IW 1000's Top-Line Tango

Revenue growth is back at the world's largest manufacturing companies. Like running into an old flame at a college reunion, executives have rediscovered the allure of robust revenues. Sales growth has always made their jobs so much more fun. Why did they

The signs of robust global manufacturing growth are everywhere within IndustryWeek's annual ode to the top line. Exxon Mobil strengthened its position at No. 1 as the world's largest publicly traded manufacturing company. The petroleum giant reported a 19% surge in revenues to a whopping $242.4 billion. At the other end of the list, company No. 1,000 -- the Incheon, Korea-based Daewoo Heavy Industries & Machinery -- reported most-recent fiscal year revenues of $1.8 billion, a 12% increase over the total sales of the bottom company in the IW 1000 last year. An impressive sign of economic power, as a group the 1,000 manufacturers topped $10.74 trillion in total revenues, a 13% increase over the previous year. A total of 460 companies recorded revenue gains of 5% or more, up from 312 companies in 2003. If all of that isn't enough to indicate the general trend, the IW 1000 companies reported an average sales increase of 7.6%, up from an average increase of 2.7% last year. Growth comes with its own set of challenges of course, but P&L managers at both large and small manufacturing companies, public or private, would all agree that those are better problems to have than continually having to squeeze out cost savings. And sales growth is pointless without profits. The 822 manufacturers in this year's IW 1000 reporting positive results -- topped once again by Exxon Mobil with a total net income of $21.5 billion -- chalked up cumulative earnings of $547 billion. This compares with 741 profitable companies and total earnings of $402 billion last year. In case you were questioning the power of a monopoly market position, the 2004 prize for most profitable manufacturer goes to Microsoft Corp. (No. 67). The purveyor of office productivity software, video-game consoles and the world's dominant computer operating system achieved a 31% profit margin on sales of $32.2 billion. Other profit leaders included the pharmaceutical firm Merck & Co. (No. 97), which earned $6.8 billion on sales of $22.5 billion. Oil & Natural Gas Corp. (No. 302), the largest petroleum exploration and production firm in India, reported a 28.7% profit margin. CSR Ltd. (No. 422), an Australian company that makes construction products and refines sugar, reported a 28.4% profit margin. Leaders & Laggards Sales growth might have been the norm in 2003, but not every company can say it had a good year. The No. 1 indicator of a successful corporate strategy and a talented -- and sometimes lucky -- management team, is how a company's performance stacks up against its peers. Industries, like the overall economy, ebb and flow, sometimes in opposite directions. It's management's job to steer the company in a direction that leverages core strengths in order to capitalize on market opportunities better than competitors, and deliver superior economic performance. If a company can accomplish this consistently, it has achieved what academics describe as a "sustainable competitive advantage." This leading or lagging performance shows up most visibly on the firm's annual scorecard, aka, income statement. With median revenue growth of 19%, the petroleum industry outpaced all other sectors in 2003. This shouldn't shock anyone who drives a car. With crude oil and gasoline pump prices at near-record highs, don't be surprised if the three largest companies on the IW 1000, Exxon Mobil (No.1), Royal Dutch/Shell (No. 2), and BP (No. 3), chalk up another banner year in 2004. Demonstrating that revenue growth isn't everything, although they