Analysis of Geographic Areas
Edwards Lifesciences Corp. operates in 4 regions: United States; Europe; Japan; and Rest of World.
Area Asset Turnover
Edwards Lifesciences Corp., asset turnover by geographic area
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States | 2.48 | 2.32 | 2.98 | 3.20 | 3.13 |
| Europe | 6.01 | 5.05 | 9.27 | 24.18 | 29.26 |
| Japan | 26.85 | 22.55 | 20.49 | 59.22 | 46.09 |
| Rest of World | 1.64 | 1.40 | 1.59 | 1.80 | 2.48 |
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).
Asset turnover ratios across all geographic segments demonstrate a general decline in efficiency from 2017 through 2020, followed by a marginal recovery in 2021. There is a stark contrast between the relatively stable domestic performance and the high volatility observed in international markets, particularly within Japan and Europe.
- United States
- The U.S. market exhibits the most consistency among the regions, although a gradual downward trend is evident. The ratio peaked at 3.20 in 2018 before declining to 2.32 in 2020, eventually settling at 2.48 in 2021. This indicates a moderate reduction in the revenue generated per unit of asset invested domestically.
- Europe
- A severe contraction in asset efficiency is observed in the European region. The ratio fell precipitously from 29.26 in 2017 to 5.05 in 2020. Although a slight recovery to 6.01 occurred in 2021, the turnover rate remains a fraction of its initial 2017 levels, suggesting a significant increase in the asset base relative to revenue growth or a substantial decline in asset productivity.
- Japan
- Japan maintains the highest asset turnover ratios across all segments, despite significant fluctuations. After reaching a peak of 59.22 in 2018, the ratio experienced a sharp decline to 20.49 in 2019. A steady recovery trend followed, with the ratio increasing to 26.85 by 2021, indicating that Japan remains the most asset-efficient geographic area.
- Rest of World
- The Rest of World segment consistently reports the lowest efficiency levels. A steady decline is noted from 2.48 in 2017 to a low of 1.40 in 2020, followed by a modest increase to 1.64 in 2021. This region demonstrates the lowest capacity for generating revenue from its asset base compared to all other geographies.
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Area Asset Turnover: United States
Edwards Lifesciences 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 thousands) | |||||
| Net sales | 2,963,100) | 2,516,800) | 2,532,700) | 2,055,300) | 1,907,600) |
| Long-lived tangible assets | 1,195,800) | 1,084,300) | 849,100) | 642,100) | 608,700) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 2.48 | 2.32 | 2.98 | 3.20 | 3.13 |
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 ÷ Long-lived tangible assets
= 2,963,100 ÷ 1,195,800 = 2.48
The financial performance within the United States market from 2017 to 2021 is characterized by steady revenue growth and a significant expansion of the long-lived asset base. While net sales increased consistently over the five-year period, the rate of investment in tangible assets exceeded the rate of sales growth, resulting in a compression of asset utilization efficiency.
- Net Sales Trends
- Net sales demonstrated a general upward trajectory, rising from 1,907,600 thousand US dollars in 2017 to 2,963,100 thousand US dollars in 2021. A notable acceleration occurred in 2019, followed by a slight contraction in 2020, before returning to strong growth in 2021.
- Long-lived Tangible Assets Growth
- There was a substantial and continuous increase in long-lived tangible assets, which grew from 608,700 thousand US dollars in 2017 to 1,195,800 thousand US dollars by 2021. The most aggressive expansion took place between 2019 and 2020, where assets increased by approximately 27.6% in a single year.
- Area Asset Turnover Analysis
- The area asset turnover ratio peaked at 3.20 in 2018 before entering a downward trend, reaching a low of 2.32 in 2020. A modest recovery to 2.48 was observed in 2021. This decline indicates that for every dollar invested in long-lived tangible assets, the company generated progressively fewer dollars in sales between 2018 and 2020. The divergence between the rapid accumulation of assets and the steadier growth of sales suggests a period of heavy capital expenditure that had not yet reached full operational productivity by the end of the analyzed period.
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Area Asset Turnover: Europe
Edwards Lifesciences Corp.; Europe; area asset turnover calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Net sales | 1,190,300) | 973,600) | 941,200) | 885,100) | 831,000) |
| Long-lived tangible assets | 197,900) | 192,700) | 101,500) | 36,600) | 28,400) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 6.01 | 5.05 | 9.27 | 24.18 | 29.26 |
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 ÷ Long-lived tangible assets
= 1,190,300 ÷ 197,900 = 6.01
Between 2017 and 2021, the European operations exhibited a significant shift in asset utilization and capital allocation. While revenue continued to grow consistently throughout the period, there was a substantial and rapid increase in long-lived tangible assets, resulting in a marked decline in the area asset turnover ratio.
