The Euros might be behind us, but there’s still much for investors to get excited about. Here, we highlight four firms that are helping power our own small-cap and sustainable equity strategies.

Though they span the continent, we believe our companies share many key traits. At their helm stand adept management teams, steering with clear business strategies. These firms are nimble, adeptly navigating the ever-evolving business landscape. They also offer creative and innovative solutions to today’s challenges. Dominant in their respective fields, they potentially offer superior earnings growth and could be poised for long-term success.

Let’s look at the team…

Leading the lineup, we have Sweden’s Troax. Just as every team needs protection at the back, industries require superior safeguarding for their most valuable assets – their employees. Traox designs top-of-line barriers and safety solutions for automated and robotic production lines. With a formidable presence spanning Europe, North America and, more recently, Asia, the company enjoys a dominant market position. It also boasts an impressive operating margin of more than 20%, a testament to its efficiency and strategic prowess. We believe Troax will only go from strength to strength, thanks to ongoing automation, nearshoring and a continued focus on health & safety. 

Next up is Rational, a pioneering force in the commercial kitchen sector. Renowned for its combi-steam cookers, Rational marries energy efficiency with innovation and compact design, enabling chefs to elevate their culinary creations effortlessly. Originating from Germany, this company has caught the eye on the global stage, pointing to the potential for a long and prosperous future. 

Rounding off our small-cap picks is Austria’s Borregaard.  This is a global leader in the manufacturing of products from Lignin (a naturally occurring byproduct form of wood). This is used in thousands of applications as a binding agent, often replacing environmentally unfriendly oil-based alternatives. This trend looks set to continue, confirming Borregaard as a key player in the green transition. 

And then we have the dynamic Besi. This is a standout Dutch name in advanced semiconductor packaging, with a strong competitive advantage in hybrid bonding – a game-changing technology that’s essential for the manufacturing of the next generation of semiconductors. The firm currently enjoys a commanding 67% market share, with demand from AI and the green transition likely to cement its dominance in this field.

And then there’s DSM-Firmenich.  The merger between these two companies has created a global leader in health, nutrition, and beauty, offering significant value that markets have yet to recognise. Its product lineup is set to address some of the most pressing challenges of our time, including antimicrobial resistance, greenhouse gas emissions, and enhancing the efficacy of biofuel production. An inventive company that looks set to be a star of tomorrow. 

Final thoughts…

Europe is home to an impressive roster of high-quality, market-leading players.  Many enjoy dominant market positions, helping drive superior earnings growth and deliver long-term success. And that’s something for investors and fans to cheer. 

Companies are selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance. Past performance is not a guide to future results.