Analysis of Reportable Segments
Walgreens Boots Alliance Inc. operates in 3 segments: Retail Pharmacy USA; Retail Pharmacy International; and Pharmaceutical Wholesale.
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- Income Statement
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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Segment Profit Margin
Walgreens Boots Alliance Inc., profit margin by reportable segment
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Retail Pharmacy USA | ||||||
| Retail Pharmacy International | ||||||
| Pharmaceutical Wholesale |
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).
- Retail Pharmacy USA Segment Profit Margin
- The profit margin in the Retail Pharmacy USA segment demonstrated a slight fluctuation between 2014 and 2017, starting at 6.37% in 2014, dipping marginally to 6.30% in 2015, then increasing to 6.42% in 2017. However, from 2017 onwards, there was a consistent downward trend, with the margin decreasing to 5.91% in 2018 and further declining to 5.03% in 2019. This pattern indicates a diminishing profitability within the domestic retail pharmacy business over the latter part of the examined period.
- Retail Pharmacy International Segment Profit Margin
- For the Retail Pharmacy International segment, data begins in 2015 at 7.02%. The profit margin increased notably to 8.71% in 2016, representing the peak value for the period. Subsequently, there was a decline each year, with margins falling to 7.95% in 2017, 7.56% in 2018, and 6.52% in 2019. Although the segment’s margin remained above the Retail Pharmacy USA margins for most of the period, the general downward trend after 2016 suggests emerging challenges impacting international retail profitability.
- Pharmaceutical Wholesale Segment Profit Margin
- The Pharmaceutical Wholesale segment shows an overall improving trend from 2015 onwards. Starting at 2.94% in 2015, the margin rose to 3.14% in 2016 and achieved a significant increase to 4.35% by 2017. After this peak, the margin slightly declined but stabilized, remaining at 4.07% through 2018 and 2019. This progression points to strengthened profitability in the wholesale pharmaceutical operations, which may reflect better operational efficiencies or favorable market conditions during the later years.
- Overall Insights
- Across all segments, the general observation is that while the Retail Pharmacy sectors—both USA and International—experienced peaks followed by declines in profit margins, the Pharmaceutical Wholesale segment showed consistent improvement and eventually stabilized at a higher margin level. The decline in Retail Pharmacy margins in recent years could signal competitive pressures or cost increases, whereas the Pharmaceutical Wholesale’s performance may represent a growth or efficiency area for the company. This divergence suggests a potential strategic focus on bolstering wholesale operations while addressing profitability challenges in retail segments.
Segment Profit Margin: Retail Pharmacy USA
Walgreens Boots Alliance Inc.; Retail Pharmacy USA; segment profit margin 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) | ||||||
| Adjusted operating income | ||||||
| Sales | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
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
Segment profit margin = 100 × Adjusted operating income ÷ Sales
= 100 × ÷ =
The financial data for the Retail Pharmacy USA segment over the six-year period from 2014 to 2019 reveals several notable trends relating to sales, adjusted operating income, and segment profit margin.
- Sales
- Sales figures exhibited a consistent upward trajectory throughout the period, increasing from $76,392 million in 2014 to $104,532 million in 2019. This represents a significant growth in revenue, indicating expanding market demand or successful penetration strategies within this segment.
- Adjusted Operating Income
- Adjusted operating income also showed a progressive increase from 2014 to 2018, rising from $4,866 million to $5,814 million. However, in 2019, there was a marked decline to $5,255 million, signaling potential challenges affecting operating profitability despite the continuing rise in sales.
- Segment Profit Margin
- The segment profit margin experienced a slight fluctuation in the early years, maintaining relatively stable levels around 6.3% to 6.42% from 2014 to 2017. From 2018 onwards, the margin declined markedly, dropping to 5.91% in 2018 and further decreasing to 5.03% in 2019. This decline suggests increased cost pressures or less favorable operating conditions impacting profitability ratios despite growing sales.
Overall, while sales growth has been strong and consistent, the profitability measures indicate emerging constraints in operating efficiency or increased expenses, as reflected by the declining adjusted operating income in the final year and the progressively weakening profit margin. These patterns warrant further examination of cost structures and market conditions to address the decreasing profitability within the segment.
Segment Profit Margin: Retail Pharmacy International
Walgreens Boots Alliance Inc.; Retail Pharmacy International; segment profit margin calculation
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Adjusted operating income | ||||||
| Sales | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
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
Segment profit margin = 100 × Adjusted operating income ÷ Sales
= 100 × ÷ =
The financial performance of the Retail Pharmacy International segment demonstrates notable fluctuations over the reported periods. Sales exhibited a general upward trajectory from 2015 through 2018, rising from approximately 8.8 billion USD to nearly 12.3 billion USD. However, in 2019, sales declined to about 11.5 billion USD, indicating a reversal in the previously upward trend.
