Mitsubishi Electric Corp reports 29.2% Net Income growth in 2018 and 0.97 pp EBITDA Margin growth from 9.7% to 10.7%
27 Apr 2018 • About Mitsubishi Electric Corp (
$MEL) • By InTwits
Mitsubishi Electric Corp reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is relatively stable: 10.7% in FY2018 vs. 9.7% in FY2017 vs. 9.1% in FY2014
- Mitsubishi Electric Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's in pair with industry average of 4.6%
- CAPEX is quite volatile: 277,456 JPYm in FY2018, 160,055 JPYm in FY2017, 249,062 JPYm in FY2016, 307,539 JPYm in FY2015, 496,108 JPYm in FY2014
- The company has highly profitable business model: ROIC is 12.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Mitsubishi Electric Corp's Revenue increased on 4.5%. During FY2014-FY2018 Revenue growth bottomed in FY2017 at -3.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.77 pp from 6.9% to 7.7% in 2018.
Gross Margin increased slightly on 1.2 pp from 30.4% to 31.6% in FY2018. Gross Margin followed a growing trend at 0.75 pp per annum in the last 5 years. SG&A as a % of Revenue showed almost no change in FY2018. SG&A as a % of Revenue grew at 0.41 pp per annum in the last 5 years.
Net Income margin increased slightly on 1.2 pp from 5.0% to 6.1% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 4.2% in FY2018. CAPEX/Revenue showed almost no change from FY2015 to FY2018. It's average CAPEX/Revenue for the last three years was 4.1%.
Return on investment
The company operates at good ROIC (12.1%) and ROE (12.6%). ROIC increased slightly on 1.0 pp from 11.1% to 12.1% in FY2018. ROE increased slightly on 1.8 pp from 10.9% to 12.6% in FY2018.
Leverage (Debt)
Debt level is -0.6x Net Debt / EBITDA and 0.7x Debt / EBITDA. Debt dropped on 11.5% while cash decreased on 9.6%.
Mitsubishi Electric Corp has no short term refinancing risk: cash is higher than short term debt (489.4%).
Financial and operational results
FY ended 31 Mar 2018
Mitsubishi Electric Corp ($MEL) key annual financial indicators| mln. JPY | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 4,054,359 | 4,323,041 | 4,394,353 | 4,238,666 | 4,431,198 | 4.5% |
| Gross Profit | 1,139,770 | 1,290,880 | 1,322,918 | 1,287,937 | 1,400,296 | 8.7% |
| SG&A | 737,042 | 790,563 | 826,232 | 829,425 | 868,812 | 4.7% |
| EBITDA | 368,128 | 473,809 | 446,421 | 411,688 | 473,196 | 14.9% |
| Net Income | 153,473 | 234,694 | 228,494 | 210,493 | 271,880 | 29.2% |
Balance Sheet
|
|---|
| Cash | 418,049 | 568,517 | 574,170 | 662,469 | 599,199 | -9.6% |
| Short Term Debt | 171,872 | 173,601 | 73,715 | 124,368 | 122,430 | -1.6% |
| Long Term Debt | 227,529 | 232,237 | 302,700 | 227,756 | 189,055 | -17.0% |
Cash flow
|
|---|
| Capex | 151,840 | 199,758 | 182,251 | 167,165 | 186,792 | 11.7% |
Ratios
|
|---|
| Revenue growth | 13.7% | 6.6% | 1.6% | -3.5% | 4.5% | |
| EBITDA growth | 31.5% | 28.7% | -5.8% | -7.8% | 14.9% | |
|
|---|
| Gross Margin | 28.1% | 29.9% | 30.1% | 30.4% | 31.6% | 1.2% |
| EBITDA Margin | 9.1% | 11.0% | 10.2% | 9.7% | 10.7% | 1.0% |
| SG&A, % of revenue | 18.2% | 18.3% | 18.8% | 19.6% | 19.6% | 0.0% |
| Net Income Margin | 3.8% | 5.4% | 5.2% | 5.0% | 6.1% | 1.2% |
| CAPEX, % of revenue | 3.7% | 4.6% | 4.1% | 3.9% | 4.2% | 0.3% |
