Nike Inc. (NYSE:NKE)

Revenue Trends

Revenues in the North America segment exhibited moderate fluctuations over the analyzed years. Initially, revenues decreased from $15,902 million in 2019 to $14,484 million in 2020. This was followed by a steady upward trajectory, reaching a peak of $21,608 million in 2023 before a slight decline to $21,396 million in 2024.

Earnings Before Interest and Taxes (EBIT) Trends

EBIT demonstrated a similar pattern of recovery and growth. After declining from $3,925 million in 2019 to $2,899 million in 2020, EBIT rebounded significantly in 2021 to $5,089 million. Subsequent years showed continued incremental improvements, culminating in $5,822 million in 2024.

Segment Profit Margin Patterns

The segment profit margin percentage displayed considerable variation across the periods. It dropped from 24.68% in 2019 to 20.02% in 2020, indicating reduced profitability. Thereafter, the margin improved markedly to 29.62% in 2021, then slightly decreased and stabilized around the mid-20s, recording 27.21% in 2024. This suggests effective cost management or pricing strategies post-2020, albeit with some volatility.

Overall Insights

The data reveals a downturn in 2020, likely attributable to external or market-specific challenges, followed by a robust recovery period through 2021 and continuing into 2024. Revenues and EBIT both exceeded pre-2020 levels, while profit margins improved significantly after the initial decline, indicating enhanced operational efficiency or favorable market conditions within the North America segment.

Earnings Before Interest and Taxes (EBIT)

The EBIT values demonstrate a fluctuating yet generally positive growth trend over the six-year period. Starting at $1,995 million in 2019, there was a significant drop in 2020 to $1,541 million, likely reflecting exceptional challenges during that year. However, the EBIT rebounded strongly in 2021 to $2,435 million and continued increasing to a peak of $3,531 million in 2023. In 2024, EBIT slightly decreased to $3,388 million but remained substantially higher than the initial years, indicating strong profitability and resilience.

Revenues

Revenues exhibited a consistent upward trajectory over the analyzed timeframe. The revenue figure started at $9,812 million in 2019 and experienced a minor decline to $9,347 million in 2020. From 2021 onwards, revenues rose steadily each year, reaching $13,607 million in 2024. This growth trend suggests expanding sales and market presence within the EMEA segment.

Segment Profit Margin (%)

The segment profit margin showed notable variability over the years, reflecting fluctuations in operational efficiency or cost structures. In 2019, the margin was 20.33%, dropping to 16.49% in 2020, which aligns with the dip in EBIT and revenue in the same year. A recovery followed in 2021, with the margin increasing to 21.26%, and a significant rise occurred in 2022 to 26.39%. The margin remained relatively stable in 2023 at 26.32% before a slight decrease to 24.9% in 2024. Overall, margins improved considerably post-2020 and indicate enhanced profitability relative to revenues.

Summary

The data reveals that the EMEA segment experienced a challenging year in 2020, with declines in EBIT, revenues, and profit margins. However, from 2021 forward, there has been a robust recovery characterized by steady revenue growth, increased EBIT with some fluctuations, and improved profit margins. Despite a modest EBIT contraction and margin decline in 2024 compared to the previous year, the overall financial performance across the period demonstrates effective resilience and operational improvement within the segment.

Earnings Before Interest and Taxes (EBIT)

The EBIT for the segment demonstrated an initial upward trend from 2019 through 2021, increasing from 2,376 million US dollars in 2019 to a peak of 3,243 million US dollars in 2021. However, following this peak, the EBIT declined substantially in 2022 to 2,365 million US dollars and remained relatively stable with minor fluctuations through 2023 and 2024, ending at 2,309 million US dollars. This pattern indicates a significant recovery and growth period culminating in 2021, followed by a contraction and stabilization phase.

