5 minute read 20 Feb 2024
Quantum Computer

Q4 2023: 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 20 Feb 2024
Related topics Strategy and Transactions Finance Risk Banking and capital markets
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Valuation Market Essentials Switzerland – what key highlights did we observe in Q4 2023?

In brief

  • Compared to the previous quarter, the spot rates of 10-year government bonds for USD, EUR and CHF have decreased to 3.9% (from 4.6%), 2.1% (from 2.9%) and 0.7% (from 1.1%), respectively, in Q4 2023.
  • During Q4 2023, the European M&A market saw a 27% increase in the total number of transactions, reaching 151 compared to 119 in the previous quarter.
  • Two new companies were listed on the Swiss SIX stock exchange, breaking the trend of the past four quarters with no new listings.
  • Compared to Q3 2023, the median EBITDA trading multiples decreased in all sectors in Q4 2023, except for the MT&T and IG&S sectors.
  • The P/E ratio decreased for retail and cantonal banks as well as insurance companies compared to the previous quarter, while it remained constant for global and private banks. Meanwhile, the P/TB ratio increased for global and private banks but decreased for retail and cantonal banks as well as insurance companies.

In times of economic turbulences, we deem monitoring the developments of the most recent market data to be crucial to understand their impact on the key parameters used in corporate valuations. In our quarterly publication Valuation – Market Essentials Switzerland, we present the key highlights of the most recent market developments. The publication covers market multiples and cost of capital components per sector for the companies of the Swiss All Share Index (except general financial and real estate companies) as well as relevant macro-economic data used in business valuations.

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PDF Brochures

Get more insights in our brochures. 

 Download Q4 2023 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 Q4 2023, the median trading EBITDA multiples of the six sectors showed the following development:
    Given that for Q3 2023 and Q4 2023 the EBITDA figures for most companies across all sectors are based on the same financials as of June 2023 (78% of the companies) and as of September 2023 (18% 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 Q4 2023 vs. Q3 2023

    151

    The number of transactions in the European M&A activity increased by 27% from 119 to 151 transactions during Q4 2023.

    Total number of transactions in Q4 2023 vs. Q4 2022

    -8%

    Compared to the same quarter last year, the number of transactions declined by 8%.

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

    The overall increase in the number of transactions with respect to Q3 2023 was driven by all sectors except for E&U, which remained constant.
    R&CP: The M&A activity increased to 33 transactions
    E&U: The M&A activity remained stable at 5 transactions
    Healthcare: The M&A activity increased to 16transactions
    IG&S: The M&A activity increased to 42 transactions
    MT&T: The M&A activity increased to 41 transactions
    CC&M: The M&A activity increased to 14 transactions

    Average transaction volume in Q4 2023

    USD 275m

    The average transaction volume (total transactions value/number of transactions) decreased to USD 275m in Q4 2023, a development driven by all sectors except for IG&S and MT&T. In particular, the healthcare sector experienced a 95% reduction in average deal volume, falling short of the major deals achieved in the previous quarter.

    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 Q4 2023, the UK accounted for 26% of the total transactions, followed by Sweden (16%) and Italy (8%).

  • Unlevered beta

  • Debt to total capital ratio

    Given that for Q3 2023 and Q4 2023 the debt figures for the companies are based on financials as of June 2023 (78% of the companies) and September 2023 (18% of the companies), the change in the debt to total capital ratio is primarily driven by the development of market capitalization of the companies. The median debt to total capital ratio decreased in all sectors since Q32023, except for CC&M and E&U 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 and Elizaveta Tarafa 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 Risk Banking and capital markets
Upvote