Analysis of Reportable Segments
AmerisourceBergen Corp. operates in 2 segments: U.S. Healthcare Solutions and International Healthcare Solutions.
Segment Profit Margin
AmerisourceBergen Corp., profit margin by reportable segment
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | |
|---|---|---|---|---|---|---|
| U.S. Healthcare Solutions | 1.16% | 1.12% | 1.08% | — | — | — |
| International Healthcare Solutions | 2.67% | 3.39% | 5.26% | — | — | — |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
An analysis of segment profit margins between 2020 and 2022 reveals divergent performance trajectories between the domestic and international healthcare operations.
- U.S. Healthcare Solutions
- A steady, incremental improvement in profit margins is observed within this segment. The margin increased from 1.08% in 2020 to 1.12% in 2021, reaching 1.16% by September 30, 2022. This indicates a consistent, albeit modest, expansion of profitability over the three-year period.
- International Healthcare Solutions
- A significant downward trend is evident in the profit margins of the international segment. The margin contracted from 5.26% in 2020 to 3.39% in 2021, further declining to 2.67% by September 30, 2022. This represents a substantial erosion of margin, with the profitability rate nearly halving over the period analyzed.
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Segment Profit Margin: U.S. Healthcare Solutions
AmerisourceBergen Corp.; U.S. Healthcare Solutions; segment profit margin calculation
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Operating income | 2,456,972) | 2,257,918) | 2,020,067) | —) | —) | —) |
| Revenue | 212,100,202) | 202,461,545) | 186,387,949) | —) | —) | —) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 1.16% | 1.12% | 1.08% | — | — | — |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
1 2022 Calculation
Segment profit margin = 100 × Operating income ÷ Revenue
= 100 × 2,456,972 ÷ 212,100,202 = 1.16%
The U.S. Healthcare Solutions segment demonstrated a consistent upward trajectory in both top-line revenue and operational profitability from 2020 through 2022. A positive correlation is observed between the growth in total revenue and the corresponding increase in operating income, resulting in a steady expansion of the segment's profit margin.
- Segment Profit Margin Trends
- The segment profit margin exhibited sequential growth over the three-year period, rising from 1.08% in 2020 to 1.12% in 2021, and further increasing to 1.16% by September 30, 2022. This indicates a gradual but steady improvement in operational efficiency and cost management relative to revenue generation.
- Revenue and Operating Income Performance
- Revenue increased from 186,387,949 thousand US dollars in 2020 to 212,100,202 thousand US dollars in 2022. During this same period, operating income rose from 2,020,067 thousand US dollars to 2,456,972 thousand US dollars. The growth rate of operating income exceeded the growth rate of revenue, which drove the incremental rise in the profit margin percentage.
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Segment Profit Margin: International Healthcare Solutions
AmerisourceBergen Corp.; International Healthcare Solutions; segment profit margin calculation
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Operating income | 706,458) | 390,286) | 184,380) | —) | —) | —) |
| Revenue | 26,491,673) | 11,529,629) | 3,508,106) | —) | —) | —) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 2.67% | 3.39% | 5.26% | — | — | — |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
1 2022 Calculation
Segment profit margin = 100 × Operating income ÷ Revenue
= 100 × 706,458 ÷ 26,491,673 = 2.67%
The International Healthcare Solutions segment experienced rapid growth in both revenue and operating income between 2020 and 2022, although this expansion was accompanied by a consistent decline in the segment profit margin.
- Revenue Expansion
- A significant upward trajectory in revenue is observed, increasing from 3,508,106 thousand US dollars in 2020 to 26,491,673 thousand US dollars by 2022. This represents an aggressive scaling of operations, with the most substantial growth occurring between 2021 and 2022.
- Operating Income Growth
- Absolute operating income followed a positive trend, rising from 184,380 thousand US dollars in 2020 to 706,458 thousand US dollars in 2022. This indicates that the segment successfully converted its increased volume into higher total profits.
