Analysis of Geographic Areas
Baxter International Inc. operates in 4 regions: United States; Europe; Asia-Pacific; and Latin America and Canada.
Area Asset Turnover
Baxter International Inc., asset turnover by geographic area
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| United States | 2.29 | 2.46 | 2.19 | — | — |
| Europe | 2.14 | 2.22 | 1.83 | — | — |
| Asia-Pacific | 2.61 | 2.76 | 2.56 | — | — |
| Latin America and Canada | 2.09 | 2.35 | 2.23 | — | — |
Based on: 10-K (reporting date: 2015-12-31), 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).
An analysis of geographic asset turnover ratios from 2013 to 2015 reveals a synchronized trend across all operational regions, characterized by a peak in asset utilization efficiency during 2014 followed by a moderate contraction in 2015.
- Asia-Pacific
- This region consistently maintains the highest asset turnover ratios of all geographic areas, indicating superior efficiency in generating revenue from its asset base. The ratio rose from 2.56 in 2013 to a peak of 2.76 in 2014, before moderating to 2.61 in 2015.
- United States
- The United States experienced a notable increase in efficiency between 2013 and 2014, with the ratio climbing from 2.19 to 2.46. This was followed by a decline to 2.29 in 2015, though the final value remained higher than the 2013 baseline.
- Europe
- Europe exhibited the most significant improvement in turnover efficiency during the initial period, rising from a low of 1.83 in 2013 to 2.22 in 2014. A slight decrease to 2.14 was observed in 2015, but the region maintained a stronger efficiency profile than in 2013.
- Latin America and Canada
- This region showed an initial increase from 2.23 in 2013 to 2.35 in 2014. However, it demonstrated the most pronounced decline in the final year, falling to 2.09 in 2015, which represents the only instance where a region's turnover ratio ended the three-year period below its starting level.
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Area Asset Turnover: United States
Baxter International Inc.; United States; area asset turnover calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | 4,001) | 3,999) | 3,584) | —) | —) |
| PP&E, net | 1,746) | 1,625) | 1,633) | —) | —) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 2.29 | 2.46 | 2.19 | — | — |
Based on: 10-K (reporting date: 2015-12-31), 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).
1 2015 Calculation
Area asset turnover = Net sales ÷ PP&E, net
= 4,001 ÷ 1,746 = 2.29
The financial performance within the United States from 2013 to 2015 is characterized by a steady increase in net sales and a fluctuation in asset utilization efficiency. While revenue grew consistently over the three-year period, the efficiency of fixed asset deployment peaked in 2014 before experiencing a slight decline.
- Net Sales Trends
- A positive growth trajectory is observed in net sales, which rose from 3,584 million in 2013 to 4,001 million by 2015. The most pronounced increase occurred between 2013 and 2014, followed by a period of stabilization where sales remained virtually flat between 2014 and 2015.
- Fixed Asset Investment
- Net property, plant, and equipment (PP&E) remained relatively stable between 2013 and 2014, with a marginal decrease from 1,633 million to 1,625 million. However, a notable increase in investment was recorded in 2015, with PP&E rising to 1,746 million.
- Area Asset Turnover Analysis
- The area asset turnover ratio demonstrates a non-linear trend. Efficiency improved from 2.19 in 2013 to a peak of 2.46 in 2014, indicating that the company generated more revenue per unit of net PP&E. In 2015, the ratio declined to 2.29, a result of the increase in the asset base (PP&E) occurring without a corresponding proportional increase in net sales.
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Area Asset Turnover: Europe
Baxter International Inc.; Europe; area asset turnover calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | 2,774) | 3,257) | 2,674) | —) | —) |
| PP&E, net | 1,298) | 1,466) | 1,463) | —) | —) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 2.14 | 2.22 | 1.83 | — | — |
Based on: 10-K (reporting date: 2015-12-31), 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).
1 2015 Calculation
Area asset turnover = Net sales ÷ PP&E, net
= 2,774 ÷ 1,298 = 2.14
The European operations exhibited fluctuating performance in revenue generation and asset efficiency between 2013 and 2015. While the region experienced a significant peak in both sales and asset productivity in 2014, the subsequent period showed a contraction in scale, although efficiency remained higher than 2013 levels.
