Analysis of Reportable Segments
Edwards Lifesciences Corp. operates in 4 segments: United States; Europe; Japan; and Rest of World.
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- Income Statement
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Current Ratio since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Debt
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Segment Profit Margin
Edwards Lifesciences Corp., profit margin by reportable segment
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States | |||||
| Europe | |||||
| Japan | |||||
| Rest of World |
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), 10-K (reporting date: 2017-12-31).
The profit margin data across various reportable segments indicates several noteworthy trends over the five-year period ending December 31, 2021.
- United States
-
The profit margin in the United States segment shows a consistent upward trend from 65.12% in 2017 to 69.22% in 2021. The margin steadily increased each year, with a slightly smaller increment between 2019 and 2020, suggesting relatively stable profitability improvements in this region over the period.
- Europe
-
Europe's profit margin also exhibits a positive trajectory, rising from 47.26% in 2017 to 51.76% in 2021. Growth occurred steadily year-over-year, although the increments are moderate and consistent, reflecting gradual strengthening of profitability in the European segment.
- Japan
-
The Japan segment shows a notable increase in profit margin, climbing from 56.41% in 2017 to 65.91% in 2021. This represents the largest relative improvement among the segments analyzed, with continuous and robust growth each year, highlighting significant enhancement in profitability.
- Rest of World
-
The Rest of World segment displays the lowest profit margins overall but experiences the most substantial growth proportionally, improving from 25.97% in 2017 to 34.73% in 2021. The margin increased steadily each year, with the largest jumps occurring between 2019 and 2020 and continuing into 2021, indicating improving operational efficiency or market conditions in these territories.
In summary, all segments have shown persistent profit margin growth throughout the five-year period. The United States and Japan segments lead in absolute profitability levels, while Rest of World is characterized by the most significant relative improvement. The data collectively suggests effective margin management and possibly enhanced market positioning or operational gains across the company's global footprint.
Segment Profit Margin: United States
Edwards Lifesciences Corp.; United States; segment profit margin calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Segment operating income | |||||
| Segment net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment profit margin = 100 × Segment operating income ÷ Segment net sales
= 100 × ÷ =
- Segment Net Sales
- Segment net sales demonstrated a consistent upward trajectory from 2017 through 2021. Beginning at $1,907,600 thousand in 2017, net sales grew steadily each year, reaching $2,963,100 thousand by 2021. This represents an overall increase of approximately 55.4% over the five-year period. The growth indicated strong market demand and successful sales strategies within the United States segment.
- Segment Operating Income
- Operating income also showed a positive trend, increasing from $1,242,300 thousand in 2017 to $2,051,000 thousand in 2021. There was notable growth between 2018 and 2019, with operating income rising by approximately 27.4%, followed by a slight decrease in 2020. However, the segment rebounded strongly in 2021, achieving the highest operating income in the timeframe. This pattern suggests effective cost management and operational efficiency alongside the sales growth.
- Segment Profit Margin
- The profit margin displayed a generally increasing trend, starting at 65.12% in 2017 and rising to 69.22% in 2021. Although there was a slight dip in 2020 to 68.63%, the margin remained relatively stable and high throughout the period. The overall improvement in profit margin indicates enhanced profitability and possibly improved pricing power or cost control measures within the segment.
- Summary
- The segment exhibited strong financial performance over the five years, characterized by steady increases in net sales and operating income coupled with improving profit margins. Despite a minor setback in operating income and margin in 2020, likely attributable to broader economic or operational challenges, the segment demonstrated resilience and growth recovery in 2021. The data reflects effective management and a robust market position in the United States segment during the reviewed period.
