- Companies in Canada to Focus on Top-Line Growth -
MARKHAM, ON, May 17 /CNW/ - As Canada emerges from the economic downturn in growth mode, Canadian
finance executives are taking a more aggressive stance when it comes to
increasing top-line revenue and seizing investment opportunities the
latest American Express/CFO Research Global Business & Spending Monitor reveals. With many companies sitting on large cash surpluses, companies
report that they will deploy more resources toward developing new
products and services, building new production capacity, and adding
headcount in sales - a sharp contrast to the positions of their U.S.
"Finance executives are opening up the company coffers to drive growth
and are moving away from budget cuts," said Rob McClean, Vice President
& General Manager, Global Commercial Card, Amex Bank of Canada.
"Businesses are exercising caution but we will see greater spending to
win and retain customers as they jockey for position in a recovering
Growing the Top-Line: Spending to Drive Revenues
While U.S. companies are still focused on profitability and bottom-line
growth (62%), finance executives in Canada say that over the next year
they plan to concentrate on increasing top-line revenue (66%).
"This trend is likely a reflection of some of the significant cuts that
Canadian companies made during the recession," said McClean. "They
believe they have slashed back expenses as far as they can, and now is
the time to focus on growing sales and revenue."
As economic prospects improve, companies will spend in order to
capitalize on a better business environment. Almost half (49%) of
Canadian respondents plan to invest more over the next twelve months on
developing new products and services, and 44% are also focused on
expanding market access through business development activities such as
sales and marketing.
Job growth will be strongest in sales - more than half of Canadian
finance executives (58%) plan to increase their sales headcount.
Respondents also expect headcount to increase in marketing (44%),
operations (38%), IT (39%), R&D (33%) and customer service (36%).
Most finance executives in Canada say their companies have been
experiencing strong cash flow over the past year (83%) and a majority
(75%) report that they have been pursuing a deliberate cash
preservation strategy. With many companies now sitting on large cash
stockpiles, Canadian finance executives have plans to put this capital
to work: almost half (44%) are retaining cash so they can seize
investment opportunities more quickly in the future.
While almost all Canadian respondents say their corporations are
reserving cash so they can pay down debt balances (94%), they are still
making some aggressive plays to grow their business. They say their
companies will use cash somewhat or very aggressively in the next
twelve months for each of the following:
78% will use cash to expand operating activities and headcount.
75% will spend more on R&D.
74% plan to increase capital spending.
Today Looks Bright, Tomorrow Looks Brighter
Canada's finance executives are optimistic about the future of the
Canadian economy, with three in four (78%) expecting substantial or
modest economic expansion over the next twelve months.
There is also a feeling that the pace of economic growth will pick up in the months ahead. Over
three-quarters (78%) of Canadian respondents see economic growth
accelerating in the second or third quarter of 2011. This is in stark
contrast to American respondents, where only 38% of executives expect
growth to accelerate during this time.
Canadian respondents report a positive outlook for their own companies
as well. Nearly three-quarters (74%) anticipate top-line growth over
the next twelve months, including 14% who expect substantial (as
opposed to modest) revenue growth.
Canadian CFOs Remain Conservative
Despite the positive outlook for their businesses and the economy,
Canadian CFOs remain conservative in their approach to growth. Most
believe that expanding too quickly would do more harm than good. A full
81% say expanding business operations too quickly would be a greater
risk than expanding too slowly, and similarly 83% believe hiring staff
too quickly would jeopardize their business.
Canadians were among the most conservative surveyed on this front,
especially in comparison to U.S. respondents, who actually saw
expanding too slowly as a greater risk to their business (57%).
Canadian companies also plan to exercise caution when it comes to their
spending. Though cash will begin to flow, their difficult experiences
during the recession have led to a more watchful approach to spending.
The vast majority of respondents (81%) expect their companies to
require a more vigorous business case for spending on technology,
headcount and operating activities.
"Companies are leveraging their lessons learned in the downturn to shape
today's corporate spending strategies for the better," continued
McClean. "They are maintaining discipline and carefully weighing each
investment and looking closely at the justification for spending and
laying the foundation for more sustainable expansion."
Customer Service Revitalized
The experience of the economic downturn is also motivating companies to
improve the experience they give their customers, with 39% of Canadian
respondents planning to invest more in customer service over the next
Canadian companies are also paying closer attention to critical customer
service dimensions such as:
Customer retention and loyalty (50%)
Effectiveness of customer service investments (44%)
Customer satisfaction (36%)
Customer service performance (36%)
"This is a clear indication that businesses recognize a shift in
consumer mindsets coming out of the economic downturn," continued
McClean. "Customers are demanding value and impeccable service, and
businesses are listening and adjusting their strategy accordingly."
About the Survey
CFO Research Services surveyed 665 senior finance executives at large
global companies across a wide range of industries in the United
States, Canada, Latin America, Europe, Asia, and Australia. Company
revenues ranged from $500 million to more than $20 billion. The
research program, which included an online survey and interviews with
senior finance executives, was completed in April 2011.
About American Express in Canada
American Express in Canada operates as Amex Bank of Canada and Amex
Canada Inc. Both are wholly owned subsidiaries of the New York based
American Express Travel Related Services Company, Inc., the largest
operating unit of the American Express Company. Amex Bank of Canada is
the issuer of American Express charge and credit cards in Canada, with outstanding products like the American Express® AeroplanPlus® Card, and the American Express® Gold Rewards Card. Amex Canada Inc. operates the Corporate Travel and Travellers Cheques
divisions in Canada. American Express opened its first offices in
Toronto and Hamilton in 1853 and now employs 3,700 Canadians
Visit us on Facebook at Facebook.com/AmericanExpressCanada
About CFO Research Services
CFO Research Services is the sponsored research group of CFO Publishing
LLC, which produces CFO magazine, CFO.com, and CFO Conferences. For more than 25 years, CFO Publishing has been
a trusted source of insight into the issues that matter most to finance
SOURCE American Express
For further information:
on behalf of American Express Canada
American Express Canada