Analysis of Reportable Segments
Allergan PLC operates in 3 segments: US Specialized Therapeutics; US General Medicine; and International.
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- Income Statement
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Debt
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Segment Profit Margin
Allergan PLC, profit margin by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| US Specialized Therapeutics | |||||
| US General Medicine | |||||
| International |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- US Specialized Therapeutics Profit Margin
- The profit margin for this segment exhibited a consistent declining trend over the five-year period. Starting at 75.01% in 2015, the margin decreased each year, reaching 66.88% by the end of 2019. This represents a total decline of approximately 8.13 percentage points, indicating reduced profitability in this segment over time.
- US General Medicine Profit Margin
- The profit margin for the US General Medicine segment experienced minor fluctuations throughout the period. It declined from 65.14% in 2015 to 62.18% in 2016, then rose gradually to a peak of 64.68% in 2018 before slightly declining again to 64.12% in 2019. Overall, the margin remained relatively stable with a slight net decrease of about 1.02 percentage points over five years.
- International Profit Margin
- The International segment's profit margin showed a modest increase initially, rising from 53.02% in 2015 to a peak of 54.42% in 2017. However, this was followed by a gradual decline to 52.97% in 2019. The overall movement suggests limited volatility, with the margin ultimately decreasing by approximately 0.05 percentage points over the full period.
- General Observations
- Across all segments, the US Specialized Therapeutics segment consistently maintained the highest profit margin, despite its downward trajectory. The US General Medicine segment demonstrated relative stability with minor fluctuations, while the International segment had the lowest profit margins and showed a slight decline after a short-term increase. These patterns may reflect varying operational challenges or market conditions impacting profitability differently across geographic and therapeutic areas.
Segment Profit Margin: US Specialized Therapeutics
Allergan PLC; US Specialized Therapeutics; segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Segment contribution | |||||
| Net revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Segment profit margin = 100 × Segment contribution ÷ Net revenues
= 100 × ÷ =
- Segment Contribution
- The segment contribution exhibited a consistent upward trend from 2015 to 2018, increasing from approximately 3.23 billion US dollars to 4.80 billion US dollars. In 2019, however, there was a noticeable decline to 4.56 billion US dollars, reversing the prior years' growth pattern.
- Net Revenues
- Net revenues followed a similar pattern, growing significantly from about 4.31 billion US dollars in 2015 to a peak of approximately 6.92 billion US dollars in 2018. In 2019, revenues slightly decreased to 6.82 billion US dollars, marking a modest contraction compared to the previous year.
- Segment Profit Margin
- The segment profit margin demonstrated a steady decline over the entire period. Starting at 75.01% in 2015, the margin decreased gradually each year to 66.88% by 2019. This indicates a reduction in profitability relative to net revenues despite overall growth in absolute financial figures from 2015 through 2018.
- Summary Insights
- Overall, the segment experienced strong revenue and contribution growth until 2018, followed by slight contractions in 2019. The declining profit margin over the years suggests increasing pressure on cost efficiency or pricing power, which may warrant further investigation. The simultaneous decrease in both revenue and segment contribution in 2019 highlights a potential weakening phase for the segment after several years of expansion.
Segment Profit Margin: US General Medicine
Allergan PLC; US General Medicine; segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Segment contribution | |||||
| Net revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Segment profit margin = 100 × Segment contribution ÷ Net revenues
= 100 × ÷ =
- Segment Contribution
- The segment contribution experienced a decline from 2015 through 2018, decreasing from approximately $4.13 billion in 2015 to around $3.44 billion in 2018. However, there was a partial recovery in 2019, with the contribution rising to about $3.74 billion, though the level did not reach that of 2015.
- Net Revenues
- Net revenues displayed a downward trend over the observed period. Starting at approximately $6.34 billion in 2015, revenues decreased consistently each year until 2018, reaching about $5.32 billion. In 2019, revenues showed some improvement, increasing to approximately $5.83 billion, yet remaining below the initial levels of 2015.
- Segment Profit Margin
- The segment profit margin exhibited relative stability with slight fluctuations over the five years. The margin started at 65.14% in 2015, declined to a low of 62.18% in 2016, then gradually improved to 64.68% in 2018 before slightly decreasing to 64.12% in 2019. Overall, the margin remained above 60%, indicating consistent profitability despite revenue and contribution variations.
- Summary
- The US General Medicine segment displayed a general decline in both segment contribution and net revenues from 2015 to 2018, followed by a modest recovery in 2019. Meanwhile, the segment profit margin remained relatively stable, suggesting effective cost management and maintained profitability despite challenges in revenue generation. The partial recovery in 2019 could indicate positive developments or market conditions affecting the segment.
