Cisco Systems Inc Net Income jumped on 14.4% in 2015 and EBITDA Margin increased slightly on 1.9 pp from 25.0% to 26.9%
12/08/2015 • About Cisco Systems Inc (
$4333) • By InTwits
Cisco Systems Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cisco Systems Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's a lot of higher than industry average of 7.0%.
- CAPEX is quite volatile: 3,352 in 2015, 3,650 in 2014, 1,150 in 2013, 389 in 2012, 432 in 2011
- The company has highly profitable business model: ROIC is at 13.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cisco Systems Inc ($4333) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 43,218 | 46,061 | 48,607 | 47,142 | 49,161 | 4.3% |
| Gross Profit | 26,536 | 28,209 | 29,440 | 27,769 | 29,681 | 6.9% |
| SG&A | 11,720 | 11,969 | 11,802 | 11,437 | 11,861 | 3.7% |
| EBITDA | 10,160 | 12,667 | 13,547 | 11,777 | 13,212 | 12.2% |
| Net Income | 6,490 | 8,041 | 9,983 | 7,853 | 8,981 | 14.4% |
Balance Sheet
|
|---|
| Cash | 7,662 | 9,799 | 7,925 | 6,726 | 6,877 | 2.2% |
| Short Term Debt | 588 | 31 | 3,283 | 508 | 3,897 | 667.1% |
| Long Term Debt | 16,234 | 16,297 | 12,928 | 20,337 | 21,457 | 5.5% |
Cash flow
|
|---|
| Capex | 1,174 | 1,126 | 1,160 | 1,275 | 1,227 | -3.8% |
Ratios
|
|---|
| Revenue growth | 7.9% | 6.6% | 5.5% | -3.0% | 4.3% | |
| EBITDA growth | -9.2% | 24.7% | 6.9% | -13.1% | 12.2% | |
| Gross Margin | 61.4% | 61.2% | 60.6% | 58.9% | 60.4% | 1.5% |
| EBITDA Margin | 23.5% | 27.5% | 27.9% | 25.0% | 26.9% | 1.9% |
| Net Income Margin | 15.0% | 17.5% | 20.5% | 16.7% | 18.3% | 1.6% |
| SG&A, % of revenue | 27.1% | 26.0% | 24.3% | 24.3% | 24.1% | -0.1% |
| CAPEX, % of revenue | 2.7% | 2.4% | 2.4% | 2.7% | 2.5% | -0.2% |
| ROIC | 12.7% | 15.6% | 15.8% | 12.1% | 13.4% | 1.3% |
| ROE | 14.2% | 16.3% | 18.1% | 13.6% | 15.4% | 1.9% |
| Net Debt/EBITDA | 0.9x | 0.5x | 0.6x | 1.2x | 1.4x | 0.2x |
Revenue and profitability
The company's Revenue increased on 4.3% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.8 pp from 9.5% to 6.7% in 2015.
Gross Margin increased slightly on 1.5 pp from 58.9% to 60.4% in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign increased slightly on 1.6 pp from 16.7% to 18.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Cisco Systems Inc had CAPEX/Revenue of 2.5%. CAPEX/Revenue showed almost no change from FY2012 to FY2015. Average CAPEX/Revenue for the last three years was 2.5%.
Return on investment
The company operates at good ROIC (13.38%) and ROE (15.44%). ROIC increased slightly on 1.3 pp from 12.1% to 13.4% in FY2015. ROE increased slightly on 1.9 pp from 13.6% to 15.4% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.4x and Debt / EBITDA is 1.9x. Net Debt / EBITDA surged on 0.2x from 1.2x to 1.4x in FY2015. Debt surged on 21.6% in FY2015 while cash increased on 2.2% in FY2015.
Management team
The company's CEO is Charles H Robbins "Chuck". Charles H Robbins "Chuck" has 3 years tenure at the company. The company's CFO Kelly A Kramer has spent 3 years at the company.
