An index of corporate financial performance
Corporate financial performance recovered slightly in every region globally in the third quarter of 2024, with strong performance from many markets in the Middle East and North America. The index also shows a notable decrease in the number of ‘zombie companies’ globally.
Discover which countries and territories are performing among the best. Assess financial performance across sectors. Identify distressed companies. Compare your company’s financial performance against tens of thousands of public companies around the world. KPMG’s Financial Performance Index (FPI) is designed to be one of the clearest indices of corporate financial performance.
For investors, financiers, regulators and governments, the KPMG FPI seeks to provide insights into the relative strength and health of key markets and sectors. With millions of datapoints going back to 2017, these long-term trends can help you spot signs of improvement or impending distress.
Updated quarterly, this webpage allows you to interact with the data to analyze shifts, trends, and related opportunities. You will also find key highlights from the most recent quarter and a spotlight on fast-moving industry sectors.
- The Federal Reserve's rate decisions significantly impact U.S. and global economies, influencing loan costs, inflation and currency values. Traditionally, rate decisions are not made close to a US election. It remains to be seen how the recent U.S. rate decision and now widely expected hiatus on rate decisions will influence financial performance of US interest rate sensitive companies globally.
- Corporate financial performance remained fairly steady, recording a slight increase of 3.8 points in the third quarter of 2024, following two quarters of consecutive declines. For the third time in a row, Saudi Arabia led the global rankings with a score of 97.0, closely followed by Türkiye, which scored 96.0 points.
- The top performing countries and territories (RC) were largely based in the Middle East, Asia and Europe, with Japan, Taiwan and the UAE all displaying positive momentum. Some European markets also performed well, such as Switzerland, France and Spain.
- While all regions recorded improvement in overall scores, Oceania experienced the most significant increase (of 14.8 points) followed by North America (6.1 points). Asia and Africa recorded similar increases in FPI scores.
- At an overall country level, around 68 percent of the markets in our research recorded FPI scores of more than 85 points. Canada and Australia showed tremendous improvement in 3Q24, increasing by 24.1 and 16.0 points respectively, buoyed by their large portion raw materials sector and related industries.
- All sectors reported FPI scores in the range of 85-95 points in the third quarter of 2024 with Chemicals (95.5 points) emerging at the top and Raw Materials and Natural Resources (85.8 points) at the bottom end. Notably, Food and Beverages, Manufacturing, and Transportation and Logistics also recorded scores above 95 points.
- Along with the increase in average FPI scores, there was also a notable decrease in the number of Zombie companies (those that score an FPI of zero for more than three quarters), with numbers decreasing from 952 to 922. Zombie companies, accounted for approximately 3.0 percent of the total companies analyzed in the quarter.
- Global economic growth in 2Q24 delivered a downtrend in regional performance across the board with the exception of Africa which showed a slight increase in financial performance. Asian markets supported consumption, thereby driving overall stability, while developed economies (led by Japan and the U.S.) faced unexpected slowdowns due to moderate consumption and supply chain disruptions, resulting in a convergence of economic output globally.
- Our FPI index showed consistent financial performance results across various global regions in the second quarter of 2024. Saudi Arabia led the rankings with an impressive FPI score of 95.5. It was closely followed by Taiwan, which scored 94.4 points.
- Countries and jurisdictions from Asia and the Middle East dominated the top 10. However, Oceania struggled in the second quarter of 2024, leading to a drop of 5.3 points.
- While in the bottom quartile, Singapore delivered sustainable growth in FPI scores, increasing 2.7 points to 84.5 in 2Q24. Canadian and Australian markets declined significantly in the second quarter of 2024, dropping 8.2 points and 5.4 points respectively.
- Equity Real Estate Investment Trusts (REITs) topped the sector charts, while Infrastructure and Real Estate sector saw the biggest decline, dropping by 4.7 points.
- There was a notable reduction in the number of Zombie companies, declining from 1,162 to 952. These companies, scoring an FPI of zero for more than three quarters, accounted for approximately 2.6 percent of the total companies analyzed.
- Global economic growth suffered a slowdown on the back of persistent inflation levels, geopolitical tensions and supply chain disruptions, necessitating monetary policy normalizations as well as international collaboration to address fiscal challenges for sustained growth plans.
- Corporate financial performance saw a minor decline in 1Q24 as compared to 4Q23. South America was one of the best performing regions with a KPMG FPI score of 92.9. However, the largest drop was experienced in Oceania region, where scores declined from 72.0 to 66.1 quarter-over-quarter.
- Companies headquartered in Australia and Canada and saw significant declines in FPI scores, while those with headquarters in Sweden and Switzerland observed slight increase in their FPI score.
- Equity Real Estate Investment Trusts (REITs) and Food and Beverages emerged as the top scoring sectors. While Raw Materials and Natural Resources and Biotechnology were the weakest performing sectors and Raw Materials and Natural Resources notably witnessed a significant decline in FPI quarter-over-quarter and stood at 77.9 points.
Global performance
Having declined two quarters in a row in 1Q24 and 2Q24, global corporate financial performance improved in the third quarter of 2024 and stood at 91.2 points.
Sector performance
Raw Materials and Natural Resources experienced the strongest growth, propelled by the Metals and Mining sub-sector. The Infrastructure and Real Estate sector followed the same growth trajectory, which was driven by substantial growth in Real Estate Development and Diversified Activities.
