Industry Multiples in Europe — Q2 2023

October 12, 2023

Our analysis uses constituents of the STOXX® Europe Total Market Index ("STOXX® Europe TMI"), which covers about 95% of the free-float in Europe.

As we observed in a recent Kroll article, 2023: Surprising Economic Resilience, the eurozone was deemed to be technically in recession (at the time of writing), with quarter-on-quarter output just barely contracting in the past two quarters. If the recession in the eurozone is confirmed, it is still much milder than expected in recent months largely due to positive energy developments. Energy was expensive but still in good supply, partly because of a mild winter and partly because of policies implemented in some eurozone countries to curb energy demand and limit price increases in energy-dependent sectors (e.g., public transportation). EU energy storage levels are much higher than they have been off the back of previous winters, and oil and gas prices have declined from the highs over the past year.

Highlights

According to the World Economic Outlook Update report, released by the International Monetary Fund (IMF) in July 2023, global growth is projected to reach 3.0% in 2023, below the estimated growth in 2022 of 3.5%.

For the eurozone, real growth is estimated to decelerate from 3.5% in 2022 to 0.9% in 2023, followed by 1.5% in 2024.

The IMF’s estimate for global inflation is 6.8% in 2023, down from 8.7% in 2022, to be followed by 5.2% in 2024.

In terms of EV/EBITDA, although for most industries there was no significant variation, some had notable changes. For semiconductors and semiconductor equipment, the median multiple decreased in the second quarter to 12x from 15x in the first quarter. For independent power and renewable electricity producers, the median multiple decreased to 15x in the second quarter from 17x in the first quarter.

Our report provides a detailed overview of the EV/revenues, EV/EBITDA, P/E and P/B multiples of companies in the STOXX® Europe TMI covering nonfinancial industries and market capitalization/revenues, P/TBV, P/E and P/B multiples covering financial industries for which such data is available. We also provide an eight-quarter look-back at the trends of these multiples for the industries covered.

We hope you find this report helpful for understanding the range of trading multiples for major industries in Europe. If you would like to receive further information or discuss any of the findings, please contact us.