Analysis of Geographic Areas
Keurig Dr Pepper Inc. operates in 2 regions: U.S. and International.
Area Asset Turnover
Keurig Dr Pepper Inc., asset turnover by geographic area
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|
| U.S. | 5.41 | 5.45 | 5.56 | 3.19 |
| International | 3.45 | 4.08 | 4.95 | 3.52 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The analysis of asset turnover across geographic segments reveals a divergent trajectory in operational efficiency between the United States and international markets from 2018 to 2021.
- U.S. Asset Turnover
- A substantial increase in efficiency is observed between 2018 and 2019, where the ratio rose from 3.19 to 5.56. Following this peak, the U.S. market demonstrated a high level of stability, with only marginal declines to 5.45 in 2020 and 5.41 in 2021, indicating a consistent capacity to generate revenue from its domestic asset base.
- International Asset Turnover
- The international segment experienced an initial improvement, peaking at 4.95 in 2019 from a 2018 baseline of 3.52. However, this was followed by a progressive downward trend, with the ratio decreasing to 4.08 in 2020 and further declining to 3.45 by 2021, suggesting a reduction in asset productivity in non-domestic markets.
- Comparative Geographic Performance
- While the international segment maintained a higher turnover ratio than the U.S. in 2018, the domestic market surpassed international efficiency by 2019. By the end of the period in 2021, a significant performance gap emerged, as the U.S. asset turnover ratio remained robust at 5.41, whereas the international ratio reverted toward its 2018 levels.
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Area Asset Turnover: U.S.
Keurig Dr Pepper Inc.; U.S.; area asset turnover calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||
| Net sales | 11,267) | 10,318) | 9,843) | 6,608) |
| Property, plant and equipment, net | 2,084) | 1,893) | 1,770) | 2,073) |
| Area Activity Ratio | ||||
| Area asset turnover1 | 5.41 | 5.45 | 5.56 | 3.19 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Area asset turnover = Net sales ÷ Property, plant and equipment, net
= 11,267 ÷ 2,084 = 5.41
Net sales exhibited a consistent upward trajectory from 2018 to 2021, increasing from US$ 6,608 million to US$ 11,267 million. The most significant growth occurred between 2018 and 2019, characterized by a substantial rise in revenue that outpaced the movement in the asset base.
- Area Asset Turnover
- A sharp increase in the asset turnover ratio was observed between 2018 and 2019, rising from 3.19 to 5.56. Following this peak, the ratio entered a period of marginal decline, settling at 5.41 by December 31, 2021. This pattern indicates a significant leap in asset productivity in 2019, followed by a stabilization of efficiency levels.
- Property, Plant and Equipment (PP&E)
- Net PP&E fluctuated over the four-year period, decreasing from US$ 2,073 million in 2018 to US$ 1,770 million in 2019, before trending upward to reach US$ 2,084 million in 2021. The reduction in net PP&E during 2019, combined with the surge in net sales, contributed heavily to the spike in the area asset turnover ratio for that year.
- Operational Efficiency Trends
- The data reveals that revenue growth significantly outpaced the expansion of the fixed asset base. While net PP&E returned to 2018 levels by 2021, net sales nearly doubled over the same period, resulting in a sustained and higher level of asset turnover compared to the 2018 baseline.
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Area Asset Turnover: International
Keurig Dr Pepper Inc.; International; area asset turnover calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||
| Net sales | 1,416) | 1,300) | 1,277) | 834) |
| Property, plant and equipment, net | 410) | 319) | 258) | 237) |
| Area Activity Ratio | ||||
| Area asset turnover1 | 3.45 | 4.08 | 4.95 | 3.52 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Area asset turnover = Net sales ÷ Property, plant and equipment, net
= 1,416 ÷ 410 = 3.45
International net sales exhibited a consistent upward trajectory from 2018 to 2021, though the rate of growth varied. Simultaneously, investments in net property, plant, and equipment increased steadily, with the pace of capital expenditure accelerating in the final two years of the period. The relationship between these two factors resulted in a fluctuating area asset turnover ratio.
