- 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