Top 5 companies by market capitalization in the Europe

In this article, Nithisha CHALLA (ESSEC Business School, Grande Ecole Program – Master in Management, 2021-2023) presents the top 5 companies by market capitalization in Europe.

Introduction to market capitalization

Market capitalization, often referred to as “market cap,” is a key metric used in the financial world to assess the size and value of a publicly traded company. Market capitalization provides insights into a company’s position in the market and its relative size compared to other companies. It is a measure of a company’s total market value, calculated by multiplying its current stock price by the total number of outstanding shares. It is an important indicator for investors, analysts, and market participants as it reflects the perceived worth of a company by the investing public. Note that market capitalization assesses the size of the company in the equity market, but the total value of the company measured by its assets or the sum of its liabilities and shareholders’ equity may be larger if the company uses debt (financial leverage).

Top 5 companies by market capitalization in Europe

The top 5 companies in the European market according to market capitalization by 2023 are as follows:

1) Nestlé S.A.
2) ASML Holding N.V.
3) Roche Holding AG
4) Novartis AG
5) SAP SE

By looking at these top 5 companies, we observe that these companies mainly belong to different sectors to the economy: Consumer Goods, Technology, and Healthcare.

We detail below the characteristics of each company: statistics, analysis of revenues, and stock market data.

#1 Nestlé S.A.

Logo of Nestle

Source: the company.

Statistics

Market capitalization: $315.44 Billion
Listed on exchanges: SIX Swiss Exchange
Listed on Stock Indexes: Swiss Market Index (SMI) and the Euro Stoxx 50 Index.
Industry: Consumer Goods (Food and Beverage)
Location of headquarters: Vevey, Switzerland
Year founded: 1866
Number of employees: 342,982

Revenues

Nestlé is a multinational food and beverage company known for its wide range of products, including baby food, dairy products, confectionery, coffee, and pet care. The company owns popular brands such as Nescafé, KitKat, Maggi, Purina, and Nespresso. With a global presence, Nestlé serves consumers in various markets and has a strong focus on nutrition, health, and wellness. The company’s diverse portfolio and commitment to sustainability have contributed to its success in the European market.

Stock chart

Stock chart for Nestle

Source: Yahoo! Finance.

The historical data for Nestle stock prices can be downloaded from Yahoo! Finance website: Download the data for Nestle

#2 ASML Holding N.V.

Logo of ASML Holding N.V.

Source: the company.

Statistics

Market capitalization: $280.24 Billion
Listed on exchanges: Euronext Amsterdam, NASDAQ
Listed on Stock Indexes: AEX Index.
Industry: Technology (Semiconductor Equipment)
Location of headquarters: Veldhoven, Netherlands
Year founded: 1984
Number of employees: 166,890

Revenues

ASML Holding is a Dutch company that specializes in the development and manufacturing of advanced semiconductor equipment used in the production of integrated circuits. The company’s lithography systems play a critical role in enabling the production of smaller, faster, and more efficient chips. ASML’s innovative technology and high-performance equipment have made it a trusted partner for semiconductor manufacturers worldwide. The company’s success has been driven by its focus on research and development, as well as its ability to meet the evolving demands of the semiconductor industry.

Stock chart

Stock chart for ASML

Source: Yahoo! Finance.

The historical data for ASML stock prices can be downloaded from Yahoo! Finance website: Download the data for ASML

#3 Roche Holding AG

Logo of Roche

Source: the company.

Statistics

Market capitalization: $253.04 Billion
Listed on exchanges: Swiss Exchange, OTCQX International Premier
Listed on Stock Indexes: Swiss Market Index
Industry: Healthcare (Pharmaceuticals)
Location of headquarters: Basel, Switzerland
Year founded: 1896
Number of employees: 149,000

Revenues

Roche Holding is a global healthcare company that operates in the fields of pharmaceuticals and diagnostics. The company focuses on developing and delivering innovative medical solutions to address various diseases, including cancer, infectious diseases, neuroscience disorders, and rare diseases. Roche’s pharmaceutical portfolio includes drugs for oncology, immunology, and other therapeutic areas. The company is also a leader in the diagnostics industry, offering a wide range of diagnostic tests and systems. Roche’s commitment to advancing healthcare and improving patient outcomes has solidified its position as a prominent player in the European market.