recorded sales increases of more than 30%, both BP and Shell reported below-industry median profit margins. It should be noted that if Shell had released its 2003 financials on schedule -- it had to delay filing to recalculate previously over-valued energy reserves, an overstatement that has cost the jobs of several top executives -- it might have moved up to No. 1. Truly an industry where economies of scale matter, the petroleum sector makes up 9% of all companies represented on the IW1000, yet it accounts for over 20% of total revenues. Bigness is even more critical in the automotive industry. The 39 vehicle manufacturers on the list accounted for $1.48 trillion, or 14% of total revenues. While General Motors (No. 4) remains the world's largest automaker, it barely achieved median industry profit margins of 2.1%. Hyundai (No. 48) and Peugeot (No. 22) did slightly better at around 3%. Although total sales declined for Kia Motors (No. 220), at 5.5% the Korean automaker reported a hair better margin than one of the long-time industry pacesetters, Honda Motor Co. (No. 17). For its part, Honda achieved strong sales growth of 8.3%. It was the only Japanese company to advance on this year's list among that country's top 10, jumping ahead of Sony Corp. (No. 20). Looking at the bottom line of other automakers, in 2003 Ford (No. 6) managed to shake off several years of losses and report a small profit ($495 million on sales of $164 billion). With margins of 10.3%, fueled by hot demand for its Cayenne SUV, Porsche (No. 332) receives the trophy for most profitable carmaker. The German manufacturer is followed in profitability by Nissan Motor Co. (No. 25) and Renault (No. 36), which recorded margins of 7.3% and 6.6%, respectively. Shifting gears, in the soft-drink sector Coca-Cola (No. 107) and PepsiCo (No. 80), maintained their one-two ranking in terms of net income levels. Both grew revenues by around 7.5% last year. Anheuser-Busch (No. 172) is not only the largest, but the most profitable brewer in the world with margins of 14.7%. Merged in 2002, the combined results of SABMiller (No. 289) appear in the IW 1000 for the first time. So far, as evidenced by meager margins of 3.6%, bigger isn't better. The pending merger of Belgian-based Interbrew (No. 276) and the Brazilian Companhia de Bebidas das Americas (No. 679), commonly known as AmBev, will challenge Anheuser-Busch for the world's largest beer company title. Checking out one final industry sector, initial results of the cantankerous Hewlett-Packard (No. 18) acquisition of Compaq are in. Although HP did jump six places as a result of an incremental 29% increase in sales, earnings remained underwhelming at 3.5% of revenues. This compares with margins of 6.4% for Dell (No. 46), and 8.5% for IBM (No. 14). Still, HP outpaces the Japanese PC and electronics manufacturers, including Sony, Toshiba (No. 31), NEC (No. 40) and Fujitsu (No. 42). We'll be the first to acknowledge that any generic industry grouping is somewhat flawed. Anheuser-Busch, for example, manufacturers and recycles aluminium cans and operates theme parks. As much like a balanced portfolio of assets as many of these companies are, management's challenge, as opportunities for revenue growth present themselves, is to make the whole greater than the sum of its parts. World's Largest Manufacturers By Country For additional countries, see the complete IW 1000 Database.

USA:
  • 311 Companies
  • $3,704 Billion Total Revenues
  • 10.7% Average Revenue Growth
2004 Rank Company Revenue
(US$ Millions)
Profit Margin (%) Revenue Growth (%)
1 Exxon Mobil Corp. 242,365 8.9 18.5
4 General Motors Corp. 185,524 2.1 -0.7
6 Ford Motor Co. 164,196 0.3 1.0
8 General Electric Co. 132,797 11.3 0.8
10 ChevronTexaco Corp. 119,703 6.0 21.1
12 ConocoPhillips 104,013 4.6 83.4
