Synnex Corporation EBITDA jumped on 19.6% and EBITDA Margin increased slightly on 0.76 pp from 5.0% to 5.7%
01/11/2021 • About Synnex Corporation (
$SNX) • By InTwits
Synnex Corporation reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Synnex Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.7%.
- The company has business model with average profitability: ROIC is 11.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.3x while industry average is -0.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Synnex Corporation's Revenue increased on 3.9%. Revenue growth showed acceleration in FY20Q4 - it increased 12.7% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.9 pp from 13.1% to 9.2% in FY2020. EBITDA Margin followed a growing trend at 0.54 pp per annum in the last 5 years.
Gross Margin decreased slightly on 0.66 pp from 12.2% to 11.5% in FY2020. SG&A as a % of Revenue decreased slightly on 0.60 pp from 8.8% to 8.2% in FY2020.
Net Income margin showed almost no change in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Synnex Corporation had CAPEX/Revenue of 0.80%. CAPEX/Revenue showed almost no change from FY2017 to FY2020. Average CAPEX/Revenue for the last three years was 0.67%.
Return on investment
The company operates at good ROE (12.9%) while ROIC is low (11.7%). ROIC showed almost no change in FY2020. ROE decreased slightly on 0.86 pp from 13.7% to 12.9% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.3x and Debt / EBITDA is 2.4x. Net Debt / EBITDA dropped on 1.1x from 2.4x to 1.3x in FY2020. Debt surged on 11.9% while cash jumped on 594%. During FY2016-FY2020 Net Debt/EBITDA topped in FY2018 at 3.9x and was declining since that time.
Synnex Corporation has no short term refinancing risk: cash is higher than short term debt (457.6%).
Valuation and dividends
Synnex Corporation's trades at EV/EBITDA 4.4x and P/E 8.5x.
Management team
Dennis Polk is a the company's CEO. Dennis Polk has spent 3 years with the company. The company's CFO Marshall W Witt has spent 7 years with the company.
Financial and operational results
FY ended 11/30/2020
Synnex Corporation ($SNX) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 14,062 | 17,046 | 20,054 | 23,757 | 24,676 | 3.9% |
| Gross Profit | 1,283 | 1,551 | 1,928 | 2,898 | 2,848 | -1.7% |
| SG&A | 903 | 1,042 | 1,377 | 2,084 | 2,018 | -3.2% |
| EBITDA | 501 | 669 | 776 | 1,186 | 1,419 | 19.6% |
| EBIT | 380 | 509 | 551 | | | |
| Tax | 121 | 164 | 157 | | | |
| Net Income | 235 | 301 | 301 | 501 | 529 | 5.7% |
| Stock Based Compensation | 6 | 12 | 23 | | | |
Balance Sheet
|
|---|
| Cash | 381 | 551 | 462 | 226 | 1,565 | 593.8% |
| Accounts Receivable | 1,756 | 2,846 | 3,640 | | | |
