NXP Semiconductors N.V. CAPEX surged on 10.7% and Revenue increased slightly on 1.6%
02/06/2019 • About NXP Semiconductors N.V. (
$NXPI) • By InTwits
NXP Semiconductors N.V. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 49.9% in 2018, 46.2% in 2017, 21.6% in 2016, 41.5% in 2015, 25.7% in 2014
- NXP Semiconductors N.V. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.6%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $305m in 2018, $111m in 2017, $118m in 2016, $85m in 2015, $103m in 2014
- In the last 5 years the company invested considerably less than D&A: $2,222m vs. $7,287m. In 2018 this situation was still the same: CAPEX was 611 while D&A was 1,987
- The company has highly profitable business model: ROIC is 13.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
NXP Semiconductors N.V.'s Revenue increased slightly on 1.6%. Revenue growth showed slowdown in 18Q4 - it was -2.2% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 15.7 pp from 20.9% to 36.5% in 2018.
Gross Margin increased slightly on 1.7 pp from 49.9% to 51.6% in 2018. During the last 5 years Gross Margin bottomed in 2016 at 42.8% and was growing since that time. SG&A as a % of Revenue decreased slightly on 1.2 pp from 11.8% to 10.6% in 2018. During 2014-2018 SG&A as a % of Revenue topped in 2015 at 15.1% and was declining since that time. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in 2018.
Net Income margin showed almost no change in 2018. The efficient tax rate was 7.4% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 6.5% in 2018. NXP Semiconductors N.V.'s CAPEX/Revenue increased slightly on 0.91 pp from 5.6% in 2015 to 6.5% in 2018. It's average CAPEX/Revenue for the last three years was 5.5%. During the last 5 years CAPEX as a % of Revenue bottomed in 2016 at 4.1% and was growing since that time.
Accounts receivable as a % of Revenue decreased slightly on 1.1 pp from 9.5% to 8.4% in 2018. Inventories as a % of Revenue showed almost no change at 13.6% in 2018. Accounts payable as a % of Revenue decreased on 2.8 pp from 24.7% to 21.9% in 2018.
Return on investment
The company operates at good ROIC (13.9%) and ROE (18.4%). ROIC increased on 4.0 pp from 10.0% to 13.9% in 2018. ROE showed almost no change in 2018. During 2014-2018 ROIC bottomed in 2016 at -0.67% and was growing since that time. During 2014-2018 ROE bottomed in 2016 at 1.8% and was growing since that time.
Leverage (Debt)
Debt level is 1.0x Net Debt / EBITDA and 1.6x Debt / EBITDA. Net Debt / EBITDA jumped on 0.3x from 0.7x to 1.0x in 2018. Debt jumped on 12.0% while cash dropped on 21.4%.
NXP Semiconductors N.V. has good short term financial stability: Interest coverage ratio (ICR) is 9.9x. NXP Semiconductors N.V. has no short term refinancing risk: cash is higher than short term debt (251.9%).
Average interest expence charged on company's debt was 3.7% in 2018.
Valuation and dividends
NXP Semiconductors N.V.'s trades at EV/EBITDA 6.7x and P/E 12.3x.
The company paid 3.4% of Net Income as dividends in 2018.
Management team
Richard L Clemmer "Rick" is a NXP Semiconductors N.V.'s CEO. Richard L Clemmer "Rick" is a founder and has spent 9 years with the company. CEO total compensation was
$77,378,651 in 2018 which included
$1,369,730 salary and
$1,388,390 annual bonus. The company's CFO Peter Kelly has spent 3 years with the company.
0.21% of the company is owned by insiders. Insider ownership didn't change in 2018.
The company has 30,000 employees. The number of employees showed almost no change in 2018. Average revenue per employee in 2018 was
$313,567 and it increased slightly on 2.0%.
