Analysis of Reportable Segments
Hubbell Inc. operates in 2 segments: Utility Solutions and Electrical Solutions.
Segment Profit Margin
Hubbell Inc., profit margin by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Utility Solutions | 15.26% | 12.17% | 15.51% | 14.07% | 12.96% |
| Electrical Solutions | 13.04% | 13.35% | 10.37% | 12.19% | 12.06% |
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).
- Utility Solutions Segment Profit Margin
- The profit margin for this segment demonstrated variability over the five-year period. Commencing at 12.96% in 2018, there was a steady increase through 2019 and 2020, reaching a peak of 15.51%. However, this was followed by a notable decline to 12.17% in 2021. The margin recovered in 2022, rising again to 15.26%, nearly matching the previous peak. Overall, the segment shows resilience with fluctuations, indicating underlying factors influencing profitability in intermediate years.
- Electrical Solutions Segment Profit Margin
- The Electrical Solutions segment exhibited a more subdued trend with smaller fluctuations than Utility Solutions. Starting at 12.06% in 2018, the margin saw a slight increase in 2019 to 12.19%, but declined sharply in 2020 to 10.37%. This was followed by a recovery phase, with margins improving to 13.35% in 2021. The margin slightly decreased to 13.04% in 2022, maintaining a level higher than earlier years preceding 2021. This pattern suggests some volatility with a strong rebound after the 2020 dip.
- Comparative Insights
- When comparing the two segments, Utility Solutions experienced greater variability but ended near its highest margins by 2022, indicating improved profitability resilience. Electrical Solutions, while more stable initially, faced a significant dip in 2020 but showed a robust recovery afterward, reaching margins higher than those recorded before 2020. Both segments faced headwinds in 2020 and early 2021 but subsequently improved their profit margins, reflecting adaptive management or market conditions positively influencing these business areas.
Segment Profit Margin: Utility Solutions
Hubbell Inc.; Utility Solutions; segment 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 | 438,200) | 284,100) | 298,200) | 276,500) | 236,100) |
| Net sales | 2,871,100) | 2,334,400) | 1,922,400) | 1,965,300) | 1,821,100) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 15.26% | 12.17% | 15.51% | 14.07% | 12.96% |
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
Segment profit margin = 100 × Operating income ÷ Net sales
= 100 × 438,200 ÷ 2,871,100 = 15.26%
- Net Sales
- Net sales displayed a generally increasing trend over the period analyzed. Beginning at 1,821,100 thousand US dollars at the end of 2018, sales increased moderately in 2019 to 1,965,300 thousand. There was a slight decline in 2020, with net sales falling to 1,922,400 thousand. However, this was followed by significant recovery and growth, with sales rising to 2,334,400 thousand in 2021 and further accelerating to 2,871,100 thousand by the end of 2022.
- Operating Income
- Operating income followed an overall upward trajectory with some fluctuation. From 236,100 thousand US dollars in 2018, it increased steadily to 276,500 thousand in 2019 and to 298,200 thousand in 2020. In 2021, operating income declined slightly to 284,100 thousand but then surged significantly to 438,200 thousand in 2022, representing substantial profitability growth in the most recent year.
- Segment Profit Margin
- The segment profit margin exhibited some variability during the period. Starting at 12.96% in 2018, it increased to 14.07% in 2019 and reached a peak of 15.51% in 2020. The margin then contracted notably in 2021 to 12.17%, indicating a reduction in operating efficiency or increased costs relative to sales during that year. This decline was reversed in 2022, with the margin rebounding to 15.26%, close to its previous peak, reflecting improved profitability and cost management.
- Summary
- Overall, the segment experienced growth in net sales and operating income across the five-year span, despite some fluctuations in 2020 and 2021. The rebound in both sales and operating income in 2022 is particularly pronounced, suggesting a strong recovery or expansion phase. Profit margin trends also highlight a temporary dip in 2021 but a return to higher efficiency levels by 2022, underscoring enhanced operational performance in the latest period.
