Abbott Laboratories Net Income jumped on 396% and EBITDA Margin increased on 2.1 pp from 20.7% to 22.8%
23 Jan 2019 • About Abbott Laboratories (
$ABT) • By InTwits
Abbott Laboratories reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Abbott Laboratories has low CAPEX intensity: 5 year average CAPEX/Revenue was 5.0%. At the same time it's in pair with industry average of 2.8%
- CAPEX is quite volatile: 1,794 TRYm in 2018, 819 TRYm in 2017, 1,021 TRYm in 2016, 561 TRYm in 2015, 401 TRYm in 2014
- The company has potentially unprofitable business model: ROIC is 6.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.3x while industry average is -0.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Abbott Laboratories's Revenue surged on 11.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.4 pp from 2.2% to 5.6% in 2018.
Gross Margin increased on 3.5 pp from 55.0% to 58.4% in 2018. SG&A as a % of Revenue decreased slightly on 1.4 pp from 33.3% to 31.9% in 2018.
Net Income margin increased on 6.0 pp from 1.7% to 7.7% in 2018. The efficient tax rate was 18.5% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 4.6%. CAPEX/Revenue decreased slightly on 0.88 pp from 5.4% in 2015 to 4.6% in 2018. Average CAPEX/Revenue for the last three years was 4.7%.
Return on investment
The company operates at low ROIC (6.6%) and ROE (7.7%). ROIC increased on 3.2 pp from 3.4% to 6.6% in 2018. ROE increased on 5.9 pp from 1.9% to 7.7% in 2018.
Leverage (Debt)
Debt level is 2.3x Net Debt / EBITDA and 2.8x Debt / EBITDA. Net Debt / EBITDA dropped on 1.0x from 3.3x to 2.3x in 2018. Debt dropped on 29.9% while cash dropped on 59.1%.
Abbott Laboratories has good short term financial stability: Interest coverage ratio (ICR) is 4.4x. Abbott Laboratories has no short term refinancing risk: cash is higher than short term debt (1,857.0%).
Average interest expence charged on company's debt was 4.2% in 2018.
The company paid 83.4% of Net Income as dividends in 2018.
Management team
Abbott Laboratories's CEO is Miles D White. Miles D White has 20 years tenure with the company. CEO total compensation was
$24,254,238 in 2018 which included
$1,900,000 salary. Abbott Laboratories's CFO is Brian B Yoor. Brian B Yoor has 3 years tenure at the company.
0.73% of the company is owned by insiders.
At the end of financial year the company had 103,000 employees. Average revenue per employee in 2018 was
$296,874.
Financial and operational results
FY ended 31 Dec 2018
Abbott Laboratories ($ABT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 20,247 | 20,405 | 20,853 | 27,390 | 30,578 | 11.6% |
| Gross Profit | 11,029 | 11,658 | 11,829 | 15,053 | 17,872 | 18.7% |
| SG&A | 6,530 | 6,785 | 6,672 | 9,117 | 9,744 | 6.9% |
| EBITDA | 4,147 | 4,339 | 4,703 | 5,659 | 6,960 | 23.0% |
| EBIT | | | | | 3,650 | |
| Interest expence | | | | | 826 | |
| Tax | | | | | 539 | |
| Net Income | 2,284 | 4,423 | 1,400 | 477 | 2,368 | 396.4% |
| Stock Based Compensation | | | | | 477 | |
Balance Sheet
|
|---|
| Cash | 4,063 | 5,001 | 18,620 | 9,407 | 3,844 | -59.1% |
| Accounts Receivable | | | | | 5,182 | |
| Inventory | | | | | 3,796 | |
| Accounts Payable | | | | | 2,975 | |
| Short Term Debt | 4,437 | 3,130 | 1,325 | 714 | 207 | -71.0% |
| Long Term Debt | 3,393 | 5,871 | 20,681 | 27,210 | 19,359 | -28.9% |
Cash flow
|
|---|
| Capex | 1,077 | 1,110 | 1,121 | 1,135 | 1,394 | 22.8% |
| Dividends | | | | | 1,974 | |
Ratios
|
|---|
| Revenue growth | 3.0% | 0.8% | 2.2% | 31.3% | 11.6% | |
| EBITDA growth | 7.7% | 4.6% | 8.4% | 20.3% | 23.0% | |
|
|---|
| Gross Margin | 54.5% | 57.1% | 56.7% | 55.0% | 58.4% | 3.5% |
| EBITDA Margin | 20.5% | 21.3% | 22.6% | 20.7% | 22.8% | 2.1% |
| EBIT Margin | | | | | 11.9% |
| SG&A, % of revenue | 32.3% | 33.3% | 32.0% | 33.3% | 31.9% | -1.4% |
