General Electric Co. CAPEX increased on 4.4% and Revenue increased slightly on 0.95%
31 Jan 2019 • About General Electric Co. (
$GEC) • By InTwits
General Electric Co. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -9.9%
- EBITDA Margin is quite volatile: -9.9% in 2018, -3.0% in 2017, 12.7% in 2016, 10.4% in 2015, 13.3% in 2014
- General Electric Co. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.2%. At the same time it's a lot of higher than industry average of 4.1%.
- CAPEX is quite volatile: ₹6,512m in FY2018, ₹4,489m in FY2017, ₹2,619m in FY2016, ₹2,509m in FY2015, ₹4,081m in FY2014
- The company has unprofitable business model: ROIC is -11.5%
- It operates with high leverage: Net Debt/EBITDA is 3.6x while industry average is 1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
General Electric Co.'s Revenue increased slightly on 0.95%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 6.9 pp from -3.0% to -9.9% in 2018. EBITDA Margin stuck to a declining trend at -6.0 pp per annum in the last 5 years.
Gross Margin increased on 9.5 pp from 9.5% to 19.1% in 2018. During the last 5 years Gross Margin bottomed in 2017 at 9.5%. SG&A as a % of Revenue showed almost no change in 2018. During 2014-2018 SG&A as a % of Revenue topped in 2015 at 15.5% and was declining since that time.
Net Income margin dropped on 13.6 pp from -4.8% to -18.4% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 6.3% in 2018. The company showed almost no change in CAPEX/Revenue from 2015 to 2018. Average CAPEX/Revenue for the last three years was 6.2%.
General Electric Co. has spent
$90m on M&A in 2018 which accounts for 0.074% of revenue.
Return on investment
The company operates at negative ROIC (-11.5%) and ROE (-52.4%). ROIC decreased on 7.4 pp from -4.1% to -11.5% in 2018. ROE dropped on 43.5 pp from -8.9% to -52.4% in 2018.
Leverage (Debt)
Debt level is 3.6x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2018. Debt dropped on 18.3% while cash dropped on 19.1%.
General Electric Co. has no short term refinancing risk: cash is higher than short term debt (272.6%).
The company paid
$4,474 despite negative Net Income of $-22,355 in 2018.
Management team
The company's CEO H Lawrence Culp Jr "Larry" has spent 1 year with the company. CEO total compensation was
$32,042,117 in 2018 which included
$2,125,000 salary and
$937,500 annual bonus. The company's CFO is Jamie S Miller. Jamie S Miller has 2 years tenure at the company.
The company has 0.82% shares owned by insiders.
At the end of financial year the company had 283,000 employees. Average revenue per employee in 2018 was
$429,739.
Financial and operational results
FY ended 31 Dec 2018
General Electric Co. ($GEC) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 116,406 | 115,158 | 119,687 | 120,468 | 121,616 | 1.0% |
| Gross Profit | 28,534 | 27,559 | 25,617 | 11,497 | 23,173 | 101.6% |
| SG&A | 16,848 | 17,831 | 18,377 | 18,280 | 18,111 | -0.9% |
| EBITDA | 15,524 | 11,967 | 15,260 | -3,651 | -12,091 | |
| EBIT | | | | | -20,315 | |
| Tax | | | | | 583 | |
| Net Income | 15,233 | -6,126 | 8,831 | -5,786 | -22,355 | |
Balance Sheet
|
|---|
| Cash | 70,025 | 70,483 | 48,129 | 43,299 | 35,020 | -19.1% |
| Accounts Receivable | | | | | 19,874 | |
| Inventory | | | | | 19,271 | |
| Accounts Payable | | | | | 17,153 | |
| Short Term Debt | 70,425 | 49,860 | 30,714 | 24,036 | 12,849 | -46.5% |
| Long Term Debt | 186,596 | 147,742 | 105,497 | 110,555 | 97,109 | -12.2% |
Cash flow
|
|---|
| Capex | 7,134 | 7,309 | 7,199 | 7,371 | 7,695 | 4.4% |
| Dividends | | | | | 4,474 | |
| Acquisitions | | | | | 90 | |
Ratios
|
|---|
| Revenue growth | 5.7% | -1.1% | 3.9% | 0.7% | 1.0% | |
| EBITDA growth | -34.4% | -22.9% | 27.5% | -123.9% | 231.2% | |
|
|---|
