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Deloitte Economics’ Coronavirus Impact MonitorIncreased concerns of a second wave of infections as economies begin reopening8th edition, 11 May 2020
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 2
• Between 1 February 2020 and 10 May 2020, the
number of global confirmed COVID-19 cases rose from
9,800 to about 3.9 million.
• As the number of new cases in Europe show signs of
falling, countries are beginning to take steps to reopen
their societies and economies. The Danish government
has activated Phase II of the reopening to take effect
from 18 May 2020.
• In Denmark, the increase in the number of confirmed
cases has remained relatively low. As of 10 May 2020,
there were 10,319 confirmed cases.
5,000
24 Feb
9,000
0
9 Mar 11 May
2.0
23 Mar
0.0
4 May
4.0
6 Apr 20 Apr
0.5
1.0
1.5
27 Apr
2.5
3.0
4,000
3.5
1,000
2,000
3,000
13 Apr
6,000
16 Mar
7,000
8,000
10,000
11,000
2 Mar 30 Mar
10,319
3.9
Source: World Health Organisation (WHO), The Danish Health Authority (Sundhedsstyrelsen)
Coronavirus outbreak
The number of new daily confirmed cases is slowing in Denmark and in Europe as countries begin to take steps to reopen their societies and economies
• The bottom chart shows the daily number of deaths in
the world, the United States and Denmark. There are
currently around 4,000-5,000 daily deaths in the
world, lower than the 6,000-7,000 peak in mid-April.
• In Denmark, the 7-day average daily death rate has
been falling since its peak at the beginning of April
2020.
• In Denmark, there were 40 patients in intensive care
as of 10 May 2020, of which 33 patients were in
respirators. This number has fallen steadily since the
peak at around 100-150 at the beginning of April
2020. The Danish Health Authority has ~925
respirators available for COVID-19 patients.
# c
onfirm
ed c
ases g
lobally
(millions)
Confirmed COVID-19 cases: World and Denmark
# c
onfirm
ed c
ases in
Denm
ark
7-day rolling average confirmed daily COVID-19 deaths: World, US and Denmark
# D
aily d
eath
s
World US Denmark
As of
10 May 2020
Denmark (RHS) World (LHS)
1 Mar 1 Apr
0
1 May
1,000
2,000
3,000
4,000
5,000
6,000
1 Jun
7,000
200
0
400
600
800
1,000
1,200
1,400
2,000
1,800
1,600
2,200
1 Jun1 Mar 1 Apr 1 May
0
2
4
6
8
10
12
14
16
18
1 Mar 1 Apr 1 May 1 Jun
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 3
Note:
Source:
1) Refinitiv European sectoral price indices measured by Refinitiv (Thomson Reuters)
Thomson Reuters Eikon
Impact on financial markets
COVID-19 impact on equity markets has been most severe on the transport and energy sectors, while medical and pharmaceutical stocks have largely recovered
• The outlook for increased public expenditure and central
bank interventions to ease liquidity strains has
supported markets.
• European equity indices suffered material losses
following the COVID-19 outbreak in Europe, but have to
some extent recovered from the bottom reached in mid-
March 2020.
• The Transport industry in particular, including airlines,
continues to be severely affected by the virus and
related travel restrictions. The Refinitiv Europe Transport
Price Index has been down by some 39% since the end
of January 2020, driven by a material decline in
volumes.
• The European energy sector, including oil and gas
companies, has lost more than 32% since the end of
January 2020. Declining energy prices have applied
downward pressure on energy equities.
• Financials, including banks, have also experienced value
destruction. Market concerns about increased credit
losses and funding squeezes are likely drivers.
• Danish short-term rates have risen to ~0% on the
outlook for increased central bank interventions. After a
sharp increase in March 2020, longer-term rates have
fallen back.
• Equity market volatility and implied default probabilities
remain elevated, ref. page 26 in the appendix.
50
40
60
70
80
90
100
110
13 Jan30 Dec 27 Jan 10 Feb 24 Feb 9 Mar 23 Mar 6 Apr 20 Apr 4 May 18 May
Equity markets: Sectoral indices in Europe1
Secto
ral in
dic
es
(2 J
an 2
020 =
100)
Major outbreak in Europe
0.3
-0.2
-0.3
-0.4
-0.1
0.0
0.1
0.2
0.4
10Y DKK Swap rates 6M CIBOR
% r
ate
s
Interest rates: 10Y Interest rate (swap) and 6M interest rates (CIBOR)
(0.1)
(0.2)
(0.3)
27 Jan 10 Feb 24 Feb 23 Mar 4 May6 Apr 20 Apr9 Mar
(0.4)
Transport TechnologyFinancialMedical & PharmaceuticalsEnergy
13 Jan
30 Dec 19
30 Dec 19 18 May
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 4
Note:
Source:
1) Deloitte surveys conducted on 12, 19, 26 March, 2, 9, 16, 23, 30 April and 7 May 2020, involving about 2,000 colleagues and clients.
Deloitte surveys, IMF World Economic outlook (October 2019) for pre-COVID-19 figures; IMF World Economic Outlook (April 2020) for revised forecasts
Economic Outlook: IMF and Deloitte survey
Q1 GDP contracted sharply across Europe and US
Economic growth projections• The “sudden stop” in the global economy, caused by the COVID-19
pandemic, has translated into significant downward revisions of
economic growth projections worldwide. According to IMF’s latest
predictions:
− The global economy is expected to contract by 3.0% in 2020
instead of the initially estimated 3.4% growth. This 3.0%
contraction in global GDP is much worse than the 0.1%
contraction experienced during the 2009 financial crisis, ref.
page 23 in the appendix.
− Danish GDP is projected to contract by 6.5% in 2020
compared to the pre-COVID-19 growth estimate of 1.9%. GDP
in Denmark shrank by 4.9% in 2009. The median forecast of
Danish 2020 GDP growth is -4.7% according to our survey of
professional forecasters, ref. page 24 in the appendix.
• Consistent with this, the eurozone economy contracted by 3.8% in
Q1 according to preliminary estimates from Eurostat. The French
and Spanish economies shrank by 5.8% and 5.2%, respectively, in
Q1, a sign of the extensive havoc caused by measures imposed to
curb the coronavirus’ spread. In the United States, GDP shrank at
an annualised rate of 4.8% in Q1.
• Deloitte’s latest survey among ~ 2,000 colleagues and clients from
all over the world on 7 May 2020 reveals that the majority of
participants continues to expect an economic rebound first in
2021. This appears to be aligned with IMF’s expectations of a 2021
rebound.
(3.0% )
World
(7.5% )
Denmark
5.8%
Eurozone
3.4%
1.4%
4.7%
1.9%
(6.5% )
6.0%
2020 forecast pre COVID-19
Revised 2020 forecast post-COVID-19
Revised 2021 forecast post-COVID-19
Deloitte survey1: When do you think activity will rebound in your economy?