Revenues

Revenue figures exhibit a consistent overall growth trend with some variability. Starting at 6,208 million US dollars in 2019, revenues increased steadily each year, reaching a maximum value of 8,290 million US dollars in 2021. In the subsequent years, revenues experienced a decline in 2022 and 2023, falling to 7,547 million and 7,248 million US dollars, respectively, before rising again to 7,545 million US dollars in 2024. Despite these fluctuations, the general trajectory over the six-year period shows revenue growth, with 2021 as the peak year.

Segment Profit Margin

The segment profit margin percentage followed a trend that correlates with both EBIT and revenue changes. It started relatively high at 38.27% in 2019, slightly decreased to 37.28% in 2020, then improved to the year of highest margin at 39.12% in 2021. Post-2021, the margin contracted notably, dropping to 31.34% in 2022. Subsequent years saw marginal stabilization but continued a slow downward trend, with margins recorded at 31.5% in 2023 and 30.6% in 2024. This downward shift indicates rising cost pressures or margin compression following the peak period.

Earnings Before Interest and Taxes (EBIT)

The EBIT displayed a decline from 1,323 million USD in 2019 to 1,184 million USD in 2020, reflecting a contraction of approximately 10.5%. Subsequently, the EBIT showed a robust recovery and upward trajectory, reaching a peak of 1,932 million USD in 2023. In 2024, EBIT slightly decreased to 1,885 million USD, still remaining substantially higher than the early-year figures. This trend suggests initial challenges followed by a strong rebound and stabilization near peak levels.

Revenues

The revenues exhibited a minor dip from 5,254 million USD in 2019 to 5,028 million USD in 2020, amounting to a 4.3% decrease. From 2020 onwards, there was a consistent year-over-year increase in revenues, peaking at 6,729 million USD in 2024. This growth represents an overall expansion of roughly 33.8% over the six-year period, signaling solid market penetration and demand growth in the segment.

Segment Profit Margin

The segment profit margin decreased from 25.18% in 2019 to 23.55% in 2020. Beginning in 2021, there was a notable improvement, with the margin rising to 28.64%, continuing to increase to 31.84% in 2022. However, after this peak, the margin declined to 30.04% in 2023 and further to 28.01% in 2024. This pattern indicates initial margin compression followed by enhanced profitability and efficiency, succeeded by a modest decline, potentially due to increased costs or competitive pressures.

Overall Analysis

Over the period observed, the segment experienced a downturn in both EBIT and revenues during 2020, likely influenced by external adverse conditions. The subsequent years illustrate a resilient recovery with strong revenue growth and improved profitability up to 2022. The slight reduction in EBIT and profit margin after 2022 suggests emerging challenges impacting operational efficiency or pricing power but does not negate the overall positive performance trend established post-2020.

Earnings before interest and taxes (EBIT)

The EBIT figures demonstrate a fluctuating trend over the analyzed periods. From May 31, 2019 to May 31, 2020, there was a slight decline from 303 million USD to 297 million USD. A significant increase is observed in the following years, with EBIT rising sharply to 543 million USD in 2021 and further increasing to a peak of 676 million USD in 2023. However, in the most recent period ending May 31, 2024, EBIT decreased to 474 million USD, indicating some volatility in operating profitability.

Revenues

Revenue figures show variability with an initial dip from 1,906 million USD in 2019 to 1,846 million USD in 2020. This was followed by consistent growth, reaching a peak of 2,427 million USD in 2023. In the latest period, revenues decreased significantly to 2,082 million USD, reflecting a notable contraction after several years of growth.

Segment profit margin

The segment profit margin percentage aligns closely with EBIT and revenue trends. It remained relatively stable around 16% in 2019 and 2020 but experienced a marked improvement in 2021 to 24.63%, followed by further gains to a peak of 28.52% in 2022. The margin then slightly decreased to 27.85% in 2023 and declined more notably to 22.77% in 2024. This indicates that while profitability improved substantially between 2021 and 2023, it faced some compression in the most recent year.

