
generation
► Bank service fees and charges are high
due to the regular use of the company’s
overdraft
► Produce regular cash flow forecasts
and compare forecasts to actuals on a
weekly basis
► Implement a forecasting strategy and
rollout training on leading practice
processes to the finance team
► Negotiate favorable payment terms or
early settlement discounts with suppliers
► Send accurate invoices where payment
terms and methods of payment are
clearly outlined
► Short-term review to consider
opportunities to release trapped cash
over a three-month period
► Turn non-operating assets into cash
► Develop and implement governance
processes around cash, assigning
accountability within the finance team
► Implement an integrated P&L, balance
sheet and cash forecasting process
and tool
► Implement processes to review
outstanding debtors and send
chasers regularly
► Review inventory and warehouse
management processes
► Engage tax experts to advise on tax
efficient strategies that could be
implemented to release cash
► Review of bank charges and options to
reduce these in the future by agreeing
long-term financing with the bank
Achieving visibility and control over cash flows and driving sustainable working capital improvements is the most
cost-effective form of finance for most organizations.
5. Reshaping resultsPage 5
A structured process is key to establish an efficient cash flow forecast and derive
appropriate conclusions
Short-term cash flow forecasting
1
Kickoff
workshop
2
► Discuss current
processes
► Data quality
► Data completeness
► Model check
(if available)
Review of existing
processes and
tools
Considerations and liquidity management
3
Liquidity forecasts
on entity/business
unit level
4
► Align inter-
company
transactions
► Match joint credit
lines/cash pooling
Consolidation
of forecasts
6
► Measures by single
cash flow
► Possible impact of
measure on
liquidity situation
► Merit of measures
Derive
measures
Continuous process
► Current situation
► Timeline
► Key drivers
► Business model
► Available
information
► Contact persons
► Deduct separate
cash flows (e.g.,
business unit,
plant, project,
entity)
► Discussing
different elements
(e.g., accounts
receivable,
accounts payable,
available liquidity)
5
Evaluation
of results
► Key cash drivers
► Cash needs/cash
coverage
► Possible
insolvency risk
► Indication of
liability risks for
management
7
Implementation
of measures and
next steps
Optional:
► Implementing
measures
► Set up cash
management
office
► Target and actual
comparisons
► Regular updates
Core modules
Optional modules
6. Reshaping resultsPage 6
Financial resilience from short-term actions and activation of longer-term
contingencies is key — uncommitted facilities and soft credit are high-risk areasLiquiditypressure/cashrequirementLowHigh
Time required to implement
Manage committed credit
Regulatory and government support
Review capital
market options
Review asset
disposal options
Defer pension
payments
Partner solutions,
e.g., suppliers,
lessors
Working capital
Repatriate
cash balances
Use headroom
in facilities
Stop non-essential spendRollover LCs/
guarantees
Use existing
cash buffer
Capex/investment
on hold
Cut share buyback
and dividends
Suspend tax
payments
Debt repayment
schedulesReview hedging
arrangements
Actions driven from our work will balance
the following factors:
„ Speed, cost, time and availability
„ Implementation ease
„ Suitability
„ Reversibility – long-term impact
„ Impediments – sequencing
Maintain uncommitted credit and
build cash buffer where possible
Cooperate with
partners
Reduce discretionary costs
Stimulate customer orders
Financial Operational Strategic
7. Reshaping resultsPage 7
Leading practices taken by peers — establishment of a cash management/liquidity
office
► Provide concise reporting to
all stakeholders
► Develop stakeholder-specific
communication plans
► Coordinate all stakeholders
with a swift results-oriented
approach toward resolving
capital structure issues
► Create trust among stakeholders
with transparent process
management
Key stakeholder considerations► Meet frequently to review liquidity initiatives and near-term cash flow needs,
e.g., payroll, AP, interest, rent
► Manage disbursements through a daily meeting to review and approve all
disbursements
► Instill discipline in management to focus critical liquidity needs
Manage
liquidity on
a daily basis
► Create a rolling daily cash flow forecast (~90 days) to manage short-term liquidity
needs
► Review and manage inflows and outflows against forecast and make adjustments on
at least a weekly basis
► Identify potential areas to pursue cost savings initiatives and release additional cash,
