Pfizer Inc revenue increased on 8.1% in 2016 while EBITDA Margin decreased slightly on 1.1 pp from 34.8% to 33.6%
31 Jan 2017 • About Pfizer Inc (
$PFZ) • By InTwits
Pfizer Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 33.6% in 2016 vs. 34.8% in 2015 vs. 41.9% in 2012
- Pfizer Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's a lot of higher than industry average of 14.2%.
- CAPEX is quite volatile: 16,643 in 2016, 11,423 in 2015, 5,206 in 2014, 4,233 in 2013, 7,433 in 2012
- The company has business model with low profitability: ROIC is at 9.2%
- It operates with high leverage: Net Debt/EBITDA is 2.2x while industry average is 1.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Pfizer Inc ($PFZ) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 54,657 | 51,584 | 49,605 | 48,851 | 52,824 | 8.1% |
| Gross Profit | 44,836 | 41,998 | 40,028 | 39,203 | 40,495 | 3.3% |
| SG&A | 15,171 | 14,355 | 14,097 | 14,809 | 14,837 | 0.2% |
| EBITDA | 22,919 | 21,594 | 18,786 | 16,981 | 17,763 | 4.6% |
| Net Income | 14,570 | 22,003 | 9,135 | 6,960 | 7,215 | 3.7% |
Balance Sheet
|
|---|
| Cash | 10,081 | 2,183 | 3,343 | 3,641 | 2,595 | -28.7% |
| Short Term Debt | 6,424 | 6,027 | 5,141 | 10,159 | 10,688 | 5.2% |
| Long Term Debt | 31,036 | 30,462 | 31,541 | 28,740 | 31,398 | 9.2% |
Cash flow
|
|---|
| Capex | 1,327 | 1,206 | 1,199 | 1,397 | 1,823 | 30.5% |
Ratios
|
|---|
| Revenue growth | -16.2% | -5.6% | -3.8% | -1.5% | 8.1% | |
| EBITDA growth | -3.3% | -5.8% | -13.0% | -9.6% | 4.6% | |
| Gross Margin | 82.0% | 81.4% | 80.7% | 80.3% | 76.7% | -3.6% |
| EBITDA Margin | 41.9% | 41.9% | 37.9% | 34.8% | 33.6% | -1.1% |
| Net Income Margin | 26.7% | 42.7% | 18.4% | 14.2% | 13.7% | -0.6% |
| SG&A, % of revenue | 27.8% | 27.8% | 28.4% | 30.3% | 28.1% | -2.2% |
| CAPEX, % of revenue | 2.4% | 2.3% | 2.4% | 2.9% | 3.5% | 0.6% |
| ROIC | 11.6% | 10.9% | 9.9% | 9.1% | 9.2% | 0.1% |
| ROE | 17.8% | 27.9% | 12.4% | 10.2% | 11.6% | 1.4% |
| Net Debt/EBITDA | 1.2x | 1.6x | 1.8x | 2.1x | 2.2x | 0.1x |
Revenue and profitability
The company's Revenue increased on 8.1% in 2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.0 pp from 24.1% to 29.1% in 2016.
Gross Margin decreased on 3.6 pp from 80.3% to 76.7% in 2016. SG&A as a % of Revenue decreased on 2.2 pp from 30.3% to 28.1% in 2016.
Net Income marign decreased slightly on 0.59 pp from 14.2% to 13.7% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.5% in 2016. CAPEX/Revenue increased slightly on 1.1 pp from 2.3% in 2013 to 3.5% in 2016. For the last three years the average CAPEX/Revenue was 2.9%.
Return on investment
The company operates at low ROIC (9.18%) and ROE (11.61%). ROIC showed almost no change in 2016. ROE increased slightly on 1.4 pp from 10.2% to 11.6% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 2.4x. Net Debt / EBITDA surged on 0.1x from 2.1x to 2.2x in 2016. Debt increased on 8.2% in 2016 while cash dropped on 28.7% in 2016.
Valuation
The company's trades at EV/EBITDA 2.3x and P/E 0.3x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 2.6x with the industry average at 19.0x.