Overall Trends and Insights

The data indicate a period of recovery and growth post-2020 with rising revenues and profitability until 2023. The declines in EBIT, revenue, and profit margin in the 2024 period suggest emerging challenges impacting the segment's financial performance. The higher profit margins during the peak years suggest improved operational efficiency or favorable pricing, but the latest declines could indicate increased costs, competitive pressures, or other market factors affecting profitability.

Earnings before interest and taxes (EBIT)

EBIT demonstrated notable fluctuations over the six-year period. It decreased from 3,925 million USD in 2019 to a low of 2,899 million USD in 2020. Subsequently, a strong rebound was observed with EBIT increasing sharply to 5,089 million USD in 2021, maintaining an upward trend through 2024, reaching 5,822 million USD. This suggests improved operational profitability and effective cost management after the decline in 2020.

Property, plant and equipment, net (PP&E)

The net value of PP&E initially decreased from 814 million USD in 2019 to 617 million USD in 2021, indicating possible asset disposals or depreciation outpacing capital expenditures during this period. After 2021, a recovery trend is apparent, with net PP&E rising to 794 million USD in 2023 before slightly decreasing to 744 million USD in 2024. This pattern may reflect renewed investment in fixed assets after a period of consolidation.

Segment Return on Assets (ROA)

Segment ROA exhibited a high degree of variability but remained at elevated levels throughout the period. Starting at 482.19% in 2019, it dipped to 449.46% in 2020, coinciding with the EBIT decline. A significant increase followed, peaking at 824.8% in 2021 and sustaining elevated figures above 680% through 2024. This suggests highly efficient asset utilization and profitability within the North America segment, despite fluctuations in asset base and earnings.

Earnings before interest and taxes (EBIT)

The EBIT for the segment demonstrated notable fluctuations over the analyzed period. Starting at $1,995 million in 2019, it declined by approximately 22.8% to $1,541 million in 2020. This decrease likely reflects external challenges impacting the business environment. However, the segment experienced a substantial recovery and growth in the following years, reaching a peak of $3,531 million in 2023, marking a cumulative increase of approximately 129% from the 2020 low. In 2024, EBIT slightly decreased to $3,388 million, indicating a moderate pullback but maintaining a strong performance level relative to previous years.

Property, Plant and Equipment, Net

The net value of property, plant, and equipment exhibited moderate variability through the years. The asset base declined from $929 million in 2019 to $885 million in 2020, consistent with the downturn observed in EBIT. Subsequently, asset value gradually increased, reaching $1,089 million by 2024. This trend suggests continued investments and asset growth, with a compound increase of roughly 23% over the six-year period, indicating ongoing capital expenditure or capitalization amid expanding operations.

Segment Return on Assets (ROA)

The segment ROA showed significant volatility, reflecting fluctuations in both profitability and asset utilization. It began at a robust 214.75% in 2019, dropped to 174.12% in 2020, in line with declines in EBIT, then surged to a peak of 357.93% in 2022, suggesting improved operational efficiency or profitability relative to assets. The ROA remained elevated in 2023 at 349.95%, before decreasing to 311.11% in 2024. Despite this dip, ROA figures in the latest years remain substantially higher than the initial years, indicating enhanced asset productivity and profitability within the segment.

Overall Analysis

The data reflects a segment that experienced a challenging period in 2020, likely influenced by macroeconomic or industry-specific factors, followed by a strong recovery and growth phase through 2022 and 2023. Profits before interest and taxes rebounded robustly, supported by increased asset investment, suggesting strategic expansion or modernization efforts. The elevated ROA in recent years indicates improved performance in asset utilization and profitability. Some moderation in EBIT and ROA in 2024 may signal a stabilization phase after rapid growth or emerging pressures requiring close monitoring. Overall, the segment exhibits resilience with positive momentum in profitability and asset management.

