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 user 2003-09-09 at 11:22:00 am Views: 144
  • #4016

    Size matters
    Despite the general downturn in financial markets across the world, office products companies have fared well in the latest FT Global 500, the annual list of the world’s most valuable public corporations

    Global company performance lists always make for interesting reading and the latest, published in the UK by the Financial Times, is no exception.

    Unlike the perhaps more-vaunted Fortune Global 500, which ranks companies in terms of sales, the FT listing measures market capitalisation and contains a forward-looking element inasmuch as a share price reflects an investor’s confidence in the firm.

    The FT feels its list gives the most accurate overall presentation of a company’s standing, pointing out that going on sales does not adequately allow for banks and financial services companies, while lists that rank on profits are distorted, for example, by write-offs.

    Consequently, the FT list can differ greatly from the Fortune table. While Microsoft tops the FT ranking, with a market value of $264 billion, in terms of revenue it rates as only the 175th largest company in the world on the Fortune list, with sales of $28.4 billion.

    Some things never change, however. Whichever way you look at it, mass retailer Wal-Mart is huge, appearing in fourth place on the FT Global 500, and first place in the Fortune Global 500. Wal-Mart’s market value is calculated to be a whopping $234.4 billion. Compare that to its nearest retail rival, Home Depot, in 46th place with a $58 billion market cap.

    The FT list gives an instant snapshot of not only the companies’ relative performance, but also the performance of the global economy itself. And it makes for sobering reading. Falling stock markets mean that this year the entire FT Global 500 is valued at $12,580 billion, down 22.6% on the previous year.

    Office products companies however, fare quite well. At the risk of sounding like a disc jockey reading the latest chart countdown, there are five new OP-related entries on the Global 500 this year (Staples, Eastman Kodak, Lexmark International, Henkel and Newell Rubbermaid), with only one company dropping out – Guilbert’s former owner, Pinault Printemps Redoute.

    Staples appears in 420th position with a market cap of $8.8 billion. It is interesting to note that its fierce rival, Office Depot, does not make the Top 500 at all, coming in as only the 417th most valuable company in the USA. On that particular ranking, Staples is streets ahead at 202nd.

    Indeed Depot is not the only notable absentee from the list. Ingram Micro for example, is the world’s 179th largest company in sales terms, but its market value does not even register in the top 500 US companies. The same goes for IT wholesaler rival Tech Data.

    And no place either for manufacturing giant Xerox. Sales of $16.5 billion may be good enough for 300th place on the Fortune list, but not the FT 500, although it does rank as 273rd most valuable in the USA.

    In terms of geographical regions, the FT list vividly illustrates where the balance of power lies – emphatically in the USA with 240 entries, almost five times more than closest competitor Japan. But again illustrating the economic malaise, the combined value of these US companies has fallen 23% over the last 12 months.

    As for the emerging markets, however, it is clear they have much emerging still to do. Hong Kong, South Korea, Taiwan and Singapore all slip down the market cap table, suffering from the global depression among technology stocks.