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IPO Watch Europe Q1 2021 www.pwc.co.uk/ipowatch
IPO Watch EuropeQ1 2021
www.pwc.co.uk/ipowatch
European IPO activity in Q1 2021 saw a significant increase in issuance with 86 IPOs raising €22.6bn compared to €1.2bn in Q1 2020 from 16 IPOs and already surpassing full year 2020 IPO issuance. The increase in Q1 2021 is primarily driven by strong market conditions fuelled by post-pandemic optimism, improved macroeconomic backdrop and a significant pipeline of quality issuers ready to go public.
Global IPO activity European IPO activity (incl. UK)
UK IPO activity
Q12017
Q12018
Q12019
Q12020
Q12021
Value ($bn)Volume of IPOs
Q12017
Q12018
Q12019
Q12020
Q12021
Value (€bn)Volume of IPOs
Q12017
Q12018
Q12019
Q12020
Q12021
Value (£bn)Volume of IPOs
$202.9bnin Q1 2021
€22.6bnin Q1 2021
£7.3bnin Q1 2021
This has been a strong start to the year for IPOs in Europe, with Q1 2021 delivering the strongest first quarter since 2000. Improved market confidence driven in part by the ongoing vaccination programmes across Europe, continued government support programmes and supportive macroeconomic data have provided a positive backdrop.
There are positive signs that momentum in the IPO market will continue throughout 2021. Given that backdrop, concerns around the pace of economic recovery and a hot IPO market in Q1, we anticipate that investors will focus on differentiated equity stories and challenge the overall quality of issuers.
Mark HughesPartner, UK Capital Markets Leader
InPost SAIndustrials
€3,220mEuronext Amsterdam
Vantage Towers AGTelecommunications
€2,000mDeutsche Börse
AUTO1 Group SEConsumer discretionary
€1,833mDeutsche Börse
Deliveroo plcTechnology
£1,500mLondon Stock Exchange
Dr Martens plcConsumer discretionary
£1,489mLondon Stock Exchange
Fix Price Group LtdConsumer discretionary
£1,248mLondon Stock Exchange
Moonpig Group plcConsumer discretionary
£540mLondon Stock Exchange
Trustpilot Group plcTechnology
£473mLondon Stock Exchange
PwC | IPO Watch Europe – Q1 2021 | 2
European IPO trendsQ1 2021 has seen the strongest European IPO activity in recent history, raising €22.6bn and surpassing full year 2020 IPO issuance of €20.3bn. Cornerstone support has also been a feature of 2021 IPOs and has added positive dynamics to the European IPO market. European SPACs issuance is gaining momentum, targeting technology and ESG sectors.
Figure 1: Quarterly European IPO activity since 2017
5.0 17.1 10.5 12.8 13.5 9.2 3.7 10.2 0.7 11.5 3.9 6.1 1.2 4.3 6.2 8.6 22.6
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Q1 2021 European IPO issuance exceeded full year 2020 IPO proceeds
European IPO market remained very active throughout Q1 2021, marking it the best first quarter since 2000 and surpassing the full year 2020 IPO issuance levels. Notably, the top five IPOs in Q1 2021 (InPost, Vantage Towers, AUTO1 Group, Deliveroo, and Dr Martens) were all over €1bn, whereas, in the first quarter last year we saw much smaller transactions. The momentum in Q1 was driven by various factors such as positive market conditions on the back of post-pandemic optimism, continued government support programmes, improved macroeconomic indicators and significant pipeline of quality issuers that were ready to go public. The pipeline was also driven by increased IPO activity by PE houses looking to exit, supported by attractive valuations.
SPACs are gaining momentum in Europe
Q1 2021 SPACs issuance in the US have already exceeded the total issuance in all of last year. SPACs in Europe are gaining momentum with Euronext Amsterdam, Frankfurt and Stockholm exchanges becoming increasingly active, as well as being backed by top quality sponsors. European SPACs have a diverse industry, including a focus on technology, ESG and nutrition.
Cornerstones bring additional support to European IPOs
Another prominent feature of the European IPO markets this quarter has been the substantial cornerstone support of the European IPOs. A majority of high profile IPOs were supported by blue-chip institutional investors with cornerstone commitments being announced early in the marketing process helping to de-risk transactions and validate their equity stories. Whilst this is not a new feature to the IPO market, it has certainly added positive dynamics to the Q1 market and highlights the quality of the investment opportunities presented to the market this year..
We have seen a significant deal flow in Europe across a broad range of sectors from technology and telecoms to consumer products and industrials. However, what stands out in particular is the flurry of European tech, online and e-commerce new listings. This has largely been driven by increased investor appetite for digital companies that have benefited from the lockdowns and broader shift towards online by consumers and companies, as well as increasing focus on sustainable businesses strategies.
