Boeing Co Net Income dropped on 106% and EBITDA Margin dropped on 13.2 pp from 13.9% to 0.74%
29 Jan 2020 • About Boeing Co (
$BOE) • By InTwits
Boeing Co reported 2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Boeing Co is a company in decline: 2019 revenue growth was -24.3%, 5 years revenue CAGR was -3.3%
- EBITDA Margin is quite volatile: 0.7% in 2019, 13.9% in 2018, 13.2% in 2017, 8.2% in 2016, 9.7% in 2015
- 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 8.9%.
- CAPEX is quite volatile: £39m in FY2019, £28m in FY2018, £22m in FY2017, £28m in FY2016, £8m in FY2015
- The company has unprofitable business model: ROIC is -10.8%
- It operates with high leverage: Net Debt/EBITDA is 33.6x while industry average is 11.1x
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 dropped on 24.3%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 13.2 pp from 13.9% to 0.74% in 2019.
Gross Margin dropped on 13.6 pp from 19.4% to 5.8% in 2019. SG&A as a % of Revenue increased slightly on 0.59 pp from 4.5% to 5.1% in 2019. SG&A as a % of Revenue followed a growing trend at 0.36 pp per annum in 2015-2019.
Net Income margin dropped on 11.2 pp from 10.3% to -0.83% in 2019.
Investments (CAPEX, working capital and M&A)
Boeing Co's CAPEX/Revenue was 2.4% in 2019. Boeing Co's CAPEX/Revenue showed almost no change from 2016 to 2019. It's average CAPEX/Revenue for the last three years was 2.0%. Battling declining revenue the company made large investments to CAPEX (323% of EBITDA) but that didn't help at least in this year.
Leverage (Debt)
Debt level is 33.6x Net Debt / EBITDA and 50.3x Debt / EBITDA. Net Debt / EBITDA jumped on 33.2x from 0.4x to 33.6x in 2019. Debt jumped on 106% while cash jumped on 24.2%. Net Debt/EBITDA followed a growing trend in the last 5 years.
Boeing Co has no short term refinancing risk: cash is higher than short term debt (124.9%).
Management team
David L Calhoun "Dave" is a Boeing Co's CEO. David L Calhoun "Dave" is a founder and has spent 0 years with the company. The company's CFO is Gregory D Smith "Greg". Gregory D Smith "Greg" has 8 years tenure at the company.
Financial and operational results
FY ended 31 Dec 2019
Boeing Co ($BOE) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 96,114 | 94,571 | 93,392 | 101,127 | 76,559 | -24.3% |
| Gross Profit | 14,026 | 13,781 | 17,326 | 19,637 | 4,466 | -77.3% |
| SG&A | 3,525 | 3,616 | 4,094 | 4,567 | 3,909 | -14.4% |
| EBITDA | 9,276 | 7,744 | 12,347 | 14,101 | 567 | -96.0% |
| EBIT | | | | 11,987 | | |
| Interest expence | | | | 475 | | |
| Tax | | | | 1,144 | | |
| Net Income | 5,176 | 4,895 | 8,197 | 10,460 | -636 | -106.1% |
| Stock Based Compensation | | | | 202 | | |
Balance Sheet
|
|---|
| Cash | 11,302 | 8,801 | 8,813 | 7,637 | 9,485 | 24.2% |
| Accounts Receivable | | | | 3,879 | | |
| Inventory | | | | 62,567 | | |
| Accounts Payable | | | | 12,916 | | |
| Short Term Debt | 1,234 | 384 | 1,335 | 3,190 | 7,592 | 138.0% |
| Long Term Debt | 8,730 | 9,568 | 9,782 | 10,657 | 20,940 | 96.5% |
Cash flow
|
|---|
| Capex | 2,450 | 2,613 | 1,739 | 1,722 | 1,834 | 6.5% |
| Dividends | | | | 3,946 | | |
| Acquisitions | | | | 3,230 | | |
