Anixter International Inc. revenue growth accelerated from 4.0% in FY2017 to 6.0% in FY2018
01/29/2019 • About Anixter International Inc. (
$AXE) • By InTwits
Anixter International Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 4.5% in FY2018 vs. 4.8% in FY2017 vs. 6.3% in FY2014
- Anixter International Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- In the last 5 years the company invested considerably less than D&A: $185m vs. $284m. In FY2018 this situation was still the same: CAPEX was 42 while D&A was 69
- The company has business model with average profitability: ROIC is 11.0%
- It operates with high leverage: Net Debt/EBITDA is 3.1x while industry average is 0.2x
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 increased on 6.0%. Revenue growth showed slowdown in FY18Q4 - it was 5.2% YoY. EBITDA Margin showed almost no change in FY2018.
Gross Margin showed almost no change in FY2018. Gross Margin stuck to a declining trend at -0.74 pp per annum in FY2014-FY2018. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2018.
Net Income margin showed almost no change in FY2018. During the last 5 years Net Income margin bottomed in FY2017 at 1.4%. The efficient tax rate was 30.0% in FY2018 while the average for the last five years was 38.5%.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 0.50%. The company showed almost no change in CAPEX/Revenue from FY2015 to FY2018. It's average CAPEX/Revenue for the last three years was 0.48%.
Accounts receivable as a % of Revenue increased slightly on 0.96 pp from 18.1% to 19.0% in FY2018. Inventories as a % of Revenue increased slightly on 1.5 pp from 15.6% to 17.1% in FY2018. Accounts payable as a % of Revenue increased on 2.6 pp from 17.0% to 19.6% in FY2018.
Anixter International Inc. has spent
$150m on M&A in FY2018 which accounts for 1.8% of revenue.
Return on investment
The company operates at low ROIC (11.0%) and ROE (10.3%). ROIC showed almost no change in FY2018. ROE increased on 2.4 pp from 7.9% to 10.3% in FY2018. During FY2014-FY2018 ROE bottomed in FY2017 at 7.9%.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.1x and Debt / EBITDA is 3.3x. Net Debt / EBITDA increased on 0.1x from 3.0x to 3.1x in FY2018. Debt showed almost no change in FY2018 while cash dropped on 30.2%.
Anixter International Inc. has good short term financial stability: Interest coverage ratio (ICR) is 4.1x. The company has no short term refinancing risk: short term debt is zero.
Average interest expence charged on company's debt was 6.1% in FY2018.
Valuation and dividends
The company's trades at EV/EBITDA 8.3x and P/E 12.7x.
Management team
The company's CEO William A Galvin is a founder and has spent 1 year with the company. CEO total compensation was
$6,648,050 in FY2018 which included
$1,227,500 salary. Anixter International Inc.'s CFO Theodore A Dosch "Ted" has spent 8 years with the company.
Insider ownership is 7.8%. Insider ownership didn't change in 2018.
At the end of financial year the company had 9,300 employees. The number of employees increased on 4.5%. Average revenue per employee in FY2018 was
$903,247 and it increased slightly on 1.4%.
