NXP Semiconductors N.V. EBITDA dropped on 12.4% and Revenue decreased on 3.0%
02/01/2021 • About NXP Semiconductors N.V. (
$NXPI) • By InTwits
NXP Semiconductors N.V. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 27.9% in 2020, 30.9% in 2019, 49.9% in 2018, 46.2% in 2017, 21.6% in 2016
- NXP Semiconductors N.V. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.4%. At the same time it's in pair with industry average of 7.3%
- CAPEX is quite volatile: $489m in FY2020, $600m in FY2019, $593m in FY2018, $176m in FY2017, $86m in FY2016
- In the last 5 years the company invested considerably less than D&A: $2,470m vs. $6,365m
- The company has potentially unprofitable business model: ROIC is 2.5%
- It operates with high leverage: Net Debt/EBITDA is 2.2x 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 decreased on 3.0%. Annual revenue decline showed slowdown in 20Q4 - revenue increased on 9.0%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.0 pp from 30.9% to 27.9% in 2020. During 2016-2020 EBITDA Margin topped in 2018 at 49.9% and was declining since that time.
Gross Margin decreased on 2.8 pp from 52.0% to 49.2% in 2020. During the last 5 years Gross Margin topped in 2019 at 52.0%. SG&A as a % of Revenue showed almost no change in 2020. SG&A as a % of Revenue followed a declining trend at -0.50 pp per annum in 2016-2020.
Net Income margin decreased on 2.1 pp from 2.7% to 0.60% in 2020. During the last 5 years Net Income margin topped in 2017 at 23.9% and was declining since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 4.6% in 2020. CAPEX/Revenue decreased slightly on 1.4 pp from 6.0% in 2017 to 4.6% in 2020. It's average level of CAPEX/Revenue for the last three years was 5.7%. During 2016-2020 CAPEX as a % of Revenue topped in 2018 at 6.5% and was declining since that time.
Return on investment
The company operates at low ROIC (2.5%) and ROE (0.6%). ROIC decreased slightly on 1.2 pp from 3.7% to 2.5% in 2020. ROE decreased slightly on 1.9 pp from 2.4% to 0.57% in 2020. During the last 5 years ROIC topped in 2018 at 13.9% and was declining since that time. During the last 5 years ROE topped in 2018 at 18.4% and was declining since that time.
Leverage (Debt)
Debt level is 2.2x Net Debt / EBITDA and 3.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from 2.4x to 2.2x in 2020. Debt showed almost no change in 2020 while cash jumped on 118%.
The company has no short term refinancing risk: short term debt is zero.
Valuation and dividends
The company's trades at EV/EBITDA 24.0x and P/E 1,009.3x.
Management team
NXP Semiconductors N.V.'s CEO Kurt Sievers has spent 9 months with the company. The company's CFO Peter Kelly has spent 5 years with the company.
