Amgen Inc Net Income surged on 34.5% in 2015 and EBITDA Margin increased on 7.5 pp from 41.3% to 48.8%
28/01/2016 • About Amgen Inc (
$4332) • By InTwits
Amgen Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Amgen Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's in pair with industry average of 45.0%.
- CAPEX is quite volatile: 9,311 in 2015, 5,063 in 2014, 2,758 in 2013, 3,611 in 2012, 12,444 in 2011
- The company has highly profitable business model: ROIC is at 14.6%
- It operates with high leverage: Net Debt/EBITDA is 2.6x while industry average is 1.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Amgen Inc ($4332) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 15,582 | 17,265 | 18,676 | 20,063 | 21,662 | 8.0% |
| Gross Profit | 13,155 | 14,066 | 15,330 | 15,641 | 17,435 | 11.5% |
| SG&A | 4,486 | 4,814 | 5,184 | 4,699 | 4,846 | 3.1% |
| EBITDA | 5,372 | 6,665 | 7,153 | 8,283 | 10,578 | 27.7% |
| Net Income | 3,683 | 4,345 | 5,081 | 5,158 | 6,939 | 34.5% |
Balance Sheet
|
|---|
| Cash | 6,946 | 3,257 | 3,805 | 3,731 | 4,144 | 11.1% |
| Short Term Debt | 84 | 2,495 | 2,505 | 500 | 2,250 | 350.0% |
| Long Term Debt | 21,344 | 24,034 | 29,623 | 30,215 | 29,306 | -3.0% |
Cash flow
|
|---|
| Capex | 567 | 689 | 693 | 718 | 594 | -17.3% |
Ratios
|
|---|
| Revenue growth | 3.5% | 10.8% | 8.2% | 7.4% | 8.0% | |
| EBITDA growth | -18.1% | 24.1% | 7.3% | 15.8% | 27.7% | |
| Gross Margin | 84.4% | 81.5% | 82.1% | 78.0% | 80.5% | 2.5% |
| EBITDA Margin | 34.5% | 38.6% | 38.3% | 41.3% | 48.8% | 7.5% |
| Net Income Margin | 23.6% | 25.2% | 27.2% | 25.7% | 32.0% | 6.3% |
| SG&A, % of revenue | 28.8% | 27.9% | 27.8% | 23.4% | 22.4% | -1.1% |
| CAPEX, % of revenue | 3.6% | 4.0% | 3.7% | 3.6% | 2.7% | -0.8% |
| ROIC | 11.1% | 13.0% | 11.7% | 11.2% | 14.6% | 3.4% |
| ROE | 17.1% | 22.8% | 24.7% | 21.5% | 25.8% | 4.2% |
| Net Debt/EBITDA | 2.7x | 3.5x | 4.0x | 3.3x | 2.6x | -0.7x |
Revenue and profitability
Amgen Inc's Revenue increased on 8.0% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.0 pp from 7.9% to 10.9% in 2015.
Gross Margin increased on 2.5 pp from 78.0% to 80.5% in 2015. SG&A as a % of Revenue decreased slightly on 1.1 pp from 23.4% to 22.4% in 2015.
Net Income marign increased on 6.3 pp from 25.7% to 32.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.7% in 2015. Amgen Inc's CAPEX/Revenue decreased slightly on 1.2 pp from 4.0% in 2012 to 2.7% in 2015. It's average level of CAPEX/Revenue for the last three years was 3.3%.
Return on investment
The company operates at high and attractive ROE (25.77%) while ROIC is a bit lower (14.57%). ROIC increased on 3.4 pp from 11.2% to 14.6% in 2015. ROE increased on 4.2 pp from 21.5% to 25.8% in 2015.
Leverage (Debt)
Debt level is 2.6x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 3.3x to 2.6x in 2015. Debt increased on 2.7% in 2015 while cash surged on 11.1% in 2015.
Management team
The company's CEO is Robert A Bradway. Robert A Bradway has 6 years tenure at the company. David W Meline is a Amgen Inc's CFO. David W Meline has spent 4 years at the company.
