Increase in the number of struggling companies in Europe, Switzerland stands out for its resilience

Alvarez & Marsal's (A&M) bi-annual study, covering over 4,500 European companies, notes a rise to 9.8% in the proportion of financially struggling companies in 2023, a record level since the start of the pandemic. However, Switzerland shows relative strength against this trend.

In Europe, the consumer goods sector is particularly concerning. The analysis reveals that sectors such as media and fashion are facing significant challenges, exacerbated by increasing operational costs and a decline in consumer demand.

Germany stands out with the highest share of distressed companies (15%). Increasing financing costs and a challenging economic environment contribute to this trend. Switzerland, while showing signs of pressure in some sectors such as raw materials and retail, maintains a relatively low insolvency risk.

Gioele Balmelli from A&M highlights the inevitable increase in restructuring activities in Europe to improve financial performance. In Switzerland, according to Alessandro Farsaci from A&M, although some sectors are under pressure, the conservative approach to corporate financing in Swiss companies demonstrates remarkable resilience.