14 IBM Corp. 89,131 8.5 9.8
15 Altria Group Inc. 81,832 11.3 1.8
18 Hewlett-Packard Co. 73,061 3.5 29.1
23 Verizon Communications Inc. 67,752 4.5 0.2
Japan:
  • 237 Companies
  • $2,112 Billion Total Revenues
  • 4.4% Average Revenue Growth
2004 Rank Company Revenue
(US$ Millions)
Profit Margin (%) Revenue Growth (%)
7 Toyota Motor Corp. 149,321 5.9 6.3
16 Hitachi Ltd. 76,192 0.3 2.5
17 Honda Motor Co. Ltd. 74,143 5.4 8.3
20 Sony Corp. 69,512 1.6 -1.4
21 Matsushita Electric Industrial Co. Ltd. 68,843 -0.3 7.6
25 Nissan Motor Co. Ltd. 63,513 7.3 10.2
31 Toshiba Corp. 53,342 0.3 4.9
40 NEC Corp. 45,097 -0.5 -7.0
42 Fujitsu Ltd. 42,948 -2.6 -7.8
45 Japan Tobacco Inc. 41,783 1.7 -1.1
Germany:
  • 44 Companies
  • $917 Billion Total Revenues
  • -1.8% Average Revenue Growth
2004 Rank Company Revenue
(US$ Millions)
Profit Margin (%) Revenue Growth (%)
5 DaimlerChrysler AG 170,457 0.3 -8.8
11 Volkswagen AG 115,358 1.2 0.5
13 Siemens AG 93,059 3.3 -12.3
27 E.ON AG 59,180 9.8 17.4
29 RWE AG 54,530 2.2 -9.0
France:
  • 48 Companies
  • $743 Billion Total Revenues
  • -2.7% Average Revenue Growth
2004 Rank Company Revenue
(US$ Millions)
Profit Margin (%) Revenue Growth (%)
9 TOTAL SA 130,067 6.7 2.1
22 Peugeot SA* 67,867 3.1 5.3
28 France Telecom 57,322 7.0 -1.1
36 Renault SA 46,429 6.6 3.6
56 Compagnie de Saint-Gobain 36,776 3.5 -2.3
* 2002 year-end revenue
United Kingdom:
  • 53 Companies
  • $698 Billion Total Revenues
  • 2.3% Average Revenue Growth
2004 Rank Company Revenue
(US$ Millions)
Profit Margin (%) Revenue Growth (%)
3 BP PLC 232,571 4.4 30.1
32 Unilever Group 53,061 6.5 -11.6
52 GlaxoSmithKline PLC 37,962 18.4 1.1
111 Imperial Tobacco Group PLC 20,205 3.7 37.6
120 AstraZeneca PLC 18,849 16.1 5.7
Netherlands:
  • 20 Companies
  • $408 Billion Total Revenues
  • 0.3% Average Revenue Growth
2004 Rank Company Revenue
(US$ Millions)
Profit Margin (%) Revenue Growth (%)
2 Royal Dutch/Shell Group* 235,598 4.1 32.9
53 EADS NV 37,695 0.5 0.6
60 Royal Philips Electronics NV 36,397 2.4 -9.4
147 Akzo Nobel NV 16,220 4.6 -6.8
202 Heineken NV 11,503 8.6 -10.1
* 2002 year-end revenue
South Korea:
  • 32 Companies
  • $260 Billion Total Revenues
  • 9.0% Average Revenue Growth
2004 Rank Company Revenue
(US$ Millions)
Profit Margin (%) Revenue Growth (%)
35 Samsung Electronics Co. Ltd.* 49,645 11.8 28.3
48 Hyundai Motor Co.* 40,106 3.0 20.8
61 SK Corp.* 36,169 -5.5 1.8
126 LG Electronics Inc.* 18,600 1.5 -25.3
197 POSCO* 11,963 7.6 9.4
* 2002 year-end revenue
Canada:
  • 38 Companies
  • $230 Billion Total Revenues
  • 9.6% Average Revenue Growth
2004 Rank Company Revenue
(US$ Millions)
Profit Margin (%) Revenue Growth (%)
99 George Weston Ltd. 22,343 2.7 6.4
145 Bombardier Inc. 16,315 -0.4 -9.9
159 Magna International Inc. 15,345 3.4 18.3
163 Imperial Oil Ltd. 14,699 8.8 12.7
178 Alcan Inc. 13,640 1.2 8.8
Top Performers By Industry For additional breakdowns by industry, see the complete IW 1000 Database.
2004 Rank Company Revenue Growth Profit Margin
Motor Vehicles
332 Porsche AG, Germany 8.8 10.3
25 Nissan Motor Co. Ltd., Japan 10.2 7.3
36 Renault SA, France 3.6 6.6
7 Toyota Motor Corp., Japan 6.3 5.9
220 Kia Motors Corp., South Korea -8.7 5.5
17 Honda Motor Co. Ltd., Japan 8.3 5.4
33 Bayerische Motoren Werke AG, Germany 0.5 4.6
75 Audi AG, Germany 0.7 3.5
22 Peugeot SA*, France 5.3 3.1
48 Hyundai Motor Co.*, South Korea 20.8 3.0
Median** 6.3 2.1
4 General Motors Corp., U.S.A. -0.7 2.1
122 Suzuki Motor Corp., Japan 20.8 1.5
11 Volkswagen AG, Germany 0.5 1.2
102 Mazda Motor Corp., Japan 12.9 1.0
62 Mitsubishi Motors Corp., Japan 21.4 1.0
5 DaimlerChrysler AG, Germany -8.8 0.3
6 Ford Motor Co., U.S.A. 1.0 0.3
86 Volvo AB, Sweden 0.7 0.2
26 Fiat SpA, Italy 13.3 -3.8
189 Isuzu Motors Ltd., Japan -15.5 -10.7
Motor Vehicle Parts
577 American Axle & Mfg. Holdings Inc., U.S.A. 5.8 5.4
