Jabil Inc. reports 14.4% revenue growth in FY2019 and almost no change in EBITDA Margin of 5.8%
09/24/2019 • About Jabil Inc. (
$JBL) • By InTwits
Jabil Inc. reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is relatively stable: 5.8% in FY2019 vs. 6.0% in FY2018 vs. 6.1% in FY2015
- 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 3.5%.
- CAPEX is quite volatile: $9,780m in FY2019, $8,879m in FY2018, $4,734m in FY2017, $5,817m in FY2016, $4,021m in FY2015
- The company has highly profitable business model: ROIC is 16.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Jabil Inc.'s Revenue surged on 14.4%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 10.3 pp from 65.0% to 54.7% in FY2019. During the last 5 years EBITDA Margin topped in FY2016 at 6.6% and was declining since that time.
Gross Margin showed almost no change in FY2019. Gross Margin stuck to a declining trend at -0.23 pp per annum in FY2015-FY2019. SG&A as a % of Revenue showed almost no change in FY2019. During the last 5 years SG&A as a % of Revenue topped in FY2016 at 5.0% and was declining since that time.
Net Income margin increased slightly on 0.74 pp from 0.39% to 1.1% in FY2019. During the last 5 years Net Income margin bottomed in FY2018 at 0.39%.
Investments (CAPEX, working capital and M&A)
Jabil Inc.'s CAPEX/Revenue was 4.0% in FY2019. Jabil Inc.'s CAPEX/Revenue decreased slightly on 1.1 pp from 5.0% in FY2016 to 4.0% in FY2019. It's average CAPEX/Revenue for the last three years was 4.1%. Jabil Inc. invested a big chunk of EBITDA (68.3%) to CAPEX to fuel its growth.
Return on investment
The company operates at good ROIC (16.1%) and ROE (15.0%). ROIC increased on 3.6 pp from 12.5% to 16.1% in FY2019. ROE surged on 11.0 pp from 4.0% to 15.0% in FY2019. During FY2015-FY2019 ROIC bottomed in FY2017 at 9.3% and was growing since that time. During the last 5 years ROE bottomed in FY2018 at 4.0%.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.9x and Debt / EBITDA is 1.7x. Net Debt / EBITDA decreased on 0.1x from 1.0x to 0.9x in FY2019. Debt decreased slightly on 0.88% while cash decreased on 7.5%.
Jabil Inc. has no short term refinancing risk: cash is higher than short term debt (310.1%).
Valuation and dividends
The company's trades at EV/EBITDA 4.5x and P/E 18.5x.
Management team
Jabil Inc.'s CEO is Mark T Mondello. Mark T Mondello is a founder and has 7 years tenure with the company. Jabil Inc.'s CFO Michael K Dastoor "Mike" has spent 2 years with the company.
Financial and operational results
FY ended 08/31/2019
Jabil Inc. ($JBL) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 17,899 | 18,353 | 19,063 | 22,095 | 25,282 | 14.4% |
| Gross Profit | 1,503 | 1,528 | 1,546 | 1,707 | 1,913 | 12.1% |
| SG&A | 863 | 924 | 908 | 1,051 | 1,111 | 5.8% |
| EBITDA | 1,085 | 1,220 | 1,171 | 1,316 | 1,473 | 12.0% |
| EBIT | 555 | 523 | 410 | 542 | | |
| Tax | 137 | 132 | 129 | 286 | | |
| Net Income | 284 | 254 | 129 | 86 | 287 | 232.6% |
| Stock Based Compensation | 63 | 59 | 49 | 91 | | |
Balance Sheet
|
|---|
| Cash | 914 | 912 | 1,190 | 1,258 | 1,163 | -7.5% |
| Accounts Receivable | 1,467 | 1,360 | 1,397 | 1,693 | | |
| Inventory | 2,507 | 2,457 | 2,942 | 3,458 | | |
| Accounts Payable | 3,663 | 3,593 | 4,258 | 4,943 | | |
| Short Term Debt | 323 | 46 | 445 | 25 | 375 | 1,389.0% |
| Long Term Debt | 1,336 | 2,074 | 1,633 | 2,494 | 2,121 | -14.9% |
Cash flow
|
|---|
| Capex | 963 | 924 | 716 | 1,037 | 1,005 | -3.0% |
| Dividends | 63 | 62 | 60 | 58 | | |
| Acquisitions | 178 | 242 | 37 | 110 | | |
Ratios
|
|---|
| Revenue growth | 13.6% | 2.5% | 3.9% | 15.9% | 14.4% | |
| EBITDA growth | 56.9% | 12.4% | -4.0% | 12.4% | 12.0% | |
|
|---|
| Gross Margin | 8.4% | 8.3% | 8.1% | 7.7% | 7.6% | -0.2% |
