g-f(2)2291 Unveiling the 2024 Value Creators: Navigating Market Momentum

 

genioux Fact post by Fernando Machuca and ChatGPT

Introduction:

The 2024 Value Creators Rankings by Boston Consulting Group (BCG) provide insights into the performance of companies based on total shareholder return (TSR) over a five-year period, offering valuable perspectives on value creation in today's dynamic business landscape.

genioux GK Nugget:

"Despite a historic bull market and soaring capital markets in 2023, companies face the challenge of maintaining or regaining TSR momentum amidst heightened investor expectations and market volatility." —  Fernando Machuca and ChatGPT, April 25, 2024

genioux Foundational Fact:

The average annual total shareholder return surged across companies in BCG’s Value Creators database, with the median rising to 12% per year from 2019 through 2023, driven primarily by technology and tech-related sectors, particularly those leveraging generative AI.

The 10 Most Relevant genioux Facts:

1. Technology hardware emerged as the top industry for value creation, boasting a median TSR of 27% per year from 2019 through 2023.
2. Traditional, asset-heavy industrial sectors, such as mining and construction, also achieved significant TSR gains.
3. Industries facing TSR headwinds from 2018 through 2022, including automotives and consumer durables, experienced strong recoveries in 2023.
4. Health care sectors, despite maintaining median returns above 10% annually, encountered a TSR slowdown.
5. North American companies expanded their representation in the global value creators rankings, occupying 38 spots among the top 100.
6. Asian-Pacific companies continue to claim an outsized share of the top performers.
7. European companies remain underrepresented among the top performers, securing only 9 of the 100 leading spots.
8. TSR rankings are based on data from 2,355 companies across 35 industries, reflecting average annual TSR over the five years from 2019 through 2023.
9. TSR performance varied widely within each industry, highlighting opportunities for companies to outperform the broader market.
10. To maintain TSR momentum, companies must focus on profitable growth and invest in innovation, including artificial intelligence and sustainability.

Conclusion:

The 2024 Value Creators Rankings underscore the importance of strategic agility and innovation in navigating today's complex business environment, where companies must continuously adapt to changing market dynamics and investor expectations to create sustainable long-term value.

REFERENCES

The g-f GK Context

Hady Farag, Jody Foldesy, Julien Ghesquieres, Gerry Hansell, Akshay Kohli, Jeff Kotzen, Martin Link, Alexander Roos, and James Tucker, The 2024 Value Creators Rankings: Even a Historic Bull Market Comes with Challenges, Boston Consulting Group (BCG), April 19, 2024.

Classical Summary:

The 2024 Value Creators Rankings, compiled by Boston Consulting Group (BCG), elucidate the landscape of total shareholder return (TSR) across various industries. Bolstered by robust capital markets in 2023, companies experienced a surge in annual TSR, particularly in the technology sector driven by excitement over generative AI. However, the report underscores the challenge of sustaining TSR momentum amidst all-time highs in global market indices. Technology companies, alongside asset-heavy industrial sectors and industries rebounding from previous stagnation, showcased remarkable TSR gains. Notably, North American firms increased their representation among the top value creators, while European companies lagged. Looking ahead, companies must navigate high expectations by focusing on innovation, such as AI and sustainability, to sustain long-term value creation. The rankings, based on five-year average TSR data, offer invaluable insights for companies striving to create and sustain shareholder value in dynamic market conditions.

Hady Farag

Partner & Director, Shareholder Value Strategy

New York

Hady Farag is a core member of the Corporate Finance & Strategy practice at Boston Consulting Group. He is an expert for corporate strategy and shareholder value and, since 2006, has worked extensively on these topics with clients around the world in various industries including technology, health care, transportation and logistics, and consumer goods. 

Hady has led many engagements covering capital allocation, investor insights, and total shareholder return (TSR) strategy (including portfolio strategy, strategic planning). He has helped clients implement capital market strategies, responses to activist attacks, and transformative value creation roadmaps. He also has advised clients on acquisitions and divestitures, strategic alliances, and corporate venturing. 

Jody Foldesy

Managing Director & Senior Partner

Los Angeles

Jody Foldesy is a core member of the Corporate Finance & Strategy and Principal Investor & Private Equity practices at Boston Consulting Group. He has deep experience across multiple industry practices, including Industrial Goods; Health Care; Technology, Media & Telecommunications; and Consumer.

Jody is deeply involved all aspects of the Corporate Development practice, including growth, corporate and portfolio strategy, shareholder value creation and total shareholder return (TSR), investor strategy, capital deployment, M&A, and postmerger integration. He leads the firm’s global work in shareholder activism, and he leads BCG’s work on TSR-led transformation in North America.

