Analysis of Geographic Areas
Illumina Inc. operates in 2 regions: United States and Other countries.
Area Asset Turnover
Illumina Inc., asset turnover by geographic area
| Dec 31, 2020 | Dec 29, 2019 | Dec 30, 2018 | Dec 31, 2017 | Dec 31, 2016 | |
|---|---|---|---|---|---|
| United States | 2.28 | 2.67 | 1.96 | 1.82 | 2.03 |
| Other countries | 8.04 | 8.73 | 9.25 | 12.05 | 14.34 |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
The asset turnover ratios for the United States and international markets exhibit divergent trajectories between 2016 and 2020. While the domestic market experienced fluctuations with a general trend toward improvement, the international segment demonstrated a consistent and significant decline in asset utilization efficiency.
- United States Asset Turnover
- The domestic ratio remained relatively stable, fluctuating between a low of 1.82 in 2017 and a peak of 2.67 in 2019. Despite a decrease to 2.28 by the end of 2020, the overall trend indicates a moderate improvement in the ability to generate revenue from U.S.-based assets compared to the 2016 baseline of 2.03.
- International Asset Turnover
- A pronounced downward trend is evident in the ratio for other countries, which fell steadily from 14.34 in 2016 to 8.04 in 2020. This represents a substantial reduction in turnover, suggesting that the revenue generated per unit of asset in international markets has diminished considerably over the five-year period.
- Comparative Geographic Performance
- Asset turnover in international markets remains significantly higher in absolute terms than in the United States, despite the sharp decline. However, the opposing performance trends suggest a shift in operational efficiency, characterized by domestic resilience and a steady erosion of productivity from international assets.
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Area Asset Turnover: United States
Illumina Inc.; United States; area asset turnover calculation
| Dec 31, 2020 | Dec 29, 2019 | Dec 30, 2018 | Dec 31, 2017 | Dec 31, 2016 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenue | 1,655) | 1,859) | 1,779) | 1,511) | 1,294) |
| Net long-lived assets | 725) | 696) | 907) | 828) | 636) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 2.28 | 2.67 | 1.96 | 1.82 | 2.03 |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
Area asset turnover = Revenue ÷ Net long-lived assets
= 1,655 ÷ 725 = 2.28
Between 2016 and 2020, the United States operations exhibited a period of revenue growth followed by a contraction, accompanied by fluctuating asset utilization efficiency. Revenue increased steadily from 2016 through 2019, reaching a peak of 1,859 million US dollars before declining to 1,655 million US dollars in 2020. This revenue trajectory was mirrored by variations in net long-lived assets and the resulting area asset turnover ratio.
- Revenue Performance
- A consistent upward trend was observed from 2016 to 2019, with revenue growing from 1,294 million US dollars to 1,859 million US dollars. However, this growth trend reversed in 2020, resulting in a year-over-year decrease of approximately 11%.
- Net Long-Lived Asset Trends
- Asset investment increased from 636 million US dollars in 2016 to a peak of 907 million US dollars in 2018. A significant reduction in net long-lived assets occurred in 2019, where the value dropped to 696 million US dollars, followed by a slight increase to 725 million US dollars in 2020.
- Area Asset Turnover Efficiency
- The asset turnover ratio remained relatively stable between 1.82 and 2.03 from 2016 to 2018. A notable spike in efficiency occurred in 2019, with the ratio reaching its peak of 2.67. This increase was driven by the simultaneous achievement of peak revenue and a substantial reduction in the net long-lived asset base. In 2020, the ratio declined to 2.28, reflecting the combined impact of decreasing revenue and a slight increase in assets.
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Area Asset Turnover: Other countries
Illumina Inc.; Other countries; area asset turnover calculation
| Dec 31, 2020 | Dec 29, 2019 | Dec 30, 2018 | Dec 31, 2017 | Dec 31, 2016 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenue | 1,584) | 1,684) | 1,554) | 1,241) | 1,104) |
| Net long-lived assets | 197) | 193) | 168) | 103) | 77) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 8.04 | 8.73 | 9.25 | 12.05 | 14.34 |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
Area asset turnover = Revenue ÷ Net long-lived assets
= 1,584 ÷ 197 = 8.04
The financial performance of the "other countries" segment between 2016 and 2020 is characterized by a steady decline in asset utilization efficiency, despite an overall increase in revenue during the majority of the period.
- Revenue Performance
- Revenue exhibited a general upward trend from 2016 through 2019, rising from 1,104 million to a peak of 1,684 million. However, a contraction occurred in 2020, with revenue falling to 1,584 million, marking the first year-over-year decrease in the analyzed period.
