An index of corporate financial performance
Corporate financial performance increased in Europe and North America regions globally in the first quarter of 2024, supported by a notable drop in the number of ‘zombie companies’ and strong performances from the Middle East and Asia.
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. The KPMG 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 corporate financial performance index (FPI) highlighted strong results across various global regions in the first quarter of 2024. Saudi Arabia led the rankings with an impressive FPI score of 96.4. It was closely followed by Mexico, which scored 95.9.
In Asia and the Middle East, besides Saudi Arabia, the United Arab Emirates (UAE), countries and jurisdictions such as Japan and Taiwan also showed robust FPI performances, with both making it to the top 10 on the index.
The two Americas regions each reported significant growth and strength. North America's FPI increased from 85.1 to 88.7, while South America posted a score of 92.0.
Noteworthy improvements were observed in Canada where the FPI score surged from 54.6 to 71.8. Similarly, Sweden and Singapore also reported increases, up 5.8 points (7.7 percent) to 82.1 and up 4.5 points (5.5 percent) to 85.1 respectively.
Despite declines in FPI scores for New Zealand, South Korea, and Spain from fourth-quarter results in 2023, these regions still maintained healthy FPI scores.
In the first quarter of 2024, the Biotechnology sector maintained its performance from the fourth quarter of 2023, with an increase of 1.2 points. Packaging Products declined by 1.5 points to 92.4.
Similarly, the Utilities and Raw Materials and Natural Resources sectors also experienced growth, with increases of 0.8 and 0.6 points, respectively.
Additionally, there was a notable reduction in the number of Zombie companies, declining from 1,162 to 1,083. These companies, scoring an FPI of zero for more than three quarters, accounted for approximately 3.1 percent of the total companies analyzed.
Corporate financial performance saw a minor decline in 4Q23 as compared to 3Q23. South America was one of the best performing regions with a KPMG FPI score of 92.6. However, the largest drop was experienced in Oceania region, where scores declined from 75.6 to 72.4 from quarter-over-quarter.
Companies headquartered in France, Italy and the UK saw an increase in FPI scores, while those with headquarters in Canada, Singapore, Indonesia, and Australia observed significant declines. Canada, in particular, experienced headwinds with FPI scores declining from 64.7 to 54.6.
Aerospace and Defense and Utilities emerged as the top scoring sectors, while Raw Materials and Natural Resources and Agriculture and Husbandry were among the weakest performing sectors in 4Q23.
There was a decline in the number of zombies in 4Q23 from 1,300 to 1,162. The zombie companies accounted for 3.4 percent of the companies in the study.
Corporate financial performance slightly increased in the third quarter of 2023, with the KPMG FPI score increasing from 88.1 in 2Q23 to 90.7 in 3Q23 globally.
The Oceania region saw the strongest growth quarter-over-quarter by point to 75.6, followed by North America (increased 4.8 points) at 86.7. South America continued its upward trajectory from the previous quarter, with its KPMG FPI score rising to 92.8 this quarter.
Companies headquartered in Canada and Australia enjoyed the greatest increase in KPMG FPI scores, while Nigeria saw the biggest declines, falling by 1.9 points to 89.5. Canada reversed its previous quarter decline, with its KPMG FPI score rising to 64.8 in 3Q23.
Raw Materials and Natural Resources, and Energy were the top performing sectors with FPI scores of 86.2 and 93.9 respectively, while Aerospace and Defense, was the only sector that saw a decline in its FPI score.
Sector performance
Biotechnology experienced the strongest growth along with Utilities sector which was propelled by Electric Utilities sub-sector which increased by 1.2 points. The Raw Materials and Natural Resources followed the growth trajectory with growth driven by Metals and Mining.
While Transportation and Logistics maintained a healthy stance with FPI scores of around 93 points, it saw a slight decrease due to minor setbacks observed in Marine Transportation and Air Freight and Logistics. The Packaging Products and Chemical sectors also experienced a minor decline in FPI scores in 1Q24.
On a quarter-over-quarter basis, the Biotechnology sector was among the strongest growing sectors with scores increasing by 1.2 points. Transportation and Logistics and Packaging Products saw a minor declines in scores of 1.3 and 1.5 points respectively.
Sector performance across regions
In the first quarter of 2024, different regions experienced varying performance in their sectors. Here is a breakdown of the regional comparisons:
Africa: The Technology and Telecommunication sector showed strong momentum, increasing their index score by 5.3 points. The Financial Services sector experienced headwinds and declined by around 4 points.
Asia: The Utilities sector increased their index score by around 1 point, while the Equity Real Estate Investment Trusts (REITs) sector experienced a decline of around 1.4 point.
South America: The Technology and Telecommunication sector and the Consumer Markets sector both performed well with an increase in the index score of around 2.2 points each. However, the Chemicals sector delivered the weakest performance declining by 5.5 points in 1Q24.
Europe: Europe’s Chemical and Biotechnology sector performed comparably well with an increased FPI score of around 4.4 points and 3.4 points respectively. The Transportation and Logistics sector dropped by approximately 6 points with a few other sectors experiencing less significant declines.
North America: Agriculture and Husbandry and Raw Materials and Natural Resources, enjoyed a significant increase of approximately 12.6 and 6.9 FPI points respectively, while Transportation and Logistics decreased by 1 point.
Oceana: Life Sciences Tools and Services witnessed a massive growth of 17.9 points. This was followed by the Biotechnology and Healthcare sector. Yet the region also saw multiple sectors slide backwards, including Energy, Raw Materials and Natural Resources and Media and Entertainment.
Zombies
Zombies are companies close to default (scoring 0 on the KPMG FPI) for three or more consecutive quarters.
he number of zombies decreased by 6.8 percent in the last quarter (from 1,162 in 4Q23 to 1,083 in 1Q24). The Raw Materials and Natural Resources sector, as well as the Technology and Telecommunication sector, contributed the highest shares of zombies, which are around 19 percent and 13.8 percent, respectively.
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 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 KPMG professionals have the data, sector, and geographic expertise 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
South America displayed a positive momentum with its KPMG FPI score increasing to 92.0 points. North America saw the strongest growth in 1Q24, increasing roughly by 3.5 points.
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 Canada (12 points), New Zealand (4.6 points) and Vietnam (4.1).
Those headquartered in China, Australia, Hong Kong (SAR), and Thailand saw a decline in FPI scores over the prior 12 months, falling by 7.5 points, 4.5 points, 3.8 points and 2.4 points, respectively.
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.
The 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 the 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 1Q24, the KPMG FPI found 1,949 companies with a KPMG FPI score of zero. The zero indexed companies were headquartered across the US (603), Australia (295), Canada (274) and Sweden (142).
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, the 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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1A distressed company is one having a KPMG FPI score of 0.