- Profit Margin Compression
- Despite the growth in absolute figures, the segment profit margin exhibited a steady downward trend. The margin decreased from 5.26% in 2020 to 3.39% in 2021, and further declined to 2.67% in 2022. This suggests that revenue grew at a faster rate than operating income, resulting in decreased operational efficiency or a shift toward lower-margin revenue streams during the period of expansion.
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Segment Capital Expenditures to Depreciation
AmerisourceBergen Corp., capital expenditures to depreciation by reportable segment
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | |
|---|---|---|---|---|---|---|
| U.S. Healthcare Solutions | 1.08 | 1.16 | 1.25 | — | — | — |
| International Healthcare Solutions | 1.75 | 2.05 | 1.99 | — | — | — |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
An analysis of the capital expenditure to depreciation ratios for the reportable segments reveals divergent investment intensities between the U.S. and International Healthcare Solutions divisions from 2020 to 2022. While both segments maintained ratios above 1.0—indicating that capital spending exceeded the depreciation of existing assets—a general decelerating trend in investment relative to depreciation emerged toward the end of the period.
- U.S. Healthcare Solutions
- A consistent downward trend is observed in the capital expenditure to depreciation ratio, which decreased from 1.25 in 2020 to 1.16 in 2021, and further to 1.08 in 2022. This steady decline suggests a reduction in the pace of capital investment relative to asset wear, indicating a shift toward maintenance-level spending rather than aggressive expansion.
- International Healthcare Solutions
- The ratio for the international segment remained substantially higher than that of the U.S. segment throughout the observed period. After a slight increase from 1.99 in 2020 to 2.05 in 2021, the ratio declined to 1.75 in 2022. The elevated levels suggest a more aggressive investment strategy in international markets, where capital expenditures significantly outpaced depreciation.
- Comparative Segment Analysis
- A comparison between the two segments shows that International Healthcare Solutions consistently invested more heavily relative to its asset base than the U.S. Healthcare Solutions segment. Notably, both segments experienced a decline in their respective ratios during the 2022 fiscal year, reflecting a synchronized reduction in capital intensity across both reportable segments.
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Segment Capital Expenditures to Depreciation: U.S. Healthcare Solutions
AmerisourceBergen Corp.; U.S. Healthcare Solutions; segment capital expenditures to depreciation calculation
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Capital expenditures | 295,406) | 310,525) | 316,249) | —) | —) | —) |
| Depreciation and amortization | 274,554) | 266,575) | 253,687) | —) | —) | —) |
| Segment Financial Ratio | ||||||
| Segment capital expenditures to depreciation1 | 1.08 | 1.16 | 1.25 | — | — | — |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
1 2022 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 295,406 ÷ 274,554 = 1.08
An analysis of the U.S. Healthcare Solutions segment reveals a steady contraction in the rate of capital investment relative to asset depreciation between 2020 and 2022.
- Capital Expenditure Trends
- Investment levels experienced a consistent decline over the observed period, falling from US$ 316.2 million in 2020 to US$ 295.4 million in 2022. This trajectory indicates a gradual reduction in the allocation of capital toward new asset acquisition or infrastructure expansion.
- Depreciation and Amortization Growth
- Conversely, depreciation and amortization expenses increased annually, rising from US$ 253.7 million in 2020 to US$ 274.6 million in 2022. This upward trend reflects the ongoing consumption of the economic benefits of previously acquired long-term assets.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation demonstrated a downward trend, moving from 1.25 in 2020 to 1.16 in 2021, and ending at 1.08 in 2022. Although the ratio remained above 1.0, indicating that the segment continued to invest more than the value of the assets being depreciated, the convergence toward parity suggests a transition from an aggressive growth investment phase toward a maintenance-focused capital strategy.
