Among the issues facing the UK as it moves closer to separating from the European Union, are the trade issues facing companies that do business with their UK based customers. With the EU, trade agreements and business rules have been negotiated and in place for years and the UK has been living under those arrangements. Now, as an independent, a whole series of agreements and details need to be worked thru.
To get a small taste of what’s at stake we took a look at some of the companies in the Global 5000 to understand where and how they participated in the UK market. Specifically, we took the top 10 of the Global 5000 companies and looked at their financials to determine (or estimate) how much of their revenue comes from the UK . . . and whether they have a UK office/presence. The idea here is to look across industries and countries where these top 10 reside to understand the extent of the challenge that the UK government will need to tackle.
Here are the top 10 of the Global 5000 companies and a look at their UK business:
- Wal-Mart generates approximately $11.6 billion of its $481 billion in the UK and operates out the ASDA operations as a subsidiary
- Saudi Aramco also generates $11 billion from the UK and has their HQ in Portman Square
- State Grid of China is a company that we estimate to not generate UK revenues. They do have a joint research lab with the University of Birmingham.
- China Petroleum & Chemical — $2.8 billion and a joint office with Repsol
- China National Petroleum – $3 billion in revenue and a trading partnership arrangement with INEOS Group
- Royal Dutch Shell – $9.8 billion and a London based UK HQ
- ExxonMobil – %17.9 billion with main operations in Fawley, UK
- Volkswagen AG with $16.6 billion from UK with HQ in Milton Keynes
- Toyota generated $11 billion from UK and has operations located in Epsom, Surrey
- Apple – with $6 billion in UK revenue recently announced it is moving its UK headquarters to Battersea power station in Southwest London
That is the outside in . . . international companies selling into the UK.
Looking at this from the other direction, we took the top 5 UK based companies (based on total revenue) and looked at how much pf their business was to the UK market vs other markets.
- BP generated $7 billion of its $182 billion from the UK
- HSBC – $3 billion out of $72 billion
- Tesco reported $51 billion out of %73 billion
- Vodafone was $9 billion
- Prudential plc at $10 billion
All these firms will have to pay careful attention to the political and government doings as the UK shapes a new future. And the same goes for those selling to these companies with a UK base. Yesterday’s constant will like be a bumpy ride.