Ironbound Consulting Group - Blog

Great Brands Checking their Pulse

9/28/2023

Image: McDonalds

Corporate Challenge: Finding new ways to increase employee happiness.

Ironbound Strategy: Opening lines of communications between stakeholders is a great way to create value for employees, customers, and society.

Ironbound Action: Illinois based McDonalds created a 24/7 global Business Integrity Line where employees can share their workplace experiences with a third-party that relays anonymous messages to corporate staff who can help. In an effort to build safe and respectful workplace environments, McDonalds wanted to go above and beyond to make employees happier when potential complaints need addressing. Focusing on employee happiness is the cornerstone of creating exceptional value for brands that want to catapult to new heights.

* Between 2020 and 2022, McDonalds’ revenue increased from $19.2B to $23.1B, with Earnings Per Share increasing from $6.31 to $8.33.

** In 2022, the company expanded on its Standards of Business Conduct, and introduced new measures for 2023 to ingrain its core values of Serve-Inclusion-Integrity-Community-Family to every corner of the company.

How Incumbents Can Defend Market Share from a Wave of AI Startups

8/30/2023

Image: IBM Quantum Processor

Corporate Challenge:  Defending market position against nimble and innovative new entrants.

Ironbound Strategy:  Powerful brands leverage their strategic assets to create holistic value across customers, employees, and society.  Giving away access to newly launched platforms helps incumbent leaders strengthen and retain their customer base.

Ironbound Strategy:  New York based IBM, founded over 100 years ago in 1911, is a multinational leader in technology with operations in 175 countries.  IBM’s work in quantum computing is a good example of blending proprietary technology with open innovation.   In 2022 IBM unveiled the 433-qubit IBM Osprey processor, putting them on track to deliver the 1,000-plus qubit system in 2023, and a 4,000-plus qubit system by 2025.  By providing access to quantum commuting through the cloud, IBM has created an ecosystem where over 1.5 million people have downloaded the free Qiskit software development kit.  As the AI innovation boom gathers momentum, IBM has positioned itself to lead the future of AI and quantum computing with superior value for new and existing customers.

* AI is expected to unlock $16 trillion in value from the global economy by 2030.

** 450,000 registered users have developed applications and published papers based on IBM quantum technology.

Prioritizing ESG for Rapid Sales Growth

7/29/2023

Image: Honeywell's Solstice®

Corporate Challenge:  Making exponential positive impacts on the environment.

Ironbound Strategy:  Creating value for the environment can help customers with their societal objectives, and galvanize employees for all brands involved.

Ironbound Action:  Indiana based Honeywell has 2035 carbon-neutral goals, has already reduced their carbon output by 90% compared to 20 years ago, and is focusing 60% of their R&D budget on making products to help their customers reach their carbon-neutral goals.  One such product is the Solstice® refrigerant.  Half of all building related carbon emissions come from heating & cooling.  Prioritizing R&D for planet friendly products improve company sales goals, customer’s societal goals, and galvanizes employees across all companies involved.

* Honeywell’s Performance Materials and Technologies segment has been steadily climbing from $9.4B in 2020, to $10.0B in 2021, to $10.7B in 2022 - and expected to rise in 2023 with Solstice®

** Between 2020 and 2020, Honeywell’s earnings-per-share has increased from $6.79 to $7.33.

Becoming a top place to work in America

6/30/2023

Image: American Express Healthy Living Wellness Center

Corporate Challenge: Investing in wellness for employees.

Ironbound Strategy: Making spaces for wellness is a surefire way to create value for customers, employees, and society.

Ironbound Action: New York based American Express was listed as Forbe's third best place to work. American Express has been creating exceptional value for their customers for over a century, it is no surprise they have also been creating phenomenal value for their employees. Employees already have unlimited hybrid and W.F.H. flexibilities, 24/7 telehealth access, nutritious dining programs at all global and regional offices, as well as on-site Healthy Living Wellness Centers. Investing in the health and wellness of employees is a remarkable way to galvanize colleagues to grow the company to new heights.

* Revenues for American Express have been skyrocketing from $36.0B in 2020, to $42.3B in 2021, to $52.8B in 2022.

** AXP's earnings per share increased from $3.77 to $9.86 between FY2020 and FY2022.

Growth from Giving Employees Options

5/31/2023

Image: Chili's

Corporate Challenge: Crating value for employees by responding to what they want.

Ironbound Strategy: Letting employees make choices about their benefits helps create value for customers, employees, and even society.

Ironbound Action: Texas based Chili’s has been lifting up employees since its founding in 1975. The company let’s employees choose their own benefits a la carte, so that each employee is motivated in their own way. When casual dining experienced post-covid slumps, Chili’s rebounded fastest in the industry by hiring even more staff in order to create better customer experiences, which elevated the brand even higher. Being known as a great employer with happy employees is a hallmark signal for brand growth.

* Chili’s parent company Brinker saw revenues increase from $3.0B in 2020, to $3.3B in 2021, to $3.8B in 2022. Earnings per share increased from $0.64 to $2.62 in the same period.

How to Get Your Brand on Mars

4/28/2023

Image: Lockheed Martin lunar vessel with Cisco Webex

Corporate Challenge: Getting aerospace agencies to choose your brand.

Ironbound Strategy: When a brand creates value for customers, employees, and society, those key stakeholders propel the brand into new places.

