Eaton Corporation plc operates as a power management company worldwide. Its Electrical Products segment offers electrical and industrial components, residential products, single phase power quality products, emergency lighting and fire detection products, wiring devices, structural support systems, and circuit protection and lighting products. The company's Electrical Systems and Services segment provides power distribution and assemblies, three phase power quality products, hazardous duty electrical equipment, explosion-proof instrumentation, utility power distribution, power reliability equipment, and services. Its Hydraulics segment offers various power products, controls and sensing products, fluid conveyance products, filtration systems solutions, industrial drum and disc brakes, and golf grips. The company's Aerospace segment provides hydraulic power generation systems, controls and sensing products, fluid conveyance products, and fuel systems for commercial and military use. Its Vehicle segment designs, manufactures, markets, and supplies drivetrain, powertrain systems, and critical components, including transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, cylinder heads, locking and limited slip differentials, transmission controls, fuel vapor components, fluid connectors, and conveyance products. The company serves industrial, institutional, governmental, utility, commercial, residential, information technology, renewable energy, marine, agriculture, oil and gas, construction, mining, forestry, material handling, truck and bus, machine tools, molding, primary metals, and power generation markets, as well as original equipment manufacturers and aftermarket customers of heavy, medium, and light-duty trucks, SUVs, CUVs, passenger cars, and agricultural equipment. Eaton Corporation plc was founded in 1916 and is based in Dublin, Ireland.
Business Analysis of Eaton Corp
The Industrial Goods & Services Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Eaton Corp compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Eaton Corp to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Eaton Corp with an interactive chart.
- Revenue Growth: Eaton Corp reported a revenue growth of -5.3% year-on-year during 2016. Electrical Components & Equipment Industry grew at -3.6% in the same period
- COGS share of Revenues: As a percentage of revenue, Eaton Corp spent 67.9% of its total revenues on COGS. Electrical Components & Equipment industry average (COGS share of revenue) in the same period was 69.6%
- R&D share of Revenues: As a percentage of revenue, Eaton Corp spent 3.0% of its total revenues on R&D. Electrical Components & Equipment industry average R&D spending in the same period was 1.3%
- SG&A share of Revenues: As a percentage of revenue, Eaton Corp spent 17.7% of its total revenues on Sales, Marketing, and General Administration (SG&A). Electrical Components & Equipment industry average SG&A spending in the same period was 17.0%
- Inventory share of Revenues: As a percentage of revenue, Eaton Corp spent 11.4% of its total revenues on Inventories. Electrical Components & Equipment industry average Inventory spending in the same period was 13.3%
- Accounts Payable share of Revenues: As a percentage of revenue, Eaton Corp invested 8.7% of its total revenues on Accounts Payable (A/P) Electrical Components & Equipment industry average Accounts Payable investment in the same period was 10.1%
- Accounts Receivable share of Revenues: As a percentage of revenue, Eaton Corp invested 18.0% of its total revenues on Accounts Receivable (A/R). Electrical Components & Equipment industry average Accounts Receivable investment in the same period was 17.8%
- PP&E share of Revenues: As a percentage of revenue, Eaton Corp invested 17.4% of its total revenues on Property, Plants, and Equipments (PP&E). Electrical Components & Equipment industry average PPE investment in the same period was 16.5%
- Intangibles share of Revenues: As a percentage of revenue, Eaton Corp invested 94.8% of its total revenues on Intangibles. Electrical Components & Equipment industry average Intangibles investment in the same period was 42.0%
- Net Margins: Eaton Corp Net Margins in the year 2016 were 9.7%. Electrical Components & Equipment industry average Net Margins in the same period were 7.9%
Sector and Industry Association of Eaton Corp
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Eaton Corp is associated with Industrials Sector Group, Industrial Goods & Services Sector, and Electrical Components & Equipment Industry.
Industrial Goods & Services sector is comprised of the following industries: Industrial Conglomerates; Industrial Machinery; Electrical Components & Equipment; Electronic Equipment & Parts; Containers & Packaging. The definitions for each of the industries is as follows:
- Industrial Conglomerates industry includes Industrial companies engaged in three or more classes of business within the Industrial industry that differ substantially from each other.
- Industrial Machinery industry includes designers, manufacturers, distributors and installers of industrial machinery and factory equipment, such as machine tools, lathes, presses and assembly line equipment. It also includes makers of pollution control equipment, castings, pressings, welded shapes, structural steelwork, compressors, pumps, bearings, elevators and escalators.
- Electrical Components & Equipment industry consists of manufacturers and distributors of electrical parts for finished products, such as printed circuit boards for radios, televisions and other consumer electronics. It also includes makers of cables, wires, ceramics, transistors, electric adapters, fuel cells and security cameras. Manufacturers of Electric motors and generators and mechanical motion control products are also part of this industry.
- Electronic Equipment & Parts industry includes companies offering Manufacturing and Design services for Engineered Components and Products used in different industries. Companies providing Laser-based manufacturing products are part of this industry.
- Containers & Packaging industry includes producers and distributors of cardboard, bags, boxes, cans, drums, bottles, jars and glass used for packaging. Specialty Packaging Products and Pressure-Sensitive Materials producers are also part of this industry.
Industry Ranking of Eaton Corp
With $19.7 billion revenues, Eaton Corp ranked number 1 of all the companies in the US Electrical Components & Equipment industry. There were a total of 33 public companies in the US Electrical Components & Equipment industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Electrical Components & Equipment industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.