Analysis of Geographic Areas
Albemarle Corp. operates in 2 regions: United States and Foreign.
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 | 0.65 | 0.70 | 0.74 | 0.86 | 0.95 |
| Foreign | 1.00 | 0.48 | 0.48 | 0.62 | 0.97 |
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).
An analysis of geographic asset turnover reveals diverging efficiency trends between domestic and international operations from 2018 through 2022. While the United States operations experienced a steady decline in asset productivity, foreign operations underwent a period of significant volatility followed by a robust recovery.
- United States Asset Turnover
- A consistent downward trend is observed in the domestic market. The ratio declined annually from 0.95 in 2018 to 0.65 by the end of 2022. This persistent decrease indicates a diminishing capacity to generate revenue relative to the asset base maintained within the United States.
- Foreign Asset Turnover
- International operations exhibited a V-shaped trajectory. Following an initial value of 0.97 in 2018, the ratio dropped sharply to 0.62 in 2019 and reached a plateau of 0.48 during 2020 and 2021. However, a significant reversal occurred in 2022, with the ratio ascending to 1.00, marking the highest efficiency level in the observed period.
The comparative data suggests a shift in operational efficiency. In 2018, both geographic segments performed similarly; however, by 2022, foreign assets became substantially more efficient at generating revenue than domestic assets, reversing the trend seen during the 2019-2021 interval.
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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 | 888,612) | 730,738) | 743,834) | 858,084) | 887,416) |
| Long-lived assets | 1,371,347) | 1,040,252) | 1,007,793) | 1,003,496) | 929,291) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 0.65 | 0.70 | 0.74 | 0.86 | 0.95 |
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
= 888,612 ÷ 1,371,347 = 0.65
The financial performance of the United States geographic area from 2018 to 2022 is characterized by a consistent decline in asset efficiency, driven by a divergence between revenue generation and investment in long-lived assets.
- Net Sales Trends
- Net sales exhibited a downward trajectory between 2018 and 2021, decreasing from 887,416 thousand US$ to a low of 730,738 thousand US$. However, a significant recovery occurred in 2022, with sales rising to 888,612 thousand US$, effectively returning to 2018 levels.
- Long-lived Asset Growth
- There was a steady and uninterrupted increase in long-lived assets throughout the analyzed period. Assets grew from 929,291 thousand US$ in 2018 to 1,040,252 thousand US$ by 2021, followed by a substantial acceleration in 2022, reaching 1,371,347 thousand US$.
- Area Asset Turnover Analysis
- The area asset turnover ratio shows a continuous year-over-year decline, falling from 0.95 in 2018 to 0.65 in 2022. This negative trend indicates a diminishing ability to generate sales from the asset base. The most pronounced efficiency loss occurred between 2018 and 2020, coinciding with falling sales and rising asset costs. Despite the sales recovery in 2022, the sharp increase in long-lived assets during that same year further suppressed the turnover ratio, resulting in the lowest efficiency level of the five-year period.
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Area Asset Turnover: Foreign
Albemarle Corp.; Foreign; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Net sales | 6,431,492) | 2,597,219) | 2,385,075) | 2,731,343) | 2,487,534) |
| Long-lived assets | 6,423,646) | 5,462,582) | 4,963,975) | 4,440,280) | 2,577,699) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 1.00 | 0.48 | 0.48 | 0.62 | 0.97 |
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
= 6,431,492 ÷ 6,423,646 = 1.00
The foreign area asset turnover exhibited a U-shaped trajectory between 2018 and 2022, characterized by a period of declining efficiency followed by a sharp recovery. While long-lived assets grew consistently throughout the five-year period, revenue generation lagged behind this expansion until a significant surge occurred in the final year.
- Net Sales Performance
- Between 2018 and 2021, net sales remained relatively stagnant, fluctuating within a range of $2.38 billion to $2.73 billion. A dramatic shift occurred in 2022, with net sales increasing to $6.43 billion, representing a growth of approximately 147% compared to the 2021 fiscal year.
