1. Focusing on firms with a turnover exceeding EUR50mn, our Q1 2019 monitoring points to a high frequency of major insolvencies (83, -1 case from Q1 2018).  Based on their financials, we calculate that these insolvent companies represented a higher combined turnover of EUR45.5bn (+4% or +EUR1.9bn vs Q1 2018). This suggests a worsening severity of global insolvencies, which could have serious effects on providers along supply chains.
  2. Regions posted uneven trends with Asia continuing to experience an increase in major insolvencies (+10 cases compared to Q1 2018), while Central & Eastern Europe recorded less (-7 cases). At the same time, Western Europe remained the main contributor to the global level of major insolvencies (36 cases compared to 12 for North America).
  3. Retail (17 insolvencies), Construction (11) and Agrifood (9) were again the most affected sectors in terms of the number of insolvencies this quarter. Metals (+5), as well as Retail (+5), posted the strongest rise in insolvencies, while Machinery & Equipment (-7) saw a noticeable decline compared to Q1 2018.
  4. Looking at the last four quarters together, we see a still high number of major insolvencies with 334 cases in total as of Q1 2019, despite a slight decrease (-14 cases compared to Q1 2018. The data also show an increasing severity to EUR160.1bn in cumulative turnover (+EUR1.9bn  i.e. +16% y/y.  Asia posted a significant increase (+20 cases compared to -14 for Western Europe and -19 for Central & Eastern Europe) but Western Europe registered the highest number of major insolvencies (139). Construction (60 insolvencies), Retail (56) and Agrifood (32) were the most affected sectors in terms of number of insolvencies. Agrifood (-10) and Services (-23) both saw a noticeable decline while Construction posted the strongest increase (+16).
  5. We find that the insolvency hot spots were Retail, Construction and Services in Western Europe; Construction in Asia and Central & Eastern Europe and Retail in North America. These reflect a wide range of challenges (indebteness, input prices, overcapacity, digital disruption, cyclical exposure) and suggest more discrimination by risk managers.

Insolvencies of major companies (*) - by size of turnovers