Hubbell Inc. (NYSE:HUBB)

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Area Profit Margin: United States

Hubbell Inc.; United States; area profit margin calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in thousands)
Operating income	598,500)	439,600)	476,200)	529,700)	478,000)
Net sales	4,536,400)	3,809,800)	3,860,400)	4,190,500)	4,040,600)
Area Profitability Ratio
Area profit margin¹	13.19%	11.54%	12.34%	12.64%	11.83%

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 profit margin = 100 × Operating income ÷ Net sales
= 100 × 598,500 ÷ 4,536,400 = 13.19%

The United States segment experienced fluctuating performance in both top-line revenue and operational profitability between 2018 and 2022, culminating in a significant peak in the final year of the period. While the segment faced a contraction in both sales and income during the middle of the observed timeframe, the 2022 results indicate a robust recovery in operational efficiency.

Net Sales and Operating Income Trends: Net sales exhibited an initial increase in 2019 before entering a two-year decline, reaching a period low of US$ 3,809.8 million in 2021. This downward trend was reversed in 2022, with sales rising sharply to US$ 4,536.4 million. Operating income followed a closely correlated trajectory, peaking in 2019 at US$ 529.7 million and dipping to US$ 439.6 million in 2021, before reaching a five-year high of US$ 598.5 million in 2022.
Area Profit Margin Analysis: The area profit margin demonstrated volatility, ranging from a low of 11.54% in 2021 to a high of 13.19% in 2022. A margin expansion was observed between 2018 and 2019, followed by a gradual compression through 2021. The substantial increase in the margin in 2022 indicates that the growth in net sales was accompanied by successful cost control or a favorable shift in product mix, as operating income growth outpaced the growth in revenue.

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Area Profit Margin: International

Hubbell Inc.; International; area profit margin calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in thousands)
Operating income	110,600)	92,700)	56,800)	66,900)	78,900)
Net sales	411,500)	384,300)	325,600)	400,500)	441,100)
Area Profitability Ratio
Area profit margin¹	26.88%	24.12%	17.44%	16.70%	17.89%

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 profit margin = 100 × Operating income ÷ Net sales
= 100 × 110,600 ÷ 411,500 = 26.88%

The international segment experienced a period of contraction between 2018 and 2020, followed by a significant acceleration in both revenue and profitability from 2021 through 2022. While net sales and operating income declined during the initial three-year period, the subsequent recovery demonstrates a notable improvement in operational efficiency and margin expansion.

Net Sales Trend: Net sales decreased from $441.1 million in 2018 to a low of $325.6 million in 2020. A recovery phase began in 2021, with sales climbing to $384.3 million and reaching $411.5 million by the end of 2022, although the final figure remained slightly below 2018 levels.
Operating Income Trajectory: Operating income mirrored the sales decline through 2020, falling from $78.9 million in 2018 to $56.8 million. However, a sharp reversal occurred in 2021, with income rising to $92.7 million and further expanding to $110.6 million in 2022, effectively surpassing pre-contraction peaks.
Area Profit Margin Expansion: The profit margin remained relatively stable between 16.70% and 17.89% from 2018 to 2020. A significant structural shift is observed starting in 2021, where the margin increased to 24.12%, further rising to 26.88% in 2022. This indicates that the growth in operating income was driven not only by the recovery in sales volume but also by enhanced cost management or pricing power.

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Hubbell Inc., ROA by geographic area

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
United States	20.06%	14.47%	15.29%	17.95%	16.08%
International	28.19%	25.82%	15.00%	17.97%	32.20%

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).

The Area Return on Assets (ROA) for both domestic and international segments exhibited volatility between 2018 and 2022, characterized by a mid-period decline followed by a significant recovery in the final year.

United States Segment Performance: The US ROA showed moderate fluctuation, starting at 16.08% in 2018 and reaching a five-year peak of 20.06% by December 31, 2022. A period of contraction occurred between 2019 and 2021, during which the ratio declined from 17.95% to a low of 14.47%. The results for 2022 indicate a strong rebound, representing the highest level of asset utilization efficiency for this region within the analyzed timeframe.
International Segment Performance: The international segment experienced more pronounced volatility compared to the domestic market. After an initial high of 32.20% in 2018, the ROA declined sharply to a low of 15.00% by 2020. This downturn was followed by a robust V-shaped recovery, with returns increasing to 25.82% in 2021 and continuing upward to 28.19% in 2022, indicating a successful restoration of earning capacity from international assets.
Comparative Regional Analysis: International operations generally outperformed US operations in terms of ROA, despite the sharp decline observed between 2018 and 2020. During the 2019-2020 period, the performance gap between the two regions narrowed significantly as both converged toward the 15-18% range. By 2022, although both regions demonstrated growth, the international segment maintained a substantial lead over the domestic segment, outperforming it by 8.13 percentage points.

