Consumer Goods: No More Growth?
In a series of posts on LinkedIn focused on Consumer Goods companies financial performance and total shareholder return (TSR), Raphael Savalle, Vice President Finance & Controller – Division and Regional CFO in Consumer and Brand driven business, explores the key drivers of TSR and we'll reveal the top 5 from his list of the Top 24 FMCG Companies.
For FMCG companies, some of the key factors driving TSR are as follows (in order of importance) – in fact those factors explain close to 50 percent of the TSR, according to Savalle:
1.Revenue Growth rate (growth in total Revenue)
2.Net Profitability change (growth in Net Income margin)
3.Asset utilization (Asset Turnover: Total Revenue / Total Assets)
4.Financial Leverage (Total Asset / Total Equity)
Considering the charts Savalle posts (click here for the original post), the performance of Estee Lauder, L’Oral, Henkel, Church & Dwight, and Beiersdorf is remarkable.
"However, Reckitt and P&G growth has stopped completely for the past 5 years," notes Savalle. "Danone growth highlights the attractivity of its categories. Colgate, who derives 70 percent-plus of its revenue from outside the US is impacted by the USD appreciation. We can expect this lack of growth to drive further consolidation alike the Kraft & Heinz merger or the ABInbev & SAB Miller one."
2. Nestle
3. The Proctor & Gamble Company
4. The Coca-Cola-Company
5. Pepsico
Click here for the full list of the Top 24 FMCG Companies and the full article "Consumer Goods: No more growth? - Except for L'Oreal, Estee Lauder, Henkel & Beiersdorf."
For FMCG companies, some of the key factors driving TSR are as follows (in order of importance) – in fact those factors explain close to 50 percent of the TSR, according to Savalle:
1.Revenue Growth rate (growth in total Revenue)
2.Net Profitability change (growth in Net Income margin)
3.Asset utilization (Asset Turnover: Total Revenue / Total Assets)
4.Financial Leverage (Total Asset / Total Equity)
Considering the charts Savalle posts (click here for the original post), the performance of Estee Lauder, L’Oral, Henkel, Church & Dwight, and Beiersdorf is remarkable.
"However, Reckitt and P&G growth has stopped completely for the past 5 years," notes Savalle. "Danone growth highlights the attractivity of its categories. Colgate, who derives 70 percent-plus of its revenue from outside the US is impacted by the USD appreciation. We can expect this lack of growth to drive further consolidation alike the Kraft & Heinz merger or the ABInbev & SAB Miller one."
Top 5 FMCG Companies
1. Johnson & Johnson2. Nestle
3. The Proctor & Gamble Company
4. The Coca-Cola-Company
5. Pepsico
Click here for the full list of the Top 24 FMCG Companies and the full article "Consumer Goods: No more growth? - Except for L'Oreal, Estee Lauder, Henkel & Beiersdorf."