Analysis of Geographic Areas
Walgreens Boots Alliance Inc. operates in 4 regions: United States; United Kingdom; Europe, excluding the United Kingdom; and Other.
Area Asset Turnover
Walgreens Boots Alliance Inc., asset turnover by geographic area
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| United States | 9.86 | 9.21 | 8.44 | 7.67 | 7.15 | 6.23 |
| United Kingdom | 5.89 | 5.41 | 5.02 | 5.39 | 3.26 | — |
| Europe, excluding the United Kingdom | 32.65 | 30.55 | 26.34 | 26.87 | 15.73 | — |
| Other | 13.18 | 11.33 | 11.87 | 15.29 | 10.13 | — |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
The analysis of area asset turnover across various geographic segments from 2014 to 2019 reveals a general trend of increasing asset efficiency, although the magnitude and consistency of this growth vary significantly by region.
- United States
- The United States segment demonstrates a consistent and linear improvement in asset turnover. The ratio increased every year throughout the period, rising from 6.23 in 2014 to 9.86 in 2019. This steady upward trajectory indicates a disciplined and continuous improvement in the efficiency of asset utilization within the domestic market.
- United Kingdom
- Asset turnover in the United Kingdom exhibited a general upward trend, growing from 3.26 in 2015 to 5.89 in 2019. A slight contraction was observed in 2017, where the ratio dipped to 5.02 from a previous high of 5.39, before recovering and continuing its growth over the subsequent two years.
- Europe, excluding the United Kingdom
- This region maintains the highest asset turnover ratios of all analyzed segments. A substantial increase occurred between 2015 and 2016, with the ratio jumping from 15.73 to 26.87. Despite a marginal decrease in 2017, the trend resumed its climb, reaching a peak of 32.65 by 2019, reflecting a high level of operational efficiency in converting assets into revenue.
- Other Geographic Areas
- The "Other" category shows the highest degree of volatility. After an initial increase from 10.13 in 2015 to a peak of 15.29 in 2016, the ratio experienced a two-year decline, falling to 11.33 by 2018. A recovery was observed in 2019, with the ratio increasing to 13.18.
Overall, the most significant gains in asset efficiency are observed in the European market (excluding the UK), while the United States provides the most stable and predictable growth pattern. The United Kingdom and other regions show more fluctuation but maintain a positive long-term trajectory since 2015.
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Area Asset Turnover: United States
Walgreens Boots Alliance Inc.; United States; area asset turnover calculation
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | 104,532) | 98,392) | 87,302) | 83,802) | 80,974) | 76,392) |
| Long-lived assets | 10,598) | 10,678) | 10,344) | 10,924) | 11,327) | 12,257) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 9.86 | 9.21 | 8.44 | 7.67 | 7.15 | 6.23 |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Area asset turnover = Sales ÷ Long-lived assets
= 104,532 ÷ 10,598 = 9.86
The operational efficiency of the United States segment demonstrates a consistent upward trajectory from 2014 to 2019, characterized by simultaneous revenue growth and a strategic reduction in the long-lived asset base.
- Revenue Growth Trends
- Sales exhibited a steady year-over-year increase, rising from 76,392 million US dollars in 2014 to 104,532 million US dollars by 2019. This consistent expansion indicates a strong and growing market presence within the domestic region.
- Long-lived Asset Management
- A general contraction in long-lived assets is observed, with values decreasing from 12,257 million US dollars in 2014 to 10,598 million US dollars in 2019. Aside from a slight increase in 2018, the overall trend suggests a lean approach to asset management or the successful optimization of existing infrastructure.
- Area Asset Turnover Efficiency
- The area asset turnover ratio improved monotonically throughout the period, ascending from 6.23 in 2014 to 9.86 in 2019. This progression reflects a significant increase in productivity, as the entity generated substantially more revenue per unit of long-lived asset over the six-year span.
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Area Asset Turnover: United Kingdom
Walgreens Boots Alliance Inc.; United Kingdom; area asset turnover calculation
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | 12,729) | 13,297) | 12,552) | 14,081) | 9,235) | —) |
| Long-lived assets | 2,162) | 2,458) | 2,502) | 2,611) | 2,835) | —) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 5.89 | 5.41 | 5.02 | 5.39 | 3.26 | — |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Area asset turnover = Sales ÷ Long-lived assets
= 12,729 ÷ 2,162 = 5.89
The financial performance in the United Kingdom market between 2015 and 2019 is characterized by a marked increase in asset utilization efficiency, driven by a combination of revenue growth and a strategic reduction in the long-lived asset base.
