Applied Materials Inc reports 28.5% Net Income growth and almost no change in EBITDA Margin of 21.4%
12/11/2015 • About Applied Materials Inc (
$4336) • By InTwits
Applied Materials Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 21.4% in FY2015, 20.9% in FY2014, 11.2% in FY2013, 9.6% in FY2012, 25.1% in FY2011
- Applied Materials Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 6.2%.
- CAPEX is quite volatile: 12,107 in FY2015, 3,332 in FY2014, 3,083 in FY2013, 2,327 in FY2012, 1,849 in FY2011
- The company has highly profitable business model: ROIC is at 15.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Applied Materials Inc ($4336) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,517 | 8,719 | 7,509 | 9,072 | 9,659 | 6.5% |
| Gross Profit | 4,360 | 3,313 | 2,991 | 3,843 | 3,952 | 2.8% |
| SG&A | 901 | 1,076 | 902 | 890 | 883 | -0.8% |
| EBITDA | 2,644 | 833 | 842 | 1,895 | 2,064 | 8.9% |
| Net Income | 1,926 | 109 | 256 | 1,072 | 1,377 | 28.5% |
Balance Sheet
|
|---|
| Cash | 5,960 | 1,392 | 1,711 | 3,002 | 4,797 | 59.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | 1,200 | |
| Long Term Debt | 1,947 | 1,946 | 1,946 | 1,947 | 3,342 | 71.6% |
Cash flow
|
|---|
| Capex | 209 | 162 | 197 | 241 | 215 | -10.8% |
Ratios
|
|---|
| Revenue growth | 10.1% | -17.1% | -13.9% | 20.8% | 6.5% | |
| EBITDA growth | 56.6% | -68.5% | 1.1% | 125.1% | 8.9% | |
| Gross Margin | 41.5% | 38.0% | 39.8% | 42.4% | 40.9% | -1.4% |
| EBITDA Margin | 25.1% | 9.6% | 11.2% | 20.9% | 21.4% | 0.5% |
| Net Income Margin | 18.3% | 1.3% | 3.4% | 11.8% | 14.3% | 2.4% |
| SG&A, % of revenue | 8.6% | 12.3% | 12.0% | 9.8% | 9.1% | -0.7% |
| CAPEX, % of revenue | 2.0% | 1.9% | 2.6% | 2.7% | 2.2% | -0.4% |
| ROIC | 25.6% | 4.0% | 4.6% | 15.9% | 15.2% | -0.7% |
| ROE | 23.6% | 1.4% | 3.6% | 14.3% | 17.8% | 3.5% |
| Net Debt/EBITDA | -1.5x | 0.7x | 0.3x | -0.6x | -0.1x | 0.4x |
Revenue and profitability
The company's Revenue increased on 6.5% in FY2015. EBITDA Margin showed almost no change in FY2015.
Gross Margin decreased slightly on 1.4 pp from 42.4% to 40.9% in FY2015. SG&A as a % of Revenue decreased slightly on 0.67 pp from 9.8% to 9.1% in FY2015.
Net Income marign increased on 2.4 pp from 11.8% to 14.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Applied Materials Inc's CAPEX/Revenue was 2.2% in FY2015. The company's CAPEX/Revenue showed almost no change from FY2012 to FY2015. It's average level of CAPEX/Revenue for the last three years was 2.5%.
Return on investment
The company operates at good ROIC (15.18%) and ROE (17.79%). ROIC decreased slightly on 0.67 pp from 15.9% to 15.2% in FY2015. ROE increased on 3.5 pp from 14.3% to 17.8% in FY2015.
Leverage (Debt)
Debt level is -0.1x Net Debt / EBITDA and 2.2x Debt / EBITDA. Net Debt / EBITDA jumped on 0.4x from -0.6x to -0.1x in FY2015. Debt jumped on 133% in FY2015 while cash surged on 59.8% in FY2015.
Management team
Applied Materials Inc's CEO Gary E Dickerson has spent 5 years at the company. Applied Materials Inc's CFO is Robert J Halliday "Bob". Robert J Halliday "Bob" has 5 years tenure at the company.
