Telefonaktiebolaget Lm Ericsson reports 19.7% EBITDA growth and 8.3% Revenue growth
27 Jan 2016 • About Telefonaktiebolaget Lm Ericsson (
$0O87) • By InTwits
Telefonaktiebolaget Lm Ericsson reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Telefonaktiebolaget Lm Ericsson 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 5.5%.
- CAPEX is quite volatile: 30,993 in 2015, 34,696 in 2014, 23,394 in 2013, 14,700 in 2012, 3,930 in 2011
- The company has highly profitable business model: ROIC is at 13.5%
- It operates with high leverage: Net Debt/EBITDA is 0.1x while industry average is -2.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Telefonaktiebolaget Lm Ericsson ($0O87) key annual financial indicators
| mln. SEK | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 226,921 | 227,779 | 227,376 | 227,983 | 246,920 | 8.3% |
| Gross Profit | 79,721 | 72,080 | 76,371 | 82,427 | 85,819 | 4.1% |
| SG&A | 26,683 | 26,023 | 26,273 | 27,100 | 29,285 | 8.1% |
| EBITDA | 30,642 | 31,735 | 28,130 | 26,790 | 32,066 | 19.7% |
| Net Income | 12,194 | 5,775 | 12,005 | 11,568 | 13,549 | 17.1% |
Balance Sheet
|
|---|
| Cash | 29,471 | 30,358 | 28,618 | 29,650 | 22,431 | -24.3% |
| Short Term Debt | 7,765 | 4,769 | 7,388 | 2,281 | 2,376 | 4.2% |
| Long Term Debt | 23,256 | 23,898 | 22,067 | 21,864 | 22,744 | 4.0% |
Cash flow
|
|---|
| Capex | 4,994 | 5,429 | 4,503 | 5,322 | 8,338 | 56.7% |
Ratios
|
|---|
| Revenue growth | 11.6% | 0.4% | -0.2% | 0.3% | 8.3% | |
| EBITDA growth | 15.2% | 3.6% | -11.4% | -4.8% | 19.7% | |
| Gross Margin | 35.1% | 31.6% | 33.6% | 36.2% | 34.8% | -1.4% |
| EBITDA Margin | 13.5% | 13.9% | 12.4% | 11.8% | 13.0% | 1.2% |
| Net Income Margin | 5.4% | 2.5% | 5.3% | 5.1% | 5.5% | 0.4% |
| SG&A, % of revenue | 11.8% | 11.4% | 11.6% | 11.9% | 11.9% | -0.0% |
| CAPEX, % of revenue | 2.2% | 2.4% | 2.0% | 2.3% | 3.4% | 1.0% |
| ROIC | 13.0% | 13.7% | 11.1% | 10.3% | 13.5% | 3.2% |
| ROE | 8.5% | 4.1% | 8.7% | 8.1% | 9.3% | 1.2% |
| Net Debt/EBITDA | 0.1x | -0.1x | 0.0x | -0.2x | 0.1x | 0.3x |
Revenue and profitability
Telefonaktiebolaget Lm Ericsson's Revenue increased on 8.3% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.7 pp from 10.5% to 8.9% in 2015.
Gross Margin decreased slightly on 1.4 pp from 36.2% to 34.8% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.4% in 2015. The company showed small growth in CAPEX/Revenue of 0.99 pp from 2.4% in 2012 to 3.4% in 2015. It's average CAPEX/Revenue for the last three years was 2.6%.
Return on investment
The company operates at good ROIC (13.49%) while ROE is low (9.32%). ROIC increased on 3.2 pp from 10.3% to 13.5% in 2015. ROE increased slightly on 1.2 pp from 8.1% to 9.3% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.1x and Debt / EBITDA is 0.8x. Net Debt / EBITDA jumped on 0.3x from -0.2x to 0.1x in 2015. Debt increased on 4.0% in 2015 while cash dropped on 24.3% in 2015.
Valuation
Telefonaktiebolaget Lm Ericsson's trades at EV/EBITDA 0.1x and P/E 0.0x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 0.1x with the industry average at 4.7x.
