Fluent Essays

Competency This competency will allow you to demonstrate what you have learned about effective business management by creating a presentation related to Business Management core concepts. Evaluate core business functions and methodologies that support business growth. Utilize leadership skills to influence organizational effectiveness. Devise management strategies based on dynamic business environments. Apply human-centered concepts to maximize engagement and relationships. Evaluate the role business technology plays in making business decisions. Interpret data to gain insights for business decisions. Scenario You are the newly-hired CEO of a Fortune 500 company. You have been in this new role for 6 months. During that time, you have had an opportunity to analyze the business operations and assess the overall organizational effectiveness. It is now time for you to present your analysis and findings as it relates to core business functions and methodologies, organizational effectives, management strategies, employee engagement, business technologies, and data analysis. Instructions Prepare a PowerPoint presentation in which you review your findings from the analysis of the business functions and operations of the following organization: Johnson & Johnson. In the presentation, you will: Highlight the strengths, weaknesses, opportunities, and threats of the company’s core business functions. Describe how managing diversity and inclusion can impact the organization. Discuss how the lack of employee engagement and building strong relationships can impact the business. Review multiple information sources to develop one recommendation strategy. Provide a review of one emerging business technology to aid in implementation of your recommendation. Develop a leadership action plan to implement your recommendation. Resources have been provided to assist you in evaluating your selected organization. It is expected that along with the resources provided that you incorporate information from the readings, your research, and personal experience (using APA citations where appropriate). NOTE - Each slide should include speaker notes. Be sure to use APA citations where appropriate as well as proper grammar, spelling, punctuation, and sentence structure. Johnson & Johnson Profile 1 Johnson AND Johnson Plz New Brunswick, NJ 08933-0002 United States Phone: 1-732-524-0400 http://www.jnj.com WELCOME Hoovers is the business information resource that delivers a unique combination of up-to-date data, broad coverage, and comprehensive information about companies, decision makers, and industries - along with powerful tools to put this information to work for your business. Hoovers offers everything you need to successfully: * Identify and evaluate potential sales leads, markets, and business partners * Deepen relationships with current customers * Assess competitive risks and eliminate threats * Build presentation-ready reports and customized lists of companies, industries, and decision makers Unlike other business information providers, only Hoovers has a full-time, in-house editorial and research team dedicated wholly to investigating, pinpointing, authenticating, and analyzing data to provide the most comprehensive, up-to-date information available on companies, industries, and executives. HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE i https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE ii Table of Contents Company Overview 1 Key Information 1 Key Financials 1 Company Rankings 2 Key People 2 Company Description 3 Company History 5 Industry Information 6 People 7 Employees 7 Board Members 7 Biographies 8 ALEX GORSKY 8 JOSEPH J WOLK 8 PETER M FASOLO 8 PAULUS STOFFELS 9 MICHAEL H ULLMANN 10 JIM SWANSON 10 Company Financials 11 Financial Summary 11 Annual Income Statement 12 Quarterly Income Statement 13 Annual Balance Sheet 14 Quarterly Balance Sheet 15 Annual Cash Flow 16 Quarterly Cash Flow 17 Financial Market Data 18 Historical Financials 19 Competition 20 Competitors List 20 Competitive Landscape 21 https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 1 Company Overview 1 Johnson AND Johnson Plz New Brunswick, NJ 08933-0002 United States Phone: 1-732-524-0400 http://www.jnj.com Johnson & Johnson (J&J) is a diversified health care giant operating through more than 260 companies located in more than 60 countries. Its Pharmaceuticals division is focused on manufacturing medicines for infectious diseases, neurological, cardiovascular, pulmonary hypertension, autoimmune, and oncology ailments. Top sellers are psoriasis drugs Remicade and Stelara and cancer drug Zytiga. J&Js Medical Devices division offers surgical equipment, orthopedic products, and contact lenses, among other items. Finally, J&Js Consumer business makes over-the-counter (OTC) drugs and products for baby, skin, oral, womens, and first-aid care. The company operates worldwide but makes about half of revenue in the US. Key Information DUNS Number 001307081 Location Type Parent/Headquarters Subsidiary Status No Manufacturer Yes Company Type Publicly Traded Company - Corporation Plant/Facility Size (Square Foot) 14,910.00 Owns/Rents Accountant PricewaterhouseCoopers LLP Total Employees 132,200 Employee Growth (1-3 years) 6\% Employees At This Location 1,000 Year of Founding or Change in Control 1886 Primary Industry 1486: Pharmaceutical Manufacturing Primary SIC Code 28340000: Pharmaceutical preparations Primary NAICS Code 325412: Pharmaceutical Preparation Manufacturing Tradestyle Johnson & Johnson