Financial Analysis of Pfizer

1. Financial
Analysis of

2. Group 1
Presentation
1-Nancy (600220522)
2-Aya (600220076)
3-Ayatullah (600220373)
4-M. Donya (600220042)
5-Maha (600220293)

3. Pfizer Inc. is the largest research-based
drugmaker in the world.
operates in three business segments:
healthcare, animal health, and consumer
healthcare
Pfizer is the company behind well-
known consumer products such as
Listerine, Rolaids, Sudafed, and
Visine, but the company's greatest
revenue producers are its prescription
drugs.
Pfizer's marquee pharmaceuticals include
Viagra, a treatment for erectile dysfunction,
Zoloft, an antidepressant, and Lipitor, a
cholesterol-lowering pharmaceutical that is
the bestselling drug in the world. Pfizer's
products are marketed in more than 150
countries.
It’s considered In March 2020, as the
scale of the COVID-19 pandemic
became apparent, Pfizer partnered with
BioNTech to study and develop
COVID-19 mRNA vaccine candidates.
About Pfizer

4. 88.300 Employees Globally
4
49 Manufacturing sites

5. Pivot to pharmaceutical
research and global expansion
Early history
The company changed from a manufacturer of
fine chemicals to a research-based
pharmaceutical company.
1849–1950 1950–1980 1980–2000
Development of Viagra, Zoloft,
and Lipitor
Pfizer was founded in
1849 by two recent
German immigrants to
the USA, Charles
Pfizer and Charles
Erhart.
’s History:

6. The Era of Mega-
Mergers
Acquisitions and mergers 2000 -2020
1. In June 2000, Pfizer acquired Warner-Lambert outright for $116 billion
2. In 2003, Pfizer merged with Pharmacia
3. On October 15, 2009, Pfizer acquired Wyeth
4. In September 2014, the company acquired Innopharma for $225 million
5. In June 2016, the company acquired Anacor Pharmaceuticals for $5.2 billion
6. In July 2019, the company acquired Therachon for up to $810 million.
7. On July 31, 2019, Pfizer’s Consumer Healthcare business, an over-the-counter medicines
business,was combined with GlaxoSmithKline’s Consumer Healthcare business to form a new
consumer healthcare joint venture.
8. In September 2020, the company acquired a 9.9% stake in CStone Pharmaceuticals for $200 million

7. Viatris Transaction
- On July 29, 2019, Pfizer & Upjohn entered into a Separation and Distribution Agreement.
- Pfizer Completes Transaction to Combine Its Upjohn Business with Mylan to form Viatris in a Reverse
Morris Trust transaction. The $12 billion deal was cleared in November 2020, creating a generics
behemoth with annual sales of around $19 to $20 billion and operations in 165 markets around the word.

8. 8
Pfizer Ventures: Investing in Science
Overview of Operations
•With a $600M capital commitment for investment,
Pfizer Ventures backs private companies at all stages of
development.
•They have a strong focus on early-stage
opportunities. But other investments, including start-
ups and spinouts, are also considered in scope.
•While primarily U.S. focused, international investments
may represent up to 20 percent of the portfolio.
•They can lead or join a syndicate of investors and will
seek board representation commensurate with our
investment.
Areas of Focus
•Investments are focused on potentially
transformative therapeutics, with an emphasis in our
core therapeutic areas: Inflammation & Immunology,
Internal Medicine, Oncology, Rare Disease, and
Vaccines.
•We also consider platform technologies, diagnostics,
drug delivery, pharmaceutical services, and other
technologies that have the potential to transform
drug discovery and development
invests in areas of current or future strategic interest to Pfizer with the goal of remaining at
the forefront of life science advances.

9. Financial Statement

10. A financial analyst will thoroughly examine a company's financial statements:
1- Income statement
2- Balance sheet
3- Cash flow statement

14. Financial Analysis
Def:
It is the process of evaluating businesses, projects, budgets, and other finance-related transactions to
determine their performance and suitability, by analyzing whether an entity is stable, solvent, liquid, or
profitable enough to warrant a monetary investment.
Types:
Internally: Can help fund managers make future business decisions or review historical trends for past
successes.
Externally: Can help investors choose the best possible investment opportunities.

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a. Liquidity Ratios:
17
Def:
They are financial metrics used to determine a debtor's ability to pay off current debt obligations
without raising external capital.