Appendix 1: Peers in Semiconductors
Below you can find Applied Materials Inc benchmarking vs. other companies in Semiconductors 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 |
|---|
| Honbridge Holdings Ltd ($8137) | 3,428.4% | -76.4% | -97.5% | 608.9% | |
| Shunfeng International Clean Energy Ltd ($1165) | 216.5% | -46.3% | 44.4% | 275.6% | |
| Phoenitron Holdings Ltd ($8066) | -8.8% | -7.2% | 4.0% | 243.8% | |
| Hanergy Thin Film Power Group Ltd ($566) | -15.1% | 7.5% | 19.1% | 192.8% | |
| China Jinhai International Group Ltd ($139) | | | | 140.3% | -81.9% |
| |
|---|
| Median (19 companies) | 1.6% | -11.2% | 8.0% | 10.4% | -57.3% |
|---|
| Applied Materials Inc ($4336) | | -17.1% | -13.9% | 20.8% | 6.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Heng Xin China Holdings Ltd ($8046) | 46.3% | 42.1% | 57.6% | 75.0% | |
| China Jinhai International Group Ltd ($139) | -92.8% | | -7.8% | 73.3% | -69.1% |
| PacMOS Technologies Holdings Ltd ($1010) | 68.1% | 68.8% | 65.7% | 65.7% | |
| Intel Corp ($4335) | 62.5% | 62.1% | 59.8% | 63.7% | |
| Hanergy Thin Film Power Group Ltd ($566) | 62.8% | 71.4% | 80.3% | 57.3% | |
| |
|---|
| Median (20 companies) | 18.0% | 22.1% | 23.7% | 31.9% | -35.7% |
|---|
| Applied Materials Inc ($4336) | 41.5% | 38.0% | 39.8% | 42.4% | 40.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Ruifeng Renewable Energy Ltd ($527) | 13.4% | 9.1% | 37.2% | 88.0% | |
| Hanergy Thin Film Power Group Ltd ($566) | 46.0% | 66.0% | 73.9% | 43.7% | |
| Intel Corp ($4335) | 43.6% | 41.5% | 38.6% | 42.8% | |
| Shunfeng International Clean Energy Ltd ($1165) | 5.9% | -11.8% | 9.5% | 40.5% | |
| Semiconductor Manufacturing International Corp ($981) | 26.9% | 34.3% | 35.5% | 34.5% | |
| |
|---|
| Median (20 companies) | 10.9% | 7.4% | 6.1% | -0.9% | -762.1% |
|---|
| Applied Materials Inc ($4336) | 25.1% | 9.6% | 11.2% | 20.9% | 21.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jun Yang Solar Power Investments Ltd ($397) | 390.5% | 671.1% | 25.9% | 78.9% | |
| Han Tang International Holdings Ltd ($1187) | 1.8% | | | 55.2% | |
| Semiconductor Manufacturing International Corp ($981) | 70.6% | 23.5% | 35.1% | 33.2% | |
| Comtec Solar Systems Group Ltd ($712) | 22.2% | | 30.2% | 18.7% | |
| Intel Corp ($4335) | 19.9% | 20.7% | 20.3% | 18.1% | |
| |
|---|
| Median (20 companies) | 10.3% | 4.7% | 11.0% | 7.0% | 9.7% |
|---|
| Applied Materials Inc ($4336) | 2.0% | 1.9% | 2.6% | 2.7% | 2.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ASM Pacific Technology Ltd ($522) | 52.1% | 12.3% | 9.2% | 21.9% | |
| Shanghai Fudan Microelectronics Group Co Ltd ($1385) | 22.2% | 25.5% | 22.7% | 21.1% | |
| Intel Corp ($4335) | 32.4% | 23.7% | 17.1% | 20.6% | |
| Hanergy Thin Film Power Group Ltd ($566) | 9.3% | 14.1% | 15.1% | 19.3% | |
| Shunfeng International Clean Energy Ltd ($1165) | 5.9% | -13.0% | 1.5% | 17.4% | |
| |
|---|
| Median (20 companies) | 2.2% | -2.2% | -0.7% | -1.3% | -14.0% |
|---|
| Applied Materials Inc ($4336) | 25.6% | 4.0% | 4.6% | 15.9% | 15.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Ruifeng Renewable Energy Ltd ($527) | 4.0x | 16.4x | 6.9x | 4.9x | |
| Solargiga Energy Holdings Ltd ($757) | 5.9x | | 13.8x | 4.4x | |
| Shunfeng International Clean Energy Ltd ($1165) | 8.2x | | 25.8x | 3.4x | |
| Phoenitron Holdings Ltd ($8066) | -1.2x | -0.8x | | 3.2x | |
| Semiconductor Manufacturing International Corp ($981) | 1.9x | 1.3x | 1.0x | 1.0x | |
| |
|---|
| Median (10 companies) | -0.0x | 0.0x | 1.0x | 0.7x | |
|---|
| Applied Materials Inc ($4336) | -1.5x | 0.7x | 0.3x | -0.6x | -0.1x |
