Plexus Corp. reports 14.2% EBITDA growth in 2020 and almost no change in EBITDA Margin of 6.5%
10/28/2020 • About Plexus Corp. (
$PLXS) • By InTwits
Plexus Corp. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 6.5% in FY2020 vs. 6.1% in FY2019 vs. 5.7% in FY2016
- Plexus Corp. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's in pair with industry average of 3.7%
- CAPEX is quite volatile: $50m in FY2020, $91m in FY2019, $63m in FY2018, $39m in FY2017, $31m in FY2016
- The company has highly profitable business model: ROIC is 12.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Plexus Corp.'s Revenue increased on 7.1%. Revenue growth showed acceleration in FY20Q4 - it increased 12.7% YoY. During the last 5 years Revenue growth topped in FY2018 at 13.7% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.9 pp from 13.1% to 18.0% in FY2020.
Gross Margin showed almost no change in FY2020. SG&A as a % of Revenue showed almost no change in FY2020. During the last 5 years SG&A as a % of Revenue topped in FY2017 at 5.0% and was declining since that time.
Net Income margin showed almost no change in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Plexus Corp. had CAPEX/Revenue of 1.5%. The company's CAPEX/Revenue showed almost no change from FY2017 to FY2020. For the last three years the average CAPEX/Revenue was 2.2%. During FY2016-FY2020 CAPEX as a % of Revenue topped in FY2019 at 2.9%.
Return on investment
The company operates at good ROIC (12.4%) and ROE (12.7%). ROIC showed almost no change in FY2020. ROE increased slightly on 0.59 pp from 12.2% to 12.7% in FY2020. ROIC followed a growing trend at 0.97 pp per annum in FY2016-FY2020.
Leverage (Debt)
Debt level is -0.0x Net Debt / EBITDA and 1.7x Debt / EBITDA. Debt surged on 31.7% while cash surged on 72.4%.
Plexus Corp. has no short term refinancing risk: cash is higher than short term debt (249.6%).
Valuation and dividends
The company's trades at EV/EBITDA 9.1x and P/E 17.3x.
Management team
Plexus Corp.'s CEO Todd P Kelsey has spent 4 years with the company. The company's CFO Patrick J Jermain has spent 6 years with the company.
Financial and operational results
FY ended 10/03/2020
Plexus Corp. ($PLXS) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 2,556 | 2,528 | 2,874 | 3,164 | 3,390 | 7.1% |
| Gross Profit | 227 | 256 | 258 | 292 | 313 | 7.2% |
| SG&A | 121 | 126 | 139 | 148 | 153 | 3.5% |
| EBITDA | 147 | 175 | 167 | 194 | 222 | 14.2% |
| EBIT | 99 | 130 | 118 | | | |
| Interest expence | 15 | 14 | 12 | | | |
| Tax | 11 | 10 | 95 | | | |
| Net Income | 76 | 112 | 13 | 109 | 117 | 8.2% |
| Stock Based Compensation | 19 | 17 | 18 | | | |
Balance Sheet
|
|---|
| Cash | 433 | 569 | 297 | 224 | 386 | 72.4% |
| Accounts Receivable | 417 | 366 | 395 | | | |
| Inventory | 564 | 655 | 794 | | | |
| Accounts Payable | 397 | 414 | 506 | | | |
| Short Term Debt | 79 | 287 | 6 | 101 | 155 | 53.5% |
| Long Term Debt | 184 | 26 | 183 | 187 | 225 | 20.0% |
Cash flow
|
|---|
| Capex | 31 | 39 | 63 | 91 | 50 | -44.7% |
| Acquisitions | | | 12 | | | |
Ratios
|
|---|
| Revenue growth | -3.7% | -1.1% | 13.7% | 10.1% | 7.1% | |
| EBITDA growth | -10.4% | 19.3% | -4.9% | 16.6% | 14.2% | |
|
|---|
| Gross Margin | 8.9% | 10.1% | 9.0% | 9.2% | 9.2% | 0.0% |
| EBITDA Margin | 5.7% | 6.9% | 5.8% | 6.1% | 6.5% | 0.4% |
