Dynamics Group AG (CH) FINANCIAL DISTRESS AMONG SWISS COMPANIES REACHES FOUR-YEAR HIGH – YET REMAINS WELL BELOW EUROPEAN AVERAGE
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Dynamics Group AG
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Media Release FINANCIAL DISTRESS AMONG SWISS COMPANIES REACHES FOUR-YEAR HIGH – YET REMAINS WELL BELOW EUROPEAN AVERAGE
Swiss corporate distress rises to 6.8%, compared with 9.2% across Europe, marking the fourth consecutive annual increase since 2022 Automotive, specialised retail and energy & utilities are Switzerland’s most distressed sectors
Zurich, 12 August 2026 – Global professional services firm Alvarez & Marsal (A&M) published its latest A&M Distress Alert (ADA), assessing the financial performance and balance-sheet robustness of more than 15,000 companies with annual revenues exceeding EUR 20 million across 33 countries in Europe and the Gulf Cooperation Council region. The analysis shows that financial distress among European corporates reached a four-year high of 9.2% in 2025, up from 8.3% the previous year. A total of 1,411 businesses are now classified as distressed, while 28.4% of companies lack operating performance and 14.9% lack balance-sheet robustness. Distress increased in 10 of the 12 sectors analysed, indicating that financial pressure has broadened beyond isolated sector-specific weaknesses. Switzerland also recorded a further increase, with the proportion of distressed companies rising from 6.2% to 6.8%. This marks the fourth consecutive annual increase, from 3.8% in 2022, but remains substantially below the European average. France (12.4%) and Germany (12.1%) recorded the highest distress rates among the markets assessed. European distress spreads across consumer-facing and industrial sectors Fashion Retail is Europe’s most distressed sector, with 14.1% of companies classified as distressed, followed by Chemicals at 12.0% and Media, Entertainment & Media Services at 11.7%. Automotive, Manufacturing and Specialised Retail recorded the sharpest year-on-year deterioration. Automotive distress rose by 2.2 percentage points to 11.2%, while Manufacturing increased by 2.0 percentage points to 10.5%. These sectors are particularly exposed to weaker demand, rising energy and logistics costs, supply-chain disruption and intensifying international competition. Nearly four in ten European automotive companies also lack balance-sheet robustness, leaving limited protection against further shocks. Chris Johnston, European Co-Head of Financial and Operational Restructuring at Alvarez & Marsal, said: “European corporate distress has moved beyond isolated pockets and is becoming increasingly broad-based. Earnings deterioration is now the principal driver, while many companies still carry limited balance-sheet headroom. The latest data predates the full impact of renewed energy and supply-chain pressures, meaning distress is likely to rise further over the next 18 to 24 months. Companies should act early by stress-testing liquidity, reassessing their operating models and planning for continued volatility.” Switzerland remains resilient – but is not immune Despite the rise in headline distress, the underlying financial indicators for Swiss companies improved slightly. The share of businesses lacking operating performance declined from 13.7% to 13.0%, while the proportion lacking balance-sheet robustness fell from 20.5% to 19.9%. Both figures remain markedly below the corresponding European levels of 14.9% and 28.4%, underlining the comparatively strong financial foundations of Swiss corporates. The Swiss picture is therefore increasingly differentiated: a growing group of companies meets the study’s combined definition of distress, even as the broader corporate population has strengthened modestly. This suggests that pressure is becoming more concentrated among individual companies rather than reflecting a general deterioration across the Swiss economy. Automotive and retail lead Swiss distress Automotive is Switzerland’s most distressed sector, with 20.0% of companies affected, followed by Specialised Retail at 16.7% and Energy & Utilities at 12.5%. The strongest year-on-year deterioration was recorded in Energy & Utilities, up 12.5 percentage points, Information Technology, up 8.3 percentage points, and Manufacturing, up 6.3 percentage points. Retailers continue to face soft demand while low inflation in Switzerland limits their ability to pass higher input costs on to consumers, putting margins under pressure. In healthcare, where hospital financial data is only partially available, A&M also continues to observe a number of challenging situations that are not fully reflected in the dataset. Strong franc and weaker growth increase pressure on exporters Switzerland’s export-oriented economy remains exposed to weaker international demand, geopolitical disruption and the historically strong Swiss franc. The currency remains a persistent headwind for exporters by reducing the value of foreign revenues and placing pressure on margins and international competitiveness. The KOF Swiss Economic Institute has revised its 2026 growth forecast downwards following the war in Iran and the resulting increase in oil prices. It now expects seasonally and sports-event-adjusted real GDP growth of 0.8%, compared with 1.0% previously. Durable-goods manufacturing and leisure have also seen a recent increase in bankruptcies, partly influenced by a reform of the Swiss Debt Enforcement and Bankruptcy Act requiring public authorities to pursue unpaid claims through formal proceedings. In services, A&M is observing a tougher operating environment as AI-driven disruption increases pressure on costs and established business models. Alessandro Farsaci, Head of Restructuring Switzerland at Alvarez & Marsal, commented: “Switzerland continues to demonstrate considerably greater resilience than most European markets, supported by prudent financing practices, comparatively robust balance sheets and the agility of its corporate sector. However, in previous cycles of economic slowdown one could observe that adverse developments in export markets typically impact the Swiss businesses with a certain time lag and hence, resilience should not be mistaken for immunity. Distress has now increased for four consecutive years, and the pressure is expected to increase further . Companies exposed to global demand, the strong franc or structural disruption should use the current window to strengthen liquidity, improve operational efficiency and build greater financial flexibility.” – –
Notes to the editors Methodology The A&M’s Restructuring & Turnaround practice has developed a methodology to assess the performance and balance-sheet robustness of European businesses and identify companies that are in financial distress or may be heading in that direction. The study analyses data from more than 15,000 companies with annual revenues exceeding EUR 20 million across 33 countries in Europe and the GCC. The companies consistently provided data for all financial years from 2022 to 2025. The ADA index analyses 18 KPIs to create two sub-scores: a performance score based on each company’s income statement and related KPIs measured against industry peers, and a robustness score based on detailed balance-sheet data. A company is classified as distressed when it records significant deficits across both its financial position and earnings performance.
About Alvarez & Marsal Founded in 1983, Alvarez & Marsal is a leading global professional services firm. Renowned for its leadership, action and results, Alvarez & Marsal provides advisory, business performance improvement and turnaround management services, delivering practical solutions to address clients’ unique challenges. With a worldwide network of experienced operators, world-class consultants, former regulators and industry authorities, Alvarez & Marsal helps corporates, boards, private equity firms, law firms and government agencies drive transformation, mitigate risk and unlock value at every stage of growth.
Contact: Nicolas Weidmann Alessandro Farsaci Additional features: File: Media Release_AM_Swiss_ADA_August_2026_Final File: AM Distressed Alert 2026 Annual Report
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2381084 12.08.2026 CET/CEST