Analysis of Reportable Segments
Baxter International Inc. operates in 2 segments: Renal and Hospital Products.
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Segment Profit Margin
Baxter International Inc., profit margin by reportable segment
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Renal | |||||
| Hospital Products |
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).
- Renal Segment Profit Margin
- The profit margin for the Renal segment is only available starting from the year ending December 31, 2013. At that point, the margin was 21.69%, which then declined to 15.96% in 2014, followed by a further decrease to 14.94% in 2015. This indicates a downward trend in profitability within this segment over the observed period.
- Hospital Products Segment Profit Margin
- Data for the Hospital Products segment profit margin is available beginning in 2013 as well. The margin was 35.45% in 2013, which experienced a slight decline to 34.17% in 2014, and continued to decrease to 32.34% in 2015. Although the profit margin remains significantly higher than that of the Renal segment, the trend shows a gradual reduction in profitability across these years.
- Comparative Insights
- Both segments show profitability that diminishes over the three-year period with available data, with the Renal segment experiencing a sharper relative decline compared to the Hospital Products segment. The Hospital Products consistently records a higher profit margin by a notable margin, but both segments face downward pressure on profitability during the period analyzed.
Segment Profit Margin: Renal
Baxter International Inc.; Renal; segment profit margin calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| EBITDA | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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
Segment profit margin = 100 × EBITDA ÷ Net sales
= 100 × ÷ =
- EBITDA
- EBITDA demonstrates a declining trend over the three reported years, decreasing from 670 million US dollars in 2013 to 666 million in 2014, followed by a more pronounced drop to 566 million in 2015. This indicates a reduction in earnings before interest, taxes, depreciation, and amortization over the period.
- Net Sales
- Net sales initially increased significantly from 3,089 million US dollars in 2013 to 4,172 million in 2014. However, there was a subsequent decline to 3,789 million in 2015. This pattern reflects strong growth followed by a contraction, though sales in 2015 remained above the 2013 level.
- Segment Profit Margin
- The segment profit margin has shown a consistent downward trend from 21.69% in 2013 to 15.96% in 2014, and further to 14.94% in 2015. This decrease suggests that profitability relative to sales has been weakening during this period.
Segment Profit Margin: Hospital Products
Baxter International Inc.; Hospital Products; segment profit margin calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| EBITDA | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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
Segment profit margin = 100 × EBITDA ÷ Net sales
= 100 × ÷ =
- EBITDA Trend
- The EBITDA figures for the available years show a slight decrease over the period from 2014 to 2016. EBITDA amounted to 2242 million US dollars in 2014, slightly decreased to 2237 million US dollars in 2015, and further declined to 1998 million US dollars in 2016. This indicates a gradual reduction in earnings before interest, taxes, depreciation, and amortization during these years.
- Net Sales Trend
- Net sales exhibited a moderate fluctuation within the same period. Sales increased from 6324 million US dollars in 2014 to 6547 million US dollars in 2015, marking a positive growth. However, in 2016, net sales declined to 6179 million US dollars, reflecting a decrease that brought sales below the 2014 level.
- Segment Profit Margin Trend
- The segment profit margin demonstrated a downward trend over the three years observed. In 2014, the margin was 35.45%, which decreased to 34.17% in 2015 and further dropped to 32.34% in 2016. This consistent decline suggests diminishing profitability relative to sales in the segment.
- Overall Insights
- The overall data points to a segment experiencing slight contraction in profitability and earnings despite fluctuating sales. While sales showed temporary growth in 2015, the subsequent decline in both net sales and EBITDA in 2016, combined with a steady decrease in segment profit margin, indicates challenges in maintaining operational efficiency and profitability over the analyzed period.
Segment Return on Assets (Segment ROA)
Baxter International Inc., ROA by reportable segment
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Renal | |||||
| Hospital Products |
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 Return on Assets (ROA) data for the company's annual reportable segments over the periods ending December 31, 2011, through December 31, 2015, reveals distinct trends for the Renal and Hospital Products segments.