Latitude/Longitude 40.499489 / -74.441814 Key Financials Fiscal Year-End December 2019 Sales (Actual) $82,059.00M 1-Year Sales Growth 0.59\% Net Income $15,119.00M 1-Year Net Income Growth (1.16)\% Total Assets $157,728.00M Market Value $360,947.93M Prescreen Score Low Risk https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 2 Company Rankings 35 in Fortune 1000 Revenue Rank (2020) 35 in Fortune 500 (2020) Key People Name Title ALEX GORSKY Chairman of the Board, Chief Executive Officer JOSEPH J WOLK Executive Vice President, Chief Financial Officer PETER M FASOLO Executive Vice President, Officer PAULUS STOFFELS Executive Vice President, Officer MICHAEL H ULLMANN Executive Vice President, General Counsel JIM SWANSON Officer https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 3 Company Description Operations Consumer. The Pharmaceuticals segment (accounting for about half of annual revenue) operates in six primary therapeutic areas: immunology, oncology, neuroscience, cardiovascular and metabolic diseases, infectious diseases, and pulmonary hypertension. The segments operating companies include Janssen Biotech and Janssen Pharmaceuticals. Its top selling drugs are Remicade and Stelara for arthritis and other inflammatory conditions; each drug brings in more than $5 billion in annual sales. Other key drugs include schizophrenia medication Invega Sustenna, rheumatoid arthritis drug Simponi, AIDS therapy Prezista, cardiovascular drug Xarelto, hypertension drug Opsumit, and cancer treatments Zytiga, Imbruvica, Darzalex, and Velcade. The Medical Devices segment (about 30\% of sales) focuses on surgery, orthopedics, vision, and interventional (cardiovascular and neurovascular) products including orthopaedic products; general surgery, biosurgical, endomechanical and energy products; electrophysiology products to treat cardiovascular disease; and vision surgery. The Consumer segment (nearly 15\% of sales) includes beauty care brands Aveeno, Clean & Clear, and Neutrogena and a range of OTC pharmaceuticals including Tylenol, Sudafed, and Benadryl. Other offerings include baby care (Johnsons), oral care (Listerine), womens health (Stayfree, Carefree, and o.b.), and wound care products (Band-Aid and Neosporin). Financial Performance In 2019, worldwide sales increased 1\% to $82.1 billion as compared to an increase of 7\% in 2018. Sales by U.S. companies were $42.1 billion in 2019 and $41.9 billion in 2018. This represents increases of 1\% in 2019 and 5\% in 2018. The companys net income in 2019 fell by $178 million to $15.1 billion compared to $15.3 billion in 2018. The fall was due to the increase on their operating expenses. Cash held by the company at the end of 2019 fell by $802 million to $17.3 billion compared to $18.1 billion in 2018. Cash provided by operations was $23.4 billion while cash used for investing and financing activities were $6.2 billion and $18.0 billion, respectively. Geographic Reach Headquartered in New Brunswick, US, J&J has approximately 260 operating companies in 60 countries selling products around the world. It has research facilities in more than a dozen countries and operates in about 100 manufacturing facilities in North America, Asia, Europe, and the Middle East. While the US and Europe represent the companys largest markets (accounting for about 50\% and nearly 25\% of sales, respectively). The Asia-Pacific region and Africa together account for nearly 20\% of revenue, while the non-US Western Hemisphere accounts for nearly 5\%. Mergers and Acquisitions While it continues to streamline its businesses for optimal performance, J&J is also keeping pace with its acquisition strategy by pursuing purchases both large and small. In late 2019, the Janssen Pharmaceutical Companies of Johnson & Johnson completed the acquisition of all rights to the investigational compound bermekimab, which has multiple dermatological indications, along with certain employees, from XBiotech Inc., for $750 million. Janssen pursue bermekimab indications outside of dermatology, XBiotech may be eligible to receive additional payments upon the receipt of certain commercialization authorizations. Janssen Research & Development will develop bermekimab. The agreement combination. In a separate transaction of the same year, Johnson & Johnson acquired TARIS Biomedical LLC (TARIS), a privately-owned biotechnology company specializing in the development of a novel drug delivery technology for the treatment of bladder diseases including cancer. The companys lead clinical-stage product, TAR-200, uses the proprietary TARIS System, which features a silicone-based drug delivery device that allows for the https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 4 continuous release of medication into the bladder. Financial terms of the transaction are not being disclosed. In 2019, the company acquired Auris Health, Inc for $3.4 billion. That deal furthered J&Js presence in surgical robotics — a field it is targeting for future growth. Also in 2019, J&J purchased the 80\% of Japanese skincare firm Ci:z that it didnt already own for more than $2 billion. Sales and Marketing J&J distributes its pharmaceutical and medical device products to retailers, wholesalers, and health care providers including hospitals. Products are marketed to consumers and health professionals. The companys consumer products are sold to the general public and sold online and to retail outlets and distributors throughout the world. J&Js three largest customers are wholesalers that distribute products across all three