Economic uncertainties, a possible BREXIT and the digital transformation challenge Swiss companies
The strong Swiss franc, geopolitical uncertainty and economic developments in the EU: Swiss companies are facing major challenges. Digitalization and industry consolidation are increasing the pressure. Restructuring cases are becoming more complex. Swiss tourism, the consumer goods industry and banks & insurance companies are particularly affected. Sustainable restructuring concepts and digitalization strategy as a mandatory prerequisite for turnaround.
Despite moderate growth, the Swiss economy is facing major challenges: China's sluggish economy, a possible exit of the British from the European Union (BREXIT) and an unchanged strong Swiss franc could significantly slow down the growth course of Swiss companies. According to the experts surveyed for Roland Berger's new "Restructuring Study Switzerland 2016," pressure is also increasing due to growing digitization and disruptive innovations (30%) as well as Switzerland's persistently high cost level (27%) in many industries. These developments are also reflected in restructuring practice: the number and complexity of restructuring cases will continue to rise, according to the study's findings. More than 50 restructuring experts in Switzerland were surveyed.
Economic and political uncertainty increases complexity
Against this backdrop, the majority (84%) of respondents expect an increasing number of restructurings in the coming twelve months. More than 40 percent also believe that the complexity of restructuring cases will increase.
Digitization as a mandatory prerequisite for a successful turnaround
Sustainable restructuring concepts are hardly conceivable without paying attention to the digital transformation that is imminent in all industries. Despite the challenges, a comprehensive digitization strategy can also be an opportunity for a successful turnaround. Accordingly, 41 percent of the study participants attribute the greatest importance to strategic restructuring measures compared to operational and financial measures.
Parallel increase in challenges in the restructuring environment
Market participants expect the importance of new financing partners in restructurings to remain unchanged (56%) or increase (44%). The task of the work-out departments tends to shift to large and complex exposures. The departments themselves can be operated relatively efficiently thanks to the banks' ongoing risk minimization strategy.
Source: www.rolandberger.ch
