LyondellBasell Industries NV (LYB)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 11.32% | 12.79% | 13.09% | 19.01% | 12.23% |
| Operating profit margin | 4.51% | 7.43% | 10.11% | 14.67% | 8.99% |
| Pretax margin | 4.52% | 6.39% | 9.47% | 14.70% | 4.99% |
| Net profit margin | 3.37% | 5.14% | 7.69% | 12.15% | 5.12% |
Based on the provided data, let's analyze the profitability ratios of LyondellBasell Industries NV over the period from December 31, 2020, to December 31, 2024:
1. Gross Profit Margin:
- The gross profit margin shows the percentage of revenue that exceeds the cost of goods sold.
- LyondellBasell's gross profit margin improved from 12.23% in 2020 to 19.01% in 2021, indicating better cost management or pricing strategies.
- However, the margin declined in the subsequent years, with the lowest point observed in 2024 at 11.32%, possibly due to cost pressures or changes in product mix.
2. Operating Profit Margin:
- The operating profit margin reflects how efficiently the company generates profit from its core operations.
- LyondellBasell's operating profit margin increased from 8.99% in 2020 to 14.67% in 2021, showing improved operational efficiency.
- Subsequently, the margin declined each year, reaching 4.51% in 2024, possibly due to rising operating expenses or lower sales volumes.
3. Pretax Margin:
- The pretax margin represents the percentage of each dollar of revenue that translates into pre-tax profit.
- LyondellBasell's pretax margin experienced a significant jump from 4.99% in 2020 to 14.70% in 2021, indicating strong pre-tax profitability.
- However, the margin decreased in the following years, hitting 4.52% in 2024, potentially influenced by higher tax expenses or weaker operating performance.
4. Net Profit Margin:
- The net profit margin reflects the company's bottom-line profitability after all expenses have been deducted.
- LyondellBasell's net profit margin improved from 5.12% in 2020 to 12.15% in 2021, reflecting solid net profitability growth.
- Nonetheless, the margin declined steadily in the subsequent years, with the lowest point at 3.37% in 2024, possibly due to increased costs or other factors impacting profitability.
In conclusion, while LyondellBasell Industries NV demonstrated initial improvements in profitability ratios, a downward trend was observed in the later years, indicating potential challenges in maintaining profitability levels. Further analysis of the underlying factors driving these trends would provide valuable insights into the company's financial performance.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.08% | 8.25% | 14.03% | 18.43% | 7.04% |
| Return on assets (ROA) | 3.80% | 5.71% | 10.68% | 15.27% | 4.01% |
| Return on total capital | 16.72% | 24.01% | 38.34% | 63.63% | 27.95% |
| Return on equity (ROE) | 10.91% | 16.35% | 30.77% | 47.31% | 17.81% |
Based on the provided financial data, we can observe the following trends in LyondellBasell Industries NV profitability ratios:
1. Operating Return on Assets (Operating ROA):
- The Operating ROA has fluctuated over the years, with a significant increase from 7.04% in 2020 to 18.43% in 2021, followed by a decline to 14.03% in 2022 and further to 8.25% in 2023, and finally dropping to 5.08% in 2024. This ratio indicates the company's operating efficiency in generating profits from its assets, showing variability in performance over the years.
2. Return on Assets (ROA):
- The ROA also experienced fluctuations, starting at 4.01% in 2020 and peaking at 15.27% in 2021, then decreasing to 10.68% in 2022, further to 5.71% in 2023, and finally dropping to 3.80% in 2024. This ratio reflects the company's overall ability to generate profits from its total assets, showing a similar pattern to the Operating ROA.
3. Return on Total Capital:
- The Return on Total Capital showed a sharp increase from 27.95% in 2020 to 63.63% in 2021, followed by a decrease to 38.34% in 2022, further declining to 24.01% in 2023, and finally dropping to 16.72% in 2024. This ratio signifies the company's efficiency in generating returns from both equity and debt capital employed, with the trend mirroring that of the other profitability ratios.
4. Return on Equity (ROE):
- The ROE followed a similar trajectory as the other ratios, starting at 17.81% in 2020, peaking at 47.31% in 2021, then declining to 30.77% in 2022, further dropping to 16.35% in 2023, and finally decreasing to 10.91% in 2024. ROE reflects how effectively the company is utilizing shareholders' equity to generate profits, with the downward trend indicating a decrease in shareholder profitability over the years.
In summary, the profitability ratios of LyondellBasell Industries NV have shown fluctuations over the years, highlighting varying levels of efficiency in generating profits from assets, total capital, and equity. The company's performance in these areas demonstrates the importance of monitoring and analyzing profitability metrics to assess financial health and operational effectiveness.