426 Autoliv Inc., U.S.A. 19.3 5.1
103 Denso Corp., Japan -2.8 4.8
182 Aisin Seiki Co. Ltd., Japan 15.2 3.4
159 Magna International Inc., Canada 18.3 3.4
94 Johnson Controls Inc., U.S.A. 12.6 3.0
298 Dana Corp., U.S.A. -16.8 2.8
153 Lear Corp., U.S.A. 9.2 2.4
Median** 8.9 2.1
203 Valeo SA, France -5.8 2.0
307 Arvinmeritor Inc., U.S.A. 13.2 1.7
489 Intier Automotive Inc., Canada 20.5 1.3
365 Cummins Inc., U.S.A. 7.6 0.8
77 Delphi Corp., U.S.A. 2.4 -0.2
407 Federal-Mogul Corp., U.S.A. 2.3 -3.4
132 Visteon Corp., U.S.A. -4.0 -6.9
Petroleum & Coal Products
24 ENI SpA, Italy 6.9 10.7
1 Exxon Mobil Corp., U.S.A. 18.5 8.9
9 TOTAL SA, France 2.1 6.7
10 ChevronTexaco Corp., U.S.A. 21.1 6.0
30 China Petroleum & Chemical Corp., China 30.3 4.9
12 ConocoPhillips, U.S.A. 83.4 4.6
Median** 19.1 4.5
3 BP PLC, United Kingdom 30.1 4.4
2 Royal Dutch/Shell Group*, Netherlands 32.9 4.1
47 Marathon Oil Corp., U.S.A. 29.6 3.2
29 RWE AG, Germany -9.0 2.2
50 Nippon Oil Corp., Japan 6.0 0.8
Aerospace & Defense
70 United Technologies Corp., U.S.A. 10.0 7.6
68 Lockheed Martin Corp., U.S.A. 19.7 3.3
82 Northrop Grumman Corp., U.S.A. 52.3 3.3
Median** 2.2 3.0
146 Lagardere Groupe SCA, France -5.4 2.6
129 Raytheon Co., U.S.A. 8.0 2.0
34 Boeing Co., U.S.A. -6.6 1.4
53 EADS NV, Netherlands 0.6 0.5
161 BAE Systems PLC, United Kingdom -7.2 0.1
Food
71 Kraft Foods Inc., U.S.A. 4.3 11.2
271 Kellogg Co., U.S.A. 6.1 8.9
223 General Mills Inc., U.S.A. 32.2 8.7
19 Nestl SA, Switzerland -3.7 7.1
127 Sara Lee Corp., U.S.A. 3.8 6.7
116 ConAgra Foods Inc., U.S.A. -28.2 3.9
248 Parmalat Finanziaria SpA*, Italy -3.4 3.3
Median** 1.3 2.7
101 Bunge Ltd., Bermuda 57.5 1.9
72 Archer-Daniels-Midland Co., U.S.A. 30.9 1.5
89 Tyson Foods Inc., U.S.A. 5.1 1.4
Beverages
107 Coca-Cola Co., U.S.A. 7.6 20.7
172 Anheuser-Busch Cos. Inc., U.S.A. 4.3 14.7
80 PepsiCo Inc., U.S.A. 7.4 13.2
202 Heineken NV, Netherlands -10.1 8.6
276 Interbrew SA, Belgium 0.7 6.6
Median** 4.6 5.8
152 LVMH Moet Hennessy Louis Vuitton SA*, France 3.8 4.4
230 Pepsi Bottling Group Inc., U.S.A. 11.4 4.1
135 Coca-Cola Enterprises Inc., U.S.A. 2.6 3.9
289 SABMiller PLC, United Kingdom 53.7 3.6
222 Kirin Brewery Co. Ltd.*, Japan -27.2 2.9
139 Diageo PLC, United Kingdom -16.3 0.8
Communications Equipment
553 Qualcomm Inc., U.S.A. 30.6 20.8
59 Nokia Corp., Finland -1.9 12.2
450 L-3 Communications Holdings Inc., U.S.A. 26.2 5.5
79 Motorola Inc., U.S.A. 1.4 3.3
Median** 0.3 1.9
517 Avaya Inc., U.S.A. -12.5 -2.0
313 Infineon Technologies AG, Germany 18.1 -7.1
286 Lucent Technologies Inc., U.S.A. -31.3 -9.1
148 L.M. Ericsson Telephone Co., Sweden -18.3 -9.1
303 Pirelli SpA*, Italy -15.7 -9.6
156 Alcatel, France -24.4 -15.5
Computers And Other Electronics
14 IBM Corp., U.S.A. 9.8 8.5
46 Dell Inc., U.S.A. 17.1 6.4
18 Hewlett-Packard Co., U.S.A. 29.1 3.5
Median** 6.3 2.6
20 Sony Corp., Japan -1.4 1.5
31 Toshiba Corp., Japan 4.9 0.3
40 NEC Corp., Japan -7.0 -0.5
42 Fujitsu Ltd., Japan -7.8 -2.6
Pharmaceuticals
97 Merck & Co. Inc., U.S.A. -56.6 30.4
287 Amgen Inc., U.S.A. 51.3 27.0
229 Sanofi-Synthelabo, France 8.6 25.0
188 Eli Lilly & Co., U.S.A. 13.6 20.4
88 Novartis AG, Switzerland -2.7 20.2
52 GlaxoSmithKline PLC, United Kingdom 1.1 18.4
44 Johnson & Johnson, U.S.A. 15.3 17.2
120 AstraZeneca PLC, United Kingdom 5.6 16.1
109 Bristol-Myers Squibb Co., U.S.A. 15.3 14.9
117 Abbott Laboratories, U.S.A. 11.3 14.0
151 Wyeth, U.S.A. 8.7 12.9
Median** 6.9 12.0
87 Roche Holding Ltd., Switzerland 11.6 9.8
39 Pfizer Inc., U.S.A. 39.6 8.7
251 Boots Group PLC, United Kingdom -0.1 5.7
147 Akzo Nobel NV, Netherlands -6.8 4.6
288 Schering-Plough Corp., U.S.A. -18.1 -1.1
* 2002 year-end revenues. ** Median calculations include the financial results of all companies within each industry.
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