Value Creation for Industrials in Europe | Page 9

TSR Decomposition | Industrial Machinery & Components

Decomposing the total shareholder return ( TSR ) for industrial machinery & components into value drivers reveals that operating performance and change in subindustry multiple are key drivers .
APPROXIMATED TOTAL SHAREHOLDER RETURN ( TSR ) DECOMPOSITION — INDUSTRIAL MACHINERY & COMPONENTS , 2016 – 2021
10 %
100 %
Two-thirds of the realized TSR were created through operational performance . Revenue and margin were equally important .
30 %
6 %
61 % -1 %
26 %
29 %
Multiple had a strong impact on TSR during the observation period . High valuations were driven by :
• Pandemic-related stimuli
• Fiscal conditions ( e . g ., interest rates )
• Positive investment sentiment
Revenue growth
Margin improvement
Investment ( CAPEX )
TSR from operational performance
Leverage
Multiple change
Other
Realized TSR
Source : Capital IQ , goetzpartners analysis
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