Intel Corp reports 10.9% CAPEX decline in 2020 while 8.2% Revenue growth
01/21/2021 • About Intel Corp (
$INTC) • By InTwits
Intel Corp reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Intel Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.5%. At the same time it's a lot of higher than industry average of 7.3%.
- 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 20.7%
- It operates with high leverage: Net Debt/EBITDA is 0.9x while industry average is 0.3x
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 8.2%. Revenue growth showed slowdown in FY20Q4 - it was -1.1% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.74 pp from 45.9% to 46.7% in FY2020. EBITDA Margin stuck to a growing trend at 2.7 pp per annum in FY2016-FY2020.
Gross Margin decreased on 2.5 pp from 58.6% to 56.0% in FY2020. During the last 5 years Gross Margin topped in FY2017 at 62.3% and was declining since that time. SG&A as a % of Revenue decreased slightly on 0.61 pp from 8.5% to 7.9% in FY2020. SG&A as a % of Revenue stuck to a declining trend at -1.6 pp per annum in the last 5 years.
Net Income margin decreased on 2.4 pp from 29.2% to 26.8% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Intel Corp had CAPEX/Revenue of 18.6%. CAPEX/Revenue showed almost no change from FY2017 to FY2020. For the last three years the average CAPEX/Revenue was 20.8%. During FY2016-FY2020 CAPEX as a % of Revenue topped in FY2019 at 22.5%.
Return on investment
The company operates at high and attractive ROIC (20.7%) and ROE (26.3%). ROIC showed almost no change in FY2020. ROE decreased slightly on 1.2 pp from 27.6% to 26.3% in FY2020. During FY2016-FY2020 ROIC topped in FY2018 at 23.2% and was declining since that time.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and 1.0x Debt / EBITDA. Net Debt / EBITDA increased on 0.1x from 0.8x to 0.9x in FY2020. Debt surged on 25.0% while cash jumped on 39.8%. During FY2016-FY2020 Net Debt/EBITDA bottomed in FY2018 at 0.7x and was growing since that time.
Intel Corp has no short term refinancing risk: cash is higher than short term debt (219.1%).
Valuation and dividends
Intel Corp's trades at EV/EBITDA 7.1x and P/E 10.9x.
Management team
Robert Holmes Swan "Bob" is a the company's CEO. Robert Holmes Swan "Bob" has spent 2 years with the company. George S Davis is a Intel Corp's CFO. George S Davis has spent 1 year at the company.
Financial and operational results
FY ended 12/26/2020
Intel Corp ($INTC) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 59,387 | 62,761 | 70,848 | 71,965 | 77,867 | 8.2% |
| Gross Profit | 36,233 | 39,098 | 43,737 | 42,140 | 43,612 | 3.5% |
| SG&A | 8,377 | 7,452 | 6,750 | 6,150 | 6,180 | 0.5% |
| EBITDA | 20,923 | 26,179 | 32,401 | 33,046 | 36,333 | 9.9% |
| EBIT | 13,133 | 18,050 | 23,316 | | | |
| Interest expence | 733 | 646 | 468 | | | |
| Tax | 2,620 | 10,751 | 2,264 | | | |
| Net Income | 10,316 | 9,601 | 21,053 | 21,048 | 20,899 | -0.7% |
| Stock Based Compensation | 1,444 | 1,358 | 1,546 | | | |
Balance Sheet
|
|---|
| Cash | 5,560 | 3,433 | 3,019 | 4,194 | 5,865 | 39.8% |
| Accounts Receivable | 4,690 | 5,607 | 6,722 | | | |
| Inventory | 5,553 | 6,983 | 7,253 | | | |
| Accounts Payable | 2,475 | 2,928 | 3,824 | | | |
| Short Term Debt | 4,634 | 1,776 | 1,261 | 3,868 | 2,677 | -30.8% |
| Long Term Debt | 20,649 | 25,037 | 25,098 | 25,683 | 34,251 | 33.4% |
