High Performance Business Study 2014 results
Jul 21, 2015
High Performance Business Study
2014 results
About the studyAccenture’s High Performance Business (HPB) study aims at understanding which companies are top performers and what makes them great.
Each quarter Accenture examines the performance of 2000 companies, consisting mainly of large multinationals that are listed on stock exchanges all over the world.
The High Performance Business Study aims at understanding which companies are the top performers and what makes them great.
► High performance is about…
• Sustained out-performance of peers
• Increased ability to overcome economic and / or business shocks
• Continuity across generations of leadership
• Creating long term shareholder value
► High performance research is based on…
• Relative performance compared to global industry peer-sets
• 10 years of Accenture research on 2,000 global companies in 61 industries
• In depth analyses on AEX performance based on 10 performance metrics
► HPB research helps companies…
• Benchmark themselves against global industry peers
• Detect opportunities to improve compared to peers
• Strive for sustained growth in performance
32
2014 Key Findings
In 2014 AEX companies slightly improved their HPB performance relative to direct international competitors. After stagnating HPB scores in the first half of 2014, AEX businesses gained ground on their international peers in the second half of the year. Companies in the large Western economies (Germany, France, UK, Spain, Italy and the US) by contrast saw a decline in performance in 2014. Despite the improved performances in 2014, AEX companies still score below average compared to their peers.
The higher scores of AEX businesses are driven by an improvement in their current performance. The companies improved relative to their peers by employing their capital more efficiently, by being more consistent in their performance and by improving their revenue growth.
In contrast to the improving current performances, AEX companies suffered a decline in their positioning for the future. The scores of the firms declined on all 4 underlying performance metrics, but the main decreases were in their positioning in emerging markets (market positioning) and in their ability to generate future growth through investments (fuel for growth).
For the fifth consecutive year ASML remains high performer in 2014. Despite good performance from Wolters Kluwer, ASML is the only High Performer in 2014. Wolters Kluwer is a noteworthy strong performer this year, its improved performance is driven by strong improvements in shareholder return (stock gains and dividend), revenue growth and higher growth expectations among investors.
54
Most countries show a decline in HPB performance since 2012, while the Netherlands and Asian countries are improving their performance.
China
US
UKNL
This graph displays the average total score of companies listed in the mentioned indices. Scores higher than 50% indicate a performance above peer average, scores lower than 50% indicate a performance below peer average.
Organisations in the Western indices are losing ground to their international peers, while the AEX-companies are slightly improving its overall performance. Companies listed in the large Asian countries (China, Japan) experiencing a rapid improvement in performance
2008 2009 2010 2011 2012 2013 2014
Top 25%
Below Average
Above Average
Bottom 25%
SpainFrance
Japan
ItalyGermany
Interpretation 2014 Results
76
Current Performance of AEX companies increased in 2014, but Positioning for the Future continued its downward trend.
Top 25%
Below Average
Above Average
Note:Graph is based on average performance of AEX companies compared to relevant peers
This graph displays the average score of AEX companies on the two main components of the HPB analysis: current performance and positioning for the future. Scores higher than 50 indicate a performance above peer average, scores lower than 50 indicate a performance below peer average.
The improved current performance of AEX-companies is driving an increase in overall performance. However, AEX-organisations are losing ground to their international peers for their positioning for the future and are now below peer average on this component.
2008 2009 2010 2011 2012 2013 2014
Interpretation 2014 Results
Bottom 25%
Margin Expansions is the only metric scoring above average, all metrics except for Capital Efficiency and Consistency have declined in 2014.
AEX-score per metric
The scores for Current Performance and Positioning for the Future are each driven by four performance indicators. This graph shows the average AEX score on each of the underlying performance indicators. Scores higher than 50% indicate an above average score. The figure on the right shows the difference between the 2014 and the 2013 results.
The AEX companies improved their current performance by employing their capital more efficiently, by being more consistent in their performance and by growing their revenues faster than competitors. The decline in positioning for the future is mainly driven by a weakened position in growing markets (Market Positioning) and by a reduced ability to fund new investments (Fuel for growth).
Interpretation 2014 Results
43
MIN
TOTAL SCORE
Current Performance
Shareholder Performance
Capital Efficiency
Revenue Growth
Consistency
Positioning for the Future
Growth Expectation
Margin Expansion
Market Positioning
Fuel for Growth
MAX
+4
+1
0
+2
+2
+2
-4
-3
-1
-5
-4
42
48
46
48
45
54
42
43
43
46 CHAN
GE
- 20
13 T
O 2
014
Current Performance Positioning for the Future
98
ASML is the only high performer in the AEX, but Altice and Wolters Kluwer also score above peer average on both axes.
This two-dimensional graph shows how AEX-companies and their peers score on current performance and positioning for the future. Companies with a score higher than 75% on both current performance and positioning for the future are considered a ‘high performer’.
Dispite a slight drop of 1 point, ASML remains the only high performer in 2014. Its advanced technology provides the chipmaker with a persistent competitive advantage resulting in a strong market position. Wolters Kluwer and the newcomer in the AEX Altice also score above peer average on both current performance and positioning for the future.
Interpretation 2014 Results
11
100
75
50
25
100755025
Current Performance
International competitors AEX companies
Positioning for the FutureHIGHPERFORMANCE
ASML
Wolters Kluwer
1110
North-America
Southern Europe
Eastern Europe
Russia
Overall HPB scores
Change in HPB score 2013-2014
Developing Asia
Asia
South-East Asia
Asian Tigers
Middle East
Africa
South America
Nordics
53
49
35
63
26
45
36
68
51
85
This figure displays the average total score of companies headquartered in the mentioned regions. Scores higher than 50% indicate a performance above peer average, scores lower than 50% indicate a performance below peer average.
