Global Finance Execs Predict Imminent Downturn, According to AlixPartners Survey
Global consulting firm AlixPartners today announced the findings of its 17th Annual Turnaround and Transformation Survey, which reveal that over 600 of the world’s leading finance professionals most experienced in responding to the downside of economic volatility see a period of widespread business distress looming.
- For the first time in 50 years, the downturn will be inflation-led – with 97% predicting that inflation will be a major driver of economic stress
- 24% anticipate a recession before the end of this calendar year, and
- 70% see it happening in the next 12 months
- More than half of global respondents (57%) believe the likelihood of a U.S. recession is 50% or more in the next 12 months.
Challenging financing markets and the efforts of ESG compliance
As belts tighten, companies’ chances of survival will be measured by the amount of cash sitting on their balance sheets. More than a third of survey respondents expect the majority of distressed companies that tapped the credit markets for financing in 2021 will need more in the next three years. Adding further pressure to the situation: survey respondents say that the availability of capital has decreased (44%) or remained flat (43%), and 52% say financial terms have grown more restrictive compared with 2021.
Compounding the already challenging financing markets are the efforts to comply with ESG guidelines. More than 84% of survey respondents believe a company’s ability to comply with ESG guidelines will impact its financial performance, and 69% agree that access to financing depends on ESG compliance.
Recession-driven M&A activity expected to jump
A recession will drive not just company restructurings but will lead to a new round of industry consolidation and reinvention: 76% of survey respondents believe that M&A transactions involving distressed assets will increase; 12% think that these will reach a new high. In an environment ruled by disruption and uncertainty, major corporations are attempting to stabilize enterprise value, and private equity firms are streamlining their portfolios. This environment creates opportunities for companies with the appropriate capital structure to pick up weaker players via M&A and build greater competitiveness for the long term, potentially at discounted prices. On the flip-side others are reassessing geographic areas of challenge or other cost-cutting measures and taking strategic action to prune portfolios and corporate structures. Would-be buyers and sellers alike are facing renewed pressure from investors and boards to focus on their core businesses to drive growth in the face of disruption. It remains to be seen where the best deals lie and who will benefit the most, but it’s clear that our respondents see a busy market on the horizon.
These findings are based on a survey conducted in May 2022 of over 600 senior experts from investment banks, lenders, financial advisory firms, law firms and corporate professionals across 20 industries based in the US, UK, Europe, Middle East and Africa, and Asia. The full report, “Preparing for the Storm” can be viewed at: alixpartners.com/storm.
Joff Mitchell, global co-lead of the firm’s Turnaround & Restructuring Services practice, said: “Business leaders must brace for further uncertainty in the realm of geopolitics, interest rates, and inflation. Growth can no longer be fuelled by cheap money, and business models have to be supported by profits. The winners will be those leadership teams who can transform their businesses with pace, agility, foresight, and an action-oriented point of view to navigate the choppy waters ahead. If a ‘turnaround mindset’ proved to be a defining factor in establishing a competitive edge during the height of the pandemic, it must now be locked in to effectively tackle a new and even bigger wave of market volatility.”
Jim Mesterharm, global co-lead of the firm’s Turnaround & Restructuring Services practice, said: “The finance experts who responded to our survey have borne out the stark reality — that the day of recession reckoning is upon us. While no one can pick the precise timing, our respondents tell us we are heading for a global recession and another intense period of restructuring. Companies unable to refinance because new funding is not available or because it's too expensive, are going to be at the forefront of this. If your runway is less than a year, then you’re heading for panic mode, assuming you’re not in it already.”
AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. Our clients include companies, corporate boards, law firms, investment banks, private equity firms, and others. Founded in 1981, AlixPartners is headquartered in New York and has offices in more than 20 cities around the world. For more information, visit www.alixpartners.com.
To view this piece of content from cts.businesswire.com, please give your consent at the top of this page.
About Business Wire
For more than 50 years, Business Wire has been the global leader in press release distribution and regulatory disclosure.
