General Electric Co. reports 21.7% revenue decline in FY2019
29 Jan 2020 • About General Electric Co. (
$GEC) • By InTwits
General Electric Co. reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- General Electric Co. is a company in decline: FY2019 revenue growth was -21.7%, 5 years revenue CAGR was -3.9%
- EBITDA Margin is declining: in FY2019 vs. -9.9% in FY2018 vs. 10.4% in FY2015
- The company has potentially unprofitable business model: ROIC is 0.5%
- It operates with high leverage: Net Debt/EBITDA is 2.8x while industry average is 1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 21.7%.
Gross Margin increased slightly on 1.3 pp from 19.1% to 20.3% in FY2019. During FY2015-FY2019 Gross Margin bottomed in FY2017 at 9.5% and was growing since that time. SG&A as a % of Revenue showed almost no change in FY2019. SG&A as a % of Revenue stuck to a declining trend at -0.21 pp per annum in the last 5 years.
Net Income margin surged on 13.2 pp from -18.4% to -5.2% in FY2019.
Return on investment
The company operates at low but positive ROIC (0.5%) and negative ROE (-18.4%). ROIC jumped on 11.9 pp from -11.5% to 0.45% in FY2019. ROE surged on 34.1 pp from -52.4% to -18.4% in FY2019.
Management team
General Electric Co.'s CEO is H Lawrence Culp Jr "Larry". H Lawrence Culp Jr "Larry" is a founder and has 1 year tenure with the company. Jamie S Miller is a the company's CFO. Jamie S Miller has spent 2 years at the company.
Financial and operational results
FY ended 30 Nov -0001
General Electric Co. ($GEC) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 115,158 | 119,687 | 120,468 | 121,616 | 95,215 | -21.7% |
| Gross Profit | 27,559 | 25,617 | 11,497 | 23,173 | 19,360 | -16.5% |
| SG&A | 17,831 | 18,377 | 18,280 | 18,111 | 13,949 | -23.0% |
| EBITDA | 11,967 | 15,260 | -3,651 | -12,091 | | |
| EBIT | | | | -20,315 | | |
| Tax | | | | 583 | | |
| Net Income | -6,126 | 8,831 | -5,786 | -22,355 | -4,979 | |
Balance Sheet
|
|---|
| Cash | 70,483 | 48,129 | 43,299 | 35,020 | 84,900 | 142.4% |
| Accounts Receivable | | | | 19,874 | | |
| Inventory | | | | 19,271 | | |
| Accounts Payable | | | | 17,153 | | |
| Short Term Debt | 49,860 | 30,714 | 24,036 | 12,849 | | |
| Long Term Debt | 147,742 | 105,497 | 110,555 | 97,109 | 94,100 | -3.1% |
Cash flow
|
|---|
| Capex | 7,309 | 7,199 | 7,371 | 7,695 | | |
| Dividends | | | | 4,474 | | |
| Acquisitions | | | | 90 | | |
Ratios
|
|---|
| Revenue growth | -1.1% | 3.9% | 0.7% | 1.0% | -21.7% | |
| EBITDA growth | -22.9% | 27.5% | -123.9% | 231.2% | | |
|
|---|
| Gross Margin | 23.9% | 21.4% | 9.5% | 19.1% | 20.3% | 1.3% |
| EBITDA Margin | 10.4% | 12.7% | -3.0% | -9.9% | |
| EBIT Margin | | | | -16.7% | |
| SG&A, % of revenue | 15.5% | 15.4% | 15.2% | 14.9% | 14.7% | -0.2% |
| Net Income Margin | -5.3% | 7.4% | -4.8% | -18.4% | -5.2% | 13.2% |
| CAPEX, % of revenue | 6.3% | 6.0% | 6.1% | 6.3% | | |
|
|---|
| ROIC | 2.0% | 4.0% | -4.1% | -11.5% | 0.5% | 11.9% |
| ROE | -5.4% | 9.4% | -8.9% | -52.4% | -18.4% | 34.1% |
| Net Debt/EBITDA | 10.6x | 5.8x | | | |
People
|
|---|
| Insider ownership | | | | 0.8% | | |
