Rexam Plc. – Ratio Analysis & Interpretations
The aim of this document is to analyse Rexam Plc. (Rexam) using ratios generated based on the financial statements and the latest annual report (as of 2012) of the company. While achieving the analysis, the last four years’ performance from 2009 to 2012 was considered. In order to understand where Rexam stands within the industry, the figures of its 2 biggest rivals – Ball Corp. (Ball) and Crown Holdings Inc. (Crown) – were compared. The ratio analysis played a crucial role in this study, as it allowed me to compare the figures of different companies operating with different currencies. A. Company History and Background:
Rexam, founded in 1923, is a leading global consumer packaging company. It has 67 manufacturing sites in 24 countries across the globe and employs around 11,100 people. It serves 2 main market segments; 1. Beverage Cans: The core business is producing Beverage Cans. 90% of the sales are generated from this principal business operation. 2. Healthcare: It manufactures a range of solutions to protect and deliver pharmaceuticals, including insulin pens, inhalers and pumps. There are 5 main global companies that dominate the market in beverage can manufacturing. Rexam and Ball are competing for the leadership and Crown flows them closely. In Healthcare Rexam is the global leader company. B. Performance of Rexam:
1. Key Figures – Company at the first glance:
In 2009-2012 period, although total revenues of Rexam has decreased from £4.5bn to £4.3bn representing a decline by 5%, EBIT increased by 36% from £353m to £479m. The reason for this improvement is Rexam’s successful executions in its operational excellence policy that reflected as reductions both in variable and fixed costs. For the same period there was a constant increase in Ball’s figures resulting with 30% and 43% rise in revenues and EBIT respectively. Except the last year, Crown has also enjoyed a rising trend and increased its revenues...
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