Analysis of Geographic Areas
United States Steel Corp. operates in 2 regions: North America and Europe.
Area Asset Turnover
United States Steel Corp., asset turnover by geographic area
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| North America | 1.99 | 2.28 | 1.39 | 1.82 | 2.48 |
| Europe | 5.03 | 4.84 | 1.98 | 2.55 | 3.49 |
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).
An analysis of geographic asset turnover from 2018 to 2022 reveals a shared pattern of contraction leading into 2020, followed by a recovery phase. However, the magnitude of the recovery and the baseline efficiency differ significantly between the North American and European operations.
- North America
- The asset turnover ratio in North America experienced a steady decline from 2.48 in 2018 to a period low of 1.39 in 2020. A subsequent recovery occurred in 2021, with the ratio rising to 2.28, before moderating to 1.99 by the end of 2022. This trajectory indicates a period of diminished asset efficiency through 2020, followed by a partial return toward historical levels.
- Europe
- European operations maintained a higher asset turnover ratio than North America throughout the entire period. After a decline from 3.49 in 2018 to 1.98 in 2020, the region exhibited a rapid acceleration in efficiency. The ratio increased sharply to 4.84 in 2021 and reached a peak of 5.03 in 2022, suggesting a substantial increase in the revenue generated per unit of asset deployed.
- Comparative Geographic Trends
- While both regions encountered a downturn in asset turnover during the 2018-2020 window, the European sector demonstrated a significantly more aggressive recovery. By the end of 2022, the efficiency gap between the two regions had widened considerably, with the European asset turnover ratio being more than 2.5 times that of the North American ratio.
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Area Asset Turnover: North America
United States Steel Corp.; North America; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| External sales | 16,822) | 16,013) | 7,774) | 10,520) | 10,973) |
| Assets | 8,459) | 7,034) | 5,590) | 5,772) | 4,432) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 1.99 | 2.28 | 1.39 | 1.82 | 2.48 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Area asset turnover = External sales ÷ Assets
= 16,822 ÷ 8,459 = 1.99
The financial performance in North America between 2018 and 2022 is characterized by significant volatility in external sales and a consistent expansion of the asset base. While external sales experienced a notable contraction reaching a trough in 2020, a robust recovery occurred in 2021 and 2022, resulting in revenue levels significantly higher than those seen at the start of the period.
- External Sales Trends
- External sales decreased from 10,973 million US dollars in 2018 to 7,774 million US dollars in 2020. A sharp reversal followed, with sales climbing to 16,013 million US dollars in 2021 and reaching 16,822 million US dollars by the end of 2022.
- Asset Base Expansion
- The total assets in the region showed a strong upward trajectory, increasing from 4,432 million US dollars in 2018 to 8,459 million US dollars in 2022. This represents nearly a twofold increase in the asset base over the five-year analysis period.
- Area Asset Turnover Analysis
- The asset turnover ratio exhibited significant fluctuations, starting at 2.48 in 2018 and declining to a low of 1.39 in 2020. Efficiency rebounded sharply to 2.28 in 2021, before moderating to 1.99 in 2022. The data indicates that the 2021 recovery in sales outpaced asset growth, though the subsequent increase in assets in 2022 led to a slight reduction in the overall turnover ratio.
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Area Asset Turnover: Europe
United States Steel Corp.; Europe; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| External sales | 4,243) | 4,262) | 1,967) | 2,417) | 3,205) |
| Assets | 843) | 880) | 993) | 947) | 919) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 5.03 | 4.84 | 1.98 | 2.55 | 3.49 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Area asset turnover = External sales ÷ Assets
= 4,243 ÷ 843 = 5.03
The European operations exhibited a period of significant volatility in operational efficiency between 2018 and 2022, characterized by an initial decline in asset utilization followed by a robust recovery and expansion in turnover rates.
