AchieveNEXT Mid-Year Sentiment Study 2021

When it comes to organic growth, most place equal emphasis on increasing sales to existing customers, entering new markets, and introducing new products and services. Each gets about 22% of mindshare. In all three growth areas, M&A will play a significant role, with a quarter of companies saying they will continue to attempt to do deals to drive short and long-term growth; there is evidence of increasing interest in buying and selling, in part because many deals were put on hold last year. A significant number of CFOs, 21%, say that identifying inorganic growth opportunities is their highest priority for the balance of the year.

CFOs appear to be holding the line on traditional capital expenditures, preferring to put their money into talent, market growth, and increasing productivity out of existing assets, including digital technologies.

Growth is back, and so are profits!

As 2021 began, we noted that companies were more likely to forecast growth in revenue than in EBITDA. They are holding to that prediction at midyear. What’s different is not how many, but how fast. Now 43% expect to end the year with EBITDA up more than 10% from last year. That suggests that companies are capturing economies of scale that might have eluded them as the recovery began. As we will see, rising labor costs, while a concern, appear not to have held down profitability, at least not so far.

Financing, Credit and the Capital Markets

From a financing, credit, and capital markets standpoint, the majority of finance leaders surveyed continue to expect rates to stay low and access to capital will continue to be fluid. Additionally, there continues to be little worry about bad debt —95% of the participants say they are confident or very confident that their bills will be paid, a big turnaround from Summer 2020, when 62% worried about their getting paid. There is also a significant opportunity for companies to increase the availability of capital—and drive EBITDA growth—through a coordinated set of initiatives to free up working capital currently tied up in inventory or receivables, an initiative described in detail by AchieveNEXT CEO Nick Araco, Jr., and Steven Higgins, Managing Director of Delancy Street Partners, in an article in Harvard Business Review .


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