Segment Profit Margin: Electrical Solutions
Hubbell Inc.; Electrical Solutions; segment 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 | 270,900) | 248,200) | 234,800) | 320,100) | 320,800) |
| Net sales | 2,076,800) | 1,859,700) | 2,263,600) | 2,625,700) | 2,660,600) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 13.04% | 13.35% | 10.37% | 12.19% | 12.06% |
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
Segment profit margin = 100 × Operating income ÷ Net sales
= 100 × 270,900 ÷ 2,076,800 = 13.04%
- Operating Income
- The operating income showed a declining trend from 2018 to 2020, decreasing from 320,800 thousand US dollars in 2018 to 234,800 thousand US dollars in 2020. However, it subsequently demonstrated a recovery, increasing to 248,200 thousand US dollars in 2021 and further to 270,900 thousand US dollars in 2022, though it did not reach the peak levels observed in 2018 and 2019.
- Net Sales
- Net sales experienced a general downward trajectory from 2018 through 2021, declining from 2,660,600 thousand US dollars in 2018 to a low of 1,859,700 thousand US dollars in 2021. In 2022, there was a modest increase to 2,076,800 thousand US dollars, marking a partial rebound but remaining below earlier levels in 2018 and 2019.
- Segment Profit Margin
- The segment profit margin showed some variability across the years. It was relatively stable around 12% in 2018 and 2019, then declined to 10.37% in 2020. A notable improvement occurred in 2021, with the margin rising sharply to 13.35%, followed by a slight decrease to 13.04% in 2022. The margin in the last two years is higher than the initial two years, indicating improved profitability despite lower sales volume.
- Overall Analysis
- The data reveals a period of contraction in net sales and operating income from 2018 to 2020, likely reflecting challenging market or operational conditions. The recovery phase in 2021 and 2022 is marked by increases in both operating income and net sales, although the sales levels have not fully returned to earlier highs. The segment profit margin's rebound and stability above 13% in 2021 and 2022 suggest enhanced operational efficiency or cost management during the recovery period, contributing to relatively stronger profitability despite lower sales volumes compared to the initial years.
Segment Return on Assets (Segment ROA)
Hubbell Inc., ROA by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Utility Solutions | 14.55% | 10.06% | 11.63% | 11.51% | 9.85% |
| Electrical Solutions | 13.73% | 11.59% | 10.52% | 14.56% | 14.40% |
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).
- Utility Solutions Segment ROA
-
The Return on Assets (ROA) for the Utility Solutions segment exhibits notable fluctuations over the five-year period. Beginning at 9.85% in 2018, there is a progressive increase to 11.51% in 2019 and a marginal rise to 11.63% in 2020. However, the segment experiences a decline in 2021 to 10.06%, indicating a possible contraction in asset efficiency or profitability during this year. This downtrend is reversed significantly in 2022, where the ROA surges to 14.55%, representing the highest value in the observed timeframe. This growth suggests improved asset utilization or increased profitability in the latter year.
- Electrical Solutions Segment ROA
-
The Electrical Solutions segment's ROA starts relatively high at 14.40% in 2018 and maintains a similar level of 14.56% in 2019, implying stable profitability and asset efficiency. In 2020, the segment experiences a substantial decrease to 10.52%, marking the lowest point in the five-year span and highlighting a considerable reduction in financial performance or asset productivity during that year. Following this decline, there is a partial recovery in 2021, with ROA rising to 11.59%, and a further improvement in 2022 to 13.73%. Despite these gains, the 2022 ROA does not fully return to the earlier peak levels observed in 2018 and 2019.
- Comparative Insights
-
Both segments display variability in ROA over the years, with 2020 marking a low point for Electrical Solutions and a relatively stable performance for Utility Solutions. Notably, Utility Solutions ends the period with a superior ROA in 2022 (14.55%) compared to Electrical Solutions (13.73%), reversing earlier trends where Electrical Solutions generally maintained a higher ROA. These changes could indicate shifting operational efficiencies, differing market conditions, or strategic initiatives impacting asset usage and profitability in the respective segments.
