European profiling - experiences of National statistical institutes
Data extracted in December 2023
Planned article update: 2 February 2025
Highlights
National statistical institutes jointly monitor large multinational enterprise groups.
European profiling: an eight-year experience in multinational enterprise groups analysis.
This article presents the experiences of national statistical institutes (NSIs) in European profiling, whether this involves a full European profiling of some large multinational enterprise groups located in Europe, including the delineation of their statistical units, or it is limited to profiling the group's structure only. This is a voluntary, organised and well-established collaborative process carried out by several national statistical institutes of EU Member States and EFTA countries supported by an online Eurostat application, the Interactive Profiling Tool (IPT), developed by Eurostat since 2015 and updated in 2023.
Between 2016 and 2023, 31 national statistical institutes from EU/EFTA/UK[1] jointly carried out European profiling of around 490 large multinational Enterprise groups located in Europe. In 2023, for the reference year 2022, the NSIs jointly profiled the structure of 148 multinational enterprise groups and carried out a complete European profiling of 82 of them. The 148 profiled multinational enterprise groups accounted for 21 942 legal units located in 170 countries and linked by around 24 500 relationships.
The objective of European profiling is to improve the quality of information of the largest multinational enterprise groups in the national statistical business registers and in the EuroGroups Register to support the production of high-quality business and macroeconomic statistics, especially when cross border phenomena can affect data consistency at European level. In European profiling the multinational enterprise groups (or MNE groups) are also known as Global enterprise groups (GEGs). In the European profiling process the national statistical institutes together define and agree on the legal, financial and economic structure of multinational enterprise groups and define their main economic activities irrespective of the geographical borders. The NSIs’ roles and responsibilities in European profiling are assigned according to the location of the unit in which the strategic decisions of the multinational enterprise groups are taken, i.e. the multinational enterprise groups global decision center (GDC).
The NSI having the role of GDC profiler:
- leads the process;
- selects the group for profiling;
- collects information from the group;
- carries out a global economic analysis of the group and shares the results with the partnering countries in which affiliated enterprises are located.
The NSIs that are partner profilers are responsible for analysing and complete the information shared by the GDC profiler regarding their territory, and for delineating their national statistical unit enterprise. The profiling teams in EU and EFTA countries can access the IPT in order to store and exchange confidential statistical information.
For an overview of the MNE groups profiled, their details, and participation of the national statistical institutes, read the full article below.
Full article
Overview of the profiled multinational enterprise groups
Between 2016 and 2023, for the reference years 2015-2022, 31 national statistical institutes from EU/EFTA/UK jointly profiled, around 490 large multinational enterprise groups located in Europe, according to the European profiling methodology. Some multinational enterprise groups, also known as Global enterprise groups (GEGs) in profiling terminology, that had changed their structure or economic activities from one year to the next or because their analysis was outdated were profiled for one or more reference years. In total, 766 profiling exercises were processed.
For the reference year 2022, the NSIs jointly profiled the structure of 148 GEGs and carried out a complete European profiling of 82 of them. At the end of the exercises, the profiled multinational enterprise groups accounted for 21 942 legal units linked by around 24 500 relationships.
European profiling begins with the profiling of the groups' structure, i.e. the analysis of the legal and financial structure. This includes the identification and the collection of information of the legal units within the groups' control perimeter, and the financial control relationships between these units. This analysis is completed by the collection of the groups' main economic characteristics at global level. The complete European profiling methodology includes also the analysis of all the main economic activities carried out in the multinational enterprise group, the delineations of its national statistical unit enterprise and the data collections features.
Both the complete European profiling and the profiling limited to the structure of the groups, are handled in cooperation by different European national statistical institutes targeting important multinational enterprise groups implanted in their countries. To this end, European national statistical institutes use an online Eurostat application, the Interactive Profiling Tool (IPT), according to a yearly cycle. For each reference year from 2015-2022 an IPT cycle was completed.
