- BCG’s Transform and Special Situations Index Analyzes 1,700 Public European Companies, Identifying the Share Showing Signs of Operational Challenges and Financial Instability
- Companies Facing Transformation or Restructuring Pressure Represent 3.5 Million Jobs and More Than $300 Billion in GDP, With Germany Most Exposed
- Consumer & Retail, Automotive, Chemicals, and Transportation & Logistics Are Most At-Risk Sectors
BOSTON—One in six (17%) European companies are under pressure to transform as geopolitical uncertainty, tariff volatility, and shifting trade policy take their toll. More than 6% face even more severe pressure, indicating a need to restructure. Together, these at-risk firms represent more than $300 billion in GDP and 3.5 million jobs.
These are among the findings of the third annual Transform and Special Situations Index from Boston Consulting Group (BCG), titled The $300 Billion Reason Why CEOs in Europe Need to Focus on Transformation. The report examined the operational performance and financial stability of more than 1,700 European public companies.
“Too many CEOs still view transformation as tomorrow’s problem,” said Renaud Montupet, a BCG managing director and senior partner, and a coauthor of the report. “Business leaders need to act fast to shore up their balance sheets and cash positions if they want to enter 2026 from a place of strength.”
Germany, Italy, and the Nordics Feel the Strain
Germany continues to face the most restructuring risk, driven by pressure in automotive, chemicals, and consumer & retail sectors. Companies across these sectors account for more than one-third of the total $300 billion-plus in GDP at risk across Europe.
Italy and the Nordics, meanwhile, both saw a sharp rise in transformation and restructuring pressure, mainly due to the struggles of large players in the technology, media & telecommunications and energy sectors, respectively.
France and the UK are faring better. Transformation pressure remains steady in France, with signs of recovery in health care and consumer & retail. Relative to other European countries, the UK shows the least restructuring pressure, although that pressure has increased since 2024.
The Most At-Risk Sectors
When assessing financial stability and exposure to macroeconomic risks, four sectors stand out:
- Consumer & Retail. The sector faces margin pressures and consumer spending cutbacks. In the near term, tariffs could impact up to $11 billion in sector output.
- Automotive. Sales remain flat while inventories swell and competitive pressure from Chinese manufacturers intensifies.
- Chemicals. Capacity utilization has dropped to 74%, far below historical norms. High energy prices and regulatory burdens continue to drag on profitability. Up to $4 billion of production could be subject to trade tariffs.
- Transportation & Logistics. Freight players have weathered recent shipping disruptions well, but a worsening truck driver shortage across Europe threatens to cripple road freight capacity.
Earnings Calls Reveal CEO Priorities
An AI-enabled review of Q1 2025 earnings calls showed that M&A, market opportunity, and revenue growth dominated CEO remarks. Mentions of balance sheet items have declined since Q1 2024.
“This is a defining moment for CEOs,” said Jochen Schönfelder, BCG managing director and senior partner, and a coauthor of the report. “Long-standing financial vulnerabilities are colliding with macroeconomic risks, and not all sectors are prepared. Without a full transformation playbook, many will remain exposed when the next storm hits.”
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Media Contact:
Eric Gregoire
+1 617 850 3783
gregoire.eric@bcg.com