- Long-lived Asset Growth
- A consistent upward trend in long-lived assets is observed, rising from $2.58 billion in 2018 to $6.42 billion in 2022. The most aggressive expansion took place between 2018 and 2019, during which assets increased by approximately 72%, establishing a higher cost base before corresponding revenue gains were realized.
- Asset Turnover Ratio Analysis
- The asset turnover ratio declined from 0.97 in 2018 to a trough of 0.48 in 2020 and 2021. This decline indicates a period of diminishing efficiency where the growth in the asset base outpaced the growth in sales. However, the ratio rebounded to 1.00 in 2022, signaling that the company successfully leveraged its accumulated assets to drive a substantial increase in foreign area revenue.
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Net sales
Albemarle Corp., net sales by geographic area
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | 888,612) | 730,738) | 743,834) | 858,084) | 887,416) |
| Foreign | 6,431,492) | 2,597,219) | 2,385,075) | 2,731,343) | 2,487,534) |
| Total | 7,320,104) | 3,327,957) | 3,128,909) | 3,589,427) | 3,374,950) |
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).
Total net sales exhibited relative stability between 2018 and 2021, followed by a substantial increase in 2022. While revenues fluctuated in the early part of the period, the final year observed a significant surge, with total sales increasing from approximately 3.33 billion US dollars in 2021 to 7.32 billion US dollars in 2022.
- United States Market Performance
- Net sales within the United States experienced a gradual decline from 2018 through 2021, decreasing from 887.4 million US dollars to a low of 730.7 million US dollars. This downward trend reversed in 2022, as domestic sales rebounded to 888.6 million US dollars, effectively returning to 2018 levels.
- Foreign Market Expansion
- Foreign operations have consistently served as the primary driver of total revenue. After a period of moderate volatility between 2018 and 2021, foreign net sales grew exponentially in 2022, rising from 2.60 billion US dollars to 6.43 billion US dollars. This represents an increase of approximately 147% in a single fiscal year.
- Geographic Revenue Concentration
- There is a clear shift toward increased reliance on international markets. Foreign sales accounted for approximately 73.7% of total revenue in 2018, and this proportion grew steadily to 87.8% by the end of 2022. This indicates a strengthening of the company's global footprint and a diminishing relative contribution from the domestic market.
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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 | 1,371,347) | 1,040,252) | 1,007,793) | 1,003,496) | 929,291) |
| Foreign | 6,423,646) | 5,462,582) | 4,963,975) | 4,440,280) | 2,577,699) |
| Total | 7,794,993) | 6,502,834) | 5,971,768) | 5,443,776) | 3,506,990) |
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).
Long-lived assets exhibited a consistent upward trajectory over the five-year period ending December 31, 2022. Total long-lived assets increased from approximately 3.51 billion USD in 2018 to 7.79 billion USD in 2022, representing an overall growth of approximately 122%.
- Total Asset Trajectory
- A steady increase in total asset value is observed annually. The most significant expansion occurred between 2018 and 2019, during which total assets rose by approximately 55%.
- Foreign Asset Expansion
- Foreign long-lived assets represent the primary driver of the company's asset growth. These assets grew from 2.58 billion USD in 2018 to 6.42 billion USD in 2022. A particularly sharp increase was noted between 2018 and 2019, with foreign asset values increasing by approximately 72% within a single fiscal year.
- Domestic Asset Trends
- United States long-lived assets showed moderate and stable growth between 2018 and 2021, remaining near the 1 billion USD threshold. However, a significant acceleration occurred in 2022, with domestic assets increasing by approximately 32% to reach 1.37 billion USD.
- Geographic Distribution and Concentration
- There is a observable shift toward international asset concentration. The proportion of total long-lived assets located outside the United States increased from 73.5% in 2018 to a peak of 84.0% in 2021, before adjusting slightly to 82.4% in 2022. This indicates a strategic emphasis on expanding foreign operational infrastructure relative to domestic holdings.
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