- Net Long-Lived Asset Accumulation
- There was a consistent and significant increase in net long-lived assets, which grew from 77 million in 2016 to 197 million by the end of 2020. The most rapid expansion occurred between 2017 and 2018, where assets increased from 103 million to 168 million.
- Area Asset Turnover Ratio
- The area asset turnover ratio experienced a continuous and monotonic decline throughout the five-year window, falling from 14.34 in 2016 to 8.04 in 2020. This downward trend indicates that the expansion of the asset base significantly outpaced the growth in revenue generation.
The observed patterns suggest a diminishing marginal return on long-lived asset investments within these geographic areas. The transition from a turnover ratio of 14.34 to 8.04 reflects a substantial reduction in the efficiency with which long-term investments are utilized to generate sales revenue.
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Revenue
Illumina Inc., revenue by geographic area
US$ in millions
| Dec 31, 2020 | Dec 29, 2019 | Dec 30, 2018 | Dec 31, 2017 | Dec 31, 2016 | |
|---|---|---|---|---|---|
| United States | 1,655) | 1,859) | 1,779) | 1,511) | 1,294) |
| Other countries | 1,584) | 1,684) | 1,554) | 1,241) | 1,104) |
| Total | 3,239) | 3,543) | 3,333) | 2,752) | 2,398) |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
Total revenue exhibited a consistent upward trajectory from 2016 to 2019, increasing from 2,398 million US dollars to a peak of 3,543 million US dollars. This growth period was followed by a contraction in 2020, where total revenue declined to 3,239 million US dollars, representing a reduction of approximately 8.6% from the previous year.
- United States Revenue Trends
- Revenue generated within the United States grew steadily between 2016 and 2019, rising from 1,294 million US dollars to 1,859 million US dollars. However, the domestic market experienced a notable decline in 2020, falling to 1,655 million US dollars, which constitutes a decrease of roughly 11% from the 2019 peak.
- International Revenue Trends
- Revenue from other countries followed a similar growth pattern, increasing from 1,104 million US dollars in 2016 to 1,684 million US dollars in 2019. The international segment showed particular strength in 2018 with a significant year-over-year increase. In 2020, international revenue declined to 1,584 million US dollars, a decrease of approximately 6%, indicating that the international market was more resilient than the domestic market during the 2020 downturn.
- Geographic Revenue Distribution
- Throughout the analyzed period, the revenue split remained relatively balanced between the United States and international markets. While the United States initially held a larger share of the total revenue, the gap narrowed over time. By 2020, the disparity between domestic and international revenue reached its lowest point in the five-year period, with international revenue accounting for approximately 48.9% of the total.
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Net long-lived assets
Illumina Inc., net long-lived assets by geographic area
US$ in millions
| Dec 31, 2020 | Dec 29, 2019 | Dec 30, 2018 | Dec 31, 2017 | Dec 31, 2016 | |
|---|---|---|---|---|---|
| United States | 725) | 696) | 907) | 828) | 636) |
| Other countries | 197) | 193) | 168) | 103) | 77) |
| Total | 922) | 889) | 1,075) | 931) | 713) |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
The net long-lived assets exhibited a growth trajectory from 2016 to 2018, followed by a notable contraction in 2019 and a partial recovery in 2020. While the majority of assets remained concentrated within the United States, there was a consistent and steady increase in the proportion of assets allocated to international markets over the five-year period.
- Domestic Asset Trends
- Assets located in the United States grew from 636 million USD in 2016 to a peak of 907 million USD in 2018. A significant reduction occurred in 2019, where assets fell to 696 million USD, representing a decrease of approximately 23% from the 2018 peak. A slight recovery was observed by the end of 2020, with values rising to 725 million USD.
- International Asset Expansion
- Net long-lived assets in other countries demonstrated uninterrupted growth throughout the period. Starting at 77 million USD in 2016, these assets increased annually, reaching 197 million USD by December 31, 2020. This represents a total increase of approximately 156% over the analyzed timeframe, indicating a strategic expansion of the international footprint.
- Total Asset Composition and Volatility
- Total net long-lived assets peaked in 2018 at 1,075 million USD before declining to 889 million USD in 2019. The overall volatility in total assets was primarily driven by fluctuations in domestic holdings, as the international segment provided a stabilizing effect through its consistent upward trend. By 2020, the total assets reached 922 million USD, with the international share constituting a larger percentage of the total compared to 2016.
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