segments, each representing between 10\% and 15\% of sales. Advertising expenses worldwide, which comprised television, radio, print media and Internet advertising, were $2.2 billion in 2019, $2.6 billion in 2018 and $2.5 billion in 2017, respectively. Strategy The Company announced plans to implement a series of actions across its Global Supply Chain that are intended to focus resources and increase investments in the critical capabilities, technologies and solutions necessary to manufacture and supply its product portfolio, enhance agility and drive growth. The Global Supply Chain actions will include expanding the use of strategic collaborations and bolstering initiatives to reduce complexity, improve cost-competitiveness, enhance capabilities and optimize the Supply Chain network. During 2019, the Company divested its Advanced Sterilization Products (ASP) business to Fortive Corporation for an aggregate value of approximately $2.8 billion, consisting of $2.7 billion of cash proceeds and $0.1 billion of retained net receivables. As of December 30, 2018, the assets held for sale on the Consolidated Balance Sheet were $0.2 billion of inventory, $0.1 billion of property, plant and equipment, net and $0.3 billion of goodwill. The Company recognized a pre-tax gain recorded in Other (income) expense, net, of approximately $2.0 billion. https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 5 Company History Company Background Brothers James and Edward Mead Johnson founded their medical products company in 1885 in New Brunswick, New Jersey. After expanding into surgical dressings, in 1921 the company introduced two of its classic products, the Band-Aid and Johnsons Baby Cream. Subsidiary Ortho Pharmaceutical (birth control products) was formed in 1931 and the Ethicon (sutures) unit was acquired in 1947. In 1959 Johnson & Johnson bought McNeil Labs, which launched Tylenol (acetaminophen) as an OTC drug the next year. Foreign acquisitions included Switzerlands Cilag-Chemie (1959) and Belgiums Janssen (1961). New products in the 1980s included ACUVUE disposable contact lenses. The company bought LifeScan (blood- monitoring products for diabetics) in 1986, but eventually divested the firm in 2018. Other purchases included Neutrogena (1994), DePuy (1998), Centocor Biotech (1999), Micrus Endovascular (2010), Crucell (2010), and Synthes (2012). In early 2017 the company acquired Swiss biotech Actelion, which focuses on rare diseases, for $30 billion. It also purchased Abbott Medical Optics (now J&J Surgical Vision) from Abbott Laboratories for $4.3 billion. https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 6 Industry Information Primary SIC Code 28340000: Pharmaceutical preparations Primary NAICS Code 325412: Pharmaceutical Preparation Manufacturing https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 7 People Employees Title Name Age Salary Bonus Chairman of the Board, Chief Executive Officer ALEX GORSKY -- $1.60M -- Executive Vice President, Chief Financial Officer JOSEPH J WOLK -- -- -- Executive Vice President, Officer PETER M FASOLO -- -- -- Executive Vice President, Officer PAULUS STOFFELS -- $1.14M -- Executive Vice President, General Counsel MICHAEL H ULLMANN -- $645,385.00 -- Officer JIM SWANSON -- -- -- Board Members Title Name Age Chairman of the Board, Chief Executive Officer ALEX GORSKY -- Board Member A WASHINGTON -- Board Member MR. ALAN DAVIS -- Board Member MR. CHARLES PRINCE -- Board Member MS. EMY RAPHAEL -- Board Member Member MS. GENA PEMBERTON -- Member of the Board MR. JAMES CULLEN -- Advisory Board Member MR. JOE KULLE -- Advisory Board Member MR. JOE KULLECHCIO -- Ww Director Human Resources, Global Board Member MS. MARCELLA COLLINS -- Board Member MR. MARK MCCLELLAN -- Board Member MS. MARY BECKERLE -- Board Member MR. PAUL KELLY -- Board Member MR. RICHARD BACKE -- Board Member MR. SCOTT DAVIS -- https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 8 Biographies ALEX GORSKY Title held since 2012: Chairman and CEO Current Company Titles 2012 - Present : Chairman and CEO 2012 - 2012 : CEO 2011 - 2012 : Vice Chairman Executive Committee 2009 - 2011 : Worldwide Chairman, Medical Devices and Diagnostics Group 2009 - 2009 : Worldwide Chairman, Surgical Care Group Current Company Compensation History Year Salary Bonus Total 2016: $1.60M -- $26.87M 2015: $1.61M -- $23.80M 2014: $1.50M -- $24.99M 2013: $1.45M -- $16.91M 2012: $1.09M -- $10.98M 2011: $847,692.00 -- $6.84M Biography Mr. Gorsky began his Johnson & Johnson career in 1988 as a sales representative with Janssen Pharmaceutica in the Pharmaceuticals business. Over the next 15 years, he advanced through positions of increasing responsibility in sales, marketing, and management. In 2001, he was appointed President of Janssen, and in 2003, promoted to Company Group Chairman of Johnson & Johnsons pharmaceuticals business in Europe, the Middle East and Africa. He left the Company in 2004 to join the Novartis Pharmaceuticals Corporation, where he served as head of the companys pharmaceuticals business in North America. Four years later, he returned to Johnson & Johnson as Company Group Chairman and Worldwide Franchise Chairman for Ethicon in the medical devices business. In 2009, he was appointed Worldwide Chairman of the Surgical Care Group and to the Johnson & Johnson Executive Committee. He was appointed Vice Chairman of the Executive Committee in January 2011. Mr. Gorsky holds a Bachelor of Science degree from the U.S. Military Academy at West Point, NY, and spent six years in the