- Net Sales Performance
- A steady upward trajectory in net sales was observed, increasing from 831 million US dollars in 2017 to approximately 1.19 billion US dollars by the end of 2021. This trend indicates sustained revenue growth and expanding market penetration within the European region.
- Long-lived Tangible Asset Growth
- There was an exponential increase in long-lived tangible assets, which rose from 28.4 million US dollars in 2017 to 197.9 million US dollars in 2021. The most aggressive expansion occurred between 2018 and 2020, where the asset base grew from 36.6 million to 192.7 million US dollars, suggesting heavy capital investment in infrastructure or regional capacity.
- Area Asset Turnover Trends
- The area asset turnover ratio experienced a sharp contraction, falling from 29.26 in 2017 to a period low of 5.05 in 2020. This decline demonstrates that the scale of capital investment significantly outpaced the growth in sales, reducing the immediate efficiency of the asset base. A slight recovery to 6.01 in 2021 suggests the beginning of a stabilization phase, where revenue growth started to better align with the expanded asset levels.
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Area Asset Turnover: Japan
Edwards Lifesciences Corp.; Japan; area asset turnover calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Net sales | 528,900) | 460,100) | 444,700) | 396,800) | 350,300) |
| Long-lived tangible assets | 19,700) | 20,400) | 21,700) | 6,700) | 7,600) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 26.85 | 22.55 | 20.49 | 59.22 | 46.09 |
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 ÷ Long-lived tangible assets
= 528,900 ÷ 19,700 = 26.85
The financial performance in Japan between 2017 and 2021 is characterized by consistent revenue growth contrasted with a significant expansion of the asset base in 2019, which fundamentally altered the area asset turnover ratio.
- Net Sales Growth
- A steady upward trajectory in net sales is observed over the five-year period. Revenue increased from 350.3 million USD in 2017 to 528.9 million USD in 2021, representing a cumulative growth of approximately 51%. The growth remained positive in every reporting period, indicating a sustained expansion of market presence in the region.
- Long-lived Tangible Assets
- The asset base remained relatively low and stable between 2017 and 2018, before experiencing a substantial increase in 2019. Long-lived tangible assets rose from 6.7 million USD in 2018 to 21.7 million USD in 2019, more than tripling in a single year. Following this peak, the asset value underwent a slight, gradual decline to 19.7 million USD by 2021.
- Area Asset Turnover Efficiency
- The asset turnover ratio exhibited significant volatility tied to the 2019 capital expansion. Efficiency peaked in 2018 at a ratio of 59.22, but dropped sharply to 20.49 in 2019 as the growth in tangible assets far outpaced the growth in sales. Since 2019, a gradual recovery in efficiency has been observed, with the ratio rising to 22.55 in 2020 and 26.85 in 2021, suggesting that the company is increasingly optimizing the utilization of its expanded asset base to generate revenue.
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Area Asset Turnover: Rest of World
Edwards Lifesciences Corp.; Rest of World; area asset turnover calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Net sales | 550,200) | 435,800) | 429,400) | 385,600) | 346,400) |
| Long-lived tangible assets | 335,500) | 311,000) | 269,400) | 214,400) | 139,700) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 1.64 | 1.40 | 1.59 | 1.80 | 2.48 |
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 ÷ Long-lived tangible assets
= 550,200 ÷ 335,500 = 1.64
The financial performance in the Rest of World geographic area is characterized by a consistent increase in revenue coupled with an aggressive expansion of the long-lived asset base, resulting in a period of declining asset efficiency followed by a recent recovery.
- Revenue Trajectory
- Net sales demonstrated steady growth over the five-year period, increasing from US$ 346.4 million in 2017 to US$ 550.2 million in 2021. The most significant year-over-year growth occurred between 2020 and 2021, with sales rising from US$ 435.8 million to US$ 550.2 million.
- Asset Expansion
- Long-lived tangible assets grew substantially, rising from US$ 139.7 million in 2017 to US$ 335.5 million by 2021. This represents an increase of approximately 140%, indicating significant capital investment in the region's infrastructure or operational capacity.