Segment ROA: Utility Solutions
Hubbell Inc.; Utility Solutions; segment 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 | 438,200) | 284,100) | 298,200) | 276,500) | 236,100) |
| Assets | 3,011,900) | 2,823,800) | 2,563,800) | 2,401,300) | 2,395,800) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 14.55% | 10.06% | 11.63% | 11.51% | 9.85% |
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
Segment ROA = 100 × Operating income ÷ Assets
= 100 × 438,200 ÷ 3,011,900 = 14.55%
- Operating Income
- The operating income demonstrates an overall upward trend from 2018 to 2022. It increased steadily from $236.1 million in 2018 to $298.2 million in 2020. However, there was a slight decline in 2021 to $284.1 million, followed by a notable surge in 2022 reaching $438.2 million. This indicates a significant improvement in profitability in the latest year under review.
- Assets
- Assets consistently grew each year, starting at approximately $2.40 billion in 2018 and rising to $3.01 billion by 2022. The growth was steady, reflecting expanding resources or investments in the segment.
- Segment Return on Assets (ROA)
- The segment ROA increased from 9.85% in 2018 to a peak of 11.63% in 2020, showing improved efficiency in asset utilization to generate returns. In 2021, the ROA declined to 10.06%, mirroring the dip in operating income that year. However, the ROA improved substantially in 2022 to 14.55%, which is the highest in the period reviewed and reflects enhanced profitability relative to the asset base.
- Summary
- The data reveals a generally positive performance trend for the segment, with expanding assets and improved profitability over the five-year period. Despite a slight setback in operating income and ROA in 2021, the segment experienced strong recovery and growth in 2022. The sharp increase in operating income and ROA in the latest year indicates significantly enhanced operational efficiency and financial performance relative to prior years.
Segment ROA: Electrical Solutions
Hubbell Inc.; Electrical Solutions; segment ROA calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Operating income | 270,900) | 248,200) | 234,800) | 320,100) | 320,800) |
| Assets | 1,972,900) | 2,142,100) | 2,233,000) | 2,197,800) | 2,228,500) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 13.73% | 11.59% | 10.52% | 14.56% | 14.40% |
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
Segment ROA = 100 × Operating income ÷ Assets
= 100 × 270,900 ÷ 1,972,900 = 13.73%
The analysis of the financial trends over the five-year period reveals several important observations regarding operating income, asset levels, and segment return on assets (ROA).
- Operating Income
- The operating income exhibited a declining trend from 2018 to 2020, dropping significantly from $320.8 million in 2018 to $234.8 million in 2020. This represents a decrease of roughly 27% over two years. However, there was a recovery in subsequent years, with operating income rising to $248.2 million in 2021 and further increasing to $270.9 million in 2022. Despite the recovery, the 2022 figure remains below the levels observed in 2018 and 2019.
- Assets
- The asset base showed a gradual decline during the examined period. From $2.23 billion in 2018, assets slightly decreased to around $2.20 billion in 2019 and then increased marginally in 2020 to approximately $2.23 billion again. In 2021 and 2022, assets contracted more noticeably, reaching $2.14 billion and $1.97 billion, respectively. This downward trend in assets may indicate asset divestitures, depreciation, or reallocation of resources.
- Segment Return on Assets (ROA)
- The segment ROA followed a similar pattern to operating income, beginning at 14.4% in 2018 and slightly increasing to 14.56% in 2019. It then declined notably in 2020 to 10.52%, aligning with the dip in operating income. Subsequent years showed improvement, with ROA rising to 11.59% in 2021 and further to 13.73% in 2022. This reflects an enhancement in asset utilization and profitability towards the end of the period, nearing the earlier peak values.
Overall, the segment experienced challenges around 2020, with both operating income and profitability ratios declining amidst relatively stable asset levels. Recovery efforts appear to have been effective from 2021 onward, yielding improved profitability despite a reduced asset base in 2022. The declining asset trend, coupled with rising ROA in the last two years, suggests more efficient use of assets or strategic restructuring within the segment.
Segment Asset Turnover
Hubbell Inc., asset turnover by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Utility Solutions | 0.95 | 0.83 | 0.75 | 0.82 | 0.76 |
| Electrical Solutions | 1.05 | 0.87 | 1.01 | 1.19 | 1.19 |
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).