Earnings before interest and taxes (EBIT)

The EBIT values show variability over the six-year period. Starting at 2376 million USD in 2019, there is a slight increase in 2020, reaching 2490 million USD. A significant peak occurs in 2021 with EBIT reaching 3243 million USD. This is followed by a decline in the subsequent years, decreasing to 2365 million USD in 2022 and further down to 2283 million USD in 2023. In 2024, EBIT shows a modest recovery, increasing slightly to 2309 million USD. Overall, the EBIT trend indicates a strong performance in 2021, with weakening profitability in the following two years before a slight rebound.

Property, Plant and Equipment, Net (PP&E)

The net value of property, plant, and equipment presents fluctuations with an initial decrease from 237 million USD in 2019 to 214 million USD in 2020. This is followed by an upward trend, peaking at 303 million USD in 2022. After 2022, PP&E values decline to 292 million USD in 2023 and then more sharply to 258 million USD in 2024. These variations suggest periods of asset expansion followed by asset reductions or disposals in the later years.

Segment Return on Assets (ROA)

Segment ROA exhibits strong performance throughout the period, with values consistently above 700%. It rises from 1002.53% in 2019 to 1163.55% in 2020, indicating improved asset efficiency. Although there is a slight decrease to 1126.04% in 2021, the ratio remains high. There is a notable decline in 2022 and 2023, with ROA dropping to approximately 780%, reflecting reduced profitability relative to assets. However, in 2024, ROA improves again to 894.96%, signifying a recovery in asset utilization efficiency. This pattern suggests that while the segment remains highly profitable relative to its asset base, there was a temporary dip in asset efficiency in the middle years.

Earnings before Interest and Taxes (EBIT)

The EBIT values display a fluctuating but generally upward trend over the six-year period. Starting at 1,323 million USD in 2019, there was a decline in 2020 to 1,184 million USD, which could indicate a temporary operational or market challenge. However, from 2020 onwards, EBIT recovered and increased significantly, reaching a peak of 1,932 million USD in 2023. The most recent year, 2024, shows a slight decrease to 1,885 million USD compared to the previous year, suggesting some stabilization or potential emerging pressures on profitability.

Property, Plant and Equipment, Net

The net value of property, plant, and equipment exhibits a gradual declining trend from 2019 through 2022, dropping from 326 million USD to 274 million USD. This downward movement may reflect asset disposals, depreciation exceeding capital expenditures, or a strategic reduction in fixed assets. However, from 2022 onwards, there is a modest increase, with values rising to 282 million USD by 2024, which might indicate reinvestment or asset acquisitions in the recent years.

Segment Return on Assets (ROA)

The segment ROA shows a strong and consistent upward trajectory from 2019 to 2023, beginning at approximately 405.83% and reaching its highest point of 692.47% in 2023. This significant increase reflects enhanced efficiency and profitability relative to the assets employed. In 2024, there is a slight decline to 668.44%, which, while lower than the peak, remains considerably higher than the initial years. Overall, the ROA indicates improved asset utilization and operational effectiveness over the evaluated timeframe.

The reportable segment data reveals significant fluctuations and trends across the six-year period ending May 31, 2024. A detailed analysis follows.

Earnings before interest and taxes (EBIT)

The EBIT values exhibit an initial slight decline from 303 million US dollars in 2019 to 297 million in 2020. Subsequently, there is a marked increase to 543 million in 2021, peaking further at 676 million in 2023. However, there is a noticeable decline in the final year, dropping to 474 million in 2024. This suggests an overall positive performance trend with a peak in the penultimate year, followed by a contraction in the most recent period.

Property, plant and equipment, net (PP&E)

There is a consistent downward trend in net PP&E over the six years. Starting at 100 million US dollars in 2019, the value diminishes steadily each year, reaching 27 million by 2024. This indicates a progressive reduction in fixed asset investment or possible asset disposals, which may reflect strategic shifts in the segment's capital structure or operational footprint.

