Last Friday someone wished me a Happy New Year.
To me it feels more like Happy Old Year. The first
month has virtually passed and everything
continues as it was the last 6 months. Inflation has
risen in Germany to highest level (5.3%) since 1993
(5.8%) and corporate transactions are at all time high.
Will it continue? Instead of creating a wave of
insolvencies (my expectation in 2020 –
I am a bad prophet)
Corona has lead to pretty much the opposite.
Most businesses (in Germany) in our monitoring had a
bumper year. What does this mean for corporate
acquisitions in Germany?
Inflation generally impacts negatively on valuation
of companies. Some of these effects can already be
seen on German stock exchange, which dropped
by about 10% this month until Thursday (recovered
a bit meanwhile). My personal observation from
speaking to many German companies is that almost
everyone has either increased or plans to
increase prices. Most complain about shortage
of labor. I think inflation is going to last for next
5 years at significantly higher levels than in
the past 10 years. Let me know what you think
about price increases in your company and
labor shortages. What do you
think is going to happened to the currency exchange?
What do you think about your pricing?