Stock chart

Stock chart for Roche Holding

Source: Yahoo! Finance.

The historical data for Roche Holding stock prices can be downloaded from Yahoo! Finance website: Download the data for Roche Holding

#4 Novartis AG

Logo of Novartis

Source: the company.

Statistics

Market capitalization: $208.78 Billion
Listed on exchanges: SIX Swiss Exchange, NYSE
Listed on Stock Indexes: Swiss Market Index
Industry: Healthcare (Pharmaceuticals)
Location of headquarters: Basel, Switzerland
Year founded: 1996
Number of employees: 335,186

Revenues

Novartis is a multinational pharmaceutical company focused on the research, development, and commercialization of innovative healthcare solutions. The company’s portfolio includes prescription medicines, generic drugs, vaccines, and consumer health products. Novartis operates in various therapeutic areas, including oncology, immunology, cardiovascular, and ophthalmology. With its commitment to advancing medical science and improving patient outcomes, Novartis has established itself as a leader in the European pharmaceutical industry.

Stock chart

Stock chart for Novartis

Source: Yahoo! Finance.

The historical data for Novartis stock prices can be downloaded from Yahoo! Finance website: Download the data for Novartis

#5 SAP SE

Logo of SAP

Source: the company.

Statistics

Market capitalization: $154.66 Billion
Listed on exchanges: Frankfurt Stock Exchange
Listed on Stock Indexes: DAX Index
Industry: Technology (Enterprise Software)
Location of headquarters: Walldorf, Germany
Year founded: 1972
Number of employees: 528,748

Revenues

SAP is a leading enterprise software company that provides solutions for business operations, analytics, cloud computing, and customer experience. Its software applications help companies manage various aspects of their operations, including finance, human resources, supply chain, and customer relationship management. SAP serves clients across industries and has a strong presence in Europe and globally. The company’s innovative solutions and commitment to digital transformation have made it a key player in the European technology sector.

Stock chart

Stock chart for SAP

Source: Yahoo! Finance.

The historical data for SAP stock prices can be downloaded from Yahoo! Finance website: Download the data for SAP

Why should I be interested in this post?

As a management student, understanding the top companies in different markets and their market capitalization holds significant value. It provides you with industry insights, allowing you to comprehend the competitive landscape and trends within specific sectors.

Analyzing market capitalization aids in investment analysis, enabling you to assess the size, growth potential, and financial health of companies. Moreover, studying successful companies (success being measured by their market capitalization) provides valuable lessons in competitive strategy, organizational management, and leadership practices.

Useful resources

Companies Market Cap Largest European companies by market capitalization

Statista Market capitalization of leading companies on Euronext stock exchange as of February 2023

Yahoo! 10 Best European Companies To Invest In

About the author

The article was written in June 2023 by Nithisha CHALLA (ESSEC Business School, Grande Ecole Program – Master in Management, 2021-2023).

My job in the Investors Relations department at SAP

In this article, Micha FISHER (University of Mannheim, MSc. Management, 2021-2023) shares his experience as an employee in the Investors Relations department at SAP, Europe’s largest software company.

SAP

SAP is a curious case within the DAX 40 index. Unlike many of the well-known German enterprises, it is not a company built around the automotive sector, machinery, or chemicals. Instead, SAP is one of the very few European software companies, that can match the dominant players from the USA.

SAP
Logo SAP
Source: SAP.

However, SAP is not known for its consumer products, and its business is purely focused on the business-to-business (B2B) sector. As one of the leading providers of Enterprise Resource Planning (ERP) systems, SAP provides other companies with the opportunity to transform themselves into intelligent enterprises with integrated processes. Applications cover all possible business processes from supply-chain management to finance through supporting functions like human resources.

In the 2020s, SAP’s current main challenge is to transform its business and its large and international client base from mainly locally managed systems (on premise) to remotely managed systems (cloud services). This presents a great opportunity and comes with many benefits not only for SAP’s customers but also for SAP shareholders, as cloud contracts provide the business with stable and more recurring revenues.

