Volex EBITDA jumped on 299% in 2016 and EBITDA Margin increased on 2.3 pp from 0.63% to 2.9%
09 Jun 2016 • About Volex (
$VLX) • By InTwits
Volex reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Volex is a company in decline: FY2016 revenue growth was -13.2%, 5 years revenue CAGR was -5.6%
- EBITDA Margin is quite volatile: 2.9% in FY2016, 0.6% in FY2015, 0.8% in FY2014, 2.1% in FY2013, 5.1% in FY2012
- Volex has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's in pair with industry average of 2.1%.
- CAPEX is quite volatile: 6.0 in FY2016, 3.9 in FY2015, 8.2 in FY2014, 24.9 in FY2013, 10.3 in FY2012
- The company has potentially unprofitable business model: ROIC is at 3.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Volex ($VLX) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 517.8 | 473.2 | 400.2 | 423.4 | 367.5 | -13.2% |
| Gross Profit | 97.5 | 83.2 | 66.0 | 70.6 | 58.5 | -17.1% |
| EBITDA | 26.6 | 10.1 | 3.2 | 2.7 | 10.6 | 299.4% |
| Net Income | 17.2 | -0.9 | -14.2 | -10.7 | -2.3 | -78.4% |
Balance Sheet
|
|---|
| Cash | 43.6 | 25.0 | 13.7 | 33.7 | 30.7 | -8.9% |
| Short Term Debt | 2.5 | 1.3 | 0.0 | 7.5 | 5.2 | -31.4% |
| Long Term Debt | 37.4 | 43.3 | 45.9 | 24.3 | 28.8 | 18.5% |
Cash flow
|
|---|
| Capex | 10.3 | 24.9 | 8.2 | 3.9 | 6.0 | 51.4% |
Ratios
|
|---|
| Revenue growth | 5.7% | -8.6% | -15.4% | 5.8% | -13.2% | |
| EBITDA growth | -1.0% | -61.9% | -68.9% | -15.6% | 299.4% | |
| Gross Margin | 18.8% | 17.6% | 16.5% | 16.7% | 15.9% | -0.8% |
| EBITDA Margin | 5.1% | 2.1% | 0.8% | 0.6% | 2.9% | 2.3% |
| Net Income Margin | 3.3% | -0.2% | -3.5% | -2.5% | -0.6% | 1.9% |
| CAPEX, % of revenue | 2.0% | 5.3% | 2.0% | 0.9% | 1.6% | 0.7% |
| ROIC | 29.3% | 4.7% | -5.6% | -5.3% | 3.9% | 9.2% |
| ROE | 38.4% | -1.8% | -34.4% | -23.5% | -4.4% | 19.1% |
| Net Debt/EBITDA | -0.1x | 1.9x | 10.2x | -0.7x | 0.3x | 1.0x |
Revenue and profitability
Volex's Revenue dropped on 13.2% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.3 pp from 0.63% to 2.9% in FY2016.
Gross Margin decreased slightly on 0.76 pp from 16.7% to 15.9% in FY2016.
Net Income marign increased slightly on 1.9 pp from -2.5% to -0.63% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Volex had CAPEX/Revenue of 1.6%. The company showed decline in CAPEX/Revenue of 3.6 pp from 5.3% in FY2013 to 1.6% in FY2016. It's average level of CAPEX/Revenue for the last three years was 1.5%.Battling declining revenue the company invested a large share of EBITDA (56.1%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low but positive ROIC (3.92%) and negative ROE (-4.37%). ROIC increased on 9.2 pp from -5.3% to 3.9% in FY2016. ROE jumped on 19.1 pp from -23.5% to -4.4% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.3x and Debt / EBITDA is 3.2x. Net Debt / EBITDA jumped on 1.0x from -0.7x to 0.3x in FY2016. Debt increased on 6.7% in FY2016 while cash decreased on 8.9% in FY2016.
