Jabil Inc. EBITDA dropped on 12.1% while Revenue increased on 7.8%
09/24/2020 • About Jabil Inc. (
$JBL) • By InTwits
Jabil Inc. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is relatively stable: 4.7% in FY2020 vs. 5.8% in FY2019 vs. 6.6% in FY2016
- Jabil Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: $1m in FY2020, $1m in FY2019, $0m in FY2018, $0m in FY2017, $1m in FY2016
- The company has business model with average profitability: ROIC is 10.8%
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 7.8%. During FY2016-FY2020 Revenue growth topped in FY2018 at 15.9% and was decelerating since that time. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.1 pp from 5.8% to 4.7% in FY2020. EBITDA Margin stuck to a declining trend at -0.41 pp per annum in FY2016-FY2020.
Gross Margin showed almost no change in FY2020. Gross Margin declined at -0.30 pp per annum in FY2016-FY2020. SG&A as a % of Revenue showed almost no change in FY2020. SG&A as a % of Revenue stuck to a declining trend at -0.18 pp per annum in the last 5 years.
Net Income margin decreased slightly on 0.94 pp from 1.1% to 0.20% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Jabil Inc. had CAPEX/Revenue of 3.6%. The company's CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average CAPEX/Revenue for the last three years was 4.1%. The company maintained rich investment policy and has spent a big chunk of EBITDA (75.9%) to CAPEX.
Return on investment
The company operates at low ROIC (10.8%) and ROE (2.9%). ROIC decreased on 5.3 pp from 16.1% to 10.8% in FY2020. ROE dropped on 12.0 pp from 15.0% to 2.9% in FY2020.
Leverage (Debt)
Debt level is 1.4x Net Debt / EBITDA and 2.4x Debt / EBITDA. Net Debt / EBITDA jumped on 0.4x from 0.9x to 1.4x in FY2020. Debt jumped on 25.8% while cash surged on 19.8%.
Jabil Inc. has no short term refinancing risk: cash is higher than short term debt (866.0%).
Valuation and dividends
Jabil Inc.'s trades at EV/EBITDA 5.3x and P/E 95.7x.
Management team
The company's CEO is Mark T Mondello. Mark T Mondello has 8 years tenure with the company. Jabil Inc.'s CFO is Michael K Dastoor "Mike". Michael K Dastoor "Mike" has 2 years tenure at the company.
Financial and operational results
Jabil Inc. ($JBL) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 18,353 | 19,063 | 22,095 | 25,282 | 27,266 | 7.8% |
| Gross Profit | 1,528 | 1,546 | 1,707 | 1,913 | 1,931 | 0.9% |
| SG&A | 924 | 908 | 1,051 | 1,111 | 1,175 | 5.7% |
| EBITDA | 1,220 | 1,171 | 1,316 | 1,473 | 1,294 | -12.1% |
| EBIT | 523 | 410 | 542 | | | |
| Tax | 132 | 129 | 286 | | | |
| Net Income | 254 | 129 | 86 | 287 | 54 | -81.2% |
| Stock Based Compensation | 59 | 49 | 91 | | | |
Balance Sheet
|
|---|
| Cash | 912 | 1,190 | 1,258 | 1,163 | 1,394 | 19.8% |
| Accounts Receivable | 1,360 | 1,397 | 1,693 | | | |
| Inventory | 2,457 | 2,942 | 3,458 | | | |
| Accounts Payable | 3,593 | 4,258 | 4,943 | | | |
| Short Term Debt | 46 | 445 | 25 | 375 | 161 | -57.1% |
| Long Term Debt | 2,074 | 1,633 | 2,494 | 2,121 | 2,980 | 40.5% |
Cash flow
|
|---|
| Capex | 924 | 716 | 1,037 | 1,005 | 983 | -2.2% |
| Dividends | 62 | 60 | 58 | | | |
| Acquisitions | 242 | 37 | 110 | | | |
Ratios
|
|---|
| Revenue growth | 2.5% | 3.9% | 15.9% | 14.4% | 7.8% | |
| EBITDA growth | 12.4% | -4.0% | 12.4% | 12.0% | -12.1% | |
|
|---|
| Gross Margin | 8.3% | 8.1% | 7.7% | 7.6% | 7.1% | -0.5% |
| EBITDA Margin | 6.6% | 6.1% | 6.0% | 5.8% | 4.7% | -1.1% |
| EBIT Margin | 2.8% | 2.2% | 2.5% | | |
| SG&A, % of revenue | 5.0% | 4.8% | 4.8% | 4.4% | 4.3% | -0.1% |
| SBC, % of revenue | 0.3% | 0.3% | 0.4% | | |
| Net Income Margin | 1.4% | 0.7% | 0.4% | 1.1% | 0.2% | -0.9% |
| CAPEX, % of revenue | 5.0% | 3.8% | 4.7% | 4.0% | 3.6% | -0.4% |
|
|---|
| ROIC | 12.3% | 9.3% | 12.5% | 16.1% | 10.8% | -5.3% |
| ROE | 10.7% | 5.4% | 4.0% | 15.0% | 2.9% | -12.0% |
| Net Debt/EBITDA | 1.0x | 0.8x | 1.0x | 0.9x | 1.4x | 0.4x |
People
|
|---|
| Insider ownership | 3.4% | 3.4% | 3.4% | | | |
| Employees | 138,000 | 170,000 | 199,000 | | | |
