Lenovo Group Ltd EBITDA jumped on 30.4% in 2015 and EBITDA Margin showed almost no change
21/05/2015 • About Lenovo Group Ltd (
$992) • By InTwits
Lenovo Group Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Lenovo Group Ltd is a fast growth stock: FY2015 revenue growth was 19.6%, 5 year revenue CAGR was 22.8% at FY2015 ROIC 24.5%
- EBITDA Margin is relatively stable: 3.9% in FY2015 vs. 3.6% in FY2014 vs. 2.6% in FY2011
- Lenovo Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's a lot of higher than industry average of 7.0%.
- CAPEX is quite volatile: 676 in FY2015, 566 in FY2014, 388 in FY2013, 307 in FY2012, 127 in FY2011
- The company has highly profitable business model: ROIC is at 24.5%
- It operates with high leverage: Net Debt/EBITDA is 0.1x while industry average is -4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Lenovo Group Ltd ($992) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 21,594 | 29,574 | 33,873 | 38,707 | 46,296 | 19.6% |
| Gross Profit | 2,364 | 3,446 | 4,074 | 5,064 | 6,682 | 32.0% |
| SG&A | 1,758 | 2,421 | 2,735 | 3,303 | 4,185 | 26.7% |
| EBITDA | 558 | 755 | 1,047 | 1,386 | 1,807 | 30.4% |
| Net Income | 273 | 473 | 635 | 817 | 829 | 1.4% |
Balance Sheet
|
|---|
| Cash | 2,954 | 3,758 | 3,454 | 3,858 | 2,855 | -26.0% |
| Short Term Debt | 272 | 63 | 176 | 445 | 1,168 | 162.3% |
| Long Term Debt | 0 | 0 | 303 | 10 | 1,886 | 18,525.7% |
Cash flow
|
|---|
| Capex | 127 | 307 | 388 | 566 | 676 | 19.5% |
Ratios
|
|---|
| Revenue growth | 30.0% | 37.0% | 14.5% | 14.3% | 19.6% | |
| EBITDA growth | 44.1% | 35.2% | 38.7% | 32.4% | 30.4% | |
| Gross Margin | 10.9% | 11.7% | 12.0% | 13.1% | 14.4% | 1.4% |
| EBITDA Margin | 2.6% | 2.6% | 3.1% | 3.6% | 3.9% | 0.3% |
| Net Income Margin | 1.3% | 1.6% | 1.9% | 2.1% | 1.8% | -0.3% |
| SG&A, % of revenue | 8.1% | 8.2% | 8.1% | 8.5% | 9.0% | 0.5% |
| CAPEX, % of revenue | 0.6% | 1.0% | 1.1% | 1.5% | 1.5% | -0.0% |
| ROIC | 18.9% | 26.2% | 30.5% | 34.7% | 24.5% | -10.2% |
| ROE | 15.9% | 22.5% | 25.3% | 28.8% | 23.4% | -5.4% |
| Net Debt/EBITDA | -4.8x | -4.9x | -2.8x | -2.5x | 0.1x | 2.6x |
Revenue and profitability
The company's Revenue surged on 19.6% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.7 pp from 26.4% to 30.2% in 2015.
Gross Margin increased slightly on 1.4 pp from 13.1% to 14.4% in FY2015. SG&A as a % of Revenue increased slightly on 0.51 pp from 8.5% to 9.0% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.5% in FY2015. CAPEX/Revenue showed almost no change from FY2012 to FY2015. For the last three years the average CAPEX/Revenue was 1.4%.
Return on investment
The company operates at high and attractive ROIC (24.52%) and ROE (23.36%). ROIC dropped on 10.2 pp from 34.7% to 24.5% in FY2015. ROE decreased on 5.4 pp from 28.8% to 23.4% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.1x and Debt / EBITDA is 1.7x. Net Debt / EBITDA jumped on 2.6x from -2.5x to 0.1x in FY2015. Debt surged on 570% in FY2015 while cash dropped on 26.0% in FY2015.
Management team
Lenovo Group Ltd's CEO is Yang Yuanqing. Yang Yuanqing has 9 years tenure at the company. Wai Ming Wong is a Lenovo Group Ltd's CFO. Wai Ming Wong has spent 11 years at the company.