| EBITDA Margin | 6.1% | 6.6% | 6.1% | 6.0% | 5.8% | -0.1% |
| EBIT Margin | 3.1% | 2.8% | 2.2% | 2.5% | |
| SG&A, % of revenue | 4.8% | 5.0% | 4.8% | 4.8% | 4.4% | -0.4% |
| SBC, % of revenue | 0.3% | 0.3% | 0.3% | 0.4% | |
| Net Income Margin | 1.6% | 1.4% | 0.7% | 0.4% | 1.1% | 0.7% |
| CAPEX, % of revenue | 5.4% | 5.0% | 3.8% | 4.7% | 4.0% | -0.7% |
|
|---|
| ROIC | 14.0% | 12.3% | 9.3% | 12.5% | 16.1% | 3.6% |
| ROE | 12.5% | 10.7% | 5.4% | 4.0% | 15.0% | 11.0% |
| Net Debt/EBITDA | 0.7x | 1.0x | 0.8x | 1.0x | 0.9x | -0.1x |
People
|
|---|
| Insider ownership | 3.4% | 3.4% | 3.4% | 3.4% | | |
| Employees | 161,000 | 138,000 | 170,000 | 199,000 | | |
| Revenue/Employee, th. $ | 111 | 133 | 112 | 111 | | |
Peers in Electronic Manufacturing Services
Below you can find Jabil Inc. benchmarking vs. other companies in Electronic Manufacturing Services 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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| 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. ($DSWL) | | 17.1% | -0.1% | 36.3% | 9.7% |
| |
|---|
| Median (27 companies) | 2.6% | 1.2% | 1.9% | 7.1% | 12.6% |
|---|
| Jabil Inc. ($JBL) | | | 3.9% | 15.9% | 14.4% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Neonode Inc. ($NEON) | 66.0% | 86.9% | 77.1% | 89.2% | |
| Andrea Electronics Corp ($ANDR) | 99.1% | 88.5% | 96.2% | 70.4% | |
| Data I/O Corporation ($DAIO) | 52.4% | 55.0% | 58.9% | 59.4% | |
| IPG Photonics Corporation ($IPGP) | 54.6% | 54.9% | 56.6% | 54.8% | |
| CTS Corporation ($CTS) | 33.2% | 35.4% | 33.2% | 35.1% | |
| |
|---|
| Median (27 companies) | 19.4% | 22.2% | 15.8% | 15.2% | 13.4% |
|---|
| Jabil Inc. ($JBL) | | 8.3% | 8.1% | 7.7% | 7.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| IPG Photonics Corporation ($IPGP) | 42.4% | 41.8% | 44.7% | 40.9% | |
| TE Connectivity Ltd. ($TEL) | 19.3% | 20.9% | 20.4% | 21.4% | |
| CTS Corporation ($CTS) | 9.0% | 20.7% | 14.0% | 17.8% | |
| Methode Electronics, Inc. ($MEI) | 15.4% | 16.5% | 16.5% | 16.1% | |
| RF Industries, Ltd. ($RFIL) | 6.7% | -12.1% | 3.1% | 15.9% | |
| |
|---|
| Median (27 companies) | 5.2% | 4.8% | 4.5% | 4.7% | 6.8% |
|---|
| Jabil Inc. ($JBL) | | 6.6% | 6.1% | 6.0% | 5.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Maxwell Technologies, Inc. ($MXWL) | 2.5% | 4.9% | 6.6% | 11.3% | |
| IPG Photonics Corporation ($IPGP) | 7.8% | 12.6% | 9.0% | 11.0% | |
| eMagin Corporation ($EMAN) | 4.7% | 6.7% | 6.2% | 8.8% | |
| TE Connectivity Ltd. ($TEL) | 4.9% | 5.3% | 5.6% | 6.7% | |
| CTS Corporation ($CTS) | 2.5% | 5.2% | 4.3% | 6.1% | |
| |
|---|
| Median (27 companies) | 2.4% | 2.8% | 2.7% | 2.4% | 1.2% |
|---|
| Jabil Inc. ($JBL) | | 5.0% | 3.8% | 4.7% | 4.0% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| RF Industries, Ltd. ($RFIL) | 4.6% | -18.7% | 0.9% | 29.2% | |
| IPG Photonics Corporation ($IPGP) | 27.8% | 25.1% | 29.9% | 22.9% | |
| Methode Electronics, Inc. ($MEI) | 26.1% | 22.7% | 20.8% | 19.2% | |
| TE Connectivity Ltd. ($TEL) | 15.1% | 15.9% | 16.2% | 18.4% | |
| Kemet Corporation ($KEM) | 3.8% | 6.2% | 6.9% | 16.9% | |
| |
|---|
| Median (29 companies) | 4.9% | 6.2% | 4.2% | 6.4% | 7.4% |
|---|
| Jabil Inc. ($JBL) | | 12.3% | 9.3% | 12.5% | 16.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Alpine 4 Technologies Ltd ($ALPP) | | | 34.1x | 65.7x | |
| SigmaTron International, Inc. ($SGMA) | 4.1x | 2.4x | 3.4x | 16.0x | |
| SMTC Corporation ($SMTX) | 1.8x | 1.0x | | 11.3x | |
| IEC Electronics Corp. ($IEC) | 14.0x | 2.0x | 5.6x | 4.9x | |
| Key Tronic Corporation ($KTCC) | 3.4x | 2.6x | 2.5x | 3.9x | |
| |
|---|
| Median (22 companies) | -0.9x | -0.0x | -0.1x | -0.2x | -3.1x |
|---|
| Jabil Inc. ($JBL) | | 1.0x | 0.8x | 1.0x | 0.9x |
