Stryker Corp. (NYSE:SYK)

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Area Asset Turnover: United States

Stryker Corp.; United States; area asset turnover calculation

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Net sales	12,321)	10,455)	10,957)	9,848)	9,059)
Net property, plant and equipment	1,717)	1,645)	1,561)	1,348)	1,102)
Area Activity Ratio
Area asset turnover¹	7.18	6.36	7.02	7.31	8.22

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ 2021 Calculation
Area asset turnover = Net sales ÷ Net property, plant and equipment
= 12,321 ÷ 1,717 = 7.18

Analysis of the United States operations reveals a period of strategic asset expansion coupled with fluctuating revenue growth between 2017 and 2021. While net sales demonstrated a general upward trajectory over the five-year period, the efficiency of asset utilization experienced a period of contraction before showing signs of recovery in the final year.

Net Sales Performance: Revenue in the United States grew from 9,059 million US dollars in 2017 to 12,321 million US dollars by 2021. This growth was consistent until 2020, when a contraction occurred, reducing sales to 10,455 million US dollars. However, a strong recovery was observed in 2021, marking the highest revenue level in the analyzed period.
Asset Base Expansion: Net property, plant, and equipment exhibited a consistent and uninterrupted upward trend, increasing every year from 1,102 million US dollars in 2017 to 1,717 million US dollars in 2021. This represents a steady commitment to increasing physical infrastructure and capacity within the domestic market.
Area Asset Turnover Efficiency: The area asset turnover ratio declined steadily from a peak of 8.22 in 2017 to a low of 6.36 in 2020. This downward trend indicates that the growth in net property, plant, and equipment outpaced the growth in net sales during this interval. The ratio improved to 7.18 in 2021, suggesting that the increased asset base began to generate proportionally higher sales following the 2020 downturn.

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Area Asset Turnover: Europe, Middle East, Africa

Stryker Corp.; Europe, Middle East, Africa; area asset turnover calculation

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Net sales	2,299)	1,818)	1,888)	1,793)	1,567)
Net property, plant and equipment	941)	938)	838)	669)	718)
Area Activity Ratio
Area asset turnover¹	2.44	1.94	2.25	2.68	2.18

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ 2021 Calculation
Area asset turnover = Net sales ÷ Net property, plant and equipment
= 2,299 ÷ 941 = 2.44

The financial performance of the Europe, Middle East, and Africa region from 2017 to 2021 is characterized by a general expansion in revenue and asset base, although efficiency metrics experienced periodic volatility. Net sales demonstrated a robust long-term upward trajectory despite a temporary contraction in 2020, while investments in fixed assets grew steadily over the same period.

Net Sales Growth: Revenue increased from US$ 1,567 million in 2017 to US$ 2,299 million in 2021. A consistent growth pattern was observed between 2017 and 2019, followed by a slight decline to US$ 1,818 million in 2020. The period concluded with a sharp recovery in 2021, representing the highest revenue level in the analyzed timeframe.
Net Property, Plant, and Equipment (PPE) Trends: Fixed assets showed an overall increase, rising from US$ 718 million in 2017 to US$ 941 million in 2021. After a brief decrease in 2018, a period of significant capital investment occurred between 2019 and 2020, with net PPE increasing from US$ 838 million to US$ 938 million before stabilizing in 2021.
Area Asset Turnover Analysis: The asset turnover ratio fluctuated significantly, peaking at 2.68 in 2018. This peak resulted from the simultaneous increase in sales and the reduction of net PPE. A subsequent downward trend was observed, with the ratio reaching a trough of 1.94 in 2020, driven by the combination of stagnant sales and an expanded asset base. Efficiency improved in 2021, with the ratio recovering to 2.44 as revenue growth substantially outpaced the growth of fixed assets.

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Area Asset Turnover: Asia Pacific

Stryker Corp.; Asia Pacific; area asset turnover calculation

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Net sales	1,973)	1,630)	1,617)	1,532)	1,413)
Net property, plant and equipment	76)	91)	95)	96)	107)
Area Activity Ratio
Area asset turnover¹	25.96	17.91	17.02	15.96	13.21

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ 2021 Calculation
Area asset turnover = Net sales ÷ Net property, plant and equipment
= 1,973 ÷ 76 = 25.96

The Asia Pacific region exhibits a strong upward trend in capital efficiency between 2017 and 2021. This is characterized by a simultaneous increase in revenue generation and a reduction in the tangible asset base, leading to a significant expansion of the area asset turnover ratio.

Net Sales Performance: A consistent growth pattern is observed in net sales, which rose from US$ 1,413 million in 2017 to US$ 1,973 million by 2021. While the growth was steady between 2017 and 2020, there was a marked acceleration in 2021, where sales increased by approximately 20.7% over the previous year.
Net Property, Plant and Equipment (PP&E) Trend: Conversely, net PP&E demonstrated a continuous downward trend throughout the five-year period. Assets decreased from US$ 107 million in 2017 to US$ 76 million in 2021, representing a total reduction of approximately 28.9%. This indicates a lean approach to physical infrastructure or a shift toward more asset-light operations in the region.
Area Asset Turnover Analysis: The area asset turnover ratio experienced substantial growth, nearly doubling from 13.21 in 2017 to 25.96 in 2021. This improvement is the result of the divergence between rising sales and falling net PP&E. The sharp increase to 25.96 in 2021 reflects a high degree of operational efficiency, as the region generated significantly more revenue per unit of net physical asset than in previous years.