Appendix 1: Peers in Technology Hardware & Equipment
Below you can find Telefonaktiebolaget Lm Ericsson benchmarking vs. other companies in Technology Hardware & Equipment 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 |
|---|
| Trakm8 Holdings ($TRAK) | | 24.6% | -8.9% | 93.5% | 94.2% |
| Seeing Machines ($SEE) | | 0.1% | 66.3% | 43.3% | 13.3% |
| Compal Electronics Inc ($CEIR) | -21.9% | -1.3% | 1.3% | 22.1% | |
| Toumaz Ld ($TMZ) | -12.9% | 279.7% | 150.3% | 19.5% | |
| Global Invacom Group Ltd ($GINV) | 0.3% | 19.0% | 55.0% | 15.9% | |
| |
|---|
| Median (19 companies) | -3.6% | 2.6% | 3.4% | 3.4% | 1.1% |
|---|
| Telefonaktiebolaget Lm Ericsson ($0O87) | | 0.4% | -0.2% | 0.3% | 8.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cml Microsystems ($CML) | 69.5% | 69.3% | 70.3% | 73.3% | 70.9% |
| Seeing Machines ($SEE) | 69.4% | 61.4% | 64.1% | 59.8% | 44.9% |
| Trakm8 Holdings ($TRAK) | 66.6% | 63.8% | 71.9% | 57.2% | 45.2% |
| Concurrent Technologies ($CNC) | 52.1% | 51.7% | 50.6% | 51.2% | |
| Vislink ($VLK) | 41.1% | 39.4% | 40.7% | 45.9% | |
| |
|---|
| Median (18 companies) | 33.9% | 34.5% | 35.2% | 36.8% | 39.3% |
|---|
| Telefonaktiebolaget Lm Ericsson ($0O87) | 35.1% | 31.6% | 33.6% | 36.2% | 34.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cml Microsystems ($CML) | 29.8% | 28.7% | 33.1% | 35.1% | 29.9% |
| Pure Wafer ($PUR) | 12.3% | 16.3% | 17.0% | 31.5% | 27.4% |
| Concurrent Technologies ($CNC) | 28.5% | 29.3% | 23.3% | 27.1% | |
| Vislink ($VLK) | 6.0% | 12.2% | 12.1% | 21.5% | |
| Samsung Electronics Co ($SMSN) | 17.6% | 22.2% | 23.3% | 20.9% | 23.6% |
| |
|---|
| Median (19 companies) | 6.0% | 3.8% | 6.8% | 5.6% | 5.3% |
|---|
| Telefonaktiebolaget Lm Ericsson ($0O87) | 13.5% | 13.9% | 12.4% | 11.8% | 13.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pure Wafer ($PUR) | 2.0% | 0.5% | 3.5% | 23.3% | 8.5% |
| Sunplus Technology Co Ltd ($SUPD) | 7.2% | 4.8% | 6.3% | 15.0% | |
| Samsung Electronics Co ($SMSN) | 13.3% | 11.4% | 10.1% | 10.7% | 12.9% |
| Tatung Co ($TAT) | 8.5% | 6.1% | 4.3% | 4.3% | |
| Lite-On Technology Corp ($LTTD) | 3.9% | 3.7% | 2.9% | 3.7% | |
| |
|---|
| Median (19 companies) | 2.0% | 2.1% | 2.0% | 1.9% | 1.6% |
|---|
| Telefonaktiebolaget Lm Ericsson ($0O87) | 2.2% | 2.4% | 2.0% | 2.3% | 3.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cml Microsystems ($CML) | 15.9% | 17.4% | 26.1% | 23.0% | 10.3% |
| Trakm8 Holdings ($TRAK) | 13.1% | 3.8% | 1.9% | 18.7% | 22.5% |
| Samsung Electronics Co ($SMSN) | 13.9% | 22.4% | 24.0% | 14.4% | 14.0% |
| Concurrent Technologies ($CNC) | 19.5% | 14.6% | 8.2% | 14.1% | |
| Vislink ($VLK) | -2.8% | 4.0% | 6.0% | 13.4% | |
| |
|---|
| Median (19 companies) | -1.6% | 0.6% | 5.8% | 5.7% | 3.4% |
|---|
| Telefonaktiebolaget Lm Ericsson ($0O87) | 13.0% | 13.7% | 11.1% | 10.3% | 13.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tatung Co ($TAT) | 7.0x | 41.1x | 6.1x | 6.7x | |
| Vislink ($VLK) | -3.4x | -1.2x | -0.5x | -0.0x | |
| Samsung Electronics Co ($SMSN) | -0.0x | -0.1x | -0.1x | -0.1x | -0.2x |
| Compal Electronics Inc ($CEIR) | -2.0x | -0.5x | 1.3x | -0.2x | |
| Pure Wafer ($PUR) | 4.9x | 2.1x | 0.2x | -0.3x | -20.2x |
| |
|---|
| Median (16 companies) | -0.6x | -1.1x | -0.8x | -1.4x | -1.8x |
|---|
| Telefonaktiebolaget Lm Ericsson ($0O87) | 0.1x | -0.1x | 0.0x | -0.2x | 0.1x |
