Q3 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 Q3 2024?

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In brief

• No new company was listed on the Swiss SIX stock exchange; however, there was one delisting on the exchange in the Retail and Consumer Products (R&CP) sector.
• Compared to Q2 2024, the median EBITDA trading multiples declined for three sectors: Media, Technology and Telecommunications (MT&T), Retail and Consumer Products (R&CP) as well as Energy and Utilities (E&U) sectors, and increased for the Chemicals, Construction and Materials (CC&M), Industrial Goods and Services (IG&S) as well as Healthcare sectors.
• In Q3 2024, the European M&A landscape experienced a downtick, with the total transaction count declining by 14% to 151, down from 176 in the preceding quarter. The average deal volume decreased by 8% compared to Q2 2024. However, when compared to Q3 2023, the number of deals experienced an uptick of 11%, increasing from 136 deals in Q3 2023.
• During the observed period, the Price-to-Earnings (P/E) ratio for global and private banks experienced an increase. In contrast, retail and cantonal banks, as well as insurance companies, saw a decrease in this metric. Concurrently, the Price-to-Tangible Book (P/TB) ratio exhibited an upward trend for insurance companies, while it decreased for retail and cantonal banks, as well as for global and private banks, when compared to the preceding quarter.
• Compared to the previous quarter, the spot rates of 10-year government bonds for the United States, the Euro Zone and Switzerland experienced a downtick, reaching 3.8% (down from 4.4%), 2.2% (down from 2.5%), and 0.4% (down from 0.6%), respectively, in Q3 2024.­

To identify major movements in valuations or to conclude that the values did not significantly change, 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.