| SBC, % of revenue | | | | | 1.6% |
| Net Income Margin | 11.3% | 21.7% | 6.7% | 1.7% | 7.7% | 6.0% |
| CAPEX, % of revenue | 5.3% | 5.4% | 5.4% | 4.1% | 4.6% | 0.4% |
|
|---|
| ROIC | 8.3% | 9.4% | 8.6% | 3.4% | 6.6% | 3.2% |
| ROE | 9.8% | 20.7% | 6.7% | 1.9% | 7.7% | 5.9% |
| Net Debt/EBITDA | 0.9x | 0.9x | 0.7x | 3.3x | 2.3x | -1.0x |
| Interest coverage ratio (ICR) | | | | | 4.4x |
| Interest expence / Average debt | | | | | 4.2% | |
People
|
|---|
| Insider ownership | | | | | 0.7% | |
| Employees | | | | | 103,000 | |
| Revenue/Employee, th. $ | | | | | 297 | |
Peers in Health Care Equipment & Services
Below we provide Abbott Laboratories benchmarking against other companies in Health Care Equipment & Services 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Puricore ($PURI) | -45.5% | 36.5% | -96.3% | 29.3% | |
| Tristel ($TSTL) | | 13.8% | 11.5% | 18.5% | 9.6% |
| Md Medical Group Invest ($MDMG) | 26.9% | 32.0% | 28.1% | 12.9% | |
| Omega Diagnostics Group ($ODX) | | 4.4% | 5.3% | 11.8% | -4.9% |
| Caretech Hldgs ($CTH) | | 0.8% | 19.9% | 11.4% | 11.8% |
| |
|---|
| Median (10 companies) | 11.0% | 5.9% | 8.4% | 10.8% | 2.4% |
|---|
| Abbott Laboratories ($ABT) | | 0.8% | 2.2% | 31.3% | 11.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Tristel ($TSTL) | 69.8% | 69.5% | 73.4% | 77.3% | 77.3% |
| Smith & Nephew ($SN.) | 74.8% | 75.3% | 72.8% | 73.8% | |
| Omega Diagnostics Group ($ODX) | 63.6% | 63.4% | 63.8% | 64.7% | 60.5% |
| Immunodiagnostic Systems Hldgs ($IDH) | 68.1% | 62.5% | 58.6% | 57.4% | 47.5% |
| Ekf Diagnostics Holdings ($EKF) | 51.9% | 48.8% | 47.5% | 55.0% | |
| |
|---|
| Median (8 companies) | 51.9% | 48.8% | 58.6% | 56.2% | 54.0% |
|---|
| Abbott Laboratories ($ABT) | 54.5% | 57.1% | 56.7% | 55.0% | 58.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Md Medical Group Invest ($MDMG) | 28.9% | 27.9% | 30.1% | 31.0% | |
| Smith & Nephew ($SN.) | 25.2% | 23.1% | 26.0% | 28.8% | |
| Tristel ($TSTL) | 20.1% | 22.9% | 20.7% | 25.4% | 24.7% |
| Ekf Diagnostics Holdings ($EKF) | 18.1% | -0.5% | 12.0% | 22.5% | |
| Caretech Hldgs ($CTH) | 24.8% | 26.1% | 27.7% | 21.3% | 18.1% |
| |
|---|
| Median (10 companies) | 19.1% | 20.3% | 11.5% | 20.1% | 16.4% |
|---|
| Abbott Laboratories ($ABT) | 20.5% | 21.3% | 22.6% | 20.7% | 22.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Md Medical Group Invest ($MDMG) | 43.4% | 8.2% | 14.1% | 25.0% | |
| Puricore ($PURI) | 15.4% | 7.3% | 97.5% | 18.5% | |
| Caretech Hldgs ($CTH) | 5.7% | 4.8% | 7.2% | 9.6% | 7.8% |
| Smith & Nephew ($SN.) | 8.1% | 7.7% | 8.4% | 7.9% | |
| Omega Diagnostics Group ($ODX) | 4.1% | 5.8% | 4.9% | 4.2% | 3.5% |
| |
|---|
| Median (10 companies) | 5.3% | 6.3% | 4.9% | 3.9% | 4.0% |
|---|
| Abbott Laboratories ($ABT) | 5.3% | 5.4% | 5.4% | 4.1% | 4.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Tristel ($TSTL) | 15.9% | 20.1% | 17.5% | 24.9% | 23.1% |
| Md Medical Group Invest ($MDMG) | 11.0% | 11.8% | 17.6% | 18.4% | |
| Smith & Nephew ($SN.) | 14.7% | 11.1% | 14.4% | 15.8% | |
| Bioquell ($BQE) | -1.8% | 1.6% | 0.7% | 12.2% | |
| Ekf Diagnostics Holdings ($EKF) | 2.3% | -9.4% | -0.5% | 7.0% | |
| |
|---|
| Median (11 companies) | 8.4% | 5.9% | 2.0% | 6.7% | 3.5% |
|---|
| Abbott Laboratories ($ABT) | 8.3% | 9.4% | 8.6% | 3.4% | 6.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Caretech Hldgs ($CTH) | 5.4x | 4.9x | 3.8x | 4.2x | 4.4x |
| Smith & Nephew ($SN.) | 1.4x | 1.3x | 1.3x | 0.9x | |
| Md Medical Group Invest ($MDMG) | 2.0x | 0.6x | 0.4x | 0.5x | |
| Omega Diagnostics Group ($ODX) | -1.8x | -1.0x | -0.7x | -0.2x | |
| Ekf Diagnostics Holdings ($EKF) | -0.3x | | -0.5x | -0.7x | |
| |
|---|
| Median (9 companies) | -0.3x | -1.0x | -0.6x | -0.7x | -1.2x |
|---|
| Abbott Laboratories ($ABT) | 0.9x | 0.9x | 0.7x | 3.3x | 2.3x |
