Apple Inc. reports 5.5% revenue growth in FY2020 and 0.67 pp EBITDA Margin decline from 29.4% to 28.7%
10/29/2020 • About Apple Inc. (
$AAPL) • By InTwits
Apple Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Apple Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.6%. At the same time it's in pair with industry average of 5.5%
- CAPEX is quite volatile: $1,407m in FY2020, $887m in FY2019, $784m in FY2018, $690m in FY2017, $539m in FY2016
- The company has highly profitable business model: ROIC is 33.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.1x while industry average is -0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Apple Inc.'s Revenue increased on 5.5%. Revenue growth showed slowdown in FY20Q4 - it was 1.0% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.1 pp from 37.4% to 33.3% in FY2020. EBITDA Margin followed a declining trend at -0.98 pp per annum in FY2016-FY2020.
Gross Margin showed almost no change in FY2020. During the last 5 years Gross Margin bottomed in FY2019 at 37.8%. SG&A as a % of Revenue showed almost no change in FY2020.
Net Income margin showed almost no change in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Apple Inc. had CAPEX/Revenue of 2.7%. CAPEX/Revenue decreased on 2.8 pp from 5.4% in FY2017 to 2.7% in FY2020. It's average CAPEX/Revenue for the last three years was 3.9%. CAPEX as a % of Revenue followed a declining trend at -0.79 pp per annum in FY2016-FY2020.
Return on investment
The company operates at high and attractive ROIC (33.0%) and ROE (73.7%). ROIC increased on 3.6 pp from 29.5% to 33.0% in FY2020. ROE surged on 17.8 pp from 55.9% to 73.7% in FY2020. During the last 5 years ROIC bottomed in FY2017 at 23.8% and was growing since that time. ROE grew at 9.3 pp per annum in FY2016-FY2020.
Leverage (Debt)
Debt level is 1.1x Net Debt / EBITDA and 1.6x Debt / EBITDA. Net Debt / EBITDA jumped on 0.3x from 0.8x to 1.1x in FY2020. Debt surged on 13.2% while cash dropped on 22.2%.
Apple Inc. 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 26.7x and P/E 35.2x.
Management team
Timothy Donald Cook "Tim" is a Apple Inc.'s CEO. Timothy Donald Cook "Tim" has spent 9 years with the company. The company's CFO Luca Maestri has spent 6 years with the company.
Financial and operational results
FY ended 09/26/2020
Apple Inc. ($AAPL) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 215,639 | 229,234 | 265,595 | 260,174 | 274,515 | 5.5% |
| Gross Profit | 84,263 | 88,186 | 101,839 | 98,392 | 104,956 | 6.7% |
| SG&A | 14,194 | 15,261 | 16,705 | 18,245 | 19,916 | 9.2% |
| EBITDA | 70,529 | 71,501 | 81,801 | 76,477 | 78,844 | 3.1% |
| EBIT | 60,024 | 61,344 | 70,898 | | | |
| Interest expence | 1,456 | 2,323 | 3,240 | | | |
| Tax | 15,685 | 15,738 | 13,372 | | | |
| Net Income | 45,687 | 48,351 | 59,531 | 55,256 | 57,411 | 3.9% |
| Stock Based Compensation | 4,210 | 4,840 | 5,340 | | | |