The 2022 IPT cycle started in April 2023, involving 148 multinational enterprise groups of relevant economic size including 21 942 legal units located in 170 different countries, as shown in Map 1. Most of the legal units belonging to the groups were in the EU-EFTA countries (58 %), 11 % in the United States of America, 7 % in the United Kingdom and 2 % in China.
National statistical institutes selected the multinational enterprise groups in April after the closed reference year and finished at the end of November of the same year. During this period data are accessible to the national statistical institutes in the IPT tool and shared. The final results are available end November, eleven months after the closed reference year. Data sources are the direct contacts with the multinational enterprise groups or the consolidated annual financial reports. The final results of the exercise are sent to national statistical business registers and integrated into the Eurogroups Register and can be used for statistical purposes only.
Details of the profiled multinational enterprise groups
For reference years 2015-2022, 31 national statistical institutes from EU/EFTA/UK used the IPT to jointly handle 766 profiling exercises on around 490 large multinational enterprise groups. As shown in Figure 1, for 2022 the national statistical institutes profiled the structure of 148 multinational enterprise groups and carried out a complete European profiling of 82 of them.
In European profiling the participating NSIs follow a clear assignment of roles and responsibilities. A GDC NSI leads the profiling and handles the global picture of the multinational enterprise groups, while the partner NSIs focus on the part of the group located in their countries. For reference year 2022, 148 multinational enterprise groups were covered, either by a complete European profiling or profiling of the structure only. This second possibility made possible by a new version of the IPT, allowed to considerably increase the number of monitored multinational enterprise groups. For reference years 2015-2021, the national statistical institutes profiled around 90 multinational enterprise groups per cycle with a peak of 117 multinational enterprise groups profiled during the 2017 cycle. From 2018, the United Kingdom no longer participated in European profiling, thus determining a drop in the total number of multinational enterprise groups profiled in the subsequent years. As in previous years, for 2022 most of the GDCs (97 %) were based in Europe while only 3 % were located outside Europe. For the GDCs outside Europe, the GDC profiling role was assigned to a European NSI that was particularly interested in analysing that multinational enterprise groups because of a significant presence of foreign affiliates operating in its country.
Structure of the profiled multinational enterprise groups
For 2022, the profiling of the 148 multinational enterprise groups includes the update of their legal and financial structures, i.e., the update of the legal units within the multinational enterprise groups’ control perimeter and the relationships between these legal units. Starting from 2021, the national statistical institutes identified 21 942 legal units within the 2022 multinational enterprise groups’ control perimeters and 24 463 relationships between these units. The 2021 multinational enterprise groups’ structures included 25 504 relationships, after the NSIs analysis, 4 750 of them were discarded and 3 709 were added by the national statistical institutes.
As shown in Figure 2, within the 2022 multinational enterprise groups' structures, 14 684 the relationships linked EU-EFTA legal units and 11 464 were cross-border relationships, i.e. between legal units from different countries.
Main activity of the profiled multinational enterprise groups
During the eight IPT cycles, the profiled multinational enterprise groups carried out a large variety of main activities, covering 17 NACE sections. However, as can be seen from Figure 3 some sectors stood out. Manufacturing ranked first, accounted for 47 % to 59 % of multinational enterprise groups activity. Wholesale and retail trade ranked second, accounting for 9 % to 18 % of the multinational enterprise groups' activity.
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Size of the profiled multinational enterprise groups
Figure 4 shows that, for the eight IPT cycles, most of the profiled multinational enterprise groups had fewer than 100 legal units within their perimeters of consolidation. However, there has been an upward trend in the multinational enterprise groups’ perimeters size, especially visible for the 3 latest cycles. For the reference years 2020-2022, multinational enterprise groups with less than 100 legal units became less predominant. At the other end of the scale, during the three latest cycles, around 7 % of the profiled multinational enterprise groups had more than 500 legal units; this share was fewer than 3 % in the previous years: in the last years Eurostat and NSIs have been able to target the largest and most relevant multinational enterprise groups for European profiling.