Despite maintaining a healthy FPI score, the Industrial Conglomerates sector suffered a slight decline, dropping to 91.1 points in 3Q24. Supported by an improvement in global financial health, all sectors (except Industrial Conglomerates) witnessed improvement in their performance
Sector performance across regions
In the third quarter of 2024, different regions experienced varying performance in their sectors. Here is a breakdown of the regional comparisons:
- Africa: The Technology and Telecommunications sector gained momentum, increasing its index score by 15.5 points. Conversely, the Industrial Conglomerates sector declined by 13.2 points.
- Asia: All sectors within the Asian market grew, with Pharmaceuticals and Life Sciences Tools and Services leading the way.
- South America: The Chemicals sector grew by 9.5 points on the index but remained in the laggard category. In contrast, the Consumer Markets and Technology and Telecommunications sectors declined by 1.5 and 0.7 points respectively in 3Q24.
- Europe: Europe’s Transportation and Logistics sector performed well, along with the Media and Entertainment sector, both increasing their FPI scores by around 3.5 points. The Equity Real Estate Investment Trusts (REITS) and Industrials Conglomerates sectors each dropped by approximately 1.4 points, with a few other sectors experiencing less significant declines.
- North America: The Agriculture and Husbandry, and Raw Materials and Natural Resources sectors observed significant increases of approximately 38.4 points and 17.1 points respectively. Meanwhile, the Industrial Conglomerates sector observed a drastic decrease of 63.3 points and dropped down to critical levels of 13.3 points.
- Oceania: The Energy and Agriculture and Husbandry sectors grew significantly, by 24.9 and 12.0 points, respectively. However, Oceania also saw declines in multiple sectors, including Biotechnology, Aerospace and Defense, and Travel and Hospitality.
Zombies
Zombies are companies close to default (scoring 0 on the KPMG FPI) for three or more consecutive quarters.
The number of zombies decreased by 3.2 percent in the most recent quarter (from 952 in 2Q24 to 922 in 3Q24). The Raw Materials and Natural Resources sector, as well as Technology and Telecommunication sector, contributed the highest share of zombies with around 20.7 and 14.0 percent respectively, followed by Biotechnology with around 11.0 percent.
What is the KPMG FPI?
The KPMG FPI distills a range of market and financial performance indicators into a single index covering nearly 40,000 public companies around the world.
The index scores companies on a scale of zero to 100, with zero indicating serious distress and 100 being best performing.
Since many companies tend to perform well for most of their lifespans, there is a natural bias towards a higher quartile score. As such, around 80 percent of the companies in our index score between 85 and 99.
As the KPMG FPI is a logit model, a drop below the average for a specific company can very quickly lead to an index score of zero.
When exploring this data, therefore, readers should consider:
- The absolute score (zero to 100)
- Comparisons across geographies
- Comparisons across sectors
- Relative performance against peers
- Trends over time
- Macro events which are driving trends and
Expected macro events which may affect future scores.
Read more about our methodology.
Want to see your company’s score?
To understand your company’s current index score, or to uncover deeper insights about specific markets or segments, contact your local KPMG member firm. KPMG’s global network of professionals have the data, sector, and geographic experience (RC) to help you understand your score and tie it back to your business needs. Whether it is benchmarking, identifying targets, comparing sectors, or looking for trends over time, KPMG professionals can connect you to the information you need to capitalize on your opportunities. That is our business. Please contact us at in-fmkpmgfpi@kpmg.com to find out more.
Regional performance
Regional performance enjoyed a generally positive trend, with every region growing in the third quarter of 2024. There were notable performances from Oceania (up 14.8 points), Asia (up 6.1 points) and North America (up 3.7 points). However, despite this significant increase in financial performance, Oceania still lags considerably.
Country and territory performance: Year-over-year biggest gainers and losers
An analysis of the KPMG FPI country data shows that, year-on-year, the largest gains in KPMG FPI scores were experienced by companies headquartered in South Africa (2.1 points), Italy (1.5 points) and Canada (1.0 points).
Year-over-year declines in FPI scores were experienced by companies headquartered in Romania (down 8.8 points), Singapore (down 3.3 points), New Zealand (down 1.6 points) and Norway (down 1.6 points)
Distressed countries and territories
Given the natural bias for the KPMG FPI to score well-performing companies at high levels (typically between 85 and 99), this index provides significant opportunity to spot distressed companies that fall outside of the normal range.
KPMG FPI is a unique index in that it combines, into a single result, both traditional market performance indicators together with company, country, and industry specific financial performance indicators. This allows KPMG FPI to identify why markets are behaving in a particular way and support its findings with data backed insights into what is causing the movement. It has also proven to identify insights earlier than traditional market indicators.
In 3Q24, the KPMG FPI found 1,671 companies with a KPMG FPI score of zero. The largest concentrations of zero-indexed companies were headquartered across USA (477), Canada (361), Australia (231) and Sweden (111).
Please visit the Zombie section to know more about significant underperforming companies.
Methodology
The KPMG Financial Performance Index measures the financial health of individual companies. Based on an initial pool of more than 40,000 companies globally, KPMG FPI identifies those companies, sectors, regions, countries, and territories that are performing well and those that are underperforming. A higher score on the KPMG FPI represents strong performance.
The KPMG FPI model draws from the Logit Probability to Financial Default model (developed by John Campbell, Jens Hilscher and Jan Szilagyi), which is based on eight explanatory variables encompassing financial and market variables, to arrive at the overall financial health of a company. The KPMG FPI is based on raw data from S&P Capital IQ database.
We release our insights publicly every quarter. However, the model can be run on any given day to reflect live market changes, so please reach out to your local KPMG member firm, or contact us at in-fmkpmgfpi@kpmg.com if you would like additional information.
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