Amgen Inc reports 12.5% EBITDA growth and 6.1% Revenue growth
02/02/2017 • About Amgen Inc (
$4332) • By InTwits
Amgen Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 51.8% in 2016 vs. 48.8% in 2015 vs. 38.6% in 2012
- Amgen Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's a lot of higher than industry average of 8.2%.
- CAPEX is quite volatile: 2,146 in 2016, 5,856 in 2015, 9,841 in 2014, 8,456 in 2013, 3,643 in 2012
- The company has highly profitable business model: ROIC is at 15.8%
- 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. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 17,265 | 18,676 | 20,063 | 21,662 | 22,991 | 6.1% |
| Gross Profit | 14,066 | 15,330 | 15,641 | 17,435 | 18,829 | 8.0% |
| SG&A | 4,814 | 5,184 | 4,699 | 4,846 | 5,062 | 4.5% |
| EBITDA | 6,665 | 7,153 | 8,283 | 10,578 | 11,899 | 12.5% |
| Net Income | 4,345 | 5,081 | 5,158 | 6,939 | 7,722 | 11.3% |
Balance Sheet
|
|---|
| Cash | 3,257 | 3,805 | 3,731 | 4,144 | 3,241 | -21.8% |
| Short Term Debt | 2,495 | 2,505 | 500 | 2,250 | 4,403 | 95.7% |
| Long Term Debt | 24,034 | 29,623 | 30,215 | 29,306 | 30,193 | 3.0% |
Cash flow
|
|---|
| Capex | 689 | 693 | 718 | 594 | 738 | 24.2% |
Ratios
|
|---|
| Revenue growth | 10.8% | 8.2% | 7.4% | 8.0% | 6.1% | |
| EBITDA growth | 24.1% | 7.3% | 15.8% | 27.7% | 12.5% | |
| Gross Margin | 81.5% | 82.1% | 78.0% | 80.5% | 81.9% | 1.4% |
| EBITDA Margin | 38.6% | 38.3% | 41.3% | 48.8% | 51.8% | 2.9% |
| Net Income Margin | 25.2% | 27.2% | 25.7% | 32.0% | 33.6% | 1.6% |
| SG&A, % of revenue | 27.9% | 27.8% | 23.4% | 22.4% | 22.0% | -0.4% |
| CAPEX, % of revenue | 4.0% | 3.7% | 3.6% | 2.7% | 3.2% | 0.5% |
| ROIC | 13.0% | 11.7% | 11.2% | 14.6% | 15.8% | 1.2% |
| ROE | 22.8% | 24.7% | 21.5% | 25.8% | 26.6% | 0.9% |
| Net Debt/EBITDA | 3.5x | 4.0x | 3.3x | 2.6x | 2.6x | 0.0x |
Revenue and profitability
The company's Revenue increased on 6.1%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 13.0 pp from 38.3% to 51.3% in FY2016.
Gross Margin increased slightly on 1.4 pp from 80.5% to 81.9% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign increased slightly on 1.6 pp from 32.0% to 33.6% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Amgen Inc had CAPEX/Revenue of 3.2%. CAPEX/Revenue decreased slightly on 0.50 pp from 3.7% in 2013 to 3.2% in 2016. For the last three years the average CAPEX/Revenue was 3.2%.
Return on investment
The company operates at high and attractive ROE (26.65%) while ROIC is a bit lower (15.77%). ROIC increased slightly on 1.2 pp from 14.6% to 15.8% in 2016. ROE increased slightly on 0.88 pp from 25.8% to 26.6% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is 2.9x. Net Debt / EBITDA increased on 0.044x from 2.6x to 2.6x in 2016. Debt increased on 9.6% while cash dropped on 21.8%.