59
53
-1
1
93
-10
-3
-4
-5
5
3
8
3
7
9
46
Companies listed in developing Asia and Africa are showing the highest overall performance. Companies listed in the major European countries are experiencing a decline in performance.
Companies listed in Developing Asia and Africa show the highest absolute performance and the strongest increase in performance. In Europe companies listed in large economies (Germany, France, UK, Italy) experiencing a decline in performance while the performance of companies listed in the Nordics is significantly improving.
Oceania
46
2
-5
-3-5
-5
NetherlandsGermany
Italy
France
UK
40
29
33
52
39
Interpretation
2014 Results
UK & Ireland
Western Europe
1312
This graph displays the average future value of AEX companies as a percentage of enterprise value compared to their international peers. Future value is computed by subtracting the relevant year’s discounted cash flow from the enterprise value.
The Future Value as percentage of Enterprise Value for AEX-companies has decreased from 39% to 12%, whereas the same ratio for international peers has only slightly decreased from 12% to 10%. Although still better than their international peers, this indicates that market expectations for AEX companies have declined.
5
10
15
20
25
30
35
40
45
5
International Peers
AEX
20090
-
-10
26
2224
16
6
-6
2
7
39
131410
2010 2011 2012 2013 2014
Future value (as percentage of enterprise value)
While the revenue is increasing, AEX companies have seen large decline in their future value, representing decreased market expectations for AEX companies.
Interpretation 2014 Results
AEX-companies have gained ground upon its international peers with increased annual revenue growth.
This figure plots the total revenue growth (in %) of AEX companies in the HPB database against the total revenue growth of their international peers.
After a small decline in revenue in 2013, AEX-companies have gained ground upon its international peers with an annual revenue growth of 9,6% vs 5,2% of the international peers.
Interpretation 2014 Results
20145
10
15
20
25
30
35
40
45
5
International Peers
AEX
20090
-
27
31
13
11
23
-1
9
5 5
96
3
2010 2011 2012 2013
Revenue growth (in % compared to the previous datapoint)
1514
0
2
4
6
8
10
12
14
16
18
20
22
24
26
28
30
32
-1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Information TechnologyPharmaceuticals
Banking
Telecom
Alcoholic Beverages
Oil Equipment and Services
Dredging
Healthcare
Semiconductor Equipment
InsurancePersonnel Services
Food Department StoresFreight and Logistics
Metals and Mining
Chemicals
Media
Food Products and HPC
AirlinesConsumer Electronics
Oil and Gas
Positive shareholder returns have been seen throughout most industries in 2014.
25
Revenue growth
Profitability
30
73
53
22
14
6
77
27
17s
69
23
66
62
39
19
88
109
65
26
This graph highlights the average total shareholder return per industry. Total shareholder return is the gain or loss on a stock plus the dividend paid out in 2014.
This graph plots the average revenue growth against profitability of each industry. Profitability is measured by the EBITDA margin.
Companies in the Airlines, Healthcare, Pharmaceuticals and Semiconductor Equipment industries are showing the largest increase in shareholder performance. Companies in the Oil and Gas and Oil Equipment and Services industries are facing the largest decrease, which seems to be related to the recent fall of the oil prices.
Companies in the pharmaceutical industry have the highest revenue growth and profitability while Freight and Logistics organisation have the lowest revenue growth and profitability.
Pharmaceutical industries are showing both strong revenue growth and high profitability.
Interpretation 2014 Results Interpretation 2014 Results
Alcoholic Beverage %
10%
5%
4%
13%
11%
13%
10%
10%
8%
3%
24%
3%
39%
24%
11%
25%
-12%
-30%
-1%
Banking
Chemicals
Consumer Electronics
Dredging
Food Department Stores
Food Products and HPC
Freight and Logistics
Insurance
Media
Metals and Mining
Oil and Gas
Oil Equipment and Services
Personnel Services
Semiconductor Equipment
Telecom
Airlines
Healthcare
Information Technology
Pharmaceuticals
6
1716
Shareholder Return 2014Industry
Companies in peerset per industry
Methodology
Current PerformanceHow the company has performed over the past 3 years
Future PositioningHow the company is positioned for future performance
Shareholder performanceAbility to create shareholder value
Market expectationsAbility to grow according to the market expectations
Market differentiationAbility to improve profitability
Market positionAbility to grow revenues
Fuel for growthAbility to extract capital to invest in future growth
ProfitabilityAbility to generate profits
Revenue growthAbility to grow revenues
ConsistencyAbility to consistently create value over the last 3 years
To compare companies like-for-like, Accenture has grouped over 2000 companies from all over the world per industry.
For more information please visit: accenture.com/hpb
18 1918
Sander van Ginkel
Managing Director Strategy Accenture Netherlands
Peter Zuyderduyn
Lead High Performance Business Accenture Netherlands
Paul van der Heijden
Manager Business Strategy, Accenture Netherlands
Tim de Bie
Manager Business Strategy, Accenture Netherlands
Contributors
Rutger Mantingh, Jasper van der Linden, Daan Peeters, Marius van Heeswijk, Roland Schoonbeek, Merel van den Berg, David Elias
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We are one of the world’s leading organizations providing management consulting, technology and outsourcing services, with more than 323,000 employees; offices and operations in more than 200 cities in 56 countries; and net revenues of $30.0 billion for fiscal 2014.Our four growth platforms—Accenture Strategy, Accenture Digital, Accenture Technology, Accenture Operations—are the innovation engines through which we build world-class skills and capabilities; develop knowledge capital; and create, acquire and manage key assets central to the development of integrated services and solutions for our clients.
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