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Canadian CEOs more confident than global peers on growth prospects, benefits of technology and ability to manage a cyber attack: KPMG Global CEO Outlook

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Canadian CEOs more confident than global peers on growth prospects, benefits of technology and ability to manage a cyber attack: KPMG Global CEO Outlook

Focused on technology and M&A as key growth drivers; plan to be the disrupters in their sectors

Canadian CEOs are far more bullish on their ability to harness technology and grow their business than their global counterparts, finds KPMG’s 2018 Global CEO Outlook. The annual report surveys some 1,300 CEOs from around the world on the biggest risks facing their businesses and the strategies they are employing to address them and continue to drive growth.

Key findings in the KPMG 2018 Global CEO Outlook

Canada Global
Confident in domestic growth 94% 74%
Plan to be the disrupter not disrupted 96% 54%
AI and robotics will create more jobs than eliminate 66% 62%
Already used AI to automate processes 22% 12%
Cyber attack will hit my company 50% 49%
Very well prepared to contain a cyber attack 58% 26%

“Despite much debate about the potential trade headwinds facing the country, Canadian CEOs have a positive outlook for their own businesses and our economy as a whole,” says Benjie Thomas, Canadian Managing Partner, Advisory Services for KPMG in Canada. “In fact, business leaders in Canada are feeling an unprecedented level of confidence that has them aggressively ready to take on the challenges and opportunities facing their companies.”

A belief in growth

Canadian CEOs are confident the Canadian economy will continue to grow (94 per cent) over the next three years and they expect their businesses to grow (96 per cent) along with it. “Canadian companies have, for the most part, enjoyed strong earnings and profits over the past few years and are looking to deploy the large pools of capital they have stored up,” says Thomas. “While many will invest in organic growth, most CEOs say they are looking outside of the organization for new opportunities.”

Thomas expects 2018 will see a big uptick in M&A across the globe and Canada will be no exception. “Eighty-two per cent of Canadian CEOs said they will make an acquisition over the next three years. More than a third of those expect the acquisition to have a significant impact on their overall organization, suggesting some deals will be sizable.”

Thomas also thinks these deals will be transformative as CEOs cited a desire to speed up the pace of business model transformation, diversify their business and speed the adoption of new technologies as the primary motivations for acquisitions.

“The fact that Canadian CEOs are bullish about growth and looking outward for investment opportunities is great. But Canadian CEOs aren’t the only ones that think Canada’s fundamentals and open borders offer strong opportunities for growth. There are a number of strategic and financial investors seeking a foothold in Canada. So those CEOs who’ve been driving great business results should expect a knock on their door from a global investor looking for a piece of the action.”

Success in the digital age

KPMG’s 2018 CEO Outlook also found Canadian CEOs are focused on how to adapt to rapid technological advancements that are disrupting many industries. “Canadian companies don’t just feel they are embracing disruption, they feel they are creating it,” says Jonathan Kallner, KPMG in Canada’s Managing Partner, Clients and Markets. “In fact, 96 per cent of Canadian CEOs say that rather than waiting to be disrupted by their competitors they are actively disrupting the sector in which they operate. It is clear that Canadian CEOs have no plans to sit back and wait for startups to reshape their industries – our leaders plan to leverage technology to be the aggressor.”

Virtually all (98 per cent) are in the process of building Artificial Intelligence (AI) into their operations with nearly one-quarter (22 per cent) having already fully implemented AI in their processes and another 56 per cent using it in limited applications. “While the benefit of many of these applications is to drive costs out of the business, Canadian CEOs also see technology as key in growing their businesses,” adds Kallner. “Nearly two-thirds believe that investments in Artificial Intelligence and robotics will create more jobs than they eliminate, slightly higher than the global view.”

But Kallner cautions that CEOs need to make sure investments are not just focused on incremental innovation but that they are also investing in business model innovation which will ultimately help future proof an organization against being disrupted. “While it can be a challenge to run parallel processes to transform the digital and non-digital aspects of your business, long-term success depends on both. Technology is not a ‘one-time’ event and innovation never stops so companies that continually work to push the boundaries in these areas are poised to lead the transformation race.”

Growing cyber threats

The Outlook also found Canadian CEOs believe the risk of a cyber-attack is the greatest threat to growth. Thomas notes that half of the CEOs said it is no longer a case of if they’ll be hit, but a matter of when, and many have taken personal ownership to protect clients and their company from an attack. “A focus on putting the right people and processes in place has 86 per cent believing they are now well prepared to contain the impact of a future attack – with 58 per cent saying they are very well prepared,” says Georgina Black, Partner & National Leader, Management Consulting for KPMG in Canada. “This personal investment by Canadian CEOs gives them a far greater confidence than their global peers, where only 26 per cent said they were very well prepared for an attack.”

Access a full copy of the KPMG 2018 Canadian CEO Outlook at kpmg.ca/CEOoutlook.

