Sanmina Corporation revenue dropped on 15.5% and EBITDA Margin showed almost no change
11/10/2020 • About Sanmina Corporation (
$SANM) • By InTwits
Sanmina Corporation reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is relatively stable: 5.2% in FY2020 vs. 4.9% in FY2019 vs. 5.2% in FY2016
- Sanmina Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: $54m in FY2020, $142m in FY2019, $200m in FY2018, $225m in FY2017, $207m in FY2016
- The company has highly profitable business model: ROIC is 13.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Sanmina Corporation's Revenue dropped on 15.5%. Annual revenue decline showed slowdown in FY20Q4 - revenue decreased slightly on 0.91%. EBITDA Margin showed almost no change in FY2020. During FY2016-FY2020 EBITDA Margin bottomed in FY2018 at 3.4% and was growing since that time.
Gross Margin showed almost no change in FY2020. During the last 5 years Gross Margin bottomed in FY2018 at 6.5% and was growing since that time. SG&A as a % of Revenue showed almost no change in FY2020. During the last 5 years SG&A as a % of Revenue bottomed in FY2019 at 3.2%.
Net Income margin showed almost no change in FY2020. During FY2016-FY2020 Net Income margin bottomed in FY2018 at -1.3% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.95% in FY2020. The company showed small CAPEX/Revenue decline of 0.68 pp from 1.6% in FY2017 to 0.95% in FY2020. It's average CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at good ROIC (13.0%) while ROE is low (8.5%). ROIC decreased on 3.3 pp from 16.2% to 13.0% in FY2020. ROE decreased slightly on 0.55 pp from 9.1% to 8.5% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.2x and Debt / EBITDA is 1.1x. Debt increased on 4.2% while cash increased on 5.7%.
Sanmina Corporation has no short term refinancing risk: cash is higher than short term debt (1,357.1%).
Valuation and dividends
Sanmina Corporation's trades at EV/EBITDA 5.6x and P/E 15.2x.
Management team
Sanmina Corporation's CEO is Jure Sola. Jure Sola has 1 year tenure with the company. Kurt Adzema is a the company's CFO. Kurt Adzema has spent 1 year at the company.
Financial and operational results
FY ended 10/03/2020
Sanmina Corporation ($SANM) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 6,481 | 6,869 | 7,110 | 8,234 | 6,960 | -15.5% |
| Gross Profit | 514 | 520 | 464 | 592 | 526 | -11.2% |
| SG&A | 245 | 252 | 251 | 260 | 241 | -7.3% |
| EBITDA | 337 | 345 | 238 | 403 | 363 | -10.0% |
| EBIT | 225 | 226 | 119 | | | |
| Tax | 17 | 75 | 193 | | | |
| Net Income | 188 | 139 | -96 | 142 | 140 | -1.3% |
| Stock Based Compensation | 27 | 38 | 33 | | | |
Balance Sheet
|
|---|
| Cash | 398 | 407 | 420 | 455 | 481 | 5.7% |
| Accounts Receivable | 974 | 1,110 | 1,177 | | | |
| Inventory | 946 | 1,052 | 1,374 | | | |
| Accounts Payable | 1,121 | 1,280 | 1,547 | | | |
| Short Term Debt | 28 | 88 | 593 | 38 | 35 | -7.7% |
| Long Term Debt | 434 | 391 | 14 | 347 | 366 | 5.6% |
Cash flow
|
|---|
| Capex | 120 | 112 | 119 | 135 | 66 | -51.0% |
| Acquisitions | 59 | | 2 | | | |
Ratios
|
|---|
| Revenue growth | 1.7% | 6.0% | 3.5% | 15.8% | -15.5% | |
| EBITDA growth | 10.9% | 2.5% | -31.0% | 69.2% | -10.0% | |
|
|---|
| Gross Margin | 7.9% | 7.6% | 6.5% | 7.2% | 7.6% | 0.4% |