U.S. Army. In 1996, he earned a Master of Business Administration (MBA) degree from the Wharton School of the University of Pennsylvania. Source: Company Web Site JOSEPH J WOLK Current Company Titles Unknown - Present : Executive Vice President, Chief Financial Officer PETER M FASOLO Title held since 2016: EVP and Chief Human Resources Officer https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 9 Current Company Titles 2016 - Present : EVP and Chief Human Resources Officer 2011 - 2016 : VP Global Human Resources Biography Peter M. Fasolo is the Executive Vice President, Chief Human Resources Officer, responsible for the global talent, recruiting, diversity, compensation, benefits, employee relations and all aspects of the human resources agenda for the Company. Mr. Fasolo is a member of the Executive Committee, Management Compensation Committee, and Chairman of the Pension and Benefits Committee. Mr. Fasolo first joined Johnson & Johnson in 2004 as Worldwide Vice President, Human Resources for Cordis Corporation. He was then named Vice President, Global Talent Management, with responsibility for executive assessment and development. Mr. Fasolo left Johnson & Johnson in 2007 to join Kohlberg Kravis Roberts & Co. (KKR) as Chief Talent Officer for the portfolio companies owned by the firm. He returned to Johnson & Johnson in September 2010 as Vice President, Global Human Resources. Mr. Fasolo has more than 20 years of global experience in healthcare, having spent 13 years with Bristol-Myers Squibb in executive level, human resource roles in the pharmaceutical, medical devices and consumer segments. He serves on the Board of the Human Resources Policy Association in Washington, D.C., is a member of the Board of Directors for the Families and Work Institute in New York, also serves on the Board of The Crisis Ministry of Mercer County, and is a Trustee of the Robert Wood Johnson Hospital in New Jersey. Mr. Fasolo earned a Ph.D. in Organizational Behavior from the University of Delaware, an M.A. in Industrial Psychology from Fairleigh Dickinson University and a B.A. in Psychology from Providence College. Source: Company Web Site PAULUS STOFFELS Title held since 2016: EVP and Chief Scientist Officer Current Company Titles 2016 - Present : EVP and Chief Scientist Officer 2012 - 2016 : Chief Scientific Officer and Worldwide Chairman, Pharmaceuticals 2011 - 2012 : Worldwide Chairman, Pharmaceuticals 2009 - 2011 : Chairman, Pharmaceutical Research and Development Current Company Compensation History Year Salary Bonus Total 2016: $1.14M -- $12.73M 2015: $1.16M -- $10.79M 2014: $1.08M -- $18.34M 2013: $952,923.00 -- $7.82M 2012: $825,385.00 -- $7.34M Biography Dr. Paul Stoffels is Executive Vice President, Chief Scientific Officer Johnson & Johnson. In this role, he works with R&D leaders across Johnson & Johnson to set the enterprise-wide innovation agenda and is a member of the Johnson & Johnson Executive Committee. Paul chairs the Johnson & Johnson R&D Management Committee and provides oversight to the Johnson & Johnson Development Corporation (JJDC) and the Johnson & Johnson Innovation centers, with the goal of catalyzing innovative science and technology. Additionally, Paul has oversight for product safety of all products of the Johnson & Johnson Family of Companies worldwide. Paul also is Worldwide Chairman, Pharmaceuticals, Johnson & Johnson, with responsibility for expansion of the company’s therapeutic pipeline through global R&D and strategic https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 10 partnerships, licensing and acquisitions. He oversees teams across the Janssen Pharmaceutical Companies of Johnson & Johnson, which discover and develop treatments for unmet medical needs in the therapeutic areas of cardiovascular & metabolism, immunology, infectious disease &vaccines, neuroscience and oncology. Prior to his role as Worldwide Chairman, he served as Global Head, Johnson & Johnson Pharmaceutical R&D from 2009 - 2011, as Company Group Chairman, Central Nervous System & Internal Medicine, from 2006 - 2009, and as Company Group Chairman, Global Virology, from 2005-2006. Paul joined Johnson & Johnson in 2002 with the acquisition of Virco and Tibotec, where he was Chief Executive Officer of Virco and as Chairman of Tibotec, and led the development of a number of leading products for the treatment of HIV. Paul studied Medicine at the University of Diepenbeek and the University of Antwerp in Belgium and Infectious Diseases and Tropical Medicine at the Institute of Tropical Medicine in Antwerp, Belgium. He began his career as a physician in Africa, focusing on HIV and tropical diseases research. Source: Company Web Site MICHAEL H ULLMANN Title held since 2016: EVP and General Counsel Current Company Titles 2016 - Present : EVP and General Counsel 2012 - 2016 : VP and General Counsel Current Company Compensation History Year Salary Bonus Total 2015: $645,385.00 -- $5.68M 2014: $591,346.00 -- $5.96M 2013: $542,308.00 -- $4.36M Biography Michael H. Ullmann is Executive Vice President, General Counsel of Johnson & Johnson and a member of the Company’s Executive Committee and Management Committee. Mike joined Johnson & Johnson as a mergers and acquisitions attorney in 1989 and has held various management positions in the Company’s Law Department since 1999. Prior to assuming his current position in 2012, Mike served as General Counsel of the Worldwide Medical Devices Group for six years. He also served as Corporate Secretary from 1999 to 2006. Prior to joining Johnson & Johnson, Mike