Mitsubishi Electric Corp reports 5.8% EBITDA decline while 1.6% Revenue growth
28 Apr 2016 • About Mitsubishi Electric Corp (
$MEL) • By InTwits
Mitsubishi Electric Corp reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Mitsubishi Electric Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: 2,324,112 in 2016, 2,560,244 in 2015, 3,505,549 in 2014, 6,569,613 in 2013, 7,054,543 in 2012
- The company has highly profitable business model: ROIC is at 12.8%
- It operates with high leverage: Net Debt/EBITDA is -0.4x while industry average is -32.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Mitsubishi Electric Corp ($MEL) key annual financial indicators
| mln. JPY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,639,468 | 3,567,184 | 4,054,359 | 4,323,041 | 4,394,353 | 1.6% |
| Gross Profit | 1,010,504 | 962,824 | 1,139,770 | 1,290,880 | 1,322,918 | 2.5% |
| SG&A | 625,283 | 648,890 | 737,042 | 790,563 | 826,232 | 4.5% |
| EBITDA | 352,688 | 280,037 | 368,128 | 473,809 | 446,421 | -5.8% |
| Net Income | 112,063 | 69,517 | 153,473 | 234,694 | 228,494 | -2.6% |
Balance Sheet
|
|---|
| Cash | 392,181 | 298,881 | 418,049 | 568,517 | 574,170 | 1.0% |
| Short Term Debt | 211,214 | 245,394 | 171,872 | 173,601 | 73,715 | -57.5% |
| Long Term Debt | 360,324 | 323,565 | 227,529 | 232,237 | 302,700 | 30.3% |
Cash flow
|
|---|
| Capex | 159,346 | 150,425 | 151,840 | 199,758 | 182,251 | -8.8% |
Ratios
|
|---|
| Revenue growth | -0.2% | -2.0% | 13.7% | 6.6% | 1.6% | |
| EBITDA growth | 4.0% | -20.6% | 31.5% | 28.7% | -5.8% | |
| Gross Margin | 27.8% | 27.0% | 28.1% | 29.9% | 30.1% | 0.2% |
| EBITDA Margin | 9.7% | 7.9% | 9.1% | 11.0% | 10.2% | -0.8% |
| Net Income Margin | 3.1% | 1.9% | 3.8% | 5.4% | 5.2% | -0.2% |
| SG&A, % of revenue | 17.2% | 18.2% | 18.2% | 18.3% | 18.8% | 0.5% |
| CAPEX, % of revenue | 4.4% | 4.2% | 3.7% | 4.6% | 4.1% | -0.5% |
| ROIC | 13.1% | 8.2% | 11.9% | 14.5% | 12.8% | -1.7% |
| ROE | 10.3% | 5.7% | 10.9% | 13.9% | 12.4% | -1.5% |
| Net Debt/EBITDA | 0.5x | 1.0x | -0.1x | -0.3x | -0.4x | -0.1x |
Revenue and profitability
The company's Revenue increased slightly on 1.6% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.51 pp from 22.6% to 23.1% in 2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue increased slightly on 0.51 pp from 18.3% to 18.8% in FY2016.
Net Income marign showed almost no change in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.1% in FY2016. Mitsubishi Electric Corp showed almost no change in CAPEX/Revenue from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 4.2%.
Return on investment
The company operates at good ROIC (12.78%) and ROE (12.41%). ROIC decreased slightly on 1.7 pp from 14.5% to 12.8% in FY2016. ROE decreased slightly on 1.5 pp from 13.9% to 12.4% in FY2016.
Leverage (Debt)
Debt level is -0.4x Net Debt / EBITDA and 0.8x Debt / EBITDA. Net Debt / EBITDA decreased on 0.1x from -0.3x to -0.4x in FY2016. Debt decreased on 7.2% in FY2016 while cash increased slightly on 0.99% in FY2016.