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Area ROA: United States

Hubbell Inc.; United States; area ROA calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in thousands)
Operating income	598,500)	439,600)	476,200)	529,700)	478,000)
Long-lived assets	2,983,500)	3,038,100)	3,113,700)	2,950,400)	2,972,400)
Area Profitability Ratio
Area ROA¹	20.06%	14.47%	15.29%	17.95%	16.08%

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 ROA = 100 × Operating income ÷ Long-lived assets
= 100 × 598,500 ÷ 2,983,500 = 20.06%

The financial performance of the United States geographic area between 2018 and 2022 is characterized by a period of volatility in earnings followed by a significant improvement in profitability and asset efficiency in the final year of the period.

Operating Income Trends: Operating income experienced fluctuations, increasing from US$ 478 million in 2018 to US$ 529.7 million in 2019. A downward trend followed, with income declining for two consecutive years to reach a period low of US$ 439.6 million in 2021. A sharp recovery occurred in 2022, with operating income rising to US$ 598.5 million, marking the highest level of profitability in the analyzed timeframe.
Long-lived Asset Base: The asset base remained relatively stable throughout the five-year period. Long-lived assets fluctuated minimally, ranging from a low of US$ 2.95 billion in 2019 to a peak of US$ 3.11 billion in 2020. The period ended with long-lived assets at US$ 2.98 billion, suggesting a consistent approach to capital allocation and asset maintenance.
Area Return on Assets (ROA) Performance: The Area ROA mirrors the volatility of operating income given the stability of the underlying asset base. After an initial increase to 17.95% in 2019, the ratio declined to 15.29% in 2020 and further to 14.47% in 2021. In 2022, a significant surge was observed, with the Area ROA reaching 20.06%, indicating a substantial improvement in the ability of the United States operations to generate profit from its long-term investments.

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Area ROA: International

Hubbell Inc.; International; area ROA calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in thousands)
Operating income	110,600)	92,700)	56,800)	66,900)	78,900)
Long-lived assets	392,300)	359,000)	378,700)	372,200)	245,000)
Area Profitability Ratio
Area ROA¹	28.19%	25.82%	15.00%	17.97%	32.20%

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 ROA = 100 × Operating income ÷ Long-lived assets
= 100 × 110,600 ÷ 392,300 = 28.19%

The international segment exhibited a U-shaped performance trend between 2018 and 2022, characterized by an initial decline in profitability and asset efficiency followed by a strong recovery. While the period began with high returns, a significant expansion of the asset base combined with fluctuating operating income led to a mid-period trough before returning to near-peak efficiency levels by the end of 2022.

Operating Income Trends: Operating income experienced a downward trajectory from 2018 to 2020, falling from 78.9 million US$ to a low of 56.8 million US$. However, a sharp reversal occurred in 2021, with income rising to 92.7 million US$, and continuing to grow to 110.6 million US$ by 2022. This represents a substantial recovery, with the 2022 figures exceeding the 2018 baseline by approximately 40%.
Long-lived Asset Evolution: A significant increase in long-lived assets occurred between 2018 and 2019, rising from 245 million US$ to 372.2 million US$. Following this initial surge, the asset base remained relatively stable, fluctuating slightly before reaching a period high of 392.3 million US$ in 2022. The rapid increase in assets early in the period suggests a phase of strategic investment or acquisition.
Area ROA Analysis: The Area ROA mirrored the volatility of operating income while being influenced by the expanded asset base. The ratio dropped sharply from 32.20% in 2018 to 15.00% in 2020, reflecting the combined impact of decreasing operating income and increasing assets. From 2021 onward, a recovery phase is evident, with the ROA climbing to 25.82% and finally to 28.19% in 2022. The upward trend in the final two years indicates improved asset utilization and a stronger conversion of the expanded asset base into operating profit.

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Hubbell Inc., asset turnover by geographic area

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
United States	1.52	1.25	1.24	1.42	1.36
International	1.05	1.07	0.86	1.08	1.80

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).

Asset turnover ratios across geographic segments demonstrate a divergence in efficiency and recovery patterns between 2018 and 2022. While the domestic market exhibited volatility followed by a strong recovery, the international market experienced a significant decline in efficiency that has not returned to baseline levels.