Financial and operational results
FY ended 12/28/2018
Anixter International Inc. ($AXE) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 5,507 | 6,191 | 7,623 | 7,927 | 8,400 | 6.0% |
| Gross Profit | 1,239 | 1,340 | 1,548 | 1,571 | 1,658 | 5.5% |
| EBITDA | 346 | 317 | 351 | 377 | 379 | 0.4% |
| EBIT | 310 | 268 | 285 | 313 | 310 | -1.0% |
| Interest expence | 45 | 64 | 79 | 75 | 76 | 2.1% |
| Tax | 86 | 86 | 76 | 129 | 67 | -48.0% |
| Net Income | 195 | 128 | 121 | 109 | 156 | 43.4% |
| Stock Based Compensation | 8 | 14 | 17 | 18 | 19 | 4.4% |
Balance Sheet
|
|---|
| Cash | 92 | 151 | 115 | 116 | 81 | -30.2% |
| Accounts Receivable | 1,171 | 1,326 | 1,353 | 1,434 | 1,600 | 11.6% |
| Inventory | 859 | 1,183 | 1,178 | 1,239 | 1,440 | 16.3% |
| Accounts Payable | 739 | 906 | 1,006 | 1,082 | 1,320 | 22.0% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 1,202 | 1,643 | 1,379 | 1,248 | 1,252 | 0.3% |
Cash flow
|
|---|
| Capex | 40 | 29 | 33 | 41 | 42 | 3.2% |
| Acquisitions | 418 | 823 | 5 | | 150 | |
Ratios
|
|---|
| Revenue growth | -11.6% | 12.4% | 23.1% | 4.0% | 6.0% | |
| EBITDA growth | -10.2% | -8.3% | 10.7% | 7.5% | 0.4% | |
|
|---|
| Gross Margin | 22.5% | 21.7% | 20.3% | 19.8% | 19.7% | -0.1% |
| EBITDA Margin | 6.3% | 5.1% | 4.6% | 4.8% | 4.5% | -0.2% |
| EBIT Margin | 5.6% | 4.3% | 3.7% | 3.9% | 3.7% | -0.3% |
| SBC, % of revenue | 0.1% | 0.2% | 0.2% | 0.2% | 0.2% | -0.0% |
| Net Income Margin | 3.5% | 2.1% | 1.6% | 1.4% | 1.9% | 0.5% |
| CAPEX, % of revenue | 0.7% | 0.5% | 0.4% | 0.5% | 0.5% | -0.0% |
|
|---|
| ROIC | 15.2% | 10.3% | 10.2% | 11.5% | 11.0% | -0.4% |
| ROE | 18.0% | 11.0% | 9.8% | 7.9% | 10.3% | 2.4% |
| Net Debt/EBITDA | 3.2x | 4.7x | 3.6x | 3.0x | 3.1x | 0.1x |
| Interest coverage ratio (ICR) | 7.0x | 4.2x | 3.6x | 4.2x | 4.1x | -0.1x |
| Interest expence / Average debt | 3.7% | 4.5% | 5.2% | 5.7% | 6.1% | 0.4% |
People
|
|---|
| Insider ownership | 7.8% | 7.8% | 7.8% | 7.8% | 7.8% | 0.0% |
| Employees | 9,100 | 8,700 | 8,900 | 8,900 | 9,300 | 4.5% |
| Revenue/Employee, th. $ | 605 | 712 | 856 | 891 | 903 | 1.4% |
Anixter International Inc. ($AXE) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,964 | 2,138 | 2,179 | 2,119 | | 3.6% | 6.8% | 8.1% | 5.2% |
| EBITDA | 78 | 89 | 107 | 104 | | -7.9% | -10.2% | 10.3% | 8.4% |
| Net Income | 32 | 35 | 48 | 42 | | 3.9% | -13.2% | 26.6% | 10,350.0% |
Balance Sheet
|
|---|
| Cash | 79 | 110 | 70 | 81 | | -33.4% | -38.0% | -9.1% | -30.2% |
| Short Term Debt | 0 | 349 | 349 | 0 | | | | | |
| Long Term Debt | 1,286 | 987 | 914 | 1,252 | | -3.9% | -25.9% | -28.0% | 0.3% |
Ratios
|
|---|
| Gross Margin | 19.6% | 19.6% | 19.5% | 20.3% | | -0.4% | -0.2% | -0.2% | 0.5% |
| EBITDA Margin | 4.0% | 4.1% | 4.9% | 4.9% | | -0.5% | -0.8% | 0.1% | 0.1% |
| Net Income Margin | 1.6% | 1.6% | 2.2% | 2.0% | | 0.0% | -0.4% | 0.3% | 2.0% |
Peers in Technology Distributors
Below you can find Anixter International Inc. benchmarking vs. other companies in Technology Distributors 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 |
|---|
| Tech Data Corporation ($TECD) | | 3.2% | -4.7% | -8.3% | 38.9% |