Ratios
|
|---|
| Revenue growth | 5.9% | -1.6% | -1.2% | 8.3% | -24.3% | |
| EBITDA growth | -1.1% | -16.5% | 59.4% | 14.2% | -96.0% | |
|
|---|
| Gross Margin | 14.6% | 14.6% | 18.6% | 19.4% | 5.8% | -13.6% |
| EBITDA Margin | 9.7% | 8.2% | 13.2% | 13.9% | 0.7% | -13.2% |
| EBIT Margin | | | | 11.9% | |
| SG&A, % of revenue | 3.7% | 3.8% | 4.4% | 4.5% | 5.1% | 0.6% |
| SBC, % of revenue | | | | 0.2% | |
| Net Income Margin | 5.4% | 5.2% | 8.8% | 10.3% | -0.8% | -11.2% |
| CAPEX, % of revenue | 2.5% | 2.8% | 1.9% | 1.7% | 2.4% | 0.7% |
|
|---|
| ROIC | 38.9% | 38.5% | 82.7% | 78.8% | -10.8% | -89.7% |
| ROE | 69.0% | 136.9% | 1,398.8% | 1,048.6% | | |
| Net Debt/EBITDA | -0.1x | 0.1x | 0.2x | 0.4x | 33.6x | 33.2x |
| Interest expence / Average debt | | | | 3.8% | | |
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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Velocity Composites Plc ($VEL) | | 0.6% | 46.2% | 14.5% | -0.7% |
| Qinetiq Group ($QQ.) | -2.4% | -1.1% | 3.6% | 6.4% | |
| Chemring Group ($BC88) | | 26.5% | 14.8% | -45.7% | 12.7% |
| |
|---|
| Median (3 companies) | 0.4% | -0.2% | 7.3% | 6.4% | 6.0% |
|---|
| Boeing Co ($BOE) | | -1.6% | -1.2% | 8.3% | -24.3% |
Top companies by Gross margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Velocity Composites Plc ($VEL) | 24.0% | 23.8% | 18.4% | 18.3% | 21.7% |
| |
|---|
| Median (1 company) | 25.9% | 22.1% | 19.5% | 18.3% | 21.7% |
|---|
| Boeing Co ($BOE) | 14.6% | 14.6% | 18.6% | 19.4% | 5.8% |
Top companies by EBITDA margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Qinetiq Group ($QQ.) | 17.9% | 13.6% | 20.6% | 20.8% | |
| Chemring Group ($BC88) | 11.4% | 14.6% | 10.6% | 4.7% | 18.1% |
| Velocity Composites Plc ($VEL) | 8.0% | 4.4% | -0.9% | -3.4% | -0.9% |
| |
|---|
| Median (3 companies) | 12.1% | 8.9% | 12.0% | 4.7% | 8.6% |
|---|
| Boeing Co ($BOE) | 9.7% | 8.2% | 13.2% | 13.9% | 0.7% |
Top companies by CAPEX/Revenue, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Chemring Group ($BC88) | 2.2% | 2.2% | 2.3% | 6.3% | 12.2% |
| Qinetiq Group ($QQ.) | 3.2% | 3.8% | 3.9% | 5.5% | |
| Velocity Composites Plc ($VEL) | 1.7% | 0.8% | 1.3% | 0.9% | 0.6% |
| |
|---|
| Median (3 companies) | 2.7% | 3.0% | 2.8% | 5.5% | 6.4% |
|---|
| Boeing Co ($BOE) | 2.5% | 2.8% | 1.9% | 1.7% | 2.4% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Qinetiq Group ($QQ.) | 26.8% | 24.7% | 29.9% | 20.6% | |
| Chemring Group ($BC88) | 1.4% | 5.8% | 3.3% | -3.7% | 7.9% |
| Velocity Composites Plc ($VEL) | 93.2% | 32.2% | -7.9% | -11.1% | -6.9% |
| Rolls-Royce Hldgs ($RR.) | 15.3% | -1.0% | 14.8% | | |
| Cobham ($85GU) | 0.5% | -36.8% | 5.9% | | |
| |
|---|
| Median (6 companies) | 21.0% | 15.3% | 10.3% | -3.7% | 0.5% |
|---|
| Boeing Co ($BOE) | 38.9% | 38.5% | 82.7% | 78.8% | -10.8% |
Top companies by Net Debt / EBITDA
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Chemring Group ($BC88) | 3.6x | 1.3x | 1.4x | 5.8x | 1.2x |
| Qinetiq Group ($QQ.) | -1.3x | -2.6x | -1.3x | -1.5x | |
| |
|---|
| Median (2 companies) | 0.4x | 0.6x | 0.4x | 2.2x | 1.2x |
|---|
| Boeing Co ($BOE) | -0.1x | 0.1x | 0.2x | 0.4x | 33.6x |
