However, Apple, Bank of America and China Construction Bank saw falling revenues from at least one geography in this time.
Bank of America, China Construction Bank, Industrial and Commercial Bank of China and Ping An Insurance witnessed declining revenue from at least one business segment.
The domestic market is the largest revenue source for each MNC.
For most, the primary source of revenue by geography and business segment does not change.
Typically, MNCs have seen the highest growth in smaller business segments and geographies.
The Forbes Global 2000 top ten
The 2020 Forbes Global 2000 list ranked public companies based on a mix of four metrics: sales, profit, assets and market value. The top ten was made up of five Chinese companies (Agricultural Bank of China, Bank of China, China Construction Bank, Industrial Commercial Bank of China and Ping An Insurance), four US companies (Apple, Bank of America, Berkshire Hathaway and JPMorgan Chase & Co), and Saudi Aramco, headquartered in Saudi Arabia. For each company, we utilised the Monitor Network’s multinational company database – which researches the company’s annual reports – to reveal the sources for revenue by geography and business segment.
Overall revenue trends
In general, the leading MNCs saw revenues rise in both 2018 and 2019. Apple (-2%) and Saudi Aramco (-7.4%) were the only companies to see declines in revenues in-between 2018 and 2019; however, Saudi Aramco did see a huge growth of 42.1% between 2017 and 2018 and Apple too exhibited double-digit growth of 15.9% during the same period. The Chinese companies analysed all showed strong revenue growth in both years, particularly Ping An Insurance, which grew by 11% in 2018 and then by a further 17.6% in 2019. US-based companies were a little more subdued, although JPMorgan Chase & Co did grow by 8.3% and then a further 6.1%.
Eight of the top ten MNCs provided a geographic breakdown. Only Berkshire Hathaway and Ping An Insurance did not. Regional differences are apparent in the eight remaining MNCs. The three US companies provide a breakdown by world geography. Conversely, the four Chinese companies divide their domestic market into several smaller markets and a single, separate international market. Similarly, Saudi Aramco only separates by ‘in kingdom’ or ‘out of kingdom’.
Each MNC’s domestic market is generally its largest revenue market. However, the largest growth areas tend to be in a different market. Only in Bank of America (US) and China Construction Bank (Beijing) is the largest market the highest growth.
Apple witnessed a decline in revenues from China (-2.4%), while Bank of America saw declines in both the Europe, Middle East and Africa region (-32.8%) and Latin America and the Caribbean (-0.2%). China Construction Bank had falling revenues from overseas (-10.2%) and from western China (-0.2%).
Domestic market is key
The domestic market is by far the most significant market for the eight MNCs that had a geographic revenue breakdown. For most, the proportion of (net) revenue derived from the respective home market was high. All four Chinese MNCs had proportions above 85%. Bank of America (89%), JPMorgan Chase & Co (77.9%) and Saudi Aramco (78.8%) also derived the majority of their (net) revenues from their home markets. Apple, with 44.9% of its revenue derived from the Americas, had a significantly smaller proportion compared with its peers. Almost one-quarter (23.2%) of Apple’s revenue originated in Europe.
Business segment breakdown
The number of business segments varies by company. Bank of China (two) and Saudi Aramco (three) have the lowest number of divisions. Conversely, Ping An Insurance (seven) and Berkshire Hathaway (six) have the most. Unsurprisingly, the largest revenue segments in Bank of China and Saudi Aramco account for a significantly larger proportion of total revenue (90.4% and 64.1%, respectively) compared with other MNCs. Berkshire Hathaway had the most diverse segmentation. Its largest segment – insurance – accounted for just over one-quarter (26.7%) of its total revenue.
The highest growth segments tended to be non-principal segments (not the largest). Only Bank of America, Bank of China, Industrial and Commercial Bank of China and JPMorgan Chase & Co witnessed the highest growth in their largest segment between 2017 and 2019.
Bank of America, China Construction Bank and Industrial and Commercial Bank of China all saw a decline in revenues for one of their segments. Ping An Insurance had a fall in both trust (-25.9%) and technology (-24.9%) segments.
China Construction Bank was the only MNC to see a change in its largest business segment. Personal banking revenues totalled Rmb268bn (yuan) ($41.47bn) in 2019, surpassing corporate banking revenues of Rmb264.3bn. Corporate banking had higher revenues in both 2017 and 2018.