2021 CEO Survey

Mid-Market Companies

Profitability was Elusive for Many

Despite their best efforts, including adjusting their financial expectations and taking actions to address the challenging business environment, more than half of our CEOs saw their profits decline in 2020. Once again, those in the technology sector reported somewhat better results but businesses depending on a reliable supply chain, like those in manufacturing and construction, have not fared as well.

41%

of businesses surveyed reported operational changes

EBITDA Profits

55%

DECLINED

25%

INCREASED

HALF of the companies in the technology sector GREW their profits

8%

of manufacturing companies grew their profits during COVID. None of the surveyed CONSTRUCTION companies reported increased profitability

70%

of CEOs experienced negative supply chain impacts during COVID

Newport Insight

Economic Impacts

The mixed profitability results revealed by our survey are consistent with what we’ve observed over the course of the pandemic – some businesses were simply better positioned to operate in the pandemic environment.  Online retail, technology providers and platforms, and streaming entertainment services are examples of three business types that thrived while others struggled. More than half of companies surveyed reported a decline in profits with 70% of those companies experiencing COVID-19 related negative supply chain impacts.  More than half of companies with a decline in profits reported being operationally worse due to pandemic impacts.  CEOs at companies reporting a decline in profits listed their highest priorities as revenue growth, customer experience, and employee wellness (in priority order).  Clearly, the pandemic conditions gave rise to a broad set of operational challenges and CEOs’ top priority of growth rests largely on solving supply chain related issues.

Michael Evans
Managing Director, San Francisco, CA

How Newport can help

Newport is a strategic business advisory firm, working with founders and CEOs of privately held, growth-stage companies to accelerate growth, improve performance, and successfully exit their businesses.

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Economic Impacts

The mixed profitability results revealed by our survey are consistent with what we’ve observed over the course of the pandemic – some businesses were simply better positioned to operate in the pandemic environment.  Online retail, technology providers and platforms, and streaming entertainment services are examples of three business types that thrived while others struggled. More than half of companies surveyed reported a decline in profits with 70% of those companies experiencing COVID-19 related negative supply chain impacts.  More than half of companies with a decline in profits reported being operationally worse due to pandemic impacts.  CEOs at companies reporting a decline in profits listed their highest priorities as revenue growth, customer experience, and employee wellness (in priority order).  Clearly, the pandemic conditions gave rise to a broad set of operational challenges and CEOs’ top priority of growth rests largely on solving supply chain related issues.

As we emerge from the pandemic, struggling businesses must ask themselves, is this a permanent transition with very permanent effects which will reverberate through our economy long term? Or, will there be a transition back to the pre-pandemic status quo and if so, how long will that take?  History has shown us that there will likely be a return to a pre-pandemic environment, but it will come with fundamental changes such as alternative work arrangements that will be permanent and significant to business models. With that in mind, businesses should focus on profitability and financial strength by reviewing their business operations and business model from a strategic, financial and operational perspective to make sure whatever the pandemic transition will be, their business is positioned for survival and success.

Learn more about how Newport can help you address your specific profitability challenges.

Michael Evans
Managing Director, San Francisco, CA