Maoxian’s Top Ten Links — February 16, 2007 | Home | All Fusion Abruptly Stops: NovaStar Implodes

February 21, 2007


Adding 150 Basis Points to Top Line Growth

Best bit from an interview with David Herro in this week’s Barron’s:

“Longer-term, I’m very bullish on global economic growth. The theme I’ve been preaching about for 10 years is finally happening: When you have three-fifths of the world’s population finally becoming consumers, that is going to have an impact. The second biggest market for the BMW 7 Series outside the U.S. is China. If China or any of the emerging markets could add 100 to 150 basis points of growth to the top line of, say, a Diageo, a Nestlé, a BMW, that is significant to its valuation in the long haul and that’s exactly what’s happening.”

BMW locally manufactures the 3- and 5-series in Shenyang.

This entry was posted on Wednesday, February 21st, 2007 at 5:16 pm (utc+8) and is filed under Trading and Investing.

2 Responses to “Adding 150 Basis Points to Top Line Growth”

  1. amir said:
    February 22nd, 2007 at 2:00 pm

    CM-

    Interesting that he thinks 150 basis points (1.5%) added to the top line would impact a Diageo(DEO) or Nestle so much. I think it will have to be much more, along the lines of 5%-10%, to see any revenue impact. I just don’t see how any company’s revenue could be impacted by such a small number.

    What are your thoughts?

  2. C. Maoxian said:
    February 22nd, 2007 at 6:49 pm

    amir: It makes a huge difference to those mature companies, like Nestle and Diageo, whose revenue growth is low … I don’t have DEO’s numbers in front of me at the moment but I do have BUD’s: their annual revenue growth over the last ten years has been about 5.5%, which is a big difference from the 4% it would be (I’m assuming) without the emerging markets.

Post your opinion