Cash flow
|
|---|
| Capex | 9,625 | 11,778 | 15,181 | 16,213 | 14,453 | -10.9% |
| Dividends | 4,925 | 5,072 | 5,541 | | | |
| Acquisitions | 15,470 | 14,499 | 190 | | | |
Ratios
|
|---|
| Revenue growth | 7.3% | 5.7% | 12.9% | 1.6% | 8.2% | |
| EBITDA growth | -7.9% | 25.1% | 23.8% | 2.0% | 9.9% | |
|
|---|
| Gross Margin | 61.0% | 62.3% | 61.7% | 58.6% | 56.0% | -2.5% |
| EBITDA Margin | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% | 0.7% |
| EBIT Margin | 22.1% | 28.8% | 32.9% | | |
| SG&A, % of revenue | 14.1% | 11.9% | 9.5% | 8.5% | 7.9% | -0.6% |
| SBC, % of revenue | 2.4% | 2.2% | 2.2% | | |
| Net Income Margin | 17.4% | 15.3% | 29.7% | 29.2% | 26.8% | -2.4% |
| CAPEX, % of revenue | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% | -4.0% |
|
|---|
| ROIC | 14.8% | 18.8% | 23.2% | 21.0% | 20.7% | -0.3% |
| ROE | 16.0% | 14.0% | 29.1% | 27.6% | 26.3% | -1.2% |
| Net Debt/EBITDA | 0.9x | 0.9x | 0.7x | 0.8x | 0.9x | 0.1x |
| Interest expence / Average debt | 2.9% | 2.5% | 1.8% | | | |
People
|
|---|
| Insider ownership | 0.0% | 0.0% | 0.0% | | | |
| Employees | 106,000 | 102,700 | 107,400 | | | |
| Revenue/Employee, th. $ | 560 | 611 | 660 | | | |
Intel Corp ($INTC) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 19,828 | 19,728 | 18,333 | 19,978 | | 23.5% | 19.5% | -4.5% | -1.1% |
| EBITDA | 10,088 | 8,760 | 8,182 | 8,887 | | 47.4% | 21.4% | -10.8% | -9.4% |
| Net Income | 5,661 | 5,105 | 4,276 | 5,857 | | 42.5% | 22.2% | -28.6% | -15.2% |
Balance Sheet
|
|---|
| Cash | 11,380 | 8,736 | 3,356 | 5,865 | | 260.8% | 204.7% | -14.7% | 39.8% |
| Short Term Debt | 3,464 | 2,254 | 504 | 2,677 | | 18.3% | -42.3% | -90.6% | -30.8% |
| Long Term Debt | 36,455 | 36,093 | 36,059 | 34,251 | | 39.3% | 41.5% | 49.6% | 33.4% |
Ratios
|
|---|
| Gross Margin | 60.6% | 53.3% | 53.1% | 56.8% | | 4.0% | -6.6% | -5.7% | -2.0% |
| EBITDA Margin | 50.9% | 44.4% | 44.6% | 44.5% | | 8.3% | 0.7% | -3.2% | -4.1% |
| Net Income Margin | 28.6% | 25.9% | 23.3% | 29.3% | | 3.8% | 0.6% | -7.9% | -4.9% |
Peers in Semiconductors
Below we provide Intel Corp benchmarking against other companies in Semiconductors 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 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (42 companies) | 1.4% | 11.0% | 4.4% | -3.1% | 1.9% |
|---|
| Intel Corp ($INTC) | - | 5.7% | 12.9% | 1.6% | 8.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| Texas Instruments Incorporated ($TXN) | 61.8% | 64.3% | 65.1% | 63.7% | 64.1% |
| |
|---|
| Median (42 companies) | 47.2% | 48.6% | 50.2% | 50.2% | 49.2% |
|---|
| Intel Corp ($INTC) | 61.0% | 62.3% | 61.7% | 58.6% | 56.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| Micron Technology, Inc. ($MU) | 25.4% | 47.9% | 65.0% | 54.7% | 40.4% |
| |
|---|
| Median (40 companies) | 9.2% | 10.7% | 9.3% | 13.5% | 17.3% |
|---|
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| Rambus, Inc. ($RMBS) | 2.5% | 2.4% | 4.7% | 2.9% | 12.2% |
| |
|---|
| Median (39 companies) | 3.6% | 4.7% | 4.2% | 3.8% | 3.7% |
|---|
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (43 companies) | 1.4% | 3.2% | 2.2% | 3.8% | 5.5% |
|---|
| Intel Corp ($INTC) | 14.8% | 18.8% | 23.2% | 21.0% | 20.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (31 companies) | -0.0x | 0.4x | 0.3x | 0.5x | 0.1x |
|---|
| Intel Corp ($INTC) | 0.9x | 0.9x | 0.7x | 0.8x | 0.9x |