| Inventory | 1,742 | 2,163 | 2,393 | | | |
| Accounts Payable | 1,683 | 2,627 | 3,048 | | | |
| Short Term Debt | 363 | 805 | 833 | 299 | 342 | 14.4% |
| Long Term Debt | 601 | 1,136 | 2,623 | 2,718 | 3,035 | 11.6% |
Cash flow
|
|---|
| Capex | 123 | 98 | 125 | 137 | 198 | 44.1% |
| Dividends | 34 | 42 | 60 | | | |
| Acquisitions | 415 | 527 | 1,070 | | | |
Ratios
|
|---|
| Revenue growth | 5.4% | 21.2% | 17.6% | 18.5% | 3.9% | |
| EBITDA growth | 9.3% | 33.5% | 16.1% | 52.8% | 19.6% | |
|
|---|
| Gross Margin | 9.1% | 9.1% | 9.6% | 12.2% | 11.5% | -0.7% |
| EBITDA Margin | 3.6% | 3.9% | 3.9% | 5.0% | 5.7% | 0.8% |
| EBIT Margin | 2.7% | 3.0% | 2.7% | | |
| SG&A, % of revenue | 6.4% | 6.1% | 6.9% | 8.8% | 8.2% | -0.6% |
| SBC, % of revenue | 0.0% | 0.1% | 0.1% | | |
| Net Income Margin | 1.7% | 1.8% | 1.5% | 2.1% | 2.1% | 0.0% |
| CAPEX, % of revenue | 0.9% | 0.6% | 0.6% | 0.6% | 0.8% | 0.2% |
|
|---|
| ROIC | 13.5% | 13.7% | 9.6% | 11.6% | 11.7% | 0.1% |
| ROE | 12.3% | 14.0% | 10.4% | 13.7% | 12.9% | -0.9% |
| Net Debt/EBITDA | 1.2x | 2.1x | 3.9x | 2.4x | 1.3x | -1.1x |
People
|
|---|
| Insider ownership | 1.9% | 1.9% | 1.9% | | | |
| Employees | 105,500 | 107,400 | 229,000 | | | |
| Revenue/Employee, th. $ | 133 | 159 | 88 | | | |
Synnex Corporation ($SNX) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 5,264 | 5,533 | 6,465 | 7,414 | | 0.3% | -3.3% | 4.2% | 12.7% |
| EBITDA | 339 | 249 | 355 | 476 | | 32.3% | -7.7% | 18.1% | 32.5% |
| Net Income | 123 | 57 | 134 | 215 | | 40.7% | -50.2% | 9.2% | 22.2% |
Balance Sheet
|
|---|
| Cash | 296 | 1,113 | 1,452 | 1,565 | | 18.8% | 309.8% | 453.7% | 593.8% |
| Short Term Debt | 597 | 337 | 423 | 342 | | -14.8% | -53.8% | -26.0% | 14.4% |
| Long Term Debt | 3,137 | 3,069 | 3,025 | 3,035 | | 10.9% | 9.9% | 9.7% | 11.6% |
Ratios
|
|---|
| Gross Margin | 13.3% | 11.2% | 11.0% | 11.1% | | 0.3% | -1.0% | -0.7% | -1.0% |
| EBITDA Margin | 6.4% | 4.5% | 5.5% | 6.4% | | 1.6% | -0.2% | 0.6% | 1.0% |
| Net Income Margin | 2.3% | 1.0% | 2.1% | 2.9% | | 0.7% | -1.0% | 0.1% | 0.2% |
Peers in Technology Distributors
Below you can find Synnex Corporation benchmarking vs. other companies in Technology Distributors 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 |
|---|
| Galaxy Next Generation Inc ($GAXY) | - | 3.7% | - | - | 23.3% |
| Wayside Technology Group, Inc. ($WSTG) | - | -61.6% | 13.0% | 15.1% | 20.5% |
| Insight Enterprises, Inc. ($NSIT) | - | 22.2% | 5.6% | 9.2% | 7.9% |
| CDW Corporation ($CDW) | - | 6.1% | 9.5% | 11.0% | 2.4% |
| EACO Corp ($EACO) | - | 5.7% | 23.1% | 14.5% | 1.8% |
| |
|---|
| Median (8 companies) | 5.3% | 4.2% | 8.3% | 11.0% | 2.1% |
|---|
