Executive Summary
The year 2022 divided the economic landscape into two clearly distinct halves. The first semester maintained the momentum of the post-pandemic recovery, with positive activity data and an improving labour market. The second semester was dominated by Russia's invasion of Ukraine, the energy crisis, inflation spiralling to **8.4%** and the European Central Bank's response with **250 basis points** of rate hikes in barely six months — the greatest monetary contraction in the history of the euro.
At BMC, this high-volatility environment redoubled demand for strategic advice. Clients needed to review their financial models, reassess their project portfolios and rethink their growth strategies in a radically different context from the previous year.
Key Highlights
The M&A market reflected the environmental uncertainty. With 431 deals closed — 11% fewer than in 2021 — M&A showed resilience in an adverse context, although with a notable transformation: valuations compressed as the cost of capital rose, due diligence processes lengthened and the percentage of debt-financed transactions fell significantly.
Renewable energy sectors continued to attract capital, paradoxically boosted by the energy crisis that highlighted the urgency of energy transition. Valuations of solar and wind assets maintained their level despite the general increase in the cost of money, underpinned by regulatory certainty from long-term contracts.
The Startup Act, approved in December 2022 after years in the legislative pipeline, was a landmark for the Spanish entrepreneurial ecosystem. Tax incentives for investors, founders and startup employees, together with administrative simplification for company creation, significantly improved Spain’s competitive framework in the European context.
Sector Analysis
Manufacturing and industry: The combination of energy crisis, supply chain disruptions and rising raw material costs subjected the manufacturing sector to severe margin pressure. Companies with greater ability to pass costs to end prices or with long-term energy contracts fared better. Nearshoring of part of production from Asia accelerated as a strategic response to global supply chain fragility.
Real estate and construction: The sector experienced duality: residential showed strength in the first half, driven by pent-up demand and inflation incentivising investment in real assets; but the rise in mortgage costs in the second half significantly cooled demand. Tertiary real estate (offices, logistics, retail) continued its repositioning, with last-mile logistics as the most sought-after asset.
Fintech and financial services: The fintech sector underwent a correction after the exuberant 2021, with scarcer financing rounds and lower valuations. However, the most solid entities used the correction to make strategic acquisitions.
Regulatory Changes
The energy transition accelerated its regulatory development, with the National Integrated Energy and Climate Plan (PNIEC) revised upwards in its objectives and active renewable auctions. Listed and large companies had to prepare for the entry into force of the new European sustainability reporting standards (ESRS) under the CSRD Directive.
The Startup Act opened new opportunities for strategic planning for companies in early development stages.
Outlook
The close of 2022 left an uncertain macroeconomic landscape. Inflation was showing signs of deceleration, but interest rates remained at levels not seen since the euro crisis. Growth prospects for 2023 were modest, with tourism and domestic consumption as the main drivers of an economy seeking its new post-pandemic, post-energy crisis equilibrium.
Our strategic advisory and M&A team continued accompanying clients in navigating an environment of growing complexity, prioritising resilience and sustainable long-term value creation.