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Cycling boom pushes Halfords annual profit towards 100 million pounds

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Cycling boom pushes Halfords annual profit towards 100 million pounds 1

(Reuters) – Halfords forecast an over 60% jump in its annual profit and said it would repay the near 11 million pounds it received in government furlough support as the bicycle retailer benefits from a cycling boom during lockdowns.

Shares in the company jumped another 16% to 335 pence by 0830 GMT on Monday, having surged more than six-fold from pandemic lows hit in March.

The company, which also does motoring services and sells car parts, said its overall business has been performing stronger than anticipated despite volatile trading in the first seven weeks of the fourth quarter.

Halfords estimated annual underlying pretax profit of between 90 million pounds and 100 million pounds ($125.78 million and $139.75 million) for the year ending in March, compared with 55.9 million pounds a year earlier.

Peel Hunt analysts raised their annual profit estimate to 95 million pounds from 76 million pounds after the unscheduled trading update and suggested that Halfords was likely reinstate its dividend sometime this year.

Halfords, which availed 10.7 million in furlough support from the government, had said in July it could make a loss of 10 million pounds for fiscal 2021 under a worst-case scenario.

But in the first seven weeks of the fourth quarter, Halfords’ like-for-like sales for cycling rose 43%, offsetting a 14% fall in its high-margin motoring businesses.

Cycling also drove a more than doubling of interim profits in November as Britons took up the hobby to avoid public transport, as well as for its appeal as a healthier alternative.

($1 = 0.7156 pounds)

(Reporting by Chris Peters and Muvija M in Bengaluru; Editing by Rashmi Aich and Aditya Soni)

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Eurofins launches prescription-free COVID-19 test, eyes further growth

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Eurofins launches prescription-free COVID-19 test, eyes further growth 2

(Reuters) – Eurofins Scientific announced on Monday the launch of a prescription-free at-home COVID-19 PCR test, as the French laboratories and diagnostics company eyed further growth.

The group, which has launched an array of COVID-19 testing products it sells to governments, airlines and transport hubs, said the nasal swab test could be ordered online for $99 or bought at pharmacies across the United States.

It specified that although the U.S. Food and Drug Administration (FDA) had authorised the at-home test under an emergency use authorisation, it had not cleared or approved the product.

“We are also working very closely with European authorities for the approval of similar direct-to-consumer products,” said the group’s chief executive Gilles Martin in a statement.

The group also reported 2020 results ahead of its own targets as it lowered its 2022 guidance and set out new goals for 2023.

Eurofins estimated that its COVID-19 testing and reagents brought in over 800 million euros of the 5.44 billion euros ($6.57 billion) in revenue for 2020.

However, Eurofins said its other businesses had been hit by lockdowns, social distancing and travel restrictions, particularly impacting its sales to clients in the travel industry, events, restaurants and clinical trials.

The group confirmed its forecasts for this year, but said results could be materially higher should COVID-19 testing continue at the current levels.

A level of coronavirus testing and market disruptions could well continue into 2022, it added, if vaccination programmes do not build sufficient immunity in many countries by summer, or if the more infectious variants reduce their effectiveness.

Excluding further COVID-19 revenues and assuming markets return to normal by the start of next year, it lowered its 2022 revenue target to 5.45 billion euros from 5.7 billion, and its core earnings forecast to 1.30 billion from 1.35 billion.

For 2023, it forecast sales (excluding COVID-19 products) of 5.73 billion euros and core earnings of 1.38 billion.

($1 = 0.8275 euros)

(Reporting by Sarah Morland in Gdansk; Editing by Christopher Cushing and Louise Heavens)

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Ladbrokes owner Entain raises offer for rival Enlabs to $440 million

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Ladbrokes owner Entain raises offer for rival Enlabs to $440 million 3

(Reuters) – Ladbrokes owner Entain on Monday raised its cash offer for rival Swedish sports betting firm Enlabs AB to value it at around 3.7 billion crowns ($440.16 million) and said it would not increase the price further.

The British company raised its cash offer to 53 crowns per share from an earlier 40 crowns per share, an 18.6% premium to Enlabs shares’ last close.

Shares of Entain were up 1.7% at 1,437.5 pence in early trading.

The COVID-19 pandemic has prompted a flurry of deals in the bookmaking sector, with potential buyers seeking to capitalise on a surge in online betting from customers confined to their homes during lockdowns.

“In a highly competitive and regulated industry, where consolidation is a key theme, Entain is able to provide the scale and platform needed to further support Enlabs’ long-term growth,” Entain’s chief financial officer and deputy CEO, Rob Wood, said in a statement.

Baltic-focussed Enlabs, which operates brands such as Optibet and NinjaCasino, has recommended shareholders accept the increased offer.

Under the leadership of former CEO Shay Segev, Entain, formerly known as GVC Holdings, planned to expand in sports betting and gaming entertainment, while exiting unregulated markets by 2023.

($1 = 8.4060 Swedish crowns)

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Ramakrishnan M.)

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