| EACO Corp ($EACO) | | 4.1% | 5.9% | 5.7% | 23.1% |
| Richardson Electronics, Ltd. ($RELL) | | -0.7% | 3.7% | -3.6% | 19.2% |
| Synnex Corporation ($SNX) | | -3.6% | 5.4% | 21.2% | 17.6% |
| Wayside Technology Group, Inc. ($WSTG) | | 12.1% | 9.4% | -61.6% | 13.0% |
| |
|---|
| Median (16 companies) | | 4.1% | 4.6% | 5.7% | 8.9% |
|---|
| Anixter International Inc. ($AXE) | | 12.4% | 23.1% | 4.0% | 6.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Taitron Components Incorporated ($TAIT) | 25.4% | 31.1% | -10.8% | 39.4% | 44.0% |
| Richardson Electronics, Ltd. ($RELL) | 29.7% | 30.0% | 31.6% | 32.1% | 33.7% |
| EACO Corp ($EACO) | 27.5% | 29.3% | 29.3% | 28.5% | 28.5% |
| Surge Components Inc ($SPRS) | 24.5% | 25.0% | 25.2% | 25.2% | 25.6% |
| ADDvantage Technologies Group, Inc. ($AEY) | 32.3% | 35.0% | 32.2% | 30.4% | 23.7% |
| |
|---|
| Median (16 companies) | 14.2% | 13.5% | 13.8% | 16.5% | 15.6% |
|---|
| Anixter International Inc. ($AXE) | 22.5% | 21.7% | 20.3% | 19.8% | 19.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Taitron Components Incorporated ($TAIT) | -8.6% | -3.2% | -39.0% | 13.0% | 19.2% |
| CDW Corporation ($CDW) | 7.3% | 7.5% | 7.7% | 7.6% | 7.7% |
| ePlus inc. ($PLUS) | 7.3% | 7.5% | 7.6% | 7.3% | 7.1% |
| EACO Corp ($EACO) | 4.0% | 4.5% | 4.7% | 4.5% | 5.9% |
| Surge Components Inc ($SPRS) | 2.8% | 3.8% | -1.5% | 1.2% | 4.8% |
| |
|---|
| Median (16 companies) | 3.2% | 3.5% | 3.4% | 3.5% | 4.0% |
|---|
| Anixter International Inc. ($AXE) | 6.3% | 5.1% | 4.6% | 4.8% | 4.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Richardson Electronics, Ltd. ($RELL) | 2.0% | 3.5% | 3.4% | 3.8% | 3.2% |
| ePlus inc. ($PLUS) | 0.9% | 1.0% | 2.1% | 1.5% | 1.0% |
| EACO Corp ($EACO) | 0.6% | 0.4% | 0.3% | 5.5% | 0.8% |
| Avnet, Inc. ($AVT) | 0.4% | 0.6% | 0.8% | 0.7% | 0.8% |
| PC Connection, Inc. ($CNXN) | 0.3% | 0.5% | 0.4% | 0.4% | 0.8% |
| |
|---|
| Median (16 companies) | 0.4% | 0.6% | 0.4% | 0.5% | 0.5% |
|---|
| Anixter International Inc. ($AXE) | 0.7% | 0.5% | 0.4% | 0.5% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Surge Components Inc ($SPRS) | 6.7% | 9.5% | -4.0% | 3.9% | 24.6% |
| CDW Corporation ($CDW) | 16.5% | 17.3% | 18.8% | 20.1% | 23.1% |
| EACO Corp ($EACO) | 19.6% | 21.8% | 22.2% | 16.1% | 21.2% |
| ePlus inc. ($PLUS) | 20.1% | 21.0% | 21.5% | 22.8% | 20.8% |
| Insight Enterprises, Inc. ($NSIT) | 17.0% | 17.4% | 20.7% | 19.3% | 20.0% |
| |
|---|
| Median (17 companies) | 11.9% | 12.1% | 12.5% | 9.9% | 11.8% |
|---|
| Anixter International Inc. ($AXE) | 15.2% | 10.3% | 10.2% | 11.5% | 11.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Synnex Corporation ($SNX) | 2.0x | 0.9x | 1.2x | 2.1x | 3.9x |
| ScanSource, Inc. ($SCSC) | -1.4x | -0.9x | 0.2x | 0.6x | 2.5x |
| CDW Corporation ($CDW) | 3.2x | 3.3x | 2.8x | 2.7x | 2.4x |
| Arrow Electronics, Inc. ($ARW) | 1.8x | 2.2x | 2.2x | 2.3x | 2.2x |
| Avnet, Inc. ($AVT) | 1.2x | 1.1x | 2.2x | 1.5x | 2.2x |
| |
|---|
| Median (15 companies) | -0.2x | -0.4x | 0.1x | 0.9x | 0.5x |
|---|
| Anixter International Inc. ($AXE) | 3.2x | 4.7x | 3.6x | 3.0x | 3.1x |
