European service sector: financial insight

A Statista DossierPlus on financial KPIs of service companies listed in the European Union and their preparedness for a crisis

European service sector: financial insight Europe’s economy has been hit hard by the corona crisis; many European economies are unlikely to recover by 2022. Different sectors are, however, expected to be affected differently, partially due to the varying sector characteristics and level of preparedness.

To give an overview of the state in which the European services sector was before the crisis and help assess its possible effects, this DossierPlus analyzes the annual reports of over 1,300 listed domestic service companies in the European Union and the United Kingdom.

The following service sectors are covered:
  • Commercial services
  • Consumer services
  • Distribution services
  • Health services
  • Industrial services
  • Technology services
  • Retail trade
  • Transportation


The analysis focuses on the various sectors and highlights individual companies as well to help understand sector differences and key learnings.

First, an overview of the European economy before the pandemic is provided, including ease of doing business scores as well as unemployment rates.

Afterward, based on the data provided in the financial statements of the companies, operating KPIs are examined, such as revenue, expenses, number of employees, and revenue per employee. These indicators are appropriate for the first assessment of sectors and serve as a starting point for the analysis.

Then company balance sheets are analyzed. Solvency and activity indicators, such as debt, cash reserves, long-term debt-to-equity ratios, quick ratio, or asset turnover, help access a companies’ ability to pay their short-term and long-term obligations and give a valuable insight into how well companies in each sector were equipped to overcome a period in which revenue drops.

The profitability and valuation of European service companies are also examined by looking at five-year annual revenue growth rates, five-year average net profit margins, EBIT and EBITDA margins, as well as return on assets, and price-to-earnings ratio. High profitability and absolute profits also provide companies greater security in difficult times.

Finally, the study provides an overview of each analyzed sector by listing the most important key performance indicators and comparing them to the overall services sector average.

The complex findings of this DossierPlus are explained in detail which help answer questions such as how service sectors within Europe differ in a financial aspect and what implications these differences have on the sectors’ preparedness for a crisis.

For an overview of the financial state of the European manufacturing sector, take a look at our European manufacturing sector: financial insight DossierPlus.
Content

Introduction: Europe before the pandemic

  • Ease of doing business in Europe
  • GDP growth forecast
  • Labor force and unemployment
  • Methodology

Operating KPIs
  • Revenue
  • Expenses
  • Number of employees
  • Revenue per employee

Solvency and activity ratios
  • Debt, cash, and cash equivalent
  • Assets and liabilities
  • Long-term debt-to-equity ratio
  • Quick ratio
  • Current ratio
  • Asset turnover

Profitability and valuation
  • Five-year annual revenue growth rate
  • Five-year average net profit margin
  • EBIT margin
  • EBITDA
  • EBITDA margin
  • Return on assets
  • Price-to-earnings ratio

Sector deep dive
  • Revenue
  • Number of employees
  • Long-term debt-to-equity
  • Quick ratio
  • Five-year annual revenue growth rate
  • EBIT margin
  • Price-to-earnings ratio


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