PG&E Corporation, through its subsidiary, Pacific Gas and Electric Company, transmits, delivers, and sells electricity and natural gas to residential, commercial, industrial, and agricultural customers primarily in northern and central California. The company's electricity distribution network consists of approximately 142,000 circuit miles of distribution lines, 59 transmission switching substations, and 606 distribution substations; and electricity transmission network comprises approximately 18,400 circuit miles of interconnected transmission lines and 92 electric transmission substations. Its natural gas system consists of approximately 42,800 miles of distribution pipelines, approximately 6,700 miles of backbone and local transmission pipelines, and various storage facilities. The company operates various electricity generation facilities, such as nuclear, hydroelectric, fossil fuel-fired, and photovoltaic. PG&E Corporation was founded in 1905 and is headquartered in San Francisco, California.
Business Analysis of PG&E
The Utilities 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 PG&E 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 PG&E 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 PG&E with an interactive chart.
- Revenue Growth: PG&E reported a revenue growth of 4.9% year-on-year during 2016. Gas, Water, & Multiutilities Industry grew at -0.4% in the same period
- COGS share of Revenues: As a percentage of revenue, PG&E spent 72.1% of its total revenues on COGS. Gas, Water, & Multiutilities industry average (COGS share of revenue) in the same period was 63.9%
- R&D share of Revenues: PG&E R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: PG&E SG&A share of Revenues details are not available because either company does not share the data or we do not have it
- Inventory share of Revenues: As a percentage of revenue, PG&E spent 2.6% of its total revenues on Inventories. Gas, Water, & Multiutilities industry average Inventory spending in the same period was 7.3%
- Accounts Payable share of Revenues: As a percentage of revenue, PG&E invested 9.7% of its total revenues on Accounts Payable (A/P) Gas, Water, & Multiutilities industry average Accounts Payable investment in the same period was 11.4%
- Accounts Receivable share of Revenues: As a percentage of revenue, PG&E invested 25.4% of its total revenues on Accounts Receivable (A/R). Gas, Water, & Multiutilities industry average Accounts Receivable investment in the same period was 15.4%
- PP&E share of Revenues: As a percentage of revenue, PG&E invested 286.3% of its total revenues on Property, Plants, and Equipments (PP&E). Gas, Water, & Multiutilities industry average PPE investment in the same period was 281.2%
- Intangibles share of Revenues: PG&E Intangibles share of Revenues details are not available because either company does not share the data or we do not have it
- Net Margins: PG&E Net Margins in the year 2016 were 7.9%. Gas, Water, & Multiutilities industry average Net Margins in the same period were 8.6%
Sector and Industry Association of PG&E
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.
PG&E is associated with Utilities Sector and Gas, Water, & Multiutilities Industry.
Utilities sector is comprised of the following industries: Electric Utilities; Gas, Water, & Multiutlities. The definitions for each of the industries is as follows:
- Electric Utilities industry includes companies engaged in generation, transmission, and/or distribution of electric energy for sale.
- Gas, Water, & Multiutlities industry includes companies engaged in transmission and/or storage of natural gas for sale and those engaged in distributing water for sale for domestic, commercial, and industrial use. It also includes companies with significant presence in more than one utility.
Industry Ranking of PG&E
With $17.7 billion revenues, PG&E ranked number 3 of all the companies in the US Gas, Water, & Multiutilities industry. There were a total of 47 public companies in the US Gas, Water, & Multiutilities industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Gas, Water, & Multiutilities 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.