Samsung Electronics Co reports 30.9% CAPEX decline in 2018 while 1.8% Revenue growth
08 Jan 2019 • About Samsung Electronics Co (
$SMSN) • By InTwits
Samsung Electronics Co reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is expanding: 35.0% in 2018 vs. 31.6% in 2017 vs. 20.9% in 2014
- Samsung Electronics Co has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.1%. At the same time it's a lot of higher than industry average of 6.2%.
- CAPEX is quite volatile: £0m in FY2018, £0m in FY2017, £0m in FY2016, £0m in FY2015, £0m in FY2014
- The company has highly profitable business model: ROIC is 22.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased slightly on 1.8%. During the last 5 years Revenue growth topped in 2017 at 18.7%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.4 pp from 31.6% to 35.0% in 2018. EBITDA Margin stuck to a growing trend at 3.6 pp per annum in the last 5 years.
Gross Margin showed almost no change in 2018. Gross Margin followed a growing trend at 2.3 pp per annum in 2014-2018. SG&A as a % of Revenue decreased on 2.8 pp from 16.3% to 13.4% in 2018.
Net Income margin increased slightly on 0.75 pp from 17.3% to 18.0% in 2018. During the last 5 years Net Income margin bottomed in 2015 at 9.3% and was growing since that time. The efficient tax rate was 27.7% in 2018.
Investments (CAPEX, working capital and M&A)
Samsung Electronics Co's CAPEX/Revenue was 12.1% in 2018. The company showed small CAPEX/Revenue decline of 0.77 pp from 12.9% in 2015 to 12.1% in 2018. Average CAPEX/Revenue for the last three years was 14.0%.
Return on investment
The company operates at high and attractive ROIC (22.2%) while ROE is a bit lower (17.3%). ROIC decreased slightly on 1.0 pp from 23.2% to 22.2% in 2018. ROE decreased slightly on 1.2 pp from 18.5% to 17.3% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.2x and Debt / EBITDA is 0.2x. Debt dropped on 22.0% while cash decreased slightly on 0.67%.
Samsung Electronics Co has good short term financial stability: Interest coverage ratio (ICR) is 87.3x. Samsung Electronics Co has no short term refinancing risk: cash is higher than short term debt (222.8%).
Average interest expence charged on company's debt was 4.6% in 2018.
The company paid 23.2% of Net Income as dividends in 2018.
Management team
CEO total compensation was 2,147,483,647 KRW in 2018 which included 2,147,483,647 KRW salary and 2,147,483,647 KRW annual bonus.
Financial and operational results
FY ended 31 Dec 2018
Samsung Electronics Co ($SMSN) key annual financial indicators| mln. KRW | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 206,205,987 | 200,653,482 | 201,866,745 | 239,575,376 | 243,771,415 | 1.8% |
| Gross Profit | 77,927,187 | 77,171,364 | 81,589,030 | 110,284,715 | 111,377,004 | 1.0% |
| SG&A | 37,446,184 | 36,081,636 | 37,235,161 | 38,947,445 | 32,688,565 | -16.1% |
| EBITDA | 43,078,492 | 47,344,299 | 49,953,637 | 75,762,430 | 85,368,706 | 12.7% |
| EBIT | | | | | 58,886,669 | |
| Interest expence | | | | | 674,617 | |
| Tax | | | | | 16,815,101 | |
| Net Income | 23,082,500 | 18,694,600 | 22,415,700 | 41,344,600 | 43,890,900 | 6.2% |
Balance Sheet
|
|---|
| Cash | 16,840,766 | 22,636,744 | 32,111,442 | 30,545,130 | 30,340,505 | -0.7% |
| Inventory | | | | | 28,984,704 | |
| Accounts Payable | | | | | 8,479,916 | |
| Short Term Debt | 9,807,966 | 11,376,973 | 13,979,606 | 16,046,238 | 13,620,046 | -15.1% |
| Long Term Debt | 1,457,553 | 1,496,990 | 1,302,780 | 2,767,807 | 1,047,057 | -62.2% |
Cash flow
|
|---|
| Capex | 22,042,943 | 25,880,222 | 24,142,973 | 42,792,234 | 29,556,406 | -30.9% |
| Dividends | | | | | 10,193,695 | |
Ratios
|
|---|
| Revenue growth | -9.8% | -2.7% | 0.6% | 18.7% | 1.8% | |
| EBITDA growth | -19.1% | 9.9% | 5.5% | 51.7% | 12.7% | |
|
|---|