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 you can find Amgen Inc benchmarking vs. other companies in Biotechnology industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Regenerative Medicine International Ltd ($8158) | | 975.8% | -63.0% | 452.4% | 885.1% |
| Bloomage BioTechnology Corp Ltd ($963) | 33.4% | 36.4% | 28.3% | 35.2% | |
| Essex Bio-technology Ltd ($1061) | 25.6% | 29.9% | 49.3% | 26.2% | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 73.7% | 78.9% | 13.2% | 23.1% | |
| Uni-Bio Science Group Ltd ($690) | -25.7% | 46.1% | 23.1% | 20.2% | |
| |
|---|
| Median (8 companies) | 29.4% | 33.2% | 6.4% | 21.6% | 885.1% |
|---|
| Amgen Inc ($4332) | | 8.2% | 7.4% | 8.0% | 6.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 89.9% | 92.2% | 92.2% | 91.4% | |
| Uni-Bio Science Group Ltd ($690) | 67.2% | 79.5% | 80.0% | 83.3% | |
| Essex Bio-technology Ltd ($1061) | 91.2% | 89.6% | 79.3% | 81.0% | |
| Bloomage BioTechnology Corp Ltd ($963) | 69.3% | 79.9% | 78.0% | 74.9% | |
| China Regenerative Medicine International Ltd ($8158) | 33.6% | -17.3% | 31.0% | 49.2% | 66.1% |
| |
|---|
| Median (8 companies) | 50.7% | 57.3% | 56.6% | 62.0% | 66.1% |
|---|
| Amgen Inc ($4332) | 81.5% | 82.1% | 78.0% | 80.5% | 81.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bloomage BioTechnology Corp Ltd ($963) | 46.8% | 39.2% | 45.2% | 44.1% | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 33.4% | 29.0% | 31.5% | 29.3% | |
| Essex Bio-technology Ltd ($1061) | 19.0% | 21.9% | 21.3% | 22.6% | |
| CK Life Sciences International Holdings Inc ($775) | 9.9% | 10.0% | 10.7% | 11.3% | |
| Tianjin TEDA Biomedical Engineering Co Ltd ($8189) | 6.9% | 7.4% | 9.1% | 9.2% | |
| |
|---|
| Median (8 companies) | 8.4% | 8.7% | 9.9% | 10.3% | -755.6% |
|---|
| Amgen Inc ($4332) | 38.6% | 38.3% | 41.3% | 48.8% | 51.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Regenerative Medicine International Ltd ($8158) | 40,271.9% | 810.7% | 3,305.9% | 1,295.1% | 58.9% |
| Bloomage BioTechnology Corp Ltd ($963) | 35.8% | 30.4% | 24.6% | 41.0% | |
| Uni-Bio Science Group Ltd ($690) | 23.9% | 28.9% | 35.5% | 15.3% | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 49.3% | 13.6% | 9.4% | 6.6% | |
| CK Life Sciences International Holdings Inc ($775) | 3.8% | 5.8% | 9.9% | 6.0% | |
| |
|---|
| Median (8 companies) | 29.9% | 12.0% | 9.6% | 6.3% | 58.9% |
|---|
| Amgen Inc ($4332) | 4.0% | 3.7% | 3.6% | 2.7% | 3.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Essex Bio-technology Ltd ($1061) | 22.6% | 25.2% | 28.5% | 31.4% | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 20.0% | 20.9% | 18.6% | 17.6% | |
| Bloomage BioTechnology Corp Ltd ($963) | 30.1% | 24.1% | 27.2% | 17.1% | |
| Tianjin TEDA Biomedical Engineering Co Ltd ($8189) | 12.4% | 10.1% | 9.8% | 9.5% | |
| CK Life Sciences International Holdings Inc ($775) | 4.2% | 4.1% | 4.3% | 4.8% | |
| |
|---|
| Median (8 companies) | 8.3% | 7.1% | 7.0% | 7.2% | -11.0% |
|---|
| Amgen Inc ($4332) | 13.0% | 11.7% | 11.2% | 14.6% | 15.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CK Life Sciences International Holdings Inc ($775) | 4.3x | 6.1x | 6.4x | 6.0x | |
| Bloomage BioTechnology Corp Ltd ($963) | -0.5x | -0.3x | -0.5x | 1.6x | |
| Essex Bio-technology Ltd ($1061) | 0.3x | -0.0x | -0.1x | -0.1x | |
| Tianjin TEDA Biomedical Engineering Co Ltd ($8189) | 2.0x | 1.4x | 0.9x | -1.3x | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | -0.4x | -2.4x | -2.2x | -1.9x | |
| |
|---|
| Median (5 companies) | 1.1x | -0.0x | -0.1x | -0.1x | |
|---|
| Amgen Inc ($4332) | 3.5x | 4.0x | 3.3x | 2.6x | 2.6x |