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Area Asset Turnover: Other countries

Stryker Corp.; Other countries; area asset turnover calculation

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Net sales	515)	448)	422)	428)	405)
Net property, plant and equipment	99)	78)	73)	178)	48)
Area Activity Ratio
Area asset turnover¹	5.20	5.74	5.78	2.40	8.44

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ 2021 Calculation
Area asset turnover = Net sales ÷ Net property, plant and equipment
= 515 ÷ 99 = 5.20

An analysis of operational efficiency in other geographic areas reveals significant volatility in asset utilization between 2017 and 2021, characterized by fluctuating capital investments and a general upward trend in revenue.

Net Sales Performance: Revenue demonstrated a consistent growth trajectory over the five-year period, rising from 405 million US dollars in 2017 to 515 million US dollars in 2021. Despite a minor contraction in 2019, the overall trend indicates a sustained expansion of market activity in these regions, with the most significant increase occurring between 2020 and 2021.
Net Property, Plant, and Equipment (PP&E) Dynamics: Fixed asset levels exhibited substantial instability. A sharp increase was observed in 2018, where net PP&E rose to 178 million US dollars from 48 million US dollars in the prior year. This peak was followed by a steep decline to 73 million US dollars in 2019, after which the asset base entered a period of gradual growth, reaching 99 million US dollars by the end of 2021.
Area Asset Turnover Analysis: The area asset turnover ratio experienced a severe contraction from 8.44 in 2017 to 2.40 in 2018, driven by the rapid expansion of the fixed asset base which far outpaced revenue growth. A recovery to 5.78 occurred in 2019, coinciding with the significant reduction in net PP&E. Between 2019 and 2021, the ratio remained relatively stable, ending at 5.20. This stabilization suggests that recent increases in capital expenditures are being more closely aligned with the growth in net sales, although the slight dip in 2021 indicates that asset growth slightly exceeded the rate of revenue increase.

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Stryker Corp., net sales by geographic area

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
United States	12,321)	10,455)	10,957)	9,848)	9,059)
Europe, Middle East, Africa	2,299)	1,818)	1,888)	1,793)	1,567)
Asia Pacific	1,973)	1,630)	1,617)	1,532)	1,413)
Other countries	515)	448)	422)	428)	405)
Total	17,108)	14,351)	14,884)	13,601)	12,444)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Total net sales exhibited a consistent upward trajectory from 2017 to 2021, interrupted only by a moderate decline in 2020. Overall revenue increased from $12,444 million in 2017 to $17,108 million by the end of 2021, with the most significant growth occurring between 2020 and 2021, where total sales rose by approximately 19.2%.

United States Market Dominance: The United States remains the primary revenue driver, consistently contributing the majority of total net sales. Revenue in this region grew from $9,059 million in 2017 to $12,321 million in 2021. Despite a temporary contraction in 2020 to $10,455 million, the market rebounded strongly in 2021, underscoring its role as the core pillar of the company's financial performance.
International Growth Patterns: The Europe, Middle East, and Africa (EMEA) region showed steady expansion, increasing from $1,567 million in 2017 to $2,299 million in 2021. The Asia Pacific region followed a similar growth path, rising from $1,413 million in 2017 to $1,973 million in 2021. Sales in other countries also grew incrementally, starting at $405 million and reaching $515 million by the end of the period.
Regional Resilience and Divergence: A divergence in regional performance is observable during the 2020 fiscal year. While the United States and EMEA markets experienced declines in net sales, the Asia Pacific region demonstrated resilience, recording a slight increase from $1,617 million to $1,630 million. This indicates a relative stability in the Asia Pacific market during a period of overall corporate revenue contraction.

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Stryker Corp., net property, plant and equipment by geographic area

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
United States	1,717)	1,645)	1,561)	1,348)	1,102)
Europe, Middle East, Africa	941)	938)	838)	669)	718)
Asia Pacific	76)	91)	95)	96)	107)
Other countries	99)	78)	73)	178)	48)
Total	2,833)	2,752)	2,567)	2,291)	1,975)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The total net property, plant, and equipment exhibited a consistent upward trajectory over the five-year period from 2017 to 2021, increasing from 1,975 million US dollars to 2,833 million US dollars. This growth represents a substantial expansion of the physical asset base, driven primarily by investments in the North American and European markets.

Domestic Asset Growth: The United States serves as the primary driver of asset expansion. Net property, plant, and equipment in this region grew steadily every year, rising from 1,102 million US dollars in 2017 to 1,717 million US dollars in 2021. This consistent increase indicates a sustained commitment to expanding domestic manufacturing or operational capacity.
EMEA Regional Trends: The Europe, Middle East, and Africa region demonstrated a general growth pattern, ending the period at 941 million US dollars compared to 718 million US dollars in 2017. While a slight decrease occurred in 2018, the subsequent years showed strong recovery and expansion, establishing this region as the second-largest component of the company's asset base.
Asia Pacific and Peripheral Market Divergence: A contrasting trend is observed in the Asia Pacific region, where net property, plant, and equipment declined steadily from 107 million US dollars in 2017 to 76 million US dollars in 2021. Meanwhile, the category for other countries displayed significant volatility, characterized by a sharp spike to 178 million US dollars in 2018 followed by a correction and gradual stabilization at 99 million US dollars by 2021.

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