19 Mar 2 Apr
60%
77%
23%
12 Mar
40%
2021
64%
17%
36%
72%
26 Mar
62%
39%
83%
9 Apr
37%
7 May
33%
67%
16 Apr
28%
23 Apr
41%
59%
30 Apr
2020
63%
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 5
Note:
Source:
1) This 51st quarterly survey took place between 8-22 April 2020 and 104 CFOs participated, including the CFOs of 23 FTSE-100 companies and the CFOs of 34 FTSE-250 companies
Deloitte UK CFO Survey
UK CFO survey results
UK CFOs’ corporate priorities have become defensive and their business optimism fell sharply in Q1 2020
• Deloitte is surveying CFOs of the UK’s largest businesses
quarterly1:
− CFOs are placing more focus on defensive strategies
than at any time since we began asking the question
in 2010 as they face the huge economic shock
wrought by COVID-19.
− Defensive strategies – reducing costs, increasing
cash flow and reducing leverage – remain the top
priorities for CFOs, but their focus on these
strategies has sharpened significantly compared to
the previous quarter.
− The COVID-19 shock triggered the largest decrease
in business confidence in the 12-year history of the
survey (not shown), taking it to its lowest ever level.
− 83% of CFOs are somewhat or significantly less
optimistic than three months ago.
Increasing cash flow
Reducing costs
Reducing leverage
Introducing new products/servicesor expanding into new markets
Raising dividends or share buybacks
13%Disposing of assets
36%
Increasing capital expenditure
Expanding by acquisition
22%
76%50%
68%45%
41%19%
17%
8%
6%17%
2%12%
0%
2019 Q42020 Q1
Corporate priorities: % of CFOs who rated the following as a strong priority for their business over the next 12 months
Business optimism: Net balance of CFOs who are more optimistic about the financial prospects for their business than three months ago
(59%)
2012Q1
2011Q1
2008Q1
2020Q1
(77%)
2010Q1
2009Q1
44%
2013Q1
(45%)
35%
2014Q1
2015Q1
45%
2016Q1
(70%)
2017Q1
2018Q1
2019Q1
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 6
Sources:
In some countries, including Denmark, the aid packages also include credit measures like state-guaranteed loans.
Danske Bank, Deloitte Covid-19 portal as of 5 May 2020
Government support
Massive state aid packages are launched to counter economic fallout from COVID-19
• The various lock-down measures in response to COVID-
19 have halted economic activity in certain sectors and
harshly disrupted others. The resulting job losses and
bankruptcies are likely to crate major economic strains
for millions in Europe and worldwide.
• Gigantic state aid packages have been launched across
the world to counter the impact of the economic crisis.
• EU finance ministers agreed on a EUR540bn (3.5% of EU
GDP) emergency support package for countries hit by
the coronavirus. The measures aim to provide safety
nets for workers, businesses and sovereigns.
• As these state aid packages are launched, governments
sharply increase debts to finance the increased spending
levels. On this background, the questions about the
following issues have started start to emerge:
− the sustainability of government debt funding, and
− impact on inflation from sharp increases in
government spending.
France
Greece
EU
Canada
New Zealand
Austria
Finland
2%
5%
22%
China
Denmark
Germany
Italy
Japan 20%
Norway
Portugal
Spain
Sweden
Switzerland
17%
The Netherlands
2%
8%
UK
USA
10%
9%
6%
6%
1%
4%
17%
10%
21%
4%
4%
12%
21%
13%
13%
3%
4%
7%
10%
State aid packages relative to GDP
FiscalCredit
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 7
Consumer• Consumers’ lack of spending impacts retail while tourism is kept
down by restrictions.
Energy & Resources• Coronavirus impacts short-term prices, but prices are expected to
rebound in 2021.
Financial Services• The anticipated recession related to the Coronavirus will have a
large impact on the sector.
Industrials• The European auto industry has experienced a production loss of
~2.2 million vehicles.
Life Science & Health Care (LSHC)• Swift recovery of LSHC sector with listed companies trading above
pre-corona levels.
Real Estate• The full impact of COVID-19 is yet to be seen.
Technology, Media & Telco (TMT)• TMT sectors have shown relative resilience to COVID-19 as the
world has gone digital.
Transport• Transport industry experienced sharp decline in activity – equity
market pricing a recovery.
We refer to pages 10-18 for in-depth coverage of developments in the sectors above
Coronavirus heatmap
Deloitte Economics’ view on the short-term outlook across selected sectors in Denmark
Source: Deloitte analysis, Dansk Erhverv
Sector
Denmark
Short-term Outlook
Financial Services High impact Moderate recovery
Consumer Slow recoveryHigh impact
Transport High impact Slow recovery
Technology,
Media & TelcoModerate impact Moderate recovery
Real Estate High impact Moderate recovery
Energy & Resources High impact Moderate recovery
Life Science &
Health Care Neutral/Low impact Growth opportunities
Industrials High impact Moderate recovery
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 8
Key messages
Economic activity has slowly begun to rebound, but the outlook remains dark
• In Denmark, the increase in the number of confirmed cases seems to be slowing. As of 10 May 2020 there were 10,319 confirmed cases. The reopening
of the society has not been accompanied by a significant increase in confirmed cases.
• The COVID-19 crisis has caused dramatic supply and demand shocks in the world economy, and these shocks are inevitably causing major disruptions
to trade. Global trade volumes are depressed, and the transport sector is facing significant uncertainty.
• Q1 GDP contracted sharply across Europe and US and the unemployment rates have sky-rocketed. More than 30 million Americans have claimed
unemployment insurance since mid-March 2020 pushing unemployment to levels not observed since the Great Depression. Projections of GDP growth
rates reveals a significant contraction of the world economy in 2020.
• Governments all over the world have introduced major aid packages, which, including credit measures, amount to two-digit percentages of GDP.
• The COVID-19 crisis is entering into a new phase as lockdown restrictions are being lifted in most Western countries. Restrictions on the Danish
economy are gradually being lifted. Schools, day care institutions and certain liberal professions have been opened for a couple of weeks. Today the
retail sector and malls reopen as the second phase begins.
• As economies start to open up, concerns arise around a second wave of infections. In Germany, health authorities estimated during the weekend that
the so-called reproduction rate had increased to 1.1 after being 0.65 on Wednesday. The rise comes after easing restrictions. A number above 1 means
that the virus is increasing again as opposed to dying out. China and South Korea have seen an increase in new cases over the weekend. Countries incl.
India, Russia, Brazil Mexico and Nigeria and South Africa are still struggling to reach a peak in new infections.
• Deloitte Economics will continue monitoring the impact of the coronavirus in Denmark and globally. Find our updates here
Disclaimer: The information in this document is intended for knowledge sharing only.
