5 minute read 5 Jun 2024
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Q1 2024: How did the Swiss valuation parameters and the European M&A volume develop?

Authors
Hannes Schobinger

Partner, Leader Valuation, Modeling & Economics | EY Switzerland

Passionate about corporate finance.

Marc Filleux

Partner, Strategy and Transactions | EY Switzerland

Seasoned expert for valuation, modeling and economics in a transactional (sell & separate and buy & integrate) context.

5 minute read 5 Jun 2024
Related topics Strategy and Transactions Finance
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Valuation Market Essentials Switzerland - what key highlights did we observe in Q1 2024?

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In brief
  • In the first quarter of 2024, one company made its debut on the Swiss SIX stock exchange, marking the largest IPO in Switzerland since 2017 with an issue volume valued at CHF 2.3 billion.
  • In the first quarter of 2024, the European M&A landscape witnessed a 31% reduction in the total number of transactions, with the number of transactions falling to 118 from 170 in the preceding quarter.
  • When comparing the fourth quarter of 2023 to the first quarter of 2024, we observed a decrease in the median EBITDA trading multiples for the Energy and Utilities (E&U), Media, Technology and Telecommunications (MT&T), and Retail and Consumer Products (R&CP) sectors. Conversely, there was an increase in multiples for the Chemicals, Construction and Materials (CC&M), Industrial goods & services (IG&S), and Healthcare sectors.
  • The Price-to-Earnings (P/E) ratio increased for Global and private banks as well as insurance companies. However, this ratio declined for retail and cantonal banks. In the same vein, the Price-to-Tangible Book (P/TB) ratio rose for Global and private banks as well as for insurance companies, while it remained consistent for retail and cantonal banks.
  • Interest rates for 10-year government bonds in USD and EUR exhibited a rise, with spot rates increasing to 4.2% (up from 3.9%) and 2.4% (up from 2.1%), respectively. The spot rate for CHF bonds held steady at 0.7%, unchanged from the previous quarter, during the first quarter of 2024.

During periods of economic uncertainty, we believe it is essential to closely monitor the latest market data to understand its influence on the primary metrics utilized in corporate valuations. Our quarterly report, "Valuation – Market Essentials Switzerland," showcases the principal features of the latest market trends. This publication provides information on market multiples and cost of capital fundamentals by sector for firms listed in the Swiss All Share Index (excluding financial and real estate companies), along with pertinent macroeconomic data that is critical for business valuations.

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PDF Brochures

Get more insights in our brochures. 

 Download Q1 2024 brochure here

Download historical brochures here

 

 

Dynamic Dashboard

Visit our dynamic Dashboard for an interactive deep dive into the market data.

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Sector abbreviations:

R&CP – Retail and consumer products

E&U – Energy and utilities

IG&S – Industrial goods and services

MT&T – Media, technology and telecommunication

CC&M – Chemicals, construction and materials

  • Trading multiples Switzerland

    In Q1 2024, the median trading EBITDA multiples of the six sectors showed the following development:
    Given that for Q1 2024 and Q4 2023 the EBITDA figures for most companies across all sectors are based on the same financials as of December 2023 (76% of the companies) and as of September 2023 (8% of the companies), the development of the multiples is mainly driven by the development of the market capitalization of the major part of the underlying companies. To gain further insights into the development of the trading EBITDA and EBIT multiples per sector and subsector during the last 5 quarters, explore our Dynamic Dashboard by clicking the link given above.

  • Transactions Europe

    Total number of transactions in Q1 2024 vs. Q4 2023

    118

    The number of transactions in the European M&A activity decreased by 30.6% from 170 to 118 transactions during Q1 2024.

    Total number of transactions in Q1 2024 vs. Q1 2023

    -6%

    Compared to the same quarter last year, the number of transactions decreased by 6%.

    *The total number of transactions refers to M&A transactions which were announced or announced and closed, and where at least one of the Revenue, EBITDA or EBIT multiples, have been published.

    The overall decrease in the number of transactions with respect to Q4 2023 was driven by all sectors.
    R&CP: The M&A activity decreased to 24 transactions
    E&U: The M&A activity decreased to 5 transactions
    Healthcare: The M&A activity decreased to 12 transactions
    IG&S: The M&A activity decreased to 33 transactions
    MT&T: The M&A activity decreased to 34 transactions
    CC&M: The M&A activity decreased to 10 transactions

    Average transaction volume in Q1 2024

    USD 596.6m

    The average transaction volume (total transactions value/number of transactions) increased to USD 596.6m in Q1 2024, driven by all sectors except IG&S and MT&T.

    Top Country

    UK

    Over the past two years, the UK has maintained its position as the leading country in terms of the number of transactions and the location of the target company. In Q1 2024, the UK accounted for 28% of the total transactions, followed by Sweden (19%), Italy and France (both at 8%).

  • Unlevered beta

  • Debt to total capital ratio

    For Q1 2024 and Q4 2023, the EBITDA figures for most companies across all sectors are based on the same financials as of December 2023 (76% of the companies) and as of September 2023 (8% of the companies). The change in the debt to total capital ratio is primarily driven by the development of market capitalization of the companies. Since Q4 2023, the median debt-to-total capital ratio has decreased for the R&CP and IG&S sector, while remaining constant for healthcare and increasing for all other sectors.
    To drill down through the debt to total capital ratios on a sector-by-sector basis during the last 5 quarters, visit our Dynamic Dashboard by clicking on the link given above.

  • Banking and Insurance Sector

    P/TB multiple

Summary

Our Valuation, Modeling & Economics Team is here to support you with Valuations, Liquidity & Scenario Planning, Portfolio Analysis, as well as other services to help you navigate through your action plans.

Acknowledgements

We thank Michael Keck, Alex Benhauresch, Jeremy Guttmann, Elizaveta Tarafa and Deepak Soni for their valuable contributions to this article.

About this article

Authors
Hannes Schobinger

Partner, Leader Valuation, Modeling & Economics | EY Switzerland

Passionate about corporate finance.

Marc Filleux

Partner, Strategy and Transactions | EY Switzerland

Seasoned expert for valuation, modeling and economics in a transactional (sell & separate and buy & integrate) context.

Related topics Strategy and Transactions Finance
Upvote