Appendix 1: Peers in Biotechnology
Below we provide Amgen Inc benchmarking against other companies in Biotechnology industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Essex Bio-technology Ltd ($1061) | 45.4% | 25.6% | 29.9% | 49.3% | |
| Bloomage BioTechnology Corp Ltd ($963) | 34.1% | 33.4% | 36.4% | 28.3% | |
| Uni-Bio Science Group Ltd ($690) | -48.2% | -25.7% | 46.1% | 23.1% | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 44.9% | 73.7% | 78.9% | 13.2% | |
| CK Life Sciences International Holdings Inc ($775) | 30.3% | 29.4% | 9.4% | -0.3% | |
| |
|---|
| Median (8 companies) | 34.1% | 27.5% | 33.2% | 6.4% | 452.4% |
|---|
| Amgen Inc ($4332) | | 10.8% | 8.2% | 7.4% | 8.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 82.8% | 89.9% | 92.2% | 92.2% | |
| Uni-Bio Science Group Ltd ($690) | 62.1% | 67.2% | 79.5% | 80.0% | |
| Essex Bio-technology Ltd ($1061) | 90.5% | 91.2% | 89.6% | 79.3% | |
| Bloomage BioTechnology Corp Ltd ($963) | 73.2% | 69.3% | 79.9% | 78.0% | |
| CK Life Sciences International Holdings Inc ($775) | 33.6% | 34.2% | 35.0% | 35.1% | |
| |
|---|
| Median (8 companies) | 63.2% | 50.7% | 57.3% | 56.6% | 49.2% |
|---|
| Amgen Inc ($4332) | 84.4% | 81.5% | 82.1% | 78.0% | 80.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bloomage BioTechnology Corp Ltd ($963) | 56.2% | 46.8% | 39.2% | 45.2% | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 35.5% | 33.4% | 29.0% | 31.5% | |
| Essex Bio-technology Ltd ($1061) | 18.0% | 19.0% | 21.9% | 21.3% | |
| CK Life Sciences International Holdings Inc ($775) | 9.3% | 9.9% | 10.0% | 10.7% | |
| Tianjin TEDA Biomedical Engineering Co Ltd ($8189) | 6.0% | 6.9% | 7.4% | 9.1% | |
| |
|---|
| Median (8 companies) | 13.6% | 8.4% | 8.7% | 9.9% | -4,271.9% |
|---|
| Amgen Inc ($4332) | 34.5% | 38.6% | 38.3% | 41.3% | 48.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Regenerative Medicine International Ltd ($8158) | 1,076.2% | 40,271.9% | 810.7% | 3,305.9% | 1,295.1% |
| Uni-Bio Science Group Ltd ($690) | 5.1% | 23.9% | 28.9% | 35.5% | |
| Bloomage BioTechnology Corp Ltd ($963) | 7.0% | 35.8% | 30.4% | 24.6% | |
| CK Life Sciences International Holdings Inc ($775) | 5.4% | 3.8% | 5.8% | 9.9% | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 24.6% | 49.3% | 13.6% | 9.4% | |
| |
|---|
| Median (8 companies) | 8.4% | 29.9% | 12.0% | 9.6% | 1,295.1% |
|---|
| Amgen Inc ($4332) | 3.6% | 4.0% | 3.7% | 3.6% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Essex Bio-technology Ltd ($1061) | 24.7% | 22.6% | 25.2% | 28.5% | |
| Bloomage BioTechnology Corp Ltd ($963) | 33.7% | 30.1% | 24.1% | 27.2% | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 15.7% | 20.0% | 20.9% | 18.6% | |
| Tianjin TEDA Biomedical Engineering Co Ltd ($8189) | 7.5% | 12.4% | 10.1% | 9.8% | |
| CK Life Sciences International Holdings Inc ($775) | 3.0% | 4.2% | 4.1% | 4.3% | |
| |
|---|
| Median (8 companies) | 9.5% | 8.3% | 7.1% | 7.0% | -11.7% |
|---|
| Amgen Inc ($4332) | 11.1% | 13.0% | 11.7% | 11.2% | 14.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CK Life Sciences International Holdings Inc ($775) | 5.4x | 4.3x | 6.1x | 6.4x | |
| Tianjin TEDA Biomedical Engineering Co Ltd ($8189) | 2.0x | 2.0x | 1.4x | 0.9x | |
| Essex Bio-technology Ltd ($1061) | -1.0x | 0.3x | -0.0x | -0.1x | |
| Bloomage BioTechnology Corp Ltd ($963) | -1.2x | -0.5x | -0.3x | -0.5x | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | -0.7x | -0.4x | -2.4x | -2.2x | |
| |
|---|
| Median (5 companies) | 0.7x | 1.1x | -0.0x | -0.1x | |
|---|
| Amgen Inc ($4332) | 2.7x | 3.5x | 4.0x | 3.3x | 2.6x |
