Selling to the Materials Sector
The Materials sector operates on the edge of global supply chains and fluctuating commodity prices, where even a slight dip in efficiency can cost millions in profit. Your sales team must prove how your solution protects the bottom line by stabilizing production and reducing waste.
Mining Highlights
- The mining industry operates on lower profit margins due to high capital expenditures in equipment, facilities, and production, while relying heavily on global commodity prices that companies cannot control.
- Companies gather ore with heavy equipment and then process it, usually focusing on extracting one primary metal. Revenue is generated by selling the refined ore, for example, copper, gold, or iron. But the ore includes small amounts of other metals, such as silver, cobalt, etc., called byproducts. Mining companies often offset expenses by selling the most valuable byproducts.
- Mining is an asset-intensive industry focused on maximizing the efficiency of equipment and infrastructure to enhance returns on investment.
- Cash flow is cyclical, with high commodity prices enabling reinvestment in maintenance, new capital projects, and building financial resilience for periods of low pricing.
- Other key metrics include average realized price, unit cash cost, and employee safety metrics like total recordable incident rate.
Compare your client's results to industry and S&P 500 results.
|
Mining |
S&P 500 |
|
|
CASH |
||
|
Cash and Cash Equivalents as a % of Sales |
11.1% |
22.7% |
|
Cash Generated from Operations as a % of Sales |
18.2% |
20.9% |
|
|
||
|
Gross Profit Margin % |
31.3% |
49.6% |
|
Operating Profit Margin % |
18.8% |
23.2% |
|
Net Profit Margin % |
12.4% |
12.9% |
|
|
||
|
Return on Assets (ROA) % |
8.8% |
8.4% |
|
Equity Ratio |
41.7% |
33.7% |
|
|
||
|
Revenue Growth Rate % |
2.8% |
6.3% |
|
Net Income Growth Rate % |
4.2% |
8.1% |
|
|
||
|
Revenue per Employee |
$0.9M |
$1.6M |
Notes:
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Because cash amounts can vary dramatically from company to company based on a company’s overall “size,” we’ve presented the numbers as a percentage of sales or revenue: the cash metric divided by total revenue or sales and then multiplied by 100.
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S&P 500 averages are calculated based on 3 years of annual reports as of July 2024, rounded. However, because certain financial industries, like asset management companies and diversified banks, hold large amounts of cash, they have been removed from the cash calculations.
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Most industry or sector averages are also calculated based on 3 years of annual reports from S&P 500 companies. However, certain companies or subsectors in the S&P sometimes skew the data far from what is typical for an industry, so we have occasionally removed some companies or subsectors or changed periods in our calculations to provide a more accurate set of comparison data.
What are Health Insurance CEOs telling Wall Street right now? We analyzed the latest annual reports from five top players to identify the mission-critical priorities shaping their 2026 spending.
1. Profitability and LTV Over Raw Growth:
The era of growth at all costs is over. Insurers are intentionally shedding unprofitable members and exiting certain geographies to protect their bottom lines. Humana has explicitly shifted its strategy away from "loss leader plans," focusing instead on maximizing customer lifetime value (LTV) and retaining high-quality membership. Commercial growth is similarly measured, with companies like Elevance and UnitedHealth prioritizing margin integrity over raw volume.
2. Massive AI and Automation Initiatives:
Artificial intelligence is being aggressively deployed to counter rising administrative and medical costs. UnitedHealth Group anticipates nearly $1 billion in AI-enabled operating cost reductions in 2026 alone, using it to handle over 80% of member calls and streamline advocacy. Elevance is also making targeted investments to embed AI-enabled capabilities that simplify the member experience and speed up prior authorizations.
3. Hyper-Focus on Specific High-Cost Trends:
Rather than fighting general medical inflation, insurers are targeting specific spikes in utilization. Centene noted that behavioral health is driving roughly 50% of their excess medical trend, with home health and high-cost specialty drugs acting as secondary pressure points. Solutions that can effectively manage complex populations or utilize advanced algorithms to detect fraud, waste, and abuse in these areas are highly attractive.
