Allergan PLC (NYSE:AGN)

The financial data presents a detailed view of operational efficiency and capital utilization over a five-year period. The analysis focuses on net operating profit after taxes (NOPAT), invested capital, and the return on invested capital (ROIC).

Net Operating Profit After Taxes (NOPAT)

The NOPAT figures exhibit a negative trend throughout the five-year span, indicating consistent operational losses. In 2015, the loss was approximately $3.5 billion, which decreased to around $2.0 billion in 2016, showing some improvement. However, in 2017, a significant deterioration occurred, with losses increasing sharply to over $10.5 billion. Subsequently, the losses decreased again, but remained substantial, at about $5.7 billion in 2018 and $5.4 billion in 2019. This fluctuation suggests volatility in operational performance, with 2017 representing a particularly challenging year.

Invested Capital

Invested capital consistently declined every year, starting at approximately $127.5 billion in 2015 and falling to about $80.3 billion by 2019. This downward trend suggests a deliberate reduction or possibly divestment of assets, which could be related to restructuring efforts, asset sales, or other strategic capital management decisions over this period.

Return on Invested Capital (ROIC)

The ROIC remained negative across all years, reflecting an inability to generate positive returns on invested capital. It initially improved from -2.75% in 2015 to -1.8% in 2016, indicating a slight reduction in inefficiency. However, the rate sharply worsened in 2017 to -10.19%, aligning with the increased NOPAT losses observed that year. The negative trend moderated slightly in 2018 and 2019, with ROIC values at -6.23% and -6.67% respectively, but remained considerably below zero, indicating persistent challenges in delivering value from capital investments.

Overall, the data reveals persistent operational losses and declining capital base with no recovery in profitability on invested capital over the analyzed period. The spike in losses and decline in returns in 2017 highlights a critical year of operational and financial difficulty, followed by some stabilization but ongoing challenges. These patterns suggest the need for strategic interventions to improve profitability and optimize capital deployment.

Operating Profit Margin (OPM)

The operating profit margin remained negative throughout the analyzed period, indicating consistent operating losses. Although the margin improved from -20.61% in 2015 to -11.72% in 2016, it deteriorated sharply to -58.34% in 2017, before gradually recovering to -27.74% by 2019. This pattern suggests volatility and operational challenges impacting profitability over these years.

Turnover of Capital (TO)

There was a steady increase in the turnover of capital from 0.12 in 2015 to 0.20 in 2019. This gradual rise indicates a consistent improvement in asset utilization efficiency, signifying that the company is generating more revenue per unit of capital over time.

Effective Cash Tax Rate (1 – CTR)

The effective cash tax rate remained constant at 100% throughout the entire period. This consistency implies that the company either did not owe cash taxes or had tax credits offsetting any liabilities, maintaining a neutral impact on cash flows from taxes year over year.

Return on Invested Capital (ROIC)

Return on invested capital was negative for all years, beginning at -2.75% in 2015 and showing a slight improvement to -1.80% in 2016. It then declined significantly to -10.19% in 2017, followed by partial recovery to -6.67% in 2019. Despite fluctuations, the persistently negative ROIC indicates that the company struggled to generate positive returns on its invested capital during the analyzed period.

Over the observed five-year period, the data reveals significant fluctuations in profitability and revenue performance.

Net operating profit before taxes (NOPBT)

The NOPBT values exhibit a consistently negative trend, indicating operating losses each year. The losses peaked in 2017 with a value of approximately -9.31 billion USD, representing the most challenging year in this timeframe. Although the losses decreased after 2017, reaching about -4.46 billion USD by 2019, the company remained substantially unprofitable before taxes throughout the entire period.

Adjusted net revenues

Revenues show modest variability but generally maintain a range between approximately 14.6 billion and 16 billion USD. After a slight decrease from about 15.06 billion USD in 2015 to 14.57 billion USD in 2016, revenues recovered and peaked in 2017 at about 15.96 billion USD. Following a small dip in 2018, revenues increased again slightly in 2019, signaling relatively stable top-line performance despite the volatile profitability.