practiced law in New York City. He graduated magna cum laude from Cornell University, College of Arts & Sciences, and earned his law degree from Columbia University School of Law. Mike serves on the Columbia Law School Board of Visitors, the Cornell University Alumni Council and the Rutgers Institute for Ethical Leadership Executive Business Cabinet. Source: Company Web Site JIM SWANSON Current Company Titles Unknown - Present : Officer https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 11 Company Financials Financial Summary Company Type Publicly Traded Company - Corporation NYSE:JNJ Parent/Headquarters Fiscal Year-End December 2019 Sales (Actual) $82,059.00M 1-Year Sales Growth 0.59\% 2019 Net Income $15,119.00M 1-Year Net Income Growth (1.16)\% Prescreen Score Low Risk https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 12 Annual Income Statement All amounts in millions of US Dollars except per share amounts. Dec 2019 Dec 2018 Dec 2017 Dec 2016 Revenue 82,059.00 81,581.00 76,450.00 71,890.00 Cost of Goods Sold 27,556.00 27,091.00 25,439.00 21,789.00 Gross Profit 54,503.00 54,490.00 51,011.00 50,101.00 Gross Profit Margin 66.42\% 66.79\% 66.72\% 69.69\% SG&A Expense 22,178.00 22,540.00 21,520.00 20,067.00 Depreciation and Amortization -- -- -- -- Operating Income 20,080.00 20,049.00 18,489.00 20,862.00 Operating Margin 24.47\% 24.58\% 24.18\% 29.02\% Nonoperating Income -- -- -- -- Nonoperating Expenses -- -- -- -- Income Before Taxes 17,328.00 17,999.00 17,673.00 19,803.00 Income Taxes 2,209.00 2,702.00 16,373.00 3,263.00 Net Income After Taxes 15,119.00 15,297.00 1,300.00 16,540.00 Continuing Operations 15,119.00 15,297.00 1,300.00 16,540.00 Discontinued Operations -- -- -- -- Total Operations -- -- -- -- Total Net Income 15,119.00 15,297.00 1,300.00 16,540.00 Net Profit Margin 18.42\% 18.75\% 1.70\% 23.01\% Diluted EPS from Continuing Operations -- -- -- -- Diluted EPS from Total Operations -- -- -- -- Diluted EPS from Total Net Income 5.63 5.61 0.47 5.93 Dividends Per Share 3.75 3.54 3.32 3.15 https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 13 Quarterly Income Statement All amounts in millions of US Dollars except per share amounts. Quarter Ending Sep 2020 Jun 2020 Mar 2020 Dec 2019 Sep 2019 Revenue 21,082.00 18,336.00 20,691.00 20,747.00 20,729.00 Cost of Goods Sold 6,972.00 6,579.00 7,062.00 7,134.00 6,867.00 Gross Profit 14,110.00 11,757.00 13,629.00 13,613.00 13,862.00 Gross Profit Margin 66.93\% 64.12\% 65.87\% 65.61\% 66.87\% SG&A Expense 5,431.00 4,993.00 5,203.00 6,039.00 5,374.00 Depreciation and Amortization -- -- -- -- -- Operating Income 5,701.00 4,051.00 5,846.00 4,342.00 5,889.00 Operating Margin 27.04\% 22.09\% 28.25\% 20.93\% 28.41\% Nonoperating Income -- -- -- -- -- Nonoperating Expenses -- -- -- -- -- Income Before Taxes 4,401.00 3,940.00 6,509.00 4,218.00 1,647.00 Income Taxes 847.00 314.00 713.00 208.00 (106.00) Net Income After Taxes 3,554.00 3,626.00 5,796.00 4,010.00 1,753.00 Continuing Operations 3,554.00 3,626.00 5,796.00 4,010.00 1,753.00 Discontinued Operations -- -- -- -- -- Total Operations -- -- -- -- -- Total Net Income 3,554.00 3,626.00 5,796.00 4,010.00 1,753.00 Net Profit Margin 16.86\% 19.78\% 28.01\% 19.33\% 8.46\% Diluted EPS from Continuing Operations -- -- -- -- -- Diluted EPS from Total Operations -- -- -- -- -- Diluted EPS from Total Net Income 1.33 1.36 2.17 1.50 0.66 Dividends Per Share 1.01 1.01 0.95 0.95 0.95 https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 14 Annual Balance Sheet All amounts in millions of US Dollars except per share amounts. Assets Dec 2019 Dec 2018 Dec 2017 Dec 2016 Cash 17,305.00 18,107.00 17,824.00 18,972.00 Net Receivables 14,481.00 14,098.00 13,490.00 11,699.00 Inventories 9,020.00 8,599.00 8,765.00 8,144.00 Other Current Assets -- -- -- -- Total Current Assets 45,274.00 46,033.00 43,088.00 65,032.00 Net Fixed Assets 17,658.00 17,035.00 17,005.00 15,912.00 Other Noncurrent -- -- -- -- Total Assets 157,728.00 152,954.00 157,303.00 141,208.00 Shareholders Equity Dec 2019 Dec 2018 Dec 2017 Dec 2016 Preferred Stock Equity 0.00 0.00 0.00 0.00 Common Stock Equity 3,120.00 3,120.00 3,120.00 3,120.00 Total Equity 59,471.00 59,752.00 60,160.00 70,418.00 Shares Outstanding (M) 2,632.51 2,662.32 2,682.53 2,706.51 Liabilities Dec 2019 Dec 2018 Dec 2017 Dec 2016 Accounts Payable 8,544.00 7,537.00 7,310.00 6,918.00 Short-Term Debt 1,202.00 2,796.00 3,906.00 4,684.00 Other Current Liabilities -- -- -- -- Total Current Liabilities 35,964.00 31,230.00 30,537.00 26,287.00 Long-Term Debt 26,494.00 27,684.00 30,675.00 22,442.00 Other Noncurrent 11,734.00 8,589.00 9,017.00 9,536.00 Total Liabilities 98,257.00 93,202.00 97,143.00 70,790.00 https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 15 Quarterly Balance Sheet All amounts in millions of US Dollars except per share amounts. Assets Quarter Ending Sep 2020 Jun 2020 Mar 2020 Dec 2019 Sep 2019 Cash 18,965.00 11,174.00 15,530.00 17,305.00 16,249.00 Net Receivables 14,579.00 14,645.00 14,874.00 14,481.00 14,801.00 Inventories 9,599.00 9,424.00 8,868.00 9,020.00 9,173.00 Other Current Assets -- -- -- -- -- Total Current Assets 57,578.00 45,892.00 44,226.00 45,274.00 44,333.00 Net Fixed Assets 17,855.00 17,598.00 17,401.00 17,658.00 17,048.00 Other Noncurrent -- -- -- -- -- Total Assets 170,693.00 158,380.00 155,017.00 157,728.00 155,521.00 Shareholders Equity Quarter Ending Sep 2020 Jun 2020 Mar 2020 Dec 2019 Sep 2019 Preferred Stock Equity -- -- -- 0.00 -- Common Stock Equity 3,120.00 3,120.00 3,120.00 3,120.00 3,120.00 Total