4. Pharmacy Benefit Transformation: The pharmacy benefit manager (PBM) space is undergoing a massive structural shift. Cigna and UnitedHealth are heavily promoting new, transparent, "rebate-free" pricing models that pass savings directly to clients and consumers. Furthermore, insurers are heavily leaning into the adoption of lower-cost biosimilars to generate billions in savings over the next few years.
The Scenario:
A SaaS vendor selling an AI-driven claims tool was struggling to overcome the "we already have a large internal team for this" objection from a C-suite executive at a mid-sized health insurer.
The Strategy:
Instead of focusing on software features, the rep used the Revenue per Employee metric ($8.9M industry average). They proved that while the insurer’s revenue was growing, their headcount was growing faster—dropping their specific ratio to $7.2M (underperforming the industry).
The Pivot:
"Your business model requires high leverage; every employee needs to support nearly $9M in revenue just to protect your 3.3% net margin. Currently, your claims team spends 40% of their time on manual entry. We aren't here to replace your team; we are here to get your Revenue per Employee back above the $8.9M benchmark by automating 'low-value' touches."
The Result:
The executive shifted from seeing a "software cost" to a "margin protector." The deal closed because the vendor aligned with the executive’s hyper-focus on operational efficiency and headcount leverage.
The Scenario:
A workplace consultant was pitching a space-utilization audit to a COO facing a "return to office" dilemma. The COO was considering a generic mandate to bring everyone back just to justify lease costs, despite the risk to retention.
The Strategy:
The consultant ignored aesthetics and focused on the 3.3% Net Profit Margin. They analyzed the insurer's footprint and found three regional centers were only 40% occupied, creating a massive "administrative leakage" that was eroding the bottom line.
The Pivot:
"Your real estate overhead is a significant drag on your 3.3% margin. By rightsizing your footprint through activity-based zones, we can exit 30,000 sq. ft. of space, saving $1.2M in annual OpEx. To generate that same $1.2M in profit via new business, your sales team would have to close $36M in new premiums. We can give you that result today without a single new sale."
The Result:
The COO realized the audit wasn't a design project—it was a capital allocation strategy. They greenlit the study because the cost was negligible compared to the $36M in "equivalent premium growth" it uncovered.
- Profitability and LTV Over Raw Growth: The era of growth at all costs is over. Insurers are intentionally shedding unprofitable members and exiting certain geographies to protect their bottom lines. Humana has explicitly shifted its strategy away from "loss leader plans," focusing instead on maximizing customer lifetime value (LTV) and retaining high-quality membership. Commercial growth is similarly measured, with companies like Elevance and UnitedHealth prioritizing margin integrity over raw volume.
- Massive AI and Automation Initiatives: Artificial intelligence is being aggressively deployed to counter rising administrative and medical costs. UnitedHealth Group anticipates nearly $1 billion in AI-enabled operating cost reductions in 2026 alone, using it to handle over 80% of member calls and streamline advocacy. Elevance is also making targeted investments to embed AI-enabled capabilities that simplify the member experience and speed up prior authorizations.
- Hyper-Focus on Specific High-Cost Trends: Rather than fighting general medical inflation, insurers are targeting specific spikes in utilization. Centene noted that behavioral health is driving roughly 50% of their excess medical trend, with home health and high-cost specialty drugs acting as secondary pressure points. Solutions that can effectively manage complex populations or utilize advanced algorithms to detect fraud, waste, and abuse in these areas are highly attractive.
- Pharmacy Benefit Transformation: The pharmacy benefit manager (PBM) space is undergoing a massive structural shift. Cigna and UnitedHealth are heavily promoting new, transparent, "rebate-free" pricing models that pass savings directly to clients and consumers. Furthermore, insurers are heavily leaning into the adoption of lower-cost biosimilars to generate billions in savings over the next few years.
- Profitability and LTV Over Raw Growth: The era of growth at all costs is over. Insurers are intentionally shedding unprofitable members and exiting certain geographies to protect their bottom lines. Humana has explicitly shifted its strategy away from "loss leader plans," focusing instead on maximizing customer lifetime value (LTV) and retaining high-quality membership. Commercial growth is similarly measured, with companies like Elevance and UnitedHealth prioritizing margin integrity over raw volume.