Balance Sheet
|
|---|
| Cash | 20,484 | 20,289 | 25,913 | 48,844 | 38,016 | -22.2% |
| Accounts Receivable | 15,754 | 17,874 | 23,186 | | | |
| Inventory | 2,132 | 4,855 | 3,956 | | | |
| Accounts Payable | 37,294 | 49,049 | 55,888 | | | |
| Short Term Debt | 11,605 | 18,473 | 20,748 | 16,240 | 15,229 | -6.2% |
| Long Term Debt | 75,427 | 97,207 | 93,735 | 91,807 | 107,049 | 16.6% |
Cash flow
|
|---|
| Capex | 12,734 | 12,451 | 13,313 | 10,495 | 7,309 | -30.4% |
| Dividends | 12,150 | 12,769 | 13,712 | | | |
| Acquisitions | 297 | 329 | 721 | | | |
Ratios
|
|---|
| Revenue growth | -7.7% | 6.3% | 15.9% | -2.0% | 5.5% | |
| EBITDA growth | -14.5% | 1.4% | 14.4% | -6.5% | 3.1% | |
|
|---|
| Gross Margin | 39.1% | 38.5% | 38.3% | 37.8% | 38.2% | 0.4% |
| EBITDA Margin | 32.7% | 31.2% | 30.8% | 29.4% | 28.7% | -0.7% |
| EBIT Margin | 27.8% | 26.8% | 26.7% | | |
| SG&A, % of revenue | 6.6% | 6.7% | 6.3% | 7.0% | 7.3% | 0.2% |
| SBC, % of revenue | 2.0% | 2.1% | 2.0% | | |
| Net Income Margin | 21.2% | 21.1% | 22.4% | 21.2% | 20.9% | -0.3% |
| CAPEX, % of revenue | 5.9% | 5.4% | 5.0% | 4.0% | 2.7% | -1.4% |
|
|---|
| ROIC | 27.0% | 23.8% | 28.0% | 29.5% | 33.0% | 3.6% |
| ROE | 36.9% | 36.9% | 49.4% | 55.9% | 73.7% | 17.8% |
| Net Debt/EBITDA | 0.9x | 1.3x | 1.1x | 0.8x | 1.1x | 0.3x |
| Interest expence / Average debt | 1.7% | 2.3% | 2.8% | | | |
People
|
|---|
| Insider ownership | 0.1% | 0.1% | 0.1% | | | |
| Employees | 116,000 | 123,000 | 132,000 | | | |
| Revenue/Employee, th. $ | 1,859 | 1,864 | 2,012 | | | |
Apple Inc. ($AAPL) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 91,819 | 58,313 | 59,685 | 64,698 | | 8.9% | 0.5% | 10.9% | 1.0% |
| EBITDA | 28,754 | 16,002 | 16,224 | 17,877 | | 7.5% | -2.8% | 12.1% | -4.9% |
| Net Income | 22,236 | 11,249 | 11,253 | 12,673 | | 11.4% | -2.7% | 12.0% | -7.4% |
Balance Sheet
|
|---|
| Cash | 39,771 | 40,174 | 33,383 | 38,016 | | -11.2% | 5.8% | -33.9% | -22.2% |
| Short Term Debt | 16,473 | 21,625 | 20,048 | 15,229 | | -24.2% | -3.6% | -14.6% | -6.2% |
| Long Term Debt | 100,278 | 97,136 | 102,138 | 107,049 | | 7.8% | 7.7% | 20.3% | 16.6% |
Ratios
|
|---|
| Gross Margin | 38.4% | 38.4% | 38.0% | 38.2% | | 0.4% | 0.7% | 0.4% | 0.2% |
| EBITDA Margin | 31.3% | 27.4% | 27.2% | 27.6% | | -0.4% | -0.9% | 0.3% | -1.7% |
| Net Income Margin | 24.2% | 19.3% | 18.9% | 19.6% | | 0.5% | -0.6% | 0.2% | -1.8% |
Peers in Technology Hardware, Storage & Peripherals
Below you can find Apple Inc. benchmarking vs. other companies in Technology Hardware, Storage & Peripherals 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Ionix Technology Inc ($IINX) | - | 246.0% | -5.8% | 92.3% | 66.8% |
| Veritec Inc ($VRTC) | - | -52.2% | 53.1% | -38.5% | 42.9% |
| Pure Storage, Inc. ($PSTG) | - | 67.9% | 38.6% | 32.7% | 20.9% |
| USA Technologies, Inc. ($USAT) | - | 34.5% | - | - | 12.9% |