- Utility Solutions Segment Asset Turnover
- The asset turnover ratio for the Utility Solutions segment exhibited a generally positive trend over the five-year period. Starting at 0.76 in 2018, it showed a modest increase in 2019 to 0.82, followed by a slight decline to 0.75 in 2020. From 2020 onwards, the ratio steadily increased, reaching 0.83 in 2021 and peaking at 0.95 in 2022. This progression indicates improving efficiency in utilizing segment assets to generate revenue, particularly notable in the last two years.
- Electrical Solutions Segment Asset Turnover
- The Electrical Solutions segment demonstrated more variability in asset turnover over the same timeframe. It started at 1.19 in 2018 and maintained this level in 2019, indicating stable asset utilization. However, there was a significant decrease to 1.01 in 2020, followed by a further reduction to 0.87 in 2021. In 2022, the ratio recovered to 1.05 but did not reach the levels observed in 2018 and 2019. This pattern suggests a period of declining efficiency in asset use in the middle years, with some improvement occurring in the latest year.
- Comparative Insights
- Comparing the two segments, the Utility Solutions segment showed a clear upward trend in asset turnover from 2020 onwards, surpassing 0.9 by the end of the period. Conversely, the Electrical Solutions segment experienced a peak early on, followed by declines and only partial recovery by 2022. The Utility Solutions segment's improvement could indicate successful strategies or operational enhancements, while the Electrical Solutions segment may have faced headwinds affecting asset productivity, although recent signs point toward a rebound.
Segment Asset Turnover: Utility Solutions
Hubbell Inc.; Utility Solutions; segment 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 | 2,871,100) | 2,334,400) | 1,922,400) | 1,965,300) | 1,821,100) |
| Assets | 3,011,900) | 2,823,800) | 2,563,800) | 2,401,300) | 2,395,800) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 0.95 | 0.83 | 0.75 | 0.82 | 0.76 |
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
Segment asset turnover = Net sales ÷ Assets
= 2,871,100 ÷ 3,011,900 = 0.95
- Net Sales
- Net sales exhibited an overall upward trend over the five-year period. Starting at $1,821,100 thousand in 2018, sales increased to $1,965,300 thousand in 2019, followed by a slight decline to $1,922,400 thousand in 2020. From 2020 onward, net sales rose significantly, reaching $2,334,400 thousand in 2021 and continuing to $2,871,100 thousand in 2022. This represents substantial growth after 2020, indicating a strong recovery and expansion in revenues.
- Assets
- Total assets showed a consistent increase year over year. Assets increased from $2,395,800 thousand in 2018 to $2,401,300 thousand in 2019, followed by further growth to $2,563,800 thousand in 2020, $2,823,800 thousand in 2021, and $3,011,900 thousand in 2022. This steady increase suggests ongoing investment or accumulation of assets to support the segment’s operations and growth.
- Segment Asset Turnover
- The segment asset turnover ratio showed variability but an overall positive trend. Starting at 0.76 in 2018, it rose to 0.82 in 2019, then decreased to 0.75 in 2020, coinciding with the dip in net sales. Subsequently, the ratio improved to 0.83 in 2021 and further to 0.95 in 2022, reaching the highest level in the period. This indicates improved efficiency in generating sales from assets, particularly notable in the last two years.
- Summary
- The data depicts a segment that experienced fluctuations in net sales around 2019-2020 but recovered strongly in the following years, supported by a continuous increase in asset base. The improving segment asset turnover ratio in the latter years highlights enhanced operational efficiency, with the highest turnover recorded in 2022. Overall, the segment is demonstrating growth in both scale and asset utilization efficiency.
Segment Asset Turnover: Electrical Solutions
Hubbell Inc.; Electrical Solutions; segment asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Net sales | 2,076,800) | 1,859,700) | 2,263,600) | 2,625,700) | 2,660,600) |
| Assets | 1,972,900) | 2,142,100) | 2,233,000) | 2,197,800) | 2,228,500) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 1.05 | 0.87 | 1.01 | 1.19 | 1.19 |
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
Segment asset turnover = Net sales ÷ Assets
= 2,076,800 ÷ 1,972,900 = 1.05
The segment exhibited a general decline in net sales from 2018 through 2021, with net sales decreasing from approximately $2.66 billion in 2018 to around $1.86 billion in 2021. However, in 2022, there was a notable recovery as net sales increased to roughly $2.08 billion, indicating a positive reversal in sales performance compared to the previous year.
