Nearly 3,500 companies whose shares are listed on the stock exchange, with annual revenues of more than $ 1 billion, lost a total of $ 320 billion in profit in 2017-2024 during periods of geopolitical and macroeconomic instability, the Financial Times (FT) reported, citing data from the consulting company EY-Parthenon.
According to Mats Persson, head of the macroeconomics and geostrategy department at EY-Parthenon UK, “after many years of cheap money and relative geopolitical stability, the world is being hit by a wave of macroeconomic changes - from trade tensions to global conflicts“. “Government policies and global events are having a greater impact on value and profits than they have in decades”, he added.
One in four of these companies experienced a decline in their profit margins of 5% or more between 2017 and 2024, based on earnings before interest, taxes, depreciation and amortization. At the same time, some companies, the study shows, have adapted well to the changing macroeconomic environment, managing to increase their profits to levels above those of the sector.
Only one in ten global companies with EBITDA margins in the top quartile in 2014 managed to maintain them by 2024, the report said.