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1. Current Ratio = 1.39
In 2021
2020 = 1.35
2019 = 0.88
2018 = 1.57

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2. Quick ratio = 1.18
In 2021
2020 = 1.04
2019 = 0.69
2018 = 1.33

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3. Cash ratio = 0.7X
4. Cash on hand
Pfizer cash on hand for the quarter ending December 31, 2021 was $29.696B, a 35.52% increase
year-over-year

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b. Activity Ratio/Efficiency Ratio/ Asset Management:
Def:
It is how efficiently a company is leveraging the assets on its balance sheet, to generate revenues & cash.
Pfizer total assets for the quarter ending December 31, 2021 were $179.188B, a 0.11% increase year-
over-year.
Pfizer total assets for 2020 were $154.229B, a 7.97% decline from 2019
ACP
2021= 52
2020= 70.2
2019= 61
2018= 54.5
APP
2021= 59
2020= 133
2019= 113
2018= 107
AAI
2021= 96
2020= 243
2019= 203
2018= 182
Asset Turnover
2021= 0.45
2020= 0.27
2019= 0.25
2018= 0.34
WCF
2021= 89
2020= 180
2019= 151
2018= 130

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c. Debt / Leverage Ratios:
Def:
-They measure the extent to which an organization uses debt to fund its operations.
-They can also be used to study an entity’s ability to pay for that debt.
-These ratios are important to investors, whose equity investments in a business could be put at risk if the
debt level is too high.
-Lenders are also avid users of these ratios, to determine the extent to which loaned funds could be at risk.
Debt Ratio
2021= 0.48
2020 = 0.59
2019 = 0.62
2018 = 0.6
Debt to Capitalization Ratio
2021= 0.33
2020= 0.38
2019 = 0.37
2018 = 0.34
Time Interest Ratio
2021= 16.1
2020= 6.3
2019= 4.8
2018= 10

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In 30/9/2021
Debt to Equity Ratio = .048

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d. Profitability Ratio:
Def:
They are financial metrics to assess a business's ability to generate earnings relative to its revenue,
operating costs, balance sheet assets, or shareholders' equity over time, using data from a specific
point in time.

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Gross Profit Margin = 62 %
Operating Profit Margin = 23.83%
Net Profit Margin = 26.97 %
In 31/12/2021
Gross Profit
Margin
2021= 0.57
2020= 0.72
2019= 0.69
2018= 0.7
Operating Margin
2021= 0.24
2020= 0.21
2019= 0.18
2018= 0.28

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In 30/9/2021
Return on Equity = 28.55 %
ROE
2021= 0.29
2020 = 0.1
2019 = 0.17
2018= 0.17
ROI
2021= 0.12
2020= 0.04
2019= 0.06
2018= 0.07

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In 2021
Return on Asset = 12.01 %

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Cost of Capital: is the rate of return the firm expects to earn from its investment in order to increase the
value of the firm in the market.

30. Major Factors on Financial
Performance (Internally)
30
1- R & D
2- Robust shareholder outreach program & consistent dividend yield
3- Viatris Transaction

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- On December 2021, Pfizer declared a dividend of $0.40 per share to be paid out in January 2022,
representing an increase of 2.5% from FY2021's dividends payout.
- Over the past 5 years, its stock has also been on a general uptrend while increasing dividends every
quarter for 11 years.
- However, its yield has been on a general downtrend, with a current dividend yield of 2.7%. Nonetheless,
it is still above its competitors in the pharmaceutical industry at a sector median of 1.28%.
Consistent Dividend Yield for investors

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in 2020 without AntiCovid ttt

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35. Competitor Analysis
35
Market cap: the total dollar market value of a company's outstanding shares of stock

36. 2020
36
2021
REVENUES $41.908 $ 81.288
SI&A EXPENSES
(IN BILLIONS)
$11.1 $11 .0 to 12.0
R&D $8.9 $9.2 to 9.7
Diluted Earning Per Share (EPS) $2.2 $3.85
a 93.97% increase from 2020

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Trailing 12 months (TTM) 2021:
Net Income Growth=220.89 %
Net Profit Margin = 27.57 %
EPS Basic Growth = 125.49 %
By analyzing the provided data, The company is doing great with expected increase in revenue
& market share in 2022.

38. The Compound Annual Growth Rate (CAGR): is the rate of return (RoR) that would be required
for an investment to grow from its beginning balance to its ending balance.

39. Comirnaty (BioNTech, Pfizer vaccine) & Paxlovid (AntiCovid pill)
will continue to be Pfizer's cash cow in the next two years, accounting for up to $31B
and $24B of sales in FY2022, respectively.
Future performance?

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Methodology in
budgeting process

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Def: It leverages hypothetical data or assumptions about future values to project performance
over a period that hasn't yet occurred.
Pro Forma

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Income Statement 2021 2022 2023
Total Revenue 81,288,000 .14 92,950,000 71,530,000
COGS -30,821,000 0.38 -35,321,000 -27,181,400
Gross Profit 50,467,000 57,629,000 44,349,000
SG & A expense -30,232,000 0.33 -30,338,419 -23,604,900
Operating Profit 23,935,000 27,291,000 20,745,000
Interest expense -1,291,000 -1,291,000 -1,291,000
NPBT 22,644,000 26,000,000 19,454,000
Taxes -1,720,944 7.6% -1,976,000 -1,478,504
NPAT 20,923,056 24,024,000 17,975,496
Forecast Income Statement
using percent-of-sales
method
Despite benefiting from $8.3 billion of public investment in the development of vaccines, the US companies
have not paid their fair share of taxes. In the first half of 2021, Moderna & Pfizer paid 7- 15% tax rate, which
is below the US statutory rate of 21%.

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