e.g., review all long-term contracts to determine ability to renegotiate
► Review short-term forecast with lenders to demonstrate control of short-term liquidity
needs
Short-term
forecasting
► Review existing financing agreements to determine flexibility with upcoming principal
and interest payments
► Review existing capital structure and identify any need for additional short-term
financing
► Review outstanding accounts receivable and develop disciplined approach to pursue
cash collections
► Manage working capital and identify areas of liquidity enhancement, e.g., propose
vendor discounts for prompt payment
► Create headroom for unanticipated cash needs
Other
liquidity
enhancements
Communication
Integrated
planning
8. Reshaping resultsPage 8
EY Advanced Manufacturing & Mobility contacts
Jerry Gootee
Partner, EY Manufacturing Leader
+1 216 583 8647
jerome.gootee@ey.com
Kris Ringland
Partner, EY Global Automotive Leader
Strategy & Transactions
+46 8 520 592 78
kristin.ringland@se.ey.com
Gaurav Malhotra
Partner, EY Americas Restructuring Leader
+1 312 879 4020
gaurav.malhotra@ey.com
David Gale
Partner, EY Global Manufacturing Leader
Strategy & Transactions
+1 612 371 8482
david.gale@ey.com
Falco Weidemeyer
Partner, EY EMEIA Restructuring Leader
+49 160 939 18335
falco.weidemeyer@de.ey.com
Randy Miller
Partner, EY Global Manufacturing &
Automotive Sector Leader
+1 313 628 8642
randall.miller@ey.com
10. Reshaping resultsPage 10
Automotive OEMs are threatened by short- and medium-term disruptions and
especially vulnerable due to the already strained competitive situation
► COVID-19 disruptions hit the industry in a transition
phase, reinforcing already prevalent industry
disruption effects
Short term:
► Drop in sales (production and mobility services)
► Supply chain disruptions
► Securing liquidity
► Plant closures as direct effect or indirect
Medium term:
► Slow ramp-up of production
► Re-establishment of supply chain and partial mitigation
of effects by adjusting supply chains
Long term:
► Partial recovery of sales; overall reduction compared
with pre-crisis due to weakened overall economic
situation
► Building of more resilient supply chains (e.g., multiple
sources instead of single source)
► Increased need for partnerships to be able to finance
future-relevant investments (e.g., alternative
powertrains, car automation)
Automotive – OEM1
1Focus on passenger cars and light commercial vehicles
low
high
Ability to operate
Revenue
sensitivity
Supply chain
effects
Cash availability
Financing
risk
Geographical scope
and dependency
► Ability to operate: high – complex production with need for large number of workers; adverse effects
can only be partially mitigated by social distancing measures (remote work for non-production
functions)
► Revenue sensitivity: high – short-term hit to sales and longer–term reduced sales due to worsening
overall economy
► Supply chain effects: very high – strong dependency on global supply chain with very limited buffers
(e.g., due to just in time or just in sequence)
► Cash availability: moderate – strong ties with capital providers and existing cash buffers mitigate
adverse effects for the short term
► Financing risk: high – already tense competitive situation with industry disruption mitigated by strong
ties with capital providers
► Geographical scope and dependency: high – worldwide (internal) supply chain effects with tasks along
value creation spread across the globe
Expected effectsCOVID-19 exposure
11. Reshaping resultsPage 11
COVID-19 works as an accelerator for an automotive supplier crisis, which was initiated
by sector-inherent regulatory insecurity and resulting market declines
► COVID-19 interruptions are hitting the automotive
supplier industry in a already difficult phase – current
structural change and the impact on many suppliers:
Short term:
► Volume drops/demand break
► Supply chain disruptions
► Plant closures as direct or indirect effect
► Insolvencies
Medium term:
► Increased sales volatility/volume drop
► Slow ramp-up of production
► Transfer-business from insolvent competition
► Weakened and fragile supply chains and suppliers;
lack of supply
► Partially new suppliers required
Long term:
► Further supplier consolidation
► Recovery of sales; but overall reduction compared with
pre-crisis due to weakened overall economic situation
► Building of more resilient supply chains (e.g., multiple
sources instead of single source) and stronger or more
trustworthy customer relationships
Automotive – supplier
Ability to operate
Revenue
sensitivity
Supply chain
effects
Cash availability
Financing
risk
Geographical scope
and dependency
COVID-19 exposure