My Work Experience

As a multinational enterprise, SAP offers various jobs in areas like development, consulting, or sales. Due to my proclivity for Finance and Communication, I choose to work for SAP’s Investor Relations department. This department works closely with the CFO and CEO of the company to facilitate an ongoing dialogue with the investor community, to prepare the publication of quarterly results and to manage the annual general meeting of shareholders.

While some colleagues deal with matters of retail shareholders or with matters of ESG investors specifically, I was mostly supporting the institutional side of the team. This means listening to the sell-side analysts of the large investments firms that are covering the company (UBS, GS, JPM, etc.), preparing meetings with those analysts or with portfolio managers and in general keeping an eye on the current sentiment of the market.

Knowledge and skills needed

A good Investor Relations Officer should have a diverse and broad background. Of course, financial knowledge and the skills to analyze financial statements is key, as those topics are part of the daily discussions with external analysts as well as with internal stakeholders.

However, a good general understanding of the industry and of the product landscape is necessary as well. And finally, sufficient communication skills are a must: it is not enough to advertise the company to future potential shareholders, it is also critical to listen to the concerns of existing shareholders and to relay this information back into the board room of the company.

What I learned

The market is always right. This is a very confrontative statement and I suppose not everyone would agree with this initially. However, in my experience, an honest and transparent approach to financial communication is the most successful one in the long term. Investor Relations should not sugarcoat its messages to the market. At the end, the value of the company is fundamentally decided by its potential to generate cash flows (and especially cash flows for shareholders with dividends). Changing the messaging can only delay a change of the stock price. One of my colleagues with a lot of experience loves to quote President Abraham Lincoln on this matter (although nobody knows if he really said that): “You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time.”.

Financial concepts

To work in Investor Relations, you should be aware of several financial concepts: Firm valuation and modelling are at the heart of the job. General knowledge about M&A activities and divestitures can also be very helpful. But the most important concept is to understand the different players on the equity market:

Sell side

The sell side represents all the third-party analysts from investment banks or independent research firms that do not actually trade the stock of the company but sell their reports and insights to those who do. These analysts have a very deep understanding of the industry and the business model and there are excellent at modelling firm valuations.

Buy side

The buy side consists of large private funds, insurance companies and sovereign state funds. These are the actual shareholders of the company and often the portfolio managers of these companies are generalists with various industries in their portfolios. They are a diverse group of firms and while some of them are very passive investors, others are actively trying to influence the decision processes within the company.

Proxy advisors

Proxy advisors provide advisory services to institutional investors. They advise the buy side investors on how to vote during the annual general meeting of a corporation. As the market for proxy advisory is heavily concentrated, it is of utmost importance for Investor Relations to keep an ongoing dialogue with these firms. Well-known proxy advisors are “Glass, Lewis & Co” and “Institutional Shareholder Services (ISS)”.

Why should I be interested in this post?

Investor Relations is a developing function in public companies and the discipline must be better studied in the academic field. It is a key function within every publicly traded company to minimize the information asymmetries between investors and management and thus in my opinion a very interesting area to work in.

Useful resources

SAP

SAP Investor Relations

National Investor Relations Institute (US-focused association)

About the author

The article was written in October 2022 by Micha FISHER (University of Mannheim, MSc. Management, 2021-2023).

Top 5 companies by market capitalization in the Europe

Introduction to market capitalization

Top 5 companies by market capitalization in Europe

#1 Nestlé S.A.

Statistics

Revenues

Stock chart

#2 ASML Holding N.V.

Statistics

Revenues

Stock chart

#3 Roche Holding AG

Statistics

Revenues

Stock chart

#4 Novartis AG

Statistics

Revenues

Stock chart

#5 SAP SE

Statistics

Revenues

Stock chart

Why should I be interested in this post?

Related posts on the SimTrade blog

Useful resources

About the author

My job in the Investors Relations department at SAP

SAP

My Work Experience

Knowledge and skills needed

What I learned

Financial concepts

Sell side

Buy side

Proxy advisors

Why should I be interested in this post?

Related posts on the SimTrade blog

Useful resources

About the author