During an IPT cycle, the NSIs gather high quality economic data and information of the multinational enterprise groups at global level, such as employment and main activity (NACE), directly from the multinational enterprise groups' headquarters. For the reference years 2015-2019, most of the profiled multinational enterprise groups employed fewer than 10 000 people globally, as shown in Figure 5. However, since the reference year 2020, the size of the multinational enterprise groups in term of global employment increased. For the reference years 2020-2022, on average, 27 % of the profiled multinational enterprise groups employed over 40 000 people, this share was less than 14 % in the previous years.
The multinational enterprise groups' size increase was due to the implementation of selecting criteria, targeting the most significant multinational enterprise groups located in Europe, in terms of employment, complexity and European influence. On average for the eight IPT cycles, the multinational enterprise groups employed around 32 600 people globally. However, this average is highly affected by extreme values as the global employment varied considerably from one multinational enterprise groups to the next. For instance, in 2022, the largest multinational enterprise groups employed over 708 700 people and the smallest fewer than 200 people.
Multinational enterprise groups profiled by national statistical institutes
For 2022, European national statistical institutes collaboratively profiled the structure of 148 multinational enterprise groups and carried out a complete European profiling of 82 of them. As shown in Figure 6, for 2022 most of the GDC NSIs (60 %) handled both profiling of the structure and complete European profiling of the multinational enterprise groups.
The NSIs updated the control perimeter of the multinational enterprise groups, i.e. all the legal units controlled by the group were checked. For the reference year 2022, NSIs updated more than 21 942 legal units, around 150 per multinational enterprise groups on average. However, the size of the multinational enterprise groups’ perimeters varied considerably, ranging from fewer than 10 legal units to over 860 legal units, as shown in Figure 7.
Details of the European profiling of the multinational enterprise groups
For the reference year 2022, NSI performed a complete European profiling on 82 multinational enterprise groups. In total for the reference years 2015-2022 NSIs handled 700 European profiling cases on around 450 large multinational enterprise groups, as some of them were profiled more than once.
During the eight IPT cycles, NSIs collaboratively profiled the multinational enterprise groups as GDC or as partners. As previously mentioned, the complete European profiling goes further than the profiling of the structure as it also includes the analysis of the multinational enterprise groups’ main economic activities, the delineations of its national statistical unit enterprises and the collection of their characteristics. The GDC NSI carries out the global economic analysis of the multinational enterprise groups, including an analysis of their global economic activities, while the partner NSIs are responsible for performing the analysis on their resident affiliates and statistical units.
On average, in 26 % of the cases profiled from 2015 to 2022, NSIs carried out intensive European profiling, as shown in Figure 8. In intensive profiling, GDC profilers meet with the multinational enterprise groups’ representatives to exchange information, discuss the worldwide groups' structure and collect data on NACE, employment and consolidated turnover. This share remained rather stable for the reference years 2015-2019. However, since the reference year 2020, the share of intensive profiling has fallen sharply from 33 % to 5 %. This turnaround was triggered by the pandemic and the difficulties in the meeting groups representatives. The NSIs therefore have developed digital data collection techniques such as web-scrapping, and NSIs mainly carried out light profiling. In light profiling GDC profilers collect data from and base their analysis on annual financial reports, websites and other available administrative and statistical sources. When NSIs profiled a non-EU GDCs, they could perform only light profiling.
For 2022, the NSIs delineated 2 319 enterprises within the 82 profiled multinational enterprise groups. Most of the enterprises were European (52 % EU27, 3 % EFTA) and 45 % were outside EU. Thanks to the EU-EFTA NSIs collaboration, profilers delineated for 2022 1 280 enterprises located in the 31 EU-EFTA countries. Among them, 672 were complex enterprises, i.e. combining more than one legal units and 608 made of a single legal unit.