For questions on the contents of this report, please contact:
Majbritt Skov
Director, Head of Deloitte Economics
Mobile: +45 30 93 54 71
maskov@deloitte.dk
Peter Lildholdt
Assistant Director
Mobile: +45 40 35 25 36
plildholdt@deloitte.dk
Tinus Bang Christensen
Partner
Mobile: +45 30 93 44 63
tbchristensen@deloitte.dk
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 9
Industry outlook
Consumer
Energy & Resources
Financial Services
Life Science & Health Care
Public
Technology, Media & Telco (TMT)
Transport
Industrials
Real Estate
Page 10
Page 11
Page 12
Page 13
Page 14
Page 15
Page 16
Page 18
Page 17
Coronavirus impact monitor – 11 May 2020 Deloitte Economics © 2020Page 10
Consumers’ financial concerns keeps confidence down
− 31% of consumers are concerned about making upcoming payments
while 47% are delaying large purchases.
− Employment fear fuels worry regarding financial situation with 41% of
consumers concerned about losing their jobs.
− Consumers expect to spend more on groceries and household goods
over the next four weeks.
Recovery of tourism remains uncertain
− 100% of global travel destinations have restrictions making tourism
one of the most affected sectors by COVID-19.
− Updated EU estimates expects revenue to drop 50% for hotels and
restaurants, 70% for tour operators and 90% for cruises and airlines.
− Current EU tourism industry, which employs 27 million people directly
and indirectly, is estimated to be losing 1bn EUR per month.
Note:
Sources:
1) MSCI World Retailing Index; 2) MSCI World Consumer Services Index; 3) MSCI Consumer Staples Index; 4) Based on OECD – Europe region
Capital IQ; MSCI; European Parliament; Deloitte State of the Consumer Tracker
Industry outlook: Consumer
Consumers’ lack of spending impacts retail while tourism is kept down by restrictions
Retail index has moved from index 95.3 to 93.4.
Hospitality index has moved from index 84.1 to 80.0.
Consumer index has moved from index 94.4 to 91.7.
Highlights from the industry (as of 6 May)
Trading multiples and economic outlook (as of 6 May)
13.1x
10y avg. 5y avg.
11.6x
3y avg.
13.8x
Index: MSCI World Retailing Index (top 10 companies)
Jan 1, 2020 Current
13.2x17.0x
-3.8x
Historical averages
(EV/FY0 EBITDA)
Coronavirus impact
(EV/FY0 EBITDA)
As of March 2020, the consumer confidence index4 was 99.93 indicating a
slightly doubtful attitude towards the future economic development, possibly
resulting in higher savings and less consumption among consumers.
99.93
97
99
101
Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Mar-16 Mar-18 Mar-20
Consumer confidence index
Based on top 10
companies
1 2 3
Indexed s
hare
price
80.0
85.1
91.7
93.4
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
100.0
105.0
110.0
26 Dec 19 26 Jan 20 26 Feb 20 26 Mar 20 26 Apr 20
Retail Hospitality Consumer MSCI World
ConsumerFinancial Services
Energy & Resources
Life Science & Health Care
Public TMT TransportIndustrials Real Estate
Coronavirus impact monitor – 11 May 2020 Deloitte Economics © 2020Page 11
Hydropower generation
− Prior to the corona crisis, electricity prices were already pressured in
the Nordics due to a warm winter, which increased the generation
capacity of Norwegian hydropower plants.
− Further, the mild winter decreased demand for electricity.
Lockdown affects demand
− The coronavirus lockdown has negatively impacted the demand of
both public institutions, private individuals and corporations.
Carbon market prices
− Lower emissions of CO2 and other greenhouse gasses has led to a
decrease in carbon prices.
− Coal becomes cheaper, lowering overall prices, as coal is marginally
price setting. This creates a self-enforcing effect, which drives down
prices even further.
Source: Thomson Reuters Eikon
Industry outlook: Energy & Resources
Coronavirus impacts short-term prices but prices are expected to rebound in 2021
The mild winter put pressure on Nordic electricity prices prior to corona crisis.
Electricity demand has decreased marginally due to coronavirus lockdown.
Significant drop in carbon emissions, resulting in lower prices.
Highlights from the industry (as of 11 May)
As the effects described above are temporary, and are the result of the
current lockdowns and restrictions on travel, we expect an increase in
prices once the restrictions are lifted.
Although the short-term impact on electricity producers are significant we
expect prices to rebound in 2021. This is supported by significantly larger
price drops in electricity futures prices in the short-term compared to the
long-term
Economic outlook
1 Feb 20
100
1 Mar 20
70
1 Jan 20 1 Apr 20 1 May 20 1 Jun 20
20
30
40
50
60
80
90
110
Natural gas TTF, spot Coal API2, spot Nordic electricity future, Q3-20
Selected futures
2635 33
25
922 23 19
Nordic power, FY-21Nordic power, Q4-20Nordic power, Q3-20 EUA, Jun-20
-63.3%
-39.1% -30.5%-21.2%
Jan 1, 2020 May 8, 2020
ConsumerFinancial Services
Energy & Resources
Life Science & Health Care
Public TMT TransportIndustrials Real Estate
Coronavirus impact monitor – 11 May 2020 Deloitte Economics © 2020Page 12
Banks and consumer finance
− As a result of the GFC, capital levels and controls are more robust reducing the impact of the impending recession. However, IFRS 9 will result in an increase in provisions for macroeconomic assumptions, loan forbearance and default payments.
− Due to Government schemes, ramifications of loan performance may not be felt until post summer.
Insurance
− Claims volume and handling expenses are likely to impact profitability for insurers, albeit claims have reduced for some lines (eg Motor).
Asset Managers
− AuM has reduced especially for funds with a high equity to fixed income asset ratio which will negatively impact profitability. Risk exists around any guaranteed pension schemes.
− Opportunities may exist for those who can successfully deploy a non-contact distribution network.
Source
1) Indices are from Stoxx Europe 600 Financial Services and MSCI World 2) DCA: Debt Collection Agencies 3) P/BV is measured as average of Nordic Insurers, banks, and DCA
S&P Capital IQ
Industry outlook: Financial Services
The anticipated recession will have a large impact on the sector
The impact of decreasing bank base rates, a fear of an increase in customer
defaults, and turmoil in the equity markets has negatively impacted valuation in the
first quarter of 2020. Q1 results will provide further details.
The slow re-opening of European countries has provided optimism to the markets,
but the risk of the crisis drawing out increases the likelihood of market corrections.
Highlights from the industry (as of 7 May)
Some of the economic issues will play out over the coming months. In particular, the recovery of forborne loans following the re-commencement of trading and the implications of claims experience for insurers.
There is a likelihood of some market consolidation certainly in the banking sector where smaller lenders have higher cost-to-income ratios and suffer from increases in provisions. In addition, asset managers who have suffered from revenue falls as a result of the decrease in AuM. A measured response to trading conditions is important for each FS sub-sector.