Segment Return on Assets (ROA)

The segment ROA demonstrates a remarkable upward trajectory, escalating from 303% in 2019 to an exceptionally high 1778.95% in 2023 before slightly receding to 1755.56% in 2024. This drastic increase in ROA is likely influenced by the simultaneous reduction in asset base alongside an increase in EBIT. The extraordinary magnitudes suggest that the segment is generating substantially higher returns per unit of asset over time, highlighting enhanced operational efficiency or profitability relative to the asset base.

In summary, the data portrays a segment that has successfully increased profitability over the reported years despite a diminishing asset base. The increase in EBIT alongside decreasing net assets leads to an exceptional rise in segment ROA, indicating improved asset utilization or margin expansion. Nonetheless, the decline in EBIT in the latest year combined with the continued decrease in PP&E may warrant further scrutiny to assess sustainability and strategic implications.

The North America segment exhibits notable trends in both revenue generation and asset management over the evaluated period from May 31, 2019, to May 31, 2024.

Revenues

Revenues demonstrate overall growth with a compound pattern. Starting at 15,902 million USD in 2019, revenues decreased in 2020 to 14,484 million USD, likely reflecting an external impact during this period. From 2020 onwards, revenues consistently increased, peaking at 21,608 million USD in 2023 before slightly declining to 21,396 million USD in 2024. Despite the slight dip in the latest year, the trend reflects strong recovery and expansion compared to the initial years.

Property, Plant and Equipment, Net

The value of property, plant, and equipment reveals some fluctuation with an initial decline from 814 million USD in 2019 to a low of 617 million USD in 2021. A gradual increase followed, reaching 794 million USD in 2023 before slightly reducing to 744 million USD in 2024. This pattern suggests some divestitures or underinvestment initially, followed by reinvestment or asset accumulation in more recent years.

Segment Asset Turnover

The segment asset turnover ratio shows an upward trend, indicating improving efficiency in the use of assets to generate revenues. It rose from 19.54 in 2019 to a peak of 28.76 in 2024, with minor variations. This consistent improvement suggests enhanced operational performance or better asset utilization across the period.

In summary, the segment has demonstrated recovery and growth in revenue after a dip in 2020, coupled with a strategic adjustment in the asset base. Efficiency in asset utilization has shown a positive trajectory, underscoring effective management in driving revenue over the given timeframe.

The financial data for the Europe, Middle East & Africa (EMEA) segment reveals several notable trends over the six-year period ending May 31, 2024. Revenues have demonstrated a generally upward trajectory, increasing from $9,812 million in 2019 to $13,607 million in 2024. This represents a growth of approximately 38.7% over the period. Despite a slight dip in 2020, likely reflective of external challenges during that year, revenue figures have recovered robustly each subsequent year, reaching their highest level in the most recent reporting period.

Regarding investments in property, plant, and equipment (PP&E), net values display some fluctuations but overall an increasing trend is observed. The net PP&E value decreased slightly from $929 million in 2019 to $885 million in 2020, then rebounded and steadily increased reaching $1,089 million in 2024. This overall upward movement suggests strategic reinvestment or expansion in physical assets within the segment, supporting operational capacity or efficiency.

The segment asset turnover ratio, which measures the efficiency of asset utilization in generating revenues, shows variability throughout the years. It remained steady at 10.56 in both 2019 and 2020, then rose significantly to 11.67 in 2021 and peaked at 13.56 in 2022. The ratio slightly decreased after that, ending at 12.49 in 2024. Although there is a recent decline, the ratio values from 2021 onwards indicate an overall improvement in asset efficiency compared to the initial years.

Revenues

Consistent growth from 2019 to 2024 with a temporary decline in 2020; highest revenue recorded in 2024.

Property, Plant and Equipment (Net)

Initial decline in 2020 followed by steady increases, reaching the highest net value in 2024, indicating asset reinvestment.

Segment Asset Turnover Ratio

Stable in early years, significant improvement post-2020, peaking in 2022; slight decrease thereafter but overall elevated compared to starting values.

Analysis of the annual financial data for the Greater China segment reveals several noteworthy trends over the six-year period ending May 31, 2024.