Another area to watch is increasing European activity around SPACs in Amsterdam, Frankfurt and other jurisdictions, seeking to capitalise on the M&A recovery.
Richard SpilsburyPartner, UK Capital Markets
PwC | IPO Watch Europe – Q1 2021 | 3
European exchangesLondon Stock Exchange continues to dominate both IPOs and further offers in Q1 2021 with a number of high profile transactions. Euronext Amsterdam has advanced to second position and hosted the IPO of InPost which was the largest IPO in Europe this quarter.
Figure 2: Top five stock exchanges by IPOs in Europe in Q1 2021 (by offering value)
1
23
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London Stock Exchange21 IPOs raised: €8,397mLargest IPO: Deliveroo plc (€1.8bn)
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Euronext - Amsterdam4 IPOs raised: €4,686mLargest IPO: InPost SA (€3.2bn)
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Deutsche Börse 4 IPOs raised: €4,522mLargest IPO: Vantage Towers AG (€2.0bn)
3
Oslo Børs27 IPOs raised: €2,132mLargest IPO: Aker Horizons AS (€437m)
4
Nasdaq Nordic - Stockholm14 IPOs raised: €1,869mLargest IPO: Cint Group AB (€594m)
5
Figure 3: Top five stock exchanges by further offers in Europe Q1 2021 (by offering value)
London Stock Exchange107 further offers raised: €10,257mLargest further offer: London Stock Exchange Group plc (€876m)
1
Deutsche Börse27 further offers raised: €6,713mLargest further offer: Siemens Healthineers AG (€2.3bn)
2
Nasdaq Nordic – Copenhagen 5 further offers raised: €6,356mLargest further offer: Tryg A/S (€5.0bn)
3
Nasdaq Nordic - Stockholm40 further offers raised: €3,223mLargest further offer: Embracer Group AB (€746m)
4
Euronext - Lisbon2 further offers raised: €2,034mLargest further offer: EDP Renovaveis SA (€1.5bn)
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54
PwC | IPO Watch Europe – Q1 2021 | 4
1.2 4.3 6.2 8.6 22.60
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Market volatilityA year after the start of the global pandemic, the volatility of the European markets dipped below 20 in early March 2021 after a year of uncertainty characterised by significant price swings in both directions. A more stable Q1 2021 provided a favourable backdrop for the IPO market in Europe with a number of issuers taking advantage of a receptive IPO market.
VSTO
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POs
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Source: Bloomberg 31 March 2021
Figure 5: Historical performance of major European market indices since January 2020
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Figure 4: Volatility tracked against European IPO values
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Euro STOXX 50 FTSE 100 DAX 30 CAC 40 AEX 25
PwC | IPO Watch Europe – Q1 2021 | 5
UK focusIn London, issuers have raised £7.3bn through 21 IPOs in Q1 2021, marking the best start to a year in recent history. London also welcomed a number of foreign issuers including Fix Price and Trustpilot with both being among the top five IPOs in the quarter.
Figure 6: Quarterly UK IPO activity since 2017
1.7 4.4 1.5 4.6 1.1 1.9 1.6 3.5 0.5 3.8 0.3 0.9 0.4 1.9 3.3 6.8
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Exceptional Q1 2021 IPO issuance in London
London continues to hold the top spot for IPOs and FOs issuance in Europe with a number of high profile transactions pricing in Q1. Technology, e-commerce and consumer companies took centre stage this quarter, supported by strong cornerstone and anchor demand. The outlook for Q2 2021 is encouraging with a significant number of IPOs in the pipeline. However, we anticipate the quality of assets and valuations to be tested harder as investors become more selective. The virtual processes and condensed marketing timetables are likely to be permanent features in the market with IPO windows being less constrained and we may see deals pricing well into the summer.
Positive reception of Lord Hill's UK listings review
The UK market had a positive reaction to the UK listings review as London looks to attract IPOs of technology companies and founder-led businesses with such measures as potential inclusion of dual-class share structures on the Premium Segment and smaller free-float requirements. In addition, the upcoming consultation on listings of SPACs in London could further fuel activity levels.
ESG remains front of mind for investors
As we have seen in the last year, there has been a major shift in investors’ attitude towards ESG across all markets, with investors focusing on sustainability issues whilst making their investment decisions. ESG strategy is becoming a critical pillar of the equity story and a must-have feature for all companies looking to go public. Particularly, investors will focus on coherent communication of the strategy which is also supported by robust reporting of ESG metrics.
The rise of the retail investorStructural shifts in the equity markets are driving forces behind the growing importance of retail investor participation as technology has made it a lot easier and cheaper for retail investors to participate in the IPOs. Increased retail investor interest, particularly around IPOs of high profile consumer oriented companies, is a trend that is likely to continue and we see more companies considering retail offers as they prepare for their IPOs.