Adjusted operating income followed a somewhat volatile pattern with a peak in 2016 at 1.155 billion USD, followed by a decline in subsequent years. From 2016's high, operating income dropped each year, reaching 747 million USD in 2019.
The segment profit margin mirrored this downward trend, increasing from 7.02% in 2015 to a peak of 8.71% in 2016, then steadily declining through the following years to 6.52% in 2019. This decline suggests decreasing profitability relative to sales.
- Sales Trend
- Generally increased from 2015 to 2018, followed by a decrease in 2019.
- Adjusted Operating Income Trend
- Peaked in 2016 with a steady decrease through 2019.
- Segment Profit Margin Trend
- Reached a high point in 2016 and declined thereafter, indicating a reduced efficiency in generating profit from sales.
Overall, the data indicates that despite growth in sales volume in earlier years, profitability has been under pressure since 2016, with declining operating income and profit margins. The decrease in sales in 2019, combined with reduced margins, highlights challenges within the segment that may warrant further investigation into operational efficiency or market conditions.
Segment Profit Margin: Pharmaceutical Wholesale
Walgreens Boots Alliance Inc.; Pharmaceutical Wholesale; segment profit margin 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) | ||||||
| Adjusted operating income | ||||||
| Sales | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
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
Segment profit margin = 100 × Adjusted operating income ÷ Sales
= 100 × ÷ =
- Sales Trend
- Sales exhibited a general upward trend from 2015 through 2019, increasing from $15,327 million in 2015 to $23,053 million in 2019. There was a notable peak in 2016 at $22,571 million, followed by a slight decline in 2017 to $21,188 million before rising again in subsequent years.
- Adjusted Operating Income Development
- Adjusted operating income rose consistently over the observed period from $450 million in 2015 to $939 million in 2019, more than doubling over five years. The increase demonstrates an overall improvement in operating profitability within the segment.
- Segment Profit Margin
- The segment profit margin improved from 2.94% in 2015 to 4.35% in 2017, reflecting enhanced profitability relative to sales. After peaking in 2017, the margin slightly decreased to 4.07% in 2018 and remained flat into 2019, indicating stabilization in profit efficiency after initial growth.
Segment Capital Expenditures to Depreciation
Walgreens Boots Alliance Inc., capital expenditures to depreciation by reportable segment
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Retail Pharmacy USA | ||||||
| Retail Pharmacy International | ||||||
| Pharmaceutical Wholesale |
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).
- Retail Pharmacy USA
-
The capital expenditures to depreciation ratio for the Retail Pharmacy USA segment exhibits a fluctuating yet generally increasing trend over the analyzed periods. Starting at 0.84 in 2014, the ratio declines to 0.69 by 2016, indicating a lower level of capital expenditure relative to depreciation during this time. Subsequently, the ratio rises again, reaching 0.91 in 2019. This suggests a renewed or increasing investment in capital assets relative to the depreciation expense in recent years.
- Retail Pharmacy International
-
The Retail Pharmacy International segment shows a more variable pattern, beginning with missing data in 2014. From 2015 to 2016, the capital expenditures to depreciation ratio increases significantly from 0.63 to 1.11, indicating capital expenditures surpassed depreciation during that year. After 2016, the ratio declines steadily to 0.58 in 2018, then slightly rebounds to 0.64 in 2019. Overall, the segment experienced an initial surge in capital investment that was not maintained consistently in the following years.
- Pharmaceutical Wholesale
-
This segment demonstrates a generally increasing trend in the capital expenditures to depreciation ratio from 2015 through 2017, rising from 0.43 to 0.71. Subsequently, the ratio slightly decreases and stabilizes around 0.67 to 0.69 in 2018 and 2019, respectively. This pattern suggests a gradual increase in capital expenditures relative to depreciation over the earlier periods, followed by relative stabilization in recent years.
- Overall Insights
-
Each segment displays distinct investment patterns relative to depreciation. The Retail Pharmacy USA segment shows a recovery and growth in capital expenditures after a mid-period dip, indicating potential expansion or asset upgrades. The Retail Pharmacy International segment features more volatility, with a notable peak followed by decline, suggesting fluctuating investment activity possibly influenced by market conditions or strategic shifts. The Pharmaceutical Wholesale segment reveals steady growth and then stabilization, reflecting moderated investment activity after initial increases. These varying trends across segments may point to differentiated strategic priorities or operational conditions within the respective business areas.
