Analysis of Geographic Areas
Celgene Corp. operates in 3 regions: United States; Europe; and All other.
Area Asset Turnover
Celgene Corp., asset turnover by geographic area
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |
|---|---|---|---|---|---|
| United States | 9.75 | 10.84 | 10.50 | 9.57 | 11.04 |
| Europe | 11.39 | 11.24 | 12.15 | 12.19 | 10.40 |
| All other | 185.88 | 225.33 | 101.15 | 76.69 | 61.31 |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
An analysis of area asset turnover reveals significant disparities in operational efficiency and asset utilization across different geographic segments between 2014 and 2018.
- United States
- Asset turnover in the United States remained relatively stable, fluctuating within a narrow range between 9.57 and 11.04. A slight decline was observed in 2015, followed by a gradual recovery through 2017, and a subsequent decrease to 9.75 by the end of 2018.
- Europe
- The European market demonstrated consistent performance with minimal volatility. The ratio increased from 10.40 in 2014 to a peak of 12.19 in 2015, remaining largely steady within the 11.00 to 12.00 range for the remainder of the period.
- All Other Regions
- The "All other" category exhibited an aggressive upward trajectory in asset efficiency. The ratio grew substantially from 61.31 in 2014 to a peak of 225.33 in 2017, representing a significant increase in the capacity to generate revenue relative to the assets deployed in these regions. Despite a contraction to 185.88 in 2018, the turnover remained exponentially higher than that of the United States and Europe.
Overall, the results indicate that while the primary Western markets maintain a stable and similar asset turnover profile, the international segments outside the US and Europe operate with a vastly different asset-to-revenue relationship, characterized by exceptionally high turnover ratios.
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Area Asset Turnover: United States
Celgene Corp.; United States; area asset turnover calculation
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues | 10,023) | 8,324) | 7,010) | 5,604) | 4,483) |
| Long-lived assets | 1,028) | 768) | 667) | 586) | 406) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 9.75 | 10.84 | 10.50 | 9.57 | 11.04 |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 2018 Calculation
Area asset turnover = Revenues ÷ Long-lived assets
= 10,023 ÷ 1,028 = 9.75
Between 2014 and 2018, a consistent upward trajectory is observed in both revenue generation and the accumulation of long-lived assets within the United States. While both metrics grew significantly, the efficiency of asset utilization experienced periodic fluctuations.
- Revenue Performance
- Annual revenues exhibited steady and substantial growth, increasing from US$ 4,483 million in 2014 to US$ 10,023 million by 2018. This indicates a strong and continuous expansion of market presence and sales volume over the five-year period.
- Long-lived Asset Investment
- Long-lived assets grew from US$ 406 million in 2014 to US$ 1,028 million in 2018. The steady increase in the asset base suggests ongoing capital expenditures aimed at supporting the growth in revenue.
- Area Asset Turnover Analysis
- The asset turnover ratio remained high but volatile, starting at 11.04 in 2014 and closing at 9.75 in 2018. After a decline to 9.57 in 2015, the ratio improved steadily to reach 10.84 by 2017. However, the drop to 9.75 in 2018 indicates that the growth in long-lived assets during the final year outpaced the corresponding growth in revenue, leading to a slight reduction in asset utilization efficiency.
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Area Asset Turnover: Europe
Celgene Corp.; Europe; area asset turnover calculation
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues | 3,771) | 3,327) | 3,046) | 2,624) | 2,311) |
| Long-lived assets | 331) | 296) | 251) | 215) | 222) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 11.39 | 11.24 | 12.15 | 12.19 | 10.40 |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 2018 Calculation
Area asset turnover = Revenues ÷ Long-lived assets
= 3,771 ÷ 331 = 11.39
European operations demonstrated consistent top-line growth from 2014 to 2018, with revenues increasing annually from US$ 2,311 million to US$ 3,771 million. This steady upward trajectory indicates a strong expansion of market presence and sales volume within the region over the five-year period.
- Long-lived Asset Trends
- Long-lived assets in Europe exhibited a general increase, rising from US$ 222 million in 2014 to US$ 331 million by 2018. A slight contraction was observed in 2015, where assets decreased to US$ 215 million, followed by a period of consistent expansion from 2016 onwards to support growing operational demands.
- Area Asset Turnover Analysis
- The area asset turnover ratio showed a significant improvement between 2014 and 2015, increasing from 10.40 to 12.19. This suggests a period of heightened capital efficiency where revenue growth substantially outpaced the accumulation of long-lived assets. Following this peak, the ratio stabilized, fluctuating narrowly between 11.24 and 12.15 through 2018.
- Relationship Between Asset Growth and Revenue
- The data indicates that while both revenues and assets grew, the rate of revenue growth remained higher than the rate of asset growth for the majority of the period. The stabilization of the turnover ratio after 2015 suggests that the company transitioned from a phase of rapid efficiency gains to a phase of balanced growth, where infrastructure investments were scaled proportionally to revenue increases.