Ironbound Action: California based Cisco has been creating extraordinary value for their employees since 1984, who continuously make some of the most revolutionary products. Their product Webex was chosen along with Amazon Alexa by Lockheed Martin to be the interactive platform between earthbound scientists and NASA’s next spacecrafts that are set to explore the moon and deep space. Cisco will now play an integral part in video communications as we gear up for missions to mars. Creating extraordinary value for employees ensures product developments that will propel your brand into outer space.

* Webex is part of Cisco’s 'collaboration portfolio', that generated $4.4B of Cisco’s $38.0B product revenue last FY.

** Cisco’s product revenue has increased from $35.9B to $36.0B to $38.0B in the last three years.

*** Total revenue including service revenue for Cisco grew from $49.3B, $49.8B, to $51.5B over the last 3 years.

Instant Customer Value with Big Data

3/20/2023

Image: Caterpillar

Corporate Challenge: Increasing customer value with IoT.

Ironbound Strategy: Prioritize stakeholders when adopting IoT so that it’s implementation creates exceptional value for the brand’s customers, employees, and society.

Ironbound Action: Texas based Caterpillar Inc has been building and repairing machines since 1925. The company placed more than 20 sensors on over 1.2 million new machines, which gave Caterpillar insights on detecting problems and estimating down times. Instead of keeping the “big data” for themselves, Caterpillar has been reaching out to customers with small and easy to fix problems before they get worse and costly. For instance, poor road conditions cause wheel slippage, that can be fixed early in as little as 2 hours with a new tire – but unnoticed it can turn into a grinding $300,000 expense that takes 10 days to fully fix. Brands like Caterpillar that already create value for stakeholders are more likely to use connected devices to save their customers time and money. Big Data can provide any brand with an opportunity to create immense value for customers in new and exciting ways.

* Caterpillar sales have increased phenomenally, from $39.0B in 2020, to $48.1B in 2021, to $56.5B in 2022.

** Profit per common share of CAT has increased from $5.51 in 2020, to $11.93 in 2021, to $12.72 in 2022.

Walgreens: A Century of Healthcare Innovations

2/8/2023

Image: Walgreens

Market Valuation:  $32 Billion

Ironbound Buy-Side Valuation:  $40 Billion

Ironbound Assessment:  Deerfield Illinois based Walgreens Boots Alliance, Inc., founded in 1901, is the largest retail pharmacy, health and daily living destination in the United States and Europe with over 13,000 locations across 9 countries.  Approximately 78% of the American population lives within 5 miles from a Walgreens or Duane Reade retail pharmacy location.  In 2022, the company filled 820 million prescriptions, and now has over 102 million myWalgreens rewards loyalty members.  Our upside valuation of $50 Billion is on the higher end to account for the Company’s transformational cost management program estimated to unlock an additional $3.5 Billion in annual cost savings after 2024.  We like Walgreens because of its meaningful holistic business purpose: to help people lead more joyful lives through better health.  In 2022, the company received numerous inclusivity awards that included, a score of 100 from the Human Rights Campaign’s Corporate Equality index, a bronze award on the Stonewall Top Global Employers Index for LGBTQ+ inclusions, and 100% on the Disability Index for disability inclusions.  The company is rolling out local clinical services at a lower cost to consumers inside pharmacy locations as a long-term healthcare value creation strategy.

Why Best Buy is a Great Company

1/23/2023

Image: BestBuy

Market Valuation:  $19 Billion

Ironbound Buy-Side Valuation:  $15 Billion

Ironbound Assessment:  Minnesota based Best Buy Co., Inc., founded in 1966, is an American multinational consumer electronic retail chain.  Over the last 5 years the company has delivered over 10% return-on-assets, and over the last 10 years averaged 11% operating income as a percentage of assets.  As a result, our upside valuation is on the higher end at $25 Billion, equivalent to 10-times the average operating income reported over the most recent three years.  We like Best Buy because it reports a mission driven triple-bottom-linebusiness model in their 10K SEC filings.  In addition, the company boasts a clear north-star purpose: to enrich lives through technology.  Moreover, the company is determined to lead with a positive impact on society and the environment.  In 2022, Best Buy reported a 2030 goal to reduce carbon emissions by 75% and become carbon neutral by 2040.  Their environmental initiatives also include a 25% reduction in water consumption by 2025 with waste reductions from single-use-plastics as well as a transition to more sustainable alternatives.  As part of their long-term growth strategy, Best Buy has been making inroads into health technology to expand their health and fitness related products and services.  These stakeholder growth strategies should help revenues double to $100 Billion over the coming decade.

165 Years of Macy’s Success

1/17/2023

Image: Macy's NYC Flagship Store

Market Valuation:  $6 Billion

Ironbound Buy-Side Valuation:  $10 Billion

Ironbound Assessment:  Manhattan NY based Macy’s Inc., founded in 1858, is an American omnichannel higher-end retailer with almost 800 locations.  Our upside valuation is $17 Billion, equivalent to either 4-times the operating income or the fiscal 2021 value of all assets.  We like Macy’s and believe the secret behind the company’s 165 years of success is rooted in their team culture, which levels-up colleagues with education and career growth.  Furthermore, there is a strong emphasis in the 10K SEC filings on workplace values of acceptance, respect, integrity, and giving back.  Looking ahead, Macy’s is making a major post-Covid Polaris growth strategy – designed to better attract Millennials.  The Polaris strategy involves modernizing existing technologies to combine the instore and digital experiences with more branded products that better appeal to the new and younger demographic.