The Covid-19 situation: significant challenges and uncertainties for companies
Covid-19 is currently having a big impact on the world and on companies’ development, but it is characterised above all by uncertainty – in both the short and the long term. In order to weather this storm and successfully face the future, an integrated approach to the current Covid-19 challenges offers the prospect of success and a sustainable recovery. To this end, a combination of in-depth understanding of and grip on the short-term financial position and developments and constant alertness in order to respond to dynamic market developments and the post-Covid reality are essential.
KPMG Transformation, Turnaround & Restructuring (TTR) Services offers integrated support to companies and other stakeholders in responding to the challenges resulting from Covid-19, delivered by a multidisciplinary team.
KPMG offers support for restructuring processes
Grip on liquidity and profitability
As a result of the Covid-19 situation, many companies have suffered significant loss of revenue in a matter of months, while costs have remained the same. As a result, expectations and existing budgets for the coming year have had to be materially revised. In many cases, the situation has led to significant pressure on the profitability of businesses and, even more importantly in the short term, pressure on their cash positions. The short time frame within which these unexpected changes have occurred, their economic impact at the global and national levels and uncertainty about the course of the pandemic and recovery make the current situation unique.
Measures for and by businesses
Governments and institutions like banks have been quick to introduce support measures in order to offer relief to companies. Examples are the government furlough scheme, fiscal measures and opportunities to defer payment obligations. These measures offer firms breathing space, but they will be finite and the deferred obligations will have to be met sooner or later. Moreover, many parties will not be able to meet their commitments to their banks despite this support and will have to discuss terms with them.
Based on a liquidity perspective, companies also need to look at operational measures that can be put in place relatively quickly. Examples are measures to address costs, working capital and investments. Further liquidity support, temporary or permanent, may be obtained from shareholders or other parties.
However, alongside the short-term perspective, the management also needs to consider the company’s strategy and direction in the longer term post-Covid in order to be in the best possible position for a sustainable recovery and a return to profitability. In short, the current situation demands a lot of companies, management and stakeholders, and in a short time frame.
KPMG Transformation, Turnaround & Restructuring (TTR) Services provides support in reviewing and adjusting your business strategy, improving your operational and financial performance and strengthening your relationships with all stakeholders.
Our approach is always tailored to your individual situation and wishes, and we put together a team on that basis. We offer integrated support to companies and other stakeholders for the challenges resulting from the pandemic, delivered by a multidisciplinary team.
Would you like more information about how we can help you? Download our brochure.
Contact our specialists
Ewald van Hamersveld
Lourens van der Zijl
Director & Head of Restructuring
Deal & Growth