Analysis of Geographic Areas
Albemarle Corp. operates in 2 regions: United States and Foreign.
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- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Dividend Discount Model (DDM)
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
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Area Asset Turnover
Albemarle Corp., asset turnover by geographic area
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | |||||
| Foreign |
Based on: 10-K (reporting date: 2022-12-31), 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).
- United States Asset Turnover
- The asset turnover ratio for the United States shows a gradual and consistent decline over the five-year period. Starting at 0.95 in 2018, the ratio decreases annually, reaching 0.65 by the end of 2022. This steady downward trend suggests diminishing efficiency in utilizing assets to generate revenue within the US market.
- Foreign Asset Turnover
- The foreign asset turnover ratio exhibits a more variable pattern. From 2018 to 2021, the ratio declines significantly from 0.97 to 0.48, indicating a reduction in asset efficiency abroad. However, in the final reported year, 2022, there is a notable recovery, with the ratio increasing sharply to 1.0. This rebound suggests an improvement in asset utilization in foreign markets, potentially due to strategic changes or market conditions that positively impacted operational efficiency.
- Comparative Insights
- Overall, asset turnover ratios in the domestic market have steadily decreased, while foreign operations experienced a downturn followed by a strong recovery. By 2022, the foreign asset turnover ratio surpasses that of the United States, indicating a shift in asset productivity favoring international operations. These trends may reflect differing market dynamics, management focus, or investment effectiveness between the two geographic areas.
Area Asset Turnover: United States
Albemarle Corp.; United States; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Net sales | |||||
| Long-lived assets | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
Based on: 10-K (reporting date: 2022-12-31), 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 2022 Calculation
Area asset turnover = Net sales ÷ Long-lived assets
= ÷ =
Analyzing the annual data of the United States geographic area reveals several noteworthy trends concerning net sales, long-lived assets, and area asset turnover over the five-year period.
- Net Sales
- Net sales exhibited a declining trend from 2018 to 2021, decreasing from approximately $887.4 million to $730.7 million. In 2022, this trend reversed, with net sales rebounding to roughly $888.6 million, slightly surpassing the initial 2018 figure.
- Long-lived Assets
- Long-lived assets demonstrated a consistent upward trajectory throughout the period. Starting at about $929.3 million in 2018, these assets increased every year, reaching approximately $1.37 billion by the end of 2022. This growth indicates ongoing investment in or acquisition of long-term assets within the United States segment.
- Area Asset Turnover
- The area asset turnover ratio, which measures the efficiency of asset use to generate sales, showed a steady decline. Beginning at a ratio of 0.95 in 2018, it decreased year-over-year to 0.65 in 2022. This decline suggests a decreasing efficiency in utilizing assets to produce sales despite the increase in net sales seen in 2022.
In summary, the data indicates that while net sales decreased over several years before recovery in 2022, long-lived assets steadily increased, resulting in a gradual reduction in asset turnover efficiency. This combination may point to increased capital investment not yet fully leveraged in terms of sales generation within the United States geographic area.
Area Asset Turnover: Foreign
Albemarle Corp.; Foreign; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Net sales | |||||
| Long-lived assets | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
Based on: 10-K (reporting date: 2022-12-31), 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 2022 Calculation
Area asset turnover = Net sales ÷ Long-lived assets
= ÷ =
- Net Sales
- Net sales exhibited fluctuations over the five-year period. Starting at approximately $2.49 billion in 2018, there was a rise to about $2.73 billion in 2019, followed by a decline to approximately $2.39 billion in 2020. A moderate recovery occurred in 2021 to $2.60 billion, culminating in a significant surge in 2022 to roughly $6.43 billion, more than doubling the prior year’s sales.
- Long-Lived Assets
- Long-lived assets showed a steady, upward trend throughout the period. Beginning at approximately $2.58 billion in 2018, assets increased markedly to about $4.44 billion in 2019. This growth continued consistently each year, reaching nearly $6.42 billion by 2022, reflecting substantial investments or asset acquisitions over the years.
- Area Asset Turnover Ratio
- The area asset turnover ratio demonstrated a declining pattern from 2018 to 2021, starting at 0.97 in 2018 and decreasing progressively to 0.48 by both 2020 and 2021. However, in 2022 the ratio increased sharply to 1.0, indicating improved efficiency in utilizing long-lived assets to generate sales during that year.