- Net Sales Trends
- Net sales grew substantially from US$ 2,674 million in 2013 to US$ 3,257 million in 2014, representing a significant increase in regional market activity. However, this growth was not sustained into 2015, as sales declined to US$ 2,774 million, nearly returning to the 2013 baseline.
- Net Property, Plant, and Equipment (PP&E)
- The asset base remained nearly stagnant between 2013 and 2014, with values moving from US$ 1,463 million to US$ 1,466 million. A notable reduction occurred in 2015, where net PP&E decreased to US$ 1,298 million, suggesting either asset divestment, depreciation, or a strategic restructuring of the physical footprint in Europe.
- Area Asset Turnover Analysis
- The asset turnover ratio improved from 1.83 in 2013 to a peak of 2.22 in 2014, driven by the increase in sales against a static asset base. In 2015, the ratio declined slightly to 2.14. This modest decrease, despite the drop in net sales, indicates that the reduction in net PP&E helped mitigate the impact of lower revenues on overall asset productivity.
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Area Asset Turnover: Asia-Pacific
Baxter International Inc.; Asia-Pacific; area asset turnover calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | 1,972) | 2,079) | 1,810) | —) | —) |
| PP&E, net | 757) | 753) | 708) | —) | —) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 2.61 | 2.76 | 2.56 | — | — |
Based on: 10-K (reporting date: 2015-12-31), 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).
1 2015 Calculation
Area asset turnover = Net sales ÷ PP&E, net
= 1,972 ÷ 757 = 2.61
The financial performance of the Asia-Pacific region from 2013 to 2015 is characterized by an initial phase of growth in both revenue and asset utilization, followed by a slight contraction in efficiency in the final year of the period.
- Net Sales Trends
- Net sales exhibited a fluctuating trend, starting at US$ 1,810 million in 2013 and increasing to a peak of US$ 2,079 million in 2014. This growth was not sustained into 2015, as sales declined to US$ 1,972 million.
- Net PP&E Growth
- Investment in property, plant, and equipment (PP&E), net, showed a steady increase over the observed period. The value rose from US$ 708 million in 2013 to US$ 753 million in 2014, and remained relatively stable at US$ 757 million in 2015.
- Area Asset Turnover Analysis
- The area asset turnover ratio, which measures the efficiency of generating sales from the asset base, improved from 2.56 in 2013 to 2.76 in 2014. This increase indicates that the growth in net sales outpaced the expansion of the net PP&E during that interval. By 2015, the ratio decreased to 2.61, reflecting the impact of declining sales against a marginally larger asset base.
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Area Asset Turnover: Latin America and Canada
Baxter International Inc.; Latin America and Canada; area asset turnover calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | 1,221) | 1,384) | 1,345) | —) | —) |
| PP&E, net | 585) | 590) | 604) | —) | —) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 2.09 | 2.35 | 2.23 | — | — |
Based on: 10-K (reporting date: 2015-12-31), 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).
1 2015 Calculation
Area asset turnover = Net sales ÷ PP&E, net
= 1,221 ÷ 585 = 2.09
Between 2013 and 2015, the operational efficiency in Latin America and Canada experienced volatility, characterized by an initial improvement in asset utilization followed by a notable decline in the final year of the period.
- Net Sales Performance
- Revenue exhibited a fluctuating trend, increasing from US$ 1,345 million in 2013 to a peak of US$ 1,384 million in 2014. However, a significant contraction occurred in 2015, with sales falling to US$ 1,221 million, representing a decrease of approximately 11.8% from the previous year.
- Net Property, Plant, and Equipment (PP&E)
- The net value of fixed assets showed a consistent, slight downward trend over the observed three-year period. PP&E decreased from US$ 604 million in 2013 to US$ 590 million in 2014, and further to US$ 585 million in 2015, indicating a gradual reduction in the capital asset base.
- Area Asset Turnover Efficiency
- The area asset turnover ratio peaked in 2014 at 2.35, driven by the combination of rising net sales and a reduced asset base, which indicated optimal efficiency in generating revenue from fixed assets. By 2015, the ratio declined to 2.09, as the substantial drop in net sales outweighed the marginal reduction in PP&E, signaling a decrease in overall asset productivity.