The complete European profiling includes the delineation of the statistical unit enterprises. According to Council regulation 0696/1993, the enterprise is "the smallest combination of legal units that is an organisational unit producing goods or services, which benefits from a certain degree of autonomy in decision-making, especially for the allocation of its current resources". At the end of the IPT cycle, enterprises are aligned with the national statistical business registers and directly integrated into the EuroGroups Register.
Economic features of European enterprises of the profiled multinational enterprise groups
For 2022, the 1 280 EU-EFTA enterprises within the 82 profiled multinational enterprise groups employed in total more than 1 385 000 people in EU-EFTA countries and accounted for over 593 081 million Euros of turnover. As Figure 9 shows, employment and turnover were highly concentrated in the largest enterprises. For 2022, 14 % of the largest EU-EFTA enterprises, employing more than 1000 persons, accounted for 91 % of the employment of these enterprises and 86 % of their turnover.
National statistical institutes participation in European profiling
In total, for reference years 2015-2022, 26 GDC NSIs led 700 European profiling cases. Out of 26 NSIs, 6 NSIs took part in all the eight IPT cycles. The total number of European profiling cases carried out by GDC NSIs during this period, fluctuated from 1 to 123 multinational enterprise groups per country, as shown in Figure 9.
During the eight IPT cycles, NSI collaborated on 700 European profiling cases accounting for more than 90 800 legal units in total, and around 11 300 legal units per cycle. As shown in Figure 10, the distribution of the profiled multinational enterprise groups in term of legal units fluctuated from a country to another.
Starting from 2017, the European profiling methodology was updated, regarding the implementation of the national enterprises by the partnering countries. Therefore, the figure related to partner starts from the reference year 2017.
As a multinational enterprise group can have affiliates in several EU-EFTA countries, the same group could involve several partner NSIs. The partner NSIs checked the national perimeter of the multinational enterprise groups in their country and defined the statistical unit ‘Enterprise’ and its national view. As shown in Figure 11, during the 2017-2022 IPT cycles, 31 NSIs acting as partner analysed 2 857 ‘national parts’ of the profiled multinational enterprise groups. The total number of multinational enterprise groups analysed by each partner NSI fluctuated from 6 to 195.
Data sources
European profiling uses several sources, such as the EuroGroups register, Outward Foreign Affiliates Statistics (OFATS), specific information provided during direct contacts between profilers and the groups’ representatives, the Annual Financial Reports published by the group which provide a presentation of their activity, their consolidated accounts and other qualitative information on multinational enterprises restructurings, investment plans etc., websites which provide a great deal of useful information on the governance structure of the multinational enterprise groups, their business segments, figures on employments and countries of affiliates. Data on multinational enterprise groups provided by EU or EFTA countries during the European profiling cycles are stored in the IPT that serves as a secure and interactive platform to support the process and as a database. The output of European profiling, containing micro data on multinational enterprise groups, their constituent ENTs and LEUs, is produced annually at the end of each cycle and transmitted to NSIs in EU Member States and EFTA countries by Eurostat using the secure channel of the Commission, if there is at least one legal unit resident in the country. Data can be used only to produce official statistics in the European statistical system
Context
Globalisation and the increasing complexity of the activities of multinational enterprise groups pose challenges to the production of business statistics and macroeconomic statistics and to the correct and consistent reflection of multinational enterprise groups’ activities in national statistics. As a prerequisite to better analyse cross border transactions of large multinational enterprise groups and correctly record them in national statistics, statisticians in the ESS need to be able to observe the complete and correct economic structures of the multinational enterprise groups that are mainly responsible for large transactions and operations and have a significant impact on data consistency in the countries where they operate.
Direct access to
See also
Database
Data from the profiling are aligned with the national statistical business registers and, since 2023 integrated in the EuroGroups Register. The access to the profiling data is restricted to produce official statistics in the EU and EFTA countries.
Dedicated section
Publications
Notes
- ↑ 27 EU Member States, 3 EFTA countries: (all except Liechtenstein) and the United Kingdom