► Ability to operate: very high – medium complex production requiring partly specialized workforce on
specific machines/tools; work outside the factory is not possible; often no backup for key personnel
► Revenue sensitivity: very high – short-term revenue losses and longer-term revenue losses due to the
closure of the OEM’s production facilities
► Supply chain effects: high – strong dependence on few suppliers with very limited buffers – often
single source
► Cash availability: very high – especially medium players often do not have notable liquidity reserves;
pre-COVID-19 margins did not allow building up buffers; pre-COVID-19 crisis (i.e., diesel) led to a
already stressed situation
► Financing risk: very high – financiers shifted away from the automotive supplier industry already before
COVID-19, due to sector inherent risks
► Geographical scope and dependency: high – global supply chain effects, dependence of suppliers’
production plants on local OEM plants
low
high
Expected effects
12. Reshaping resultsPage 12
The mobility services sector impacts of COVD-19 are expected to be severe — long-term
impact will depend on government stimulus and interventions
Short term:
► Curfews are expected to be more widely spread and
business activity will further decline limiting revenue
potential to almost zero
Medium term:
► Revenue potential is likely limited in the medium term
► Employee retention will depend strongly on trajectory
of future COVID-19 cases as government support will
be important
► Retaining people will be key to be able to fully
participate in a long-term rebound of business and
leisure activity
Long term:
► Impact of COVID-19 is possible for an extended period
of time (beyond 18 months), depending on
macroeconomic outcomes
► Asset-heavy business models in the sector could be less
affected long-term provided that financing is available,
as they are may be able to rebound more quickly
► Very long-term effects should be limited, smaller
businesses could be more affected than larger
ones and hence consolidation may take effect to
some degree
Mobility services (transportation)
Ability to operate
Revenue
sensitivity
Supply chain
effects
Cash availability
Financing
risk
Geographical scope
and dependency
COVID-19 exposure
► Ability to operate: moderate – key input is labor on a given asset base, as long as work force is in place
effects should be moderate
► Revenue sensitivity: very high – severe effects as offerings rely on underlying business and leisure
activities that may be subdued for a longer period of time
► Supply chain effects: low – should be quite limited, as local labor is the key
► Cash availability: high – substantial cash flow impact on foregone revenue expected; companies usually
have little cash bound in their supply chain; depending on workforce flexibility and sick leave pay
ensured by governments cash consumption can be wound down to some extent
► Financing risk: moderate – depending on business model, financing requirements are structurally less
high in the sector
► Geographical scope and dependency: moderate – limited exposure due to often local nature of
services, international travel severely affected
low
high
Expected effects
13. Reshaping resultsPage 13
The construction and industrial products is primarily exposed due to its huge workforce
and tight timelines
► COVID-19 slows down the positive growth, especially
when construction workforce/planners/engineers will
be affected
Short term:
► Stable sales – projects will be completed
► Disruptions when workforce is infected
► Declining sales in machinery/machine building as
industry is retaining investments
Medium term:
► Recovery based on state subsidies and infrastructure
investments/needed renovation
► Supply chain recovers in machinery/machine building
Long term:
► Construction material suppliers drive prefabrication
to increase efficiency levels
► Further consolidation of fragmented landscape of
suppliers and services providers – forward integration
and new business models
Construction material/industrial products
Ability to operate
Revenue
sensitivity
Supply chain
effects
Cash availability
Financing
risk
Geographical scope
and dependency
COVID-19 exposure
► Ability to operate: very high – huge workforce (skilled and unskilled) is endangered by COVID-19 –
timelines will be difficult to keep in a seasonal business; specialized installers remain a critical
bottleneck, also on side of engineers/planners
► Revenue sensitivity: moderate – short term stable as projects are planned and need to be completed;
long term declining investments in selected segments
► Supply chain effects: low – construction material is sourced locally, many suppliers in a fragmented
