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
Kellanova, MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2023-12-30), 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: 2019-12-28).
1 Fair value of debt. See details »
2 Invested capital. See details »
The analysis of Market Value Added (MVA) reveals a general contraction in shareholder value creation over the five-year period from 2019 to 2023. While MVA remained positive throughout the period, indicating that the market value consistently exceeded the capital invested in the business, a downward trajectory is evident, culminating in a significant decrease in the most recent fiscal year.
- Market Value Trends
- The fair market value exhibited relative stability between 2019 and 2022, fluctuating between US$ 29.97 billion and US$ 31.70 billion. However, a sharp decline was observed in 2023, with the value dropping to US$ 25.75 billion, representing a decrease of approximately 16.8% compared to 2022.
- Invested Capital Dynamics
- Invested capital remained consistent from 2019 through 2022, with a slight peak of US$ 13.59 billion in 2021. A notable reduction occurred in 2023, where invested capital fell to US$ 11.68 billion. This decline suggests a contraction in the company's capital base or a strategic reallocation of assets during the final observed period.
- Market Value Added (MVA) Interpretation
- MVA peaked in 2019 at US$ 18.60 billion and concluded the period at US$ 14.08 billion in 2023, reflecting a total decrease of approximately 24.3%. The most significant erosion of MVA occurred between 2022 and 2023, where the value dropped by US$ 3.68 billion. Because the decline in market value outpaced the reduction in invested capital during 2023, the overall value added by the company from the perspective of the market has diminished.
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MVA Spread Ratio
Kellanova, MVA spread ratio calculation, comparison to benchmarks
| Dec 30, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 14,078) | 17,756) | 17,867) | 16,778) | 18,603) | |
| Invested capital2 | 11,675) | 13,188) | 13,587) | 13,194) | 13,101) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 120.58% | 134.63% | 131.50% | 127.17% | 141.99% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Coca-Cola Co. | 258.44% | 267.55% | 289.24% | — | — | |
| Mondelēz International Inc. | 97.98% | 73.56% | 85.16% | — | — | |
| PepsiCo Inc. | 265.48% | 296.11% | 297.67% | — | — | |
| Philip Morris International Inc. | 265.23% | 327.97% | 585.34% | — | — | |
Based on: 10-K (reporting date: 2023-12-30), 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: 2019-12-28).
1 MVA. See details »
2 Invested capital. See details »
3 2023 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 14,078 ÷ 11,675 = 120.58%
4 Click competitor name to see calculations.
The financial performance metrics between 2019 and 2023 indicate a general contraction in value creation and a downward trajectory in market valuation relative to invested capital. While the middle of the period showed signs of stability and modest recovery, the most recent fiscal year reflects a significant decline across all analyzed indicators.
- Market Value Added (MVA)
- A downward trend is observed in the MVA, which decreased from US$ 18,603 million in 2019 to US$ 14,078 million in 2023. Following a dip in 2020, the value remained relatively stable through 2022, hovering around the US$ 17,000 million to US$ 18,000 million range. However, 2023 marked a sharp decline, representing the lowest value in the five-year period.
- Invested Capital
- Invested capital showed minimal volatility from 2019 through 2022, peaking at US$ 13,587 million in 2021. A notable shift occurred in 2023, where invested capital dropped to US$ 11,675 million. This reduction suggests a contraction in the capital base during the final year of the analysis.
- MVA Spread Ratio
- The MVA spread ratio, which measures the market's valuation of the company relative to its invested capital, peaked at 141.99% in 2019. After a decrease in 2020, the ratio experienced a gradual recovery, reaching 134.63% by 2022. This positive momentum was reversed in 2023, as the ratio fell to 120.58%. Because the decline in MVA was more pronounced than the reduction in invested capital in 2023, the resulting compression of the spread ratio indicates a diminished market premium on the capital employed.
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MVA Margin
Kellanova, MVA margin calculation, comparison to benchmarks
| Dec 30, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 14,078) | 17,756) | 17,867) | 16,778) | 18,603) | |
| Net sales | 13,122) | 15,315) | 14,181) | 13,770) | 13,578) | |
| Performance Ratio | ||||||
| MVA margin2 | 107.29% | 115.94% | 125.99% | 121.85% | 137.00% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Coca-Cola Co. | 471.88% | 497.46% | 600.94% | — | — | |
| Mondelēz International Inc. | 167.29% | 149.09% | 182.53% | — | — | |
| PepsiCo Inc. | 217.79% | 238.05% | 261.55% | — | — | |
| Philip Morris International Inc. | 387.28% | 489.05% | 543.41% | — | — | |
Based on: 10-K (reporting date: 2023-12-30), 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: 2019-12-28).
1 MVA. See details »
2 2023 Calculation
MVA margin = 100 × MVA ÷ Net sales
= 100 × 14,078 ÷ 13,122 = 107.29%
3 Click competitor name to see calculations.
The financial performance from December 2019 through December 2023 indicates a general contraction in market value creation and a steady decline in the efficiency of value generation relative to sales.
- Market Value Added (MVA) Trends
- A downward trajectory in absolute market value is evident over the analyzed period. The MVA decreased from 18,603 million USD in 2019 to 16,778 million USD in 2020. While a period of relative stability followed, with values fluctuating between 17,756 million USD and 17,867 million USD from 2021 to 2022, a sharp decline occurred in 2023, with the value falling to 14,078 million USD.
- Net Sales Performance
- Net sales showed a consistent growth pattern from 2019 to 2022, rising from 13,578 million USD to a peak of 15,315 million USD. However, this growth trend was abruptly reversed in 2023, as sales dropped to 13,122 million USD, representing a level lower than that recorded at the start of the five-year period.
- MVA Margin Analysis
- The MVA margin reveals a persistent decline in value-creation efficiency. The margin started at 137.00% in 2019 and ended at 107.29% in 2023. Despite a minor recovery in 2021 to 125.99%, the overall trend is negative. This suggests that the market's valuation of the company's added value is not keeping pace with its operational scale, reflecting a diminishing premium relative to net sales.
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