- Overall Insights
- The data indicate a period of moderate volatility in net sales until 2021, followed by a strong performance in 2022 coinciding with continuous asset growth. The declining asset turnover ratio up to 2021 suggests decreasing efficiency, possibly due to increasing asset base not fully leveraged in the earlier years. The rebound in 2022 ratio, coupled with substantial sales growth, implies a turnaround in asset utilization efficiency and sales effectiveness within that geographic area.
Net sales
Albemarle Corp., net sales by geographic area
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | |||||
| Foreign | |||||
| Total |
Based on: 10-K (reporting date: 2022-12-31), 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).
- United States Net Sales
- The net sales in the United States demonstrated a declining trend from 2018 to 2021, decreasing from 887,416 thousand US dollars in 2018 to 730,738 thousand US dollars in 2021. In 2022, there was a notable recovery with net sales increasing to 888,612 thousand US dollars, slightly surpassing the 2018 level.
- Foreign Net Sales
- Foreign net sales showed more variability over the same period. After an initial increase from 2,487,534 thousand US dollars in 2018 to 2,731,343 thousand US dollars in 2019, there was a decline in 2020 to 2,385,075 thousand US dollars. This was followed by a recovery to 2,597,219 thousand US dollars in 2021. A substantial and significant increase occurred in 2022, with foreign net sales rising dramatically to 6,431,492 thousand US dollars, more than doubling the previous year's figure.
- Total Net Sales
- Total net sales mirrored the general patterns seen in the geographic segments. There was overall growth from 3,374,950 thousand US dollars in 2018 to 3,589,427 thousand US dollars in 2019, followed by a decline to 3,128,909 thousand US dollars in 2020. Total sales slightly improved in 2021 to 3,327,957 thousand US dollars. The most remarkable change occurred in 2022, with total net sales increasing sharply to 7,320,104 thousand US dollars, driven predominantly by the strong growth in foreign net sales.
- General Observations
- The data suggest that while the United States market experienced a period of contraction from 2018 through 2021 before rebounding in 2022, the foreign markets exhibited greater volatility but ultimately contributed to a significant expansion in the latest period. The pronounced increase in foreign net sales in 2022 implies a possible strategic shift, enhanced market penetration, or acquisition activity internationally. This shift in sales distribution has resulted in the total net sales more than doubling compared to the preceding year, indicating an overall growth surge driven by international sales.
Long-lived assets
Albemarle Corp., long-lived assets by geographic area
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | |||||
| Foreign | |||||
| Total |
Based on: 10-K (reporting date: 2022-12-31), 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).
- United States Long-Lived Assets
- The long-lived assets located in the United States demonstrated a gradual increase over the observed five-year period. The value rose from approximately $929.3 million in 2018 to about $1.37 billion in 2022. The year-over-year growth was consistent, with a slight acceleration evident in the last recorded year, suggesting increased investment or capitalization of assets domestically.
- Foreign Long-Lived Assets
- Foreign long-lived assets experienced significant expansion throughout the timeframe. Starting at roughly $2.58 billion in 2018, the value nearly doubled by 2019, surging to over $4.44 billion, and continued rising steadily to reach approximately $6.42 billion in 2022. This robust growth indicates a strong emphasis on international asset acquisition or capital investment outside the United States.
- Total Long-Lived Assets
- The cumulative long-lived assets reflected the combined trends of domestic and foreign assets, increasing substantially from about $3.51 billion in 2018 to nearly $7.79 billion in 2022. The overall growth was particularly marked between 2018 and 2019, followed by steady annual increments thereafter. The strengthening in total figures is primarily driven by the significant foreign asset increases, while the US assets contributed a stable and moderate rise.
- Overall Insights
- The data reveals a strategic growth pattern with a pronounced focus on expanding foreign long-lived assets, which have outpaced domestic assets in both magnitude and growth rate. The domestic asset base has grown consistently but at a more moderate pace. This suggests an emphasis on international diversification or expansion over the period. The scaling of total assets more than doubled, underscoring substantial investment and possible operational growth globally.