The Top Ten Value Creators in 19 of the 25 Industrial Sectors Studied by The Boston Consulting Group Delivered Double-Digit Sales Growth in the Five-Year Period From 2008 Through 2012
BOSTON, MA--(Marketwired - Sep 17, 2013) - The big winners in global equity markets since the 2008 financial crisis have been those companies that have successfully fought the economic headwinds and delivered above-average growth, according to a new report by The Boston Consulting Group (BCG).
The top ten value creators in 25 industrial sectors delivered sales growth ranging from 6 percent per year, on average, in the forest products and multibusiness industries to 27 percent per year in the pharmaceutical and technology sectors. These growth rates are between two times and nine times the current rate of growth in global GDP (roughly 3 percent). These findings were released today in BCG's fifteenth annual Value Creators report, "Unlocking New Sources of Value Creation."
The 2013 Value Creators Rankings
The 2013 Value Creators rankings are based on an analysis of total shareholder return (TSR) at 1,616 global companies for the five-year period from 2008 through 2012. The rankings list the top ten value creators for the entire sample, for large-cap companies (defined as those with a market valuation of at least $50 billion), and for 25 separate industrial sectors.
Among the key findings:
How to Think About Growth
Just because the top value creators are delivering high growth doesn't necessarily mean that all companies should make growth their top priority.
"All things being equal, sustainable earnings growth is the key to long-term value creation," said Gerry Hansell, a BCG senior partner and coauthor of the report. "But investments to drive earnings growth often end up destroying value. Other actions -- raising margins, reducing risk, allocating capital differently, restructuring the portfolio -- may be more relevant depending on the company's opportunity set and starting position."
The report describes ten different starting positions -- what BCG terms "value patterns" -- that determine the most appropriate ways for a given company to create shareholder value. It also profiles three companies from the rankings -- North American retailer of high-end yoga and exercise clothes Lululemon Athletica, Korean automaker Hyundai Motor Company, and U.S. industrial supplier W.W. Grainger -- to illustrate how companies can create superior value from very different starting positions.
The Advantage of a TSR Focus
The report also describes the advantage of a focus on TSR in order to make sure a company delivers growth that actually creates value. "The value of looking at a business through the lens of TSR," said BCG senior partner and report coauthor Jeff Kotzen, "is that it allows a management team to distinguish between the kinds of growth that will create value and the kinds of growth that will destroy it." The report illustrates this point through a detailed case study of U.S. apparel maker VF Corporation. It describes how the company has used a consistent focus on TSR to reshape its portfolio in order to deliver higher growth with higher gross margins -- making it a leading value creator in its peer group.
A copy of the report can be downloaded at www.bcgperspectives.com.
To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or email@example.com.
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