Segment Profit Margin: International
Allergan PLC; International; segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Segment contribution | |||||
| Net revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Segment profit margin = 100 × Segment contribution ÷ Net revenues
= 100 × ÷ =
- Segment Contribution
- The segment contribution exhibited consistent growth from 2015 to 2018, increasing from approximately 1,159,600 thousand US dollars in 2015 to a peak of about 1,897,200 thousand US dollars in 2018. However, there was a slight decline in 2019, with the contribution decreasing to around 1,802,000 thousand US dollars. This indicates a generally positive performance trend over the period, though with a minor setback in the final year.
- Net Revenues
- Net revenues followed a similar upward trajectory from 2015 through 2018, rising from roughly 2,187,300 thousand US dollars in 2015 to about 3,504,700 thousand US dollars in 2018. In 2019, revenues slightly decreased to approximately 3,402,000 thousand US dollars, mirroring the decline observed in segment contribution. Overall, the data suggests robust revenue growth over the four years, with a modest reduction in the last year under review.
- Segment Profit Margin
- The segment profit margin remained relatively stable over the five-year period, fluctuating within a narrow range. It increased slightly from 53.02% in 2015 to a peak of 54.42% in 2017, then experienced a mild decrease to 52.97% by 2019. Despite minor variations, the margin maintained a level above 52.9%, indicating consistent profitability in relation to net revenues across all years.
- Summary of Trends
- Overall, the financial data reveals a positive growth pattern in both segment contribution and net revenues between 2015 and 2018, with a peak in 2018 followed by a slight downturn in 2019. Profit margins remained stable throughout, suggesting that profitability relative to revenues was largely maintained despite fluctuations in absolute figures. The downturn in 2019 merits further examination to determine underlying causes and potential impacts on future performance.
Net revenues
Allergan PLC, net revenues by reportable segment
US$ in thousands
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| US Specialized Therapeutics | |||||
| US General Medicine | |||||
| International | |||||
| Total |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- US Specialized Therapeutics
- The segment exhibited a consistent upward trajectory from 2015 to 2018, with net revenues increasing from approximately $4.31 billion to $6.92 billion. However, in 2019, a slight decline was observed, with revenues decreasing to about $6.82 billion. Overall, this segment demonstrated significant growth over the five-year period, reaching its peak in 2018 before a modest reduction in the following year.
- US General Medicine
- This segment showed a declining trend from 2015 to 2018, where net revenues dropped steadily from around $6.34 billion to roughly $5.32 billion. Notably, in 2019, there was a reversal with revenues increasing to approximately $5.83 billion. Despite this recovery, the 2019 figure remained below the initial 2015 value, indicating a general downward trend over the period with a partial rebound at the end.
- International
- International net revenues consistently increased from roughly $2.19 billion in 2015 to $3.50 billion in 2018, illustrating steady growth in this segment. However, a slight decrease occurred in 2019, with revenues falling to about $3.40 billion. This segment generally followed an upward trend with a minor dip in the last year of the period.
- Total Revenues
- Total revenues rose from approximately $12.84 billion in 2015 to a peak of around $15.92 billion in 2017. A marginal decline occurred in 2018, followed by a modest recovery in 2019 to about $16.06 billion, the highest value in the period. Overall, total net revenues showed a positive growth pattern across the five years, with minor fluctuations towards the end.
Segment contribution
Allergan PLC, segment contribution by reportable segment
US$ in thousands
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| US Specialized Therapeutics | |||||
| US General Medicine | |||||
| International | |||||
| Total |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The data reflects the segment contributions in US dollars (thousands) over the five-year period ending December 31, 2019. Three segments are reported: US Specialized Therapeutics, US General Medicine, and International, with an aggregate total also provided.
- US Specialized Therapeutics
- This segment exhibits consistent growth from 2015 to 2018, increasing from approximately 3.23 billion to 4.80 billion. However, in 2019, there is a slight decline to about 4.56 billion, indicating a potential slowdown or market challenges after several years of steady gains.
- US General Medicine
- The segment shows a downward trend during most of the period. Starting at roughly 4.13 billion in 2015, it decreases notably to about 3.44 billion by 2018. In 2019, there is a modest recovery to approximately 3.74 billion. Overall, the segment appears to be under pressure, with a notable decline in the middle years followed by a slight rebound.
- International
- This segment demonstrates steady expansion from 1.16 billion in 2015 to 1.90 billion in 2018, followed by a modest reduction to 1.80 billion in 2019. The consistent growth over most years suggests successful international operations, though the slight decline in the final year could warrant further examination.
- Total
- The total segment contribution increases steadily from 8.52 billion in 2015 to a peak of approximately 10.23 billion in 2017. Thereafter, it slightly decreases and stabilizes around 10.1 billion in 2018 and 2019. This pattern reflects the combined effects of the individual segment trends, with growth driven mainly by US Specialized Therapeutics and International segments, and moderated by the weaker performance in US General Medicine.