Jabil Inc. reports 15.9% revenue growth in FY2018 and almost no change in EBITDA Margin of 6.0%
09/25/2018 • About Jabil Inc. (
$JBL) • By InTwits
Jabil Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Jabil Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.6%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: $740m in 2018, $514m in 2017, $229m in 2016, $166m in 2015, $258m in 2014
- The company has highly profitable business model: ROIC is 12.5%
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 surged on 15.9%. Revenue growth showed small slowdown in FY18Q4 - it was 14.9% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.4 pp from 10.0% to 7.6% in 2018. During FY2014-FY2018 EBITDA Margin topped in FY2016 at 6.6% and was declining since that time.
Gross Margin showed almost no change in FY2018. During FY2014-FY2018 Gross Margin topped in FY2015 at 8.4% and was declining since that time. SG&A as a % of Revenue showed almost no change in FY2018. During FY2014-FY2018 SG&A as a % of Revenue topped in FY2016 at 5.0% and was declining since that time. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2018.
Net Income margin showed almost no change in FY2018. Net Income margin stuck to a declining trend at -0.32 pp per annum in the last 5 years. The efficient tax rate was 76.8% in FY2018 while the average for the last five years was 43.3%.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 4.7%. CAPEX/Revenue decreased slightly on 0.69 pp from 5.4% in FY2015 to 4.7% in FY2018. It's average level of CAPEX/Revenue for the last three years was 4.5%. The company invested a big chunk of EBITDA (78.8%) to CAPEX to secure its growth.
Accounts receivable as a % of Revenue showed almost no change in FY2018. Inventories as a % of Revenue showed almost no change at 15.6% in FY2018. Accounts payable as a % of Revenue showed almost no change in FY2018.
Jabil Inc. has spent
$110m on M&A in FY2018 which accounts for 0.50% of revenue.
Return on investment
The company operates at good ROIC (12.5%) while ROE is low (4.0%). ROIC increased on 3.1 pp from 9.3% to 12.5% in FY2018. ROE decreased slightly on 1.4 pp from 5.4% to 4.0% in FY2018. During the last 5 years ROE topped in FY2015 at 12.5% and was declining since that time.
Leverage (Debt)
Debt level is 1.0x Net Debt / EBITDA and 1.9x Debt / EBITDA. Net Debt / EBITDA surged on 0.2x from 0.8x to 1.0x in FY2018. Debt surged on 21.2% while cash increased on 5.7%.
Jabil Inc. has no short term refinancing risk: cash is higher than short term debt (4,992.5%).
Valuation and dividends
Jabil Inc.'s trades at EV/EBITDA 4.4x and P/E 52.9x.
The company paid 67.2% of Net Income as dividends in FY2018. Dividends grew on average at -3.1% per annum in the last 5 years).
Management team
The company's CEO is Mark T Mondello. Mark T Mondello is a founder and has 2 years tenure with the company. CEO total compensation was
$11,396,365 in FY2018 which included
$1,150,000 salary. Jabil Inc.'s CFO is Michael K Dastoor "Mike". Michael K Dastoor "Mike" has 1 year tenure at the company.
3.4% of the company is owned by insiders. Insider ownership didn't change in 2018.
At the end of financial year the company had 199,000 employees. The number of employees jumped on 17.1%. Average revenue per employee in FY2018 was
$111,032 and it decreased slightly on 0.98%.