- Massive AI and Automation Initiatives: Artificial intelligence is being aggressively deployed to counter rising administrative and medical costs. UnitedHealth Group anticipates nearly $1 billion in AI-enabled operating cost reductions in 2026 alone, using it to handle over 80% of member calls and streamline advocacy. Elevance is also making targeted investments to embed AI-enabled capabilities that simplify the member experience and speed up prior authorizations.
- Hyper-Focus on Specific High-Cost Trends: Rather than fighting general medical inflation, insurers are targeting specific spikes in utilization. Centene noted that behavioral health is driving roughly 50% of their excess medical trend, with home health and high-cost specialty drugs acting as secondary pressure points. Solutions that can effectively manage complex populations or utilize advanced algorithms to detect fraud, waste, and abuse in these areas are highly attractive.
- Pharmacy Benefit Transformation: The pharmacy benefit manager (PBM) space is undergoing a massive structural shift. Cigna and UnitedHealth are heavily promoting new, transparent, "rebate-free" pricing models that pass savings directly to clients and consumers. Furthermore, insurers are heavily leaning into the adoption of lower-cost biosimilars to generate billions in savings over the next few years.
- Profitability and LTV Over Raw Growth: The era of growth at all costs is over. Insurers are intentionally shedding unprofitable members and exiting certain geographies to protect their bottom lines. Humana has explicitly shifted its strategy away from "loss leader plans," focusing instead on maximizing customer lifetime value (LTV) and retaining high-quality membership. Commercial growth is similarly measured, with companies like Elevance and UnitedHealth prioritizing margin integrity over raw volume.
- Massive AI and Automation Initiatives: Artificial intelligence is being aggressively deployed to counter rising administrative and medical costs. UnitedHealth Group anticipates nearly $1 billion in AI-enabled operating cost reductions in 2026 alone, using it to handle over 80% of member calls and streamline advocacy. Elevance is also making targeted investments to embed AI-enabled capabilities that simplify the member experience and speed up prior authorizations.
- Hyper-Focus on Specific High-Cost Trends: Rather than fighting general medical inflation, insurers are targeting specific spikes in utilization. Centene noted that behavioral health is driving roughly 50% of their excess medical trend, with home health and high-cost specialty drugs acting as secondary pressure points. Solutions that can effectively manage complex populations or utilize advanced algorithms to detect fraud, waste, and abuse in these areas are highly attractive.
- Pharmacy Benefit Transformation: The pharmacy benefit manager (PBM) space is undergoing a massive structural shift. Cigna and UnitedHealth are heavily promoting new, transparent, "rebate-free" pricing models that pass savings directly to clients and consumers. Furthermore, insurers are heavily leaning into the adoption of lower-cost biosimilars to generate billions in savings over the next few years.
What are the leaders in global mining, specialty coatings, and chemical manufacturing telling Wall Street right now? We analyzed the 2026 strategic outlooks for the top players in the materials space to identify the mission-critical priorities shaping their capital allocation.
1. Margin Resilience Over Volume Growth:
After a roller coaster of price changes in the market, leaders are "cherry-picking" their best work. They are pouring all their resources into their most modern, low-cost mines and factories while shutting down or pausing the older, "gas-guzzler" locations that cost too much to run. The goal is to build a safety net so that even if the market price for materials like copper or chemicals falls, the company can still make a steady profit because its remaining operations are so efficient.
2. Decarbonization as a Competitive Moat:
Sustainability is no longer a PR initiative; it is a specialized product line. Major chemical and coating firms are investing billions into electrified cracking technology and bio-based resins. By offering materials with a lower carbon footprint, they are capturing premium contracts from automotive and consumer electronics companies that need to meet their own strict environmental targets. This allows materials firms to charge a premium for high-performance, low-impact goods.
3. Digital Reliability and the Connected Mine:
The 2026 tech budget is centered on eliminating the unexpected. Leading mining and chemical companies are deploying autonomous hauling systems and remote operations centers that allow experts to manage multiple sites from a single hub. By using sensors to monitor equipment health in real-time, these firms are shifting from reactive repairs to predictive maintenance, aimed at cutting unplanned downtime by up to 25%.
