Europe has endured one of its most turbulent years since the end of World War II in 2022. The Russian invasion of Ukraine in February sparked humanitarian, political and economic crises, exacerbating a supply chain crisis and an energy crisis that has sent inflation soaring to historic levels.
In the context of this energy crisis, Shell tops Fortune’s inaugural list of the largest companies in Europe, ahead of Volkswagen in first place. The group is one of six energy companies in the top 10 of the Fortune 500 in Europe, with major companies such as TotalEnergies and Glencore achieving significant revenue growth last year.
Shell’s revenues rose by more than 41% to $386 billion in 2022, the highest in Europe. The oil and gas giant also took the mantle of the most profitable company in Europe’s Fortune 500 list, having generated income of $42.3 billion.
The group has its LNG arm to thank for its impressive performance in 2022. The energy source has proven to be a strong alternative to Russian gas after Moscow cut off access to the Nord Stream 1 pipeline last year, and then the Nord Stream 1 and 2 pipelines were damaged.
Shell was profitable last year, spending $25 billion on capital spending, of which $3.5 billion went to its renewable energy arm as part of its goal to become carbon neutral by 2050.
Wael Sawan took over the reins from Ben van Beurden to become CEO in January this year. The former head of integrated gas and renewables has since embarked on a plan to woo shareholders by taking a slower path away from fossil fuels.
There are bumps ahead for Shell as it works to maintain its position as Europe’s largest company in 2023. The past year has brought new challenges in the face of low oil prices and a weak economy that could dampen energy demand.
The old industry still dominates Europe
In contrast to Fortune’s historic list of the largest US companies, which is occupied by a dynamic mix of retail, technology, pharmaceuticals and energy, the industry remains dominated by Europe.
Energy groups occupied seven of the top 10 spots on the Fortune 500 list in Europe, where they have adapted to a tougher economic climate and harsher geopolitical context to significantly increase sales.
The largest car companies in Europe occupied the remaining positions in the top ten, although the fortunes of the two German car manufacturers Volkswagen (ranked second) and Mercedes-Benz (ranked ninth) were in contrast to the energy companies. The pair faced persistent semiconductor shortages last year, which impacted the companies’ bottom lines as they continued their transition from combustion engines to electric vehicles.
The 2023 list is likely to reveal the impact of more challenges facing Europe’s largest companies. Persistent inflation and high interest rates have taken a toll on consumers and businesses this year, sending the continent’s largest economies heading into recession while the United States pulls ahead.
But there are also opportunities. While the German economy has suffered in 2022, it is still home to some of the world’s largest companies. The continent also boasts Danish group Novo Nordisk, which has emerged as one of the most exciting companies of 2023 after its weight-loss drugs captured US attention.
At the same time, renewed interest in energy independence may bring Europe’s major speculators back to the forefront.