Financial and operational results
FY ended 08/31/2018
Jabil Inc. ($JBL) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 15,762 | 17,899 | 18,353 | 19,063 | 22,095 | 15.9% |
| Gross Profit | 1,026 | 1,503 | 1,528 | 1,546 | 1,707 | 10.4% |
| SG&A | 676 | 863 | 924 | 908 | 1,051 | 15.8% |
| EBITDA | 691 | 1,085 | 1,220 | 1,171 | 1,316 | 12.4% |
| EBIT | 204 | 555 | 523 | 410 | 542 | 32.2% |
| Tax | 74 | 137 | 132 | 129 | 286 | 121.5% |
| Net Income | 241 | 284 | 254 | 129 | 86 | -33.1% |
| Stock Based Compensation | 11 | 63 | 59 | 49 | 91 | 86.8% |
Balance Sheet
|
|---|
| Cash | 1,000 | 914 | 912 | 1,190 | 1,258 | 5.7% |
| Accounts Receivable | 1,209 | 1,467 | 1,360 | 1,397 | 1,693 | 21.2% |
| Inventory | 2,008 | 2,507 | 2,457 | 2,942 | 3,458 | 17.5% |
| Accounts Payable | 3,061 | 3,663 | 3,593 | 4,258 | 4,943 | 16.1% |
| Short Term Debt | 13 | 323 | 46 | 445 | 25 | -94.3% |
| Long Term Debt | 1,670 | 1,336 | 2,074 | 1,633 | 2,494 | 52.7% |
Cash flow
|
|---|
| Capex | 624 | 963 | 924 | 716 | 1,037 | 44.7% |
| Dividends | 68 | 63 | 62 | 60 | 58 | -3.3% |
| Acquisitions | | 178 | 242 | 37 | 110 | 199.5% |
Ratios
|
|---|
| Revenue growth | -8.6% | 13.6% | 2.5% | 3.9% | 15.9% | |
| EBITDA growth | -20.6% | 56.9% | 12.4% | -4.0% | 12.4% | |
|
|---|
| Gross Margin | 6.5% | 8.4% | 8.3% | 8.1% | 7.7% | -0.4% |
| EBITDA Margin | 4.4% | 6.1% | 6.6% | 6.1% | 6.0% | -0.2% |
| EBIT Margin | 1.3% | 3.1% | 2.8% | 2.2% | 2.5% | 0.3% |
| SG&A, % of revenue | 4.3% | 4.8% | 5.0% | 4.8% | 4.8% | -0.0% |
| SBC, % of revenue | 0.1% | 0.3% | 0.3% | 0.3% | 0.4% | 0.2% |
| Net Income Margin | 1.5% | 1.6% | 1.4% | 0.7% | 0.4% | -0.3% |
| CAPEX, % of revenue | 4.0% | 5.4% | 5.0% | 3.8% | 4.7% | 0.9% |
|
|---|
| ROIC | 5.0% | 14.0% | 12.3% | 9.3% | 12.5% | 3.1% |
| ROE | 10.5% | 12.5% | 10.7% | 5.4% | 4.0% | -1.4% |
| Net Debt/EBITDA | 1.0x | 0.7x | 1.0x | 0.8x | 1.0x | 0.2x |
People
|
|---|
| Insider ownership | 3.4% | 3.4% | 3.4% | 3.4% | 3.4% | 0.0% |
| Employees | 142,000 | 161,000 | 138,000 | 170,000 | 199,000 | 17.1% |
| Revenue/Employee, th. $ | 111 | 111 | 133 | 112 | 111 | -1.0% |
Jabil Inc. ($JBL) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 5,586 | 5,301 | 5,437 | 5,772 | | 9.4% | 19.2% | 21.1% | 14.9% |
| EBITDA | 340 | 317 | 314 | 344 | | -4.0% | 15.5% | 34.5% | 11.7% |
| Net Income | 64 | 37 | 43 | -57 | | -27.5% | 80.5% | | -225.5% |
Balance Sheet
|
|---|
| Cash | 746 | 941 | 677 | 1,258 | | -0.2% | 24.6% | -8.9% | 5.7% |
| Short Term Debt | 427 | 27 | 274 | 25 | | 888.5% | -42.6% | -49.3% | -94.3% |
| Long Term Debt | 1,693 | 2,181 | 2,175 | 2,494 | | -18.1% | 6.1% | 32.3% | 52.7% |
Ratios
|
|---|
| Gross Margin | 8.4% | 7.5% | 7.3% | 7.7% | | -0.1% | -0.6% | 0.1% | -0.8% |
| EBITDA Margin | 6.1% | 6.0% | 5.8% | 6.0% | | -0.9% | -0.2% | 0.6% | -0.2% |
| Net Income Margin | 1.1% | 0.7% | 0.8% | -1.0% | | -0.6% | 0.2% | 1.3% | -1.9% |
Peers in Electronic Manufacturing Servi
Below you can find Jabil Inc. benchmarking vs. other companies in Electronic Manufacturing Servi 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| RF Industries, Ltd. ($RFIL) | | 41.9% | -7.8% | -24.0% | 118.4% |
