Unisys Corp EBITDA jumped on 178% and EBITDA Margin increased on 10.0 pp from 5.9% to 15.9%
12 Feb 2019 • About Unisys Corp (
$USY) • By InTwits
Unisys Corp reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 15.9% in 2018, 5.9% in 2017, 7.2% in 2016, 4.1% in 2015, 9.6% in 2014
- Unisys Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.0%. At the same time it's a lot of higher than industry average of 2.5%.
- CAPEX is quite volatile: ₹29m in FY2018, ₹60m in FY2017, ₹30m in FY2016, ₹63m in FY2015, ₹37m in FY2014
- In the last 5 years the company invested considerably less than D&A: $595m vs. $825m. In 2018 this situation was still the same: CAPEX was 109 while D&A was 164
- It operates with medium-size leverage: Net Debt/EBITDA is 0.1x while industry average is -2.0x
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 3.0%. Revenue growth showed slowdown in 18Q4 - it was 2.2% YoY. During the last 5 years Revenue growth bottomed in 2015 at -10.2% and was accelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 14.4 pp from 24.9% to 10.6% in FY2018.
Gross Margin increased on 6.8 pp from 17.4% to 24.3% in 2018. SG&A as a % of Revenue decreased on 2.4 pp from 15.6% to 13.1% in 2018. During 2014-2018 SG&A as a % of Revenue topped in 2015 at 17.2% and was declining since that time. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in 2018. SBC as a % of Revenue was relatively stable in the last 5 years.
Net Income margin increased on 5.1 pp from -2.4% to 2.7% in 2018. The efficient tax rate was 46.0% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 3.8%. Unisys Corp's CAPEX/Revenue decreased slightly on 1.2 pp from 5.0% in 2015 to 3.8% in 2018. It's average CAPEX/Revenue for the last three years was 3.6%.
Accounts receivable as a % of Revenue showed almost no change in 2018. Accounts payable as a % of Revenue increased slightly on 1.9 pp from 10.7% to 12.6% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.1x and Debt / EBITDA is 1.5x. Net Debt / EBITDA surged on 0.7x from -0.6x to 0.1x in 2018. Debt increased slightly on 1.3% while cash dropped on 17.6%.
Unisys Corp has good short term financial stability: Interest coverage ratio (ICR) is 4.4x. Unisys Corp has no short term refinancing risk: cash is higher than short term debt (6,050.0%).
Average interest expence charged on company's debt was 9.8% in 2018.
Management team
Peter A Altabef is a Unisys Corp's CEO. Peter A Altabef has spent 1 year with the company. CEO total compensation was
$7,042,532 in 2018 which included
$991,000 salary.
2.4% of the company is owned by insiders. Insider ownership didn't change in 2018.
The company has 22,000 employees. The number of employees surged on 10%. Average revenue per employee in 2018 was
$128,409 and it decreased on 6.3%.
