Q2 2024: How did the Swiss valuation parameters and the European M&A volume develop?

Valuation Market Essentials Switzerland - what key highlights did we observe in Q2 2024?

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In brief

• No new company was listed on the Swiss SIX stock exchange. However, there were four delistings on the exchange: two in Media, Technology and Telecommunications (MT&T), one in Industrial goods & services (IG&S), and one in the Healthcare sector.
• Compared to Q1 2024, the median EBITDA trading multiples declined for the MT&T and Retail and Consumer Products (R&CP) sectors, remained stable for the Chemicals, Construction and Materials (CC&M) sector, and increased for IG&S, Healthcare and Energy and utilities (E&U) sectors.
• In Q2 2024, the European M&A landscape experienced an uptick, with the total transaction count rising by 13% to 148, up from 131 in the preceding quarter. The average deal volume increased by 71% as compared to Q1 2024. The number of transactions in Q2 2024 lies however 20% below the number of transactions in the same quarter a year ago.
• During the observed period, the Price-to-Earnings (P/E) ratio for Insurance companies experienced an increase. In contrast, Retail and cantonal banks saw a decrease in this metric, whereas Global and private banks remained stable. Concurrently, the Price-to-Tangible Book (P/TB) ratio exhibited an upward trend for Global and private banks as well as Insurance companies, while it remained stable for Retail and cantonal banks when compared to the preceding quarter.
• Compared to the previous quarter, the spot rates of 10-year government bonds for the USD and EUR experienced a slight uptick, reaching 4.4% (up from 4.2%) and 2.5% (up from 2.4%), respectively, in Q2 2024, while the rate for the CHF decreased slightly to 0.6% (down from 0.7%).

In times of economic turbulences, we deem monitoring the development of the most recent market data to be crucial to understand its 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.