The survey found signs that economic uncertainty among CFOs has decreased to a two-and-a-half year low. Lower uncertainty has lifted business confidence for a third consecutive quarter and reduced corporate emphasis on defensive strategies like cost control. CFOs also reported that credit conditions have improved and are more optimistic about their own companies' financial prospects. Overall the survey showed a broad-based rise in confidence among UK businesses.

1. The fog of economic uncertainty which has been a
dominant feature of the CFO Survey for the last five
years showed some signs of clearing in the first quarter.
Chief Financial Officers’ perceptions of macroeconomic
and financial uncertainty have dropped to a two-and-a-
half-year low. And, despite the crisis in Cyprus, CFOs are
more confident that the euro area will hold together.
Lower uncertainty has lifted business confidence for a
third consecutive quarter and corporate appetite for risk
is not far off the peaks seen in early 2011 when Europe
looked set for a sustained recovery.
Reduced stress in financial markets has delivered
improvements in credit conditions for large UK corporates.
CFOs say credit is more available and cheaper than at any
time since the survey started in September 2007.
CFOs have edged away from their previous emphasis
on cost control and cash flow. Our index of corporate
defensiveness, having trended higher for two-and-a-half
years, has declined sharply.
Q2 2013
Fewer risks, greater optimism
The Deloitte CFO Survey
May 2013

2. Chart 1. Uncertainty
% of CFOs who rate the level of external financial and economic uncertainty facing their business as above normal,
high or very high
72
77
82
87
92
97
2013
Q1
2012
Q4
2012
Q3
2012
Q2
2012
Q1
2011
Q4
2011
Q3
2011
Q2
2011
Q1
2010
Q4
2010
Q3
The Deloitte CFO Survey

3. British business looks set to benefit from a less risky,
and improving, global economic backdrop. UK-based
businesses with strong overseas exposure are shifting
towards more expansionary policies. UK-focused
businesses remain defensive, but optimism among these
companies has risen too.
Overall this quarter’s survey shows a strikingly broad-
based rise in confidence among the UK’s largest
businesses.
Authors
Ian Stewart
Chief Economist
020 7007 9386
istewart@deloitte.co.uk
Debapratim De
Senior Economic Analyst
020 7303 0888
dde@deloitte.co.uk
Alex Cole
Economic Analyst
020 7007 2947
alecole@deloitte.co.uk
Contacts
Ian Stewart
Chief Economist
020 7007 9386
istewart@deloitte.co.uk
Mark FitzPatrick
Vice Chairman and
CFO Programme Leader
020 7303 5167
mfitzpatrick@deloitte.co.uk
The Deloitte CFO Survey

4. Optimism rises
CFO optimism about financial prospects for their own
companies has risen for the third consecutive quarter.
Companies that generate a large share of their revenues
abroad and those that are more UK-focused have both
become more optimistic.
Chart 2. Financial prospects
Net % of CFOs who are more optimistic about financial prospects for their company now than three months ago
LessoptimisticMoreoptimistic
-70
-50
-30
-10
10
30
50
70
13
Q1
12
Q3
12
Q1
11
Q3
11
Q1
10
Q3
10
Q1
09
Q3
09
Q1
08
Q3
08
Q1
07
Q3

5. Greater optimism among CFOs is also reflected in the
continued easing of their fears of a euro breakup,
despite the crisis in Cyprus.
CFOs now attach an 18% probability to the euro
breaking up in 12 months – exactly half the level
last summer.
Chart 3. Average probability of euro secession
Probability assigned by UK CFOs to the likelihood of any of the existing members of the euro area not being in the single
currency in the next 12 months (%)
2013 Q12012 Q42012 Q32012 Q22012 Q12011 Q4
37%
26%
36%
27%
22%
18%
Optimism rises

