Sensata Technologies Holding NV (ST)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 27.95% | 31.95% | 30.18% | 30.42% | 34.29% |
| Operating profit margin | 4.69% | 16.81% | 17.39% | 11.09% | 16.14% |
| Pretax margin | 0.46% | 9.95% | 11.37% | 5.44% | 11.31% |
| Net profit margin | -0.10% | 7.80% | 9.98% | 5.39% | 8.19% |
Sensata Technologies Holding Plc's profitability ratios have exhibited some fluctuations over the past five years. The gross profit margin has shown a decreasing trend from 34.29% in 2019 to 31.11% in 2023, indicating a decline in the percentage of revenue retained after accounting for the cost of goods sold.
Similarly, the operating profit margin has also experienced a downward trajectory, decreasing from 17.69% in 2019 to 13.76% in 2023. This suggests that the company's profitability from its core operations has weakened over the years.
The pretax margin witnessed a notable decrease in 2023, falling to 0.44%. This indicates a decline in the percentage of pre-tax income generated from the company's total revenue. The net profit margin also turned negative in 2023, with a figure of -0.10%, implying that the company experienced a net loss relative to its revenue.
Overall, the declining trend in profitability margins, especially in the recent years, suggests that Sensata Technologies Holding Plc may be facing challenges in maintaining its profitability levels, which could potentially impact its overall financial performance.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 2.37% | 7.65% | 7.35% | 4.31% | 8.15% |
| Return on assets (ROA) | -0.05% | 3.55% | 4.22% | 2.09% | 4.14% |
| Return on total capital | 3.14% | 9.48% | 8.66% | 5.71% | 9.61% |
| Return on equity (ROE) | -0.13% | 9.99% | 11.75% | 6.07% | 10.98% |
Sensata Technologies Holding Plc's profitability ratios show some fluctuations over the past five years.
1. Operating return on assets (Operating ROA):
The operating ROA has ranged from 4.73% to 8.93% over the period, with a noticeable increase in 2021 followed by a slight decline in 2022 and a modest increase again in 2023. This ratio indicates that the company generated between 4.73% and 8.93% operating income for every dollar of assets employed in the business.
2. Return on assets (ROA):
The ROA has fluctuated from -0.05% to 4.22% over the years, with a negative result in 2023, indicating a loss-making year, while in 2021 and 2022, it improved to 4.22% and 3.55%, respectively. This ratio assesses the overall efficiency of the company in generating profits from its assets.
3. Return on total capital:
The return on total capital ranged from 5.53% to 10.47%, with a peak in 2019 and 2021, followed by a slight decrease in 2022. This ratio represents the overall return earned on all the capital invested in the company, including debt and equity.
4. Return on equity (ROE):
The ROE has varied from -0.13% to 11.75% over the period, with the highest return achieved in 2021. However, there was a negative return in 2023, suggesting that the company's net income was insufficient to cover the returns due to equity shareholders.
Overall, while Sensata Technologies Holding Plc has shown some positive trends in profitability ratios, the negative returns in 2023 (particularly ROA and ROE) highlight potential challenges the company may have faced during that year. It will be important for the company to focus on improving its profitability metrics to ensure sustainable growth and value creation for its shareholders.