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 gregoire.eric@bcg.com.
The BCG Game Changing Program
For 50 years, The Boston Consulting Group has been helping leaders anticipate and respond to a changing world. Today, it is clear that the pace of change is accelerating. So, for organizations to own the future, they must change their game. The radical shifts in the global economy, magnified by a relentless rise in uncertainty, require bolder moves, fitter organizations and better execution. To help leaders capitalize on the emerging opportunities, we are investing in a program of research and development, culminating in a series of publications which condense our global experience on five important requirements for success: profitable growth and value, fitness, adaptability, connectivity and stewardship. For more on the Game Changing Program, please go to:
https://www.bcgperspectives.com/changing_the_game.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 78 offices in 43 countries. For more information, please visit bcg.com.
About bcgperspectives.com
Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter, and LinkedIn.
Contact Information:
The Boston Consulting Group
Eric Gregoire
Global Media Relations Manager
Tel +1 617 850 3783
Fax +1 617 850 3701
gregoire.eric@bcg.com