6. Our panel of CFOs, mostly representing large UK
corporates, also report a continued improvement in
credit conditions.
CFOs report credit is cheaper and more easily available
now than at any time in the past five years.
Chart 4. Cost and availability of credit
Net % of CFOs reporting credit is costly and credit is easily available
Cost of credit (LHS)
Availability of credit (RHS)
CreditiscostlyCreditischeap
CreditisavailableCreditishardtoget
-100
-80
-60
-40
-20
0
20
40
60
80
100
-100
-80
-60
-40
-20
0
20
40
60
80
100
13
Q1
12
Q3
12
Q1
11
Q3
11
Q1
10
Q3
10
Q1
09
Q3
09
Q1
08
Q3
08
Q1
07
Q3
Optimism rises

7. Investment drivers
This section compares CFO sentiment on nine key
drivers of corporate investment today and six months
ago. The big message is that improving macroeconomic
and financial conditions are easing the constraints on
business investment.
The radar chart below rates CFO sentiment on a score
of zero to ten, with ten the most positive. The blue line
depicts CFOs’ assessment six months ago; the green line
shows the current position. CFOs are more positive on
eight out of the nine drivers, thus the green line almost
envelops the blue line.
CFOs’ biggest worries, denoted by low absolute scores
on the lines, relate to economic uncertainty, the
weakness of the euro area and fiscal consolidation in
the UK. But, encouragingly, they are less worried today
about weak growth in Europe and uncertainty than six
months ago. Concerns about UK fiscal consolidation
have increased, but only marginally.
CFOs are most optimistic, and increasingly so, about
prospects for long-term growth in demand for their own
products and economic activity in emerging markets, the
US and the Asia-Pacific region. Sentiment on the cost and
availability of finance has also improved, and CFOs do
not see credit conditions exerting a dampening effect on
investment.

8. Chart 5. Factors affecting corporate investment plans
CFOs’ assessment of the effect of each of the following factors on their investment plans: Q3 2012 (blue line) and Q1 2013
(green line). On a 10-point scale where 0 implies the most negative effect and 10 the most positive.
Economic and financial uncertainty
Growth in the euro area
Fiscal consolidation
in the UK
Growth in the UK
Cost and availability of external financeAvailability of internal finance
Q3 2012
Growth in emerging
markets
Growth in the US
and Asia-Pacific
Secular or long-term growth
in demand for companies’
products
Q1 2013
1
2
3
4
5
6
7
8
9
10
Investment drivers

9. Rising risk appetite
In recent months investors have increasingly turned to
risk assets, such as equities, in search of higher returns.
The S&P 500 has gained 10% this year hitting an
all-time high in the first week of April.
Chart 6. Standard & Poor’s 500 equity index
Source: Thomson Reuters Datastream
600
800
1000
1200
1400
1600
2013201220112010200920082007

10. CFOs’ attitudes to risk tend to mirror those of investors.
Corporate risk appetite rose to almost a two-year high in
the first quarter.
Companies that derive most of their revenues from
foreign markets display a significantly greater appetite for
risk than their UK-facing peers.
Chart 7. Risk appetite
% of CFOs who think this is a good time to take greater risk onto their balance sheets
0
10
20
30
40
50
13
Q1
12
Q3
12
Q1
11
Q3
11
Q1
10
Q3
10
Q1
09
Q3
09
Q1
08
Q3
08
Q1
07
Q3
Rising risk appetite

11. Expectations for an increase in corporate revenues also rose in the first quarter.
Chart 8. Outlook for revenue growth
Net % of CFOs who expect UK corporates’ revenues to increase in the next 12 months
IncreaseDecrease
-35
-25
-15
-5
5
15
25
35
45
55
65
13
Q1
12
Q4
12
Q3
12
Q2
12
Q1
11
Q4
11
Q3
11
Q2
11
Q1
10
Q4
10
Q3
Rising risk appetite