- Net Sales Trends
- Revenue grew from US$ 834 million in 2018 to US$ 1,416 million in 2021. A substantial increase was observed between 2018 and 2019, where sales rose by approximately 53%, followed by more tempered growth rates of 1.8% in 2020 and 8.9% in 2021.
- Fixed Asset Expansion
- Net property, plant, and equipment grew from US$ 237 million in 2018 to US$ 410 million in 2021. While the initial increase between 2018 and 2019 was modest, the investment rate accelerated significantly in 2020 and 2021, with the asset base expanding by approximately 28.5% in the final year alone.
- Area Asset Turnover Analysis
- The area asset turnover ratio reached a peak of 4.95 in 2019, reflecting a period where revenue growth significantly outperformed the expansion of the asset base. Following this peak, the ratio declined to 4.08 in 2020 and further to 3.45 in 2021. This downward trend indicates that recent increases in property, plant, and equipment have not yet been matched by proportional increases in net sales, leading to a decrease in asset utilization efficiency that fell slightly below the 2018 level by the end of the period.
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Net sales
Keurig Dr Pepper Inc., net sales by geographic area
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|
| U.S. | 11,267) | 10,318) | 9,843) | 6,608) |
| International | 1,416) | 1,300) | 1,277) | 834) |
| Total | 12,683) | 11,618) | 11,120) | 7,442) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
Total net sales exhibited a consistent upward trajectory between 2018 and 2021, increasing from 7,442 million US$ to 12,683 million US$. The most pronounced acceleration occurred between 2018 and 2019, during which total revenue grew by approximately 49.3%, followed by more moderate annual growth rates in 2020 and 2021.
- U.S. Market Performance
- Net sales within the United States served as the primary driver of total revenue growth, rising from 6,608 million US$ in 2018 to 11,267 million US$ by the end of 2021. A significant surge is observed between 2018 and 2019, with a revenue increase of approximately 49%, after which the market maintained a steady growth pattern of roughly 4.7% in 2020 and 9.3% in 2021.
- International Market Performance
- The international segment demonstrated a similar growth spike between 2018 and 2019, increasing from 834 million US$ to 1,277 million US$. While growth continued through 2021, reaching 1,416 million US$, the pace of expansion in the international sector was more subdued in the later years compared to the domestic market.
- Geographic Revenue Concentration
- A high degree of geographic concentration is evident, as the U.S. market consistently accounted for the vast majority of total net sales. The revenue contribution from the U.S. remained stable at approximately 88.8% of total sales across the entire 2018-2021 period, indicating that the company's growth scaled proportionally across both domestic and international segments without significantly altering the overall revenue mix.
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Property, plant and equipment, net
Keurig Dr Pepper Inc., property, plant and equipment, net by geographic area
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|
| U.S. | 2,084) | 1,893) | 1,770) | 2,073) |
| International | 410) | 319) | 258) | 237) |
| Total | 2,494) | 2,212) | 2,028) | 2,310) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The net property, plant, and equipment (PP&E) experienced a period of volatility followed by a steady upward trajectory, concluding the four-year period at its highest valuation of US$ 2,494 million in 2021.
- United States Asset Trends
- Domestic assets witnessed a contraction in 2019, decreasing from US$ 2,073 million to US$ 1,770 million. A subsequent recovery trend is observed, with values increasing to US$ 1,893 million in 2020 and reaching US$ 2,084 million by the end of 2021, effectively restoring the domestic asset base to its 2018 levels.
- International Asset Expansion
- International PP&E demonstrated consistent and accelerating year-over-year growth. Assets rose from US$ 237 million in 2018 to US$ 410 million in 2021, representing a significant and uninterrupted increase in non-domestic capital investment over the observed period.
- Geographic Asset Distribution
- While the vast majority of the asset base remains concentrated within the United States, a shift in geographic proportion is evident. The international segment's contribution to total net PP&E grew from approximately 10.3% in 2018 to 16.4% in 2021, indicating a strategic expansion of the company's global physical infrastructure relative to its domestic footprint.
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