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Unisys Corp reports 4,465% Net Income growth in 2020 while 31.3% Revenue decline

22 Feb 2021 • About Unisys Corp ($USY) • By InTwits

Unisys Corp reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
  • Unisys Corp is a company in decline: 2020 revenue growth was -31.3%, 5 years revenue CAGR was -7.6%
  • EBITDA Margin is quite volatile: 13.7% in 2020, 15.4% in 2019, 15.9% in 2018, 5.9% in 2017, 7.2% in 2016
  • Unisys Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.3%. At the same time it's a lot of higher than industry average of 2.1%.
  • CAPEX is quite volatile: £0m in FY2020, £1m in FY2019, £0m in FY2018, £0m in FY2017, £0m in FY2016
  • The company has highly profitable business model: ROIC is 1,463.1%
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 31.3%. Annual revenue decline showed slowdown in 20Q4 - revenue dropped on 22.2%. During the last 5 years Revenue growth topped in 2019 at 4.4%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.7 pp from 15.4% to 13.7% in 2020.

Gross Margin increased slightly on 1.2 pp from 22.6% to 23.8% in 2020. SG&A as a % of Revenue increased on 4.8 pp from 13.5% to 18.2% in 2020. During 2016-2020 SG&A as a % of Revenue bottomed in 2018 at 13.1% and was growing since that time.

Net Income margin jumped on 37.6 pp from -0.58% to 37.0% in 2020.

Investments (CAPEX, working capital and M&A)


In 2020 the company had CAPEX/Revenue of 2.9%. The company's CAPEX/Revenue decreased slightly on 1.2 pp from 4.1% in 2017 to 2.9% in 2020. For the last three years the average CAPEX/Revenue was 3.2%. During the last 5 years CAPEX as a % of Revenue topped in 2017 at 4.1% and was declining since that time.

Leverage (Debt)


Debt level is -0.6x Net Debt / EBITDA and 2.6x Debt / EBITDA. Debt decreased slightly on 0.52% while cash surged on 66.8%.

Unisys Corp has no short term refinancing risk: cash is higher than short term debt (642.2%).

Management team


Unisys Corp's CEO is Peter A Altabef. Peter A Altabef has 6 years tenure with the company. Michael M Thomson "Mike" is a the company's CFO. Michael M Thomson "Mike" has spent 1 year at the company.

Financial and operational results


FY ended 31 Dec 2020

Unisys Corp ($USY) key annual financial indicators

mln. $201620172018201920202020/2019
P&L
Revenue2,8212,7422,8252,9492,026-31.3%
Gross Profit559478686666483-27.5%
SG&A456427370397369-6.9%
EBITDA203161448455278-38.8%
EBIT485284
Interest expence275364
Tax57-664
Net Income-48-6576-17751
Stock Based Compensation101113
Balance Sheet
Cash37173460553989966.8%
Accounts Receivable506503509
Accounts Payable189242269
Short Term Debt10611108414067.5%
Long Term Debt194634643650590-9.3%
Cash flow
Capex841121098758-33.4%
Ratios
Revenue growth-6.4%-2.8%3.0%4.4%-31.3%
EBITDA growth62.6%-20.7%178.2%1.5%-38.8%

Gross Margin19.8%17.4%24.3%22.6%23.8%1.2%
EBITDA Margin7.2%5.9%15.9%15.4%13.7%-1.7%
EBIT Margin1.7%0.2%10.1%
SG&A, % of revenue16.2%15.6%13.1%13.5%18.2%4.8%
SBC, % of revenue0.3%0.4%0.5%
Net Income Margin-1.7%-2.4%2.7%-0.6%37.0%37.6%
CAPEX, % of revenue3.0%4.1%3.8%2.9%2.9%-0.1%

ROIC1,463.1%
Net Debt/EBITDA-0.3x-0.6x0.1x0.4x-0.6x-1.0x
Interest coverage ratio (ICR)1.7x0.1x4.4x
Interest expence / Average debt9.1%11.2%9.9%
People
Insider ownership2.4%2.4%2.4%
Employees21,00020,00022,000
Revenue/Employee, th. $134137128