12. CFOs are placing less emphasis on defensive strategies,
such as reducing costs and increasing cash flow, than in
the previous quarter.
Nonetheless, cost reduction and increasing cash flow
remain the top two priorities for corporates, albeit by a
narrowing margin.
Chart 9. Corporate priorities in the next 12 months
% of CFOs who rated each of the following as a strong priority for their business in the next 12 months
Disposing of assets
Increasing capital
expenditure
Reducing leverage
Expanding by
acquisition
Raising dividends
or share buybacks
Introducing new products/
services or expanding
into new markets
Increasing cash flow
Reducing costs
42%
39%
35%
18%
17%
13%
15%
6%
50%
49%
34%
8%
17%
11%
20%
8%
2013 Q12012 Q4
CFOs less defensive

13. Our index of corporate defensiveness, having trended higher for two-and-a-half years, has dropped sharply.
Chart 10. CFO priorities: Expansionary vs. defensive strategies
Defensive
Arithmetic average of the % of CFOs who rated expansionary and defensive strategies as a strong priority for their
business in the next 12 months. Expansionary strategies are introducing new products/services or expanding into
new markets, expanding by acquisition and increasing capital expenditure. Defensive strategies are reducing costs,
reducing leverage and increasing cash flow.
Expansionary
19%
21%
23%
25%
27%
29%
31%
33%
35%
37%
39%
13
Q1
12
Q4
12
Q3
12
Q2
12
Q1
11
Q4
11
Q3
11
Q2
11
Q1
10
Q4
10
Q3
CFOs less defensive

14. International companies, those deriving more than 70%
of their revenue from outside the UK, have decisively
shifted from a defensive to an expansionary stance.
UK-facing corporates, those deriving less than 30% of
their revenues from abroad, remain defensive.
Chart 11. Index of corporate expansion: International & UK-facing corporates
Difference between the arithmetic averages of the % of CFOs who rated expansionary and
defensive strategies as a strong priority for their business in the next 12 months.
Defensive and expansionary strategies defined under Chart 10.
International
UK-facing
ExpansionaryDefensive
-30%
-20%
-10%
0%
10%
20%
30%
13
Q1
12
Q4
12
Q3
12
Q2
12
Q1
11
Q4
11
Q3
11
Q2
Overseas markets beckon

15. Lower costs and improved availability of credit have
ensured that raising debt, through bond issuance or
bank borrowing, remains the most attractive form of
financing for our panel of large corporates.
Equity issuance has also gained favour among CFOs.
Chart 12. Favoured source of corporate funding
Net % of CFOs reporting the following sources of funding as attractive
Bond
issuance
Bank
borrowing
Equity
issuance
AttractiveUnattractive
-60
-40
-20
0
20
40
60
80
13
Q1
12
Q3
12
Q1
11
Q3
11
Q1
10
Q3
10
Q1
09
Q3
09
Q1
08
Q3
08
Q1
07
Q3
Overseas markets beckon

16. CFOs consider equities to be overvalued for the first
time in three years.
Government bonds continue to be seen, as they have
been for five years, as the most overvalued asset.
Chart 13. UK valuations
Net % of respondents who think the following assets are overvalued
Government bonds
Commercial
real estate
Equities
OvervaluedUndervalued
-80
-60
-40
-20
0
20
40
60
80
100
13
Q1
12
Q3
12
Q1
11
Q3
11
Q1
10
Q3
10
Q1
09
Q3
09
Q1
08
Q3
08
Q1
07
Q3
Overseas markets beckon

17. The macroeconomic backdrop to the Deloitte CFO Survey
Q1 2013
Economic activity in the UK and the euro area appears to
have stagnated in the first quarter and growth forecasts
for 2013 have drifted lower. However, the British
Chambers of Commerce reported a rise in optimism
among small UK companies. Market nerves about the US
deficit eased and US housing and employment activity
improved. The outlook for growth in emerging markets
improved as fears of a ‘hard landing’ eased. The bold
monetary and fiscal stimulus policies introduced by
Japan’s new government led to a strong rally in Japanese
equities and boosted confidence about Japan’s growth
prospects. Financial markets continued to strengthen,
with the UK FTSE 100 up 8.7% between January and the
end of March, and the S&P 500 and Dow Jones Industrial
Average reaching all-time highs. Financial market
optimism was only briefly dented by the €17 billion
bailout of Cypriot banks. The episode set new precedents
with private depositors being forced to contribute to the
rescue and the imposition of capital controls.
Economic and financial context

