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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About Accenture

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.

Authors