Financial and operational results
FY ended 31 Dec 2018
Unisys Corp ($USY) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 3,356 | 3,015 | 2,821 | 2,742 | 2,825 | 3.0% |
| Gross Profit | 778 | 541 | 559 | 478 | 686 | 43.5% |
| SG&A | 554 | 520 | 456 | 427 | 370 | -13.2% |
| EBITDA | 324 | 125 | 203 | 161 | 448 | 178.2% |
| EBIT | 155 | -55 | 48 | 5 | 284 | 6,076.1% |
| Interest expence | 9 | 12 | 27 | 53 | 64 | 21.2% |
| Tax | 86 | 44 | 57 | -6 | 64 | |
| Net Income | 47 | -110 | -48 | -65 | 76 | |
| Stock Based Compensation | 10 | 9 | 10 | 11 | 13 | 17.9% |
Balance Sheet
|
|---|
| Cash | 494 | 365 | 371 | 734 | 605 | -17.6% |
| Accounts Receivable | | | 506 | 503 | 509 | 1.2% |
| Accounts Payable | 263 | 219 | 189 | 242 | 269 | 11.2% |
| Short Term Debt | 2 | 77 | 106 | 11 | 10 | -7.4% |
| Long Term Debt | 222 | 236 | 194 | 634 | 643 | 1.4% |
Cash flow
|
|---|
| Capex | 139 | 152 | 84 | 112 | 109 | -3.1% |
| Dividends | 4 | | | | | |
Ratios
|
|---|
| Revenue growth | -2.9% | -10.2% | -6.4% | -2.8% | 3.0% | |
| EBITDA growth | -14.7% | -61.4% | 62.6% | -20.7% | 178.2% | |
|
|---|
| Gross Margin | 23.2% | 17.9% | 19.8% | 17.4% | 24.3% | 6.8% |
| EBITDA Margin | 9.6% | 4.1% | 7.2% | 5.9% | 15.9% | 10.0% |
| EBIT Margin | 4.6% | -1.8% | 1.7% | 0.2% | 10.1% | 9.9% |
| SG&A, % of revenue | 16.5% | 17.2% | 16.2% | 15.6% | 13.1% | -2.4% |
| SBC, % of revenue | 0.3% | 0.3% | 0.3% | 0.4% | 0.5% | 0.1% |
| Net Income Margin | 1.4% | -3.6% | -1.7% | -2.4% | 2.7% | 5.1% |
| CAPEX, % of revenue | 4.1% | 5.0% | 3.0% | 4.1% | 3.8% | -0.2% |
|
|---|
| Net Debt/EBITDA | -0.8x | -0.4x | -0.3x | -0.6x | 0.1x | 0.7x |
| Interest expence / Average debt | 4.1% | 4.4% | 8.9% | 11.2% | 9.8% | -1.4% |
People
|
|---|
| Insider ownership | 2.4% | 2.4% | 2.4% | 2.4% | 2.4% | 0.0% |
| Employees | 23,200 | 23,000 | 21,000 | 20,000 | 22,000 | 10.0% |
| Revenue/Employee, th. $ | 145 | 131 | 134 | 137 | 128 | -6.3% |
Unisys Corp ($USY) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 708 | 667 | 688 | 761 | | 6.6% | 0.2% | 3.3% | 2.2% |
| EBITDA | 144 | 94 | 96 | 114 | | 137.7% | 26.5% | 768.5% | 14.4% |
| Net Income | 41 | 4 | 6 | 25 | | | | | -50.5% |
Balance Sheet
|
|---|
| Cash | 656 | 584 | 516 | 605 | | 117.4% | 2.3% | -13.8% | -17.6% |
| Short Term Debt | 11 | 10 | 10 | 10 | | -90.0% | -9.7% | -12.4% | -7.4% |
| Long Term Debt | 636 | 638 | 640 | 643 | | 226.1% | 1.3% | 1.4% | 1.4% |
Ratios
|
|---|
| Gross Margin | 28.4% | 22.9% | 22.3% | 23.4% | | 7.5% | 5.1% | 9.4% | 0.7% |
| EBITDA Margin | 20.3% | 14.1% | 14.0% | 15.0% | | 11.2% | 2.9% | 12.3% | 1.6% |
| Net Income Margin | 5.7% | 0.6% | 0.9% | 3.3% | | 10.7% | 6.9% | 7.1% | -3.5% |
Peers in Software & Computer Services
Below we provide Unisys Corp benchmarking against other companies in Software & Computer Services 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 |