Julien Ghesquieres

MANAGING DIRECTOR & SENIOR PARTNER

New York

I am a Managing Director & Senior Partner at Boston Consulting Group based in BCG's New York office. I am a part of the Corporate Finance & Strategy Practice Leadership team and lead our Corporate Finance Business globally. I am a core member of the Technology and Industrial Goods Practices. 

I am an expert in value creation and shareholder value topics, with deep expertise in TSR strategy, growth initiatives, new business build, and corporate processes. I have done extensive work with mid-sized and large companies at both the corporate level as well as the product level with strategy, organization, go-to-market, cost, pricing, and innovation initiatives.

Gerry Hansell

Managing Director & Senior Partner

Chicago

Gerry Hansell is a senior member of Boston Consulting Group’s Corporate Finance & Strategy and Industrial Goods practices. He is the global leader for BCG’s growth strategy and value patterns work. Gerry was also a BCG Fellow from 2010 through 2017.

As a fellow, Gerry’s research focused on the value patterns that describe how a company’s starting position at a given time shapes the range and types of strategic moves that are most likely to create value for that company. The common types of value patterns that inform a company’s investment thesis and strategic agenda are defined, not by industry, but by business model economics and investor appeal. Different value patterns show different types of priorities, trade-offs, and risks.

Akshay Kohli

Managing Director & Partner

Mumbai - Nariman Point

Akshay Kohli leads Boston Consulting Group’s Corporate Finance & Strategy (CFS) practice in India and sits on the Asia-Pacific CFS leadership team. He is the Asia-Pacific lead for shareholder value advisory, and a core member of the Principal Investors & Private Equity (PIPE) practice. Akshay worked at the BCG New York office for eight years before transferring to the India system in late 2020.

Akshay works with clients on how best to translate strategy into strong and sustainable shareholder value. He is experienced in Total Shareholder Return (TSR) strategy, investor strategy, financial and capital allocation strategy (including capital payout policy, optimal capital structure), corporate valuation, buy- and sell-side transactions (M&A, carveouts, spinoffs, etc.), commercial and vendor due diligence, and portfolio company value creation planning and execution. He has worked in a wide range of industries with a focus on technology, media, and telecommunications; consumer, and industrial goods. He also has experience leading large-scale transformation programs in corporate strategy, organization design, sales, go-to-market, and pricing.

Jeff Kotzen

Managing Director & Senior Partner

New Jersey

Jeff Kotzen is global leader of the shareholder value topic at The Boston Consulting Group. The topic focuses on optimizing total shareholder return (TSR) by aligning business, financial, and investor strategies, leveraging the firm’s proprietary tools and methodologies. Jeff began his consulting career in 1991 and has been with BCG since 1997.

Jeff has led more than 50 projects on shareholder value strategy, across a broad range of industries and locations. This work typically has resulted in a 15% to 30% increase in the client's relative share price and price-earnings multiple in the six months after the strategy was initiated.

Martin Link

KNOWLEDGE EXPERT, TEAM MANAGER

Munich

Martin Link, a Knowledge Expert and Team Manager at Boston Consulting Group (BCG) in Munich, plays a pivotal role in shaping value creation strategies and insights. 

Martin Link’s expertise bridges data-driven insights and strategic decision-making, impacting companies worldwide. 

Alexander Roos

Managing Director & Senior Partner; Global Leader, Center for CFO Excellence

Berlin

Alexander Roos is the global leader of Boston Consulting Group’s Center for CFO Excellence and a member of the Industrial Goods practice.

Since joining BCG in 1998, Alexander’s client work has included global corporations—as well as international private-equity investors and sovereign wealth funds—covering a wide range of industries.

James Tucker

Managing Director & Senior Partner; Global Leader, Corporate Finance and Strategy Practice

Toronto

James Tucker is a member of the Global Leadership Team for Boston Consulting Group’s Corporate Finance & Strategy practice, and leads the practice globally. He is also a member of the Global Leadership Team for the firm’s Financial Institutions practice and leads the firm’s work in M&A, PMI, transformation, turnaround, and zero-based budgeting.

James primarily serves large multi-line financial institutions, corporate and retail banks, wealth and asset managers, pension funds, sovereign wealth funds, payments companies, and select private equity players and their respective portfolio companies.

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Categorization

This genioux Fact post is classified as Breaking Knowledge which means: Insights for comprehending the forces molding our world and making sense of news and trends.

Type: Breaking Knowledge, Free Speech

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