Segment Capital Expenditures to Depreciation: Retail Pharmacy USA
Walgreens Boots Alliance Inc.; Retail Pharmacy USA; segment capital expenditures to depreciation 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) | ||||||
| Capital expenditures | ||||||
| Depreciation and amortization | ||||||
| Segment Financial Ratio | ||||||
| Segment capital expenditures to depreciation1 | ||||||
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
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
- Capital Expenditures
- Capital expenditures exhibited a fluctuating trend over the six-year period. Beginning at 1,106 million US dollars in 2014, spending decreased to a low of 777 million in 2016 before rebounding to 1,323 million by 2019. This indicates a renewed investment focus in the latter years, with the highest outlay recorded in 2019.
- Depreciation and Amortization
- Depreciation and amortization expenses showed a general downward trend from 1,316 million USD in 2014 to 1,090 million in 2017. However, the figures reversed thereafter, increasing to 1,459 million USD in 2019, the highest within the observed timeframe. This pattern suggests initial asset base reduction followed by acquisition or capitalization of new assets leading to higher depreciation charges.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation declined from 0.84 in 2014 to a low of 0.69 in 2016, reflecting reduced investment relative to asset wear. From 2017 onward, the ratio increased steadily to 0.91 in 2019, indicating that capital spending began to outpace depreciation more consistently. This shift may reflect a strategic emphasis on renewing or expanding asset capacity in recent years.
Segment Capital Expenditures to Depreciation: Retail Pharmacy International
Walgreens Boots Alliance Inc.; Retail Pharmacy International; segment capital expenditures to depreciation 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) | ||||||
| Capital expenditures | ||||||
| Depreciation and amortization | ||||||
| Segment Financial Ratio | ||||||
| Segment capital expenditures to depreciation1 | ||||||
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
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
The "Retail Pharmacy International" segment shows varied trends in capital expenditures and depreciation expenses over the six-year period from 2014 through 2019.
- Capital Expenditures
- Capital expenditures exhibited considerable fluctuation during the years with data available. Starting at $249 million in 2015, expenditures peaked at $444 million in 2016, followed by a decline to $384 million in 2017. Subsequent years showed a more pronounced decrease to $241 million in 2018, before rising modestly to $275 million in 2019. These changes suggest periodic investment cycles, with the largest investments occurring mid-period.
- Depreciation and Amortization
- Depreciation and amortization expenses steadily increased over the period. Beginning at $393 million in 2015, expenses rose incrementally each year to reach $429 million by 2019. This consistent rise indicates ongoing recognition of the expense related to the segment's asset base, reflecting the capitalization and aging of assets over time.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation demonstrates how investment levels compare to asset consumption. The ratio started at 0.63 in 2015, increased significantly to a high of 1.11 in 2016, and then declined through 2017 to 2019, where it stabilized between 0.58 and 0.64. A ratio above 1.0 in 2016 suggests that capital expenditures exceeded depreciation, indicating net asset growth that year. The decline afterwards points to a reduction in asset additions relative to asset consumption or aging.
Overall, the data reveal a cycle of heightened investment activity around 2016 followed by more conservative capital spending. Despite the fluctuations in investment, the steady rise in depreciation implies a sustained asset base with ongoing usage and aging. The decreasing capital expenditure to depreciation ratio in later years may reflect a strategic shift toward maintaining existing assets rather than expanding the asset base substantially.
Segment Capital Expenditures to Depreciation: Pharmaceutical Wholesale
Walgreens Boots Alliance Inc.; Pharmaceutical Wholesale; segment capital expenditures to depreciation calculation
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Capital expenditures | ||||||
| Depreciation and amortization | ||||||
| Segment Financial Ratio | ||||||
| Segment capital expenditures to depreciation1 | ||||||
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
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
- Capital Expenditures
- Capital expenditures exhibit a clear upward trend from 2015 through 2017, increasing from 51 million US dollars in 2015 to 107 million US dollars in 2017. Subsequent years show a stabilization in capital spending, with figures remaining at 104 million US dollars for both 2018 and 2019, indicating a plateau in investment levels after the initial growth phase.