Appendix 1: Peers in Pharmaceuticals & Biotechnology
Below you can find Pfizer Inc benchmarking vs. other companies in Pharmaceuticals & 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 |
|---|
| Ergomed ($ERGO) | 21.1% | 3.7% | 39.7% | 42.7% | |
| Cyprotex ($CRX) | 5.3% | 17.3% | 18.5% | 34.9% | |
| Beximco Pharmaceuticals ($BXP) | | 12.9% | 6.8% | 15.7% | 6.3% |
| Quantum Pharma ($QP.) | | 26.0% | 10.8% | 15.4% | 13.4% |
| Pharmstandard OJSC ($PHST) | 19.1% | 12.4% | -27.7% | 14.5% | |
| |
|---|
| Median (11 companies) | 13.6% | 12.4% | 6.8% | 5.1% | 8.6% |
|---|
| Pfizer Inc ($PFZ) | | -5.6% | -3.8% | -1.5% | 8.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cyprotex ($CRX) | 81.9% | 80.0% | 75.0% | 77.3% | |
| Animalcare Group ($ANCR) | 54.0% | 56.0% | 55.4% | 55.9% | 54.4% |
| Source Bioscience ($SBS) | 45.1% | 46.0% | 48.6% | 50.5% | |
| Beximco Pharmaceuticals ($BXP) | 47.3% | 46.1% | 45.5% | 46.3% | 46.5% |
| Anpario ($ANP) | 32.6% | 35.0% | 40.5% | 44.9% | |
| |
|---|
| Median (11 companies) | 42.7% | 42.9% | 44.2% | 44.0% | 46.5% |
|---|
| Pfizer Inc ($PFZ) | 82.0% | 81.4% | 80.7% | 80.3% | 76.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pharmstandard OJSC ($PHST) | 26.1% | 30.3% | 30.9% | 29.0% | |
| Beximco Pharmaceuticals ($BXP) | 29.1% | 26.9% | 27.2% | 26.6% | 28.9% |
| Animalcare Group ($ANCR) | 24.2% | 25.2% | 24.5% | 25.4% | 23.5% |
| Eastpharma Ltd ($EAST) | 21.1% | 15.6% | 16.1% | 23.3% | |
| Source Bioscience ($SBS) | 16.1% | 16.7% | 20.1% | 20.5% | |
| |
|---|
| Median (11 companies) | 16.1% | 14.5% | 16.1% | 20.0% | 23.5% |
|---|
| Pfizer Inc ($PFZ) | 41.9% | 41.9% | 37.9% | 34.8% | 33.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Taihua ($TAIH) | 0.9% | 0.1% | 1.6% | 62.2% | |
| Beximco Pharmaceuticals ($BXP) | 11.1% | 26.1% | 24.8% | 19.4% | 13.5% |
| Eastpharma Ltd ($EAST) | 11.9% | 12.3% | 7.1% | 6.2% | |
| Cathay International Hldgs Ltd ($CTI) | 16.7% | 12.1% | 4.0% | 5.5% | |
| Cyprotex ($CRX) | 3.5% | 12.0% | 12.9% | 5.3% | |
| |
|---|
| Median (11 companies) | 3.5% | 4.7% | 4.0% | 5.3% | 3.0% |
|---|
| Pfizer Inc ($PFZ) | 2.4% | 2.3% | 2.4% | 2.9% | 3.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pharmstandard OJSC ($PHST) | 34.0% | 42.6% | 28.8% | 23.9% | |
| Quantum Pharma ($QP.) | | 8.9% | 4.6% | 17.8% | 9.1% |
| Cyprotex ($CRX) | 4.3% | 8.4% | -9.7% | 15.0% | |
| Animalcare Group ($ANCR) | 14.0% | 15.4% | 14.2% | 14.8% | 13.8% |
| Ergomed ($ERGO) | 82.0% | 148.0% | 15.5% | 14.6% | |
| |
|---|
| Median (11 companies) | 8.4% | 8.9% | 8.4% | 13.8% | 10.9% |
|---|
| Pfizer Inc ($PFZ) | 11.6% | 10.9% | 9.9% | 9.1% | 9.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cathay International Hldgs Ltd ($CTI) | 15.0x | 12.2x | 6.3x | 12.7x | |
| Cyprotex ($CRX) | 0.6x | -4.3x | 20.0x | 3.9x | |
| Eastpharma Ltd ($EAST) | 2.7x | 3.8x | 4.3x | 2.7x | |
| Beximco Pharmaceuticals ($BXP) | 1.1x | 1.5x | 1.5x | 1.4x | 1.0x |
| Quantum Pharma ($QP.) | 6.4x | 8.3x | 15.5x | 0.8x | 2.8x |
| |
|---|
| Median (10 companies) | 0.3x | -0.5x | 0.8x | 0.7x | 1.0x |
|---|
| Pfizer Inc ($PFZ) | 1.2x | 1.6x | 1.8x | 2.1x | 2.2x |
