AutoZone, Inc. reports 21.6% EBITDA growth in 2020 and 3.1 pp EBITDA Margin growth from 21.8% to 24.9%
09/22/2020 • About AutoZone, Inc. (
$AZO) • By InTwits
AutoZone, Inc. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- AutoZone, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.4%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: $0m in FY2020, $1m in FY2019, $2m in FY2018, $0m in FY2017, $0m in FY2016
- The company has highly profitable business model: ROIC is 55.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.3x while industry average is 1.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
AutoZone, Inc.'s Revenue increased on 6.5%. Revenue growth showed acceleration in FY20Q4 - it increased 14.0% YoY. During FY2016-FY2020 Revenue growth bottomed in FY2017 at 2.4% and was accelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.5 pp from 1.5% to 3.1% in FY2020. During the last 5 years EBITDA Margin bottomed in FY2018 at 19.2% and was growing since that time.
Gross Margin showed almost no change in FY2020. Gross Margin grew at 0.27 pp per annum in FY2016-FY2020. SG&A as a % of Revenue decreased slightly on 0.51 pp from 35.0% to 34.5% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue topped in FY2018 at 37.1% and was declining since that time.
Net Income margin showed almost no change in FY2020. Net Income margin stuck to a growing trend at 0.60 pp per annum in FY2016-FY2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 3.6% in FY2020. The company showed small CAPEX/Revenue decline of 1.5 pp from 5.1% in FY2017 to 3.6% in FY2020. Average CAPEX/Revenue for the last three years was 4.2%. During FY2016-FY2020 CAPEX as a % of Revenue topped in FY2017 at 5.1% and was declining since that time.
Leverage (Debt)
Debt level is 1.3x Net Debt / EBITDA and 1.8x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 2.0x to 1.3x in FY2020. Debt increased on 9.0% while cash surged on 893%.
AutoZone, Inc. has no short term refinancing risk: cash is higher than short term debt (783.9%).
Valuation and dividends
AutoZone, Inc.'s trades at EV/EBITDA 9.7x and P/E 15.3x.
Management team
The company's CEO William C Rhodes III "Bill" has spent 16 years with the company.
Financial and operational results
AutoZone, Inc. ($AZO) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 10,636 | 10,889 | 11,221 | 11,864 | 12,632 | 6.5% |
| Gross Profit | 5,609 | 5,740 | 5,974 | 6,365 | 6,771 | 6.4% |
| SG&A | 3,548 | 3,660 | 4,163 | 4,149 | 4,353 | 4.9% |
| EBITDA | 2,358 | 2,403 | 2,156 | 2,586 | 3,145 | 21.6% |
| Net Income | 1,241 | 1,281 | 1,338 | 1,617 | 1,733 | 7.2% |
Balance Sheet
|
|---|
| Cash | 190 | 293 | 218 | 176 | 1,751 | 893.1% |
| Short Term Debt | 45 | 48 | 52 | 56 | 223 | 297.1% |
| Long Term Debt | 4,924 | 5,081 | 5,006 | 5,206 | 5,513 | 5.9% |
Cash flow
|
|---|
| Capex | 489 | 554 | 522 | 496 | 458 | -7.7% |
Ratios
|
|---|
| Revenue growth | 4.4% | 2.4% | 3.1% | 5.7% | 6.5% | |
| EBITDA growth | 6.1% | 1.9% | -10.3% | 20.0% | 21.6% | |
|
|---|
| Gross Margin | 52.7% | 52.7% | 53.2% | 53.7% | 53.6% | -0.1% |
| EBITDA Margin | 22.2% | 22.1% | 19.2% | 21.8% | 24.9% | 3.1% |
| SG&A, % of revenue | 33.4% | 33.6% | 37.1% | 35.0% | 34.5% | -0.5% |
| Net Income Margin | 11.7% | 11.8% | 11.9% | 13.6% | 13.7% | 0.1% |
| CAPEX, % of revenue | 4.6% | 5.1% | 4.7% | 4.2% | 3.6% | -0.6% |
|
|---|
| ROIC | 61.4% | 55.2% | 46.0% | 57.9% | 55.5% | -2.4% |
| Net Debt/EBITDA | 2.0x | 2.0x | 2.2x | 2.0x | 1.3x | -0.7x |
AutoZone, Inc. ($AZO) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 2,793 | 2,514 | 2,779 | 4,546 | | 5.7% | 2.6% | -0.1% | 14.0% |
| EBITDA | 672 | 579 | 666 | 1,246 | | 17.8% | 19.7% | 5.3% | 38.5% |
| Net Income | 350 | 299 | 343 | 740 | | -0.3% | 1.6% | -15.5% | 31.0% |
Balance Sheet
|
|---|
| Cash | 158 | 153 | 509 | 1,751 | | -37.3% | -21.8% | 192.5% | 893.1% |
| Short Term Debt | 290 | 293 | 295 | 223 | | - | - | - | 297.1% |
| Long Term Debt | 7,932 | 8,083 | 8,026 | 5,513 | | 53.8% | 58.2% | 50.9% | 5.9% |
Ratios
|
|---|
| Gross Margin | 53.7% | 54.3% | 53.6% | 53.1% | | 0.1% | 0.3% | 0.0% | -0.3% |
| EBITDA Margin | 24.0% | 23.0% | 23.9% | 27.4% | | 2.5% | 3.3% | 1.2% | 4.9% |
| Net Income Margin | 12.5% | 11.9% | 12.3% | 16.3% | | -0.8% | -0.1% | -2.2% | 2.1% |
Peers in Automotive Retail
Below we provide AutoZone, Inc. benchmarking against other companies in Automotive Retail industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