Regarding assets, there was a gradual downward trend over the five-year period. Assets decreased from approximately $2.23 billion at the end of 2018 to about $1.97 billion by the end of 2022. This decline suggests a reduction in the asset base allocated to the segment during this timeframe.
The segment asset turnover ratio, which measures the efficiency of asset utilization in generating sales, also showed a declining trend from 2018 to 2021. It remained stable at 1.19 in both 2018 and 2019, then declined to 1.01 in 2020 and further to 0.87 in 2021. In 2022, the ratio improved to 1.05, reflecting a partial recovery in asset utilization efficiency alongside the rebound in net sales.
- Summary of Trends
- 1. Net sales declined steadily from 2018 to 2021, followed by a recovery in 2022.
- 2. Total assets showed a consistent decrease throughout the period.
- 3. Segment asset turnover mirrored sales trends, declining through 2021 before improving in 2022.
- 4. The combined movement in sales and asset turnover suggests efforts towards improved operational efficiency in 2022 despite a reduced asset base.
Segment Capital Expenditures to Depreciation
Hubbell Inc., capital expenditures to depreciation by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Utility Solutions | 0.88 | 0.51 | 0.57 | 0.53 | 0.42 |
| Electrical Solutions | 0.80 | 0.77 | 0.53 | 0.70 | 0.86 |
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).
- Utility Solutions Capital Expenditures to Depreciation Ratio
- The capital expenditures to depreciation ratio for Utility Solutions exhibited a generally upward trend over the analyzed period. Starting at 0.42 at the end of 2018, the ratio increased to 0.53 in 2019 and further to 0.57 in 2020, suggesting a growing investment relative to the depreciation expense in this segment. Although there was a slight decline in 2021 to 0.51, the ratio sharply rose to 0.88 in 2022, indicating a significant increase in capital expenditures compared to depreciation expenses during the most recent year.
- Electrical Solutions Capital Expenditures to Depreciation Ratio
- For Electrical Solutions, the ratio started relatively high at 0.86 in 2018 but decreased markedly to 0.7 in 2019 and further to 0.53 in 2020, reflecting a reduction in capital expenditures relative to depreciation. However, the trend reversed in 2021 with an increase to 0.77, and in 2022, the ratio continued to rise slightly to 0.80. This pattern suggests an initial period of reduced reinvestment followed by a renewed focus on capital expenditure growth relative to depreciation in the latter years.
- Comparative Insights
- Comparison between the two segments reveals differing investment dynamics. Utility Solutions displayed a consistent increase in capital expenditures relative to depreciation, especially notable with the sharp rise in 2022. In contrast, Electrical Solutions experienced an initial decline in this ratio over the first three years before recovering and stabilizing at a level slightly below its 2018 peak. The divergent trends may reflect different capital investment strategies or operational requirements between the segments during the observed period.
Segment Capital Expenditures to Depreciation: Utility Solutions
Hubbell Inc.; Utility Solutions; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Capital expenditures | 86,900) | 55,800) | 53,100) | 45,400) | 36,800) |
| Depreciation and amortization | 99,200) | 108,500) | 92,500) | 86,000) | 87,000) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 0.88 | 0.51 | 0.57 | 0.53 | 0.42 |
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
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 86,900 ÷ 99,200 = 0.88
- Capital Expenditures
- Capital expenditures have shown a consistent upward trend from 2018 to 2022. Beginning at $36.8 million in 2018, spending increased each year, reaching a peak of $86.9 million in 2022. This represents a significant increase of approximately 136% over the five-year period, with the most notable jump occurring between 2021 and 2022.