|---|
| Pinnacle Technology Group ($PINN) | -17.1% | | | 108.6% | |
| Wandisco ($WAND) | 40.0% | -2.0% | 3.5% | 72.6% | |
| Microgen ($MCGN) | -0.0% | 7.2% | 34.5% | 45.7% | |
| Lombard Risk Management ($LRM) | 21.6% | 5.4% | 10.3% | 44.8% | |
| Zoo Digital Group ($ZOO) | | 19.9% | 1.5% | 41.7% | 73.2% |
| |
|---|
| Median (39 companies) | 0.8% | 6.3% | 11.7% | 12.4% | 26.9% |
|---|
| Unisys Corp ($USY) | | -10.2% | -6.4% | -2.8% | 3.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lombard Risk Management ($LRM) | 99.2% | 98.6% | 99.3% | 99.6% | |
| Netcall ($NET) | 91.0% | 90.9% | 91.2% | 91.7% | 90.2% |
| Wandisco ($WAND) | 80.7% | 93.2% | 88.1% | 90.0% | |
| Eleco ($ELCO) | 87.8% | 88.9% | 86.7% | 87.9% | |
| Dotdigital Group ($DOTD) | 90.5% | 89.3% | 87.4% | 86.1% | 78.9% |
| |
|---|
| Median (33 companies) | 57.6% | 58.8% | 60.0% | 57.0% | 43.4% |
|---|
| Unisys Corp ($USY) | 23.2% | 17.9% | 19.8% | 17.4% | 24.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rightster Group ($RSTR) | -146.3% | -64.1% | -19.9% | 114.2% | |
| Dotdigital Group ($DOTD) | 29.2% | 32.0% | 30.4% | 31.7% | 26.9% |
| Sopheon ($SPE) | 6.8% | 19.8% | 22.6% | 27.9% | |
| Mail.Ru Group Ltd ($61HE) | 50.5% | 34.6% | 35.2% | 25.1% | |
| Gresham Computing ($GHT) | 8.8% | 18.1% | 20.6% | 22.6% | |
| |
|---|
| Median (39 companies) | 11.1% | 12.4% | 10.3% | 11.0% | 9.7% |
|---|
| Unisys Corp ($USY) | 9.6% | 4.1% | 7.2% | 5.9% | 15.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Actual Experience ($ACT) | 2.6% | 6.0% | 39.9% | 48.7% | 3.6% |
| Csf Group ($CSFG) | 2.4% | 7.1% | 4.9% | 8.5% | 16.5% |
| Pennant International Group ($PEN) | 1.4% | 0.2% | 6.3% | 7.1% | |
| Nasstar ($NASA) | 2.1% | 5.2% | 8.9% | 6.5% | |
| Oxford Metrics ($OMG) | 2.8% | 2.4% | 1.8% | 5.8% | 3.9% |
| |
|---|
| Median (39 companies) | 1.7% | 1.1% | 1.2% | 1.3% | 0.9% |
|---|
| Unisys Corp ($USY) | 4.1% | 5.0% | 3.0% | 4.1% | 3.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rm ($RM.) | 130.8% | 289.2% | 254.7% | 73.8% | 39.0% |
| Triad Group ($TRD) | 24.5% | 61.5% | 74.4% | 61.1% | 41.0% |
| Sopheon ($SPE) | -10.5% | 14.7% | 22.7% | 32.3% | |
| Dotdigital Group ($DOTD) | 28.5% | 31.4% | 28.9% | 29.3% | 26.6% |
| International Bus Mach Corp ($IBM) | 31.6% | 29.7% | 21.5% | 19.5% | 19.8% |
| |
|---|
| Median (41 companies) | 9.4% | 4.3% | 7.1% | 6.4% | 7.5% |
|---|
| Unisys Corp ($USY) | | | | | |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Datatec ($DTC) | 0.3x | 0.4x | 1.1x | 10.2x | |
| Progility ($PGY) | 1.8x | 12.8x | 6.8x | 3.9x | |
| Zoo Digital Group ($ZOO) | | | 38.3x | 3.2x | 0.9x |
| Statpro Group ($SOG) | -0.3x | -0.2x | | 3.0x | |
| Idox ($IDOX) | 1.0x | 1.3x | 1.2x | 2.2x | |
| |
|---|
| Median (31 companies) | -0.3x | -0.6x | -0.9x | -0.5x | -0.4x |
|---|
| Unisys Corp ($USY) | -0.8x | -0.4x | -0.3x | -0.6x | 0.1x |
