Amphenol Corporation Net Income jumped on 85.2% and EBITDA Margin increased slightly on 0.62 pp from 23.6% to 24.2%
01/23/2019 • About Amphenol Corporation (
$APH) • By InTwits
Amphenol Corporation reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Amphenol Corporation is a growth stock: 2018 revenue growth was 17.0%, 5 year revenue CAGR was 12.2% at 2018 ROIC 21.1%
- EBITDA Margin is relatively stable: 24.2% in 2018 vs. 23.6% in 2017 vs. 22.5% in 2014
- Amphenol Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: $305m in 2018, $111m in 2017, $118m in 2016, $85m in 2015, $103m in 2014
- The company has highly profitable business model: ROIC is 21.1%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.2x while industry average is -0.7x
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 jumped on 17.0%. Revenue growth showed slowdown in 18Q4 - it was 14.4% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.62 pp from 23.6% to 24.2% in 2018. EBITDA Margin stuck to a growing trend at 0.41 pp per annum in the last 5 years.
Gross Margin decreased slightly on 0.58 pp from 32.9% to 32.4% in 2018. During 2014-2018 Gross Margin topped in 2017 at 32.9%. SG&A as a % of Revenue decreased slightly on 0.76 pp from 9.8% to 9.0% in 2018. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in 2018.
Net Income margin increased on 5.4 pp from 9.3% to 14.7% in 2018. The efficient tax rate was 23.6% in 2018 while the average for the last five years was 31.5%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 3.8% in 2018. The company showed small growth in CAPEX/Revenue of 0.70 pp from 3.1% in 2015 to 3.8% in 2018. For the last three years the average CAPEX/Revenue was 3.4%. During 2014-2018 CAPEX as a % of Revenue bottomed in 2016 at 3.0% and was growing since that time.
Accounts receivable as a % of Revenue decreased slightly on 0.95 pp from 22.8% to 21.8% in 2018. Inventories as a % of Revenue decreased slightly on 0.74 pp from 15.8% to 15.0% in 2018. Accounts payable as a % of Revenue decreased on 2.6 pp from 18.6% to 16.1% in 2018.
Amphenol Corporation has spent
$159m on M&A in 2018 which accounts for 1.9% of revenue.
Return on investment
The company operates at high and attractive ROIC (21.1%) and ROE (30.1%). ROIC increased slightly on 1.9 pp from 19.2% to 21.1% in 2018. ROE surged on 13.1 pp from 17.0% to 30.1% in 2018. During the last 5 years ROIC bottomed in 2016 at 18.3% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.2x and Debt / EBITDA is 1.8x. Net Debt / EBITDA increased on 0.1x from 1.1x to 1.2x in 2018. Debt increased slightly on 0.79% while cash dropped on 25.6%.
Amphenol Corporation has good short term financial stability: Interest coverage ratio (ICR) is 16.6x. Amphenol Corporation has no short term refinancing risk: cash is higher than short term debt (167.4%).
Average interest expence paid by the company was 2.8% in 2018.
Valuation and dividends
The company's trades at EV/EBITDA 14.5x and P/E 22.0x.
The company paid 21.1% of Net Income as dividends in 2018. Dividends grew on average at 20.0% per annum in the last 5 years).
Management team
Richard Adam Norwitt is a Amphenol Corporation's CEO. Richard Adam Norwitt is a founder and has spent 10 years with the company. CEO total compensation was
$10,110,360 in 2018 which included
$1,130,000 salary. The company's CFO is Craig A Lampo. Craig A Lampo has 4 years tenure at the company.
At the end of financial year the company had 0.50% shares owned by insiders. Insider ownership didn't change in 2018.
The company has 73,600 employees. The number of employees increased on 5.1%. Average revenue per employee in 2018 was
$111,440 and it jumped on 11.3%.
