Over past 1.5 years or so, the global investors have been dealing with lots of uncertainties and volatility across financial markets and throughout different asset classes. Global experts believe that while the recession fears have been reduced to a great extent, the uncertain economic environment is expected to continue as increased rates of interest and higher inflation might result in a global economic slowdown. Strong rally in risky financial assets has left behind Europe’s weakest company’s borrowers, and recession fears continue to persist in Euro region despite there has been some optimism about the US “soft landing”. Therefore, investors might want to own top European companies for long-term growth which strong balance sheets and growth opportunities. Europe’s riskiest and lowest corporate bonds tend to have average yield of ~19.66%, as per Ice BofA index which tracks regional debt rated triple C or lower. This equates into spread — which is defined as the premium paid by companies over the government debt issuers — of over 18 percentage points. In contrast, lowest-rated and riskiest US corporate bonds are giving average yield of ~13.47%, and a much smaller spread lower ~9%. This significantly wide difference between 2 regions’ risky credit spreads continue to hover at widest level since GFC in year 2008-2009. Therefore investors who are looking for top European companies for long-term growth should make investments as per their risk appetite and goals. Global hedge fund and investment managers believe that this wider gap points to fears and risks of the slowdown in Europe as compared to ‘soft landing’ in the United States. Scenario in the US consists of the US Fed successfully cooling its economy without inducing a significant downturn. However, the region has earlier showed growth and Europe’s economy saw a marginal increase after several months of stagnation. However, increased interest rates which have been designed to battle inflation continue to cast a shadow as this scenario results in difficult spending and borrowing. The 20 countries which utilise the euro currency have seen ~0.3% growth in April-to-June period. With this in mind, we will now have a look at top European companies for long-term growth. Anheuser-Busch InBev SA/NV, also known as AB InBev, is the Belgian multinational drink and brewing company which is based out of Leuven, Belgium. The company has been categorised as the largest brewer in the world. The company has reported its 3Q23 financial results, with its revenue increasing by 5.0% as revenue per hl growth came at 9.0%. Its revenues in 9M23 saw an increase of 8.3% with revenue per hl growth of 10.1%. It also saw 15.1% rise in combined revenues of global brands, Budweiser, Stella Artois, Corona and Michelob Ultra, outside of the company’s respective home markets in 3Q23. It saw ~66% of its revenue through B2B digital platforms with monthly active user base of BEES touching 3.4 million users and more than 125 million USD of revenue was generated by its digital direct-to-consumer ecosystem. In 3Q23, total volumes saw a decline of 3.4%, with its own beer volumes falling by 4.0% and non-beer volumes increasing by 1.4%. During 9M23, its total volumes fell 1.4% with own beer volumes declining by 1.9% and non-beer volumes rising 1.8%. In 3Q23, normalized EBITDA saw an increase of 4.1% to US$5431 million with normalized EBITDA margin contraction of 29 basis points to 34.9%. In 9M23, normalized EBITDA saw an increase of 7.3% to US$15,099 million and normalized EBITDA margin declined by 31 bps to 33.6%. Normalized EBITDA figures for 9M22 included impact of US$201 million from tax credits in Brazil. The company has been categorised as one of the world’s largest biotech companies and leading provider of in-vitro diagnostics and global supplier of transformative innovative solutions throughout major disease areas. The company has released results for 3Q23, with its group sales increasing by 1% at the constant exchange rates (CER) in the first 9 months, exhibiting a strong increase of 7% in 3Q. Excluding the COVID-19 products, its sales saw an increase of 9%. Pharmaceuticals Division sales went up by ~9%, as a result of continued high demand for newer medicines. Diagnostics Division’s base business increased by 7% and overall divisional sales were down by 18% because of surge in demand for COVID-19 tests in 2022. The company saw solid results in the first 9 months of 2023, which more than compensated for anticipated fall in demand for COVID-19 products. Strong progress was made in the company’s product pipeline with several positive clinical studies. During first 9 months of 2023, its sales increased 1% to CHF 44.1 billion, despite the company compensating for significant drop in sales of COVID-19 products and biosimilar erosion (a total of CHF 4.0 billion or 9% of sales). It is the global financial services company providing insurance products, such as motor, household, travel and pet insurance, and personal lending products. It has released its results for 1H23, and saw growth in customers and turnover, with solid profit despite tough market conditions. In 1H, its profit came at £234 million, turnover increased 21% to £2.2 billion and Group customer base went up by 4%. Even though the inflation persisted, the company navigated this cycle well and it maintained pricing discipline and focus towards medium-term profitability. UK Motor business saw a profit of £298 million in 1H23. It made strong progress on its diversification strategy, as its non-UK Motor products delivered ~19% customer growth, and its UK Household business and European Motor business saw profits of £8.7 million and £4.7 million, respectively. The above-mentioned top European companies for long-term growth have the best businesses and have sound and predictable cash flows. These firms are being managed by teams having history of making smart capital allocation decisions. Global analysts expect that EU GDP growth should rise to 1.3% in 2024. In euro area, its GDP growth is expected to be marginally lower, at ~1.2%. In 2025, growth should be able to strengthen to 1.65% for the EU and 1.6% for euro area.

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *