Honeywell International Inc reports 14.2% EBITDA growth and 3.2 pp EBITDA Margin growth from 16.8% to 20.0%
29 Jan 2016 • About Honeywell International Inc (
$HON) • By InTwits
Honeywell International Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 20.0% in 2015 vs. 16.8% in 2014 vs. 9.7% in 2011
- Honeywell International Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's in pair with industry average of 4.2%.
- CAPEX is quite volatile: 2,434 in 2015, 4,212 in 2014, 6,632 in 2013, 5,691 in 2012, 4,244 in 2011
- The company has highly profitable business model: ROIC is at 23.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Honeywell International Inc ($HON) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 36,529 | 37,665 | 39,055 | 40,306 | 38,581 | -4.3% |
| Gross Profit | 7,973 | 9,374 | 10,691 | 11,349 | 11,834 | 4.3% |
| SG&A | 5,399 | 5,218 | 5,190 | 5,518 | 5,006 | -9.3% |
| EBITDA | 3,531 | 5,082 | 6,490 | 6,755 | 7,711 | 14.2% |
| Net Income | 2,067 | 2,926 | 3,924 | 4,239 | 4,768 | 12.5% |
Balance Sheet
|
|---|
| Cash | 3,698 | 4,634 | 6,422 | 6,959 | 5,455 | -21.6% |
| Short Term Debt | 674 | 1,101 | 2,028 | 2,637 | 6,514 | 147.0% |
| Long Term Debt | 6,881 | 6,395 | 6,801 | 6,046 | 5,554 | -8.1% |
Cash flow
|
|---|
| Capex | 798 | 884 | 947 | 1,094 | 1,073 | -1.9% |
Ratios
|
|---|
| Revenue growth | 12.9% | 3.1% | 3.7% | 3.2% | -4.3% | |
| EBITDA growth | -11.7% | 43.9% | 27.7% | 4.1% | 14.2% | |
| Gross Margin | 21.8% | 24.9% | 27.4% | 28.2% | 30.7% | 2.5% |
| EBITDA Margin | 9.7% | 13.5% | 16.6% | 16.8% | 20.0% | 3.2% |
| Net Income Margin | 5.7% | 7.8% | 10.0% | 10.5% | 12.4% | 1.8% |
| SG&A, % of revenue | 14.8% | 13.9% | 13.3% | 13.7% | 13.0% | -0.7% |
| CAPEX, % of revenue | 2.2% | 2.3% | 2.4% | 2.7% | 2.8% | 0.1% |
| ROIC | 14.4% | 21.8% | 23.0% | 21.3% | 23.2% | 1.9% |
| ROE | 19.3% | 24.6% | 25.8% | 24.1% | 26.5% | 2.4% |
| Net Debt/EBITDA | 1.1x | 0.6x | 0.4x | 0.3x | 0.9x | 0.6x |
Revenue and profitability
Honeywell International Inc's Revenue decreased on 4.3% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.2 pp from 16.8% to 20.0% in 2015.
Gross Margin increased on 2.5 pp from 28.2% to 30.7% in 2015. SG&A as a % of Revenue decreased slightly on 0.71 pp from 13.7% to 13.0% in 2015.
Net Income marign increased slightly on 1.8 pp from 10.5% to 12.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
Honeywell International Inc's CAPEX/Revenue was 2.8% in 2015. CAPEX/Revenue showed almost no change from 2012 to 2015. Average CAPEX/Revenue for the last three years was 2.6%.
Return on investment
The company operates at high and attractive ROIC (23.20%) and ROE (26.53%). ROIC increased slightly on 1.9 pp from 21.3% to 23.2% in 2015. ROE increased on 2.4 pp from 24.1% to 26.5% in 2015.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and 1.6x Debt / EBITDA. Net Debt / EBITDA surged on 0.6x from 0.3x to 0.9x in 2015. Debt jumped on 39.0% in 2015 while cash dropped on 21.6% in 2015.
Valuation
The company's trades at EV/EBITDA 1.0x and P/E 0.2x while industy averages are 10.5x and 26.1x. Honeywell International Inc's EV/(EBITDA-CAPEX) is 1.1x with the industry average at 4.7x.
