LyondellBasell Industries N.V. (NYSE:LYB)

The financial data reveal several notable trends in the performance and financial structure over the period from 2014 to 2018.

Return on Assets (ROA)

ROA shows a fluctuating pattern with an overall moderate decline by the end of the period. It started at 17.19% in 2014, peaked at 19.67% in 2015, then fell to 16.36% in 2016, slightly increased again to 18.62% in 2017, and finally decreased to 16.58% in 2018. This indicates variability in asset profitability, with a downward trend towards the end.

Financial Leverage

Financial leverage experienced significant changes during the period. It increased steadily from 2.92 in 2014 to a high of 3.88 in 2016, suggesting greater use of debt or other liabilities relative to equity. Afterwards, it decreased notably to 2.93 in 2017 and further to 2.76 in 2018, reflecting a move toward a more conservative capital structure in the latter years.

Return on Equity (ROE)

ROE exhibited a strong upward movement early in the period, growing from 50.2% in 2014 to a peak of 68.34% in 2015. It then gradually declined each year to 63.43% in 2016, 54.52% in 2017, and 45.71% in 2018. Despite the decline, ROE remained relatively high, indicating continued strong profitability for shareholders but with reduced efficiency or increased equity base impact over time.

Overall, the data indicate that profitability metrics (ROA and ROE) showed peaks around the mid-period with subsequent declines, while financial leverage increased until 2016 and then reduced significantly. The reduction in leverage in later years corresponds with a decline in ROE, which may suggest a cautious approach toward risk and financing after a period of higher leverage. These dynamics reflect shifting financial and operational strategies or responses to market conditions over the analyzed period.

Net Profit Margin

The net profit margin shows an overall increasing trend from 2014 to 2017, rising from 9.15% to a peak of 14.15%. However, in 2018, there is a noticeable decrease to 12.02%, indicating a downward adjustment after several years of growth.

Asset Turnover

The asset turnover ratio declines sharply from 1.88 in 2014 to 1.24 in 2016, suggesting decreasing efficiency in utilizing assets to generate sales. Although there is a modest recovery to 1.38 by 2018, the ratio remains significantly lower than the initial 2014 figure.

Financial Leverage

Financial leverage increases from 2.92 in 2014 to a high of 3.88 in 2016, indicating a rising reliance on debt. After this peak, leverage decreases moderately to 2.76 by 2018, reflecting a strategy to reduce debt exposure or strengthen the equity base.

Return on Equity (ROE)

ROE experiences considerable volatility but remains at elevated levels throughout the period. It climbs from 50.2% in 2014 to a peak of 68.34% in 2015, then gradually declines each year to 45.71% in 2018. This decline corresponds with the reduction in financial leverage and the slight fall in net profit margin during the latter years.

Tax Burden

The tax burden ratio remained relatively stable from 2014 to 2016, fluctuating slightly around 0.72 to 0.73. However, there was a marked increase starting in 2017, reaching 0.89 and maintaining a similar level in 2018 at 0.88. This indicates a higher proportion of pre-tax income being retained after tax in the most recent years, suggesting improved tax efficiency or changes in tax regulations.

Interest Burden

The interest burden ratio exhibited minor fluctuations over the period, remaining close to the 0.92 to 0.95 range without a clear upward or downward trend. This suggests consistent management of interest expenses relative to earnings before interest and taxes, with stable financial costs throughout the years.

EBIT Margin

The EBIT margin showed notable improvement from 13.3% in 2014 to a peak of 19.91% in 2015, maintaining a high level of 19.0% in 2016. Subsequently, there was a decline in profitability, with margins decreasing to 17.31% in 2017 and further down to 14.51% in 2018. This indicates a reduction in core operating profitability after a strong period early in the timeframe.

Asset Turnover

A downward trend in asset turnover is apparent from 1.88 in 2014 to a low of 1.24 in 2016, reflecting a decrease in efficiency at generating sales from assets. Thereafter, a modest recovery took place with ratios climbing back to 1.32 in 2017 and 1.38 in 2018, suggesting incremental improvements in asset utilization.