Segment Profit Margin: Europe
Edwards Lifesciences Corp.; Europe; segment profit margin calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Segment operating income | |||||
| Segment net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment profit margin = 100 × Segment operating income ÷ Segment net sales
= 100 × ÷ =
- Segment Operating Income
- The operating income for the Europe segment displayed a general upward trend over the five-year period. Starting at $378.4 million in 2017, it increased steadily each year, reaching $569.1 million by the end of 2021. The growth between 2017 and 2018 was modest, followed by a more pronounced increase from 2018 to 2019. From 2019 onwards, operating income continued to rise but at a slower pace from 2019 to 2020, then accelerated again into 2021.
- Segment Net Sales
- Net sales demonstrated a consistent upward trajectory throughout the duration. Beginning at $800.7 million in 2017, net sales gradually increased year-over-year. The most significant growth occurred between 2020 and 2021, with net sales rising from approximately $945.2 million to nearly $1.1 billion. This indicates expanding market activity or increased demand in the Europe segment during this period.
- Segment Profit Margin
- The profit margin showed a positive trend, indicating improved efficiency or profitability over time. Starting at 47.26% in 2017, the margin rose slightly to 47.77% in 2018. A noteworthy increase occurred in 2019, with the margin reaching just over 50%, maintaining a stable level around 50.7% in 2020. By 2021, the margin further improved to 51.76%, suggesting enhanced cost management or favorable pricing strategies contributing to higher profitability relative to sales.
- Overall Analysis
- The segment exhibited strong financial performance with consistent growth in both revenue and operating income. The steady increase in net sales coupled with rising profit margins implies effective operational management and growing profitability. The acceleration in both sales and operating income in the final year suggests that recent strategic initiatives or market conditions have positively impacted the segment's financial results in Europe.
Segment Profit Margin: Japan
Edwards Lifesciences Corp.; Japan; segment profit margin calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Segment operating income | |||||
| Segment net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment profit margin = 100 × Segment operating income ÷ Segment net sales
= 100 × ÷ =
The segment operating income for the Japan reportable segment of Edwards Lifesciences Corp. demonstrated a consistent upward trend from 2017 through 2021. Starting at $201.1 million in 2017, it increased annually, reaching $348.0 million by the end of 2021. This represents a significant growth in operating income over the five-year period.
Similarly, segment net sales showed continuous growth over the same timeframe. Beginning at $356.5 million in 2017, net sales rose each year, peaking at $528.0 million in 2021. The incremental increases suggest steady demand and successful market operations within the segment.
The segment profit margin, expressed as a percentage, also increased steadily each year. From 56.41% in 2017, the margin improved to 65.91% in 2021. This positive trend indicates enhanced operational efficiency or improved pricing strategies resulting in higher profitability relative to sales.
- Overall Trend
- All key financial indicators—operating income, net sales, and profit margin—grew progressively over the analyzed period.
- Operating Income Growth
- Operating income grew by approximately 73% from 2017 to 2021, reflecting strong segment profitability.
- Net Sales Increase
- Net sales expanded by roughly 48% over the five years, illustrating increasing revenue generation within the segment.
- Profit Margin Improvement
- The profit margin improved by over 9 percentage points, highlighting effective cost management or value creation strategies.
- Implication
- The consistent improvement in profitability ratios alongside revenue growth suggests strong operational performance and potential competitive advantages in the Japan segment.
Segment Profit Margin: Rest of World
Edwards Lifesciences Corp.; Rest of World; segment profit margin calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Segment operating income | |||||
| Segment net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Segment profit margin = 100 × Segment operating income ÷ Segment net sales
= 100 × ÷ =
- Segment Operating Income
- The segment operating income shows a consistent upward trend over the five-year period. Starting at 92,800 thousand US dollars in 2017, it increased each year, reaching 185,200 thousand US dollars in 2021. This represents a doubling of operating income from 2017 to 2021, indicating strong and sustained growth in profitability within this segment.
- Segment Net Sales
- Net sales for the segment also demonstrate steady growth. Beginning at 357,300 thousand US dollars in 2017, the net sales increased each year with a notable acceleration in 2021, reaching 533,200 thousand US dollars. This upward trend reflects expanding revenue generation and market penetration in the rest-of-world segment.
