5 minute read 31 Aug 2023
Futuristic high-tech computer Network concept

Q2 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 31 Aug 2023
Related topics Strategy and Transactions Finance Risk Banking and capital markets
Upvote

Show resources

Valuation Market Essentials Switzerland - what key highlights did we observe in Q2 2023?

In brief

  • Continuing from the previous two quarters, no new company was listed on the Swiss SIX stock exchange due to volatile market conditions.
  • Compared to Q1 2023, the median EBITDA trading multiples increased for E&U, IG&S and MT&T, while they decreased for the rest of the sectors.
  • During Q2 2023, the European M&A market saw a 22% increase in the total number of transactions, reaching 137 compared to 112 in the previous quarter.
  • The P/E ratio increased for retail and cantonal banks. Global and private banks as well as insurance companies experienced a decline in the P/E ratio from the previous quarter.
  • Compared to the previous quarter, the spot rates of USD and EUR 10-year government bonds experienced an uptick, reaching 3.8% and 2.5%, respectively, in Q2 2023. However, the CHF 10-year government bond declined to 1.0% compared to the previous quarter.

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.

Valuation Market Essential Newsletter

Stay tuned and sign up to our EY Valuation Market Essentials Newsletter. 

Subscribe

PDF Brochures

Get more insights in our brochures. 

 Download brochure here

Download historical brochures here

 

 

Dynamic Dashboard

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

View the dashboard

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 Q2 2023 the median trading EBITDA multiples of the six sectors showed the following development.
    Given that for Q1 and Q2 2023 the EBITDA figures for most companies across all sectors are based on the same financials as of December 2022 (70% of the companies) and as of March 2023 (15% 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 Q2 2023 vs. Q1 2023

    137

    The number of transactions in the European M&A activity increased by 22% from 112 to 137 transactions during Q2 2023.

    Total number of transactions in Q2 2023 vs. Q2 2022

    -38%

    Compared to the same quarter last year, the number of transactions declined by 38%.

    *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 Q1 2023 was driven by Healthcare, IG&S and R&CP sectors.
    R&CP: The M&A activity increased to 36 transactions in Q2 2023
    E&U: The M&A activity decreased to 3 transactions in Q2 2023
    Healthcare: The M&A activity increased to 15 transactions in Q2 2023
    IG&S: The M&A activity increased to 41 transactions in Q2 2023
    MT&T: Compared to past quarter, the M&A activity remained stable at 38 transactions in Q2 2023
    CC&M: The M&A activity witnessed a decline to 4 transactions in Q2 2023

    Average transaction volume in Q2 2023

    USD 364m

    The average transaction volume (total transactions value/number of transactions) increased to USD 364m in Q2 2023 driven by all sectors except Healthcare.

    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 Q2 2023, the UK accounted for 19% of the total transactions, followed by Italy (12%) and Sweden (10%).

  • Unlevered beta

  • Debt to total capital ratio

    Given that for Q1 and Q2 2023 the debt figures for the companies are based on financials as of December 2022 (70% of the companies) and March 2023 (15% 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 increased since Q1 2023 for CC&M and declined/remained stable 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 and Elizaveta Leontyeva 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