Trading multiples and economic outlook
40
90
50
60
70
80
100
110
120
30
3/26/202/25/201/9/20 1/24/20 2/10/20 3/11/20 4/14/20 4/28/20
Banking
Consumer Finance DCA
Insurance European AM
MSCI World
Index: S&P Capital IQ
Jan 1, 2020
1.2x
1.7x
Current
-0.5x
Coronavirus impact (P/BV)
80
77
56
43
77
Nordic Insurers
Nordic DCAs
Nordic Banks
European AM
Nordic Consumer Finance
28-04-2020
Market capitalization (1 Jan = index 100)
2
3
[55.7]
[43.4]
[76,9]
[79.9]
[76.8]
1
[84.9]
ConsumerFinancial Services
Energy & Resources
Life Science & Health Care
Public TMT TransportIndustrials Real Estate
Note:
Coronavirus impact monitor – 11 May 2020 Deloitte Economics © 2020Page 13
Note:
Source:
1) Data as of 7 May 2020; 2) Passenger cars, trucks, vans, buses, and coaches; 3) Data as of 20 April 2020 covering employees directly employed by car, truck, van and bus manufacturers
Capital IQ; MSCI World Indices; European Automobile Manufacturers Association; Reuters
Industry outlook: Industrials
The European auto industry has experienced a production loss of ~2.2 million vehicles
Especially industrial companies’ share prices have realised a minor set-back during
the last week – down by ~5%.
Share prices have primarily been driven by earnings report and President Trump’s
threats to relight the trade war between the United States and China.
Share price development year-to-date
Trading multiples
1 Apr 201 Jan 20 1 Mar 201 Feb 20 1 May 20 1 Jun 20
50
60
70
80
90
110
100
Industrials MSCI WorldMaterials Automotive
10y avg. 5y avg. 3y avg.
11.6x 13.1x 14.2x11.8x
Jan 1, 20 Current
13.8x
-2.0x
MSCI World Industrials Index
Historical averages
(EV/EBITDA)
Coronavirus impact
(EV/EBITDA)
85.184.3
92.4
69.3
5y avg.
11.7x11.5x
10y avg.
10.3x
3y avg. Jan 1, 20 Current
11.8x 13.1x
+1.3x
MSCI World Materials Index
Historical averages
(EV/EBITDA)
Coronavirus impact
(EV/EBITDA)
MSCI World Automotive Index
Historical averages
(EV/EBITDA)
Coronavirus impact
(EV/EBITDA)
10.2x
5y avg.10y avg. 3y avg.
9.9x9.8x 11.1x
Jan 1, 20 Current
9.8x
-1.3x
COVID-19 has significantly impacted European auto industry
COVID-19 has resulted in closed factories in the EU and the United Kingdom,
leading to a production loss of ~2.2 million motor vehicles, affecting more than 1.1
million manufacturing workers.
Factories in the EU and the United Kingdom have on average been closed for 28
working days.
There are positive signals for the industry, as several car manufacturers, including
Volkswagen Group, have restarted production at certain factories across Europe.
Germany
Spain
France
The UK
Czech Republic
602,973
410,796
255,674
188,894
143,981
Total EU + UK 2,195,430
Country Production lost1,2 Downtime1 Employees affected3
29 working days
31 working days
32 working days
32 working days
25 working days
28 working days
568,518
60,000
90,000
65,455
45,000
1,138,536
ConsumerFinancial Services
Energy & Resources
Life Science & Health Care
Public TMT TransportIndustrials Real Estate
Coronavirus impact monitor – 11 May 2020 Deloitte Economics © 2020Page 14
Collaboration is the new normal
− COVID-19 has further accelerated an ongoing trend of collaboration
among LSHC companies, scientists, and public institutions.
− Examples of recent private collaborations are:
− Bavarian Nordic and AdaptVac for COVID-19 vaccine.
− Consortium of 15 large life science companies, including Novartis,
Johnson & Johnson, and Pfizer, to share knowledge
Race for COVID-19 vaccine or other treatment
− The antiviral, Remdesivir, has shown promising results in preliminary
trials with improved recovery time and potential survival benefits.
− Race for developing a vaccine is still ongoing with a horizon of 12-18
months.
− According to Milken Institute, 123 candidate vaccines and 203 different
treatment variations are being developed as of 7 May 2020.
Note:
Sources:
1) MSCI World Health Care Index (top 10 constituents), 2) MSCI World Pharmaceuticals, Biotechnology and Life Sciences Index (top 10 constituents)
Milken Institute, Deloitte Health Forward Blog, Capital IQ, NIH
Industry outlook: Life Science and Health Cre (LSHC)
Swift recovery of LSHC sector with listed companies trading above pre-corona levels
Significant recovery in both Health Care and Life Science in recent weeks continues.
Life Science trade above pre-corona levels.
Significantly faster recovery and better performance among Life Science and Health
Care companies compared to the general market.
Highlights from the industry (as of 6 May)
LSHC companies trade above pre-corona levels.
Countries are reopening, and many health care systems are again
focusing on other illnesses and treatments than COVID-19.
Rapid recovery expected for LSHC companies unrelated to COVID-19
treatments as demand for non-essential medications and equipment rises.
Continued high demand for COVID-19 related therapies and equipment.
Trading multiples and economic outlook
85.1
99.2
10y avg.
14.1x
5y avg. 3y avg.
11.7x13.7x
Index: MSCI World Health Care Index
Jan 1, 2020
14.2x
Current
14.2x
0.0x
Historical averages (EV/EBITDA FY0) Coronavirus impact (EV/EBITDA FY0)
103.6
1 2
Indexed share price development
60
65
70
75
80
85
90
95
100
105
110
22 Dec 19 22 Jan 20 22 Feb 20 22 Mar 20 22 Apr 20
Healthcare Life science MSCI World
ConsumerFinancial Services
Energy & Resources
Life Science & Health Care
Public TMT TransportIndustrials Real Estate
Coronavirus impact monitor – 11 May 2020 Deloitte Economics © 2020Page 15
The recover phase has begun
− Government’s focus is now to move society towards normality and at
the same time avoid an increase in the reproduction rate.
− Top economists have contributed with recommendations about how to
reopen the economy in the most cost-effective way.
− Priority is to increase testing. 11 new test centres opened in the end
of April.
Back to normal
− The government has begun to reopen society. Day care institutions
and schools and many liberal professions have reopened in phase 1.
In phase 2, starting from today, the retail sector and malls are allowed
to open. Also, the restrictions considering social distancing are eased.
Implementation of aid packages
− Provision of emergency financial support for individuals and
businesses is a new and large assignment in the economic ministries.
