Pfizer Inc Net Income dropped on 47.7% while Revenue increased on 2.1%
29 Jan 2019 • About Pfizer Inc (
$PFZ) • By InTwits
Pfizer Inc reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Pfizer Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.3%. At the same time it's a lot of higher than industry average of 2.8%.
- CAPEX is quite volatile: ₹1,929m in FY2018, ₹638m in FY2017, ₹1,437m in FY2016, ₹2,086m in FY2015, ₹2,963m in FY2014
- The company has highly profitable business model: ROIC is 12.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.0x while industry average is 2.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Pfizer Inc's Revenue increased on 2.1%. EBITDA Margin showed almost no change in 2018. During 2014-2018 EBITDA Margin bottomed in 2016 at 33.6% and was growing since that time.
Gross Margin showed almost no change in 2018. During 2014-2018 Gross Margin bottomed in 2016 at 76.7% and was growing since that time. SG&A as a % of Revenue decreased slightly on 1.2 pp from 28.1% to 26.9% in 2018.
Net Income margin dropped on 19.8 pp from 40.6% to 20.8% in 2018. The efficient tax rate was 6.0% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 3.8% in 2018. Pfizer Inc showed small growth in CAPEX/Revenue of 0.95 pp from 2.9% in 2015 to 3.8% in 2018. For the last three years the average CAPEX/Revenue was 3.7%. CAPEX as a % of Revenue grew at 0.36 pp per annum in 2014-2018.
Return on investment
The company operates at good ROIC (12.3%) and ROE (16.6%). ROIC increased slightly on 1.4 pp from 10.9% to 12.3% in 2018. ROE dropped on 16.0 pp from 32.6% to 16.6% in 2018. During 2014-2018 ROIC bottomed in 2015 at 9.1% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.0x and Debt / EBITDA is 2.0x. Net Debt / EBITDA dropped on 0.1x from 2.1x to 2.0x in 2018. Debt decreased on 4.0% while cash dropped on 15.1%. During 2014-2018 Net Debt/EBITDA topped in 2016 at 2.2x and was declining since that time.
Pfizer Inc has good short term financial stability: Interest coverage ratio (ICR) is 10.6x. Pfizer Inc has short term refinancing risk: cash is only 12.9% of short term debt.
Average interest expence paid by the company was 3.2% in 2018.
The company paid 71.5% of Net Income as dividends in 2018.
Management team
The company's CEO is Albert Bourla. Albert Bourla has 1 year tenure with the company. CEO total compensation was
$19,549,213 in 2018 which included
$1,992,500 salary. The company's CFO is Frank A D'Amelio. Frank A D'Amelio has 9 years tenure at the company.
Insider ownership is 0.063%.
At the end of financial year the company had 92,400 employees. Average revenue per employee in 2018 was
$580,595.
Financial and operational results
FY ended 31 Dec 2018
Pfizer Inc ($PFZ) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 49,605 | 48,851 | 52,824 | 52,546 | 53,647 | 2.1% |
| Gross Profit | 40,028 | 39,203 | 40,495 | 41,306 | 42,399 | 2.6% |
| SG&A | 14,097 | 14,809 | 14,837 | 14,784 | 14,455 | -2.2% |
| EBITDA | 18,786 | 16,981 | 17,763 | 19,889 | 20,385 | 2.5% |
| EBIT | | | | | 14,001 | |
| Interest expence | | | | | 1,316 | |
| Tax | | | | | 706 | |
| Net Income | 9,135 | 6,960 | 7,215 | 21,308 | 11,153 | -47.7% |
| Stock Based Compensation | | | | | 949 | |
Balance Sheet
|
|---|
| Cash | 3,343 | 3,641 | 2,595 | 1,342 | 1,139 | -15.1% |
| Accounts Receivable | | | | | 8,025 | |
| Inventory | | | | | 7,508 | |
| Accounts Payable | | | | | 4,674 | |
| Short Term Debt | 5,141 | 10,159 | 10,688 | 9,953 | 8,831 | -11.3% |
| Long Term Debt | 31,541 | 28,740 | 31,398 | 33,538 | 32,909 | -1.9% |
Cash flow
|
|---|
| Capex | 1,199 | 1,397 | 1,823 | 1,956 | 2,042 | 4.4% |
| Dividends | | | | | 7,978 | |
Ratios
|
|---|
| Revenue growth | -3.8% | -1.5% | 8.1% | -0.5% | 2.1% | |