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Segment Capital Expenditures to Depreciation: International Healthcare Solutions
AmerisourceBergen Corp.; International Healthcare Solutions; segment capital expenditures to depreciation calculation
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Capital expenditures | 200,912) | 127,692) | 53,428) | —) | —) | —) |
| Depreciation and amortization | 114,790) | 62,376) | 26,897) | —) | —) | —) |
| Segment Financial Ratio | ||||||
| Segment capital expenditures to depreciation1 | 1.75 | 2.05 | 1.99 | — | — | — |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
1 2022 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 200,912 ÷ 114,790 = 1.75
The International Healthcare Solutions segment exhibited a significant escalation in both capital expenditures and depreciation and amortization expenses between 2020 and 2022. Capital expenditures grew from 53,428 thousand US dollars in 2020 to 200,912 thousand US dollars by 2022, representing a substantial increase in investment. Parallelly, depreciation and amortization costs rose from 26,897 thousand US dollars to 114,790 thousand US dollars over the same period, reflecting a rapidly expanding asset base.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio remained consistently above 1.0 throughout the observed period, indicating that capital investments exceeded the annual depreciation of assets. The ratio experienced a slight increase from 1.99 in 2020 to a peak of 2.05 in 2021, suggesting an acceleration in growth-oriented spending. However, a contraction to 1.75 occurred in 2022, signifying that while investments continued to rise, they did so at a slower pace relative to the increasing depreciation charges resulting from previous asset acquisitions.
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Revenue
AmerisourceBergen Corp., revenue by reportable segment
US$ in thousands
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | |
|---|---|---|---|---|---|---|
| U.S. Healthcare Solutions | 212,100,202) | 202,461,545) | 186,387,949) | —) | —) | —) |
| International Healthcare Solutions | 26,491,673) | 11,529,629) | 3,508,106) | —) | —) | —) |
| Intersegment eliminations | (4,869) | (2,331) | (2,129) | —) | —) | —) |
| Total | 238,587,006) | 213,988,843) | 189,893,926) | —) | —) | —) |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
Total consolidated revenue demonstrates a consistent upward trajectory from 2020 to 2022, increasing from approximately $189.9 billion to $238.6 billion. This growth is driven by positive performance across both reportable segments, although the rate and scale of expansion differ significantly between domestic and international operations.
- U.S. Healthcare Solutions Revenue
- This segment serves as the primary revenue driver for the organization. A steady growth pattern is observed, with revenue rising from $186.4 billion in 2020 to $212.1 billion in 2022. The expansion reflects a stable and consistent increase in domestic market activity.
- International Healthcare Solutions Revenue
- The international segment exhibited aggressive exponential growth over the analyzed period. Revenue increased from $3.5 billion in 2020 to $26.5 billion in 2022. This rapid acceleration indicates a significant strategic expansion in non-U.S. markets, substantially increasing the segment's proportional contribution to the total revenue mix.
- Intersegment Eliminations and Consolidated Impact
- Intersegment eliminations grew from $2.1 million in 2020 to $4.9 million in 2022. Despite this increase, the impact of these eliminations remains immaterial relative to the total revenue scale and does not meaningfully offset the growth trends observed in the primary operating segments.
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Operating income
AmerisourceBergen Corp., operating income by reportable segment
US$ in thousands
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | |
|---|---|---|---|---|---|---|
| U.S. Healthcare Solutions | 2,456,972) | 2,257,918) | 2,020,067) | —) | —) | —) |
| International Healthcare Solutions | 706,458) | 390,286) | 184,380) | —) | —) | —) |
| Total | 3,163,430) | 2,648,204) | 2,204,447) | —) | —) | —) |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
Total operating income across reportable segments demonstrated a consistent upward trajectory from September 30, 2020, through September 30, 2022. Total income increased from US$ 2,204,447 thousand to US$ 3,163,430 thousand, representing a total growth of approximately 43.5% over the period.
- U.S. Healthcare Solutions Performance
- The U.S. Healthcare Solutions segment exhibited steady and incremental growth. Operating income rose from US$ 2,020,067 thousand in 2020 to US$ 2,456,972 thousand in 2022. This segment remains the primary contributor to the overall operating income, maintaining a dominant position in the total earnings mix.
- International Healthcare Solutions Growth
- The International Healthcare Solutions segment experienced rapid expansion, characterized by high growth rates. Operating income increased from US$ 184,380 thousand in 2020 to US$ 706,458 thousand in 2022. The most significant acceleration occurred between 2020 and 2021, where income more than doubled.
