Name: LyondellBasell Industries N.V. (NYSE:LYB) | Common-Size Income Statement
Creator: Stock Analysis on Net

Common-Size Income Statement

LyondellBasell Industries N.V., common-size consolidated income statement

12 months ended:	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Trade	97.75%	97.74%	97.50%	97.54%	98.04%
Related parties	2.25%	2.26%	2.50%	2.46%	1.96%
Sales and other operating revenues	100.00%	100.00%	100.00%	100.00%	100.00%
Cost of sales	-83.40%	-81.37%	-79.47%	-78.46%	-85.38%
Gross profit	16.60%	18.63%	20.53%	21.54%	14.62%
Selling, general and administrative expenses	-2.89%	-2.49%	-2.85%	-2.53%	-1.77%
Research and development expenses	-0.29%	-0.31%	-0.34%	-0.31%	-0.28%
Operating income	13.41%	15.83%	17.34%	18.70%	12.58%
Interest expense	-0.92%	-1.42%	-1.10%	-0.95%	-0.77%
Interest income	0.12%	0.07%	0.06%	0.10%	0.07%
Other income, net	0.27%	0.52%	0.38%	0.08%	0.08%
Income from continuing operations before equity investments and income taxes	12.88%	15.00%	16.67%	17.93%	11.96%
Income from equity investments	0.74%	0.93%	1.26%	1.04%	0.56%
Income from continuing operations before income taxes	13.62%	15.93%	17.93%	18.97%	12.52%
Provision for income taxes	-1.57%	-1.73%	-4.75%	-5.28%	-3.38%
Income from continuing operations	12.04%	14.19%	13.18%	13.68%	9.15%
Loss from discontinued operations, net of tax	-0.02%	-0.05%	-0.03%	-0.02%	-0.01%
Net income	12.02%	14.14%	13.15%	13.67%	9.14%
Net (income) loss attributable to non-controlling interests	-0.01%	0.01%	0.00%	0.01%	0.01%
Net income attributable to the Company shareholders	12.02%	14.15%	13.14%	13.67%	9.15%

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

The financial performance from 2014 to 2018 is characterized by a significant spike in profitability in 2015, followed by a gradual contraction in operating margins, although net income remained relatively resilient until 2018.

Revenue Composition: Revenue streams remained highly stable throughout the period. Trade sales consistently accounted for approximately 97.5% to 98% of total sales and other operating revenues, while related party transactions contributed a small and steady portion, fluctuating between 1.96% and 2.50%.
Gross Profitability and Cost Management: Gross profit experienced a sharp increase from 14.62% in 2014 to a peak of 21.54% in 2015, driven by a reduction in the cost of sales from 85.38% to 78.46%. However, a subsequent upward trend in the cost of sales is observed from 2016 to 2018, reaching 83.40%, which compressed the gross profit margin back down to 16.60% by the end of the period.
Operating Efficiency: Operating income mirrored the trend of gross profit, peaking at 18.70% in 2015 and declining to 13.41% by 2018. This decline was compounded by a general increase in selling, general, and administrative expenses, which rose from 1.77% in 2014 to 2.89% in 2018. Research and development expenses remained marginal and stable, hovering around 0.30% of revenue.
Non-Operating Items and Taxation: Interest expenses showed volatility, increasing from 0.77% in 2014 to a peak of 1.42% in 2017 before retreating to 0.92% in 2018. A notable trend is observed in the provision for income taxes, which decreased significantly from a peak of 5.28% in 2015 to 1.57% in 2018, effectively cushioning the impact of falling operating margins on the bottom line.
Net Income Trends: Net income attributable to shareholders grew from 9.15% in 2014 to a peak of 14.15% in 2017. The fact that net income peaked in 2017 despite operating income peaking in 2015 suggests that lower tax provisions and non-operating adjustments played a critical role in sustaining net profitability. A downturn occurred in 2018, with net income falling to 12.02%.

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