Appendix 1: Peers in General Industrials
Below we provide Honeywell International Inc benchmarking against other companies in General Industrials 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 |
|---|
| Robinson ($RBN) | 10.3% | -1.6% | 10.2% | 20.3% | |
| Press Corp ($PESD) | -40.5% | 111.1% | 52.6% | 20.3% | |
| Thyssenkrupp Ag ($0O1C) | | -2.8% | -7.2% | 6.9% | 3.8% |
| Macfarlane Group ($MACF) | 6.7% | -1.9% | 1.4% | 6.9% | |
| Barloworld ($BWO) | | 17.5% | 1.6% | 4.4% | 1.0% |
| |
|---|
| Median (9 companies) | 10.2% | 1.3% | 1.4% | 4.4% | 1.1% |
|---|
| Honeywell International Inc ($HON) | | 3.1% | 3.7% | 3.2% | -4.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Press Corp ($PESD) | 75.4% | 58.9% | 54.4% | 56.0% | |
| Macfarlane Group ($MACF) | 30.2% | 32.0% | 31.2% | 30.9% | |
| Smurfit Kappa Group ($SKG) | 27.9% | 28.6% | 28.9% | 29.5% | |
| Jardine Strategic Hldgs ($88EI) | 24.7% | 24.0% | 24.0% | 25.4% | |
| General Electric Co. ($GEC) | 40.2% | 38.4% | 37.7% | 24.5% | 23.9% |
| |
|---|
| Median (9 companies) | 24.7% | 24.0% | 24.6% | 24.5% | 22.9% |
|---|
| Honeywell International Inc ($HON) | 21.8% | 24.9% | 27.4% | 28.2% | 30.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Press Corp ($PESD) | 37.1% | 29.5% | 29.6% | 29.2% | |
| Robinson ($RBN) | 14.4% | 16.0% | 14.1% | 15.1% | |
| Jardine Strategic Hldgs ($88EI) | 28.8% | 15.0% | 13.3% | 13.5% | |
| General Electric Co. ($GEC) | 17.6% | 17.2% | 16.5% | 13.3% | 10.4% |
| Smurfit Kappa Group ($SKG) | 13.1% | 13.4% | 12.8% | 12.7% | |
| |
|---|
| Median (9 companies) | 13.1% | 13.4% | 12.8% | 12.7% | 9.4% |
|---|
| Honeywell International Inc ($HON) | 9.7% | 13.5% | 16.6% | 16.8% | 20.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Press Corp ($PESD) | 22.7% | 21.3% | 8.5% | 12.1% | |
| General Electric Co. ($GEC) | 8.9% | 10.5% | 9.4% | 6.1% | 6.3% |
| Smurfit Kappa Group ($SKG) | 3.8% | 4.3% | 4.4% | 5.3% | |
| Jardine Strategic Hldgs ($88EI) | 4.4% | 5.8% | 5.2% | 4.1% | |
| Robinson ($RBN) | 4.9% | 4.3% | 6.0% | 3.5% | |
| |
|---|
| Median (9 companies) | 4.4% | 4.3% | 5.2% | 3.5% | 2.6% |
|---|
| Honeywell International Inc ($HON) | 2.2% | 2.3% | 2.4% | 2.7% | 2.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Press Corp ($PESD) | 12.1% | 21.6% | 27.1% | 24.7% | |
| Macfarlane Group ($MACF) | 15.1% | 17.9% | 22.2% | 19.0% | |
| Barloworld ($BWO) | 12.4% | 14.0% | 13.5% | 14.1% | 12.9% |
| Smurfit Kappa Group ($SKG) | 10.2% | 10.8% | 11.2% | 11.8% | |
| Thyssenkrupp Ag ($0O1C) | 15.7% | -27.3% | -6.5% | 10.8% | 9.5% |
| |
|---|
| Median (9 companies) | 12.1% | 10.3% | 9.6% | 10.8% | 8.1% |
|---|
| Honeywell International Inc ($HON) | 14.4% | 21.8% | 23.0% | 21.3% | 23.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| General Electric Co. ($GEC) | 11.8x | 10.5x | 8.9x | 12.0x | 10.6x |
| Coral Products ($CRU) | 1.5x | 1.5x | 2.9x | 3.4x | 2.7x |
| Smurfit Kappa Group ($SKG) | 2.9x | 2.9x | 2.6x | 2.7x | |
| Thyssenkrupp Ag ($0O1C) | 1.1x | 3.4x | 4.5x | 2.0x | 1.8x |
| Jardine Strategic Hldgs ($88EI) | 0.6x | 1.4x | 1.3x | 1.3x | |
| |
|---|
| Median (9 companies) | 1.1x | 1.5x | 1.4x | 1.3x | 2.2x |
|---|
| Honeywell International Inc ($HON) | 1.1x | 0.6x | 0.4x | 0.3x | 0.9x |
