Analysis of Reportable Segments
Allergan Inc. operates in 2 segments: Specialty pharmaceuticals and Medical devices.
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Analysis of Profitability Ratios
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Analysis of Debt
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Segment Profit Margin
Allergan Inc., profit margin by reportable segment
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Specialty pharmaceuticals | |||||
| Medical devices |
Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
- Specialty Pharmaceuticals Segment Profit Margin
- The profit margin for the specialty pharmaceuticals segment exhibited a consistent upward trend throughout the analyzed period. Starting at 37.8% in 2010, the margin increased steadily each year, reaching 47.11% by the end of 2014. This represents an overall improvement of approximately 9.31 percentage points over five years, indicating enhanced profitability or operational efficiency in this business segment.
- Medical Devices Segment Profit Margin
- The medical devices segment showed a different pattern, with a generally downward trend in profit margin from 33.64% in 2010 to a low of 28.68% in 2013. This decline over four years suggests potential challenges in maintaining profitability within this segment. However, an improvement was observed in 2014, where the profit margin recovered to 34.37%, surpassing the initial 2010 margin. This recovery may indicate successful corrective actions or favorable market conditions during the final year examined.
- Comparative Insights
- Over the five-year period, the specialty pharmaceuticals segment steadily strengthened its profit margin, while the medical devices segment experienced volatility with a mid-period decline followed by a rebound. By 2014, the specialty pharmaceuticals margin significantly outpaced that of medical devices, reflecting divergent performance trends between these two segments. The data suggests a growing strategic or financial emphasis on specialty pharmaceuticals relative to medical devices.
Segment Profit Margin: Specialty pharmaceuticals
Allergan Inc.; Specialty pharmaceuticals; segment profit margin calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Operating income | |||||
| Product net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
1 2014 Calculation
Segment profit margin = 100 × Operating income ÷ Product net sales
= 100 × ÷ =
- Operating income
-
The operating income displayed a consistent upward trend over the five-year period. Starting at 1,501,900 thousand US dollars in 2010, it increased steadily each year, reaching 2,832,300 thousand US dollars by the end of 2014. This represents an approximate cumulative growth of 88.6% within the period, indicating continuous improvement in operational profitability.
- Product net sales
-
Product net sales also exhibited a sustained increase over the period, rising from 3,973,400 thousand US dollars in 2010 to 6,012,100 thousand US dollars in 2014. This growth reflects a significant expansion of approximately 51.3%, demonstrating strong revenue progression in the segment. The incremental increases observed year-over-year suggest effective sales strategies and potentially increased market demand for the products.
- Segment profit margin
-
The segment profit margin showed a continuous improvement throughout the timeframe, beginning at 37.8% in 2010 and growing to 47.11% by 2014. This substantial enhancement of over 9 percentage points highlights improved cost control, operational efficiency, or pricing power. The consistent year-over-year margin growth aligns with the increases in both operating income and net sales, suggesting overall strengthening profitability within the specialty pharmaceuticals segment.
- General observations
-
The data collectively indicate that the segment experienced robust financial health and growth from 2010 through 2014. Both sales and profitability metrics improved notably, with operating income and sales rising steadily and profit margins increasing at an accelerating pace. This trend suggests not only rising demand or volume but also enhanced operational leverage and cost management over the period under review.
Segment Profit Margin: Medical devices
Allergan Inc.; Medical devices; segment profit margin calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Operating income | |||||
| Product net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
1 2014 Calculation
Segment profit margin = 100 × Operating income ÷ Product net sales
= 100 × ÷ =
- Operating Income
- Operating income exhibited a fluctuating trend over the five-year period. Starting at 284,700 thousand US dollars in 2010, it experienced marginal growth to 286,000 thousand in 2011, followed by a decline to 278,800 thousand in 2012. The downward trend continued into 2013 with a further decrease to 246,200 thousand, representing the lowest point in the observed period. However, there was a significant recovery in 2014, where operating income sharply increased to 382,900 thousand, marking the highest level within the timeframe.
- Product Net Sales
- Product net sales demonstrated overall growth with some variability. Beginning at 846,200 thousand US dollars in 2010, sales rose steadily to 915,100 thousand in 2011 and marginally increased to 924,200 thousand in 2012. A contraction occurred in 2013 with sales declining to 858,500 thousand. In 2014, product net sales experienced a substantial increase to 1,114,000 thousand, indicating a strong positive performance in that year that exceeded previous annual figures.
