Market Value Added (MVA)
Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.
MVA
Hershey Co., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The financial data reflects notable developments in the market valuation and invested capital over the five-year period.
- Market (fair) value
- The market value showed a consistent upward trend overall, beginning at approximately $27.65 billion in 2018 and increasing to $53.73 billion by the end of 2022. There was a slight decrease noticed in 2020 compared to 2019, but the value rebounded strongly in the subsequent years, reaching the highest point in 2022. This indicates growing investor confidence and potentially favorable market conditions.
- Invested capital
- Invested capital experienced a gradual increase from about $6.55 billion in 2018 to nearly $8.76 billion in 2022. The growth appears steady without any significant fluctuations, suggesting stable capital investment over the period. The most notable increase occurred between 2020 and 2021, showing accelerated investment activity during these years.
- Market value added (MVA)
- Market value added, representing the difference between market value and invested capital, followed a pattern similar to market value. Starting at roughly $21.10 billion in 2018, MVA increased steadily, aside from a dip in 2020, ultimately reaching approximately $44.97 billion in 2022. This increase signifies improved wealth creation for shareholders, as the market values have risen faster than the capital invested.
Overall, the data indicates robust growth in market valuation, supported by steady investment increases, culminating in substantial value creation over the five years analyzed. The temporary decline in 2020 may reflect external market factors impacting valuation but was followed by a strong recovery.
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MVA Spread Ratio
Hershey Co., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 44,973,798) | 38,614,099) | 29,040,753) | 31,501,445) | 21,104,259) | |
| Invested capital2 | 8,759,552) | 8,529,610) | 7,520,057) | 6,702,394) | 6,545,593) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 513.43% | 452.71% | 386.18% | 470.00% | 322.42% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Coca-Cola Co. | 267.55% | 289.24% | — | — | — | |
| Mondelēz International Inc. | 73.56% | 85.16% | — | — | — | |
| PepsiCo Inc. | 296.11% | 297.67% | — | — | — | |
| Philip Morris International Inc. | 327.97% | 585.34% | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2022 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 44,973,798 ÷ 8,759,552 = 513.43%
4 Click competitor name to see calculations.
The financial data reveals several notable trends in key metrics over the five-year period from 2018 to 2022.
- Market Value Added (MVA)
- The Market Value Added showed consistent growth overall, increasing from approximately 21.1 billion USD in 2018 to around 44.97 billion USD in 2022. Although there was a slight decline between 2019 and 2020, the general trajectory is upward, with a significant rise in 2021 followed by continued growth in 2022. This suggests enhanced market valuation and value creation by the company during these years.
- Invested Capital
- Invested capital increased steadily each year, growing from approximately 6.55 billion USD in 2018 to about 8.76 billion USD in 2022. The growth rate appears moderate but consistent, indicating ongoing capital investment and expansion efforts by the company over the period.
- MVA Spread Ratio
- The MVA spread ratio exhibited some fluctuations but maintained a generally high level throughout the period. Starting at 322.42% in 2018, it peaked at 470% in 2019, dipped to 386.18% in 2020, then climbed again to 452.71% in 2021 and reached its highest point at 513.43% in 2022. The elevated ratio in the later years indicates improved returns on capital employed relative to cost, reflecting efficient capital management and strong value generation.
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MVA Margin
Hershey Co., MVA margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 44,973,798) | 38,614,099) | 29,040,753) | 31,501,445) | 21,104,259) | |
| Net sales | 10,419,294) | 8,971,337) | 8,149,719) | 7,986,252) | 7,791,069) | |
| Performance Ratio | ||||||
| MVA margin2 | 431.64% | 430.42% | 356.34% | 394.45% | 270.88% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Coca-Cola Co. | 497.46% | 600.94% | — | — | — | |
| Mondelēz International Inc. | 149.09% | 182.53% | — | — | — | |
| PepsiCo Inc. | 238.05% | 261.55% | — | — | — | |
| Philip Morris International Inc. | 489.05% | 543.41% | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 2022 Calculation
MVA margin = 100 × MVA ÷ Net sales
= 100 × 44,973,798 ÷ 10,419,294 = 431.64%
3 Click competitor name to see calculations.
The financial data indicates several notable trends over the five-year period observed.
- Market Value Added (MVA)
- The Market Value Added shows a consistent overall increase from 21,104,259 thousand US dollars at the end of 2018 to 44,973,798 thousand US dollars by the end of 2022. There was a significant rise from 2018 to 2019, followed by a slight decline in 2020. However, the upward trend resumed strongly in 2021 and continued through 2022, reaching the highest value in the period.
- Net Sales
- Net sales demonstrated gradual growth each year, beginning at 7,791,069 thousand US dollars in 2018 and increasing annually to reach 10,419,294 thousand US dollars in 2022. The sales growth rate accelerated notably in 2021 and 2022 compared to earlier years, reflecting an increasing revenue generation capability over time.
- MVA Margin
- The MVA margin fluctuated throughout the period but exhibited a clear upward trend overall. Starting at 270.88% in 2018, it rose sharply to 394.45% in 2019 before slightly declining to 356.34% in 2020. Subsequently, it increased again to 430.42% in 2021 and maintained a similar high level at 431.64% in 2022. This pattern suggests improved efficiency in generating market value relative to sales over the years.
In summary, the company has experienced significant growth in market value added alongside steady increases in net sales. The rising MVA margin highlights enhanced value creation relative to sales, particularly toward the later years of the period under review.
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