Pfizer Inc Net Income dropped on 23.8% in 2015 and Revenue decreased slightly on 1.5%
02 Feb 2016 • About Pfizer Inc (
$PFZ) • By InTwits
Pfizer Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Pfizer Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's a lot of higher than industry average of 12.4%.
- CAPEX is quite volatile: 2,086 in FY2015, 2,963 in FY2014, 2,204 in FY2013, 3,724 in FY2012, 7,461 in FY2011
- The company has business model with low profitability: ROIC is at 9.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Pfizer Inc ($PFZ) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 65,259 | 54,657 | 51,584 | 49,605 | 48,851 | -1.5% |
| Gross Profit | 51,183 | 44,836 | 41,998 | 40,028 | 39,203 | -2.1% |
| SG&A | 18,832 | 15,171 | 14,355 | 14,097 | 14,809 | 5.1% |
| EBITDA | 23,710 | 22,919 | 21,594 | 18,786 | 16,981 | -9.6% |
| Net Income | 10,009 | 14,570 | 22,003 | 9,135 | 6,960 | -23.8% |
Balance Sheet
|
|---|
| Cash | 3,182 | 10,081 | 2,183 | 3,343 | 3,641 | 8.9% |
| Short Term Debt | 4,016 | 6,424 | 6,027 | 5,141 | 10,159 | 97.6% |
| Long Term Debt | 34,926 | 31,036 | 30,462 | 31,541 | 28,740 | -8.9% |
Cash flow
|
|---|
| Capex | 1,660 | 1,327 | 1,206 | 1,199 | 1,397 | 16.5% |
Ratios
|
|---|
| Revenue growth | -2.7% | -16.2% | -5.6% | -3.8% | -1.5% | |
| EBITDA growth | 7.3% | -3.3% | -5.8% | -13.0% | -9.6% | |
| Gross Margin | 78.4% | 82.0% | 81.4% | 80.7% | 80.3% | -0.4% |
| EBITDA Margin | 36.3% | 41.9% | 41.9% | 37.9% | 34.8% | -3.1% |
| Net Income Margin | 15.3% | 26.7% | 42.7% | 18.4% | 14.2% | -4.2% |
| SG&A, % of revenue | 28.9% | 27.8% | 27.8% | 28.4% | 30.3% | 1.9% |
| CAPEX, % of revenue | 2.5% | 2.4% | 2.3% | 2.4% | 2.9% | 0.4% |
| ROIC | 10.8% | 11.6% | 10.9% | 9.9% | 9.1% | -0.8% |
| ROE | 11.8% | 17.8% | 27.9% | 12.4% | 10.2% | -2.1% |
| Net Debt/EBITDA | 1.5x | 1.2x | 1.6x | 1.8x | 2.1x | 0.3x |
Revenue and profitability
The company's Revenue decreased slightly on 1.5% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.1 pp from 37.9% to 34.8% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue increased slightly on 1.9 pp from 28.4% to 30.3% in 2015.
Net Income marign decreased on 4.2 pp from 18.4% to 14.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 2.9%. Pfizer Inc's CAPEX/Revenue showed almost no change from 2012 to 2015. Average CAPEX/Revenue for the last three years was 2.5%.
Return on investment
The company operates at low ROIC (9.08%) and ROE (10.23%). ROIC decreased slightly on 0.77 pp from 9.9% to 9.1% in 2015. ROE decreased on 2.1 pp from 12.4% to 10.2% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.1x and Debt / EBITDA is 2.3x. Net Debt / EBITDA surged on 0.3x from 1.8x to 2.1x in 2015. Debt increased on 6.0% in 2015 while cash increased on 8.9% in 2015.
Valuation
The company's trades at EV/EBITDA 2.2x and P/E 0.3x while industy averages are 10.5x and 26.1x. Pfizer Inc's EV/(EBITDA-CAPEX) is 2.4x with the industry average at 4.7x.