Source: Deloitte Insights, Government’s response to COVID-19. From pandemic crisis to a better future, April 2020
Industry outlook: Public
The reopening of society has intensified
Consumer
Highlights from the industry (as of 11 May)
Aid packages and focus on supporting the private sector through earlier start-up of planned investment and prepayment of suppliers are expected to ease the negative
impact on the economy.
The severe and long-lasting financial and economic impacts of the pandemic depend on the effects of the aid packages and the strategy for the reopening of society.
Aid packages may challenge government spending in the long term.
Digitalisation in the public sector may be boosted as the crisis has reinforced virtual ways of working.
Economic outlook
A timeline for COVID-19 government response
Financial Services
Energy & Resources
Life Science & Health Care
Public TMT TransportIndustrials Real Estate
Coronavirus impact monitor – 11 May 2020 Deloitte Economics © 2020Page 16
Retail
− We believe there is a long-term impact on retail with accelerated shift
to online trade. As such new occupiers and business models need to be
developed by landlords
− Despite the reopening of many cafés and restaurants, there will only
be capacity for a limited number of guest. Creativity is required
− At some point the government can no more support the hospitality and
leisure sector, which will have significant impact for both landlords and
tenants.
• Residential
− According to FB Gruppen the demand for project housing is down by
20% and the main reason is the financial institutions tightening the
financing terms as explained in a previous version of our Corona
Monitor
− In a brand new forecast from Nybolig, prices on residentials will fall by
3-6% in 2020. Not until end of 2022 will we reach pre-covid prices
again
1) Based on Collier International, Patrizia AG, Agate Ejendomme, Jeudan A/S, and Park Street Nordicom
Finans Danmark, Thomson Reuters Eikon, Capital IQ
Industry outlook: Real Estate
Why can't the financial markets see the mess of the real economy?
Real estate share prices are still to recover fully. However, interest rates decrease
slightly, perhaps fuelled by renewed appetite from investors.
We still believe that the full impact of COVID-19 is yet to be seen. Despite kick-off
of the reopening phase in most countries, support from banks and aid packages are
still essential. But at some point that will have to end...
Consumer
Highlights from the industry (as of 11 May)
We still expect a significant reduction in M&A activity for all asset classes, except
logistics (positive effect). No changes to outlook from last week.
Currently, price multiples are not impacted from COVID-19 significantly but forced
transactions due to liquidity will probably be at lower multiples.
As of the last couple of weeks, we expect decreasing prices but even lower
multiples as short-term income will be impacted severely, despite the current
optimism in the financial markets
Trading multiples and economic outlook
5y avg.10y avg.
27.6x
3y avg.
28.6x25.4x
Historical averages (EV/EBITDA) Coronavirus impact (EV/EBITDA)
Index: Custom weighted average index1
Note:
Source:
Financial Services
Energy & Resources
Life Science & Health Care
Public TMT TransportIndustrials Real Estate
0.5%
0.8%
1.0%
1.3%
1.5%
1.8%
2.0%
50
60
70
80
90
100
110
01 Jan 15 Jan 29 Jan 12 Feb 26 Feb 11 Mar 25 Mar 08 Apr 22 Apr
Inte
rest ra
te
Sto
ck p
rice index
(2 J
an 2
02
0 =
10
0)
STOXX 600 Real Estate Index Danish long-term mortgage rates
1 Jan 2020 Current
29.0x30.6x
-1.6x
Coronavirus impact monitor – 11 May 2020 Deloitte Economics © 2020Page 17
TMT perceived as a defensive sector, which has less to lose from COVID-19
Telecom: Spend among consumers is often within a contract; demand is
up; need is not discretionary (new cars) or constrained (leisure).
Media & Entertainment: The financial impact varies across sub-sectors.
Media consumption up (e.g., Netflix, Disney+), but willingness/ability to
pay may be constrained as the economic outlook exacerbates. Events
(consumer, business) mostly heavily restricted. Cinemas, theatres,
museums mostly closed. TV and movie production mostly halted. Theme
parks mostly closed.
Technology: Some segments (e.g., robotics, communication software)
see record demand; digital transformation being accelerated; companies
catering to SMEs may suffer from customer liquidity.
Note:
Source:
1) MSCI World industry indices used, 01-01-2020 = index 100, 2) In EMEA and selected Asian countries physical games sales are up 63% according to GamesIndustry.biz
S&P Capital IQ (April 2020), Forrester Research (March 2020)
Industry outlook: TMT
TMT sectors have shown relative resilient to COVID-19 as the world have gone digital
TMT companies are trading above the overall equity market.
Media and Entertainment quickly recovered after the shockwave on the stock
market – as people stay home, the entertainment market are making records2
Highlights from the industry (as of 7 May)
Forrester has revised its IT spending forecast downward with a best case
scenario where the global tech market growth slowing to ~2% in 2020.
If a full-fledged recession hits, there is a 50% probability that global tech
markets will decline by 2% or more in 2020.
Software spending is the subsector expected to show highest growth,
while computer equipment and IT consulting and systems integration
services spending are expected to show weaker growth.
Trading multiples and economic outlook
1 Feb 201 Jan 20 1 Apr 20
90
1 Mar 20 1 May 20
60
70
80
100
110
120
98
85
21.1x
10y avg. 5y avg. 3y avg.
24.0x
16.1x
Index: MSCI World Information Technology
Jan 1, 2020 Current
26.0x28.0x
-2.0x
Historical averages (EV/EBITDA) Coronavirus impact (EV/EBITDA)
106106
Information Technology1 MSCI WorldMedia and EntertainmentCommunication Services
ConsumerFinancial Services
Energy & Resources
Life Science & Health Care
Public TMT TransportIndustrials Real Estate
Coronavirus impact monitor – 11 May 2020 Deloitte Economics © 2020Page 18
500
700
900
1100
1 11 21 31 41 51 61
Note:
Source:
1) A.P. Møller-Mærsk, D/S Norden, DFDS, DSV Panalpina, NTG, TORM, 2) Lowest YTD is 4.6x on March 20th
Capital IQ, Shanghai Shipping Exchange, Forbes, IHS Markit
Industry outlook: Transport
Transport industry experienced sharp decline in activity – equity market pricing a recovery
Trading multiples and economic outlook (as of 29 April)
Transportation indices have largely followed the total market.
Transport companies have picked up pace from the recent correction, much due to
the accelerated conversion from brick-and-mortar to e-commerce.
Transportation stocks indicate belief in the market’s recovery
− The rapid spread of COVID-19 has had a major impact on global goods
transport, with ripple effects from the shortfall in demand for goods
from China.
− The recent surge in stock prices since the low point in mid-March 2020
indicates an expectation for a recovering demand global trade.
Accelerated conversion to e-commerce to aid in recovery
− As of mid-April 2020, US retailers’ online YoY revenue growth was
68%, substantiated by 146% YoY growth in the number of online
retail orders.
− A big rush on freight capacity and the subsequent increase in freight
rates are expected, as demand recovers and companies are trying to
get their products on the water.