| EBITDA growth | -13.0% | -9.6% | 4.6% | 12.0% | 2.5% | |
|
|---|
| Gross Margin | 80.7% | 80.3% | 76.7% | 78.6% | 79.0% | 0.4% |
| EBITDA Margin | 37.9% | 34.8% | 33.6% | 37.9% | 38.0% | 0.1% |
| EBIT Margin | | | | | 26.1% |
| SG&A, % of revenue | 28.4% | 30.3% | 28.1% | 28.1% | 26.9% | -1.2% |
| SBC, % of revenue | | | | | 1.8% |
| Net Income Margin | 18.4% | 14.2% | 13.7% | 40.6% | 20.8% | -19.8% |
| CAPEX, % of revenue | 2.4% | 2.9% | 3.5% | 3.7% | 3.8% | 0.1% |
|
|---|
| ROIC | 9.9% | 9.1% | 9.2% | 10.9% | 12.3% | 1.4% |
| ROE | 12.4% | 10.2% | 11.6% | 32.6% | 16.6% | -16.0% |
| Net Debt/EBITDA | 1.8x | 2.1x | 2.2x | 2.1x | 2.0x | -0.1x |
| Interest expence / Average debt | | | | | 3.2% | |
People
|
|---|
| Insider ownership | | | | | 0.1% | |
| Employees | | | | | 92,400 | |
| Revenue/Employee, th. $ | | | | | 581 | |
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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Evocutis ($EVO) | 25.2% | 57.3% | 51.2% | 54.5% | |
| Benchmark Hldgs ($BMK) | | 25.0% | 147.5% | 28.2% | 8.1% |
| Quantum Pharma ($QP.) | 10.8% | 15.4% | 13.4% | 26.8% | |
| Ixico ($IXI) | | | 4.9% | 25.8% | 31.2% |
| Ergomed ($ERGO) | 39.7% | 42.7% | 30.0% | 21.4% | |
| |
|---|
| Median (14 companies) | 6.3% | 4.5% | 7.2% | 10.4% | 31.2% |
|---|
| Pfizer Inc ($PFZ) | | -1.5% | 8.1% | -0.5% | 2.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| C4X Discovery Hldg ($C4XD) | 96.3% | | 95.7% | 97.9% | |
| Indivior ($INDV) | 91.5% | 90.4% | 89.9% | 90.5% | |
| Astrazeneca ($AZN) | 78.0% | 81.2% | 82.1% | 80.8% | |
| GlaxoSmithKline ($GSK) | 68.2% | 63.0% | 66.7% | 65.7% | |
| Ixico ($IXI) | | | 48.6% | 56.5% | 58.8% |
| |
|---|
| Median (13 companies) | 46.3% | 44.9% | 47.7% | 49.1% | 53.8% |
|---|
| Pfizer Inc ($PFZ) | 80.7% | 80.3% | 76.7% | 78.6% | 79.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Evocutis ($EVO) | 35.0% | 35.4% | 38.6% | 45.2% | |
| Astrazeneca ($AZN) | 20.8% | 28.3% | 32.5% | 29.9% | |
| Beximco Pharmaceuticals ($BXP) | 27.2% | 26.6% | 28.9% | 27.3% | |
| Eastpharma Ltd ($EAST) | 16.1% | 23.3% | 23.9% | 22.9% | |
| Animalcare Group ($ANCR) | 24.5% | 25.4% | 23.5% | 20.9% | |
| |
|---|
| Median (14 companies) | 18.5% | 21.9% | 15.4% | 16.6% | -11.6% |
|---|
| Pfizer Inc ($PFZ) | 37.9% | 34.8% | 33.6% | 37.9% | 38.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| C4X Discovery Hldg ($C4XD) | 1.1% | | 15.1% | 28.0% | 0.6% |
| Benchmark Hldgs ($BMK) | 10.9% | 31.8% | 17.1% | 23.4% | 16.6% |
| Beximco Pharmaceuticals ($BXP) | 24.8% | 19.4% | 13.5% | 19.4% | |
| Eastpharma Ltd ($EAST) | 7.1% | 6.2% | 6.7% | 10.3% | |
| Cathay International Hldgs Ltd ($CTI) | 4.0% | 5.5% | 6.2% | 8.2% | |
| |
|---|
| Median (14 companies) | 3.8% | 5.3% | 5.5% | 5.5% | 1.4% |
|---|
| Pfizer Inc ($PFZ) | 2.4% | 2.9% | 3.5% | 3.7% | 3.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Indivior ($INDV) | | 172.1% | 85.9% | 107.2% | |
| Evocutis ($EVO) | 68.6% | 62.4% | 59.8% | 70.1% | |
| GlaxoSmithKline ($GSK) | 15.2% | 42.9% | 10.9% | 20.2% | |
| Animalcare Group ($ANCR) | 14.2% | 14.8% | 13.8% | 12.0% | |
| Beximco Pharmaceuticals ($BXP) | 8.7% | 9.6% | 10.9% | 11.2% | |
| |
|---|
| Median (14 companies) | 7.3% | 14.2% | 10.2% | 10.3% | -14.9% |
|---|
| Pfizer Inc ($PFZ) | 9.9% | 9.1% | 9.2% | 10.9% | 12.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cathay International Hldgs Ltd ($CTI) | 6.3x | 12.7x | 20.5x | 21.7x | |
| Quantum Pharma ($QP.) | 15.5x | 0.8x | 2.8x | 4.2x | |
| Astrazeneca ($AZN) | 0.8x | 1.3x | 1.6x | 2.2x | |
| GlaxoSmithKline ($GSK) | 2.9x | 0.9x | 3.1x | 2.1x | |
| Eastpharma Ltd ($EAST) | 4.3x | 2.7x | 1.8x | 2.1x | |
| |
|---|
| Median (11 companies) | 0.8x | 0.7x | 0.3x | 1.5x | 3.4x |
|---|
| Pfizer Inc ($PFZ) | 1.8x | 2.1x | 2.2x | 2.1x | 2.0x |