- Depreciation and Amortization
- Depreciation and amortization expenses have fluctuated over the period. Starting at $87.0 million in 2018, the amount slightly decreased in 2019, then rose to $92.5 million in 2020, peaked at $108.5 million in 2021, and decreased to $99.2 million in 2022. Despite variability, the overall trend shows an increase compared to the starting point.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation exhibits variability but shows a notable increase over time. Initially, the ratio was 0.42 in 2018 and gradually rose to 0.57 in 2020. A slight decline to 0.51 occurred in 2021, followed by a sharp increase to 0.88 in 2022. The 2022 ratio indicates that capital expenditures nearly equaled depreciation expenses, suggesting a considerable investment in assets relative to the assets currently being expensed through depreciation.
Segment Capital Expenditures to Depreciation: Electrical Solutions
Hubbell Inc.; Electrical Solutions; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Capital expenditures | 39,500) | 31,100) | 34,800) | 45,800) | 53,000) |
| Depreciation and amortization | 49,300) | 40,600) | 65,100) | 65,000) | 61,400) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 0.80 | 0.77 | 0.53 | 0.70 | 0.86 |
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
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 39,500 ÷ 49,300 = 0.80
- Capital Expenditures
- Capital expenditures showed a declining trend from 2018 to 2021, decreasing from 53,000 thousand US dollars in 2018 to 31,100 thousand US dollars in 2021. In 2022, there was a noticeable increase to 39,500 thousand US dollars, indicating a potential shift towards increased investment after several years of reduction.
- Depreciation and Amortization
- Depreciation and amortization values remained relatively stable between 2018 and 2020, ranging from 61,400 to 65,100 thousand US dollars. However, there was a significant decrease in 2021 to 40,600 thousand US dollars, followed by a partial recovery in 2022 to 49,300 thousand US dollars. This decline and subsequent rise may reflect changes in asset base or amortization schedules.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of segment capital expenditures to depreciation declined from 0.86 in 2018 to a low of 0.53 in 2020, corresponding with the decreases observed in capital spending. Afterwards, the ratio increased to 0.77 in 2021 and further to 0.80 in 2022, consistent with the resurgence in capital expenditures. This suggests a gradual alignment of capital investments relative to asset depreciation over the period.
Net sales
Hubbell Inc., net sales by reportable segment
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Utility Solutions | 2,871,100) | 2,334,400) | 1,922,400) | 1,965,300) | 1,821,100) |
| Electrical Solutions | 2,076,800) | 1,859,700) | 2,263,600) | 2,625,700) | 2,660,600) |
| 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).
- Utility Solutions Segment Net Sales
- The Utility Solutions segment demonstrated a consistent upward trend over the five-year period. Net sales increased from $1,821,100 thousand in 2018 to $2,871,100 thousand in 2022. Notable growth occurred especially in the latter two years, with a marked rise from $2,324,400 thousand in 2021 to $2,871,100 thousand in 2022, indicating strong demand or increased market penetration in this segment.
- Electrical Solutions Segment Net Sales
- The Electrical Solutions segment experienced a decline in net sales during the initial years, dropping from $2,660,600 thousand in 2018 to $1,859,700 thousand in 2021. However, in 2022, there was a partial recovery, with net sales rising to $2,076,800 thousand. Despite this rebound, the 2022 figure remained below the initial 2018 level, reflecting challenges or shifts within this segment over the period.
- Total Net Sales
- Total net sales showed moderate fluctuations, initially increasing from $4,481,700 thousand in 2018 to a peak of $4,591,000 thousand in 2019, followed by a decline to $4,186,000 thousand in 2020. The total sales stabilized somewhat in 2021 at $4,194,100 thousand before significantly increasing to $4,947,900 thousand in 2022. The substantial growth in 2022 suggests an overall positive development in the company’s combined segment performance, primarily driven by gains in the Utility Solutions segment.
- Overall Insights
- The data reveals a divergence in performance between the two segments. Utility Solutions consistently expanded its sales base, contributing increasingly to the total revenue. In contrast, Electrical Solutions faced declining sales for the majority of the period, with only recent improvement. The rebound in total net sales in 2022 was largely attributable to the strong performance of Utility Solutions, which compensated for the lagging Electrical Solutions segment. This pattern suggests a potential strategic emphasis or market advantage in the Utility Solutions area going forward.
