24 Feb 2010 07:30

SEB Financial Officers' Index: Volume and price increases ahead

Optimism is increasing among Swedish financial officers. A majority is now expecting higher volumes to contribute to improved profitability in 2010. At the same time the focus on cost cutting has been reduced. The potential for price increases has improved and expectations that profits will rise this year are high. The effects of the economic downturn have subsided with a clear majority of officers now believing their companies' performance has bottomed.

 

SEB's Financial Officers' survey, addressed to around 70 of Sweden's largest companies, shows respondents becoming increasingly positive towards the current situation. SEB's Financial Officers' Index for February published today stands at 60, up from 59 in November.

The Financial Officers' survey suggests respondents are more positive regarding the current business climate.

"More than half of financial officers expect volume increases to support higher profitability this year. Profitability improvements should be further supported by cost cutting initiatives executed in 2009. Indeed, some 65 percent of respondents expect improved profitability in 2010", says Ebba Lindahl, head of Credit Research at SEB and co-author of the report with Disa Hammar.

Companies' financial positions have improved further.

"A total of 74 percent of financial officers now regard their company's financial position as either favorable or very favorable, compared to a record low of 50 percent in February last year. Willingness to lend amongst banks has also improved significantly and companies are increasingly interested in making strategic investments", says Hammar.

The survey shows that price hikes are in the pipeline.

"Financial officers regard the price outlook for their companies' own products more favorably than in recent surveys, which should positively impact results this year. Some 64 percent of respondents believe they will be able to raise prices in the next six months, while 27 percent expect prices to remain largely unchanged", says Lindahl.

This is the sixteenth publication of SEB's Financial Officers' Index, a unique quarterly survey whose purpose is to reflect changes of sentiment in the financial environment and facilitate the understanding of economic and financial trends. The survey comprises a total of 15 questions covering areas such as business climate, strategic investments, employment, views on currencies and interest rates, financial strength, and lending attitudes amongst financial institutions. The full report (in Swedish) is available at www.sebgroup.com\press.

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For further information, please contact:

Ebba Lindahl, Trading Strategy, SEB, tel. +46 8-506 232 08
Elisabeth Lennhede, Press Officer, tel. +46 70 763 99 16