Weyerhaeuser Company is a timber, land and forest products company. As of December 31, 2016, the Company owned or controlled 13.1 million acres of timberlands, primarily in the United States, and manages additional timberlands under long-term licenses in Canada. The Company's segments include Timberlands; Real Estate, Energy and Natural Resources (Real Estate & ENR), and Wood Products. The Timberlands segment's offerings include logs, timber and recreational access via leases. The Real Estate & ENR segment includes sales of timberlands; rights to explore for and extract hard minerals, oil and gas production, and coal, and equity interests in its Real Estate Development Ventures. The Wood Products segment includes the manufacturing and distribution of wood products. The Wood Products segment is engaged in softwood lumber, engineered wood products, structural panels, medium density fiberboard and building materials distribution.
Business Analysis of Weyerhaeuser
The Real Estate & REITs 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 Weyerhaeuser 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 Weyerhaeuser 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 Weyerhaeuser with an interactive chart.
- Revenue Growth: Weyerhaeuser reported a revenue growth of 21.3% year-on-year during 2016. Specialty REITs Industry grew at 15.7% in the same period
- COGS share of Revenues: As a percentage of revenue, Weyerhaeuser spent 76.8% of its total revenues on COGS. Specialty REITs industry average (COGS share of revenue) in the same period was 46.1%
- R&D share of Revenues: As a percentage of revenue, Weyerhaeuser spent 0.3% of its total revenues on R&D. Specialty REITs industry average R&D spending in the same period was 0.0%
- SG&A share of Revenues: As a percentage of revenue, Weyerhaeuser spent 6.6% of its total revenues on Sales, Marketing, and General Administration (SG&A). Specialty REITs industry average SG&A spending in the same period was 10.0%
- Inventory share of Revenues: As a percentage of revenue, Weyerhaeuser spent 5.6% of its total revenues on Inventories. Specialty REITs industry average Inventory spending in the same period was 1.0%
- Accounts Payable share of Revenues: As a percentage of revenue, Weyerhaeuser invested 3.7% of its total revenues on Accounts Payable (A/P) Specialty REITs industry average Accounts Payable investment in the same period was 13.4%
- Accounts Receivable share of Revenues: As a percentage of revenue, Weyerhaeuser invested 6.1% of its total revenues on Accounts Receivable (A/R). Specialty REITs industry average Accounts Receivable investment in the same period was 11.5%
- PP&E share of Revenues: As a percentage of revenue, Weyerhaeuser invested 252.5% of its total revenues on Property, Plants, and Equipments (PP&E). Specialty REITs industry average PPE investment in the same period was 404.9%
- Intangibles share of Revenues: As a percentage of revenue, Weyerhaeuser invested 0.6% of its total revenues on Intangibles. Specialty REITs industry average Intangibles investment in the same period was 33.5%
- Net Margins: Weyerhaeuser Net Margins in the year 2016 were 16.1%. Specialty REITs industry average Net Margins in the same period were 18.5%
Sector and Industry Association of Weyerhaeuser
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.
Weyerhaeuser is associated with Financials Sector Group, Real Estate & REITs Sector, and Specialty REITs Industry.
Real Estate & REITs (Real Estate Investment Trusts) sector is comprised of the following industries: Diversified REITs; Industrial & Office REITs; Hotel & Lodging REITs; Retail REITs; Residential REITs; Specialty REITs; Mortgage REITs; Real Estate Holding & Development; Real Estate Services. The definitions for each of the industries is as follows:
- Diversified REITs industry includes REITs or corporations that invest in a variety of property types without a concentration on any single type.
- Industrial & Office REITs industry includes REITs that primarily invest in office, industrial, and flex properties.
- Hotel & Lodging REITs industry includes REITs that primarily invest in hotels or lodging properties.
- Retail REITs industry includes REITs that primarily invest in retail properties, malls, shopping centers, strip centers and factory outlets.
- Residential REITs industry includes REITs that primarily invest in residential home properties, apartment buildings, and residential communities.
- Specialty REITs industry includes REITs that invest in self storage properties, properties in the health care industry such as hospitals, assisted living facilities and health care laboratories, and other specialized properties such as auto dealership facilities, timber properties and net lease properties.
- Mortgage REITs industry includes REITs that are directly involved in lending money to real estate owners and operators or indirectly through the purchase or mortgages or mortgage backed securities.
- Real Estate Holding & Development industry includes companies that invest directly or indirectly in real estate through development, investment or ownership.
- Real Estate Services industry includes companies that provide services to real estate companies but do not own the properties themselves. It includes agencies, brokers, leasing companies, management companies and advisory services.
Industry Ranking of Weyerhaeuser
With $6.4 billion revenues, Weyerhaeuser ranked number 1 of all the companies in the US Specialty REITs industry. There were a total of 36 public companies in the US Specialty REITs industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Specialty REITs 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.