LyondellBasell Industries N.V. operates as a manufacturer of chemicals and polymers, refiner of crude oil, producer of gasoline blending components, and developer and licensor of technologies for production of polymers worldwide. The company operates in five segments: Olefins and PolyolefinsAmericas; Olefins and PolyolefinsEurope, Asia, International; Intermediates and Derivatives; Refining; and Technology. It produces and markets olefins, including ethylene, propylene, and butadiene; polyethylene products, which consist of high density polyethylene, low density polyethylene, and linear low density polyethylene; polyolefins, such as polyethylene and polypropylene (PP); and PP homopolymers, copolymers, and compounds. The company also produces and sells propylene oxide and its derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomers, methanol products, glacial acetic acids, vinyl acetate monomers, and ethylene oxides and derivatives. In addition, it refines crude oil into gasoline, diesel, and jet fuel; develops and licenses chemical and polyolefin process technologies; and manufactures and sells polyolefin catalysts, as well as purchases and sells ethylene. The company also exports its products. LyondellBasell Industries N.V. was founded in 2005 and is based in London, the United Kingdom.
Business Analysis of Lyondellbasell Industries
The Basic Materials 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 Lyondellbasell Industries 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 Lyondellbasell Industries 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 Lyondellbasell Industries with an interactive chart.
- Revenue Growth: Lyondellbasell Industries reported a revenue growth of -10.9% year-on-year during 2016. Chemicals Industry grew at -4.1% in the same period
- COGS share of Revenues: As a percentage of revenue, Lyondellbasell Industries spent 79.5% of its total revenues on COGS. Chemicals industry average (COGS share of revenue) in the same period was 70.2%
- R&D share of Revenues: As a percentage of revenue, Lyondellbasell Industries spent 0.3% of its total revenues on R&D. Chemicals industry average R&D spending in the same period was 2.5%
- SG&A share of Revenues: As a percentage of revenue, Lyondellbasell Industries spent 2.9% of its total revenues on Sales, Marketing, and General Administration (SG&A). Chemicals industry average SG&A spending in the same period was 13.0%
- Inventory share of Revenues: As a percentage of revenue, Lyondellbasell Industries spent 13.1% of its total revenues on Inventories. Chemicals industry average Inventory spending in the same period was 14.6%
- Accounts Payable share of Revenues: As a percentage of revenue, Lyondellbasell Industries invested 8.7% of its total revenues on Accounts Payable (A/P) Chemicals industry average Accounts Payable investment in the same period was 12.6%
- Accounts Receivable share of Revenues: As a percentage of revenue, Lyondellbasell Industries invested 9.7% of its total revenues on Accounts Receivable (A/R). Chemicals industry average Accounts Receivable investment in the same period was 16.8%
- PP&E share of Revenues: As a percentage of revenue, Lyondellbasell Industries invested 34.7% of its total revenues on Property, Plants, and Equipments (PP&E). Chemicals industry average PPE investment in the same period was 52.9%
- Intangibles share of Revenues: As a percentage of revenue, Lyondellbasell Industries invested 3.7% of its total revenues on Intangibles. Chemicals industry average Intangibles investment in the same period was 31.4%
- Net Margins: Lyondellbasell Industries Net Margins in the year 2016 were 13.1%. Chemicals industry average Net Margins in the same period were 8.1%
Sector and Industry Association of Lyondellbasell Industries
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.
Lyondellbasell Industries is associated with Basic Materials Sector and Chemicals Industry.
Basic Materials sector is comprised of the following industries: Metal Mining; Coal Mining; Chemicals. The definitions for each of the industries is as follows:
- Metal Mining industry includes companies primarily engaged in mining, developing mines, or exploring for precious metals such as Gold, Silver, Platinum and base metals such as Iron, Copper, Aluminum, Lead, and Zinc. It also includes companies that manufacture alloys such as steel.
- Coal Mining industry includes companies engaged in the exploration for and/or mining of coal.
- Chemicals industry includes companies that produce and/or distribute commodity and specialty chemicals. The companies manufacture three general classes of products: (1) basic chemicals, such as acids, alkalies, salts, and organic chemicals; (2) chemical products to be used in further manufacture, such as synthetic fibers, plastics materials, dry colors, and pigments; and (3) finished chemical products to be used as materials or supplies in other industries, such as paints, fertilizers, and explosives.
Industry Ranking of Lyondellbasell Industries
With $29.2 billion revenues, Lyondellbasell Industries ranked number 2 of all the companies in the US Chemicals industry. There were a total of 66 public companies in the US Chemicals industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Chemicals 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.
- Conduct a holistic benchmarking; to identify and target additional sources of value
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