- Revenue Trends
- Sales experienced a significant surge between 2015 and 2016, rising from US$ 9,235 million to US$ 14,081 million. Following this peak, revenue levels stabilized, oscillating between US$ 12,552 million in 2017 and US$ 13,297 million in 2018, before ending the period at US$ 12,729 million in 2019.
- Asset Base Management
- A consistent downward trend in long-lived assets is observed throughout the analyzed period. Assets decreased every year, falling from US$ 2,835 million in 2015 to US$ 2,162 million in 2019. This indicates a continuous contraction of the fixed asset base, likely reflecting depreciation, asset disposals, or optimized capital allocation.
- Area Asset Turnover Efficiency
- The area asset turnover ratio demonstrates substantial growth, increasing from 3.26 in 2015 to 5.89 in 2019. The most significant improvement occurred between 2015 and 2016, where the ratio rose to 5.39. While a slight dip to 5.02 was recorded in 2017, the ratio recovered and climbed steadily thereafter. The growth in this ratio during the final years, despite stagnant sales, is primarily attributable to the steady decline in long-lived assets, signifying that the organization generated more revenue per dollar of assets held.
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Area Asset Turnover: Europe, excluding the United Kingdom
Walgreens Boots Alliance Inc.; Europe, excluding the United Kingdom; area asset turnover calculation
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | 17,009) | 17,594) | 16,224) | 16,793) | 11,402) | —) |
| Long-lived assets | 521) | 576) | 616) | 625) | 725) | —) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 32.65 | 30.55 | 26.34 | 26.87 | 15.73 | — |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Area asset turnover = Sales ÷ Long-lived assets
= 17,009 ÷ 521 = 32.65
The financial performance for the European region, excluding the United Kingdom, from 2015 to 2019, is characterized by a substantial increase in asset efficiency. The period is marked by a divergent trend where revenue expanded while the long-lived asset base consistently contracted, resulting in a significant improvement in the area asset turnover ratio.
- Sales Performance
- A general upward trajectory in sales is observed, rising from US$ 11,402 million in 2015 to a peak of US$ 17,594 million in 2018, before settling at US$ 17,009 million in 2019. Despite the slight decline in the final year, the overall revenue growth indicates a strengthening market position within the specified geographic area.
- Long-lived Assets Trend
- A consistent year-over-year reduction in long-lived assets is evident. Assets decreased from US$ 725 million in 2015 to US$ 521 million in 2019. This steady decline suggests a strategic optimization of the asset base, potential divestments, or an increase in asset depreciation without corresponding capital reinvestment.
- Area Asset Turnover Analysis
- The area asset turnover ratio more than doubled over the analyzed period, increasing from 15.73 in 2015 to 32.65 in 2019. This sharp upward trend is the result of the simultaneous increase in sales and the reduction of the asset denominator. The data indicates that the company has become significantly more effective at generating revenue from its long-lived assets in this region.
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Area Asset Turnover: Other
Walgreens Boots Alliance Inc.; Other; area asset turnover calculation
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | 2,596) | 2,254) | 2,136) | 2,675) | 1,833) | —) |
| Long-lived assets | 197) | 199) | 180) | 175) | 181) | —) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 13.18 | 11.33 | 11.87 | 15.29 | 10.13 | — |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Area asset turnover = Sales ÷ Long-lived assets
= 2,596 ÷ 197 = 13.18
The financial performance of the "Other" geographic area demonstrates a volatile but generally efficient utilization of long-lived assets to generate revenue between 2015 and 2019. While sales figures fluctuated significantly, the asset base remained relatively stable, leading to notable swings in the asset turnover ratio.
- Sales Trends
- Annual sales exhibited considerable volatility, starting at 1,833 million US dollars in 2015 and peaking at 2,675 million US dollars in 2016. A subsequent decline occurred in 2017, with sales dropping to 2,136 million US dollars. However, a recovery trend followed, with revenue increasing to 2,254 million US dollars in 2018 and reaching 2,596 million US dollars by 2019.
- Long-lived Assets
- The investment in long-lived assets remained comparatively steady over the analyzed period. Assets decreased slightly from 181 million US dollars in 2015 to a low of 175 million US dollars in 2016. A gradual increase was observed thereafter, peaking at 199 million US dollars in 2018 before stabilizing at 197 million US dollars in 2019.
