In the absence of a league table on share buybacks in Europe, BNP Paribas has compiled a unique share buyback database – the most complete and authoritative source of information on buyback activities in the European market – aiming to provide listed companies with useful benchmarks on capital allocation strategies and shareholder returns.
BNP Paribas has released its 4th quarterly edition of ‘Buyback to the Future’ and its first full year report on share buyback activities in the European market, reviewing the share buybacks executed in 2022 and 2021 by 425 large caps across Europe.
The latest report reveals a near-doubling of corporate share repurchases in 2022 and expectations for an active 2023. The year 2022 saw a major increase in the value of shares repurchased by listed corporates with a nominal value of €161bn bought back across the biggest 11 European markets. This was nearly double the €84bn of share buybacks executed in 2021.
The number of companies carrying out buyback programmes was only slightly up year-on-year (+11%), so the real driver of the higher volumes was the return of the big buybacks. In fact, 40% of the programmes executed in 2022 represented in excess of 3% of the corporate’s market capitalisation, a huge jump from the 12% of large buybacks in 2021 as corporate confidence improved.
A quarter of these programmes were over €1bn in aggregate. Unsurprisingly, the Energy and Financial sectors together accounted for almost half of the total value of shares bought back in 2022 while interest rate and refinancing-sensitive sectors such as Utilities and Real Estate were absent from the market.
As volatility rose in early-2022, there was a big increase in the proportion of companies using optimised structures such as guaranteed discounts or performance sharing to repurchase their shares at a lower cost.
There were some signs of momentum slowing towards the end of the year, with Q4 2022 seeing the first quarter-on-quarter decline in buybacks executed for two years. Nonetheless, the survey shows that the market is set to remain active in 2023 with the number of companies buying back shares likely to remain stable and a significant number of large programmes are expected.
As one of the most active participants with a strong ambition in this space, BNP Paribas’ Corporate Cash Equity and Strategic Equity teams work closely together to deliver the most relevant and unique insights on the market trends and structures to Europe’s leading corporates.
For more information on share buybacks, please contact BNP Paribas’ Corporate Cash Equity team at corporate.equity@exanebnpparibas.com.