Financial Leverage

Financial leverage increased significantly from 2.92 in 2014 to 3.88 in 2016, indicating greater reliance on debt financing during this period. This was followed by a contraction to 2.93 in 2017 and further to 2.76 in 2018, pointing to a deliberate reduction in leverage and a possible shift towards a more conservative capital structure.

Return on Equity (ROE)

ROE experienced substantial fluctuations, rising sharply from 50.2% in 2014 to a peak of 68.34% in 2015, then decreasing steadily each year to 63.43% in 2016, 54.52% in 2017, and 45.71% in 2018. This decline aligns with reduced EBIT margins and changes in leverage, indicating diminishing overall shareholder returns over time despite initial strong performance.

Net Profit Margin

The net profit margin exhibits an upward trend from 9.15% in 2014 to a peak of 14.15% in 2017, indicating improved profitability over this period. However, in 2018, there is a noticeable decline to 12.02%, suggesting some pressure on profit margins during the final year analyzed.

Asset Turnover

The asset turnover ratio shows a declining pattern from 1.88 in 2014 to 1.24 in 2016, reflecting decreasing efficiency in utilizing assets to generate sales. While there is a slight recovery in 2017 and 2018, reaching 1.38, the ratio remains well below its 2014 level, indicating persistent challenges in asset utilization.

Return on Assets (ROA)

Return on assets fluctuates over the period, starting at 17.19% in 2014 and increasing to a high of 19.67% in 2015. Subsequently, it declines to 16.36% in 2016 but recovers somewhat in 2017 to 18.62%, before falling again to 16.58% in 2018. The ROA trend suggests varying levels of effectiveness in generating profits from assets, with some volatility but maintaining overall moderate returns.

Tax Burden

The tax burden ratio remained relatively stable from 2014 to 2016, fluctuating slightly around 0.72–0.73. However, it increased significantly in 2017 to 0.89 and remained elevated at 0.88 in 2018, indicating a higher proportion of earnings retained after taxes during these later years.

Interest Burden

The interest burden ratio showed a stable trend across the five years, remaining close to the range of 0.92 to 0.95, with no substantial variation. This indicates consistent costs related to interest expenses relative to operating earnings over the period.

EBIT Margin

EBIT margin exhibited notable fluctuations, beginning at 13.3% in 2014 and increasing sharply to nearly 20% in 2015 and slightly declining to 19% in 2016. From 2017 onwards, it declined steadily to 17.31% and further to 14.51% in 2018, suggesting reduced profitability from core operations in the last two years.

Asset Turnover

Asset turnover decreased consistently from 1.88 in 2014 to a low of 1.24 in 2016, reflecting declining efficiency in generating revenue from assets. It then showed a slight recovery, rising to 1.32 in 2017 and 1.38 in 2018, although it did not return to earlier levels.

Return on Assets (ROA)

Return on assets followed an inconsistent pattern. Starting at 17.19% in 2014, it rose to 19.67% in 2015, then dropped to 16.36% in 2016. It increased again to 18.62% in 2017 before declining to 16.58% in 2018. This indicates variability in overall asset profitability during the period.

Tax Burden

The tax burden ratio remained relatively stable over the five-year period, fluctuating slightly around 0.72 to 0.73 from 2014 to 2016. There was a marked increase in 2017 and 2018, rising to 0.89 and 0.88 respectively, indicating a higher proportion of earnings being paid as taxes in the latter years.

Interest Burden

The interest burden ratio showed limited variation, staying within a narrow range of 0.92 to 0.95 throughout the period. The ratio was highest in 2015 and 2018 at 0.95 and 0.94, respectively, implying consistent interest expense impact on earnings before tax during these years.

EBIT Margin

The EBIT margin demonstrated a peak in 2015 at 19.91%, with a slight decline to 19% in 2016. Thereafter, the margin decreased steadily, reaching 17.31% in 2017 and further dropping to 14.51% in 2018, reflecting a diminishing operational profitability over time.

Net Profit Margin

The net profit margin generally improved from 9.15% in 2014 to a peak of 14.15% in 2017, despite minor volatility in between. However, this margin declined to 12.02% in 2018, suggesting some reduction in overall profitability after taxes and interest expenses despite previously increasing trends.