Unisys Corp ($USY) key quoterly financial indicators

mln. $20Q120Q220Q320Q4 YoY change
P&L
Revenue515439495577 -7.1%-22.9%-10.3%-22.2%
EBITDA58386588 -3.0%-64.8%-39.3%-6.2%
Net Income1,015-79-13-173 --400.0%--
Balance Sheet
Cash790782774899 56.5%54.2%81.9%66.8%
Short Term Debt590158100140 1,008.3%112.4%21.1%67.5%
Long Term Debt1019598590 -86.8%-87.6%-84.9%-9.3%
Ratios
Gross Margin21.9%17.1%24.2%30.4% -0.6%-9.7%-1.1%10.1%
EBITDA Margin 11.2% 8.7% 13.0% 15.2% 0.5%-10.3%-6.2%2.6%
Net Income Margin 197.0% -17.9% -2.6% -30.0% 200.5%-22.5%-0.2%-28.5%

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 FY2016 FY2017 FY2018 FY2019 FY2020
Actual Experience ($ACT)2.3%-49.1%195.1%79.7%-
Ideagen ($IDEA)-23.6%33.2%29.2%21.2%
Eagle Eye Solutions Ltd ($EYE)-71.2%24.6%22.8%20.6%
Arcontech Group ($ARC)-7.8%9.2%12.8%4.0%
Oxford Metrics ($OMG)--1.1%8.6%11.7%-14.3%
 
Median (15 companies)11.7%15.9%21.8%6.5%4.0%
Unisys Corp ($USY)--2.8%3.0%4.4%-31.3%


Top companies by Gross margin, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Craneware ($CRW)94.0%93.8%94.9%93.8%93.7%
Eagle Eye Solutions Ltd ($EYE)78.8%88.3%89.3%93.1%93.5%
Ideagen ($IDEA)88.0%89.5%91.2%91.6%-
Netcall ($NET)91.2%91.7%90.2%89.8%88.3%
Dotdigital Group ($DOTD)87.4%86.1%78.9%89.7%86.6%
 
Median (14 companies)61.5%59.8%56.0%78.0%86.6%
Unisys Corp ($USY)19.8%17.4%24.3%22.6%23.8%


Top companies by EBITDA margin, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Dotdigital Group ($DOTD)30.4%31.7%26.9%34.9%37.6%
Arcontech Group ($ARC)14.5%16.7%23.0%32.4%40.4%
Micro Focus International ($MCRO)40.9%38.9%27.5%30.3%-
Craneware ($CRW)32.3%30.4%31.1%30.3%33.4%
Ideagen ($IDEA)23.9%21.8%23.8%23.5%-
 
Median (15 companies)10.9%11.3%12.2%15.4%16.8%
Unisys Corp ($USY)7.2%5.9%15.9%15.4%13.7%


Top companies by CAPEX/Revenue, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Netcall ($NET)2.7%0.7%0.8%4.7%0.6%
International Bus Mach Corp ($IBM)4.5%4.1%4.3%3.1%4.1%
Micro Focus International ($MCRO)0.8%0.9%0.8%1.7%-
Ideagen ($IDEA)1.6%1.1%1.4%1.5%-
Oxford Metrics ($OMG)1.8%5.8%3.9%1.3%1.0%
 
Median (15 companies)1.1%1.1%0.8%1.1%0.6%
Unisys Corp ($USY)3.0%4.1%3.8%2.9%2.9%


Top companies by ROIC, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Craneware ($CRW)27.9%30.0%34.9%33.4%29.8%
Rm ($RM.)254.7%73.8%39.0%31.6%-
Dotdigital Group ($DOTD)28.9%29.3%26.6%25.9%22.8%
Arcontech Group ($ARC)14.5%14.5%17.8%22.9%20.4%
Oxford Metrics ($OMG)16.3%12.7%16.4%14.7%5.0%
 
Median (16 companies)7.1%4.9%5.3%3.5%5.6%
Unisys Corp ($USY)-----


Top companies by Net Debt / EBITDA

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
International Bus Mach Corp ($IBM)1.7x1.8x1.7x3.8x4.1x
Ncc Group ($NCC)0.5x-0.8x0.5x1.0x
Eagle Eye Solutions Ltd ($EYE)-----0.5x
Dotdigital Group ($DOTD)-2.1x-2.0x-1.3x-1.3x-1.2x
Netcall ($NET)-4.3x-4.3x0.3x-0.3x-1.3x
 
Median (8 companies)-1.0x-0.5x-0.4x-0.1x-1.2x
Unisys Corp ($USY)-0.3x-0.6x0.1x0.4x-0.6x