Energy Crisis Looms Over European Equity Markets

The unfolding European energy crisis is causing havoc among energy producers and utilities. Germany’s nationalization of struggling utility company Uniper is a recent example of the fallout. But how could soaring energy prices affect companies from the perspective of energy consumption?

Which European companies may be most exposed to rising energy costs?

We looked at the energy exposure of stocks in the MSCI Europe Index. First, we identified the most energy-intensive companies measured in terms of energy consumption in gigawatt hours (GWh) per USD 1 million of sales.¹ We only included companies whose assets are predominantly located in Europe, with the top 10 most energy-intensive companies outside of energy producers and utilities shown in the exhibit below. In the absence of offsetting government subsidies, high energy costs could significantly reduce these companies’ profit margins.

Next, we assessed companies with the largest absolute energy consumption, measured in GWh. These companies might be at risk if European governments seek to cut energy use.²