United States Asset Turnover: The domestic segment maintained a relatively stable efficiency profile, concluding the period with a five-year peak ratio of 1.52 in 2022. A temporary contraction occurred in 2020, where the ratio declined to 1.24, followed by a consistent upward trend over the subsequent two years. This progression indicates an improving capacity to generate revenue from domestic asset bases.
International Asset Turnover: International operations experienced a sharp reduction in asset turnover, falling from a high of 1.80 in 2018 to a low of 0.86 in 2020. Although a partial recovery was observed in 2021, the ratio stabilized at 1.05 by 2022. The substantial gap between the 2018 and 2022 figures suggests a persistent decrease in the revenue-generating efficiency of assets located outside the United States.
Comparative Geographic Performance: A reversal in relative asset efficiency is observable over the analyzed period. In 2018, the international segment outperformed the United States in asset turnover. However, by 2022, the United States became the more efficient segment, as the domestic ratio grew while the international ratio remained suppressed compared to its historical performance.

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Area Asset Turnover: United States

Hubbell Inc.; 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	4,536,400)	3,809,800)	3,860,400)	4,190,500)	4,040,600)
Long-lived assets	2,983,500)	3,038,100)	3,113,700)	2,950,400)	2,972,400)
Area Activity Ratio
Area asset turnover¹	1.52	1.25	1.24	1.42	1.36

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
= 4,536,400 ÷ 2,983,500 = 1.52

Between 2018 and 2022, the asset utilization efficiency in the United States market exhibited a cyclical pattern, characterized by a period of contraction followed by a significant recovery. The area asset turnover ratio fluctuated from a starting point of 1.36 in 2018 to a five-year peak of 1.52 by the end of 2022.

Net Sales Performance: Revenue trends showed initial growth in 2019, followed by a two-year decline through 2020 and 2021, where sales reached a period low of US$ 3,809,800 thousand. This was followed by a substantial increase in 2022, with net sales rising to US$ 4,536,400 thousand, representing the highest volume in the analyzed period.
Long-Lived Asset Stability: The investment in long-lived assets remained relatively stable over the five-year horizon, oscillating around the US$ 3 billion mark. A peak in asset value occurred in 2020 at US$ 3,113,700 thousand, while the lowest value was recorded in 2019 at US$ 2,950,400 thousand.
Area Asset Turnover Analysis: The efficiency ratio experienced a notable dip between 2019 and 2021, falling from 1.42 to 1.24. This decline was driven by the inverse correlation of decreasing net sales and increasing long-lived assets during 2020. However, a sharp improvement occurred in 2022, as the ratio rose to 1.52. This peak efficiency was the result of a simultaneous increase in revenue generation and a reduction in the long-lived asset base, indicating a more optimized use of capital to drive sales in the region.

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Area Asset Turnover: International

Hubbell Inc.; International; 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	411,500)	384,300)	325,600)	400,500)	441,100)
Long-lived assets	392,300)	359,000)	378,700)	372,200)	245,000)
Area Activity Ratio
Area asset turnover¹	1.05	1.07	0.86	1.08	1.80

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
= 411,500 ÷ 392,300 = 1.05

The international segment experienced a significant shift in asset utilization efficiency between 2018 and 2022. A pronounced volatility in net sales, coupled with a substantial expansion of the long-lived asset base, resulted in a marked reduction in the area asset turnover ratio from its 2018 peak.

Net Sales Performance: Revenue followed a downward trajectory initially, falling from US$ 441.1 million in 2018 to a trough of US$ 325.6 million in 2020. A recovery phase was observed in the subsequent two years, with sales climbing to US$ 384.3 million in 2021 and reaching US$ 411.5 million by the end of 2022.
Long-lived Asset Growth: A substantial increase in the asset base occurred in 2019, where long-lived assets rose from US$ 245.0 million to US$ 372.2 million. This elevated investment level persisted throughout the period, ending at US$ 392.3 million in 2022, representing a total increase of approximately 60% over the five-year span.
Area Asset Turnover Trends: The asset turnover ratio declined sharply from 1.80 in 2018 to 0.86 in 2020, driven by the simultaneous contraction of sales and the expansion of the asset base. While the ratio recovered to 1.07 in 2021 and stabilized at 1.05 in 2022, the efficiency of asset utilization remains significantly lower than the 2018 level, indicating that the increase in capital investment has not yet yielded a proportional increase in revenue generation.