Equity 64,473.00 62,978.00 61,294.00 59,471.00 58,210.00 Shares Outstanding (M) 2,632.17 2,632.38 2,632.39 2,632.51 2,630.96 Liabilities Quarter Ending Sep 2020 Jun 2020 Mar 2020 Dec 2019 Sep 2019 Accounts Payable 7,044.00 6,765.00 7,411.00 8,544.00 7,491.00 Short-Term Debt 5,078.00 5,332.00 2,190.00 1,202.00 2,299.00 Other Current Liabilities -- -- -- -- -- Total Current Liabilities 38,847.00 36,772.00 33,689.00 35,964.00 35,162.00 Long-Term Debt 32,680.00 25,062.00 25,393.00 26,494.00 26,919.00 Other Noncurrent 12,149.00 11,034.00 10,944.00 11,734.00 11,381.00 Total Liabilities 106,220.00 95,402.00 93,723.00 98,257.00 97,311.00 https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 16 Annual Cash Flow All amounts in millions of US Dollars except per share amounts. Dec 2019 Dec 2018 Dec 2017 Dec 2016 Cash & Cash Equivalents at Beginning of Year 18,107.00 17,824.00 18,972.00 13,732.00 Net Cash Provided by Operating Activities 23,416.00 22,201.00 21,056.00 18,767.00 Net Cash Provided by Investing Activities (6,194.00) (3,167.00) (14,868.00) (4,761.00) Net Cash Privided by Financing Activities (18,015.00) (18,510.00) (7,673.00) (8,551.00) Net Increase/Decrease in Cash & Equivalents (793.00) 524.00 (1,485.00) 5,455.00 Cash & Cash Equivalents at End of Year 17,305.00 18,107.00 17,824.00 18,972.00 https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 17 Quarterly Cash Flow All amounts in millions of US Dollars except per share amounts. Quarter Ending Sep 2020 Jun 2020 Mar 2020 Dec 2019 Sep 2019 Cash & Cash Equivalents at Beginning of Year 11,174.00 15,530.00 17,305.00 16,249.00 14,376.00 Net Cash Provided by Operating Activities 8,383.00 3,452.00 3,358.00 6,398.00 7,527.00 Net Cash Provided by Investing Activities (4,819.00) (7,522.00) (581.00) (1,344.00) (1,645.00) Net Cash Privided by Financing Activities 4,196.00 (357.00) (4,315.00) (4,072.00) (3,893.00) Net Increase/Decrease in Cash & Equivalents 7,760.00 (4,427.00) (1,538.00) 982.00 1,989.00 Cash & Cash Equivalents at End of Year 18,965.00 11,174.00 15,530.00 17,305.00 16,249.00 https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 18 Financial Market Data Current Information Last Close (04-Dec-2020) $150.27 Price/Sales Ratio 4.53 52-Week High $157.00 Price/Book Ratio 5.60 52-Week Low $109.16 Price/Earnings Ratio 21.56 60-Month Beta 0.69 Price/Cash Flow Ratio 16.96 Market Cap $360,947.93M Return on Assets 9.73\% Shares Outstanding -- Return on Equity 25.36\% Dividend Rate 4.04 Current Ratio 1.26 Dividend Yield 2.69\% Long-Term Debt/Equity 0.45 # of Institutional Holders 1,940 \% Owned by Institutions 50.16\% Latest Short Interest Ratio -- Latest Net Insider Transactions 1 Growth 12 Month 36 Month 60 Month Revenue Growth 0.59\% 4.51\% 2.00\% EPS Growth 0.36\% (1.72\%) (0.25\%) Dividend Growth 5.93\% 5.98\% 6.32\% https://hoovers.com HOOVERS.COM866-541-3770 • December 15, 2020 • PAGE 19 Historical Financials Income Statement Year Revenue ($M) Net Income ($M) Net Profit Margin Dec 2019 82,059.00 15,119.00 18.42\% Dec 2018 81,581.00 15,297.00 18.75\% Dec 2017 … COMPANY PROFILE Johnson & Johnson REFERENCE CODE: DDE623F4-24CB-41C6-9B74-AEBC6CEF6369 PUBLICATION DATE: 31 May 2019 www.marketline.com COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED A Progressive Digital Media business http://www.marketlineinfo.com/ Johnson & Johnson TABLE OF CONTENTS Johnson & Johnson © MarketLine Page 2 TABLE OF CONTENTS Company Overview ........................................................................................................ 3 Key Facts ......................................................................................................................... 3 SWOT Analysis ............................................................................................................... 4 Johnson & Johnson Company Overview Johnson & Johnson © MarketLine Page 3 Company Overview COMPANY OVERVIEW Johnson & Johnson (J&J or the company) is a health care company that develops, manufactures and markets consumer health care products, pharmaceuticals, and medical devices. It offers pharmaceuticals in the therapeutic areas of immunology, oncology, neuroscience, infectious diseases and vaccines, pulmonary hypertension, cardiovascular and metabolism. The company markets its products under Simponi, Remicade, Stelara, Aveeno, Clean & Clear, Dabao, Johnsons Adult, Le Petite Marseillais, Neutrogena and Ogx brand names. J&J distributes its pharmaceutical products, medical devices and consumer products to retailers, wholesalers, health care professionals and hospitals and through a network of retail outlets and distributors. It has business presence across the Americas, Europe, Asia- Pacific and Africa. The company is headquartered in New Brunswick, New Jersey, the US. The company reported revenues of (US Dollars) US$81,581 million for the fiscal year ended December 2018 (FY2018), an increase of 6.7\% over FY2017. In FY2018, the company’s operating margin was 22.1\%, compared to an operating margin of 23.1\% in FY2017. In FY2018, the company recorded a net margin of 18.8\%, compared to a net margin of 1.7\% in FY2017. The company reported revenues of US$20,021.0 million for the first quarter ended March 2019, a decrease of 1.8\% over the previous quarter. Key Facts KEY FACTS Head Office Johnson & Johnson One Johnson & Johnson Plaza New Brunswick New Jersey New Brunswick New Jersey USA Phone 1 732 5242455 Fax Web Address www.jnj.com Revenue / turnover (USD Mn) 81,581.0 Financial Year End December Employees 135,100 New York Stock Exchange