Boeing Co Net Income jumped on 27.6% and EBITDA Margin increased slightly on 0.72 pp from 13.2% to 13.9%
30 Jan 2019 • About Boeing Co (
$BOE) • By InTwits
Boeing Co reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Boeing Co has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 1.8%.
- CAPEX is quite volatile: ₹0m in FY2018, ₹2,440m in FY2017, ₹953m in FY2016, ₹9,475m in FY2015, ₹12,853m in FY2014
- The company has highly profitable business model: ROIC is 78.8%
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 on 8.3%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.72 pp from 13.2% to 13.9% in 2018. During 2014-2018 EBITDA Margin bottomed in 2016 at 8.2% and was growing since that time.
Gross Margin increased slightly on 0.87 pp from 18.6% to 19.4% in 2018. During the last 5 years Gross Margin bottomed in 2016 at 14.6% and was growing since that time. SG&A as a % of Revenue showed almost no change in 2018. During 2014-2018 SG&A as a % of Revenue bottomed in 2015 at 3.7% and was growing since that time.
Net Income margin increased slightly on 1.6 pp from 8.8% to 10.3% in 2018. During the last 5 years Net Income margin bottomed in 2016 at 5.2% and was growing since that time. The efficient tax rate was 9.9% in 2018.
Investments (CAPEX, working capital and M&A)
Boeing Co's CAPEX/Revenue was 1.7% in 2018. The company's CAPEX/Revenue decreased slightly on 0.85 pp from 2.5% in 2015 to 1.7% in 2018. It's average level of CAPEX/Revenue for the last three years was 2.1%. During the last 5 years CAPEX as a % of Revenue topped in 2016 at 2.8% and was declining since that time.
Boeing Co has spent
$3,230m on M&A in 2018 which accounts for 3.2% of revenue.
Return on investment
The company operates at high and attractive ROIC (78.8%) and ROE (1,048.6%). ROIC decreased on 3.8 pp from 82.7% to 78.8% in 2018. ROE dropped on 350 pp from 1,399% to 1,049% in 2018. ROIC followed a growing trend at 14.2 pp per annum in 2014-2018. During 2014-2018 ROE topped in 2017 at 1,399%.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.4x and Debt / EBITDA is 1.0x. Net Debt / EBITDA surged on 0.3x from 0.2x to 0.4x in 2018. Debt surged on 24.6% while cash dropped on 13.3%. Net Debt/EBITDA grew at 0.2x per annum in 2014-2018.
Boeing Co has good short term financial stability: Interest coverage ratio (ICR) is 25.2x. Boeing Co has no short term refinancing risk: cash is higher than short term debt (239.4%).
Average interest expence charged on company's debt was 3.4% in 2018.
Valuation and dividends
The company's trades at EV/EBITDA 0.6x and P/E 0.2x.
The company paid 37.7% of Net Income as dividends in 2018.
Management team
CEO total compensation was
$23,392,187 in 2018 which included
$1,700,000 salary. Gregory D Smith "Greg" is a the company's CFO. Gregory D Smith "Greg" has spent 8 years at the company.
At the end of financial year the company had 0.15% shares owned by insiders.
At the end of financial year the company had 153,000 employees. Average revenue per employee in 2018 was
$660,961.
Financial and operational results
FY ended 31 Dec 2018
Boeing Co ($BOE) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 90,762 | 96,114 | 94,571 | 93,392 | 101,127 | 8.3% |
| Gross Profit | 14,010 | 14,026 | 13,781 | 17,326 | 19,637 | 13.3% |
| SG&A | 3,767 | 3,525 | 3,616 | 4,094 | 4,567 | 11.6% |
| EBITDA | 9,379 | 9,276 | 7,744 | 12,347 | 14,101 | 14.2% |
| EBIT | | | | | 11,987 | |
| Interest expence | | | | | 475 | |
| Tax | | | | | 1,144 | |
| Net Income | 5,446 | 5,176 | 4,895 | 8,197 | 10,460 | 27.6% |
| Stock Based Compensation | | | | | 202 | |
Balance Sheet
|
|---|
| Cash | 11,733 | 11,302 | 8,801 | 8,813 | 7,637 | -13.3% |
| Accounts Receivable | | | | | 3,879 | |
| Inventory | | | | | 62,567 | |
| Accounts Payable | | | | | 12,916 | |
| Short Term Debt | 929 | 1,234 | 384 | 1,335 | 3,190 | 139.0% |
| Long Term Debt | 8,141 | 8,730 | 9,568 | 9,782 | 10,657 | 8.9% |
Cash flow
|
|---|