Financial and operational results
FY ended 12/31/2018
NXP Semiconductors N.V. ($NXPI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 5,647 | 6,101 | 9,498 | 9,256 | 9,407 | 1.6% |
| Gross Profit | 2,640 | 2,787 | 4,069 | 4,619 | 4,851 | 5.0% |
| SG&A | 686 | 922 | 1,141 | 1,090 | 993 | -8.9% |
| EBITDA | 1,454 | 2,532 | 2,055 | 4,275 | 4,697 | 9.9% |
| EBIT | 1,049 | 2,015 | -150 | 2,102 | 2,710 | 28.9% |
| Interest expence | 145 | 227 | 408 | 310 | 273 | -11.9% |
| Tax | 40 | -104 | -851 | -483 | 176 | |
| Net Income | 539 | 1,526 | 200 | 2,215 | 2,208 | -0.3% |
| Stock Based Compensation | 133 | 216 | 333 | 281 | 314 | 11.7% |
Balance Sheet
|
|---|
| Cash | 1,185 | 1,614 | 1,894 | 3,547 | 2,789 | -21.4% |
| Accounts Receivable | 593 | 1,130 | 1,033 | 879 | 792 | -9.9% |
| Inventory | 755 | 1,879 | 1,113 | 1,236 | 1,279 | 3.5% |
| Accounts Payable | 729 | 1,014 | 973 | 1,146 | 999 | -12.8% |
| Short Term Debt | 20 | 556 | 421 | 751 | 1,107 | 47.4% |
| Long Term Debt | 3,979 | 8,656 | 8,766 | 5,814 | 6,247 | 7.4% |
Cash flow
|
|---|
| Capex | 329 | 341 | 389 | 552 | 611 | 10.7% |
| Dividends | | | | | 74 | |
Ratios
|
|---|
| Revenue growth | 17.3% | 8.0% | 55.7% | -2.5% | 1.6% | |
| EBITDA growth | 24.8% | 74.1% | -18.8% | 108.0% | 9.9% | |
|
|---|
| Gross Margin | 46.8% | 45.7% | 42.8% | 49.9% | 51.6% | 1.7% |
| EBITDA Margin | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% | 3.7% |
| EBIT Margin | 18.6% | 33.0% | -1.6% | 22.7% | 28.8% | 6.1% |
| SG&A, % of revenue | 12.1% | 15.1% | 12.0% | 11.8% | 10.6% | -1.2% |
| SBC, % of revenue | 2.4% | 3.5% | 3.5% | 3.0% | 3.3% | 0.3% |
| Net Income Margin | 9.5% | 25.0% | 2.1% | 23.9% | 23.5% | -0.5% |
| CAPEX, % of revenue | 5.8% | 5.6% | 4.1% | 6.0% | 6.5% | 0.5% |
|
|---|
| ROIC | 21.4% | 14.3% | -0.7% | 10.0% | 13.9% | 4.0% |
| ROE | 58.6% | 25.3% | 1.8% | 18.1% | 18.4% | 0.3% |
| Net Debt/EBITDA | 1.9x | 3.0x | 3.5x | 0.7x | 1.0x | 0.3x |
| Interest coverage ratio (ICR) | 7.2x | 8.9x | | 6.8x | 9.9x | 3.1x |
| Interest expence / Average debt | 3.6% | 3.4% | 4.4% | 3.9% | 3.7% | -0.2% |
People
|
|---|
| Insider ownership | 0.2% | 0.2% | 0.2% | 0.2% | 0.2% | 0.0% |
| Employees | 27,884 | 44,000 | 40,400 | 30,100 | 30,000 | -0.3% |
| Revenue/Employee, th. $ | 203 | 139 | 235 | 308 | 314 | 2.0% |
NXP Semiconductors N.V. ($NXPI) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 2,269 | 2,290 | 2,445 | 2,403 | | 2.6% | 4.0% | 2.4% | -2.2% |
| EBITDA | 629 | 633 | 2,708 | 727 | | -71.6% | 3.8% | 286.9% | -3.3% |
| Net Income | 58 | 54 | 1,820 | 276 | | -95.6% | 10.2% | 1,585.2% | -63.3% |
Balance Sheet
|
|---|
| Cash | 3,983 | 2,981 | 1,944 | 2,789 | | 78.0% | 12.8% | -36.6% | -21.4% |
| Short Term Debt | 1,249 | 2 | 1,002 | 1,107 | | 11,254.5% | -99.7% | 32.9% | 47.4% |
| Long Term Debt | 5,329 | 5,341 | 5,354 | 6,247 | | -18.0% | -7.8% | -7.7% | 7.4% |
Ratios
|
|---|
| Gross Margin | 51.7% | 51.5% | 51.4% | 51.7% | | 2.9% | 2.3% | 0.5% | 1.2% |
| EBITDA Margin | 27.7% | 27.6% | 110.8% | 30.3% | | -72.4% | -0.1% | 81.4% | -0.4% |
| Net Income Margin | 2.6% | 2.4% | 74.4% | 11.5% | | -56.5% | 0.1% | 69.9% | -19.2% |
Peers in Semiconductors
Below you can find NXP Semiconductors N.V. benchmarking vs. other companies in Semiconductors 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 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 9.7% | 4.4% | 11.0% | 5.0% |
|---|
| NXP Semiconductors N.V. ($NXPI) | | 8.0% | 55.7% | -2.5% | 1.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 45.3% | 47.7% | 48.0% | 48.6% | 50.4% |
|---|
| NXP Semiconductors N.V. ($NXPI) | 46.8% | 45.7% | 42.8% | 49.9% | 51.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| Broadcom Inc. ($AVGO) | 24.9% | 38.0% | 19.9% | 40.4% | 44.2% |
| |
|---|
| Median (66 companies) | 9.6% | 11.3% | 9.2% | 10.7% | 9.8% |
|---|
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.6% | 4.7% | 4.4% |
|---|
| NXP Semiconductors N.V. ($NXPI) | 5.8% | 5.6% | 4.1% | 6.0% | 6.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.0% | 3.8% | 1.7% | 3.2% | 3.0% |
|---|
| NXP Semiconductors N.V. ($NXPI) | 21.4% | 14.3% | -0.7% | 10.0% | 13.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (45 companies) | -0.6x | -0.3x | -0.0x | 0.4x | 0.3x |
|---|
| NXP Semiconductors N.V. ($NXPI) | 1.9x | 3.0x | 3.5x | 0.7x | 1.0x |