| Gross Margin | 37.8% | 38.5% | 40.4% | 46.0% | 45.7% | -0.3% |
| EBITDA Margin | 20.9% | 23.6% | 24.7% | 31.6% | 35.0% | 3.4% |
| EBIT Margin | | | | | 24.2% |
| SG&A, % of revenue | 18.2% | 18.0% | 18.4% | 16.3% | 13.4% | -2.8% |
| Net Income Margin | 11.2% | 9.3% | 11.1% | 17.3% | 18.0% | 0.7% |
| CAPEX, % of revenue | 10.7% | 12.9% | 12.0% | 17.9% | 12.1% | -5.7% |
|
|---|
| ROIC | 14.4% | 14.0% | 14.3% | 23.2% | 22.2% | -1.0% |
| ROE | 13.1% | 9.7% | 10.9% | 18.5% | 17.3% | -1.2% |
| Net Debt/EBITDA | -0.1x | -0.2x | -0.3x | -0.2x | -0.2x | -0.0x |
| Interest expence / Average debt | | | | | 4.6% | |
Peers in Technology Hardware & Equipment
Below we provide Samsung Electronics Co benchmarking against other companies in Technology Hardware & 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Filtronic ($FTC) | | -46.7% | -22.5% | 160.5% | -32.2% |
| Toumaz Ld ($TMZ) | 19.5% | 22.1% | 0.3% | 27.7% | |
| Cml Microsystems ($CML) | | -10.6% | 4.7% | 21.5% | 14.2% |
| Batm Advanced Communications ($BVC) | -4.3% | -11.1% | -6.9% | 18.5% | |
| Compal Electronics Inc ($CEIR) | 22.1% | 0.2% | -9.5% | 15.8% | |
| |
|---|
| Median (18 companies) | 6.6% | 1.1% | -4.7% | 0.4% | 12.4% |
|---|
| Samsung Electronics Co ($SMSN) | | -2.7% | 0.6% | 18.7% | 1.8% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cml Microsystems ($CML) | 73.3% | 70.9% | 71.2% | 71.4% | 70.2% |
| Vislink ($VLK) | 45.9% | 45.0% | 73.1% | 62.9% | |
| Concurrent Technologies ($CNC) | 51.2% | 50.6% | 54.2% | 55.4% | |
| Trakm8 Holdings ($TRAK) | 57.2% | 45.2% | 48.3% | 49.4% | 49.4% |
| Toumaz Ld ($TMZ) | 43.6% | 42.4% | 44.0% | 41.2% | |
| |
|---|
| Median (17 companies) | 36.0% | 37.1% | 31.4% | 22.1% | 37.1% |
|---|
| Samsung Electronics Co ($SMSN) | 37.8% | 38.5% | 40.4% | 46.0% | 45.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cml Microsystems ($CML) | 35.1% | 29.9% | 30.0% | 31.4% | 30.7% |
| Concurrent Technologies ($CNC) | 27.1% | 28.6% | 24.8% | 28.4% | |
| Tatung Co ($TAT) | 9.2% | 2.1% | 9.1% | 12.5% | |
| Trakm8 Holdings ($TRAK) | 12.9% | 14.0% | 15.8% | 8.7% | 10.2% |
| Mti Wireless Edge ($MWE) | 5.5% | 12.0% | 9.1% | 8.5% | |
| |
|---|
| Median (18 companies) | 5.6% | 5.3% | 6.1% | 5.4% | 10.2% |
|---|
| Samsung Electronics Co ($SMSN) | 20.9% | 23.6% | 24.7% | 31.6% | 35.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Tatung Co ($TAT) | 4.3% | 6.7% | 16.1% | 45.1% | |
| Seeing Machines ($SEE) | 1.0% | 3.9% | 1.6% | 5.6% | 12.6% |
| Batm Advanced Communications ($BVC) | 1.6% | 2.5% | 4.1% | 3.0% | |
| Filtronic ($FTC) | 3.2% | 1.1% | 1.3% | 2.3% | 2.5% |
| Lite-On Technology Corp ($LTTD) | 3.7% | 2.4% | 1.6% | 2.0% | |
| |
|---|
| Median (18 companies) | 1.9% | 1.8% | 1.5% | 1.6% | 1.5% |
|---|
| Samsung Electronics Co ($SMSN) | 10.7% | 12.9% | 12.0% | 17.9% | 12.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Filtronic ($FTC) | -14.9% | -80.4% | -79.3% | 18.6% | 16.5% |
| Concurrent Technologies ($CNC) | 14.1% | 20.9% | 14.7% | 16.1% | |
| Cml Microsystems ($CML) | 23.0% | 10.3% | 10.1% | 11.2% | 10.4% |
| Lite-On Technology Corp ($LTTD) | 5.7% | 7.0% | 10.6% | 7.5% | |
| Mti Wireless Edge ($MWE) | 1.7% | 8.7% | 7.0% | 7.5% | |
| |
|---|
| Median (18 companies) | 5.7% | 3.4% | 1.7% | 4.8% | 4.6% |
|---|
| Samsung Electronics Co ($SMSN) | 14.4% | 14.0% | 14.3% | 23.2% | 22.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vislink ($VLK) | -0.0x | 1.8x | 0.4x | 54.5x | |
| Tatung Co ($TAT) | 6.7x | 40.1x | 9.2x | 7.7x | |
| Trakm8 Holdings ($TRAK) | -0.5x | -0.2x | 0.3x | 1.7x | 1.1x |
| Compal Electronics Inc ($CEIR) | -0.2x | -0.3x | 0.1x | 1.0x | |
| Global Invacom Group Ltd ($GINV) | -2.8x | -1.4x | -0.9x | 0.1x | |
| |
|---|
| Median (15 companies) | -1.4x | -1.4x | -0.9x | -1.1x | -1.3x |
|---|
| Samsung Electronics Co ($SMSN) | -0.1x | -0.2x | -0.3x | -0.2x | -0.2x |