| EBITDA Margin | 5.2% | 5.0% | 3.4% | 4.9% | 5.2% | 0.3% |
| EBIT Margin | 3.5% | 3.3% | 1.7% | | |
| SG&A, % of revenue | 3.8% | 3.7% | 3.5% | 3.2% | 3.5% | 0.3% |
| SBC, % of revenue | 0.4% | 0.6% | 0.5% | | |
| Net Income Margin | 2.9% | 2.0% | -1.3% | 1.7% | 2.0% | 0.3% |
| CAPEX, % of revenue | 1.9% | 1.6% | 1.7% | 1.6% | 0.9% | -0.7% |
|
|---|
| ROIC | 14.2% | 13.9% | 7.0% | 16.2% | 13.0% | -3.3% |
| ROE | 12.0% | 8.5% | -6.1% | 9.1% | 8.5% | -0.5% |
| Net Debt/EBITDA | 0.2x | 0.2x | 0.8x | -0.2x | -0.2x | -0.0x |
People
|
|---|
| Insider ownership | 3.2% | 3.2% | 3.2% | | | |
| Employees | 45,397 | 47,000 | 47,000 | | | |
| Revenue/Employee, th. $ | 143 | 146 | 151 | | | |
Sanmina Corporation ($SANM) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,840 | 1,591 | 1,655 | 1,875 | | -15.9% | -25.2% | -18.4% | -0.9% |
| EBITDA | 91 | 56 | 98 | 119 | | -15.3% | -47.4% | 1.1% | 29.5% |
| Net Income | 38 | 5 | 45 | 52 | | 1.0% | -88.1% | 4.6% | 161.2% |
Balance Sheet
|
|---|
| Cash | 431 | 1,115 | 1,117 | 481 | | 5.2% | 174.9% | 169.7% | 5.7% |
| Short Term Debt | 56 | 691 | 691 | 35 | | -92.1% | 7.3% | 347.0% | -7.7% |
| Long Term Debt | 386 | 377 | 371 | 366 | | 2,586.0% | - | 5.7% | 5.6% |
Ratios
|
|---|
| Gross Margin | 7.3% | 6.8% | 7.9% | 8.1% | | 0.5% | -0.4% | 0.7% | 0.6% |
| EBITDA Margin | 4.9% | 3.5% | 5.9% | 6.3% | | 0.0% | -1.5% | 1.1% | 1.5% |
| Net Income Margin | 2.1% | 0.3% | 2.7% | 2.8% | | 0.3% | -1.6% | 0.6% | 1.7% |
Peers in Electronic Manufacturing Services
Below you can find Sanmina Corporation 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 | 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% |
| Plexus Corp. ($PLXS) | - | -1.1% | 13.7% | 10.1% | 7.1% |
| |
|---|
| Median (13 companies) | 4.6% | 1.9% | 9.8% | 1.9% | -1.3% |
|---|
| Sanmina Corporation ($SANM) | - | 6.0% | 3.5% | 15.8% | -15.5% |
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. ($RFIL) | 28.0% | 30.4% | 34.1% | 28.3% | 26.9% |
| |
|---|
| Median (13 companies) | 22.2% | 15.8% | 15.2% | 15.4% | 17.1% |
|---|
| Sanmina Corporation ($SANM) | 7.9% | 7.6% | 6.5% | 7.2% | 7.6% |
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. ($IEC) | 7.4% | 3.8% | 4.3% | 6.6% | 7.5% |
| |
|---|
| Median (12 companies) | 5.0% | 4.5% | 4.8% | 6.1% | 5.9% |
|---|
| Sanmina Corporation ($SANM) | 5.2% | 5.0% | 3.4% | 4.9% | 5.2% |
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. ($JBL) | 5.0% | 3.8% | 4.7% | 4.0% | 3.6% |
| |
|---|
| Median (12 companies) | 2.8% | 3.4% | 2.5% | 1.4% | 3.5% |
|---|
| Sanmina Corporation ($SANM) | 1.9% | 1.6% | 1.7% | 1.6% | 0.9% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IEC Electronics Corp. ($IEC) | 16.9% | 3.1% | 6.4% | 12.7% | 14.8% |
| Plexus Corp. ($PLXS) | 8.7% | 10.3% | 9.6% | 12.6% | 12.4% |
| 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 ($SMTX) | 2.0% | -16.0% | 4.0% | 4.2% | 7.4% |
| |
|---|
| Median (13 companies) | 6.2% | 4.2% | 6.4% | 10.2% | 4.5% |
|---|
| Sanmina Corporation ($SANM) | 14.2% | 13.9% | 7.0% | 16.2% | 13.0% |
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. ($JBL) | 1.0x | 0.8x | 1.0x | 0.9x | 1.4x |
| |
|---|
| Median (10 companies) | 0.3x | 0.1x | -0.2x | 0.3x | 0.7x |
|---|
| Sanmina Corporation ($SANM) | 0.2x | 0.2x | 0.8x | -0.2x | -0.2x |