- Area Asset Turnover Efficiency
- The area asset turnover ratio reflects a period of high operational efficiency, peaking in 2016 at 15.29. This peak was driven by the simultaneous occurrence of maximum sales and minimum long-lived assets. The ratio declined to 11.87 in 2017 and 11.33 in 2018 as sales contracted and the asset base expanded. By 2019, efficiency improved again, with the ratio rising to 13.18, indicating a renewed capacity to generate higher sales volumes relative to the asset investment.
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Sales
Walgreens Boots Alliance Inc., sales by geographic area
US$ in millions
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| United States | 104,532) | 98,392) | 87,302) | 83,802) | 80,974) | 76,392) |
| United Kingdom | 12,729) | 13,297) | 12,552) | 14,081) | 9,235) | —) |
| Europe, excluding the United Kingdom | 17,009) | 17,594) | 16,224) | 16,793) | 11,402) | —) |
| Other | 2,596) | 2,254) | 2,136) | 2,675) | 1,833) | —) |
| Total | 136,866) | 131,537) | 118,214) | 117,351) | 103,444) | 76,392) |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
Total sales experienced significant growth over the five-year period ending August 31, 2019, increasing from 76,392 million US dollars in 2014 to 136,866 million US dollars in 2019. A substantial increase in total revenue is noted between 2014 and 2015, coinciding with the first reporting of revenues from the United Kingdom, Europe, and other international territories.
- United States Market Performance
- The United States remains the primary revenue driver, exhibiting consistent year-over-year growth. Sales rose steadily from 76,392 million US dollars in 2014 to 104,532 million US dollars in 2019, representing a total increase of approximately 37% over the period. The most pronounced growth occurred between 2017 and 2019.
- European Market Trends
- Revenue from the United Kingdom and Europe (excluding the UK) showed a sharp increase in 2016, followed by a period of volatility and stagnation. United Kingdom sales peaked in 2016 at 14,081 million US dollars before declining to 12,729 million US dollars by 2019. Similarly, Europe excluding the UK reached a peak of 17,594 million US dollars in 2018 but ended the period at 17,009 million US dollars in 2019.
- Other Geographic Regions
- The "Other" category represents the smallest portion of total sales. While this segment experienced fluctuations, with a dip in 2017 to 2,136 million US dollars, it showed a recovery by 2019, reaching 2,596 million US dollars.
- Geographic Revenue Concentration
- The concentration of revenue is heavily skewed toward the United States. In 2014, the U.S. accounted for 100% of the reported sales. By 2019, despite the expansion into international markets, the United States still contributed approximately 76% of the total consolidated sales, indicating a high reliance on the domestic market for overall growth.
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Long-lived assets
Walgreens Boots Alliance Inc., long-lived assets by geographic area
US$ in millions
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| United States | 10,598) | 10,678) | 10,344) | 10,924) | 11,327) | 12,257) |
| United Kingdom | 2,162) | 2,458) | 2,502) | 2,611) | 2,835) | —) |
| Europe, excluding the United Kingdom | 521) | 576) | 616) | 625) | 725) | —) |
| Other | 197) | 199) | 180) | 175) | 181) | —) |
| Total | 13,478) | 13,911) | 13,642) | 14,335) | 15,068) | 12,257) |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
Total long-lived assets experienced an initial increase between 2014 and 2015, rising from 12,257 million US$ to 15,068 million US$. Following this peak, a general downward trajectory was observed through 2019, with total assets declining to 13,478 million US$. This overall trend reflects a consistent reduction in asset carrying values across most geographic segments.
- United States Asset Trends
- The United States represents the largest concentration of long-lived assets. A steady decline occurred between 2014 and 2017, where values fell from 12,257 million US$ to 10,344 million US$. A slight recovery was noted in 2018 at 10,678 million US$, followed by a marginal decrease to 10,598 million US$ by August 31, 2019.
- United Kingdom Asset Trends
- Long-lived assets in the United Kingdom exhibited a continuous year-over-year decline from 2015 to 2019. Starting at 2,835 million US$ in 2015, the asset value decreased progressively each year, ending the period at 2,162 million US$, representing a significant contraction in the regional asset base.
- European and Other Regional Trends
- Assets in Europe, excluding the United Kingdom, followed a similar downward pattern to the UK, decreasing from 725 million US$ in 2015 to 521 million US$ in 2019. Conversely, assets categorized as "Other" remained relatively stable, fluctuating within a narrow range between 175 million US$ and 199 million US$ over the same period.
- Geographic Asset Distribution Insight
- The distribution of assets indicates a high level of dependency on the US market. While the US assets decreased overall, the rate of decline in international markets—specifically the UK and Europe—was more consistent, suggesting a strategic reduction or accelerated depreciation of long-lived assets outside of the North American region.
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