| Employees | | | | 283,000 | | |
| Revenue/Employee, th. $ | | | | 430 | | |
Peers in General Industrials
Below you can find General Electric Co. benchmarking vs. other companies in General Industrials 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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Coral Products ($CRU) | 1.2% | 7.4% | 14.5% | 9.2% | |
| Smurfit Kappa Group ($SKG) | 0.3% | 0.6% | 4.9% | 4.5% | |
| Honeywell International Inc ($HON) | -4.3% | 1.9% | 3.1% | 3.1% | |
| Barloworld ($BWO) | 1.0% | -1.0% | -0.2% | 2.4% | |
| Thyssenkrupp Ag ($0O1C) | 3.8% | -8.2% | 5.6% | -16.1% | |
| |
|---|
| Median (5 companies) | 1.2% | 0.6% | 6.2% | 3.1% | |
|---|
| General Electric Co. ($GEC) | | 3.9% | 0.7% | 1.0% | -21.7% |
Top companies by Gross margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Coral Products ($CRU) | 29.6% | 33.1% | 34.1% | 34.6% | |
| Smurfit Kappa Group ($SKG) | 30.0% | 30.3% | 29.8% | 33.1% | |
| Honeywell International Inc ($HON) | 30.7% | 30.9% | 32.0% | 30.5% | |
| Thyssenkrupp Ag ($0O1C) | 16.1% | 16.9% | 16.8% | 14.2% | |
| |
|---|
| Median (4 companies) | 29.6% | 30.3% | 29.8% | 31.8% | |
|---|
| General Electric Co. ($GEC) | 23.9% | 21.4% | 9.5% | 19.1% | 20.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Honeywell International Inc ($HON) | 20.0% | 19.6% | 20.4% | 18.7% | |
| Smurfit Kappa Group ($SKG) | 14.3% | 14.9% | 14.0% | 16.3% | |
| Barloworld ($BWO) | 10.3% | 10.7% | 11.0% | 14.6% | |
| Coral Products ($CRU) | 8.5% | 7.1% | 8.7% | 5.9% | |
| Thyssenkrupp Ag ($0O1C) | 5.5% | 6.3% | 5.5% | 3.3% | |
| |
|---|
| Median (5 companies) | 10.3% | 14.3% | 11.0% | 14.6% | |
|---|
| General Electric Co. ($GEC) | 10.4% | 12.7% | -3.0% | -9.9% | |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Smurfit Kappa Group ($SKG) | 5.3% | 5.2% | 5.2% | 5.9% | |
| Coral Products ($CRU) | 2.5% | 8.9% | 4.3% | 3.9% | |
| Thyssenkrupp Ag ($0O1C) | 2.7% | 3.1% | 3.3% | 2.3% | |
| Honeywell International Inc ($HON) | 2.8% | 2.8% | 2.5% | 2.0% | |
| Barloworld ($BWO) | 2.2% | 1.6% | 1.2% | 1.0% | |
| |
|---|
| Median (5 companies) | 2.8% | 3.1% | 3.3% | 2.3% | |
|---|
| General Electric Co. ($GEC) | 6.3% | 6.0% | 6.1% | 6.3% | |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Honeywell International Inc ($HON) | 23.2% | 19.6% | 19.0% | 18.1% | |
| Smurfit Kappa Group ($SKG) | 13.9% | 14.1% | 13.4% | 16.3% | |
| Barloworld ($BWO) | 12.9% | 12.7% | 13.2% | 13.2% | |
| Thyssenkrupp Ag ($0O1C) | 9.5% | 12.7% | 12.2% | 5.2% | |
| Coral Products ($CRU) | 6.7% | 3.2% | 3.6% | -0.9% | |
| |
|---|
| Median (6 companies) | 12.9% | 12.7% | 12.7% | 13.2% | |
|---|
| General Electric Co. ($GEC) | 2.0% | 4.0% | -4.1% | -11.5% | 0.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Coral Products ($CRU) | 2.7x | 2.5x | 3.0x | 5.3x | |
| Thyssenkrupp Ag ($0O1C) | 1.8x | 1.8x | 1.3x | 2.5x | |
| Smurfit Kappa Group ($SKG) | 2.6x | 2.4x | 2.4x | 2.1x | |
| Honeywell International Inc ($HON) | 0.9x | 1.0x | 1.3x | 0.9x | |
| Barloworld ($BWO) | 1.7x | 1.2x | 0.8x | 0.4x | |
| |
|---|
| Median (5 companies) | 1.3x | 1.2x | 1.3x | 2.1x | |
|---|