market; selected categories sourced globally
► Cash availability: moderate – installers are basically short on cash, suppliers and distribution allow for
sufficient cash
► Financing risk: moderate – low interest rates and state subsidies
► Geographical scope and dependency: moderate – as sector is highly local, only limited risk for global
material suppliers
low
high
Expected effects
14. Reshaping resultsPage 14
The short-term effects on the chemicals sector are expected to be severe, driven by
significant price effects and the industry’s global geographical scope
► COVID-19 crisis may offer opportunities
Short term:
► Short-term stress will be significant
► Keeping license to operate is key
► Preparation how to benefit from the crisis should
start immediately
► A drop in oil prices may help lower feedstock (input)
cost and boost margins
► Cash flow and working capital is not an issue right now
Medium term:
► In the expected rebound, agility is key to capture
opportunities and maintain/grow market share
Long term:
► Depending on what the world will conclude from
COVID-19 crisis, there may be significant changes to
global supply chains, more resilience and reserves in
supply chains and possibly more regional and less
global supply chains
Chemicals
Ability to operate
Revenue
sensitivity
Supply chain
effects
Cash availability
Financing
risk
Geographical scope
and dependency
COVID-19 exposure
► Ability to operate: moderate – critical issues are both availability to shift personnel and critical support
functions such as fire brigades in order to maintain license to operate; physical separation of shifts,
etc., needed to avoid entire shifts to off duty
► Revenue sensitivity: very high – with demand of customer industries (e.g., automotive) plummeting and
imports increasing, we expect significant price effects. Excess demand in plastics, packing, textiles and
fibers may compensate, but remains to be seen
► Supply chain effects: high – while supply side mostly stable, key effects are in outbound; however,
overall effects have potential to be significant
► Cash availability: low – cash will need close consideration in the future
► Financing risk: high – effects of raw material (oil related) and product prices on the balance sheet will
be significant, especially in base chemicals
► Geographical scope and dependency: very high – impact will vary by region, but global scope of most
chemical markets is expected to prolong the impact of COVID-19 as the crisis migrates across the
globe
low
high
Expected effects
15. Reshaping resultsPage 15
Aerospace and defense will be under significant stress as a result of commercial
airlines grounding planes and canceling orders
Short term:
► Short-term stress will be significant
► Keeping workforce at the ready is key, despite some
potential for disruptions
► Defense and govt. contractors will focus on their
requirements and rights under government contracts
to recover costs and maintain continuity of operations
Medium term:
► Government assistance package will focus on keeping
the supply chain afloat until demand recovers
► Airline orders deferred and cancelled
► With the competitive talent market, companies
will have key decisions to make around layoffs
and furloughs
Long term:
► Commercial aerospace resurgence will be tied to
the global health recovery from COVID-19 when
restrictions on air travel are lifted
► Defense and government services may have a
sharper recovery than others given direct linkage
to government spending
► Pension fund positions could be eroded leading to
cash funding requirements
Aerospace and defense
Ability to operate
Revenue
sensitivity
Supply chain
effects
Cash availability
Financing
risk
Geographical scope
and dependency
COVID-19 exposure
► Ability to operate: high – critical workforce is vulnerable and not able to operate effectively; new
protocols adding to inefficiency and cost to avoid the potential for temporary factory closures halting
production
► Revenue sensitivity: high – near-term demand for commercial aircraft being deferred with later-term
effect on aftermarket
► Supply chain effects: very high – complex and highly interconnected and dependent supply base;
small businesses need certainty of cash flow to remain operational
► Cash availability: high – potential delays in customer payments, although US Federal Government
seems focused on keeping money flowing
► Financing risk: moderate – uncertainty around the access to credit markets for the broader supply
chain
► Geographical scope and dependency: low – as sector is highly localized (particularly defense and
government services), only limited risk
low
high
Expected effects