Revenues

Revenues exhibit a general upward trend from 2019 through 2021, rising from $6,208 million to $8,290 million. However, following this peak, there is a decline in revenue in 2022 and 2023 to $7,547 million and $7,248 million respectively, before a moderate recovery to $7,545 million in 2024. This pattern suggests some volatility in sales performance, with the segment facing challenges after 2021 but managing partial recuperation by the latest period.

Property, Plant, and Equipment, Net

The net value of property, plant, and equipment demonstrates fluctuations throughout the timeframe. Initial decline is observed from $237 million in 2019 to $214 million in 2020, followed by growth peaking at $303 million in 2022. Afterward, there is a decline to $292 million in 2023 and a further decrease to $258 million in 2024. This pattern may reflect capital expenditure cycles, asset disposals, or depreciation impacts aligned with operational adjustments.

Segment Asset Turnover Ratio

The segment asset turnover ratio, which indicates revenue generated per unit of asset, varies notably across the periods. It rises sharply from 26.19 in 2019 to a peak of 31.21 in 2020, then gradually declines to 24.91 in 2022 and remains relatively stable in 2023 at 24.82. The ratio improves again to 29.24 in 2024. These changes suggest fluctuating efficiency in utilizing assets to generate revenue, with a significant efficiency gain in 2020, followed by a downturn, and a strong recovery in the latest year.

Revenue Trends

Revenues in the Asia Pacific & Latin America segment display an overall upward trend from May 31, 2019, through May 31, 2024. Starting at $5,254 million in 2019, there is a modest decline to $5,028 million in 2020, likely reflecting external disruptions. From 2021 onwards, revenue consistently increases, reaching $6,729 million by 2024, demonstrating a steady recovery and growth momentum over the period.

Property, Plant and Equipment (Net)

The net value of property, plant, and equipment exhibits a gradual decline and stabilization pattern. It decreases from $326 million in 2019 to a low point of $274 million in 2022. Afterwards, it shows slight increments, recording $279 million and $282 million in 2023 and 2024 respectively, suggesting limited new investment or asset replacement and a relatively stable asset base in recent years.

Segment Asset Turnover Ratio

The segment asset turnover ratio demonstrates a significant and consistent increase across the years. Beginning at 16.12 in 2019, the ratio gradually climbs each year, surpassing 20 in 2022 and reaching 23.86 by 2024. This indicates improving efficiency in using segment assets to generate sales, reflecting enhanced operational productivity and possibly better management of asset utilization over time.

Summary of Insights

The data overall indicates a resilient and expanding segment in terms of revenue generation, with an improving ability to turn assets into sales. The decline and subsequent stabilization of property, plant, and equipment values may reflect strategic asset management practices, possibly focusing on optimizing existing resources rather than expanding the asset base substantially. The increasing asset turnover ratio aligns with the revenue growth, underscoring an effective use of assets to support growing sales volumes in the Asia Pacific & Latin America markets.

Revenues

The revenues exhibit a fluctuating trend over the six-year period. Beginning at $1,906 million in 2019, revenues decreased slightly to $1,846 million in 2020. This was followed by a notable increase to $2,205 million in 2021 and a steady upward trend reaching $2,427 million in 2023. However, there is a decline observed in 2024, with revenues falling to $2,082 million. Overall, the segment experienced growth after 2020 but faced a reversal in the most recent year.

Property, Plant and Equipment, Net

There is a clear downward trend in the net value of property, plant, and equipment. The figure decreased consistently from $100 million in 2019 to $27 million in 2024. This steady reduction suggests ongoing asset disposals, depreciation, or a strategic shift away from capital-intensive investments within the segment during this timeframe.

Segment Asset Turnover

A significant improvement is observed in the segment asset turnover ratio, increasing from 19.06 in 2019 to 77.11 in 2024. This indicates a progressively enhanced efficiency in utilizing assets to generate revenues. The ratio increased steadily each year, reflecting effective asset management or operational improvements that allow the segment to generate higher sales per dollar of asset deployed.