Appendix 1: Peers in Telecommunications
Below we provide Cisco Systems Inc benchmarking against other companies in Telecommunications industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Energine International Holdings Ltd ($1185) | -41.8% | 143.6% | 34.3% | 103.1% | |
| MOBI Development Co Ltd ($947) | -23.4% | -13.8% | 29.1% | 85.6% | |
| Vodatel Networks Holdings Ltd ($8033) | 34.4% | -5.9% | -4.6% | 81.7% | |
| Gold Tat Group International Ltd ($8266) | | 29.4% | 1,582.2% | 77.0% | 26.5% |
| Great World Co Holdings Ltd ($8003) | | 1,651.8% | -81.7% | 61.9% | -3.7% |
| |
|---|
| Median (49 companies) | 8.5% | 9.7% | 8.3% | 7.5% | 26.5% |
|---|
| Cisco Systems Inc ($4333) | | 6.6% | 5.5% | -3.0% | 4.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Synertone Communication Corp ($1613) | 65.4% | 68.1% | 64.1% | 70.5% | 50.3% |
| Zhi Cheng Holdings Ltd ($8130) | 61.6% | 45.9% | 41.0% | 64.0% | 19.6% |
| APT Satellite Holdings Ltd ($1045) | 52.3% | 58.7% | 64.1% | 62.5% | |
| Hong Kong Television Network Ltd ($1137) | | -59.6% | -101.3% | 59.7% | |
| HKT Trust & HKT Ltd ($6823) | 58.9% | 57.2% | 55.7% | 58.2% | |
| |
|---|
| Median (43 companies) | 29.9% | 26.1% | 28.1% | 27.1% | 32.5% |
|---|
| Cisco Systems Inc ($4333) | 61.4% | 61.2% | 60.6% | 58.9% | 60.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 83.5% | 86.5% | 85.8% | 81.6% | |
| APT Satellite Holdings Ltd ($1045) | 76.7% | 81.0% | 78.9% | 77.5% | |
| Synertone Communication Corp ($1613) | 49.5% | 44.9% | 48.5% | 49.4% | 51.5% |
| PCCW Ltd ($8) | 31.4% | 32.0% | 31.9% | 39.2% | |
| China Mobile Ltd ($941) | 47.1% | 43.7% | 38.2% | 36.9% | |
| |
|---|
| Median (49 companies) | 14.2% | 9.9% | 6.7% | 7.9% | -0.4% |
|---|
| Cisco Systems Inc ($4333) | 23.5% | 27.5% | 27.9% | 25.0% | 26.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hong Kong Television Network Ltd ($1137) | | 12,435.9% | 504.9% | 1,283.5% | |
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 61.8% | 93.8% | 71.7% | 75.0% | |
| Hanny Holdings Ltd ($275) | 80.8% | 19.8% | 11.6% | 28.3% | 0.2% |
| APT Satellite Holdings Ltd ($1045) | 155.2% | 74.3% | 2.5% | 27.2% | |
| China Electronics Corp Holdings Co Ltd ($85) | 1.5% | 1.8% | 8.3% | 27.1% | |
| |
|---|
| Median (49 companies) | 3.4% | 2.9% | 3.9% | 4.7% | 1.4% |
|---|
| Cisco Systems Inc ($4333) | 2.7% | 2.4% | 2.4% | 2.7% | 2.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| VTech Holdings Ltd ($303) | 40.5% | 37.6% | 39.5% | 40.0% | 39.8% |
| Telecom Service One Holdings Ltd ($8145) | | 95.0% | 5.4% | 26.7% | 39.8% |
| TCL Communication Technology Holdings Ltd ($2618) | 6.4% | -1.6% | 6.0% | 17.2% | |
| China Fiber Optic Network System Group Ltd ($3777) | 23.1% | 18.8% | 17.6% | 16.6% | |
| China U-Ton Holdings Ltd ($6168) | 69.5% | 35.7% | 25.0% | 16.2% | |
| |
|---|
| Median (49 companies) | 6.9% | 5.6% | 5.6% | 5.8% | -1.6% |
|---|
| Cisco Systems Inc ($4333) | 12.7% | 15.6% | 15.8% | 12.1% | 13.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CCT Land Holdings Ltd ($261) | | 10.1x | 23.8x | 48.4x | |
| China Energine International Holdings Ltd ($1185) | | | | 13.3x | |
| China Electronics Corp Holdings Co Ltd ($85) | -2.1x | -2.0x | -1.3x | 12.5x | |
| China All Access Holdings Ltd ($633) | -1.0x | 0.9x | 1.8x | 5.2x | |
| Synertone Communication Corp ($1613) | -0.3x | -0.4x | -2.2x | 4.8x | 2.5x |
| |
|---|
| Median (35 companies) | -0.2x | -0.2x | -0.0x | 0.4x | 0.1x |
|---|
| Cisco Systems Inc ($4333) | 0.9x | 0.5x | 0.6x | 1.2x | 1.4x |