Appendix 1: Peers in Pharmaceuticals & Biotechnology
Below we provide Pfizer Inc benchmarking against other companies in Pharmaceuticals & 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 |
|---|
| Cathay International Hldgs Ltd ($CTI) | 12.0% | 19.6% | 5.1% | 30.6% | |
| Source Bioscience ($SBS) | 12.6% | 8.2% | 18.8% | 28.9% | |
| Cyprotex ($CRX) | 33.5% | 5.3% | 17.3% | 18.5% | |
| Beximco Pharmaceuticals ($BXP) | 21.6% | 17.7% | 12.9% | 6.8% | |
| Animalcare Group ($ANCR) | | -8.2% | 11.6% | 6.3% | 5.1% |
| |
|---|
| Median (9 companies) | 17.1% | 8.2% | 12.4% | 6.3% | 5.1% |
|---|
| Pfizer Inc ($PFZ) | | -16.2% | -5.6% | -3.8% | -1.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cyprotex ($CRX) | 83.2% | 81.9% | 80.0% | 75.0% | |
| Animalcare Group ($ANCR) | 54.0% | 54.0% | 56.0% | 55.4% | 55.9% |
| Source Bioscience ($SBS) | 44.4% | 45.1% | 46.0% | 48.6% | |
| Cathay International Hldgs Ltd ($CTI) | 51.2% | 52.2% | 49.1% | 47.1% | |
| Beximco Pharmaceuticals ($BXP) | 48.0% | 47.3% | 46.1% | 45.5% | |
| |
|---|
| Median (9 companies) | 44.4% | 45.1% | 46.0% | 45.5% | 55.9% |
|---|
| Pfizer Inc ($PFZ) | 78.4% | 82.0% | 81.4% | 80.7% | 80.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pharmstandard OJSC ($PHST) | 28.1% | 26.1% | 30.3% | 30.9% | |
| Beximco Pharmaceuticals ($BXP) | 30.5% | 29.1% | 26.9% | 27.2% | |
| Animalcare Group ($ANCR) | 29.9% | 24.2% | 25.2% | 24.5% | 25.4% |
| Source Bioscience ($SBS) | -6.8% | 16.1% | 16.7% | 20.1% | |
| Taihua ($TAIH) | 23.2% | 9.1% | 10.5% | 18.5% | |
| |
|---|
| Median (9 companies) | 14.8% | 16.3% | 15.6% | 18.5% | 25.4% |
|---|
| Pfizer Inc ($PFZ) | 36.3% | 41.9% | 41.9% | 37.9% | 34.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Beximco Pharmaceuticals ($BXP) | 14.1% | 11.1% | 26.1% | 24.8% | |
| Cyprotex ($CRX) | 4.0% | 3.5% | 12.0% | 12.9% | |
| Eastpharma Ltd ($EAST) | 9.5% | 11.9% | 12.3% | 7.1% | |
| Pharmstandard OJSC ($PHST) | 4.1% | 2.7% | 2.6% | 5.8% | |
| Source Bioscience ($SBS) | 46.3% | 13.7% | 7.9% | 5.3% | |
| |
|---|
| Median (9 companies) | 4.1% | 3.5% | 7.9% | 5.3% | 0.1% |
|---|
| Pfizer Inc ($PFZ) | 2.5% | 2.4% | 2.3% | 2.4% | 2.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pharmstandard OJSC ($PHST) | 37.1% | 34.0% | 42.6% | 28.8% | |
| Animalcare Group ($ANCR) | 18.1% | 14.0% | 15.4% | 14.2% | 14.8% |
| Anpario ($ANP) | 11.9% | 15.9% | 14.7% | 13.6% | |
| Beximco Pharmaceuticals ($BXP) | 9.4% | 9.7% | 8.9% | 8.7% | |
| Source Bioscience ($SBS) | -14.9% | 7.0% | 5.8% | 8.4% | |
| |
|---|
| Median (9 companies) | 9.5% | 7.0% | 8.4% | 8.4% | 14.8% |
|---|
| Pfizer Inc ($PFZ) | 10.8% | 11.6% | 10.9% | 9.9% | 9.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cyprotex ($CRX) | -0.2x | 0.6x | -4.3x | 20.0x | |
| Cathay International Hldgs Ltd ($CTI) | 8.2x | 15.0x | 12.2x | 6.3x | |
| Eastpharma Ltd ($EAST) | 15.6x | 2.7x | 3.8x | 4.3x | |
| Beximco Pharmaceuticals ($BXP) | 0.6x | 1.1x | 1.5x | 1.5x | |
| Source Bioscience ($SBS) | | 0.3x | 1.5x | 0.8x | |
| |
|---|
| Median (9 companies) | -0.3x | 0.3x | -0.5x | 0.8x | -1.7x |
|---|
| Pfizer Inc ($PFZ) | 1.5x | 1.2x | 1.6x | 1.8x | 2.1x |
