One in Six Western European Companies Face Financial Strain
Boston Consulting Group reports that rising leverage and transformation pressures have left 16.2% of Western European companies financially vulnerable.
One in six publicly traded companies in western Europe is experiencing financial strain due to rising leverage, according to a report by Boston Consulting Group. An analysis of 1,700 firms shows that transformation pressure rose to 16.2% from 14.3% last year, with the highest levels of pressure occurring in Spain and Portugal at 22%.
Net-debt-to-Ebitda ratios increased 22% between 2022 and 2025, leaving businesses vulnerable to trade disruptions, energy costs, and high interest rates. The property sector is the most affected, with 62% of firms under pressure to transform. Automotive companies and media and publishing firms also face significant restructuring needs due to Chinese competition, the transition to electric vehicles, and the rise of AI-mediated discovery.
Tobias Wens, a managing director at the firm, noted that European companies have emerged from five difficult years with more debt and less capacity to withstand setbacks. He warned that if business plans do not materialize or another shock occurs, companies will have fewer options than they did a few years ago.