- Segment Profit Margin
- The profit margin has improved consistently from 25.97% in 2017 to 34.73% in 2021. This upward movement signifies enhanced operational efficiency and higher profitability relative to sales over time. The profit margin increase is particularly marked in the last two years, indicating effective cost management or favorable pricing strategies.
- Overall Analysis
- The data illustrates a robust performance in the rest-of-world segment, with increasing sales accompanied by even stronger growth in operating income, resulting in rising profit margins. This suggests that the segment is not only growing in volume but is also enhancing profitability and operational effectiveness. The consistent year-over-year improvements point to favorable market conditions as well as successful management strategies.
Segment net sales
Edwards Lifesciences Corp., segment net sales by reportable segment
US$ in thousands
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States | |||||
| Europe | |||||
| Japan | |||||
| Rest of World | |||||
| Total |
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), 10-K (reporting date: 2017-12-31).
The net sales data across geographic segments display a consistent upward trend from 2017 through 2021, reflecting overall growth in revenue generation.
- United States
- Sales in the United States increased steadily from approximately $1.91 billion in 2017 to $2.96 billion in 2021. There was notable acceleration in growth between 2018 and 2019, with sales rising from $2.06 billion to $2.53 billion. Although there was a slight decline in 2020 to $2.52 billion, sales rebounded strongly in 2021, reaching their highest value in the period analyzed.
- Europe
- Europe demonstrated gradual yet consistent growth in net sales, increasing from around $800.7 million in 2017 to nearly $1.10 billion in 2021. The year-over-year increases were steady, with a noticeable uptick from 2020 to 2021, suggesting strengthened market performance in this region.
- Japan
- Net sales in Japan rose steadily each year, starting at $356.5 million in 2017 and reaching $528 million by 2021. This segment showed continuous growth without any periods of decline, indicating robust demand and market expansion over the five-year span.
- Rest of World
- The "Rest of World" segment mirrored the growth trend observed in other regions, moving from $357.3 million in 2017 to $533.2 million in 2021. This steady increase suggests broadening geographical reach and diversification of revenue sources outside major markets.
- Total Net Sales
- Total net sales grew from approximately $3.42 billion in 2017 to $5.12 billion in 2021, reflecting an overall increase of nearly 50% over five years. The most significant jump occurred between 2019 and 2021, indicating accelerated business expansion during this period. The total figures confirm the combined positive performance across all reportable segments.
Segment operating income
Edwards Lifesciences Corp., segment operating income by reportable segment
US$ in thousands
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States | |||||
| Europe | |||||
| Japan | |||||
| Rest of World | |||||
| Total |
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), 10-K (reporting date: 2017-12-31).
- Overall Trend
- The segment operating income exhibits a consistent upward trend across all geographic regions from 2017 through 2021. Total operating income increased steadily each year, indicating sustained growth in profitability.
- United States
- The United States segment shows a strong increasing pattern, with income rising from approximately $1.24 billion in 2017 to about $2.05 billion in 2021. Growth accelerated notably in 2019 and 2021, although there was a slight decline between 2019 and 2020.
- Europe
- Europe's operating income also grew steadily, from around $378 million in 2017 to $569 million in 2021. The growth rate remained relatively consistent year-over-year, with no decrease observed in any period.
- Japan
- Japan's segment income increased continuously from approximately $201 million in 2017 to $348 million in 2021. The increases appear moderate and steady, reflecting stable expansion in this region.
- Rest of World
- Operating income from the Rest of World segment rose from about $93 million in 2017 to $185 million in 2021. This segment shows a more gradual increase but maintains a positive trajectory throughout the period.
- Comparative Insights
- While all regions demonstrate growth, the United States segment contributes the largest share to total operating income and exhibits the greatest volatility with a slight dip in 2020. All other regions maintain uninterrupted growth. The aggregated growth culminates in a total operating income increase of approximately 65% over the five-year span.