Element Solutions Inc (ESI)
Profitability ratios
Return on sales
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 42.06% | 42.15% | 41.56% | 41.28% | 40.09% | 39.37% | 39.26% | 38.09% | 37.55% | 37.37% | 37.04% | 37.94% | 38.85% | 40.04% | 41.35% | 42.11% | 42.52% | 42.40% | 42.59% | 43.02% |
| Operating profit margin | 14.15% | 14.27% | 13.77% | 9.97% | 7.93% | 7.44% | 7.64% | 10.98% | 12.12% | 12.76% | 12.42% | 12.02% | 11.68% | 12.50% | 13.95% | 14.39% | 14.25% | 12.55% | 13.22% | 13.79% |
| Pretax margin | 12.05% | 11.71% | 10.74% | 6.99% | 5.94% | 5.53% | 5.56% | 9.18% | 10.46% | 10.67% | 10.36% | 9.73% | 8.49% | 10.49% | 12.47% | 10.28% | 9.33% | 4.38% | 5.94% | 9.52% |
| Net profit margin | 11.56% | 9.94% | 11.08% | 8.24% | 5.62% | 5.06% | 2.30% | 5.90% | 7.12% | 7.34% | 6.80% | 6.15% | 7.00% | 8.47% | 10.02% | 10.66% | 7.66% | 4.08% | 6.78% | 4.39% |
Analyzing Element Solutions Inc.'s profitability ratios over the period from June 2020 through March 2025 reveals several notable trends and shifts.
Gross Profit Margin:
The gross profit margin has exhibited a gradual decline from a high of 43.02% in June 2020 to a low of approximately 37.04% in September 2022. Subsequently, there has been a steady recovery, reaching 42.06% in March 2025. This pattern suggests initial pressure on gross profitability followed by a period of margin expansion in recent years.
Operating Profit Margin:
The operating profit margin experienced a decline from approximately 13.79% in June 2020 to a nadir of 7.44% by December 2023. However, from the first quarter of 2024 onward, there is a sustained upward trajectory, culminating in a margin of about 14.15% in March 2025. This indicates a recent improvement in operating efficiency and profitability.
Pre-tax Margin:
Initially, the pre-tax margin decreased from 9.52% in June 2020 to lows around 4.38% in December 2020. After bottoming out, the margin recovered modestly, reaching approximately 12.05% in March 2025. The trend reflects variability but shows signs of strengthening in recent periods.
Net Profit Margin:
The net profit margin has been quite volatile. It peaked at 10.66% in June 2021, then declined sharply, reaching approximately 2.30% in September 2023. Nonetheless, recent data indicates a significant rebound, with the margin rising to about 11.56% in March 2025. This trajectory suggests recent improvements in bottom-line profitability after prior difficulties.
Overall, the company faced pressures on profitability margins during 2020 and 2022, likely influenced by market conditions, operational challenges, or external factors. The subsequent recovery, particularly in operating and net profit margins from early 2024 onwards, indicates a strategic turnaround or operational efficiency gains. The pattern of margin compression followed by recovery is consistent with transient headwinds impacting the company’s profitability, followed by a phase of stabilization and growth in recent periods.
Return on investment
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 7.31% | 7.20% | 6.50% | 4.72% | 3.77% | 3.49% | 3.59% | 5.10% | 6.01% | 6.63% | 6.69% | 6.29% | 5.76% | 5.84% | 6.16% | 6.66% | 6.21% | 5.19% | 5.42% | 5.75% |
| Return on assets (ROA) | 5.97% | 5.01% | 5.23% | 3.90% | 2.67% | 2.37% | 1.08% | 2.74% | 3.53% | 3.82% | 3.66% | 3.22% | 3.45% | 3.96% | 4.42% | 4.94% | 3.34% | 1.69% | 2.78% | 1.83% |
| Return on total capital | 15.81% | 14.52% | 13.62% | 10.02% | 8.36% | 7.85% | 7.43% | 10.77% | 12.15% | 13.53% | 14.77% | 13.64% | 12.33% | 12.56% | 13.14% | 12.79% | 12.10% | 10.30% | 11.07% | 11.98% |
| Return on equity (ROE) | 11.36% | 10.25% | 10.93% | 8.20% | 5.65% | 5.07% | 2.41% | 6.02% | 7.39% | 8.03% | 7.80% | 6.72% | 7.10% | 8.20% | 9.25% | 9.28% | 6.36% | 3.26% | 5.36% | 3.58% |
Element Solutions Inc.'s profitability ratios over the analyzed period reveal insights into its operational efficiency and capital utilization.
Operating Return on Assets (Operating ROA):
The Operating ROA exhibited a declining trend from a peak of 6.66% as of June 30, 2021, to a low of approximately 3.49% by December 31, 2023. Post this period, a notable recovery is evident, with a steady increase reaching 7.31% by March 31, 2025. The pattern indicates periods of operational strength followed by declines, possibly reflecting cyclical or structural shifts in the company's core operations.
Return on Assets (ROA):
The ROA followed a similar trend, declining from 4.94% on June 30, 2021, to a low of around 1.08% in September 2023. Subsequently, the ratio improved, reaching 5.97% by March 2025, signaling a recovery in the company's efficiency in generating net income from its assets.
Return on Total Capital:
This ratio shows a long-term upward trend, increasing from approximately 12.79% (June 30, 2021) to 15.81% (March 31, 2025). Despite some fluctuations, the overall trajectory indicates improved effectiveness in generating returns on the company's total invested capital over time.
Return on Equity (ROE):
The ROE experienced considerable variability, rising from 9.28% in June 2021 to a peak of 10.93% in September 2024, reflecting enhancements in shareholder returns. However, a sharp decline to 2.41% in September 2023 suggests periods of reduced profitability or increased equity base without commensurate profit growth. Recent data indicates a recovery, with the ratio reaching 11.36% as of March 31, 2025.
Summary:
Throughout the analyzed period, Element Solutions Inc. has demonstrated fluctuations in profitability metrics, with periods of growth interrupted by downturns. The recent upward trends in operating ROA, ROA, and ROE suggest an improvement in operational efficiency and profitability. The company's ability to recover from prior lows, particularly in net income generation and shareholder returns, indicates resilience and potential for enhanced profitability capacity moving forward.