- Depreciation and Amortization
- Depreciation and amortization costs demonstrate considerable variability over the examined period. Starting at 120 million US dollars in 2015, these costs peak at 166 million in 2016 before declining to 150 million in 2017. There is a slight increase to 155 million in 2018, followed by a reduction back to 150 million in 2019. This fluctuation may reflect changes in asset base, useful life estimates, or amortization schedules.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation shows a general increasing trend from 0.43 in 2015 to a high of 0.71 in 2017, suggesting a period of heightened investment relative to the depreciation expense, possibly indicating asset growth or renewal. This ratio subsequently experiences minor declines, settling around 0.67 in 2018 and increasing slightly to 0.69 in 2019, which still represents a level significantly above the initial 2015 ratio and implies consistent reinvestment efforts in the segment.
Sales
Walgreens Boots Alliance Inc., sales by reportable segment
US$ in millions
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Retail Pharmacy USA | ||||||
| Retail Pharmacy International | ||||||
| Pharmaceutical Wholesale | ||||||
| Eliminations | ||||||
| Total |
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).
- Retail Pharmacy USA
- Sales in the Retail Pharmacy USA segment show a steady and consistent upward trend over the six-year period. Starting at approximately $76.4 billion in 2014, sales increased each year, reaching over $104.5 billion by 2019. This represents a cumulative growth of nearly 37%, indicating strong performance and expansion within the domestic retail pharmacy market.
- Retail Pharmacy International
- The Retail Pharmacy International segment data begins in 2015 with sales of about $8.8 billion. Sales then increased significantly to a peak of approximately $13.3 billion in 2016, followed by a decline and slight fluctuations in subsequent years, ending at $11.5 billion in 2019. This pattern suggests initial rapid growth internationally, though the later decreases indicate potential market challenges or strategic adjustments in this segment.
- Pharmaceutical Wholesale
- The Pharmaceutical Wholesale segment also commences data reporting in 2015. Sales show an initial strong increase from about $15.3 billion in 2015 to approximately $22.6 billion in 2016. However, sales declined to around $21.2 billion in 2017, then rose again to reach near $23.1 billion in 2019. This indicates some volatility but overall growth in wholesale pharmaceutical sales, reflecting perhaps shifts in distribution channels or market demand.
- Eliminations
- The Eliminations category, representing inter-segment sales adjustments, consistently records negative values ranging from approximately -$1.6 billion in 2015 to around -$2.2 billion in 2019. The negative figures grew steadily each year, signaling increasing inter-segment transactions being offset to avoid double-counting in consolidated sales totals.
- Total
- Total reported sales demonstrated a strong and steady increase throughout the period, starting at approximately $76.4 billion in 2014 and reaching nearly $136.9 billion by 2019. This represents an overall growth exceeding 79%, driven primarily by increases in the Retail Pharmacy USA segment, complemented by growth and fluctuations in international retail and pharmaceutical wholesale components.
Adjusted operating income
Walgreens Boots Alliance Inc., adjusted operating income by reportable segment
US$ in millions
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Retail Pharmacy USA | ||||||
| Retail Pharmacy International | ||||||
| Pharmaceutical Wholesale | ||||||
| Eliminations | ||||||
| Total |
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 annual reportable segment adjusted operating income data reveals several noteworthy trends and fluctuations over the six-year period under review.
- Retail Pharmacy USA
- This segment exhibited a steady upward trajectory from 2014 through 2018, with adjusted operating income increasing from US$4,866 million to a peak of US$5,814 million. In 2019, a decline is observed as the income decreases to US$5,255 million, indicating a potential shift in operational performance or market conditions affecting this segment during that year.
- Retail Pharmacy International
- This segment shows an initial increase from US$616 million in 2015 to a peak of US$1,155 million in 2016, followed by a consistent decrease across the subsequent years, ending at US$747 million in 2019. The volatility after 2016 may suggest challenges in sustaining growth or increased competitive pressures internationally.
- Pharmaceutical Wholesale
- Pharmaceutical Wholesale presents a clear growth pattern from US$450 million in 2015, rising steadily each year to US$939 million in 2019. This consistent increase illustrates an expanding contribution from this segment to the overall operating income which could be indicative of strategic focus or favorable market dynamics within the wholesale sector.
- Eliminations
- The eliminations category reflects minor negative and positive adjustments, with small values oscillating around zero. These adjustments do not appear to have a significant impact on the overall total operating income figures.
- Total Adjusted Operating Income
- The aggregate total adjusted operating income shows robust growth from US$4,866 million in 2014 to a high of US$7,679 million in 2018, driven primarily by increases in the Retail Pharmacy USA and Pharmaceutical Wholesale segments. However, in 2019, the total declines notably to US$6,942 million, aligning with the downturn in Retail Pharmacy USA and the falling trend in Retail Pharmacy International, despite the continued growth in Pharmaceutical Wholesale.
