Fri, Mar 10, 2023

Industry Multiples in Europe - Q4 2022

We are pleased to launch the fifth edition of our Industry Multiples in Europe quarterly report. This report provides valuable insights into trading multiples for various key industries in Europe as of December 31, 2022.

Our analysis uses constituents of the STOXX® Europe Total Market Index (“STOXX® Europe TMI”), which covers about 95% of the free float in Europe, distributed among several industries and sectors, following the definitions by the Global Industry Classification Standard (GICS).

The global economy faced big challenges in 2022, such as high inflation, the war in Ukraine and the zero-COVID-19 policy in China. These will likely continue to have repercussions in 2023. Europe has been disproportionately impacted by Russia’s war on Ukraine, with energy costs rising significantly and high inflation sparking a cost-of-living crisis. Consumer and business confidence across Europe has fallen significantly, and both manufacturing and consumer services are in contraction for the eurozone and the UK. In December, the Kroll Institute expected that Germany and Italy were already seeing output fall and forecasted that the eurozone would be in recession in early 2023. The UK economy has already reported falling output in Q3 2022, and this may be the beginning of a protracted recession.


According to the International Monetary Fund (IMF) in its World Economic Outlook Update report released January 2023, the IMF’s estimate for global growth in 2022 is 3.4%, below the historical average of 3.8% (2000-2019).
For the eurozone, the IMF forecasts growth in 2023 to slow to 0.7% from 3.5% in 2022, reflecting the effects of faster rate hikes by the European Central Bank and elevated inflation, offset by lower wholesale energy prices and government purchasing power support in the form of energy price controls and cash transfers.
Inflation will remain high for most countries in the short term. The IMF believes disinflation will take time, estimating that by 2024 inflation will still be above pre-pandemic levels for most economies globally.
In terms of EV/EBITDA, multiples have generally decreased in 2022 due to the more pessimistic outlook and deteriorating market conditions that were present during most of the year. Almost all industries finished 2022 with lower EV/EBITDA multiples compared to December 2021.

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.

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