Q1 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 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.