Operating income
Hubbell Inc., operating income by reportable segment
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Utility Solutions | 438,200) | 284,100) | 298,200) | 276,500) | 236,100) |
| Electrical Solutions | 270,900) | 248,200) | 234,800) | 320,100) | 320,800) |
| 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).
The operating income data for the reportable segments over the observed five-year period reveals notable trends and shifts. An analysis of the Utility Solutions segment shows a general positive trajectory in operating income, starting at 236.1 million US dollars at the end of 2018 and increasing steadily to a notable peak of 438.2 million US dollars by the end of 2022. This marked rise, particularly the substantial jump from 284.1 million in 2021 to 438.2 million in 2022, suggests strong performance and potential growth opportunities realized most recently.
Conversely, the Electrical Solutions segment exhibits a different pattern. Its operating income was relatively stable between 2018 and 2019, around 320 million US dollars, yet experienced a significant decline in 2020, dropping to 234.8 million US dollars. The segment showed some recovery in 2021 and 2022, with income increasing to 248.2 million and 270.9 million US dollars, respectively. Despite this rebound, the segment had not regained the earlier levels seen in 2018 and 2019 by the end of 2022.
When considering the total operating income across both segments, the overall trend mirrors the trajectory of the Utility Solutions segment, given its increasing share. Total operating income rose from 556.9 million US dollars in 2018 to a peak of 596.6 million in 2019, then declined over the next two years to around 532 million US dollars, before rising sharply to 709.1 million US dollars in 2022. This increase in 2022 represents the highest value recorded in the period and reflects the strong growth predominantly driven by the Utility Solutions segment.
- Utility Solutions Segment
- Steady growth in operating income from 2018 through 2020.
- Minor decline in 2021 followed by a significant increase in 2022.
- Overall substantial improvement over the five-year period.
- Electrical Solutions Segment
- Stable earnings in 2018 and 2019.
- Sharp decrease in 2020.
- Partial recovery in 2021 and 2022 but remaining below early period values.
- Total Operating Income
- Increase from 2018 to 2019 followed by a decline through 2020 and 2021.
- Significant rebound in 2022, reaching the highest point within the period.
- Growth pattern largely influenced by the strong upward trend in Utility Solutions.
Assets
Hubbell Inc., assets by reportable segment
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Utility Solutions | 3,011,900) | 2,823,800) | 2,563,800) | 2,401,300) | 2,395,800) |
| Electrical Solutions | 1,972,900) | 2,142,100) | 2,233,000) | 2,197,800) | 2,228,500) |
| General Corporate | 417,800) | 315,600) | 288,300) | 303,900) | 247,800) |
| Total | 5,402,600) | 5,281,500) | 5,085,100) | 4,903,000) | 4,872,100) |
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 segment assets data reveals distinct trends across the different business units over the five-year period from 2018 to 2022.
- Utility Solutions
- The assets in this segment show a consistent year-over-year increase throughout the period. Starting at approximately 2.40 billion US dollars in 2018, the assets grew steadily to reach around 3.01 billion by the end of 2022. This reflects a sustained expansion or increased investment in this segment, indicating its growing contribution to the overall asset base.
- Electrical Solutions
- In contrast, the Electrical Solutions segment exhibits a generally declining trend over the same timeframe. Asset values decreased from about 2.23 billion US dollars in 2018 to approximately 1.97 billion in 2022. This gradual reduction suggests either divestitures, asset optimization, or a strategic shift away from this segment.
- General Corporate
- General Corporate assets show some fluctuations with an overall upward trajectory. From roughly 248 million US dollars in 2018, assets increased to about 418 million by 2022, with minor variations year to year. This growth may reflect increased corporate-level investments or assets such as goodwill or other corporate-level holdings.
- Total Assets
- The aggregate assets across all segments show a steady increase each year, rising from approximately 4.87 billion US dollars in 2018 to over 5.40 billion in 2022. This overall growth is primarily driven by the expansion in the Utility Solutions segment and, to a lesser extent, the increase in General Corporate assets, which more than offset the decline seen in Electrical Solutions.
In summary, the reported data highlights a strategic emphasis on growth within Utility Solutions, a contraction in Electrical Solutions assets, and steady increases in General Corporate asset holdings, resulting in overall asset growth for the company from 2018 through 2022.
