BCG warns of increased financial pressure on European companies! It can cope with the increasingly narrow impact space and the simultaneous increase in transformation pressure

The Zhitong Finance App learned that Boston Consulting Group (BCG) said that as rising leverage ratios make companies more vulnerable to shocks, one out of every six Western European companies is facing financial pressure. After analyzing about 1,700 European listed companies, BCG indicated that across Europe, the proportion of companies in need of transformation has risen from 14.3% last year to 16.2%. Among them, Spain and Portugal are facing the most widespread pressure, with 22% of companies needing to transform their businesses. France and German-speaking regions, including Germany, Austria, and Switzerland, account for the highest share of companies facing more severe financial pressure or restructuring pressure, all at 10%.

According to the report, the net debt/profit before interest, tax, depreciation and amortization (EBITDA) ratio — a measure of overall debt levels — rose 22% between 2022 and 2025. By the beginning of 2026, nearly one-third of companies had more than tripled this ratio, and BCG believes this level has reached a critical level of financial pressure. After borrowing large amounts of cheap debt during the pandemic, many borrowers are now struggling to reduce their leverage ratio. This makes it harder for them to withstand the reality of soaring energy costs, trade disruptions, and “higher-for-longer (long-term high)” interest rates.

Tobias Wens, managing director of BCG and co-author of the report, said that after five difficult years, European companies are burdened with more debt, while their ability to withstand setbacks has declined. “If the business plan fails or is hit again, companies will have fewer options to deal with than a few years ago,” he said. +

European companies are under pressure to transform

The report shows that real estate companies are particularly prominent. About 62% of real estate companies are under pressure to transform, compared to only 12% in 2025. Economic uncertainty and rising long-term interest rates are hampering real estate valuations and transaction activities, while also making real estate more difficult for buyers to afford.

About 28% of automobile companies are also under pressure to restructure due to weak demand, overcapacity, the cost of switching to electric vehicles, and increasing competition from China. About one-fifth of media and publishing companies are also facing more serious pressure, as audiences and advertisements are shifting to online platforms and content creators, and artificial intelligence-mediated information discovery methods are constantly evolving.