| EBIT Margin | 3.9% | 5.1% | 4.1% | | |
| SG&A, % of revenue | 4.7% | 5.0% | 4.8% | 4.7% | 4.5% | -0.2% |
| SBC, % of revenue | 0.8% | 0.7% | 0.6% | | |
| Net Income Margin | 3.0% | 4.4% | 0.5% | 3.4% | 3.5% | 0.0% |
| CAPEX, % of revenue | 1.2% | 1.5% | 2.2% | 2.9% | 1.5% | -1.4% |
|
|---|
| ROIC | 8.7% | 10.3% | 9.6% | 12.6% | 12.4% | -0.2% |
| ROE | 8.7% | 11.5% | 1.3% | 12.2% | 12.7% | 0.6% |
| Net Debt/EBITDA | -1.2x | -1.5x | -0.7x | 0.3x | -0.0x | -0.4x |
| Interest coverage ratio (ICR) | 6.8x | 9.6x | 9.7x | | |
| Interest expence / Average debt | 5.6% | 4.7% | 4.9% | | | |
People
|
|---|
| Insider ownership | 2.3% | 2.3% | 2.3% | | | |
| Employees | 14,000 | 16,000 | 18,000 | | | |
| Revenue/Employee, th. $ | 183 | 158 | 160 | | | |
Plexus Corp. ($PLXS) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 852 | 767 | 857 | 913 | | 11.3% | -2.7% | 7.2% | 12.7% |
| EBITDA | 54 | 34 | 63 | 68 | | 8.8% | -26.0% | 32.1% | 32.7% |
| Net Income | 31 | 13 | 36 | 38 | | 39.5% | -47.8% | 44.5% | 2.4% |
Balance Sheet
|
|---|
| Cash | 253 | 226 | 297 | 386 | | 34.0% | 22.7% | 49.5% | 72.4% |
| Short Term Debt | 68 | 116 | 154 | 155 | | 685.9% | 24.9% | 10.8% | 53.5% |
| Long Term Debt | 229 | 226 | 227 | 225 | | 21.9% | 20.7% | 20.9% | 20.0% |
Ratios
|
|---|
| Gross Margin | 9.3% | 8.0% | 9.7% | 9.8% | | -0.2% | -0.9% | 0.8% | 0.2% |
| EBITDA Margin | 6.3% | 4.4% | 7.4% | 7.4% | | -0.1% | -1.4% | 1.4% | 1.1% |
| Net Income Margin | 3.6% | 1.7% | 4.2% | 4.1% | | 0.7% | -1.5% | 1.1% | -0.4% |
Peers in Electronic Manufacturing Services
Below we provide Plexus Corp. 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 ($EMAN) | - | 3.0% | 19.1% | 1.9% | 10.1% |
| Jabil Inc. ($JBL) | - | 3.9% | 15.9% | 14.4% | 7.8% |
| SMTC Corporation ($SMTX) | - | -17.1% | 55.2% | 72.4% | 3.7% |
| |
|---|
| Median (13 companies) | 4.6% | 3.0% | 7.1% | 1.9% | -8.7% |
|---|
| Plexus Corp. ($PLXS) | - | -1.1% | 13.7% | 10.1% | 7.1% |
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. ($RFIL) | 28.0% | 30.4% | 34.1% | 28.3% | 26.9% |
| |
|---|
| Median (13 companies) | 22.2% | 15.8% | 15.2% | 15.4% | 17.1% |
|---|
| Plexus Corp. ($PLXS) | 8.9% | 10.1% | 9.0% | 9.2% | 9.2% |
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. ($IEC) | 7.4% | 3.8% | 4.3% | 6.6% | 7.5% |
| |
|---|
| Median (12 companies) | 4.8% | 4.5% | 4.7% | 5.8% | 5.3% |
|---|
| Plexus Corp. ($PLXS) | 5.7% | 6.9% | 5.8% | 6.1% | 6.5% |
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% |
| Jabil Inc. ($JBL) | 5.0% | 3.8% | 4.7% | 4.0% | 3.6% |
| |
|---|
| Median (12 companies) | 2.8% | 3.4% | 2.5% | 1.4% | 3.5% |
|---|
| Plexus Corp. ($PLXS) | 1.2% | 1.5% | 2.2% | 2.9% | 1.5% |
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% |
| Jabil Inc. ($JBL) | 12.3% | 9.3% | 12.5% | 16.1% | 10.8% |
| CTS Corporation ($CTS) | 18.1% | 9.8% | 14.8% | 11.8% | 9.2% |
| SMTC Corporation ($SMTX) | 2.0% | -16.0% | 4.0% | 4.2% | 7.4% |
| |
|---|
| Median (13 companies) | 6.2% | 4.2% | 6.4% | 10.2% | 4.5% |
|---|
| Plexus Corp. ($PLXS) | 8.7% | 10.3% | 9.6% | 12.6% | 12.4% |
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 |
| Jabil Inc. ($JBL) | 1.0x | 0.8x | 1.0x | 0.9x | 1.4x |
| |
|---|
| Median (10 companies) | 0.6x | 0.5x | 0.5x | 0.1x | 0.6x |
|---|
| Plexus Corp. ($PLXS) | -1.2x | -1.5x | -0.7x | 0.3x | -0.0x |
