Consumer Sector Key Financial Data 2023
The following analysis considers the 1602 major publicly listed companies in the consumer sector with a market capitalisation above $1 billion. The numbers presented are expressed in millions of dollars except for percentages and ratios.
| Number | 1602 |
| Expected Growth Rate | 5,12% |
| Financials 2023 | |
| Total Revenues | $ 15.831.389,00 |
| Operating Income | $ 1.385.820,00 |
| Free Cash Flows Firm | $ 787.438,39 |
| Effective Tax Rate | 22,01% |
| 10Y Median Operating Ratios | |
| Revenues Growth | 5,91% |
| Gross Margin | 28,33% |
| Operating Margin | 8,43% |
| Reinvestment Margin | 3,42% |
| ROIC | 10,94% |
| Sales to IC | 1,87 |
| Solvency Ratios | |
| Debt to EV | 20,15% |
| Debt to Equity | 60,33% |
| Interest Coverage | 8,32 |
| Rating | Aa2/AA |
| Spread | 0,94% |
| Beta | |
| Unlevered Beta 2 y | 0,47 |
| Unlevered Beta 5 y | 0,56 |
In 2023 the consumer sector generated $15’831 billion in revenues while over the past 10 years, the median growth rate in revenues has been 5.91%.
Overall, the consumer sector registered an operating income of $1’385 billion in 2023. Regarding profitability, the 10-year median gross margin is 28.3%, while the 10-year median operating margin is equal to 8.4%.
The total free cash flows to the firm for the consumer sector instead, were equal to $787.4 billion in 2023.
Moving on to efficiency ratios, the consumer sector’s 10-year median return on invested capital (ROIC) is 10.9%, while the 10-year median sales to invested capital is equal to 1.87.
The 10-year median reinvestment margin for the consumer sector – expressed as total reinvestments in net capital expenditures, acquisitions, and R&D divided by total revenues – is 3.4%.
Multiplying the reinvestment margin, which shows how much companies in the consumer sector have invested over the past years, by the sales to invested capital ratio, showing how efficiently companies in the consumer sector have invested, is it possible to calculate the expected growth rate in revenues for the consumer sector, equal to 5.12%.
Check out this post for a detailed explanation of how to calculate future revenue growth rates.
As regards solvency ratios, the debt-to-enterprise value ratio for the consumer sector is 20.2%, while the debt-to-equity ratio is 60.3%.
The interest coverage ratio instead, showing how much the operating income covers interest expenses, is equal to 8.32, which would translate into a credit rating for the consumer sector equal to Aa2/AA based on Moody’s rating standards.
Finally, the unlevered beta of the consumer sector – which is the beta depurated by the debt leverage – has been 0.47, for the past 2 years, and 0.56, for the past 5 years.
However, the beta is only one of the required inputs to calculate the appropriate discount rate for company valuation, check out this page where you can find the equity risk premium for different markets needed to calculate the required cost of equity.