Capital expenditures
Hubbell Inc., capital expenditures by reportable segment
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Utility Solutions | 86,900) | 55,800) | 53,100) | 45,400) | 36,800) |
| Electrical Solutions | 39,500) | 31,100) | 34,800) | 45,800) | 53,000) |
| General Corporate | 2,900) | 3,300) | 500) | 2,700) | 6,400) |
| Total | 129,300) | 90,200) | 88,400) | 93,900) | 96,200) |
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 annual reportable segment capital expenditures exhibit distinct trends across the three segments over the five-year period ending December 31, 2022.
- Utility Solutions
- Capital expenditures in this segment show a generally increasing trend. Starting at $36,800 thousand in 2018, the expenditures rose steadily each year, reaching $86,900 thousand in 2022. The most notable increase occurred between 2021 and 2022, where capital spending grew by approximately 56%.
- Electrical Solutions
- This segment displays a downward trend in capital expenditures from 2018 through 2021, declining from $53,000 thousand to $31,100 thousand. In 2022, there is a moderate rebound to $39,500 thousand, indicating a potential renewed investment focus or strategic adjustment after several years of decline.
- General Corporate
- Capital expenditures for the General Corporate segment fluctuate with no clear directional trend. The expenditures decreased sharply from $6,400 thousand in 2018 to $500 thousand in 2020, followed by an increase to $3,300 thousand in 2021, and a slight decrease again to $2,900 thousand in 2022. These variations suggest a variable spending pattern possibly related to specific corporate initiatives or administrative needs rather than consistent capital investment.
- Total Capital Expenditures
- The total capital expenditures reflect the combined effects of the segment trends. After a decline from $96,200 thousand in 2018 to $88,400 thousand in 2020, total expenditures stabilized around the $90,000 thousand mark through 2021. A significant increase occurred in 2022, with total capital spending jumping to $129,300 thousand. This spike is primarily driven by the substantial increase in the Utility Solutions segment, overshadowing the more moderate growth in Electrical Solutions and the fluctuations in General Corporate expenditures.
Overall, the data indicate a strategic reallocation of capital resources with increasing emphasis on the Utility Solutions segment, a reduction and partial recovery in Electrical Solutions, and variable but comparatively minor changes in General Corporate spending. The total capital expenditures trend suggests a renewed growth phase in investment activities in 2022.
Depreciation and amortization
Hubbell Inc., depreciation and amortization by reportable segment
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Utility Solutions | 99,200) | 108,500) | 92,500) | 86,000) | 87,000) |
| Electrical Solutions | 49,300) | 40,600) | 65,100) | 65,000) | 61,400) |
| Total | 148,500) | 149,100) | 157,600) | 151,000) | 148,400) |
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).
- Utility Solutions Segment
- The depreciation and amortization expense for the Utility Solutions segment exhibited a generally increasing trend from 2018 through 2021, rising from $87,000 thousand in 2018 to a peak of $108,500 thousand in 2021. However, this was followed by a decline in 2022, with the expense decreasing to $99,200 thousand. The initial upward movement may indicate increased capital investments or asset base expansion in prior years, while the subsequent reduction could suggest a slowdown in asset additions, changes in asset lives, or disposals.
- Electrical Solutions Segment
- This segment demonstrated more variability over the period. Depreciation and amortization expense increased slightly from $61,400 thousand in 2018 to $65,100 thousand in 2020. Thereafter, a significant decline occurred, falling sharply to $40,600 thousand in 2021, before partially recovering to $49,300 thousand in 2022. This volatility may reflect changes in the segment's asset base, such as asset impairments, disposals, or adjustments in depreciation policies during 2021, with some stabilization seen in 2022.
- Total Depreciation and Amortization
- The aggregate depreciation and amortization expense maintained relatively stable levels over the five-year period, ranging narrowly between approximately $148,400 thousand and $157,600 thousand. The total expense peaked in 2020 and then exhibited a moderate decline in the subsequent years, aligning with the trends observed in the component segments. The stability in total suggests that the fluctuations within segments partially offset one another, indicating balanced overall asset management across the company.