Appendix 1: Peers in Computers
Below you can find Lenovo Group Ltd benchmarking vs. other companies in Computers industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Peking University Resources Holdings Co Ltd ($618) | 16.2% | -49.6% | 11.2% | 106.0% | |
| Alibaba Health Information Technology Ltd ($241) | 29.4% | 29.4% | -96.7% | 73.0% | |
| Thiz Technology Group Ltd ($8119) | 136.4% | -4.1% | -95.1% | 72.2% | |
| Universal Technologies Holdings Ltd ($1026) | 95.5% | -47.3% | 49.8% | 67.1% | |
| PAX Global Technology Ltd ($327) | 52.5% | 19.0% | 12.1% | 61.2% | |
| |
|---|
| Median (24 companies) | 12.7% | 3.8% | -1.8% | 7.2% | |
|---|
| Lenovo Group Ltd ($992) | | 37.0% | 14.5% | 14.3% | 19.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Universal Technologies Holdings Ltd ($1026) | 86.0% | 87.3% | 79.7% | 90.3% | |
| Thiz Technology Group Ltd ($8119) | 2.9% | 8.8% | 63.8% | 86.2% | |
| Computer & Technologies Holdings Ltd ($46) | 27.4% | 45.3% | 54.0% | 52.1% | |
| CCID Consulting Co Ltd ($8235) | 46.5% | 43.7% | 49.1% | 51.8% | |
| Alibaba Health Information Technology Ltd ($241) | 10.1% | 11.4% | -12.6% | 49.3% | |
| |
|---|
| Median (22 companies) | 13.2% | 14.2% | 17.0% | 17.2% | |
|---|
| Lenovo Group Ltd ($992) | 10.9% | 11.7% | 12.0% | 13.1% | 14.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Computer & Technologies Holdings Ltd ($46) | 4.8% | 12.9% | 19.9% | 20.1% | |
| Ju Teng International Holdings Ltd ($3336) | 9.5% | 15.1% | 19.9% | 19.3% | |
| PAX Global Technology Ltd ($327) | 18.9% | 16.5% | 17.4% | 18.8% | |
| CCID Consulting Co Ltd ($8235) | 19.0% | 10.6% | 10.8% | 12.3% | |
| Universal Technologies Holdings Ltd ($1026) | 29.5% | 12.8% | 1.5% | 9.9% | |
| |
|---|
| Median (24 companies) | 2.9% | 3.2% | 2.2% | -1.5% | |
|---|
| Lenovo Group Ltd ($992) | 2.6% | 2.6% | 3.1% | 3.6% | 3.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| North Asia Resources Holdings Ltd ($61) | 34.3% | 4.6% | 94.2% | 177.8% | |
| Beautiful China Holdings Co Ltd ($706) | 44.9% | 8.4% | 2.2% | 26.2% | |
| Ju Teng International Holdings Ltd ($3336) | 17.6% | 14.1% | 18.7% | 20.0% | |
| Alibaba Health Information Technology Ltd ($241) | 2.1% | 4.4% | 46.3% | 17.2% | |
| Universal Technologies Holdings Ltd ($1026) | 8.5% | 20.0% | 5.7% | 14.2% | |
| |
|---|
| Median (24 companies) | 1.6% | 1.2% | 1.6% | 2.1% | |
|---|
| Lenovo Group Ltd ($992) | 0.6% | 1.0% | 1.1% | 1.5% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| PAX Global Technology Ltd ($327) | 14.1% | 12.3% | 12.8% | 18.7% | |
| CCID Consulting Co Ltd ($8235) | 20.6% | 11.3% | 10.7% | 10.2% | |
| TPV Technology Ltd ($903) | 6.4% | 7.7% | 1.8% | 10.1% | |
| Computer & Technologies Holdings Ltd ($46) | 4.1% | 6.0% | 8.6% | 9.4% | |
| Wong's International Hldgs ($99) | 9.5% | 5.1% | 4.8% | 8.5% | |
| |
|---|
| Median (25 companies) | 3.7% | 0.9% | -0.2% | -1.4% | |
|---|
| Lenovo Group Ltd ($992) | 18.9% | 26.2% | 30.5% | 34.7% | 24.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| EVOC Intelligent Technology Co Ltd ($2308) | 6.4x | 0.5x | 5.8x | 5.7x | |
| Powerleader Science & Technology Group Ltd ($8236) | 2.0x | 2.7x | 3.6x | 4.6x | |
| Ju Teng International Holdings Ltd ($3336) | 2.5x | 2.1x | 1.8x | 1.7x | |
| Wong's International Hldgs ($99) | -1.8x | -3.5x | 2.7x | 1.4x | |
| TPV Technology Ltd ($903) | 0.5x | -0.2x | 0.6x | -0.0x | |
| |
|---|
| Median (12 companies) | -1.6x | -2.1x | -1.3x | -4.1x | |
|---|
| Lenovo Group Ltd ($992) | -4.8x | -4.9x | -2.8x | -2.5x | 0.1x |