Operating profit margin (OPM)

Margins remained negative across all years, corroborating the unprofitability indicated by the NOPBT figures. The margin worsened significantly in 2017 to -58.34%, aligning with the peak operating loss in the same year. Subsequently, the margin improved somewhat, rising to -27.74% by 2019. Despite this improvement, the persistent negative margins emphasize ongoing operational challenges, with substantial losses relative to revenue.

In summary, the financial data reflects a period of considerable operational difficulty, marked by sizeable and sustained losses before taxes. Revenue levels displayed relative stability, which contrasts with the deep negative margins and significant losses, particularly peaking in 2017. The gradual improvement post-2017 suggests partial recovery efforts, although profitability remains elusive as of the last reported period.

Adjusted Net Revenues

The adjusted net revenues exhibit a generally positive trend over the five-year period. Starting at approximately $15.06 billion in 2015, there is a slight decline to around $14.57 billion in 2016. However, revenues recover in subsequent years, reaching nearly $15.96 billion in 2017. The figures remain relatively stable in 2018 at approximately $15.79 billion and show a modest increase to nearly $16.08 billion by 2019. This pattern suggests a recovery phase post-2016, followed by consistent revenue generation with mild growth in the final year.

Invested Capital

The invested capital demonstrates a consistent downward trend throughout the period. Beginning at roughly $127.5 billion in 2015, it decreases annually to reach approximately $111.25 billion in 2016, $103.55 billion in 2017, $91.10 billion in 2018, and finally about $80.27 billion in 2019. This continuous reduction may indicate asset divestitures, increased efficiency in capital use, or a strategic shift toward leaner capital deployment.

Turnover of Capital (TO)

The turnover of capital shows a clear upward trend, increasing steadily from 0.12 in 2015 to 0.13 in 2016, 0.15 in 2017, 0.17 in 2018, and ultimately reaching 0.20 in 2019. This ratio reflects improved efficiency in using invested capital to generate revenues, possibly driven by the combination of stable or growing revenues alongside declining invested capital.

Overall Analysis

The data reveals a strategic evolution characterized by a decrease in invested capital coupled with stable to slightly increasing revenues. This combination results in a notable improvement in capital turnover, indicating enhanced operational efficiency over the analyzed period. The trend suggests that the entity is optimizing capital deployment to maintain revenue levels while reducing invested resources, which may positively affect return on capital employed.

The financial data presented reveals several notable trends over the five-year period ending in 2019.

Cash Operating Taxes

Cash operating taxes fluctuated significantly during the period. Starting at 398,183 thousand US dollars in 2015, there was a decline to 294,697 thousand US dollars in 2016. However, 2017 saw a sharp increase to 1,237,785 thousand US dollars, followed by a substantial negative figure in 2018 of -398,902 thousand US dollars, indicating a cash tax refund or tax benefit. In 2019, cash operating taxes returned to a positive value of 897,358 thousand US dollars. These fluctuations suggest considerable variability in tax payments or possible changes in tax regulations, liabilities, or deferments.

Net Operating Profit Before Taxes (NOPBT)

NOPBT remained negative throughout the five years, indicating operational losses before tax. The losses showed a narrowing trend from -3,104,433 thousand US dollars in 2015 to -1,706,923 thousand US dollars in 2016, implying some operational improvement. However, the loss dramatically increased in 2017 to -9,312,718 thousand US dollars, marking the highest negative point in the period. The losses then reduced in subsequent years to -6,072,516 thousand US dollars in 2018 and further to -4,459,638 thousand US dollars in 2019. Although losses decreased after 2017, profitability had not been achieved by the end of 2019.

Effective Cash Tax Rate (CTR)

Data for the effective cash tax rate is not available for any of the years, which limits the ability to evaluate the efficiency or impact of cash tax payments relative to operating profits.

Overall, the trends demonstrate high volatility in cash taxes and persistent operational losses throughout the examined timeframe, with notable loss acceleration in 2017 followed by modest improvement. The negative cash operating taxes in 2018 are particularly significant and warrant further investigation for possible one-time tax adjustments or refunds.