- Renal Segment ROA
- The Renal segment's ROA data begins from 2013, with a value of 12.24%. In 2014, the ROA increased to 13.51%, indicating an improvement in asset utilization and profitability during that year. However, in 2015, there was a decline to 12.28%, suggesting a slight deterioration compared to the previous year's peak. Overall, the Renal segment shows an upward trend followed by a modest decrease but remains near the initial 2013 level by the end of the period analyzed.
- Hospital Products Segment ROA
- For the Hospital Products segment, the ROA starts at a higher base, with 31.85% in 2013. It increases slightly to 32.35% in 2014, indicating enhanced efficiency and profitability. However, in 2015, the ROA declines to 30.13%, signaling a reduction in asset returns relative to the previous years, though still maintaining a relatively strong level compared to the Renal segment. This pattern suggests a peak in 2014 followed by a moderate downturn in 2015.
In summary, both segments demonstrate peak ROA values in 2014, followed by decreases in 2015. The Hospital Products segment consistently outperforms the Renal segment in ROA by a significant margin throughout the analyzed periods. The data indicates a need to investigate the causes behind the post-2014 declines, despite generally healthy returns.
Segment ROA: Renal
Baxter International Inc.; Renal; segment ROA calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| EBITDA | |||||
| Total assets | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
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
Segment ROA = 100 × EBITDA ÷ Total assets
= 100 × ÷ =
- EBITDA
- The EBITDA values for the period indicate a downward trend. From 2014 to 2015, the EBITDA decreased from 670 million US dollars to 666 million US dollars, followed by a more notable reduction to 566 million US dollars in 2016. This represents a decline of approximately 15.5% over the two years.
- Total assets
- Total assets showed a consistent decline throughout the observed period. The asset base reduced from 5475 million US dollars in 2014 to 4928 million US dollars in 2015, and further declined to 4609 million US dollars in 2016. This trend indicates a contraction of the segment’s asset base by about 15.9% over the two years.
- Segment Return on Assets (ROA)
- The segment ROA experienced fluctuations but remained relatively stable. It increased from 12.24% in 2014 to 13.51% in 2015, suggesting improved efficiency in utilizing its assets to generate income during that year. However, the ROA decreased to 12.28% in 2016, aligning closely with the initial figure observed in 2014. This indicates that despite asset contraction and declining EBITDA, the segment maintained a consistent level of asset profitability overall.
Segment ROA: Hospital Products
Baxter International Inc.; Hospital Products; segment ROA calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| EBITDA | |||||
| Total assets | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
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
Segment ROA = 100 × EBITDA ÷ Total assets
= 100 × ÷ =
The analysis of the Hospital Products segment over the three-year period ending December 31, 2015, reveals several noteworthy trends in operational performance and asset utilization.
- EBITDA
- The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) remained relatively stable between 2014 and 2015, with a slight decline from 2,242 million US dollars to 1,998 million US dollars. This indicates a moderate decrease in operating profitability or cash earnings capacity during the last year of the period under review.
- Total Assets
- The total assets of the segment demonstrated a consistent downward trend from 7,039 million US dollars in 2013 to 6,632 million US dollars in 2015. This reduction suggests a gradual contraction or optimization of asset base, possibly through asset sales, disposals, or efficiency improvements in capital deployment.
- Segment Return on Assets (ROA)
- The segment ROA, a key indicator of how effectively assets are used to generate earnings, showed minor fluctuations over the three years. It rose slightly from 31.85% in 2013 to 32.35% in 2014 before declining to 30.13% in 2015. Despite this dip in 2015, the ROA remained at a relatively high level, indicating continued efficient asset utilization in generating operational returns.
In summary, the data suggests that while the Hospital Products segment experienced a slight decrease in profitability and asset base in the final year, it maintained a strong return on assets overall. The stable EBITDA and high ROA imply effective management of existing assets, although the downward trends warrant monitoring to understand underlying causes and potential impacts on future performance.
Segment Asset Turnover
Baxter International Inc., asset turnover by reportable segment
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Renal | |||||
| Hospital Products |
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 analysis of the annual reportable segment asset turnover ratios over the observed periods reveals the following patterns and insights.
- Renal Segment Asset Turnover
- The renal segment shows missing data for the years 2011 and 2012. Starting from 2013, the asset turnover ratio was recorded at 0.56. This ratio increased notably in 2014 to 0.85, demonstrating a significant improvement in the efficiency with which assets were used to generate revenue within that segment. In 2015, the ratio slightly declined to 0.82, indicating a minor reduction but maintaining a relatively high level compared to the initial recorded value.