| Capex | 2,236 | 2,450 | 2,613 | 1,739 | 1,722 | -1.0% |
| Dividends | | | | | 3,946 | |
| Acquisitions | | | | | 3,230 | |
Ratios
|
|---|
| Revenue growth | 4.8% | 5.9% | -1.6% | -1.2% | 8.3% | |
| EBITDA growth | 11.6% | -1.1% | -16.5% | 59.4% | 14.2% | |
|
|---|
| Gross Margin | 15.4% | 14.6% | 14.6% | 18.6% | 19.4% | 0.9% |
| EBITDA Margin | 10.3% | 9.7% | 8.2% | 13.2% | 13.9% | 0.7% |
| EBIT Margin | | | | | 11.9% |
| SG&A, % of revenue | 4.2% | 3.7% | 3.8% | 4.4% | 4.5% | 0.1% |
| SBC, % of revenue | | | | | 0.2% |
| Net Income Margin | 6.0% | 5.4% | 5.2% | 8.8% | 10.3% | 1.6% |
| CAPEX, % of revenue | 2.5% | 2.5% | 2.8% | 1.9% | 1.7% | -0.2% |
|
|---|
| ROIC | 29.5% | 38.9% | 38.5% | 82.7% | 78.8% | -3.8% |
| ROE | 46.3% | 69.0% | 136.9% | 1,398.8% | 1,048.6% | -350.2% |
| Net Debt/EBITDA | -0.3x | -0.1x | 0.1x | 0.2x | 0.4x | 0.3x |
| Interest expence / Average debt | | | | | 3.4% | |
People
|
|---|
| Insider ownership | | | | | 0.2% | |
| Employees | | | | | 153,000 | |
| Revenue/Employee, th. $ | | | | | 661 | |
Peers in Aerospace & Defense
Below you can find Boeing Co benchmarking vs. other companies in Aerospace & Defense 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 |
|---|
| Velocity Composites Plc ($VEL) | | -4.9% | 0.6% | 46.2% | 14.5% |
| Chemring Group ($BC88) | | -6.4% | 26.5% | 14.8% | -45.7% |
| Rolls-Royce Hldgs ($RR.) | | -0.1% | 9.0% | 9.0% | |
| Cobham ($85GU) | | 11.9% | -6.2% | 5.6% | |
| Qinetiq Group ($QQ.) | | -2.4% | -1.1% | 3.6% | 6.4% |
| |
|---|
| Median (6 companies) | | -1.2% | -0.2% | 7.3% | 6.4% |
|---|
| Boeing Co ($BOE) | | 5.9% | -1.6% | -1.2% | 8.3% |
Top companies by Gross margin, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cobham ($85GU) | 30.3% | 32.0% | 19.4% | 29.0% | |
| Rolls-Royce Hldgs ($RR.) | 23.3% | 23.8% | 20.4% | 19.5% | |
| Velocity Composites Plc ($VEL) | 20.5% | 24.0% | 23.8% | 18.4% | 18.3% |
| |
|---|
| Median (3 companies) | 26.8% | 25.9% | 22.1% | 19.5% | 18.3% |
|---|
| Boeing Co ($BOE) | 15.4% | 14.6% | 14.6% | 18.6% | 19.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Qinetiq Group ($QQ.) | 16.8% | 17.9% | 13.6% | 20.6% | 20.8% |
| Cobham ($85GU) | 13.4% | 12.9% | -27.3% | 16.0% | |
| Rolls-Royce Hldgs ($RR.) | 14.8% | 16.1% | 6.6% | 12.5% | |
| Bae Systems ($BA.) | 12.1% | 11.0% | 11.2% | 11.4% | |
| Chemring Group ($BC88) | 16.1% | 11.4% | 14.6% | 10.6% | 4.7% |
| |
|---|
| Median (6 companies) | 14.1% | 12.1% | 8.9% | 12.0% | 4.7% |
|---|
| Boeing Co ($BOE) | 10.3% | 9.7% | 8.2% | 13.2% | 13.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rolls-Royce Hldgs ($RR.) | 4.7% | 3.5% | 3.9% | 4.7% | |
| Qinetiq Group ($QQ.) | 3.1% | 3.2% | 3.8% | 3.9% | 5.5% |
| Cobham ($85GU) | 3.4% | 4.7% | 4.3% | 3.4% | |
| Chemring Group ($BC88) | 2.7% | 2.2% | 2.2% | 2.3% | 6.3% |
| Bae Systems ($BA.) | 1.7% | 2.1% | 2.3% | 2.1% | |
| |
|---|
| Median (6 companies) | 3.3% | 2.7% | 3.0% | 2.8% | 5.5% |
|---|
| Boeing Co ($BOE) | 2.5% | 2.5% | 2.8% | 1.9% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Qinetiq Group ($QQ.) | 17.4% | 26.8% | 24.7% | 29.9% | 20.6% |
| Chemring Group ($BC88) | 4.4% | 1.4% | 5.8% | 3.3% | -3.7% |
| Velocity Composites Plc ($VEL) | | 93.2% | 32.2% | -7.9% | -11.1% |
| Cobham ($85GU) | 2.6% | 0.5% | -36.8% | 5.9% | |
| Bae Systems ($BA.) | 26.0% | 27.9% | 26.0% | 18.4% | |
| |
|---|
| Median (6 companies) | 13.8% | 21.0% | 15.3% | 10.3% | -3.7% |
|---|
| Boeing Co ($BOE) | 29.5% | 38.9% | 38.5% | 82.7% | 78.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Chemring Group ($BC88) | 2.1x | 3.6x | 1.3x | 1.4x | 5.8x |
| Cobham ($85GU) | 4.9x | 4.5x | | 1.2x | |
| Bae Systems ($BA.) | 0.5x | 0.8x | 0.8x | 0.4x | |
| Rolls-Royce Hldgs ($RR.) | -0.3x | 0.1x | 0.6x | 0.3x | |
| Qinetiq Group ($QQ.) | -1.3x | -1.3x | -2.6x | -1.3x | -1.5x |
| |
|---|
| Median (5 companies) | 0.1x | 0.4x | 0.6x | 0.4x | 2.2x |
|---|
| Boeing Co ($BOE) | -0.3x | -0.1x | 0.1x | 0.2x | 0.4x |