| CPI Card Group Inc. ($PMTS) | - | -17.4% | 0.4% | 8.7% | 12.3% |
| |
|---|
| Median (20 companies) | 1.4% | 1.5% | 4.3% | -3.7% | -10.2% |
|---|
| Apple Inc. ($AAPL) | - | 6.3% | 15.9% | -2.0% | 5.5% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Immersion Corporation ($IMMR) | 99.7% | 99.4% | 99.8% | 99.5% | 99.4% |
| Datasea Inc ($DTSS) | - | 39.3% | 54.4% | - | 89.7% |
| Pure Storage, Inc. ($PSTG) | 61.9% | 65.9% | 65.5% | 66.4% | 69.0% |
| Avid Technology, Inc. ($AVID) | 65.0% | 57.8% | 57.9% | 60.5% | 63.3% |
| Socket Mobile, Inc. ($SCKT) | 50.2% | 53.5% | 51.4% | 52.5% | 53.1% |
| |
|---|
| Median (21 companies) | 38.8% | 39.6% | 38.8% | 32.7% | 37.4% |
|---|
| Apple Inc. ($AAPL) | 39.1% | 38.5% | 38.3% | 37.8% | 38.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CPI Card Group Inc. ($PMTS) | 14.9% | -0.0% | 9.0% | 15.2% | 17.9% |
| Immersion Corporation ($IMMR) | -25.1% | -127.0% | 48.6% | -50.4% | 17.4% |
| Avid Technology, Inc. ($AVID) | 17.5% | 6.6% | 8.4% | 13.5% | 13.6% |
| Western Digital Corporation ($WDC) | 12.5% | 21.4% | 27.5% | 11.5% | 11.7% |
| NCR Corporation ($NCR) | 14.4% | 16.0% | 8.1% | 15.6% | 11.4% |
| |
|---|
| Median (19 companies) | 3.8% | 3.5% | 7.9% | 7.7% | 7.6% |
|---|
| Apple Inc. ($AAPL) | 32.7% | 31.2% | 30.8% | 29.4% | 28.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Datasea Inc ($DTSS) | - | 0.0% | 0.0% | - | 20.9% |
| Hewlett Packard Enterprise Company ($HPE) | 10.8% | 10.9% | 9.6% | 9.8% | 8.8% |
| Pure Storage, Inc. ($PSTG) | 8.9% | 10.4% | 6.3% | 7.4% | 5.3% |
| Stratasys, Ltd. ($SSYS) | 6.7% | 3.3% | 3.5% | 3.5% | 5.2% |
| Western Digital Corporation ($WDC) | 4.5% | 3.0% | 4.0% | 5.3% | 3.9% |
| |
|---|
| Median (19 companies) | 1.7% | 1.8% | 2.2% | 1.7% | 1.7% |
|---|
| Apple Inc. ($AAPL) | 5.9% | 5.4% | 5.0% | 4.0% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| HP Inc. ($HPQ) | 15.8% | 60.8% | 72.9% | 116.0% | 109.2% |
| Avid Technology, Inc. ($AVID) | - | - | 252.4% | 42.1% | 30.0% |
| CPI Card Group Inc. ($PMTS) | 12.8% | -9.3% | 2.7% | 15.4% | 20.5% |
| NCR Corporation ($NCR) | 13.9% | 16.3% | 4.6% | 14.3% | 5.5% |
| Crossroads Systems Inc ($CRSS) | -175.9% | -96.3% | - | - | 3.9% |
| |
|---|
| Median (21 companies) | -2.6% | 0.2% | 2.2% | 2.9% | 2.0% |
|---|
| Apple Inc. ($AAPL) | 27.0% | 23.8% | 28.0% | 29.5% | 33.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Diebold Nixdorf Incorporated ($DBD) | - | 8.3x | - | 6.6x | 7.3x |
| CPI Card Group Inc. ($PMTS) | 5.8x | - | 12.4x | 7.2x | 5.2x |
| Hewlett Packard Enterprise Company ($HPE) | 0.4x | 1.2x | 1.6x | 2.6x | 5.2x |
| NCR Corporation ($NCR) | 2.7x | 2.3x | 5.2x | 3.3x | 4.8x |
| Western Digital Corporation ($WDC) | 5.5x | 1.7x | 1.1x | 3.7x | 3.5x |
| |
|---|
| Median (11 companies) | 0.1x | 0.2x | 0.2x | 1.8x | 3.3x |
|---|
| Apple Inc. ($AAPL) | 0.9x | 1.3x | 1.1x | 0.8x | 1.1x |
