Global CEOs Realistic About Growth in the Face of Unprecedented Headwinds

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LONDON, May 24, 2018 /PRNewswire=KYODO JBN/--

-- 55 percent predict cautious revenue growth of less than 2 percent over next

   3 years: 4th annual KPMG International survey

    - Repositioning their business to meet the needs of Millennials is a

      priority for 38 percent.

    - Geopolitics hits the boardroom, with territorialism named as top threat

      to growth.

    - Half say becoming a victim of a cyber attack is inevitable.

Despite being relatively bullish on the economy at large as well as their

overall outlook for their country, optimism from global CEOs is tempered by a

healthy dose of realism, with half (55 percent) predicting cautious topline

revenue growth for their own business. Half of CEOs (52 percent) say they will

need to hit growth targets before hiring new skills. According to the KPMG

Global CEO Outlook (

https://home.kpmg.com/xx/en/home/insights/2018/05/ceo-outlook.html?cid=psrs_nwr_xx-acx_2018-adv-ceooutlook18&utm_medium=psrs&utm_source=nwr&utm_content=xx-acx&utm_campaign=2018-adv-ceooutlook18#splash

), they are driving growth against a backdrop of significant demographic

shifts, geopolitical volatility and the seemingly inevitable future cyber

attack. CEOs are stepping up to the cyber challenge, in particular, with 59

percent saying they feel a personal responsibility for protecting customer

data.

"CEOs are harnessing the headwinds of change to steer their organizations to

growth," said Bill Thomas, Chairman, KPMG International. "CEOs I'm talking with

recognize that geopolitical uncertainty, disruption and cyber threats are their

new normal. The best are looking for the opportunities this creates, changing

their systems, and in some cases their entire business. It's clear that driving

growth in 2018 and beyond will require CEOs to combine resourcefulness and

realism in equal measure."

Stepping up to the challenge of an uncertain world

CEOs play an essential role in pivoting their organizations to the consumers of

tomorrow in order to seize every opportunity to grow, with four in ten (38

percent) responding that their business requires repositioning to meet the

needs of Millennials. There's also a growing sense of inevitability of a cyber

breach with nearly half (49 percent) of CEOs saying that becoming the victim of

an attack is a case of 'when' and not 'if'. Given the current geopolitical

environment, it's perhaps not surprising that a 'return to territorialism' was

named the number one threat to growth this year.

Driving realistic growth

CEOs are optimistic about the macroeconomic environment; they are confident

about global and industry growth prospects (67 and 78 percent, respectively).

They're also feeling confident in their individual country growth (74 percent

are confident, although this is down 3 percentage points from 2017). But

there's a more complex story emerging regarding company growth prospects:

    - 90 percent are confident in their company's growth prospects (up 7

      percentage points from 2017).

    - However, only 37 percent plan to increase headcount by more than 6

      percent over the next 3 years (down 10 percentage points).

    - And 55 percent predict cautious revenue growth of less than 2 percent

      over the next 3 years.

Making digital a personal crusade

CEOs are embracing the digital agenda like never before and taking personal

ownership of data and trust.

    - 71 percent are personally ready to lead a radical organization

      transformation.

    - 59 percent see protecting customer data as a critical personal

      responsibility.

    - Counter to popular opinion, 62 percent expect AI to create more jobs

      than it destroys.

Putting instinct over facts

With customer demands changing continually, and the technology landscape in a

constant state of flux, agility and intuition are critical.

    - 59 percent believe agility is the new currency of business; indicating

      if they're too slow they will be bankrupt.

    - More than half (51 percent) are less confident in the accuracy of

      predictive analytics compared to historic data, and have the highest

      trust for social media sources over all others.

    - 67 percent admitted they have relied on their own intuition over data-

      driven insights to make strategic decisions in the past 3 years.

"Data is hugely important, but ultimately CEOs have to make big calls and it's

clear that experience and intuition still have a role to play," said Thomas.

Rising cyber threats

The ever-present risk of a cyber security threat is rising on the radar, up

from fifth to second place overall this year in terms of risks hampering future

growth. Only half (51 percent) of respondents indicated they are well-prepared

for a cyber attack, even though over half (55 percent) say that a strong cyber

strategy is critical to engender trust with key stakeholders.

Developing markets a focus for growth

Seventy percent say their biggest priority for geographical expansion is

emerging markets, with Central/South America noted as the most important

region.

To view additional information about the study, please visit:

www.kpmg.com/CEOoutlook. You can also follow the conversation @KPMG on Twitter

using the hashtag: #CEOoutlook.

About KPMG's 2018 Global CEO Outlook survey

The survey covers 1,300 CEOs in 11 key markets (Australia, China, France,

Germany, India, Italy, Japan, Netherlands, Spain, UK and US) and 11 key

industry sectors (asset management, automotive, banking, consumer and retail,

energy, infrastructure, insurance, life sciences, manufacturing, technology and

telecoms). A third of the companies surveyed have more than US$10B in annual

revenue, with no responses from companies under US$500M. The survey was

conducted between 22 January and 27 February 2018. NOTE: some figures may not

add up to 100 percent due to rounding.

About KPMG

KPMG is a global network of professional services firms providing Audit, Tax

and Advisory services. We operate in 154 countries and territories and have

200,000 people working in member firms around the world. The independent member

firms of the KPMG network are affiliated with KPMG International Cooperative

("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct

and separate entity and describes itself as such.

For further information: Europe and Asia:

Brian Bannister,

KPMG International,

+44-7919-393753,

Brian.Bannister@kpmg.co.uk;

Americas:

Amy Greenshields,

KPMG International,

+1-416-777-8749,

amygreenshields@kpmg.ca

SOURCE: KPMG International