01—Abstract
Summary
Summary of the 10-K filed February 17, 2022. Cited figures are marked; the original filing is the authoritative source.
Johnson & Johnson (JNJ) reported strong performance in its 2021 fiscal year, with worldwide sales reaching $93.8 billiona, a significant increase of 13.6% from the previous year.
This growth was primarily driven by robust performance across all three segments: Pharmaceutical, Medical Devices (MedTech), and Consumer Health, with operational growth contributing significantly. The Pharmaceutical segment saw a notable 14.3%b increase in sales, fueled by strong performances in Immunology (STELARA®, TREMFYA®) and Oncology (DARZALEX®, ERLEADA®), as well as the substantial contribution from the COVID-19 vaccine. The Medical Devices segment experienced a 17.9% sales increase, reflecting a recovery in global procedural volumes post-COVID-19 impacts, with strong growth in Surgery and Interventional Solutions.
Looking ahead, JNJ announced its intention to separate its Consumer Health business into a new, publicly traded company within 18 to 24 months. This strategic move aims to allow each business to pursue its own growth strategies and capital allocation priorities.
The company also highlighted its continued commitment to innovation, investing $14.7 billionc in R&D, and its focus on human capital management, including diversity, equity, and inclusion. Despite facing ongoing litigation, including significant accruals for talc and opioid-related matters, the company expressed confidence in its financial position and liquidity.
02—Key points
Key Highlights
- Worldwide sales increased by 13.6% to $93.8 billion in fiscal year 2021.
- Pharmaceutical segment sales grew by 14.3% to $52.1 billion, driven by key products like STELARA®, TREMFYA®, DARZALEX®, ERLEADA®, and the COVID-19 vaccine.
- Medical Devices segment sales increased by 17.9% to $27.1 billion, benefiting from the recovery of global procedural volumes.
- Consumer Health segment sales grew by 4.1% to $14.6 billion, with strong performance in OTC medicines and Skin Health/Beauty brands.
- The company announced plans to separate its Consumer Health business into a new publicly traded entity within 18-24 months.
- Research and Development expenses totaled $14.7 billion, representing 15.7% of sales.
- The company has significant ongoing litigation, particularly concerning talc and opioid-related liabilities, with substantial accruals made.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Johnson & Johnson kept $0.27.
- Revenue$78.74B100.0%
- Cost of revenue−$23.40B29.7%
- Gross profit$55.34B70.3%
- Operating costs−$37.54B47.7%
- Operating income$17.80B22.6%
- Interest, other & tax$3.08B3.9%
- Net income$20.88B26.5%
Where FY2022 revenue went
$78.74B- Cost of revenue: $23.40B, 30% of revenue
- SG&A: $20.12B, 26% of revenue
- Operating income: $17.80B, 23% of revenue
- Other operating costs: $17.42B, 22% of revenue
Kept 23% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 17, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $78.74B$82.58B | −4.7% |
| Cost of Revenue | $23.40B$28.43B | −17.7% |
| Gross Profit | $55.34B$54.16B | +2.2% |
| R&D Expenses | $0— | — |
| SG&A Expenses | $20.12B$22.08B | −8.9% |
| Operating Income | $17.80B— | — |
| Interest Expense | $183.00M$201.00M | −9.0% |
| Net Income | $20.88B$14.71B | +41.9% |
| EPS (Basic) | $7.93$5.59 | +41.9% |
| EPS (Diluted) | $7.81$5.51 | +41.7% |
| Shares Outstanding (Basic) | 2.63B2.63B | 0.0% |
| Shares Outstanding (Diluted) | 2.67B2.67B | +0.1% |
05—Questions
Frequently Asked Questions
What is the company's strategy regarding its Consumer Health business?
Johnson & Johnson announced in November 2021 its intention to separate its Consumer Health business into a new, publicly traded company. This separation is targeted for completion within 18 to 24 months from the announcement date and aims to allow both the new consumer health company and the remaining J&J (Pharmaceutical and MedTech) to focus on their respective strategic priorities and growth opportunities.
How did the Pharmaceutical segment perform in 2021?
The Pharmaceutical segment demonstrated strong growth, with sales increasing by 14.3% to $52.1 billion. Key drivers included robust performance from immunology products like STELARA® (up 18.5%) and TREMFYA® (up 57.9%), oncology treatments such as DARZALEX® (up 43.8%) and ERLEADA® (up 70.0%), and the significant contribution from the Janssen COVID-19 vaccine. However, REMICADE® sales declined by 14.9% due to biosimilar competition.
What is the company's approach to managing litigation and legal liabilities?
Johnson & Johnson faces numerous legal proceedings, most notably concerning talc-related liabilities and opioid litigation. The company records accruals for probable and reasonably estimable losses associated with these matters. For talc liabilities, a $2 billion trust has been established as part of a corporate restructuring and bankruptcy filing. For opioid litigation, the company has agreed to a settlement framework involving up to $5 billion in payments to states, cities, counties, and tribal governments. While the company believes it has strong defenses, the ultimate outcome of these litigations remains uncertain and could materially affect future results.
06—Continue