| Revenue/Employee, th. $ | 133 | 112 | 111 | | | |
Jabil Inc. ($JBL) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 7,506 | 6,125 | 6,336 | 7,300 | | - | - | - | - |
| EBITDA | 383 | 318 | 286 | 391 | | - | - | - | - |
| Net Income | 40 | -3 | -51 | 68 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 720 | 697 | 763 | 1,394 | | - | - | - | - |
| Short Term Debt | 480 | 745 | 509 | 161 | | - | - | - | - |
| Long Term Debt | 2,608 | 2,555 | 2,555 | 2,980 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 7.4% | 7.0% | 7.2% | 6.7% | | - | - | - | - |
| EBITDA Margin | 5.1% | 5.2% | 4.5% | 5.4% | | - | - | - | - |
| Net Income Margin | 0.5% | -0.1% | -0.8% | 0.9% | | - | - | - | - |
Peers in Electronic Manufacturing Services
Below we provide Jabil Inc. benchmarking against other companies in Electronic Manufacturing Services 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.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Netlist Inc ($NLST) | - | 95.0% | -12.5% | -22.1% | 81.0% |
| IEC Electronics Corp. ($IEC) | - | -24.1% | 21.2% | 34.3% | 16.4% |
| eMagin Corporation ($EMAN) | - | 3.0% | 19.1% | 1.9% | 10.1% |
| Plexus Corp. ($PLXS) | - | -1.1% | 13.7% | 10.1% | 7.1% |
| SMTC Corporation ($SMTX) | - | -17.1% | 55.2% | 72.4% | 3.7% |
| |
|---|
| Median (13 companies) | 4.6% | 1.9% | 7.1% | 1.9% | -8.7% |
|---|
| Jabil Inc. ($JBL) | - | 3.9% | 15.9% | 14.4% | 7.8% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Neonode Inc. ($NEON) | 86.9% | 77.1% | 89.2% | 89.7% | 82.0% |
| IPG Photonics Corporation ($IPGP) | 54.9% | 56.6% | 54.8% | 46.1% | 44.9% |
| CTS Corporation ($CTS) | 35.4% | 33.2% | 35.1% | 33.6% | 32.8% |
| TE Connectivity Ltd. ($TEL) | 33.7% | 34.3% | 33.9% | 32.7% | 30.7% |
| RF Industries, Ltd. ($RFIL) | 28.0% | 30.4% | 34.1% | 28.3% | 26.9% |
| |
|---|
| Median (13 companies) | 22.2% | 15.8% | 15.2% | 15.4% | 17.1% |
|---|
| Jabil Inc. ($JBL) | 8.3% | 8.1% | 7.7% | 7.6% | 7.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IPG Photonics Corporation ($IPGP) | 41.8% | 44.7% | 40.9% | 26.8% | 24.0% |
| CTS Corporation ($CTS) | 20.7% | 14.0% | 17.8% | 17.6% | 18.1% |
| TE Connectivity Ltd. ($TEL) | 20.9% | 20.4% | 21.4% | 19.8% | 11.1% |
| TTM Technologies, Inc. ($TTMI) | 14.0% | 14.6% | 13.5% | 15.8% | 9.7% |
| IEC Electronics Corp. ($IEC) | 7.4% | 3.8% | 4.3% | 6.6% | 7.5% |
| |
|---|
| Median (12 companies) | 4.8% | 4.5% | 4.7% | 6.1% | 5.9% |
|---|
| Jabil Inc. ($JBL) | 6.6% | 6.1% | 6.0% | 5.8% | 4.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| eMagin Corporation ($EMAN) | 6.7% | 6.2% | 8.8% | 4.2% | 8.5% |
| IPG Photonics Corporation ($IPGP) | 12.6% | 9.0% | 11.0% | 10.2% | 7.3% |
| TTM Technologies, Inc. ($TTMI) | 3.4% | 5.7% | 5.3% | 6.7% | 4.9% |
| TE Connectivity Ltd. ($TEL) | 5.3% | 5.6% | 6.7% | 5.6% | 4.6% |
| CTS Corporation ($CTS) | 5.2% | 4.3% | 6.1% | 4.6% | 3.5% |
| |
|---|
| Median (12 companies) | 2.8% | 2.7% | 2.4% | 1.4% | 2.6% |
|---|
| Jabil Inc. ($JBL) | 5.0% | 3.8% | 4.7% | 4.0% | 3.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IEC Electronics Corp. ($IEC) | 16.9% | 3.1% | 6.4% | 12.7% | 14.8% |
| Sanmina Corporation ($SANM) | 14.2% | 13.9% | 7.0% | 16.2% | 13.0% |
| Plexus Corp. ($PLXS) | 8.7% | 10.3% | 9.6% | 12.6% | 12.4% |
| CTS Corporation ($CTS) | 18.1% | 9.8% | 14.8% | 11.8% | 9.2% |
| SMTC Corporation ($SMTX) | 2.0% | -16.0% | 4.0% | 4.2% | 7.4% |
| |
|---|
| Median (13 companies) | 6.2% | 4.2% | 6.4% | 10.2% | 4.5% |
|---|
| Jabil Inc. ($JBL) | 12.3% | 9.3% | 12.5% | 16.1% | 10.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SMTC Corporation ($SMTX) | 1.0x | - | 11.3x | 3.8x | 4.2x |
| TE Connectivity Ltd. ($TEL) | 1.4x | 1.3x | 1.1x | 1.1x | 2.7x |
| IEC Electronics Corp. ($IEC) | 2.0x | 5.6x | 4.9x | 3.6x | 2.1x |
| TTM Technologies, Inc. ($TTMI) | 2.2x | 1.5x | 3.2x | 3.3x | 2.0x |
| Plexus Corp. ($PLXS) | -1.2x | -1.5x | -0.7x | 0.3x | -0.0x |
| |
|---|
| Median (10 companies) | -0.0x | -0.1x | -0.2x | 0.1x | -0.1x |
|---|
| Jabil Inc. ($JBL) | 1.0x | 0.8x | 1.0x | 0.9x | 1.4x |