Financial and operational results
FY ended 12/31/2018
Amphenol Corporation ($APH) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 5,346 | 5,569 | 6,286 | 7,011 | 8,202 | 17.0% |
| Gross Profit | 1,694 | 1,780 | 2,040 | 2,310 | 2,655 | 14.9% |
| SG&A | 530 | 544 | 632 | 685 | 739 | 7.9% |
| EBITDA | 1,203 | 1,276 | 1,422 | 1,654 | 1,987 | 20.1% |
| EBIT | 1,035 | 1,105 | 1,205 | 1,428 | 1,687 | 18.2% |
| Interest expence | | 68 | 73 | 92 | 102 | 10.2% |
| Tax | 257 | 281 | 309 | 692 | 372 | -46.3% |
| Net Income | 709 | 764 | 823 | 651 | 1,205 | 85.2% |
| Stock Based Compensation | 9 | 28 | 3 | 50 | 56 | 11.9% |
Balance Sheet
|
|---|
| Cash | 969 | 1,737 | 1,035 | 1,719 | 1,279 | -25.6% |
| Accounts Receivable | 1,124 | 1,105 | 1,349 | 1,599 | 1,792 | 12.1% |
| Inventory | 866 | 929 | 929 | 1,107 | 1,234 | 11.5% |
| Accounts Payable | 618 | 588 | 678 | 876 | 891 | 1.7% |
| Short Term Debt | 2 | 0 | 375 | 1 | 764 | 69,381.8% |
| Long Term Debt | 2,655 | 2,813 | 2,636 | 3,542 | 2,806 | -20.8% |
Cash flow
|
|---|
| Capex | 209 | 172 | 191 | 227 | 311 | 37.1% |
| Dividends | 102 | 159 | 173 | 205 | 254 | 23.9% |
| Acquisitions | 518 | 200 | 1,305 | 266 | 159 | -40.2% |
Ratios
|
|---|
| Revenue growth | 15.8% | 4.2% | 12.9% | 11.5% | 17.0% | |
| EBITDA growth | 16.4% | 6.1% | 11.4% | 16.3% | 20.1% | |
|
|---|
| Gross Margin | 31.7% | 32.0% | 32.5% | 32.9% | 32.4% | -0.6% |
| EBITDA Margin | 22.5% | 22.9% | 22.6% | 23.6% | 24.2% | 0.6% |
| EBIT Margin | 19.4% | 19.8% | 19.2% | 20.4% | 20.6% | 0.2% |
| SG&A, % of revenue | 9.9% | 9.8% | 10.1% | 9.8% | 9.0% | -0.8% |
| SBC, % of revenue | 0.2% | 0.5% | 0.1% | 0.7% | 0.7% | -0.0% |
| Net Income Margin | 13.3% | 13.7% | 13.1% | 9.3% | 14.7% | 5.4% |
| CAPEX, % of revenue | 3.9% | 3.1% | 3.0% | 3.2% | 3.8% | 0.6% |
|
|---|
| ROIC | 19.1% | 18.5% | 18.3% | 19.2% | 21.1% | 1.9% |
| ROE | 24.6% | 24.8% | 23.8% | 17.0% | 30.1% | 13.1% |
| Net Debt/EBITDA | 1.4x | 0.8x | 1.4x | 1.1x | 1.2x | 0.1x |
| Interest expence / Average debt | | 2.5% | 2.5% | 2.8% | 2.8% | 0.0% |
People
|
|---|
| Insider ownership | 0.5% | 0.5% | 0.5% | 0.5% | 0.5% | 0.0% |
| Employees | 42,200 | 50,700 | 62,000 | 70,000 | 73,600 | 5.1% |
| Revenue/Employee, th. $ | 127 | 110 | 101 | 100 | 111 | 11.3% |
Amphenol Corporation ($APH) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,867 | 1,981 | 2,129 | 2,225 | | 19.7% | 18.9% | 15.7% | 14.4% |
| EBITDA | 437 | 470 | 517 | 563 | | 18.8% | 19.7% | 18.5% | 23.0% |
| Net Income | 266 | 285 | 317 | 338 | | 18.1% | 13.2% | 14.1% | |
Balance Sheet
|
|---|
| Cash | 1,000 | 964 | 998 | 1,279 | | -19.5% | -26.8% | -31.3% | -25.6% |
| Short Term Debt | 750 | 768 | 790 | 764 | | 99.9% | 104.4% | 71,736.4% | 69,381.8% |
| Long Term Debt | 2,489 | 2,668 | 2,468 | 2,806 | | -13.0% | -11.7% | -30.7% | -20.8% |
Ratios
|
|---|
| Gross Margin | 32.5% | 32.5% | 32.3% | 32.1% | | -0.6% | -0.6% | -0.6% | -0.5% |
| EBITDA Margin | 23.4% | 23.7% | 24.3% | 25.3% | | -0.2% | 0.2% | 0.6% | 1.8% |
| Net Income Margin | 14.2% | 14.4% | 14.9% | 15.2% | | -0.2% | -0.7% | -0.2% | 20.5% |
Peers in Electronic Components
Below you can find Amphenol Corporation benchmarking vs. other companies in Electronic Components 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 |