Retail offers are becoming increasingly important, particularly in the UK, with Deliveroo completing their Community Offer alongside the IPO and PensionBeeannouncing its plans to offer shares to its customers as part of their recently launched IPO.
The structure and size of the retail component needs to be a part of the early IPO preparation discussion to get the balance right between the additional process requirements and target retail and customer investor base.
Ekaterina ChmatovaSenior Manager, UK Capital Markets
PwC | IPO Watch Europe – Q1 2021 | 6
Relative performance of UK IPOs
Relative performance based on the FTSE All Share Index for Main Market listed companies and FTSE AIM All Share index for AIM quoted companies.
Source: Bloomberg as of 31 March 2021
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-60% -30% 0% 30% 60% 90% 120% 150% 180%
Nightcap plc
Cellular Goods plc
AMTE Power plc
Auction Technology Group plc
tinyBuild Inc
Supreme plc
Dr Martens plc
Moonpig Group plc
Virgin Wines UK plc
AdvancedAdvT Ltd
ActiveOps Ltd
In The Style Group plc
Trustpilot Group plc
Cordiant Digital Infrastructure Ltd
Fix Price Group Ltd
Foresight Group Holdings Ltd
Digital 9 Infrastructure plc
VH Global Sustainable Energy Opportunities plc
Parsley Box Group plc
Deliveroo plc
Aim Main
companies have outperformedthe index
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companies have underperformedthe index
7
Figure 7: Share price performance of trading UK IPOs relative to the FTSE all share index, from IPO to 31 March 2021 (%)
Overall new listings have delivered a positive after market performance in Q1 2021, where we have seen 13 issuers outperforming their relative indices including LSE’s landmark IPOs of the first quarter such as Dr Martens and Moonpig.
PwC | IPO Watch Europe – Q1 2021 | 7
IPO – Q4 IPO – Q3 IPO – Q2 IPO – Q1 IPOs
Global money raised via IPOsGlobal IPO issuance in Q1 2021 has totalled US$202.9bn from 727 IPOs, fuelled by the significant SPACs IPO activity in the United States. The largest IPO globally in Q1 was Kuaishou Technology IPO raising US$6.2bn on the Hong Kong Stock Exchange.
Figure 8: Global money raised via IPOs (10-year overview)
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Figure 9: Top ten largest IPOs in Q1 2021
Pricing date Issuer name Issuer country
Sector Exchange Money raised
29-Jan-21 Kuaishou Technology Technology HKEX $6.2bn
10-Mar-21 Coupang Inc Consumer Discretionary NYSE $4.6bn
27-Jan-21 InPost SA Industrials Euronext Amsterdam $3.9bn
10-Feb-21 Bumble Inc Technology NASDAQ $2.5bn
17-Mar-21 Vantage Tower AG Telecommunications Deutsche Börse $2.4bn
2-Feb-21 AUTO1 Group SE Consumer Discretionary Deutsche Börse $2.2bn
14-Jan-21 Playtika Holding Corp Consumer Discretionary NASDAQ $2.2bn
26-Jan-21 Shoals Technologies Group Inc Utilities NASDAQ $2.1bn
31-Mar-21 Deliveroo plc Technology LSE $2.1bn
29-Jan-21 Dr Martens plc Consumer Discretionary LSE $2.0bn
PwC | IPO Watch Europe – Q1 2021 | 8
Appendix
PwC | IPO Watch Europe – Q1 2021 | 9
Appendix: European IPOs over €100m in Q1 2021
Appendix 1: European IPOs
IPO date Issuer Value (€m) Stock Exchange Sector
27-Jan-21 InPost SA 3,220 Euronext - Amsterdam Industrials
17-Mar-21 Vantage Towers AG 2,000 Deutsche Börse Telecommunications
02-Feb-21 AUTO1 Group SE 1,833 Deutsche Börse Consumer Discretionary
31-Mar-21 Deliveroo plc 1,757 London Technology
29-Jan-21 Dr Martens plc 1,684 London Consumer Discretionary
05-Mar-21 Fix Price Group Ltd 1,457 London Consumer Discretionary
25-Mar-21 CTP BV 854 Euronext - Amsterdam Financials
02-Feb-21 Moonpig Group plc 613 London Consumer Discretionary
19-Feb-21 Cint Group AB 594 Nasdaq Nordic - Stockholm Technology
23-Mar-21 Trustpilot Group plc 550 London Technology
25-Feb-21 Desenio Group AB 442 Nasdaq Nordic - Stockholm Consumer Discretionary
28-Jan-21 Aker Horizons AS 437 Oslo Børs Utilities
15-Feb-21 Cordiant Digital Infrastructure Ltd 424 London Financials
05-Feb-21 Huuuge Inc 371 Warsaw Consumer Discretionary
25-Mar-21 European FinTech IPO Co 1 BV 362 Euronext - Amsterdam Financials
23-Mar-21 Friedrich Vorwerk Group SE 360 Deutsche Börse Utilities
26-Mar-21 Digital 9 Infrastructure plc 349 London Financials
23-Feb-21 Auction Technology Group plc 348 London Technology
25-Mar-21 ACQ Bure AB 342 Nasdaq Nordic - Stockholm Financials
