FCF IPO Market Monitor H2 2017

The FCF IPO Market Monitor is the most comprehensive analysis of European IPOs, providing relevant valuation metrics (e.g. ratios, multiples), general information and performance data of European IPOs that have been issued within the last six months.

2017 was a very successful year for European Initial Public Offerings (IPOs). With a total of 97 IPOs in 2017, nearly 30% more companies were taken public than in 2016.

The second half-year 2017 tied in with the thriving start of the first half-year (48 IPOs, EURm 11.9 bn issuance volume) and recorded 49 IPOs with a deal volume totalling up to EUR 13.4 bn. With five new public debutants, Germany is among the top 3 IPO stock exchanges in Europe. The “Micro IPO” Mynaric AG, “Small IPOs” with Varta AG and Voltabox AG, the “Medium IPO” Jost Werke AG as well as the “Large IPO” Hello Fresh SE joined the German trading floor and accounted together for 9% of the European deal volume. IPOs being issued on the Deutsche Börse recorded on average the highest share price performance with +22% since their debut.

The Italian tyre manufacturer Pirelli, the Swiss provider of energy management solutions Landis+Gyr Group AG as well as the British commodity and energy group En+ Group plc find themselves among the biggest issuances in the second half of 2017. The majority of the European IPOs come from the industrials (14), consumer discretionary (14) and information technology (8) sector.

A significant issuance volume increase was recorded by the “Large IPO” segment (issuance volume over EUR 250m). Due to considerably larger IPOs in the second half of 2017, European Large IPOs collected EUR 2.3 bn more (EUR 10.7 bn) than in the first half of 2017. The “Medium IPO” segment (issuance volume between EUR 100m and EUR 250m) recorded the biggest decline. Merely half (EUR 1.3 bn) of the issuance volume of the first half year of 2017 was reached, with its share shrinking to 9.2% of the total issuance volume (20,3% in H1 2017).

The “Micro IPO” segment (issuance volume between EUR 20m and EUR 50m) registered with 16 the most IPOs, followed by “Small IPOs” (13) (issuance volume between EUR 50m and EUR 100m), Large IPOs (13) and Medium IPOs (7).

The London Stock Exchange reclaimed its position as the leading exchange location for European IPOs, having 10 companies taken public, more than last half year’s leader Sweden with 8 IPOs. Only 73% of the European IPOs were priced within the announced price range, compared to 82% in the first half of 2017, and was even missed by 19%.

The “FCF Small IPO Index”, which measures the development of the market capitalization of IPOs with an issuance volume between EUR 50m and 100m, outperformed its peer segments with an increase of 43% in the first half of 2017. The FCF Medium IPO Index as well as the FCF Large IPO Index weren’t supported by the positive development of European leading indices and outperformed by its European peers.

The first trading day performances of the new issues was 8.9%, increasing the “underprizing” by 1.7% compared to last half-year. Given the positive sentiment on European markets in the first half of 2017, all IPOs recorded a positive performance of +9.3% on average since their debuts. Medium IPOs recorded the highest positive gains of +16.5% (YTD) while Large IPOs disappointed with +3.6% compared to the whole market and smaller segments.

FCF IPO Market Monitor H2 2017