Subscribe to releases from Business Wire
Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from Business Wire
Feeling ’22: Mary Kay Inc. Announces Awards, Milestones, and Accomplishments From First Half of the Year28.7.2022 20:02:00 EEST | Press release
Mary Kay Inc. is feeling ’22. Throughout the first half of the year, the iconic global entrepreneurship company has furthered its innovations in skin science, continued its social impact efforts, and garnered several prestigious awards for its business and leadership. It’s a thing of beauty—and the nearly 60-year-old brand is just getting started. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220728005228/en/ Mary Kay logo (Graphic: Mary Kay Inc.) 2022 AWARDS & HIGHLIGHTS 30 total awards for business excellence, social impact and sustainability 10 employer awards recognizing Mary Kay as a great place to work and for operational excellence 7 awards for Mary Kay’s c-suite and senior leadership 17 self-released reports reinforcing Mary Kay’s operational and philanthropic efforts supporting its sustainability commitments for its Enriching Lives Today for a Sustainable Tomorrow strategy 3 mentions in annual reports from social i
Asaf Ashkenazi Named CEO of Verimatrix28.7.2022 19:00:00 EEST | Press release
Regulatory News: Verimatrix (Euronext Paris: VMX) (Paris:VMX), today announced the appointment of Asaf Ashkenazi as Chief Executive Officer effective Monday, August 1st, 2022. Amedeo D’Angelo, Chairman and Chief Executive Officer since 2015, remains Executive Chairman of Verimatrix effective the same day. Asaf Ashkenazi joined Verimatrix in 2018 and currently serves as Chief Operating Officer. He will lead the company’s ongoing business model transformation announced last year that focuses on recurring subscription-based revenue sources and new products. “This evolution and reinforcement of the Verimatrix governance structure aligns well with the company’s needs as we further the progression of our business model,” Amedeo D’Angelo said. “I look forward to working closely with Asaf in his newly expanded role as CEO during this strategic development of Verimatrix.” Previously leading the company’s R&D, product, sales and marketing operations, Asaf Ashkenazi will continue to harness his d
GUESS Heads to Granada for the 2022 Fall/Winter Advertising Campaign28.7.2022 18:00:00 EEST | Press release
The new GUESS Fall-Winter 2022 advertising campaign sees the brand off to explore the history-steeped streets of Granada, Spain. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220728005098/en/ GUESS Heads to Granada for the 2022 Fall/Winter Advertising Campaign (Photo: Business Wire) The FW22 campaign is immortalized through the lens of fashion photographer Tatiana Gerusova, under the guidance of GUESS?, Inc.’s Chief Creative Officer, Paul Marciano. The new campaign features a sizzling lineup: German-born, Polish fashion model Kim Dammer, Serbian model Nina Kostić, Spanish model Lidia Santos, Italian model Mario Ermito, and French model Xavier Grey. GUESS Women The campaign showcases an enticing array of GUESS pieces, highlighting must-have accessories and elevated animal and botanical prints. The collection brings a fresh and youthful breeze of contemporary color and style to grey winter days. Against the alluring continent
Innovaderm Bolsters European Presence With Two Newly-Established Operations Hubs (Spain & Poland)28.7.2022 17:00:00 EEST | Press release
Innovaderm announced today that its strategic European expansion initiative has reached a major milestone with the launch of two key centres of operations in Poland and Spain. Biotechnology and pharmaceutical companies can officially partner with the CRO’s team of experts in Europe to manage clinical trials in psoriasis, acne, atopic dermatitis and other dermatology indications. This includes adherence to stringent regulatory requirements, patient recruitment, site selection, clinical monitoring and protocol writing. “To date, we have successfully completed more than 500 clinical trials at 2,900 sites,” says Dave Selkirk, Innovaderm’s Chief Operating Officer. “The presence of two operations hubs in Europe will allow us to go one step further and accelerate the development of promising therapies that have the potential to transform lives. As we look to the future, our goal is to continue supporting innovation in research and the increasing number of patients with skin conditions worldwi
Echosens Partners with World Hepatitis Alliance on World Hepatitis Day, July 28, Urges Importance of Testing and Treatment28.7.2022 16:07:00 EEST | Press release
Echosens, a high-technology company offering liver diagnostic solutions, establishes its support of World Hepatitis Day (WHD), July 28 by partnering with the World Hepatitis Alliance as a bronze sponsor. The commemoration calls for greater awareness of the 357 million people who live with viral hepatitis but are unaware of it. The campaign’s theme “I can’t wait” highlights the need to accelerate the fight against viral hepatitis and the importance of testing and treatment for the real people who need it. “Echosens recognizes that every 30 seconds, someone in the world dies from a hepatitis-related illness, and we join hands with organizations throughout the world to advance increased vigilance around liver health,” says Dominque Legros, Echosens Group CEO. “It is gratifying to see that this year's theme for World Hepatitis Day aligns with our mission for early detection that can result in more effective intervention, treatment and better outcomes.” Viral hepatitis is an inflammation of
In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.Visit our pressroom