Page 179 - CW E-Magazine (17-12-2024)

Special Report

Exhibit 6 - TSR Growth Is Even More Closely Correlated to Revenue Growth than EBITDA Margin Growth
Five-year TSR 2019–2023 (%) Five-year TSR 2019–2023 (%)

30 30
South Asia
South Asia South Korea
South Korea
20 20
Western Europe Switzerland
China Switzerland United States China

10 United States Western Europe 10 Japan
Germany LATAM LATAM
Nordic
Japan Nordic Germany Canada
Canada UK Australia UK Australia
0 0
Middle East Middle Others
Others East

–10 –10
–15 -10 –5 0 5 –5 0 5 10 15 20
Median EBITDA Margin CAGR (2019–2023) Median Revenue CAGR (2019–2023)
N = 330 N = 343
Circle size represents group total of companies' revenue in USD

Europe Emerging Markets NEA North America China
Sources: Company reports; S&P Capital IQ; BCG analysis.
Notes: “South Asia” comprises India; “Other” includes Israel, Cayman Islands, and South Africa; “ASEAN” includes Thailand, Malaysia, and Vietnam;
“Middle East” includes Egypt, Kuwait, and Saudi Arabia; “LATAM” includes Mexico, Brazil, and Chile; “Nordic” includes Denmark, Finland, Norway, and
Sweden. All absolute values are median values.
the drivers of value creation in different measures. Furthermore, the number of * Investing in innovation and sustain-
regions underlines the importance of companies doing so has increased by ability by developing product port-
having a clear and robust TSR strategy. more than 10% over the last 12 months. folios and business models that are
supported by key trends, such as cir-
Securing Success in the Chemical To drive successful value creation, cularity and the transition to net zero.
Industry Requires a Proactive TSR companies should be guided by the * Rigorously driving commercial
Strategy following key principles. excellence and customer focus
In an era marked by significant chal- through efficiency improvements,
lenges and uncertainties, chemical com- Prioritize the main driver of TSR: prioritizing customer needs, and
panies must adopt a strategy that can growth stronger relationships.
activate all TSR levers. Value creation Rather than relying solely on * Exploring partnerships and joint
is growing in importance. Increasingly, efficiency improvements, companies ventures along the value chain so
company leaders want their medium-and should focus on robust growth strate- that companies can enhance their
long-term plans to have a clear TSR ele- gies that leverage end market dynamics go-to-market strategies and service
ment. (See “The Rising Importance of a and innovations. This involves: offerings.
TSR Strategy.”) Using AI, we’ve found * Tapping into emerging opportuni-
that two out of three chemical compa- ties by aligning growth strategies Pursue continuous portfolio optimiza-
nies now tackle value creation topics with strong end-industry sectors tion and strategic M&A.
in their earnings calls, with a particular to achieve consistent, long-term Chemical companies must rigorously
focus on capital levers and cost efficiency growth and profitability. adjust their portfolios and actively

Chemical Weekly December 17, 2024 179

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