- Hospital Products Segment Asset Turnover
- Similar to the renal segment, no data is available for the years 2011 and 2012. In 2013, the hospital products segment attained an asset turnover ratio of 0.90. This ratio increased marginally to 0.95 in 2014, reflecting a steady enhancement in asset utilization efficiency. In 2015, the ratio slightly decreased to 0.93, remaining close to the previous year's performance and indicating sustained asset turnover efficiency.
Overall, both segments exhibit a pattern of substantial improvement in the initial year of available data, followed by stabilization with small fluctuations. The hospital products segment consistently maintains a higher asset turnover ratio compared to the renal segment through the periods with available data, signifying comparatively more efficient asset usage within hospital products. The slight declines observed in 2015 for both segments suggest a need for cautious monitoring but do not indicate a sharp downturn.
Segment Asset Turnover: Renal
Baxter International Inc.; Renal; segment 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 | |||||
| Total assets | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
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
Segment asset turnover = Net sales ÷ Total assets
= ÷ =
- Net Sales
- Net sales experienced a significant increase from 2013 to 2014, rising from 3,089 million USD to 4,172 million USD. However, this growth was followed by a decline in 2015, with net sales dropping to 3,789 million USD. Despite the decrease in 2015, the net sales figure remained above the 2013 level, indicating an overall upward trend across the observed period.
- Total Assets
- The total assets allocated to the segment showed a consistent decline over the three-year period from 2013 to 2015. Starting at 5,475 million USD in 2013, total assets decreased to 4,928 million USD in 2014 and further to 4,609 million USD in 2015. This downward trend suggests a reduction in asset investment or divestiture within the segment during this timeframe.
- Segment Asset Turnover
- The segment asset turnover ratio revealed a positive trajectory from 2013 through 2015. It increased markedly from 0.56 in 2013 to 0.85 in 2014, indicating improved efficiency in using assets to generate sales. Although there was a slight decrease to 0.82 in 2015, the ratio remained substantially higher than the 2013 level, underscoring better asset utilization efficiency over the period.
- Overall Analysis
- Overall, the segment showed enhanced efficiency in asset utilization as reflected by the rising asset turnover ratio, concurrent with a reduction in total assets. Although net sales peaked in 2014 before experiencing a decline in 2015, sales remained elevated relative to the 2013 baseline. The data suggests that the segment may have optimized asset deployment, contributing to improved productivity while managing a lower asset base. This reflects a potential strategic emphasis on operational efficiency or asset rationalization.
Segment Asset Turnover: Hospital Products
Baxter International Inc.; Hospital Products; segment 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 | |||||
| Total assets | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
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
Segment asset turnover = Net sales ÷ Total assets
= ÷ =
- Net Sales
- Net sales exhibited a rising trend from 2013 to 2014, increasing from 6324 million US dollars to 6547 million US dollars. However, in 2015, net sales decreased to 6179 million US dollars, indicating a decline after two years of growth.
- Total Assets
- Total assets decreased consistently over the observed period, starting from 7039 million US dollars in 2013 and declining to 6915 million in 2014, followed by a further decrease to 6632 million in 2015. This suggests a reduction in the investment base or asset holdings within this segment.
- Segment Asset Turnover
- The segment asset turnover ratio showed a slight improvement from 0.9 in 2013 to 0.95 in 2014, indicating enhanced efficiency in using assets to generate sales during that period. However, it slightly declined to 0.93 in 2015, still reflecting relatively stable but marginally decreasing efficiency.
- Overall Analysis
- During the assessed years, the segment demonstrated growth in net sales initially, accompanied by a marginal increase in asset utilization efficiency in 2014. Nevertheless, the decline in net sales in 2015, combined with a steady reduction in total assets and a slight decrease in asset turnover, may point to emerging challenges in maintaining sales momentum and efficient asset deployment within the segment.
Net sales
Baxter International Inc., net sales by reportable segment
US$ in millions
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Renal | |||||
| Hospital Products | |||||
| Total |
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 annual reportable segment net sales data reveals distinct trends in three key financial metrics over the periods from 2013 to 2015. There is no data available for the years 2011 and 2012, thus the analysis focuses on the subsequent three years.
