World Fuel Services Corporation, an energy management company, provides energy procurement advisory, supply fulfillment and transaction, and payment management solutions to commercial and industrial customers in the aviation, marine, and transportation industries. It operates through three segments: Aviation, Marine, and Land. The Aviation segment offers fuel management; price risk management; ground handling; dispatch services; and international trip planning services, such as flight plans, weather reports, and overflight permits. This segment offers fuel and related products and services to commercial airlines, second and third tier airlines, cargo carriers, regional and low cost carriers, airports, fixed based operators, corporate fleets, fractional operators, private aircraft, military fleets, and to the United States (U.S.) and foreign governments, as well as intergovernmental organizations. The Marine segment provides fuel, lubricants, and related products and services to international container and tanker fleets, commercial cruise lines, yachts and time charter operators, offshore rig owners and operators, the U.S. and foreign governments, and other fuel suppliers. Its marine fuel-related services include management services to procure fuel, cost control, quality control, claims management, and card payment and related processing services. This segment also offers fueling of vessels in ports and at sea, and transportation and delivery of fuel and fuel-related products. The Land segment provides fuel, lubricants, power and natural gas solutions to petroleum distributors operating in the land transportation market; retail petroleum operators; and industrial, commercial, residential, and government customers. This segment also offers management services to procure fuel and price risk management; card payment solutions, merchant processing services, and payment solutions. The company was founded in 1984 and is headquartered in Miami, Florida.
Business Analysis of World Fuel
The Oil & Gas 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 World Fuel 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 World Fuel 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 World Fuel with an interactive chart.
- Revenue Growth: World Fuel reported a revenue growth of -11.1% year-on-year during 2016. Oil & Gas Distribution Industry grew at -12.3% in the same period
- COGS share of Revenues: As a percentage of revenue, World Fuel spent 96.7% of its total revenues on COGS. Oil & Gas Distribution industry average (COGS share of revenue) in the same period was 75.2%
- R&D share of Revenues: World Fuel 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: As a percentage of revenue, World Fuel spent 2.6% of its total revenues on Sales, Marketing, and General Administration (SG&A). Oil & Gas Distribution industry average SG&A spending in the same period was 3.7%
- Inventory share of Revenues: As a percentage of revenue, World Fuel spent 1.7% of its total revenues on Inventories. Oil & Gas Distribution industry average Inventory spending in the same period was 4.8%
- Accounts Payable share of Revenues: As a percentage of revenue, World Fuel invested 6.6% of its total revenues on Accounts Payable (A/P) Oil & Gas Distribution industry average Accounts Payable investment in the same period was 10.1%
- Accounts Receivable share of Revenues: As a percentage of revenue, World Fuel invested 8.7% of its total revenues on Accounts Receivable (A/R). Oil & Gas Distribution industry average Accounts Receivable investment in the same period was 10.6%
- PP&E share of Revenues: As a percentage of revenue, World Fuel invested 1.2% of its total revenues on Property, Plants, and Equipments (PP&E). Oil & Gas Distribution industry average PPE investment in the same period was 155.8%
- Intangibles share of Revenues: As a percentage of revenue, World Fuel invested 4.7% of its total revenues on Intangibles. Oil & Gas Distribution industry average Intangibles investment in the same period was 39.0%
- Net Margins: World Fuel Net Margins in the year 2016 were 0.5%. Oil & Gas Distribution industry average Net Margins in the same period were 3.9%
Sector and Industry Association of World Fuel
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.
World Fuel is associated with Oil & Gas Sector and Oil & Gas Distribution Industry.
Oil & Gas sector is comprised of the following industries: Oil & Gas Production; Oil & Gas Distribution; Oil & Gas Equipment and Services; Alternative Energy. The definitions for each of the industries is as follows:
- Oil & Gas Production industry includes companies primarily engaged in operating oil & gas properties. Key activities may include exploration for crude petroleum and natural gas; drilling, completing, and equipping wells; and all other activities in the preparation of oil and gas up to the point of shipment from the producing property. It also includes companies engaged in crude petroleum refining and producing gasoline, kerosene, distillate fuel oils, residual fuel oils, and lubricants, through fractionation or straight distillation of crude oil.
- Oil & Gas Distribution industry includes companies primarily engaged in the pipeline transportation of petroleum, natural gas, and other commodities. It also includes companies primarily engaged in the wholesale and retail distribution of petroleum and petroleum products.
- Oil & Gas Equipment and Services industry includes companies primarily engaged in drilling wells for oil or gas field operations for others on a contract or fee basis. It also includes companies providing exploration services and machinery & equipment for oil and gas field operations.
- Alternative Energy industry includes companies that develop or manufacture renewable energy equipment utilizing sources such as solar, wind, geothermal, hydro, and waves. It also includes companies that produce alternative fuels such as methanol, ethanol, hydrogen and biofuels that are mainly used to power vehicles.
Industry Ranking of World Fuel
With $27 billion revenues, World Fuel ranked number 2 of all the companies in the US Oil & Gas Distribution industry. There were a total of 69 public companies in the US Oil & Gas Distribution industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Oil & Gas Distribution industry by revenues during 2016 were:
- Energy Transfer Equity ($37.5 billion)
- World Fuel ($27 billion)
- Enterprise Products Partners ($23 billion)
- Energy Transfer Partners ($21.8 billion)
- Plains All American Pipeline ($20.2 billion)
- Plains GP Holdings ($20.2 billion)
- Sunoco ($15.7 billion)
- Kinder Morgan ($13.1 billion)
- NGL Energy Partners ($11.7 billion)
- Sunoco Logistics ($9.2 billion)
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.