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Net sales
Baxter International Inc., net sales by geographic area
US$ in millions
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| United States | 4,001) | 3,999) | 3,584) | —) | —) |
| Europe | 2,774) | 3,257) | 2,674) | —) | —) |
| Asia-Pacific | 1,972) | 2,079) | 1,810) | —) | —) |
| Latin America and Canada | 1,221) | 1,384) | 1,345) | —) | —) |
| Consolidated | 9,968) | 10,719) | 9,413) | —) | —) |
Based on: 10-K (reporting date: 2015-12-31), 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).
Consolidated net sales exhibited a period of growth between 2013 and 2014, followed by a contraction in 2015. Total net sales increased from US$ 9,413 million in 2013 to a peak of US$ 10,719 million in 2014, before declining to US$ 9,968 million by the end of 2015. This trajectory indicates a general volatility in global revenue streams during the observed three-year window.
- United States Market Trends
- The United States represents the largest source of revenue throughout the period. Net sales grew by approximately 11.6% between 2013 and 2014, rising from US$ 3,584 million to US$ 3,999 million. Unlike other regions, the US market demonstrated resilience in 2015, maintaining its value with a marginal increase to US$ 4,001 million, thereby offsetting some of the losses experienced in international markets.
- European Market Volatility
- Europe showed the most significant fluctuations in performance. A substantial increase was recorded between 2013 and 2014, where sales rose from US$ 2,674 million to US$ 3,257 million, representing a growth rate of approximately 21.8%. However, this gain was largely reversed in 2015, with sales dropping to US$ 2,774 million, a decrease of roughly 14.8% from the previous year.
- Asia-Pacific Performance
- Net sales in the Asia-Pacific region followed the general consolidated trend of growth followed by decline. Revenue increased from US$ 1,810 million in 2013 to US$ 2,079 million in 2014. In 2015, a slight contraction occurred, with sales decreasing to US$ 1,972 million, representing a decline of approximately 5.1%.
- Latin America and Canada Trends
- The Latin America and Canada segment exhibited the lowest growth rate among all regions. Sales increased marginally from US$ 1,345 million in 2013 to US$ 1,384 million in 2014. A notable decline followed in 2015, with net sales falling to US$ 1,221 million, marking an 11.8% decrease and bringing the revenue below 2013 levels.
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PP&E, net
Baxter International Inc., pp&e, net by geographic area
US$ in millions
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| United States | 1,746) | 1,625) | 1,633) | —) | —) |
| Europe | 1,298) | 1,466) | 1,463) | —) | —) |
| Asia-Pacific | 757) | 753) | 708) | —) | —) |
| Latin America and Canada | 585) | 590) | 604) | —) | —) |
| Consolidated | 4,386) | 4,434) | 4,408) | —) | —) |
Based on: 10-K (reporting date: 2015-12-31), 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).
The consolidated net property, plant, and equipment (PP&E) remained relatively stable from 2013 to 2015, fluctuating minimally around the 4.4 billion US dollar mark. While the overall balance showed little variance, a redistribution of assets across geographic regions occurred during this period, characterized by growth in the United States and Asia-Pacific, contrasted by declines in Europe and the Latin America and Canada region.
- United States Regional Analysis
- The United States represents the largest portion of the net PP&E. After a marginal decrease from 1,633 million US dollars in 2013 to 1,625 million US dollars in 2014, there was a notable increase to 1,746 million US dollars by December 31, 2015, indicating an expansion or modernization of domestic infrastructure.
- European Regional Analysis
- European assets remained stagnant between 2013 and 2014, moving from 1,463 million US dollars to 1,466 million US dollars. However, a significant reduction is observed in 2015, where the value dropped to 1,298 million US dollars, reflecting a contraction in the regional asset base.
- Asia-Pacific Regional Analysis
- A consistent upward trend is observed in the Asia-Pacific region. Net PP&E grew from 708 million US dollars in 2013 to 753 million US dollars in 2014, continuing its ascent to 757 million US dollars by the end of 2015.
- Latin America and Canada Regional Analysis
- This region exhibited a steady downward trend over the three-year period. Assets decreased from 604 million US dollars in 2013 to 590 million US dollars in 2014, further declining to 585 million US dollars in 2015.
- Consolidated Asset Distribution
- By the end of 2015, the geographic concentration of net PP&E shifted, with the United States increasing its share of the total consolidated assets, while the relative weight of European and Latin American/Canadian assets diminished.
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