| Synnex Corporation ($SNX) | - | 21.2% | 17.6% | 18.5% | 3.9% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Galaxy Next Generation Inc ($GAXY) | 70.0% | 61.4% | - | 6.1% | 51.0% |
| EACO Corp ($EACO) | 29.3% | 28.5% | 28.5% | 27.7% | 27.2% |
| ADDvantage Technologies Group, Inc. ($AEY) | 32.2% | 30.4% | 23.7% | 16.5% | 23.3% |
| CDW Corporation ($CDW) | 16.6% | 16.5% | 16.7% | 16.9% | 17.4% |
| PC Connection, Inc. ($CNXN) | 13.8% | 13.1% | 15.2% | 16.0% | 16.2% |
| |
|---|
| Median (8 companies) | 14.2% | 16.9% | 16.3% | 15.4% | 16.8% |
|---|
| Synnex Corporation ($SNX) | 9.1% | 9.1% | 9.6% | 12.2% | 11.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CDW Corporation ($CDW) | 7.7% | 7.6% | 7.7% | 8.3% | 9.0% |
| EACO Corp ($EACO) | 4.7% | 4.5% | 5.9% | 6.4% | 6.6% |
| Insight Enterprises, Inc. ($NSIT) | 3.4% | 3.3% | 4.1% | 4.0% | 4.4% |
| Arrow Electronics, Inc. ($ARW) | 4.4% | 4.1% | 4.5% | 1.4% | 4.1% |
| PC Connection, Inc. ($CNXN) | 3.4% | 3.1% | 3.7% | 4.6% | 3.5% |
| |
|---|
| Median (8 companies) | 3.4% | 3.5% | 4.1% | 4.3% | 3.8% |
|---|
| Synnex Corporation ($SNX) | 3.6% | 3.9% | 3.9% | 5.0% | 5.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| EACO Corp ($EACO) | 0.3% | 5.5% | 0.8% | 0.8% | 3.0% |
| ADDvantage Technologies Group, Inc. ($AEY) | 0.8% | 0.4% | 0.3% | 1.1% | 1.2% |
| CDW Corporation ($CDW) | 0.5% | 0.5% | 0.5% | 1.3% | 0.9% |
| Galaxy Next Generation Inc ($GAXY) | 0.0% | 15.1% | - | 0.0% | 0.8% |
| Arrow Electronics, Inc. ($ARW) | 0.7% | 0.8% | 0.5% | 0.5% | 0.4% |
| |
|---|
| Median (8 companies) | 0.4% | 0.5% | 0.5% | 0.8% | 0.6% |
|---|
| Synnex Corporation ($SNX) | 0.9% | 0.6% | 0.6% | 0.6% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CDW Corporation ($CDW) | 18.8% | 20.1% | 23.1% | 26.0% | 23.5% |
| EACO Corp ($EACO) | 22.2% | 16.1% | 21.2% | 23.0% | 14.6% |
| Insight Enterprises, Inc. ($NSIT) | 20.7% | 19.3% | 20.0% | 14.7% | 13.7% |
| Arrow Electronics, Inc. ($ARW) | 12.5% | 12.1% | 13.3% | 1.4% | 11.3% |
| PC Connection, Inc. ($CNXN) | 18.6% | 16.6% | 17.0% | 19.6% | 11.2% |
| |
|---|
| Median (8 companies) | 12.1% | 9.9% | 11.8% | 19.0% | 11.3% |
|---|
| Synnex Corporation ($SNX) | 13.5% | 13.7% | 9.6% | 11.6% | 11.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Arrow Electronics, Inc. ($ARW) | 2.2x | 2.3x | 2.2x | 7.5x | 1.9x |
| CDW Corporation ($CDW) | 2.8x | 2.7x | 2.4x | 2.2x | 1.6x |
| Insight Enterprises, Inc. ($NSIT) | -0.9x | 0.9x | 0.2x | 2.7x | 1.1x |
| EACO Corp ($EACO) | -0.7x | 1.2x | 0.5x | 0.5x | 1.0x |
| PC Connection, Inc. ($CNXN) | -0.5x | -0.6x | -0.9x | -0.6x | -0.9x |
| |
|---|
| Median (6 companies) | 0.1x | 0.9x | 0.5x | 1.4x | 1.1x |
|---|
| Synnex Corporation ($SNX) | 1.2x | 2.1x | 3.9x | 2.4x | 1.3x |