18. Economic and financial context
UK GDP growth: Actual and forecast (%)
-8
-6
-4
-2
0
2
4
6
2013201220112010200920082007
UK growth to see weak recovery
Quarter-on-quarter
growth
Forecasts
Year-on-year
growth
Source: ONS, consensus forecasts from The Economist and Deloitte calculations

19. Economic and financial context
VIX Index – a measure of equity market volatility
0
10
20
30
40
50
60
70
80
90
2013201220112010200920082007
Financial stress
has eased
Source: ONS, consensus forecasts from The Economist and Deloitte calculations
Greaterfinancialstress

20. UK private and public sector job growth (thousands)
Source: ONS
Private sector hiring offsets public sector job
losses
Private sector
-300
-200
-100
0
100
200
300
400
500
12
Q4
12
Q1
11
Q1
10
Q1
09
Q1
08
Q1
07
Q1
Public sector
Economic and financial context

21. Economic and financial context
UK annual CPI inflation (%)
0
1
2
3
4
5
6
7
8
9
121008060402009896949290
UK consumer price inflation has edged up recently
Source: ONS

22. Two-chart summary of key survey messages
Uncertainty
% of CFOs who rate the level of external financial and economic uncertainty facing their business as above normal,
high or very high
Sharp fall in uncertainty
72
77
82
87
92
97
13
Q1
12
Q4
12
Q3
12
Q2
12
Q1
11
Q4
11
Q3
11
Q2
11
Q1
10
Q4
10
Q3

23. Two-chart summary of key survey messages
CFO priorities: Expansionary vs. defensive strategies
Defensive
CFOs less defensive
Arithmetic average of the % of CFOs who rated expansionary and defensive strategies as a strong priority for their business in
the next 12 months.
See page 10 for definitions of expansionary and defensive strategies.
Expansionary
19%
21%
23%
25%
27%
29%
31%
33%
35%
37%
39%
13
Q1
12
Q4
12
Q3
12
Q2
12
Q1
11
Q4
11
Q3
11
Q2
11
Q1
10
Q4
10
Q3

24. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member
firms, each of which is a legally separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure
of DTTL and its member firms.
Deloitte LLP is the United Kingdom member firm of DTTL.
This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set
out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from
acting on any of the contents of this publication. Deloitte LLP would be pleased to advise readers on how to apply the principles set out in this
publication to their specific circumstances. Deloitte LLP accepts no duty of care or liability for any loss occasioned to any person acting or refraining
from action as a result of any material in this publication.
© 2013 Deloitte LLP. All rights reserved.
Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at
2 New Street Square, London EC4A 3BZ, United Kingdom. Tel: +44 (0) 20 7936 3000 Fax: +44 (0) 20 7583 1198.
Designed and produced by The Creative Studio at Deloitte, London. 26539A
About the survey
This is the 23rd
quarterly survey of Chief Financial Officers and Group Finance Directors
of major companies in the UK. The 2013 first quarter survey took place between 14th
and
28th
March. 120 CFOs participated, including the CFOs of 26 FTSE 100 and 44 FTSE 250
companies. The rest were CFOs of other UK-listed companies, large private companies and
UK subsidiaries of major companies listed overseas. The combined market value of the 69
UK-listed companies surveyed is £671 billion, or approximately 32% of the UK quoted equity
market.
The Deloitte CFO Survey is the only survey of major corporate users of capital that gauges
attitudes to valuations, risk and financing. To join our panel of CFO respondents and for
additional copies of this report, please contact Tulaine Trimble on 020 7007 1684 or email
ttrimble@deloitte.co.uk
Please visit www.deloitte.co.uk/cfosurvey for current and past copies of the survey,
historical data and coverage of the survey in the media and elsewhere.