Additions to property, plant and equipment

The additions to property, plant, and equipment demonstrated variability over the examined years. Initially, values decreased from 117 million US dollars in 2019 to 98 million in 2021, indicating a reduction in capital investments during that period. This trend was followed by a significant rise to 283 million in 2023, the highest point observed, suggesting a notable increase in asset acquisition or upgrades. However, in 2024, this figure declined sharply to 102 million, indicating a partial retreat in capital expenditures from the prior peak.

Depreciation

Depreciation expenses showed a gradual decline from 149 million US dollars in 2019 to a low of 124 million in 2022. Thereafter, depreciation slightly increased, reaching 152 million in 2024, the highest value within the period. This increase may reflect changes in asset base or depreciation policies during the latter years.

Segment capital expenditures to depreciation ratio

This ratio displayed fluctuations reflecting the relationship between investments in property, plant and equipment relative to the depreciation charge. From 2019 through 2021, the ratio remained relatively stable, fluctuating modestly around 0.74 to 0.79. A marked increase occurred in 2022 and 2023, peaking at 2.21 in 2023, indicating capital expenditures significantly outpaced depreciation. Conversely, the ratio decreased to 0.67 in 2024, signifying capital spending fell below depreciation levels during that year.

The financial data for the Europe, Middle East & Africa (EMEA) segment over the period from May 31, 2019, to May 31, 2024, reveals several noteworthy trends related to capital investment and asset depreciation.

Additions to Property, Plant, and Equipment

There is a clear fluctuation in additions to property, plant, and equipment throughout the analyzed years. The value started at $233 million in 2019, followed by a significant decline to $139 million in 2020. Subsequently, a gradual increase occurred, reaching $153 million in 2021, $197 million in 2022, and peaking at $215 million in 2023. In 2024, there was a slight decrease to $206 million, but the level remained substantially higher compared to the low point in 2020.

Depreciation

Depreciation expenses presented a rising trend from 2019 to 2021, beginning at $111 million and increasing steadily to $136 million by 2021. In 2022, depreciation slightly decreased to $134 million and further declined to $120 million in 2023. However, in 2024, depreciation sharply increased again to $146 million, the highest value recorded during the period.

Segment Capital Expenditures to Depreciation Ratio

The ratio of segment capital expenditures to depreciation started at a high level of 2.1 in 2019, indicating capital spending was more than double the depreciation expense. This ratio then dropped dramatically to 1.05 in 2020, highlighting a year in which capital expenditures approximated depreciation. Following this decline, the ratio recovered gradually to 1.13 in 2021 and rose more substantially to 1.47 in 2022. The upward trend continued to 1.79 in 2023 before tapering to 1.41 in 2024.

Overall, the data reflects a period of reduced investment in fixed assets in 2020, possibly due to external factors impacting expenditure decisions. From 2021 onward, an increasing focus on capital expenditures is evident, with additions generally rising and capital expenditures outpacing depreciation by a growing margin until 2023. The slight moderation in 2024 suggests a potential reassessment of investment levels, despite depreciation expenses reaching their highest value. The fluctuations in the capital expenditure to depreciation ratio indicate a dynamic balance between reinvestment and asset aging over time.

Capital Expenditures and Depreciation Trends

Over the analyzed period from May 31, 2019, to May 31, 2024, capital expenditures in the form of additions to property, plant, and equipment exhibit notable fluctuations. The spending initially decreases from 49 million US dollars in 2019 to 28 million in 2020, followed by a significant increase peaking at 94 million in 2021. Subsequently, the expenditures decline steadily over the next three years, reaching a low of 27 million by 2024.

Depreciation Patterns

Depreciation values show a different pattern, beginning at 50 million US dollars in 2019 and declining over the next three years to a minimum of 41 million in 2022. From this point, depreciation rises again, reaching 56 million by 2024. The general trend indicates a reduction followed by a recovery phase.