− This could entail space and capacity constraints for shippers, resulting
in an opportunity for air cargo.
10y avg. 5y avg. 3y avg.
7.6x7.1x 7.5x
Historical averages
(EV/FY1 EBITDA)
7.4x
Last close 2019
6.6x
Current
-0.8x
Coronavirus impact2
(EV/FY1 EBITDA)
Danish listed transport companies1
91.184.9
93.0
6065707580859095
100105110115120
Apr 19 Jun 19 Aug 19 Sep 19 Nov 19 Jan 20 Feb 20 Apr 20
MSCI World MSCI Transportation Danish Transportation Index
2020
The Shanghai Containerized Freight Index (SCFI) is down 19.0% YTD to
829 from its high 1023 in week 1, however up 9.5% YoY.
2019
Consumer
Highlights from the industry (as of 29 April)
Financial Services
Energy & Resources
Life Science & Health Care
Public TMT TransportIndustrials Real Estate
Coronavirus impact monitor – 11 May 2020 Deloitte Economics © 2020Page 19
Industry outlook: Deloitte contacts
How Deloitte can help you
• Please use the contact details opposite to get in touch
with our Financial Advisory industry group leaders and
find out how we can assist you.
• We are well-positioned to assist in a range of tasks,
such as those below.
Mads Damborg
Partner
Email: madsdamborg@deloitte.dk
Mobile: +45 30 93 54 81
Consumer
Troels Ellemose Lorentzen
Partner
Email: tlorentzen@deloitte.dk
Mobile: +45 30 93 56 90
Energy & Resources
Mads Damborg
Partner
Email: madsdamborg@deloitte.dk
Mobile: +45 30 93 54 81
Life Science & Health Care
Kasper Svold Maagaard
Partner
Email: kmaagaard@deloitte.dk
Mobile: +45 30 93 54 54
TMT
Tinus Bang Christensen
Partner
Email: tbchristensen@deloitte.dk
Mobile: +45 30 93 44 63
Real Estate
Financial Services
Rikke Beckmann Danielsen
Partner
Email: rdanielsen@deloitte.dk
Mobile: +45 30 93 56 92
Government & Public Services
Niels Stoustrup
Partner
Email: nstoustrup@deloitte.dk
Mobile: +45 30 93 59 15
Industrials
State aid packages
Liquidity scenario analysis
Debt covenant advice and financing
Business restructuring and M&A
Bankable business plan development
Stakeholder management and process control
Impact assessment
Economic modelling and forecasting
Focus areas
Mike Robinson
Partner
Email: michrobinson@deloitte.dk
Mobile: +45 30 93 00 03
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 20
Danish and European economic outlook
European corporate earnings expectations
Global GDP forecasts
Danish 2020 GDP expectations
Deloitte Government Response Portal
European market volatility and credit default probability
Appendices
Page 21
Page 22
Page 23
Page 24
Page 25
Page 26
Aid packages Page 27
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 21
Source: Thomson Reuters Eikon, Markit Economics, Statistics Denmark, Eurostat
Economic outlook
Latest indicators point to sharp economic slowdown in Denmark and across the Eurozone
• Danish consumer confidence for April 2020, based on
survey data collected from 1-19 April 2020, declined to
-11.9, down from 0.4 in March 2020.
• The decline in consumer confidence is primarily driven
by deteriorating economic conditions in Denmark, but
the propensity to consume has also declined markedly.
• The latest reading on Danish consumer confidence does
point to a significant slowdown in consumer spending,
even if the past link between consumer confidence and
growth in consumer spending is not perfect.
Danish consumer confidence and YoY consumer spending growth
• The preliminary read on Eurozone PMI, measuring
business sentiment across the Eurozone, plummeted to
an all-time low of 13.5 in April 2020, down from a prior
record low of 29.7 in March 2020. This indicates by far
the largest collapse in European GDP growth recorded
in over two decades of survey data collection. By
comparison, the lowest reading seen during the global
financial crisis was 36.2, reached in February 2008.
• Looking into the details of the survey responses, it
appears that the service sector bore the brunt of the
impact from the lockdown measures. However,
manufacturing also saw a record fall. Supply chain
delays hit the highest ever reported.
Eurozone PMI composite and YoY GDP growth
(8%)
(6%)
(4%)
(2%)
-
2%
4%
6%
8%
(20)
(15)
(10)
(5)
-
5
10
15
20
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Consum
er s
pendin
g, c
hange Y
oY
Consum
er confidence, in
dex
Danish consumer spending, change YoY (RHS) Danish consumer confidence
(7%)
(5%)
(3%)
(1%)
1%
3%
5%
7%
10
20
30
40
50
60
70
80
90
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Euro
zone G
DP, c
hange Y
oY
PM
I C
om
posit
e
Eurozone GDP, change YoY (RHS) Eurozone PMI Composite
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 22
Note:
Source:
1) Based on analyst estimates for S&P Europe 350 Index constituent companies
S&P Capital IQ
Corporate earnings expectations
Corporate earnings expectations have been severely curtailed since the beginning of the outbreak
• The selloff in European equity markets, triggered by the
COVID-19 pandemic and the associated economic
slowdown, differs across sectors, ref. page 3.
• To shed light on the underlying drivers of this selloff
across sectors, the chart on the right displays changes
in expectations of stock analysts. In particular, the
chart shows how stock analysts have downgraded
consensus expectations of net income across sectors
and time:
− Energy, incl. oil and gas companies, saw its net
income estimates being downgraded by 40%-70%
in 2020-2021, likely due to the sharp declines in oil
and gas prices.
− Consumer discretionary, Financials, and
Transportation are also expected to be severely
affected. Their net income estimates for 2020 are,
on average, more than 30% below pre-crisis
estimates.
− Health Care and Real Estate are expected to
weather the storm relatively well, both in the short
(2020) and long (2023) term.
Change in net income consensus estimates between 31 January 2020 and 8 May 20201
(80%) (70%) (60%) (50%) (40%) (30%) (20%) (10%) - 10%
Food & staples retailing
Real estate
Health care
Utilities
Communication services
Other consumer staples
Information Technology
Materials
Industrials
Transportation
Financials
Consumer discretionary
Energy
2020 2021 2022 2023
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 23
Source: IMF, World Economic Outlook (April 2020)
GDP forecasts
World Economic Outlook: GDP growth projections for Denmark, Eurozone and World
• IMF is projecting the global economy to contract by
3% in 2020, far worse than the -0.1% growth
experienced during the 2009 financial crisis. The
economic growth forecasts from the IMF assume that
the COVID-19 pandemic fades in the second half of
2020 and containment efforts can be unwound. The
disruptions are assumed to be concentrated mostly in
the second quarter of 2020 for almost all countries,
with a gradual recovery thereafter, as it takes some
time for production to ramp up after the shock.