Ticker JNJ Johnson & Johnson SWOT Analysis Johnson & Johnson © MarketLine Page 4 SWOT Analysis SWOT ANALYSIS Johnson & Johnson (J&J) is a provider of diverse healthcare products. Leadership position in diverse healthcare segments, growth in revenue, and focus on R&D are the companys major strengths, whereas overdependence on US remains the cause for concern. Product approvals, positive outlook for global pharmaceuticals market strategic acquisitions and divestures are likely to offer growth opportunities to the company. However, influx of generics, medical device regulations in different countries and competitive pressures could affect its business operations. Strength Leadership position in diverse healthcare segments Focus on R&D enabling innovative product launches Growth in revenue driven by acquisitions and divestitures Weakness Overdependence on US Opportunity Positive outlook for global pharmaceuticals market Strategic acquisitions and divestures Product approvals likely to help the company in catering to unmet medical needs Threat Competitive pressures Influx of generics Medical device regulations in different countries Strength Leadership position in diverse healthcare segments The company is one of the largest and diversified healthcare companies in the world. It has strong presence in the medical devices, pharmaceutical and consumer products markets worldwide. J&J conducts its business through over 260 operating companies in more than 60 countries worldwide. The company manufactures and markets pharmaceutical products in six therapeutic areas, including immunology, infectious diseases and vaccines, neuroscience, oncology, pulmonary hypertension, and cardiovascular and metabolism. It offers medical devices, which are used by physicians, nurses, hospitals, eye care professionals and clinics worldwide. The company also develops, manufactures and markets products for baby care, oral care, beauty, womens health care and wound care. Strong market position enhances J&Js brand image and enables it to penetrate new markets as new product launches become easier. Focus on R&D enabling innovative product launches J&J’s research and development (R&D) activities focus on developing new products in the areas of immunology, infectious, cardiovascular, metabolism, neuroscience and cancer therapy. The company operates R&D facilities in the US, Brazil, Belgium, China, Germany, Switzerland Singapore, the UK, Johnson & Johnson SWOT Analysis Johnson & Johnson © MarketLine Page 5 France, Israel, Poland, Sweden, India, Japan, and the Netherlands with additional R&D support in more than 30 other countries worldwide. In FY2018, the company spent US$10,775 million on R&D, which accounted for 13.2\% of the company’s revenue. The companys continued investments in R&D yielded many new pharmaceutical products in the past. Hence, the companys commitment to technological innovation as reflected in its R&D investments and a focus on new product development not only strengthens its market position but also helps it to maintain a robust product pipeline. Growth in revenue driven by acquisitions and divestitures J&J reported revenue of US$81,581 million in FY2018 as compared to US$76,450 million in FY2017, an annual growth of 6.7\%. The growth in revenue was primarily due to the acquisitions and divestitures made during the year. It is also attributable to 12.4\% increase in revenue of Pharmaceutical segment, 1.5\% growth in revenue of Medical Devices segment and 1.8\% growth in revenue of Consumer segment. Strong growth in revenue increases the company’s ability to provide higher returns to its shareholders and also increases its ability to allocate adequate funds for future growth initiatives. Weakness Overdependence on US Overdependence on US could be the major area of concern for the company. Though the company has business presence across the Americas, Europe, Asia-Pacific and Africa, it depends on the US for majority of its revenue. In FY2018, the company generated 51.3\% of its revenue from the US. Overdependence on one single geographic region makes the company susceptible to changes associated with the economic and political situation of the country. It also exposes the company to business risks associated with that particular region and negatively impact the revenue. Opportunity Positive outlook for global pharmaceuticals market The global pharmaceuticals market has experienced healthy growth in recent years and also expected to grow in the next few years. According to in-house-research the global pharmaceuticals market is forecast to reach a value of US$1,423.6 billion by 2022 from US$1,066.5 billion in 2017, growing at a CAGR of 5.9\% during 2017-2022. The US accounted for 37.6\% of the global pharmaceuticals market value in 2017, followed by Asia-Pacific (27.3\%), Europe (24.9\%), Middle East (1.6\%) and rest of the world (8.6\%). J&J offers pharmaceutical products in various therapeutic areas, including immunology, infectious diseases and vaccines, neuroscience, oncology, and cardiovascular and metabolic diseases. The company stands to benefit from the growing pharmaceutical industry, which in turn will help drive the companys financial and operational growth. Strategic acquisitions and divestures J&J made various strategic acquisitions and divestures in the recent year. In April 2019, the company’s Johnson & Johnson SWOT Analysis Johnson & Johnson © MarketLine Page 6 subsidiary Ethicon, Inc acquired Auris Health, Inc, a developer of robotics technology for medical applications. The