- Segment Profit Margin
- The segment profit margin showed a declining trend from 2010 through 2013, followed by a notable improvement in 2014. The margin started at 33.64% in 2010, decreasing progressively each year to 31.25% in 2011, 30.17% in 2012, and reaching its lowest at 28.68% in 2013. In 2014, the profit margin rebounded sharply to 34.37%, the highest percentage observed during the period, suggesting improved profitability relative to sales in that year.
- Summary of Trends
- The data indicates a correlation between product net sales and operating income, both experiencing similar patterns: steady performance with slight growth until 2012, decline in 2013, and strong recovery in 2014. The segment profit margin’s decline over the first four years suggests increasing cost pressures or pricing challenges, which improved significantly in 2014, enhancing overall profitability. The strong recovery across all metrics in 2014 may reflect effective strategic initiatives, cost management, or favorable market conditions during that year.
Product net sales
Allergan Inc., product net sales by reportable segment
US$ in thousands
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Specialty pharmaceuticals | |||||
| Medical devices | |||||
| Total |
Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
- Specialty Pharmaceuticals Net Sales
- The net sales for specialty pharmaceuticals demonstrated a consistent upward trend over the five-year period. Starting at approximately 3.97 billion USD in 2010, sales increased steadily each year, reaching about 6.01 billion USD by the end of 2014. This represents an overall growth of around 51% from 2010 to 2014, indicating a strong and sustained expansion in this segment.
- Medical Devices Net Sales
- The medical devices segment showed more variability in net sales across the years. Beginning at roughly 846 million USD in 2010, sales experienced moderate increases through 2012, peaking near 924 million USD. However, there was a notable decline in 2013, with sales dropping to approximately 858 million USD. Following this downturn, the segment rebounded significantly in 2014, reaching a peak at about 1.11 billion USD. Overall, this segment exhibits a fluctuating but generally positive trajectory, culminating in a substantial increase of about 32% from 2010 to 2014.
- Total Net Sales
- Total net sales, aggregating both segments, showed continuous growth throughout the observed period. The total increased from roughly 4.82 billion USD in 2010 to about 7.13 billion USD in 2014. The year-over-year increments were steady, with no apparent stagnation or decline, indicating robust overall company sales performance driven predominantly by the specialty pharmaceuticals segment, supported by recovery in medical devices sales in the final year.
- Summary of Trends and Insights
- The data reveals that specialty pharmaceuticals form the largest and fastest-growing portion of net sales, suggesting a strong market presence and potential competitive advantages in this area. Medical devices, while smaller in scale, contribute meaningfully with a recovery in sales after a slight dip in 2013. The overall increasing trend in total net sales underscores successful growth strategies and expanding market demand across the company's product lines over the five-year span.
Operating income
Allergan Inc., operating income by reportable segment
US$ in thousands
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Specialty pharmaceuticals | |||||
| Medical devices | |||||
| Total |
Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
- Specialty pharmaceuticals operating income
- The operating income from specialty pharmaceuticals shows a consistent upward trend over the five-year period. It increased steadily from 1,501,900 thousand US dollars in 2010 to 2,832,300 thousand US dollars in 2014. This represents a nearly 89% growth, indicating a strong and continuous expansion in this segment.
- Medical devices operating income
- The operating income for medical devices exhibited a relatively stable trend from 2010 to 2012, with values around 280,000 thousand US dollars. However, there was a decline in 2013 to 246,200 thousand US dollars, followed by a significant increase in 2014 to 382,900 thousand US dollars. This fluctuation suggests some volatility in the medical devices segment, but the sharp rise in the final year indicates a possible recovery or growth phase.
- Total operating income
- The total operating income, aggregating specialty pharmaceuticals and medical devices, shows consistent growth throughout the period. Starting at 1,786,600 thousand US dollars in 2010, it rose each year, reaching 3,215,200 thousand US dollars in 2014. This overall increase of approximately 80% reflects the combined effect of the strong growth in specialty pharmaceuticals and the recovery in medical devices.
- General insights
- The specialty pharmaceuticals segment is the primary driver of operating income growth, with a steady and robust increase. Conversely, the medical devices segment experienced more variability but ended the period with a substantial gain following a dip. The total operating income's upward trajectory underscores effective performance management and possibly successful strategic initiatives within the company's reportable segments during the analyzed timeframe.