• The global economy is projected to rebound in 2021,
growing at 5.8% as economic activity normalises,
helped by policy support. In comparison, global growth
rebounded to 5.4% in 2010 from -0.1% in 2009.
• It is stressed that the 2021 rebound depends critically
on the pandemic fading in the second half of 2020,
allowing containment efforts to be gradually scaled
back and restoring consumer and investor confidence.
(4 .9%) (6.5%)
6.0%
(10%)
(5%)
-
5%
10%
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020
Denmark: GDP growth
Historical Forecast
(0.1%)
(3.0%)
5.8%
(10%)
(5%)
-
5%
10%
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020
World: GDP growth
Historical Forecast
(4 .5%)(7 .5%)
4.7%
(10%)
(5%)
-
5%
10%
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020
Eurozone: GDP growth
Historical Forecast
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 24
Source: IMF, Danish Central Bank, Danish Ministry of Finance, DØRS, Confederation of Danish Industry, Danske Bank, Nordea
Danish 2020 GDP expectations
Danish GDP projected to contract by 4.7% according to our survey of forecasters
• The Danish Central Bank forecasts three scenarios for the Danish economy in 2020. The three scenarios differ by the speed with which containment
efforts are unwound. In the mild scenario, where GDP is contracting by 3% in 2020, restrictions are gradually eased from Easter to a full lifting of
restrictions by October 2020.
• The Confederation of Danish Industry has based its projection of a 7% decline in 2020 GDP on a survey of its member firms.
• Nordea has published an economic forecast for the Danish economy based on three scenarios for global developments: a V-shaped recovery, a slower
U-shaped scenario, and a pessimistic L scenario. The positive V-shaped recovery is associated with a steep decline in GDP in the first half of 2020, but
the recovery is taking sharp during the summer, and GDP declines by a relatively modest 0.5% in 2020.
• The Economic Councils project two scenarios for the Danish economy. In the optimistic scenario, the economy rebounds relatively quickly, and GDP
declines by 3.5% in 2020. In the pessimistic scenario, a second wave of COVID-19 emerges during the fall, and new containment efforts and
restrictions are activated; new aid packages are introduced. In this scenario, GDP contracts by 5.5% in 2020.
2.3%
3.9%
0.9%
(0 .5%)
(4.9%)
1.9% 1.3% 0.2%
0.9% 1.6%
2.3% 3.2%
2.0% 2.4% 2.4%
Median; (4 .7%)
(14%)
(12%)
(10%)
(8%)
(6%)
(4%)
(2%)
-
2%
4%
6%
8%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Denmark: GDP growth and 2020 market expectations
Historical (IMF) Danish Central Bank Ministry of Finance
The Economic Councils IMF Confederation of Danish Industry
Danske Bank Nordea Median
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 25
• To aid our clients in navigating the complex landscape of COVID-19 assistance programmes, Deloitte has developed a free digital portal that captures
the latest financial, tax, business, and social measures enacted by country.
Deloitte Government Response Portal
Database of financial, tax, business, and social measures announced by governments globally
Access the portal!
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 26
Note:
Source:
1) VSTOXX as volatility index of EURO STOXX; 2) Default probability calculated based on 5Y iTraxx European Crossover CDS and a recovery rate of 40%.
Thomson Reuters Eikon
Market volatility and European credit default probability
Equity market volatility remains elevated and comparable to the levels observed during the global financial crisis
• The VSTOXX Index measures 30-day implied volatility
of the EURO STOXX 50 equity index and reflects
investors' uncertainty about future equity market
moves.
• As shown, the coronavirus induced an increase in
volatility to a level comparable to that experienced
during the global financial crisis in 2008. Since then,
volatility has declined, but it still remains elevated and
comparable to the levels observed during the global
financial crisis.
68
30
90
70
30
0
50
10
20
40
60
80
100
VSTOXX Index1
Vola
tility
index
• The chart opposite shows the development in the
implied default probabilities based on the 5Y iTraxx
European Crossover spread of Credit Default Swaps and
an assumed recovery rate of 40%. It measures default
probabilities on a portfolio of sub-investment grade
corporate debt in Europe.
• With a current default probability of about 35%, we are
at the highest level since the European debt crisis, but
still below peak financial crisis levels.
• As the index reflects cost of debt, any refinancing will
be costly for leveraged companies, even though interest
rates are close to being record low.
30
0
10
60
20
40
50
70
%
61.7%
34.9%
Defa
ult p
robability in %
iTraxx Europe Crossover index: Default probability2
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 27
Sources: Danske Bank, Deloitte Covid-19 portal, reuters
Aid packages
(1/7)
Country Target groupsSize of aid Type of aid
Canada
• Consumers• Corporates• Employees
• About CAD 146bn (~6.2% of GDP)
• Emergency wage subsidies• Business and personal tax deferrals• Student loan payment delays
China
• SMEs
• About CNY 1.25tn (~1.25% of GDP)
• Reduction in VAT for SMEs• Exemption from social security payments for up to five months• Postponement of Housing Provision Fund payments for companies affected by
COVID-19• Special-purpose bond issuance quota lifted and front loaded (for infrastructure
projects)
Austria
• SMEs• Family-owned
companies• One-person
enterprises
• EUR 38bn (~9.5% of GDP)
• Liquidity measures• Loan guarantees• Tax deferrals• Labour subsidies for companies that have to reduce working hours• Aid for one-person and family-owned enterprises, tourism and cultural sectors• Safety net for small businesses
Page 27
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 28
Aid packages
(2/7)
Country Target groupsSize of aid Type of aid
European
Union (EU)
• Member states• Corporates• SMEs• Health care efforts
• EUR 500bn (~3.5% of GDP)
• General escape clause for fiscal rules• Maximum flexibility on state aid rules• Pandemic Crisis Support': loan through ESM in the tune of 2% of countries'
GDP (EUR 240bn) • Corona Response Investment Initiative' to support health care efforts, SMEs &
vulnerable sectors • Stepped up EIB lending to SMEs (EUR 200bn)
Finland
• Corporates• SMEs
• EUR 18bn (~7.5% of GDP)
• Additional budgets worth EUR 4.1bn largely to business aid and healthcare • Deferred corporate tax and pension payments • Finnvera gets EUR 10bn additional loan guarantee limit to help businesses • Emergency aid to companies in worst affected small companies • State Pension Fund will buy EUR 1bn of commercial paper
Denmark
• Self-employed• SMEs• Corporates• Airlines
• Fiscal: DKK 98bn (~4.3% of GDP)
• Credit: Up to DKK 301bn (~13.1% of GDP)
• Salary compensation scheme running for three months, covering up to 90% of an employee's salary and runs for four months
• Schemes that cover income for self-employed persons and help to cover fixed costs
• Extend deadlines for payroll taxes and VAT, including temporary return of taxes already paid in March in some cases
• Local governments will move future investments to 2020• Government guarantee for some corporate debt and airlines• Enhanced export credit
Sources: Danske Bank, Deloitte Covid-19 portal
Page 28
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 29
Aid packages
(3/7)
Country Target groupsSize of aid Type of aid
Germany
• Affected companies• SMEs• Self-employed
• EUR 750bn (~22% of GDP)
• Immediate assistance program to support SMEs and self-employed (EUR 50bn)• Liquidity measures for affected companies (KfW credit & state guarantees incl.