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Hubbell Inc., 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	4,536,400)	3,809,800)	3,860,400)	4,190,500)	4,040,600)
International	411,500)	384,300)	325,600)	400,500)	441,100)
Total	4,947,900)	4,194,100)	4,186,000)	4,591,000)	4,481,700)

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).

Net sales for the period between 2018 and 2022 exhibit a U-shaped recovery pattern, characterized by a decline in the middle years followed by a substantial increase in the final year. Total revenue reached its highest point in 2022 at approximately $4.95 billion, representing a significant expansion compared to the low point observed in 2020.

United States Market Performance: The domestic market serves as the primary revenue driver. Sales increased from $4.04 billion in 2018 to $4.19 billion in 2019, before experiencing a two-year contraction that bottomed at $3.81 billion in 2021. A sharp recovery occurred in 2022, with sales rising to $4.54 billion, marking the highest domestic revenue in the five-year period.
International Market Performance: International sales demonstrate a smaller overall contribution to total revenue and experienced a more pronounced early decline. From $441.1 million in 2018, international revenue decreased steadily to a low of $325.6 million in 2020. A gradual recovery followed, with sales increasing to $384.3 million in 2021 and reaching $411.5 million by 2022, although levels remained below the 2018 baseline.
Geographic Revenue Concentration: A heavy concentration of revenue is maintained within the United States. The domestic market consistently accounts for approximately 90% or more of total net sales throughout the analyzed period. While international markets showed a recovery trend post-2020, the overall financial trajectory remains overwhelmingly dependent on US market dynamics.

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Hubbell Inc., operating income by geographic area

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
United States	598,500)	439,600)	476,200)	529,700)	478,000)
International	110,600)	92,700)	56,800)	66,900)	78,900)
Total	709,100)	532,300)	533,000)	596,600)	556,900)

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 operating income exhibited a period of volatility between 2018 and 2021 before experiencing a significant expansion in 2022, reaching a peak of $709.1 million. The overall financial performance is heavily weighted toward domestic operations, although the international segment demonstrated a notable recovery and growth trend in the final two years of the analyzed period.

United States Operating Performance: Operating income within the United States showed fluctuations, initially rising to $529.7 million in 2019 before entering a downward trend that lasted through 2021, where it reached a period low of $439.6 million. This trend reversed sharply in 2022, with income increasing to $598.5 million, representing a substantial recovery and the highest absolute value recorded across the five-year span.
International Operating Performance: The international segment experienced a consistent decline from 2018 to 2020, with operating income falling from $78.9 million to $56.8 million. Following this trough, a strong upward trajectory was observed, with income rising to $92.7 million in 2021 and further increasing to $110.6 million by the end of 2022.
Geographic Income Concentration: The United States remains the primary driver of total operating income. While international income grew by approximately 40% between 2018 and 2022, the domestic market continues to provide the vast majority of the company's operating profit. The surge in total operating income in 2022 was the result of simultaneous growth in both geographic regions.

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Hubbell Inc., 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	2,983,500)	3,038,100)	3,113,700)	2,950,400)	2,972,400)
International	392,300)	359,000)	378,700)	372,200)	245,000)
Total	3,375,800)	3,397,100)	3,492,400)	3,322,600)	3,217,400)

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 long-lived assets exhibited a period of growth from 2018 through 2020, peaking at 3,492,400 thousand US dollars before experiencing a slight decline over the subsequent two years to 3,375,800 thousand US dollars. While the overall asset base remained relatively stable over the five-year period, there is a discernible shift in the geographic distribution of these assets.

United States Asset Trends: Long-lived assets within the United States represent the vast majority of the total asset base. These assets fluctuated modestly, moving from 2,972,400 thousand US dollars in 2018 to a peak of 3,113,700 thousand US dollars in 2020. Following this peak, a downward trend occurred, with assets decreasing to 2,983,500 thousand US dollars by the end of 2022, effectively returning to 2018 levels.
International Asset Expansion: A significant growth pattern is observed in international long-lived assets. Between 2018 and 2019, assets increased sharply from 245,000 thousand US dollars to 372,200 thousand US dollars. Despite a minor contraction in 2021, international assets reached their highest point in 2022 at 392,300 thousand US dollars, representing an overall increase of approximately 60% since 2018.
Geographic Asset Allocation: The proportion of total long-lived assets allocated to international operations increased steadily over the period analyzed. In 2018, international assets comprised approximately 7.6% of the total. By 2022, this share expanded to approximately 11.6%. This indicates a strategic increase in the relative weight of non-domestic infrastructure and long-term investments compared to the domestic asset base.

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