Appendix 1: Peers in Industrial Engineering
Below you can find Mitsubishi Electric Corp benchmarking vs. other companies in Industrial Engineering 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mincon Group ($MCON) | 53.5% | -17.1% | 4.2% | 28.8% | |
| Ab Dynamics ($ABDP) | 36.9% | 36.8% | 13.8% | 19.3% | |
| Flowtech Fluidpower ($FLO) | -5.8% | -5.1% | 17.7% | 18.7% | |
| Somero Enterprise Inc ($SOMA) | 47.1% | 40.1% | 31.5% | 18.5% | |
| Hydro International ($HYD) | 11.7% | -7.2% | -0.1% | 17.7% | |
| |
|---|
| Median (21 companies) | 11.7% | 6.1% | -0.0% | 0.1% | -0.5% |
|---|
| Mitsubishi Electric Corp ($MEL) | | -2.0% | 13.7% | 6.6% | 1.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Somero Enterprise Inc ($SOMA) | 48.7% | 52.2% | 54.0% | 55.8% | |
| Hydro International ($HYD) | 37.3% | 39.4% | 45.3% | 46.4% | |
| Rotork ($76ID) | 46.8% | 47.4% | 48.0% | 45.7% | 44.3% |
| Northbridge Industrial Services ($NBI) | 57.0% | 54.0% | 48.4% | 43.4% | |
| Amiad Water Systems Ltd ($AFS) | 42.8% | 40.8% | 38.9% | 40.5% | |
| |
|---|
| Median (19 companies) | 31.3% | 30.0% | 33.2% | 34.2% | 44.3% |
|---|
| Mitsubishi Electric Corp ($MEL) | 27.8% | 27.0% | 28.1% | 29.9% | 30.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Northbridge Industrial Services ($NBI) | 30.3% | 29.2% | 32.4% | 32.5% | |
| Somero Enterprise Inc ($SOMA) | 12.6% | 23.9% | 27.4% | 28.2% | |
| Rotork ($76ID) | 27.0% | 27.6% | 28.0% | 25.0% | 22.8% |
| Ab Dynamics ($ABDP) | 21.3% | 18.9% | 20.1% | 24.0% | |
| Mincon Group ($MCON) | 22.9% | 30.0% | 22.7% | 17.6% | |
| |
|---|
| Median (21 companies) | 8.6% | 8.2% | 7.4% | 7.9% | 16.6% |
|---|
| Mitsubishi Electric Corp ($MEL) | 9.7% | 7.9% | 9.1% | 11.0% | 10.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pressure Technologies ($PRES) | 2.4% | 2.3% | 3.3% | 11.6% | |
| Somero Enterprise Inc ($SOMA) | 1.7% | 1.8% | 2.1% | 5.9% | |
| Ab Dynamics ($ABDP) | 2.2% | 5.6% | 2.5% | 4.2% | |
| Braime(T.F.& J.H.)(Hldgs) ($BMTO) | 2.3% | 9.6% | 5.6% | 3.8% | |
| Avingtrans ($AVG) | 8.6% | 4.6% | 5.0% | 3.7% | |
| |
|---|
| Median (21 companies) | 2.4% | 2.0% | 2.4% | 2.2% | 3.6% |
|---|
| Mitsubishi Electric Corp ($MEL) | 4.4% | 4.2% | 3.7% | 4.6% | 4.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Somero Enterprise Inc ($SOMA) | 6.0% | 34.1% | 51.7% | 54.3% | |
| Energy Technique ($ETQ) | 18.9% | 19.3% | 47.5% | 41.6% | |
| Renold ($RNO) | 18.8% | -12.7% | -2.5% | 41.3% | 39.1% |
| Ab Dynamics ($ABDP) | 44.4% | 34.3% | 28.4% | 31.4% | |
| Rotork ($76ID) | 50.0% | 45.4% | 38.1% | 21.9% | 17.0% |
| |
|---|
| Median (21 companies) | 14.2% | 12.3% | 10.8% | 8.8% | 28.0% |
|---|
| Mitsubishi Electric Corp ($MEL) | 13.1% | 8.2% | 11.9% | 14.5% | 12.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tricorn Group ($TCN) | -0.3x | 0.9x | 5.8x | 4.0x | |
| Avingtrans ($AVG) | 3.1x | 0.7x | 1.2x | 3.6x | |
| 600 Group ($SIXH) | | 3.2x | 2.2x | 3.1x | |
| Chamberlin ($CMH) | 0.5x | 0.4x | | 2.2x | |
| Braime(T.F.& J.H.)(Hldgs) ($BMTO) | 0.6x | 1.2x | 1.4x | 1.5x | |
| |
|---|
| Median (21 companies) | 0.1x | 0.1x | 0.6x | 0.7x | 0.9x |
|---|
| Mitsubishi Electric Corp ($MEL) | 0.5x | 1.0x | -0.1x | -0.3x | -0.4x |
