安永-2019年第21期全球资本信心晴雨表（英文）-2019.10-20页_1mb

Global Capital Confidence Barometer Summary

Core Content

The EY Global Capital Confidence Barometer highlights the ongoing resilience and strategic focus of companies in the face of geopolitical, economic, and technological uncertainties. Despite these challenges, dealmaking remains a central strategy for corporate growth, with M&A intentions and market expectations showing strong continuity.

Main Viewpoints

• Geopolitical and Economic Uncertainty: Executives are not deterred by geopolitical and trade concerns, with 64% actively planning to respond to these issues. Only 54% expect an economic slowdown in the near to mid-term, indicating a generally optimistic outlook.

• M&A Intentions Remain Strong: Over half of respondents (52%) plan to actively pursue M&A in the next 12 months, and 68% expect the M&A market to improve. The prolonged M&A upcycle is expected to continue, with companies using acquisitions to build optionality and resilience.

• Talent and Technology Challenges: Companies are facing difficulties in securing the right talent (61%) and are increasingly relying on M&A to acquire these capabilities. Technology is a major driver of growth, with over half of respondents allocating 25%–50% of their investment capital to digital/technology initiatives.

• Strategic Drivers for M&A: The primary strategic motivations for M&A include acquiring transitional capabilities, expanding product offerings, and accessing new markets. Companies are also using M&A to future-proof their business and secure long-term value.

• Market Trends and Drivers: The M&A market is expected to remain healthy, with a focus on cross-border and cross-sector deals. Megadeals are a notable trend, although there is uncertainty about their continuation. The tech effect is a significant driver, with digital transformation influencing investment decisions across sectors.

Key Information

Financial Performance Outlook

• Corporate financial performance metrics are expected to remain positive in the near term, with an uptick in free cash flow generation and investment in R&D and capital expenditures.
• Companies are not focusing on internal technology development as much as they are on acquiring external capabilities.

Investment Strategies

• Digital Investment: Over half of companies are allocating significant portions of their investment capital to digital/technology initiatives.
• Investment Methods: Companies are using a variety of methods to invest in digital/technology assets, including direct acquisitions, joint ventures, and external venture funds.
• Talent Acquisition: With tight labor markets and a shortage of skilled talent, M&A is becoming a preferred method to secure the right expertise.

Sector Outlook

• Advanced Manufacturing: This sector is undergoing transformation due to the integration of digital technologies. Portfolio optimization is a key driver, with a focus on acquiring technology-based companies to expand services.
• Life Sciences: Expected to achieve a record M&A total in 2019. Megadeals and alliances are common, driven by the need for therapeutic focus and innovation.
• Media and Entertainment: Companies are actively acquiring content and distribution capabilities to stay competitive. Exclusive content libraries and data-driven insights are critical.
• Mining and Metals: M&A activity is expected to increase as companies seek to replenish their portfolios and secure resources. Copper and battery minerals are key targets.
• Power and Utilities: The sector is transitioning towards clean energy and renewables, with cross-border M&A and private capital driving growth in this area.

Corporate Purpose and Social Value

• Companies are increasingly focused on creating long-term value for all stakeholders, not just shareholders. Social value reporting metrics are being adopted by 84% of companies, signaling a shift in corporate strategy.

Confidence and Resilience

• Confidence in the global economy remains strong, with companies using scenario planning and threat analysis to build resilience in their operations and supply chains.
• The emphasis is on proactive strategies to manage risks and seize opportunities, especially in the context of technological disruption and evolving market conditions.

Key Takeaways

• M&A is a strategic priority: Companies are using M&A to address growth challenges, acquire talent and technology, and future-proof their business.
• Digital transformation is key: Technology is a central enabler for growth, and companies are investing heavily in digital capabilities.
• Geopolitical and trade concerns are manageable: Despite these issues, companies are proactively reconfiguring their operations and supply chains.
• Market confidence is high: The global economy is expected to remain resilient, and M&A activity is anticipated to continue despite headwinds.
• Diversified investment approaches: Companies are adopting a range of investment methods to secure the right digital and technological assets, including external funds and joint ventures.