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Area Asset Turnover: All other
Celgene Corp.; All other; area asset turnover calculation
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues | 1,487) | 1,352) | 1,173) | 1,028) | 877) |
| Long-lived assets | 8) | 6) | 12) | 13) | 14) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 185.88 | 225.33 | 101.15 | 76.69 | 61.31 |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 2018 Calculation
Area asset turnover = Revenues ÷ Long-lived assets
= 1,487 ÷ 8 = 185.88
Between 2014 and 2018, the "All other" geographic area experienced a significant increase in operational efficiency, characterized by consistent revenue growth coupled with a general reduction in the associated long-lived asset base.
- Revenue Trends
- A consistent upward trajectory in revenues is observed, with values increasing annually from US$ 877 million in 2014 to US$ 1,487 million in 2018. This represents a steady expansion of income generated within this specific geographic segment.
- Long-lived Asset Utilization
- Long-lived assets showed a general declining trend over the period, starting at US$ 14 million in 2014 and reaching a minimum of US$ 6 million in 2017, before a slight increase to US$ 8 million in 2018. The reduction in the asset base suggests a lean approach to resource allocation in this region.
- Area Asset Turnover Analysis
- The area asset turnover ratio exhibited exponential growth, rising from 61.31 in 2014 to a peak of 225.33 in 2017. This sharp increase indicates a substantial improvement in the ability to generate revenue per unit of long-lived asset. A correction occurred in 2018, where the ratio declined to 185.88, corresponding with the slight increase in long-lived assets despite continued revenue growth.
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Revenues
Celgene Corp., revenues by geographic area
US$ in millions
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |
|---|---|---|---|---|---|
| United States | 10,023) | 8,324) | 7,010) | 5,604) | 4,483) |
| Europe | 3,771) | 3,327) | 3,046) | 2,624) | 2,311) |
| All other | 1,487) | 1,352) | 1,173) | 1,028) | 877) |
| Total | 15,281) | 13,003) | 11,229) | 9,256) | 7,670) |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
Total revenues exhibit a consistent upward trajectory, nearly doubling over the five-year period from 2014 to 2018. Annual revenue increased from US$ 7,670 million to US$ 15,281 million, reflecting a sustained growth trend across all reported geographic segments.
- United States Revenue Performance
- The United States market serves as the primary driver of growth, with revenues rising from US$ 4,483 million in 2014 to US$ 10,023 million in 2018. This region experienced the most significant acceleration, with its proportion of total revenue increasing from approximately 58.5% to 65.6% over the analyzed period.
- European Revenue Performance
- Revenues in Europe showed steady absolute growth, increasing from US$ 2,311 million in 2014 to US$ 3,771 million in 2018. However, the relative contribution of this region to the total revenue mix declined from 30.1% to 24.7%.
- Other Geographic Regions
- The "All other" category maintained a consistent positive trend, growing from US$ 877 million in 2014 to US$ 1,487 million in 2018. This segment remained the smallest contributor to overall revenue, with its share decreasing slightly from 11.4% to 9.7%.
The geographic distribution of revenue indicates an increasing concentration of income within the United States. While international markets in Europe and other regions continued to expand in absolute terms, the pace of domestic growth significantly outstripped international expansion, leading to a higher dependency on the U.S. market for total revenue generation.
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Long-lived assets
Celgene Corp., long-lived assets by geographic area
US$ in millions
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |
|---|---|---|---|---|---|
| United States | 1,028) | 768) | 667) | 586) | 406) |
| Europe | 331) | 296) | 251) | 215) | 222) |
| All other | 8) | 6) | 12) | 13) | 14) |
| Total | 1,367) | 1,070) | 930) | 814) | 643) |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
Total long-lived assets exhibited a consistent upward trajectory over the five-year period from 2014 to 2018, increasing from US$ 643 million to US$ 1,367 million. This overall growth of approximately 112.6% indicates a significant expansion of the company's long-term infrastructure and capital investment.
- United States Asset Growth
- The United States served as the primary driver of asset expansion. Long-lived assets in this region grew from US$ 406 million in 2014 to US$ 1,028 million in 2018, representing an increase of approximately 153%. This suggests a strategic emphasis on scaling domestic operations.
- European Market Performance
- Assets in Europe demonstrated a general upward trend, rising from US$ 222 million in 2014 to US$ 331 million in 2018. While growth was positive, it was more gradual than in the US market and included a slight contraction between 2014 and 2015.
- Other Geographic Regions
- Long-lived assets in all other regions remained immaterial and showed a slight downward trend. Values decreased from US$ 14 million in 2014 to US$ 8 million in 2018, indicating a minimal operational footprint outside of the US and Europe.
- Regional Concentration Shift
- A notable shift in geographic concentration is observed. The United States' share of total long-lived assets increased from approximately 63% in 2014 to roughly 75% in 2018. Conversely, the proportional allocation of assets to Europe declined from approximately 35% to 24% over the same period.
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