- Area Asset Turnover Efficiency
- The area asset turnover ratio experienced a notable decline from 2.48 in 2017 to a minimum of 1.40 in 2020. This downward trend indicates a period where the growth of the long-lived asset base outpaced the growth of net sales, suggesting a decrease in the efficiency of asset utilization. However, a recovery was observed in 2021, with the ratio improving to 1.64, signaling that sales growth began to accelerate relative to the accumulated asset base.
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Net sales
Edwards Lifesciences Corp., net sales by geographic area
US$ in thousands
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States | 2,963,100) | 2,516,800) | 2,532,700) | 2,055,300) | 1,907,600) |
| Europe | 1,190,300) | 973,600) | 941,200) | 885,100) | 831,000) |
| Japan | 528,900) | 460,100) | 444,700) | 396,800) | 350,300) |
| Rest of World | 550,200) | 435,800) | 429,400) | 385,600) | 346,400) |
| Total | 5,232,500) | 4,386,300) | 4,348,000) | 3,722,800) | 3,435,300) |
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 demonstrated a sustained increase over the analyzed five-year period, rising from $3.44 billion in 2017 to $5.23 billion by the end of 2021. This overall growth trend was characterized by steady annual gains, with a momentary deceleration in the growth rate between 2019 and 2020 before a strong rebound in the final year.
- United States Market Dynamics
- The United States constitutes the largest share of net sales, growing from $1.91 billion in 2017 to $2.96 billion in 2021. The region experienced a slight decline in net sales during 2020, dropping from $2.53 billion to $2.52 billion, which contributed to the overall corporate stagnation during that year. However, a sharp increase occurred in 2021, reflecting a robust recovery.
- European Market Growth
- Net sales in Europe exhibited consistent year-over-year growth, increasing from $831 million in 2017 to $1.19 billion in 2021. The most significant acceleration in this region occurred between 2020 and 2021, where sales rose by approximately 22%.
- Asia-Pacific and Emerging Markets
- Both Japan and the Rest of World segments showed steady expansion. Japan's net sales rose from $350.3 million to $528.9 million, while the Rest of World segment grew from $346.4 million to $550.2 million. The Rest of World segment, in particular, saw a substantial increase in 2021, growing from $435.8 million to $550.2 million.
- Geographic Revenue Distribution
- The proportional distribution of revenue remained relatively stable, with the United States maintaining a dominant position of approximately 55% to 57% of total sales. International markets collectively contributed an increasing volume of revenue, with the combined growth of Japan and the Rest of World segments indicating a broadening global footprint.
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Long-lived tangible assets
Edwards Lifesciences Corp., long-lived tangible assets by geographic area
US$ in thousands
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States | 1,195,800) | 1,084,300) | 849,100) | 642,100) | 608,700) |
| Europe | 197,900) | 192,700) | 101,500) | 36,600) | 28,400) |
| Japan | 19,700) | 20,400) | 21,700) | 6,700) | 7,600) |
| Rest of World | 335,500) | 311,000) | 269,400) | 214,400) | 139,700) |
| Total | 1,748,900) | 1,608,400) | 1,241,700) | 899,800) | 784,400) |
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 long-lived tangible assets experienced substantial growth between 2017 and 2021, increasing from $784.4 million to $1.749 billion. This overall expansion reflects a significant increase in the organization's global physical infrastructure over the five-year period.
- Domestic Asset Concentration
- The United States remains the primary region for asset allocation, with values increasing from $608.7 million in 2017 to $1.196 billion in 2021. While the absolute value of domestic assets nearly doubled, the proportional share of total assets held in the U.S. decreased from approximately 77.6% in 2017 to 68.4% in 2021, indicating a strategic shift toward geographic diversification.
- European Infrastructure Acceleration
- Europe exhibited the most aggressive relative growth among all regions. Assets in Europe rose from $28.4 million in 2017 to $197.9 million in 2021. A period of rapid intensification is observed between 2018 and 2020, where assets increased from $36.6 million to $192.7 million, signaling a significant investment phase in European operations.
- International Market Trends
- The Rest of World category showed consistent and steady growth, climbing from $139.7 million in 2017 to $335.5 million in 2021. In contrast, Japan's asset base remained relatively small and stable, peaking at $21.7 million in 2019 before experiencing a marginal decline to $19.7 million by the end of 2021.
- Aggregate Growth Dynamics
- The total increase in long-lived tangible assets was driven predominantly by expansion in the United States and Europe. The data indicates a transition from a heavily U.S.-centric asset base toward a more globally distributed model, with the combined international assets growing from $175.7 million in 2017 to $552.9 million in 2021.
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