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SEC Hot Topics Seminar

SEC Hot Topics Seminar. State of the Capital Markets September 14, 2010. Economic outlook. Downturn to end within 12 months. 40%. 64%. 61%. Of companies believe the global downturn will end within the next 12 months compared with 30% in 2009.

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SEC Hot Topics Seminar

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  1. SEC Hot Topics Seminar State of the Capital Markets September 14, 2010

  2. Economic outlook Downturn to end within 12 months 40% 64% 61% Of companies believe the global downturn will end within the next 12 months compared with 30% in 2009 Of companies feel more confident about the prospects for their local economy than six months ago, the most optimistic being Australia Of respondents expect the downturn in their own industries to end within 12 months, compared to just 49% six months ago April 2010 Confidence in local economy November 2009 Downturn in industries to end within 12 months April 2010 November 2009 *Data presented in slides 2-10 is based on an April 2010 survey of 817 executives by Ernst & Young LLP.

  3. Capital-related issues are top-of-mind in boardrooms and C-suites Operational efficiencies/cost reduction Customer segmentation and profitability Performance monitoring of subsidiary businesses Supply chain risks/ performance Balance between fixed and variable costs Integrating previously acquired business

  4. Priorities for investing capital

  5. Preserving capital Companies are operationally restructuring to focus on performance improvement Wave of refinancing expected When restructuring what will be your priority? How soon are you likely to refinance loans or other debt obligations? November 2009 28% Within 6 months 6 - 12 months 35% April 2010 Other 7% 1-2 years 26% Liquidity and working capital management 13% Performance improvement 42% 11% 3-4 years Other Capital/debt structure 14% 0 5 10 15 20 25 30 35 40 20% Operational restructuring 24% Performance improvement 50% Liquidity and working capital management 30%

  6. Raising capital Those with access to funding will be well placed to take advantage of opportunities As a result of the downturn, deal processes continue to evolve For companies that need access to funding for capital projects, when do you think this will become available? How likely is your company to execute divestments in the following time periods? 0-6 months 6 -12 months 1-2 years 1% 1% 6% 25% Within 6 months 6 – 12 months 1 – 2 years 30% 3 – 5 years Not in the foreseeable future More than 5 years 37%

  7. Capital markets 61% Of companies say that credit and capital conditions have improved in the last six months 26% of all respondents stated that access to funding is not a problem for their company Wave of refinancing is expected with 58% of companies needing to refinance loans or other debt within the next four years Driving operational fitness and working capital management remains critical – 35% still need to restructure core business 62% expect financing to fund major projects available in the next 12 months

  8. Focusing on growth 76% Of companies are focusing on growth, up 56% compared to six months ago April 2010

  9. Optimistic deal market Likelihood of acquisitions 57% 47% Expect to make an acquisition in the next 12 months, up from 33% Expect to do so in the next 6 months, up from 25% 6-12 months 0-6 months

  10. IPO Market Overview

  11. Follow-On Market Overview

  12. Current IPO Backlog

  13. Current Follow-On Backlog

  14. IPO and Follow-On Post Deal Performance • New tech stocks have delivered on average 7.2% gain on their first day as public companies, compared to an average around 6% from all IPOs in the U.S., according to data from Ipreo.

  15. Re-IPO Case Study

  16. Follow-On Case Study Kid Brands Subsidiaries

  17. In conclusion Confidence returning to the markets Funding becoming more available Heightened uncertainty continues Investor focus on capital allocation Pent-up demand/supply in M&A markets Industries bifurcating: consolidators and consolidatees Deal processes continue to evolve

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