Steffen Ullmann
Senior Portfolio Manager – Investment Grade
Market leadership is not a sure-fire success – even in supposedly stable sectors such as the advertising industry. What was considered a solid position for years can be eroded by operational weaknesses and strategic mistakes. The latest shifts in the sector show this: Competitive position and credit quality are directly linked. For active credit investors, this results in both risks and opportunities.
Market leaders that have been established for years can lose their position faster than many people think. In the global advertising industry – a sector with an annual turnover of around EUR 750 billion – it is currently possible to observe impressively how the balance of power is shifting and how these changes are directly reflected in the credit markets.
After a long phase of clear hierarchies, there were significant shifts in 2025. While the previous market leader is struggling with weak operational development and losing important customer contracts to competitors, rivals are taking the opportunity to expand their positions through targeted takeovers and organic growth.
Change in competitive positions
Source: Bloomberg, own calculation: Rank based on sales per year in EUR; period 01.01.2015 to 07.10.2025; own presentation.
The credit markets have registered this dynamic: The spreads of the market leader, which is under pressure, have widened by around 75 basis points since the beginning of the year, while two rising competitors have recorded spread tightening of 15-25 basis points.
Change in spreads
Source: Bloomberg, 5Y credit default swap spreads, period: 31.12.2024 to 31.12.2025; own presentation.
Such shifts have a direct impact on a company’s credit quality. The competitive position reflects the operational strength and relevance of the business model. The loss of a market leadership position is rarely a sudden event, but the result of a gradual process in which structural weaknesses accumulate over time. These changes are reflected in sales, profitability and cash flow and thus directly influence a company’s ability to meet its interest and repayment obligations.
This dynamic makes it clear why analyzing the competitive position is one of the key elements of a sustainable credit analysis. It is not enough just to look at key figures or ratings. The decisive factor is how a company is positioned within its market, what strategic options it has and how robust its business model actually is in competition.
In the investment grade segment in particular, we focus on the long-term drivers of creditworthiness. Structural characteristics such as business model, market position and competitive dynamics have a lasting impact on credit quality. Changes in these areas are of particular interest to us, as they determine which issuers maintain stability and which lose substance.
“Market leadership is not a static seal of quality, but has to be earned anew every day. In the advertising industry, we are currently observing how delayed strategic adjustments to the digital transformation are having a direct impact on competitive position and credit quality – a lesson in the importance of qualitative analysis in credit investing.”
– Steffen Ullmann
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