Appendix 1: Peers in Electronic & Electrical Equipment
Below we provide Volex benchmarking against other companies in Electronic & Electrical Equipment 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Stadium Group ($SDM) | -8.8% | 3.0% | -1.1% | 29.0% | |
| Flowgroup ($FLOW) | -92.9% | 125,263.6% | 141.9% | 21.1% | |
| Solid State ($SSP) | 22.2% | 21.7% | 1.9% | 13.9% | |
| Zytronic ($ZYT) | -0.3% | -15.4% | 9.3% | 12.6% | |
| Apc Technology Group ($APC) | -5.4% | 58.7% | -4.7% | 10.4% | |
| |
|---|
| Median (12 companies) | -2.8% | -4.9% | -1.1% | -1.3% | -2.5% |
|---|
| Volex ($VLX) | | -8.6% | -15.4% | 5.8% | -13.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Zytronic ($ZYT) | 36.3% | 30.8% | 36.6% | 41.9% | |
| Elektron Technology ($EKT) | 40.6% | 37.5% | 34.8% | 35.6% | 37.2% |
| Solid State ($SSP) | 27.8% | 26.1% | 29.2% | 30.5% | |
| Maruwa Co Ltd ($MAW) | 31.6% | 28.6% | 32.8% | 30.0% | 35.9% |
| Lpa Group ($LPA) | 28.3% | 27.2% | 29.6% | 27.4% | |
| |
|---|
| Median (10 companies) | 27.8% | 27.2% | 29.2% | 26.2% | 36.6% |
|---|
| Volex ($VLX) | 18.8% | 17.6% | 16.5% | 16.7% | 15.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Zytronic ($ZYT) | 25.3% | 18.8% | 22.9% | 27.8% | |
| Maruwa Co Ltd ($MAW) | 22.3% | 17.7% | 17.8% | 14.7% | 19.6% |
| Dewhurst ($DWHA) | 12.9% | 12.6% | 13.7% | 14.7% | |
| Morgan Advanced Materials ($BA29) | 13.7% | 13.1% | 9.8% | 12.8% | 14.6% |
| Stadium Group ($SDM) | 6.1% | 7.1% | 9.9% | 12.1% | |
| |
|---|
| Median (12 companies) | 6.7% | 5.4% | 5.7% | 8.5% | 14.6% |
|---|
| Volex ($VLX) | 5.1% | 2.1% | 0.8% | 0.6% | 2.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Morgan Advanced Materials ($BA29) | 2.9% | 3.8% | 3.7% | 7.0% | 4.0% |
| Maruwa Co Ltd ($MAW) | 23.8% | 15.3% | 7.6% | 6.5% | 4.4% |
| Zytronic ($ZYT) | 3.6% | 2.8% | 1.4% | 4.7% | |
| Stadium Group ($SDM) | 1.0% | 0.8% | 0.5% | 2.7% | |
| Dewhurst ($DWHA) | 2.7% | 1.3% | 0.9% | 1.9% | |
| |
|---|
| Median (12 companies) | 3.0% | 2.0% | 1.3% | 1.6% | 4.0% |
|---|
| Volex ($VLX) | 2.0% | 5.3% | 2.0% | 0.9% | 1.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dewhurst ($DWHA) | 29.2% | 20.7% | 24.5% | 27.3% | |
| Zytronic ($ZYT) | 23.0% | 11.9% | 17.0% | 22.7% | |
| Solid State ($SSP) | 22.3% | 19.7% | 44.5% | 20.0% | |
| Stadium Group ($SDM) | 16.5% | 17.6% | 17.3% | 19.3% | |
| Morgan Advanced Materials ($BA29) | 17.9% | 16.3% | 10.9% | 18.4% | 21.9% |
| |
|---|
| Median (12 companies) | 13.8% | 6.8% | 7.0% | 7.8% | 9.0% |
|---|
| Volex ($VLX) | 29.3% | 4.7% | -5.6% | -5.3% | 3.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Walsin Lihwa Corp ($WALS) | 5.3x | 8.7x | 3.9x | 4.6x | |
| Lpa Group ($LPA) | 1.9x | 0.7x | 1.5x | 3.8x | |
| Morgan Advanced Materials ($BA29) | 1.4x | 1.5x | 2.3x | 1.8x | 1.7x |
| Elektron Technology ($EKT) | 0.7x | 1.7x | 3.8x | 0.8x | 0.5x |
| Solid State ($SSP) | 1.4x | 1.2x | 0.4x | 0.7x | |
| |
|---|
| Median (9 companies) | 1.0x | 0.3x | 0.8x | 0.7x | 0.5x |
|---|
| Volex ($VLX) | -0.1x | 1.9x | 10.2x | -0.7x | 0.3x |