|---|
| Superconductor Technologies Inc. ($SCON) | | -61.4% | -46.3% | 240.5% | 248.9% |
| Akoustis Technologies, Inc. ($AKTS) | | | | | 148.3% |
| CPS Technologies Corp. ($CPSH) | | -5.9% | -29.5% | -5.0% | 48.0% |
| Littelfuse, Inc. ($LFUS) | | 1.9% | 21.7% | 15.7% | 40.7% |
| Cavitation Technologies Inc ($CVAT) | | -73.6% | 267.5% | -40.9% | 22.6% |
| |
|---|
| Median (22 companies) | | -5.9% | 1.1% | 7.7% | 14.1% |
|---|
| Amphenol Corporation ($APH) | | 4.2% | 12.9% | 11.5% | 17.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cavitation Technologies Inc ($CVAT) | 93.5% | 85.0% | 93.2% | 93.5% | 90.6% |
| Dolby Laboratories ($DLB) | 92.7% | 90.2% | 89.4% | 89.1% | 87.9% |
| Flexpoint Sensor Systems Inc ($FLXT) | 96.7% | 95.2% | 92.7% | 87.9% | 86.1% |
| Airgain, Inc. ($AIRG) | 44.6% | 41.9% | 44.4% | 47.1% | 43.7% |
| II-VI Incorporated ($IIVI) | 33.2% | 36.6% | 37.8% | 40.0% | 39.8% |
| |
|---|
| Median (22 companies) | 33.2% | 36.7% | 33.7% | 38.3% | 37.6% |
|---|
| Amphenol Corporation ($APH) | 31.7% | 32.0% | 32.5% | 32.9% | 32.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Corning Incorporated ($GLW) | 32.2% | 27.5% | 27.9% | 27.3% | 25.4% |
| Dolby Laboratories ($DLB) | 34.1% | 29.1% | 30.9% | 30.8% | 25.1% |
| Vishay Intertechnology, Inc. ($VSH) | 14.8% | 11.9% | 15.4% | 18.7% | 21.3% |
| IEH Corp ($IEHC) | 18.4% | 21.2% | 18.0% | 16.3% | 20.2% |
| Littelfuse, Inc. ($LFUS) | 20.6% | 16.8% | 17.4% | 23.0% | 19.1% |
| |
|---|
| Median (22 companies) | 8.6% | 11.9% | 13.6% | 8.7% | 9.3% |
|---|
| Amphenol Corporation ($APH) | 22.5% | 22.9% | 22.6% | 23.6% | 24.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Akoustis Technologies, Inc. ($AKTS) | | | | 334.0% | 574.7% |
| CBAK Energy Technology, Inc. ($CBAK) | 8.0% | 92.4% | 57.2% | 20.6% | 30.1% |
| Corning Incorporated ($GLW) | 11.1% | 13.7% | 12.0% | 17.8% | 19.9% |
| II-VI Incorporated ($IIVI) | 4.3% | 7.1% | 7.0% | 14.3% | 13.2% |
| Superconductor Technologies Inc. ($SCON) | 586.1% | 57.8% | 0.0% | 34.1% | 12.1% |
| |
|---|
| Median (22 companies) | 4.2% | 2.7% | 3.4% | 5.1% | 4.1% |
|---|
| Amphenol Corporation ($APH) | 3.9% | 3.1% | 3.0% | 3.2% | 3.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vishay Intertechnology, Inc. ($VSH) | 8.3% | 4.5% | 9.8% | 18.4% | 27.8% |
| IEH Corp ($IEHC) | 27.7% | 28.2% | 24.2% | 19.2% | 26.1% |
| Inrad Optics Inc ($INRD) | -26.7% | -5.2% | -9.2% | -10.4% | 17.7% |
| Littelfuse, Inc. ($LFUS) | 14.3% | 11.1% | 11.7% | 15.8% | 12.1% |
| Rogers Corporation ($ROG) | 13.1% | 11.0% | 10.1% | 14.5% | 11.3% |
| |
|---|
| Median (22 companies) | 6.8% | 5.8% | 4.7% | 6.0% | 7.8% |
|---|
| Amphenol Corporation ($APH) | 19.1% | 18.5% | 18.3% | 19.2% | 21.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Belden Inc ($BDC) | 3.9x | 5.2x | 2.1x | 2.6x | 2.3x |
| Inrad Optics Inc ($INRD) | | 9.9x | | | 1.4x |
| Corning Incorporated ($GLW) | -0.7x | -0.0x | -0.5x | 0.3x | 1.3x |
| Bel Fuse Inc. ($BELFA) | 4.6x | 2.0x | | 1.4x | 1.3x |
| II-VI Incorporated ($IIVI) | 0.7x | 0.0x | 0.1x | 0.5x | 0.9x |
| |
|---|
| Median (14 companies) | -0.6x | -0.3x | -0.5x | -0.3x | 0.5x |
|---|
| Amphenol Corporation ($APH) | 1.4x | 0.8x | 1.4x | 1.1x | 1.2x |