| Alpine 4 Technologies Ltd ($ALPP) | | | 35,893.8% | 5.8% | 71.5% |
| Kemet Corporation ($KEM) | | -1.3% | -10.7% | 3.1% | 58.4% |
| SMTC Corporation ($SMTX) | | -3.5% | -23.9% | -17.1% | 55.2% |
| Deswell Industries, Inc. ($DSWL) | | -7.0% | 17.1% | -0.1% | 36.3% |
| |
|---|
| Median (27 companies) | | 2.6% | 1.2% | 1.9% | 7.1% |
|---|
| Jabil Inc. ($JBL) | | 13.6% | 2.5% | 3.9% | 15.9% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Neonode Inc. ($NEON) | 68.2% | 66.0% | 86.9% | 77.1% | 89.2% |
| Andrea Electronics Corp ($ANDR) | 83.8% | 99.1% | 88.5% | 96.2% | 70.4% |
| Data I/O Corporation ($DAIO) | 53.9% | 52.4% | 55.0% | 58.9% | 59.4% |
| IPG Photonics Corporation ($IPGP) | 54.1% | 54.6% | 54.9% | 56.6% | 54.8% |
| CTS Corporation ($CTS) | 32.2% | 33.2% | 35.4% | 33.2% | 35.1% |
| |
|---|
| Median (27 companies) | 14.7% | 19.4% | 22.2% | 15.8% | 15.2% |
|---|
| Jabil Inc. ($JBL) | 6.5% | 8.4% | 8.3% | 8.1% | 7.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| IPG Photonics Corporation ($IPGP) | 41.5% | 42.4% | 41.8% | 44.7% | 40.9% |
| TE Connectivity Ltd. ($TEL) | 19.7% | 19.3% | 20.9% | 20.4% | 21.4% |
| CTS Corporation ($CTS) | 14.7% | 9.0% | 20.7% | 14.0% | 17.8% |
| Methode Electronics, Inc. ($MEI) | 12.6% | 15.4% | 16.5% | 16.5% | 16.1% |
| RF Industries, Ltd. ($RFIL) | 12.4% | 6.7% | -12.1% | 3.1% | 15.9% |
| |
|---|
| Median (27 companies) | 4.8% | 5.2% | 4.8% | 4.5% | 4.7% |
|---|
| Jabil Inc. ($JBL) | 4.4% | 6.1% | 6.6% | 6.1% | 6.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Maxwell Technologies, Inc. ($MXWL) | 3.7% | 2.5% | 4.9% | 6.6% | 11.3% |
| IPG Photonics Corporation ($IPGP) | 11.5% | 7.8% | 12.6% | 9.0% | 11.0% |
| eMagin Corporation ($EMAN) | 5.8% | 4.7% | 6.7% | 6.2% | 8.8% |
| TE Connectivity Ltd. ($TEL) | 5.3% | 4.9% | 5.3% | 5.6% | 6.7% |
| CTS Corporation ($CTS) | 3.2% | 2.5% | 5.2% | 4.3% | 6.1% |
| |
|---|
| Median (27 companies) | 2.5% | 2.4% | 2.8% | 2.7% | 2.4% |
|---|
| Jabil Inc. ($JBL) | 4.0% | 5.4% | 5.0% | 3.8% | 4.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| RF Industries, Ltd. ($RFIL) | 8.5% | 4.6% | -18.7% | 0.9% | 29.2% |
| IPG Photonics Corporation ($IPGP) | 27.0% | 27.8% | 25.1% | 29.9% | 22.9% |
| Methode Electronics, Inc. ($MEI) | 19.7% | 26.1% | 22.7% | 20.8% | 19.2% |
| TE Connectivity Ltd. ($TEL) | 17.3% | 15.1% | 15.9% | 16.2% | 18.4% |
| Kemet Corporation ($KEM) | -2.8% | 3.8% | 6.2% | 6.9% | 16.9% |
| |
|---|
| Median (29 companies) | 4.4% | 4.9% | 6.2% | 4.2% | 6.4% |
|---|
| Jabil Inc. ($JBL) | 5.0% | 14.0% | 12.3% | 9.3% | 12.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpine 4 Technologies Ltd ($ALPP) | | | | 34.1x | 65.7x |
| SigmaTron International, Inc. ($SGMA) | 2.7x | 4.1x | 2.4x | 3.4x | 16.0x |
| SMTC Corporation ($SMTX) | 3.5x | 1.8x | 1.0x | | 11.3x |
| IEC Electronics Corp. ($IEC) | 7.1x | 14.0x | 2.0x | 5.6x | 4.9x |
| Key Tronic Corporation ($KTCC) | 0.2x | 3.4x | 2.6x | 2.5x | 3.9x |
| |
|---|
| Median (22 companies) | -0.5x | -0.9x | -0.0x | -0.1x | -0.2x |
|---|
| Jabil Inc. ($JBL) | 1.0x | 0.7x | 1.0x | 0.8x | 1.0x |