- External Sales Trends
- Revenue in the European region experienced a contraction from 2018 to 2020, falling from $3,205 million to a trough of $1,967 million. A sharp reversal occurred in 2021, where sales more than doubled to $4,262 million, remaining relatively stable at $4,243 million through the end of 2022.
- Asset Base Evolution
- The asset base demonstrated an inverse trend to sales during the first three years of the period, increasing steadily from $919 million in 2018 to a peak of $993 million in 2020. Following this peak, assets were reduced consistently, declining to $843 million by December 31, 2022, suggesting a period of asset optimization or divestment.
- Area Asset Turnover Analysis
- The asset turnover ratio reflects a substantial improvement in productivity over the five-year period. After declining from 3.49 in 2018 to a low of 1.98 in 2020—driven by the combination of falling sales and a growing asset base—the ratio accelerated sharply. By 2022, the turnover ratio reached 5.03, indicating that the region became significantly more efficient at generating revenue from its deployed assets compared to the baseline year.
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External sales
United States Steel Corp., external sales by geographic area
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| North America | 16,822) | 16,013) | 7,774) | 10,520) | 10,973) |
| Europe | 4,243) | 4,262) | 1,967) | 2,417) | 3,205) |
| Total | 21,065) | 20,275) | 9,741) | 12,937) | 14,178) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
Total external sales exhibited significant volatility between 2018 and 2022, characterized by a marked contraction culminating in 2020 followed by a substantial expansion in the subsequent two years. Total revenue decreased from $14,178 million in 2018 to a period low of $9,741 million in 2020, before rebounding sharply to reach $21,065 million by the end of 2022.
- North American Market Performance
- North America represents the primary driver of external sales. Following a decline from $10,973 million in 2018 to $7,774 million in 2020, the region experienced an aggressive recovery. Sales surged to $16,013 million in 2021 and continued to climb to $16,822 million in 2022, indicating a strong post-2020 growth trajectory.
- European Market Performance
- The European segment mirrored the broader trend of decline and recovery. Sales decreased steadily from $3,205 million in 2018 to a low of $1,967 million in 2020. A significant rebound occurred in 2021, with sales increasing to $4,262 million, and remaining relatively stagnant at $4,243 million in 2022.
- Geographic Revenue Concentration
- A high level of geographic concentration is observed, with North American sales consistently dominating the total revenue mix. By 2022, North American operations accounted for approximately 80% of total external sales, a proportion that remained relatively stable despite the fluctuations in absolute dollar values across both regions.
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Assets
United States Steel Corp., assets by geographic area
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| North America | 8,459) | 7,034) | 5,590) | 5,772) | 4,432) |
| Europe | 843) | 880) | 993) | 947) | 919) |
| Total | 9,302) | 7,914) | 6,583) | 6,719) | 5,351) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
Total assets exhibited a consistent upward trajectory over the five-year period, increasing from 5,351 million US$ in 2018 to 9,302 million US$ in 2022. Despite a marginal contraction observed in 2020, the overall trend indicates a substantial expansion of the asset base.
- North American Asset Expansion
- Assets in North America grew significantly from 4,432 million US$ in 2018 to 8,459 million US$ in 2022. This growth was characterized by a sharp increase in 2019, a slight dip in 2020, followed by accelerated gains in 2021 and 2022. The domestic asset base nearly doubled over the analyzed period, driving the majority of the total asset growth.
- European Asset Performance
- The European segment displayed a contrasting trend to the North American operations. Assets increased modestly from 919 million US$ in 2018 to a peak of 993 million US$ in 2020, before entering a period of steady decline to 843 million US$ by the end of 2022. This indicates a gradual reduction in the asset footprint within the European region.
- Geographic Concentration Shift
- A pronounced shift in geographic asset distribution is evident. North American assets represented approximately 82.8% of total assets in 2018, whereas by 2022, this concentration increased to approximately 90.9%. Conversely, the relative weight of European assets diminished from 17.2% in 2018 to 9.1% in 2022, highlighting a strategic reallocation of resources toward the North American market.
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