- Comparative Segment Analysis
- A shift in the composition of operating income is observed. In 2020, the International Healthcare Solutions segment accounted for approximately 8.4% of total operating income. By 2022, its contribution increased to approximately 22.3%, indicating a diversifying revenue stream and an increasing reliance on international market growth to supplement the stable gains of the U.S. market.
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Depreciation and amortization
AmerisourceBergen Corp., depreciation and amortization by reportable segment
US$ in thousands
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | |
|---|---|---|---|---|---|---|
| U.S. Healthcare Solutions | 274,554) | 266,575) | 253,687) | —) | —) | —) |
| International Healthcare Solutions | 114,790) | 62,376) | 26,897) | —) | —) | —) |
| Acquisition-related intangibles amortization | 304,551) | 176,221) | 110,478) | —) | —) | —) |
| Total | 693,895) | 505,172) | 391,062) | —) | —) | —) |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
Total depreciation and amortization expenses exhibited a significant upward trajectory between 2020 and 2022, rising from 391,062 thousand US dollars to 693,895 thousand US dollars. This overall increase represents a cumulative growth of approximately 77% over the three-year period, driven primarily by accelerating costs associated with international operations and acquisition-related intangibles.
- U.S. Healthcare Solutions
- Expenses in the U.S. segment demonstrated a stable and modest growth pattern. Costs increased from 253,687 thousand US dollars in 2020 to 274,554 thousand US dollars in 2022. This gradual ascent suggests a consistent level of asset utilization and depreciation within the domestic market, reflecting organic growth or maintenance of existing infrastructure.
- International Healthcare Solutions
- A sharp increase in depreciation and amortization is observed within the international segment. Costs rose from 26,897 thousand US dollars in 2020 to 114,790 thousand US dollars in 2022. This represents a substantial growth rate, indicating significant capital investment or the integration of new assets in foreign markets.
- Acquisition-related Intangibles Amortization
- The most aggressive growth occurred in amortization related to acquisitions, which climbed from 110,478 thousand US dollars in 2020 to 304,551 thousand US dollars in 2022. The acceleration of these costs suggests an active period of merger and acquisition activity, resulting in a higher volume of intangible assets being amortized over time.
- Total Expense Composition
- The composition of total depreciation and amortization shifted noticeably over the period. In 2020, U.S. Healthcare Solutions accounted for the majority of the expense. By 2022, acquisition-related intangibles became a more dominant driver of the total cost, illustrating a strategic shift toward growth through acquisition and international expansion.
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Capital expenditures
AmerisourceBergen Corp., capital expenditures by reportable segment
US$ in thousands
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | |
|---|---|---|---|---|---|---|
| U.S. Healthcare Solutions | 295,406) | 310,525) | 316,249) | —) | —) | —) |
| International Healthcare Solutions | 200,912) | 127,692) | 53,428) | —) | —) | —) |
| Total | 496,318) | 438,217) | 369,677) | —) | —) | —) |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
Total capital expenditures exhibited a consistent upward trajectory between September 30, 2020, and September 30, 2022. Aggregate spending increased from 369,677 thousand US dollars to 496,318 thousand US dollars, representing a total growth of approximately 34.2% over the three-year period.
- U.S. Healthcare Solutions
- A marginal and steady decline in capital allocation is observed within the domestic segment. Expenditures decreased from 316,249 thousand US dollars in 2020 to 295,406 thousand US dollars in 2022, indicating a reduction in capital intensity for U.S. operations.
- International Healthcare Solutions
- Significant growth is evident in international capital expenditures, which rose from 53,428 thousand US dollars in 2020 to 200,912 thousand US dollars in 2022. This represents a substantial increase of approximately 276%, reflecting an aggressive expansion of the international infrastructure.
- Segment Investment Shift
- The composition of capital expenditures shifted markedly over the period. In 2020, the U.S. Healthcare Solutions segment accounted for approximately 85.5% of total capital spending. By 2022, this proportion decreased to approximately 59.5%, while the International Healthcare Solutions segment's share grew from 14.5% to 40.5%.
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