|
|---|
| ROIC | 11.9% | 14.5% | 12.8% | 11.1% | 12.1% | 1.0% |
| ROE | 10.9% | 13.9% | 12.4% | 10.9% | 12.6% | 1.8% |
| Net Debt/EBITDA | -0.1x | -0.3x | -0.4x | -0.8x | -0.6x | 0.1x |
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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Flowtech Fluidpower ($FLO) | 17.7% | 18.7% | 19.9% | 45.6% | |
| Corac Group ($CRA) | 12.2% | -5.7% | 3.8% | 38.8% | |
| 600 Group ($SIXH) | -0.2% | 5.0% | 3.4% | 29.9% | |
| Molins ($MLIN) | -16.9% | -0.5% | -52.3% | 28.7% | |
| Mincon Group ($MCON) | 4.2% | 28.8% | 8.4% | 27.8% | |
| |
|---|
| Median (18 companies) | -0.0% | 0.3% | 4.0% | 8.4% | 4.5% |
|---|
| Mitsubishi Electric Corp ($MEL) | | 6.6% | 1.6% | -3.5% | 4.5% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Somero Enterprise Inc ($SOMA) | 54.0% | 55.8% | 56.8% | 56.9% | |
| Rotork ($76ID) | 48.0% | 45.7% | 44.3% | 44.2% | |
| Tricorn Group ($TCN) | 36.1% | 36.0% | 40.3% | 40.6% | |
| Amiad Water Systems Ltd ($AFS) | 38.9% | 40.5% | 39.3% | 39.5% | |
| Mincon Group ($MCON) | 43.2% | 40.2% | 40.1% | 36.5% | |
| |
|---|
| Median (16 companies) | 33.2% | 34.2% | 32.0% | 33.1% | |
|---|
| Mitsubishi Electric Corp ($MEL) | 28.1% | 29.9% | 30.1% | 30.4% | 31.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Somero Enterprise Inc ($SOMA) | 27.4% | 28.2% | 30.1% | 32.2% | |
| Rotork ($76ID) | 28.0% | 25.0% | 22.8% | 19.9% | |
| Ab Dynamics ($ABDP) | 20.1% | 24.0% | 22.7% | 19.0% | |
| Mincon Group ($MCON) | 22.7% | 17.6% | 16.4% | 14.3% | |
| Northbridge Industrial Services ($NBI) | 32.4% | 32.5% | 9.1% | 14.1% | |
| |
|---|
| Median (17 companies) | 7.4% | 7.9% | 7.7% | 10.2% | 6.9% |
|---|
| Mitsubishi Electric Corp ($MEL) | 9.1% | 11.0% | 10.2% | 9.7% | 10.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ab Dynamics ($ABDP) | 2.5% | 4.2% | 7.9% | 32.7% | |
| Chamberlin ($CMH) | 2.6% | 3.1% | 4.2% | 11.6% | |
| Ms International ($MSI) | 2.0% | 1.8% | 4.7% | 7.7% | |
| Mincon Group ($MCON) | 4.3% | 2.5% | 6.9% | 5.8% | |
| Renold ($RNO) | 3.3% | 2.1% | 4.8% | 4.6% | 4.5% |
| |
|---|
| Median (17 companies) | 2.4% | 2.2% | 3.4% | 3.0% | 4.5% |
|---|
| Mitsubishi Electric Corp ($MEL) | 3.7% | 4.6% | 4.1% | 3.9% | 4.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Somero Enterprise Inc ($SOMA) | 51.7% | 54.3% | 51.7% | 55.2% | |
| Renold ($RNO) | -2.5% | 41.3% | 39.1% | 44.7% | 21.3% |
| Ab Dynamics ($ABDP) | 28.4% | 31.4% | 28.0% | 19.3% | |
| Rotork ($76ID) | 38.1% | 21.9% | 17.0% | 15.7% | |
| Hms Hydraulic Mach & Sys Grp ($HMSG) | 3.2% | 14.7% | 12.0% | 15.1% | |
| |
|---|
| Median (18 companies) | 10.8% | 8.8% | 4.5% | 5.5% | 21.3% |
|---|
| Mitsubishi Electric Corp ($MEL) | 11.9% | 14.5% | 12.8% | 11.1% | 12.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Tricorn Group ($TCN) | 5.8x | 4.0x | 7.2x | 5.1x | |
| Pressure Technologies ($PRES) | -0.7x | 1.3x | 2.3x | 4.8x | |
| Chamberlin ($CMH) | | 2.2x | 2.2x | 4.3x | |
| 600 Group ($SIXH) | 2.2x | 3.1x | | 4.0x | |
| Northbridge Industrial Services ($NBI) | 1.2x | 1.5x | 4.9x | 2.7x | |
| |
|---|
| Median (17 companies) | 0.6x | 1.1x | 1.3x | 0.9x | 1.8x |
|---|
| Mitsubishi Electric Corp ($MEL) | -0.1x | -0.3x | -0.4x | -0.8x | -0.6x |