08-Mar-21 Aker Clean Hydrogen AS 340 Oslo Børs Utilities
18-Feb-21 Lakestar SPAC I SE 275 Deutsche Börse Financials
28-Jan-21 VH Global Sustainable Energy Opportunities plc
274 London Financials
04-Feb-21 Foresight Group Holdings Ltd 258 London Financials
12-Feb-21 ESG Core Investments BV 250 Euronext – Amsterdam Financials
09-Mar-21 tinyBuild Inc 180 London Consumer Discretionary
19-Mar-21 EcoOnline Holding AS 158 Oslo Børs Technology
18-Mar-21 RugVista Group AB 152 Nasdaq Nordic - Stockholm Consumer Discretionary
18-Mar-21 Marwyn Acquisition Company I Ltd 152 London Financials
24-Mar-21 Sitowise Group plc 140 Nasdaq Nordic - Helsinki Industrials
26-Mar-21 Froy ASA 134 Oslo Børs Consumer Staples
26-Mar-21 Norse Atlantic ASA 125 Oslo Børs Consumer Discretionary
12-Feb-21 Sonans Holding AS 122 Oslo Børs Consumer Discretionary
18-Mar-21 Nightingale Health Ltd 110 Nasdaq Nordic - Helsinki Health Care
26-Mar-21 Pierce Group AB 103 Nasdaq Nordic - Stockholm Consumer Discretionary
PwC | IPO Watch Europe – Q1 2021 | 10
About IPO Watch Europe
Executing a successful IPO is typically the culmination of a complex process, whatever market you list on. From Strategy, accounting, reporting, financial systems, governance, adviser selection, marketing process, media and investor relations, to treasury and financial risk management, legal, tax, HR, technology – every piece of the puzzle must be in place and connected before you proceed.
Planning and good preparation are crucial to a successful IPO, regardless of the market or stock exchange. PwC’s dedicated team of capital markets professionals is here to help and make the task at hand an easier experience for you. We have deep experience and knowledge of the rules and regulations governing all major capital markets – and a successful history of working on both international and domestic IPOs.
Find out more at www.pwc.co.uk/capitalmarkets
About IPO Watch EuropeIPO Watch Europe surveys all new primary market equity IPOs on Europe’s Principal stock markets and market segments (including exchanges in Austria, Belgium, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Serbia, Spain, Sweden, Switzerland, Turkey and the UK) on a quarterly basis. Movements between markets on the same exchange are excluded.
The data in this report is based on data extracted from Dealogicand includes greenshore (if exercised). Only transactions with a minimum of $5 million raised have been included. The data excludes PIPOs and transactions on Over-The-Counter exchanges. In case IPOs take place on two or more exchanges, the full amount of money raised is attributed to all exchanges. Industry classification is based on the new enhanced FTSE Russell Industry Classification Benchmark (ICB).
This survey was conducted between 1 January to 31 March and IPOs based on their pricing date, and between 1 January to 31 March for further offers analysis. All market data is sourced from Dealogic and has not been independently verified by PricewaterhouseCoopers LLP.
Basis of preparation for global IPO watch
Global IPO Watch analyses IPO and FO trends on a quarterly basis, both at a global and regional level. Its is based on data extracted from Dealogic, whereby only transactions with a minimum of $5 million raised have been included. Transaction proceeds include the overallotment option (if exercised). The data excluded PIPOs and transactions on Over-The-Counter exchanges. In case IPOs or FOs take place on two or more exchanges, the full amount of money raised is attributed to all exchanges. If a transactions is executed in two or more regions, the money raised is also attributed to all regions. Industry classification is based on the new enhanced FTSE Russell Industry Classification Benchmark. Index performance is based on pricing data extracted from Bloomberg.
Contacts
PwC | IPO Watch Europe – Q1 2021 | 11
Mark HughesPartner, UK Capital Markets Leader
M: +44 (0)7736 599759E: [email protected]
Richard SpilsburyPartner, UK Capital Markets
M: +44 (0)7703 503562E: [email protected]
Ekaterina ChmatovaSenior Manager, UK Capital Markets
M: +44 (0)7710 036613E: [email protected]
This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
© 2021 PricewaterhouseCoopers LLP. All rights reserved. PwC refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
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