equity stakes)• Easier access to short-term work compensation• Easier access to unemployment benefits and protection of tenants• Lower VAT rate (7%) for restaurants for 1 year• Deferred tax payments for companies
Greece
• Corporates• Affected companies• Citizens
• EUR 10bn (~5.3% of GDP)
• Suspended tax and contribution payments for 4 months for businesses directly affected by the outbreak of COVID-19
• EUR 800 bonus for employees unable to work due to outbreak• Sales tax reduced to 6% from the standard 24% for products needed to
prevent the spread of COVID-19• Businesses and workers directly hit by outbreak will be allowed to pay only
60% of their commercial property lease rentals• State to pay all outstanding obligations to citizens
France
• Affected businesses• SMEs• Employees
• EUR 400bn (~16.5% of GDP)
• EUR 4bn package to support start-ups • Extended deadlines for social security and tax payments and sick leave
payments for caring for children • Short-time working scheme, under which the state will cover entirety of lost
salaries • EUR 300bn for credit guarantees to support corporation bank-funding • Cash handouts of EUR 1500 for affected SMEs. Additional support of EUR 2,000
can be provided to prevent bankruptcy
Sources: Danske Bank, Deloitte Covid-19 portal
Page 29
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 30
Aid packages
(4/7)
Country Target groupsSize of aid Type of aid
Japan
• SMEs• Citizens
• JPY 12.1tn (~19.6% of GDP)
• Favourable credit lines for SMEs• Delayed tax and social security payments• Cash handout of 100,000 JPY to all citizens
New Zealand
• Corporates• Employees
• NZD 12.1bn (~4% of GDP)
• Wage Subsidy scheme• Permanent lift in welfare payments• Loan scheme for SMEs• Reintroducing depreciation deductions• Lifting the threshold for payment of provisional tax
Italy
• SMEs• Corporates• Employees• Self-employed
• EUR 375bn (~21% of GDP)
• Help for workers facing temporary layoffs• Guarantee fund for SME loans• Moratorium for business and personal mortgage repayments• One-off payment of EUR 500 for self-employed and cash bonus for Italians still
working, financial support to families
Sources: Danske Bank, Deloitte Covid-19 portal
Page 30
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 31
Aid packages
(5/7)
Country Target groupsSize of aid Type of aid
Portugal
• Corporates• EUR 9.2bn
(~4.3% of GDP)
• Credit lines for affected businesses and tax deferrals• Possible moratorium on capital and interest payments
Norway
• SMEs• Employees• Self-employed• Corporates• Airlines
• Fiscal:NOK 201bn (~6.7% of GDP)
• Credit: NOK 100bn (~3.3% of GDP)
• Government loan guarantee specifically aimed at SMEs (NOK 50bn) and reintroduction of Government Bond Fund (NOK 50bn)
• Corporate deficits can be written off against tax on surpluses from previous years
• Owners of loss-making companies can postpone payments of the wealth tax• "Temporary tax relief for airlines, drop in both passenger tariffs and airport
tariffs"• Reduction of employee’s tax by 4 pp. for 2 months• Other benefits, i.e. government pays for the first 20 days for temporary lay-
offs• Reintroduction of Government Bond Fund (NOK 50bn)• VAT reduction from 12% to 6% from April 1 for specific sectors directly
affected by COVID-19• Cash injections directly to corporates and Kommunalbanken• Guarantee to Airlines and support to start-ups
Sources: Danske Bank, Deloitte Covid-19 portal
Page 31
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 32
Aid packages
(6/7)
Country Target groupsSize of aid Type of aid
Sweden
• Corporates• SMEs• Specific sectors
• Fiscal:SEK 100bn (~2% of GDP)
• Credit: SEK 565bn (~10% of GDP)
• Businesses will be offered the opportunity to have tax payments for the period January to March repaid. Repaid taxes can be kept for a period of a year (SEK 300bn)
• Increased loan facilities and introduction of government loan guarantees for Swedish businesses
• Intensive care fund for SMEs of SEK 100 bn and allowance for SME to postpone annual VAT payments for 4 months
• Credit guarantees to airlines and support to Health Agencies• Short term work allowance scheme avoids termination of employment• A temporary discount for rental costs in vulnerable sectors
Switzerland
• Corporates• SMEs
• CHF 42bn (~6% of GDP)
• Aid package aimed at helping companies where CHF 8bn is earmarked to fund the imposition of short-time work at firms; other tranches for hardship loans and to support specific sectors
• Special guarantee scheme to support SMEs in liquidity difficulties due to COVID-19
Spain
• Corporates• SMEs
• EUR 117bn (~9.4% of GDP)
• Public guarantees (EUR 100bn)• Deferred tax payments for SMEs• Suspension of mortgage payments• Measures for tourism and transport sectors
Sources: Danske Bank, Deloitte Covid-19 portal
Page 32
Coronavirus Impact Monitor – 11 May 2020 Deloitte Economics © 2020Page 33
Sources: Danske Bank, Deloitte Covid-19 portal
Aid packages
(7/7)
Country Target groupsSize of aid Type of aid
United
Kingdom
• Corporates• SMEs
• GBP 480bn (21% of GDP)
• Government-backed loans and guarantees • SME GBP 3,000 cash grant• CBILS (Corona Business Interruption Loan Scheme) of up to £5m to help firms
manage cash flows. Terms from 3 months to 10 years for term loans and asset finance. Interest-free first year
• COVID-19 self-employment income support scheme• Coronavirus Job Retention Scheme• Deferring tax payments
United States
of America
• Large corporations• SMEs
• USD 2.8tn (~13% of GDP)
• Loan guarantees and assistance for large companies (USD 500bn)• Aid for SMEs (USD 671bn)• Unemployment insurance extension. Jobless workers to receive extra USD
600/week for 4 months• More health care spending (USD 225bn)• Direct payments to individuals. Lower and middle-income Americans to receive
USD 1200 per adult and USD 500 for every child under age 17
The
Netherlands
• Corporates• SMEs• Self-employed• Affected companies
• EUR 16bn (~2% of GDP)
• Delayed tax payment and temporary arrangement for compensation of labour costs
• Business Finance Guarantee Scheme, funding opportunities for companies experiencing difficulties in obtaining bank loans and bank guarantees
• Assistance scheme for self-employed• Compensation scheme for specific sectors• EUR 4,000 compensation for firms heavily affected
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