Overall, the data indicate strong growth phases followed by a corrective year in 2019, highlighting possible market or operational challenges impacting revenue-generating segments, particularly Retail Pharmacy USA and Retail Pharmacy International. The Pharmaceutical Wholesale segment remains a consistent source of growth, potentially providing a stabilizing influence amid the fluctuations seen in the other areas.
Depreciation and amortization
Walgreens Boots Alliance Inc., depreciation and amortization by reportable segment
US$ in millions
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Retail Pharmacy USA | ||||||
| Retail Pharmacy International | ||||||
| Pharmaceutical Wholesale | ||||||
| Eliminations | ||||||
| Total |
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).
- Overall trend in depreciation and amortization
- There is an initial increase in total depreciation and amortization from 1316 million USD in 2014 to a peak of 1742 million USD in 2015, followed by a slight decline over the next two years until 2017. From 2017 onward, the total figure shows a consistent upward trend, culminating at 2038 million USD in 2019, the highest in the observed period.
- Retail Pharmacy USA segment
- The Retail Pharmacy USA segment demonstrates a gradual decrease in depreciation and amortization from 1316 million USD in 2014 to 1090 million USD in 2017. However, from 2017 onwards, the segment experiences a substantial increase, with figures rising sharply to 1459 million USD by 2019, which surpasses the initial 2014 level.
- Retail Pharmacy International segment
- The Retail Pharmacy International segment starts reporting values from 2015, showing a steady but moderate increase in depreciation and amortization from 393 million USD to 429 million USD over the five-year span. Growth in this segment appears stable and incremental.
- Pharmaceutical Wholesale segment
- This segment reports starting from 2015 with 120 million USD, reaching a peak of 166 million USD in 2016, then experiencing a moderate decline to 150 million USD in 2017 and remaining essentially flat through 2019. The segment's depreciation and amortization values demonstrate relative stability after the initial rise.
- Eliminations
- Eliminations are reported only in 2015 and 2016 with values of 12 million USD and 17 million USD, respectively. No further data is provided for subsequent years, indicating that eliminations possibly became immaterial or were no longer separately disclosed.
- Segment contribution and implications
- Retail Pharmacy USA remains the dominant contributor to depreciation and amortization expenses throughout the period, despite its decline and subsequent resurgence. The growing trend in Retail Pharmacy International suggests expansion or increased capital investment in that segment. Pharmaceutical Wholesale's stable figures imply consistent asset usage or capital expenditure. The total upward trend after 2017 likely reflects increased capital investments or acquired assets since depreciation and amortization typically correlate with asset base changes.
Capital expenditures
Walgreens Boots Alliance Inc., capital expenditures by reportable segment
US$ in millions
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Retail Pharmacy USA | ||||||
| Retail Pharmacy International | ||||||
| Pharmaceutical Wholesale | ||||||
| Total |
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).
- Capital Expenditures Trends
- The data indicate that total capital expenditures have experienced a general upward trend over the six-year period. Total expenditures increased from 1,106 million US dollars in 2014 to 1,702 million US dollars in 2019, demonstrating consistent growth, particularly from 2017 onward.
- Retail Pharmacy USA Segment
- This segment represents the largest portion of capital expenditures throughout the observed period. Expenditures declined from 1,106 million US dollars in 2014 to a low of 777 million US dollars in 2016. Subsequently, investment levels rebounded, rising steadily to reach 1,323 million US dollars by 2019, the highest recorded in the data. This pattern indicates a phase of reduced investment activity followed by a renewed increase in capital allocation.
- Retail Pharmacy International Segment
- Capital expenditures for this segment began being reported in 2015, starting at 249 million US dollars. There was significant growth in 2016 to 444 million US dollars, followed by a decline to 241 million US dollars in 2018. The expenditures slightly recovered in 2019 to 275 million US dollars. This exhibits volatility with an initial increase, subsequent decrease, and modest recovery.
- Pharmaceutical Wholesale Segment
- Expenditures in this segment, first reported in 2015, show a moderate increase from 51 million US dollars to 107 million US dollars by 2017. From 2017 to 2019, capital expenditures remained stable at approximately 104 million US dollars, suggesting a plateau in investment activity within this segment.
- Summary Insights
- Over the six years, the overall capital expenditure trajectory is upward, driven notably by the Retail Pharmacy USA segment’s growth after an initial decline. The Retail Pharmacy International segment has demonstrated uneven investment levels, while Pharmaceutical Wholesale spending appears more stable after moderate initial growth. The data reflect a strategic emphasis on increasing capital investment predominantly in the domestic retail pharmacy sector, with cautious and fluctuating investments internationally and steady spending in wholesale operations.