4. Portfolio Simplification and Core Focus:
Companies are shedding non-core assets to lean into their most profitable strengths. Whether it is a coatings leader focusing on high-growth architectural markets or a chemical giant spinning off legacy plastics, the goal is to reduce complexity. This streamlined approach allows management to react faster to global supply chain shifts and focus capital on the specialized materials that offer the highest long-term returns.
The Scenario:
A salesperson for a heavy-duty modular storage firm was pitching to the Operations Director of a major chemical manufacturer. The Director was hesitant to buy new storage silos, arguing that their current system of using third-party warehouses ten miles away was a "flexible expense" they could turn on and off.
The Strategy:
The salesperson ignored the "cost of rent" and focused on Cycle Time and Working Capital. They calculated how much money was tied up in "trucks in transit"—the hours spent loading, driving, and unloading materials between the factory and the remote warehouse.
The Pivot:
"Right now, you’re paying for flexibility, but you’re losing on speed. Every hour your raw materials spend sitting in a truck between your warehouse and your production line, they are 'dead assets' that aren't making you money. By moving to on-site modular storage, you cut your internal lead time from six hours to six minutes. This doesn't just save on gas and driver wages; it unlocked $4M in working capital last year because you no longer need to keep a 'buffer' of extra material just in case a truck gets stuck in traffic. We are here to turn your inventory back into cash the moment it hits your property."
The Result:
The Operations Director realized that the cheap remote warehouse was actually a "clog" in their cash flow. They approved the purchase of the on-site silos because the salesperson proved that faster movement was the same as having more money in the bank.
The Scenario:
A rep for a real-time ore-sensing technology was pitching to a VP of Operations at a major copper mining firm. The VP believed their current lab-based testing was accurate enough and saw no reason to change.
The Strategy:
The salesperson ignored the technical accuracy and focused on the Net Profit Margin. They analyzed the time gap between taking a sample and getting lab results, showing that the mine was frequently processing low-grade rock with high-grade settings, which wasted energy and expensive chemicals.
The Pivot:
"Every hour you wait for lab results, your processing plant is flying blind. You’re using the same amount of electricity and chemicals on rock that has half the metal content. Our sensors give you that data in seconds, not hours. If we can improve your recovery rate by just half a percent, that translates to millions in found revenue from the exact same mountain you’re already digging. You don't need to find a new mine; you just need to keep more of what you’ve already found."
The Result:
The VP realized the technology was actually a margin protector. They approved the pilot because the return on investment was measured in the immediate recovery of trapped value.
- Profitability and LTV Over Raw Growth: The era of growth at all costs is over. Insurers are intentionally shedding unprofitable members and exiting certain geographies to protect their bottom lines. Humana has explicitly shifted its strategy away from "loss leader plans," focusing instead on maximizing customer lifetime value (LTV) and retaining high-quality membership. Commercial growth is similarly measured, with companies like Elevance and UnitedHealth prioritizing margin integrity over raw volume.
- Massive AI and Automation Initiatives: Artificial intelligence is being aggressively deployed to counter rising administrative and medical costs. UnitedHealth Group anticipates nearly $1 billion in AI-enabled operating cost reductions in 2026 alone, using it to handle over 80% of member calls and streamline advocacy. Elevance is also making targeted investments to embed AI-enabled capabilities that simplify the member experience and speed up prior authorizations.
- Hyper-Focus on Specific High-Cost Trends: Rather than fighting general medical inflation, insurers are targeting specific spikes in utilization. Centene noted that behavioral health is driving roughly 50% of their excess medical trend, with home health and high-cost specialty drugs acting as secondary pressure points. Solutions that can effectively manage complex populations or utilize advanced algorithms to detect fraud, waste, and abuse in these areas are highly attractive.
- Pharmacy Benefit Transformation: The pharmacy benefit manager (PBM) space is undergoing a massive structural shift. Cigna and UnitedHealth are heavily promoting new, transparent, "rebate-free" pricing models that pass savings directly to clients and consumers. Furthermore, insurers are heavily leaning into the adoption of lower-cost biosimilars to generate billions in savings over the next few years.