Capital Expenditures Relative to Depreciation

The ratio of segment capital expenditures to depreciation fluctuates considerably across the period. It starts slightly below parity at 0.98 in 2019, declines to 0.64 in 2020, then surges to over twice depreciation at 2.04 in 2021. This elevated level is sustained somewhat in 2022 at 1.9 before falling again to near parity in 2023 at 1.04, and finally dropping sharply to 0.48 in 2024. These changes suggest varying investment intensity relative to asset consumption, with particularly aggressive capital investment in the 2021-2022 timeframe, followed by a pronounced reduction in the latest year.

Summary of Observations

The overall data indicate cyclical investment behavior within the segment, with a peak in capital expenditures during 2021, likely signaling expansion or upgrading of asset base at that time. The depreciation trend, reflecting asset aging and consumption, moves inversely for a portion of the period before increasing, possibly due to enhanced asset base or accelerated depreciation policies. The capital-to-depreciation ratio's volatility underscores shifting strategic priorities regarding asset growth versus asset amortization. The notable decline in both capital expenditure and its ratio to depreciation in 2024 may imply a period of consolidation or reduced investment activity.

Additions to property, plant and equipment

The additions to property, plant, and equipment exhibited a generally increasing trend over the six-year period. Starting at $47 million in 2019, the value decreased slightly to $41 million in 2020, likely reflecting reduced capital investment during that year. Subsequently, investment steadily grew each year, rising to $54 million in 2021, $56 million in 2022, followed by more significant increases to $64 million in 2023 and $75 million in 2024. This pattern suggests a commitment to expanding or upgrading assets in the segment, particularly in the more recent years.

Depreciation

Depreciation expenses showed a declining trend from 2019 through 2023, falling from $53 million in 2019 to $42 million in each of 2022 and 2023, indicating either a change in asset base composition or the aging of depreciable assets resulting in lower annual charges. However, in 2024, depreciation increased noticeably to $51 million, which may reflect new asset additions or changes in depreciation policies.

Segment capital expenditures to depreciation ratio

This ratio measures the relationship between capital expenditures and depreciation charges within the segment. The ratio remained constant at 0.89 in both 2019 and 2020, suggesting a balance between asset additions and asset usage costs. From 2021 onward, the ratio increased significantly, peaking at 1.52 in 2023 before slightly declining to 1.47 in 2024. This indicates that capital investments increasingly outpaced depreciation over the recent years, reflecting an expansion phase with growing asset investments relative to asset consumption.

Additions to property, plant and equipment

The additions to property, plant, and equipment show a general declining trend over the six-year period. Starting at 18 million USD in 2019, the value decreased significantly to 12 million USD in 2020, followed by a further drop to 7 million USD in 2021. Subsequently, the additions stabilized at 7 to 9 million USD from 2021 through 2024, indicating a reduction and then consistent lower investment levels in capital assets.

Depreciation

Depreciation expense decreased steadily from 31 million USD in 2019 to 17 million USD by 2024. This decline was gradual with slight fluctuations in 2020 and 2021, where it fell to 25 and 26 million USD respectively, before continuing a downward trend in the subsequent years. This suggests a reduction in the depreciable asset base or changes in the asset mix or estimated useful lives.

Segment capital expenditures to depreciation ratio

The ratio of segment capital expenditures to depreciation initially declined from 0.58 in 2019 to a low of 0.27 in 2021. Afterward, the ratio recovered modestly to 0.41 from 2022 onwards, where it remained stable through 2024. This pattern indicates an initial period of reduced capital expenditure relative to asset depreciation, followed by a consistent, though lower, rate of reinvestment compared to depreciation in the latter years.

Summary of trends

Overall, the data reveals a trend of diminished capital spending alongside declining depreciation expenses, reflecting either asset base reduction or longer asset lifespans. The stable capital expenditures to depreciation ratio from 2022 onward suggests a balance between asset maintenance and replacement, albeit at a lower investment intensity compared to earlier years.