| Gross Margin | 24.5% | 23.9% | 21.4% | 9.5% | 19.1% | 9.5% |
| EBITDA Margin | 13.3% | 10.4% | 12.7% | -3.0% | -9.9% | -6.9% |
| EBIT Margin | | | | | -16.7% |
| SG&A, % of revenue | 14.5% | 15.5% | 15.4% | 15.2% | 14.9% | -0.3% |
| Net Income Margin | 13.1% | -5.3% | 7.4% | -4.8% | -18.4% | -13.6% |
| CAPEX, % of revenue | 6.1% | 6.3% | 6.0% | 6.1% | 6.3% | 0.2% |
|
|---|
| ROIC | 2.5% | 2.0% | 4.0% | -4.1% | -11.5% | -7.4% |
| ROE | 11.8% | -5.4% | 9.4% | -8.9% | -52.4% | -43.5% |
| Net Debt/EBITDA | 12.0x | 10.6x | 5.8x | | |
People
|
|---|
| Insider ownership | | | | | 0.8% | |
| Employees | | | | | 283,000 | |
| Revenue/Employee, th. $ | | | | | 430 | |
Peers in General Industrials
Below we provide General Electric Co. benchmarking against other companies in General Industrials 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 |
|---|
| Coral Products ($CRU) | | 1.2% | 7.4% | 14.5% | 9.2% |
| Macfarlane Group ($MACF) | 6.9% | 10.0% | 6.3% | 9.0% | |
| Robinson ($RBN) | | 3.8% | -5.8% | 8.6% | |
| Jardine Strategic Hldgs ($88EI) | -1.3% | -8.8% | 0.5% | 6.8% | |
| Press Corp ($PESD) | 20.3% | 17.8% | 17.2% | 6.2% | |
| |
|---|
| Median (9 companies) | 3.2% | 1.2% | 0.6% | 6.2% | 2.4% |
|---|
| General Electric Co. ($GEC) | | -1.1% | 3.9% | 0.7% | 1.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Press Corp ($PESD) | 56.0% | 54.5% | 59.6% | 59.1% | |
| Coral Products ($CRU) | 23.7% | 29.6% | 33.1% | 34.1% | 34.6% |
| Honeywell International Inc ($HON) | 28.2% | 30.7% | 30.9% | 32.0% | |
| Macfarlane Group ($MACF) | 30.9% | 31.5% | 31.0% | 30.8% | |
| Smurfit Kappa Group ($SKG) | 29.5% | 30.0% | 30.3% | 29.8% | |
| |
|---|
| Median (9 companies) | 25.4% | 29.6% | 30.3% | 29.8% | 24.4% |
|---|
| General Electric Co. ($GEC) | 24.5% | 23.9% | 21.4% | 9.5% | 19.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Press Corp ($PESD) | 29.2% | 25.3% | 27.7% | 35.2% | |
| Jardine Strategic Hldgs ($88EI) | 13.5% | 15.1% | 21.4% | 27.4% | |
| Honeywell International Inc ($HON) | 16.8% | 20.0% | 19.6% | 20.4% | |
| Smurfit Kappa Group ($SKG) | 12.7% | 14.3% | 14.9% | 14.0% | |
| Barloworld ($BWO) | 10.0% | 10.3% | 10.7% | 11.0% | 14.6% |
| |
|---|
| Median (9 companies) | 12.7% | 10.3% | 14.3% | 11.0% | 5.9% |
|---|
| General Electric Co. ($GEC) | 13.3% | 10.4% | 12.7% | -3.0% | -9.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Press Corp ($PESD) | 12.1% | 9.0% | 8.8% | 11.3% | |
| Robinson ($RBN) | 3.5% | 3.7% | 6.5% | 8.8% | |
| Smurfit Kappa Group ($SKG) | 5.3% | 5.3% | 5.2% | 5.2% | |
| Coral Products ($CRU) | 2.2% | 2.5% | 8.9% | 4.3% | 3.9% |
| Jardine Strategic Hldgs ($88EI) | 4.1% | 2.9% | 3.1% | 3.3% | |
| |
|---|
| Median (9 companies) | 2.9% | 2.8% | 3.1% | 3.3% | 2.3% |
|---|
| General Electric Co. ($GEC) | 6.1% | 6.3% | 6.0% | 6.1% | 6.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Honeywell International Inc ($HON) | 21.3% | 23.2% | 19.6% | 19.0% | |
| Macfarlane Group ($MACF) | 19.0% | 17.8% | 16.9% | 15.4% | |
| Smurfit Kappa Group ($SKG) | 11.8% | 13.9% | 14.1% | 13.4% | |
| Barloworld ($BWO) | 14.1% | 12.9% | 12.7% | 13.2% | 13.2% |
| Thyssenkrupp Ag ($0O1C) | 10.8% | 9.5% | 12.7% | 12.2% | 5.2% |
| |
|---|
| Median (9 companies) | 11.8% | 12.9% | 12.7% | 12.7% | 5.2% |
|---|
| General Electric Co. ($GEC) | 2.5% | 2.0% | 4.0% | -4.1% | -11.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Coral Products ($CRU) | 3.4x | 2.7x | 2.5x | 3.0x | 5.3x |
| Smurfit Kappa Group ($SKG) | 2.7x | 2.6x | 2.4x | 2.4x | |
| Robinson ($RBN) | 1.0x | 0.9x | 1.2x | 2.2x | |
| Honeywell International Inc ($HON) | 0.3x | 0.9x | 1.0x | 1.3x | |
| Thyssenkrupp Ag ($0O1C) | 2.0x | 1.8x | 1.8x | 1.3x | 2.5x |
| |
|---|
| Median (9 companies) | 1.3x | 1.3x | 1.2x | 1.3x | 2.5x |
|---|