- Renal Segment
- The Renal segment experienced an initial increase in net sales, rising from $3,089 million in 2013 to $4,172 million in 2014. However, in 2015, net sales decreased to $3,789 million, indicating a contraction after the prior year's growth. Despite the decline, the 2015 figure remains above the 2013 baseline, suggesting overall positive movement across the period.
- Hospital Products Segment
- Net sales for Hospital Products showed a modest increase from $6,324 million in 2013 to $6,547 million in 2014. In 2015, net sales decreased slightly to $6,179 million. The fluctuations are relatively minor, reflecting a fairly stable performance with a slight downward trend in the latest year recorded.
- Total Net Sales
- The total net sales follow a similar pattern to the Renal and Hospital Products segments combined. There is a noticeable increase from $9,413 million in 2013 to $10,719 million in 2014, indicating strong revenue growth. In 2015, total net sales declined to $9,968 million, showing a downturn but maintaining levels above those in 2013.
Overall, the data exhibits a growth peak in 2014 across all segments, followed by a consecutive decline in 2015. The Renal segment shows the most significant variation, while Hospital Products remain relatively steady. The total net sales reflect these segment trends, peaking in 2014 before a decrease the following year but still outperforming 2013 figures.
EBITDA
Baxter International Inc., ebitda by reportable segment
US$ in millions
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Renal | |||||
| Hospital Products | |||||
| Total |
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 EBITDA data for the two reportable segments over the three-year period from 2013 to 2015 reflects a declining trend.
- Renal Segment
- EBITDA was reported at 670 million USD in 2013, with a marginal decline to 666 million USD in 2014. The segment experienced a more noticeable decrease in 2015, dropping to 566 million USD. This indicates a downward trajectory with a significant contraction in profitability in the final year.
- Hospital Products Segment
- The segment's EBITDA stood at 2242 million USD in 2013 and showed a slight decrease to 2237 million USD in 2014. In 2015, the segment saw a more pronounced reduction to 1998 million USD, suggesting challenges impacting earnings in the later period.
- Total EBITDA
- Total EBITDA, aggregating both segments, displayed a slight decrease from 2912 million USD in 2013 to 2903 million USD in 2014. The decline became more substantial in 2015, with total EBITDA falling to 2564 million USD. The trend reflects overall contraction in earnings, primarily influenced by decreases in each segment.
Overall, the data indicates that both segments experienced relatively stable EBITDA values between 2013 and 2014, followed by a more significant downturn in 2015. The Hospital Products segment consistently accounted for the majority of EBITDA, with the Renal segment contributing a smaller, yet material portion. The combined effect of declining EBITDA in both areas led to a notable reduction in total segment EBITDA by the end of the period analyzed.
Total assets
Baxter International Inc., total assets by reportable segment
US$ in millions
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Renal | |||||
| Hospital Products | |||||
| Total |
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 total assets data for the annual reportable segments demonstrates a declining trend over the examined period from December 31, 2013, to December 31, 2015.
- Renal Segment
- The Renal segment shows a decrease in total assets from 5,475 million US dollars in 2013 to 4,928 million in 2014, followed by a further decline to 4,609 million in 2015. This indicates a consistent reduction in assets tied to this segment across the timeframe.
- Hospital Products Segment
- Total assets for the Hospital Products segment also decreased over the same period, dropping from 7,039 million US dollars in 2013 to 6,915 million in 2014, and further down to 6,632 million in 2015. Although this segment holds a larger asset base than the Renal segment, it similarly exhibits a downward trend.
- Total Assets
- Combining the two segments, the total assets decreased from 12,514 million US dollars in 2013 to 11,843 million in 2014, and then to 11,241 million in 2015. This steady reduction in overall segment assets suggests either asset disposition, reduced capital expenditure, or changes in segment valuation over the years.
The absence of data for 2011 and 2012 limits trend analysis before 2013. However, from 2013 onward, the consistent decline in both segments' assets and the aggregate total suggests a strategic or operational shift affecting the asset base. This may reflect changes in the company's investment focus, divestitures, or efficiency improvements that reduce asset requirements.