acquisition would expand the company’s digital surgery portfolio across multiple surgical specialties and enable it to address unmet clinical needs. In January 2019, the company acquired Ci:z Holdings Co., Ltd., a provider of dermocosmetic, cosmetic and skincare products. The acquisition is expected to expand the company’s offering in science-based, efficacious dermocosmetic brands and strengthen its market presence in Japan with key customers. Also in April 2019 , J&J sold its Advanced Sterilization Products (ASP) business, a division of Ethicon, Inc., to Fortive Corporation for US$2.8 billion. In October 2018, the company sold its LifeScan business to Platinum Equity for US$2.1 billion. These divestures would allow the company to focus on core and profitable business. J&J can also use the sale proceeds of this transaction for the growth of the company. Product approvals likely to help the company in catering to unmet medical needs The company advanced its pipeline with several regulatory submissions and approvals for new drugs and additional indications for existing drugs in the recent year. In April 2019, the company’s BALVERSA (erdafitinib) was approved by the US FDA for the treatment of patients with locally advanced or metastatic urothelial carcinoma (mUC) with certain FGFR (fibroblast growth factor receptor) genetic alterations. In March 2019, the company’s SPRAVATO (esketamine) CIII nasal spray was approved by FDA for adults with treatment-resistant depression (TRD). In February 2019, J&J’s TREMFYA One-Press patient- controlled injector was approved by FDA for the treatment of adults with moderate-to-severe plaque psoriasis. In January 2019, the company’s IMBRUVICA (ibrutinib) plus obinutuzumab was approved by FDA as first non-chemotherapy combination regimen for the treatment-naive patients with chronic lymphocytic leukemia. In October 2018, J&J’s INVOKANA was approved by FDA to reduce the risk of major adverse cardiovascular (CV) events due to a cardiovascular cause in adults with type 2 diabetes (T2D) and established cardiovascular disease. These product approvals are expected to help J&J in addressing the unmet medical needs and thereby generate huge revenue. Threat Competitive pressures J&J operates in a highly competitive pharmaceutical, medical devices and healthcare industries. The competitive environment in pharmaceutical and consumer healthcare industries could affect the company’s business operations. The company faces competition from biotechnology firms, major drug discovery and development firms, apart from medical devices manufacturers. J&J competes with Abbott Laboratories, Beiersdorf AG, Boston Scientific Corporation, Bristol-Myers Squibb Company, Eli Lilly and Company, Merck & Co., Inc., Novartis AG, Pfizer Inc, The Procter & Gamble Co, and Unilever in the areas of central nervous system, cardiovascular, gastrointestinal and metabolic disorders, immunology, oncology, hematological disorders, infectious diseases, medical devices and consumer products. Major factors influencing competition include changing incentive programs and new product launches in the market. Such intense competition could affect the company’s business operations. Influx of generics The pharmaceutical industry across the world is expected to report patent expiries of a large number of Johnson & Johnson SWOT Analysis Johnson & Johnson © MarketLine Page 7 innovative drugs in the next few years. Over the last couple of years, the looming arrival of the patent cliff has been haunting the pharmaceutical industry. As the demand for medicines grows, governments are exerting increasing pressure on doctors to prescribe cheaper generic medicines. As a result, pharmaceutical manufacturers will be under pressure to develop generic medicines. This makes companies undertake changes in their operations such as deploying the scale and international sourcing capabilities to secure lower prices and better margins on generics in a way in which legislation typically does not permit branded products. An increase in generic medicines will have a direct effect on the prescription medicines. The influx of generics into the market could affect the company’s revenue. Medical device regulations in different countries The companys medical device and pharmaceutical products are subject to various local transnational and foreign laws and regulations. In the US, the FDA regulates the launch of new medical devices and pharmaceutical drugs. It also regulates the manufacturing and labeling and record keeping procedures for healthcare products. Receiving marketing approval for new healthcare products and drugs from the US FDA is expensive and time consuming. In Europe, CE marking indicates that a product meets the essential requirements of all relevant European Medical Device Directives and is a legal requirement to market a device in the European Union. In India, the Department of Health under India’s Ministry of Health and Family Welfare is responsible for the regulation of medical devices. In China, the State Food and Drug Administration (SFDA) regulates the introduction of new medical products in the Chinese market. The company has to comply with regulations governing product standards, import restrictions, packaging and labeling requirements, tariff regulations and tax requirements. Non-compliance with the regulations and laws or failure to maintain, obtain or renew necessary licenses and permits could affect the companys operations and financial performance. 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