Financial and operational results
FY ended 12/31/2020
NXP Semiconductors N.V. ($NXPI) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 9,498 | 9,256 | 9,407 | 8,877 | 8,612 | -3.0% |
| Gross Profit | 4,069 | 4,619 | 4,851 | 4,618 | 4,235 | -8.3% |
| SG&A | 1,141 | 1,090 | 993 | 924 | 879 | -4.9% |
| EBITDA | 2,055 | 4,275 | 4,697 | 2,747 | 2,406 | -12.4% |
| EBIT | -150 | 2,102 | 2,710 | | | |
| Interest expence | 408 | 310 | 273 | | | |
| Tax | -851 | -483 | 176 | | | |
| Net Income | 200 | 2,215 | 2,208 | 243 | 52 | -78.6% |
| Stock Based Compensation | 333 | 281 | 314 | | | |
Balance Sheet
|
|---|
| Cash | 1,894 | 3,547 | 2,789 | 1,045 | 2,275 | 117.7% |
| Accounts Receivable | 1,033 | 879 | 792 | | | |
| Inventory | 1,113 | 1,236 | 1,279 | | | |
| Accounts Payable | 973 | 1,146 | 999 | | | |
| Short Term Debt | 421 | 751 | 1,107 | 64 | 0 | -100.0% |
| Long Term Debt | 8,766 | 5,814 | 6,247 | 7,564 | 7,609 | 0.6% |
Cash flow
|
|---|
| Capex | 389 | 552 | 611 | 526 | 392 | -25.5% |
| Dividends | | | 74 | | | |
Ratios
|
|---|
| Revenue growth | 55.7% | -2.5% | 1.6% | -5.6% | -3.0% | |
| EBITDA growth | -18.8% | 108.0% | 9.9% | -41.5% | -12.4% | |
|
|---|
| Gross Margin | 42.8% | 49.9% | 51.6% | 52.0% | 49.2% | -2.8% |
| EBITDA Margin | 21.6% | 46.2% | 49.9% | 30.9% | 27.9% | -3.0% |
| EBIT Margin | -1.6% | 22.7% | 28.8% | | |
| SG&A, % of revenue | 12.0% | 11.8% | 10.6% | 10.4% | 10.2% | -0.2% |
| SBC, % of revenue | 3.5% | 3.0% | 3.3% | | |
| Net Income Margin | 2.1% | 23.9% | 23.5% | 2.7% | 0.6% | -2.1% |
| CAPEX, % of revenue | 4.1% | 6.0% | 6.5% | 5.9% | 4.6% | -1.4% |
|
|---|
| ROIC | -0.7% | 10.0% | 13.9% | 3.7% | 2.5% | -1.2% |
| ROE | 1.8% | 18.1% | 18.4% | 2.4% | 0.6% | -1.9% |
| Net Debt/EBITDA | 3.5x | 0.7x | 1.0x | 2.4x | 2.2x | -0.2x |
| Interest coverage ratio (ICR) | | 6.8x | 9.9x | | |
| Interest expence / Average debt | 4.4% | 3.9% | 3.9% | | | |
People
|
|---|
| Insider ownership | 0.2% | 0.2% | 0.2% | | | |
| Employees | 40,400 | 30,100 | 30,000 | | | |
| Revenue/Employee, th. $ | 235 | 308 | 314 | | | |
NXP Semiconductors N.V. ($NXPI) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 2,021 | 1,817 | 2,267 | 2,507 | | -3.5% | -18.0% | 0.1% | 9.0% |
| EBITDA | 624 | 414 | 637 | 779 | | 9.7% | -38.8% | -16.7% | 5.7% |
| Net Income | -21 | -214 | -22 | 309 | | - | -622.0% | -120.2% | 171.1% |
Balance Sheet
|
|---|
| Cash | 1,079 | 3,266 | 3,566 | 2,275 | | -50.8% | 7.8% | 0.8% | 117.7% |
| Short Term Debt | 59 | 1,408 | 1,810 | 0 | | -94.9% | 14.5% | 51.2% | -100.0% |
| Long Term Debt | 7,526 | 8,167 | 7,769 | 7,609 | | 18.6% | 9.1% | 3.2% | 0.6% |
Ratios
|
|---|
| Gross Margin | 49.3% | 47.3% | 48.1% | 51.4% | | -1.9% | -4.6% | -4.3% | -1.2% |
| EBITDA Margin | 30.9% | 22.8% | 28.1% | 31.1% | | 3.7% | -7.7% | -5.7% | -1.0% |
| Net Income Margin | -1.0% | -11.8% | -1.0% | 12.3% | | -0.0% | -13.6% | -5.8% | 7.4% |
Peers in Semiconductors
Below you can find NXP Semiconductors N.V. benchmarking vs. other companies in Semiconductors 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 |
|---|
| 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 ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (43 companies) | 1.2% | 11.0% | 4.9% | -3.0% | 2.8% |
|---|
| NXP Semiconductors N.V. ($NXPI) | - | -2.5% | 1.6% | -5.6% | -3.0% |
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% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| |
|---|
| Median (43 companies) | 48.0% | 48.6% | 50.2% | 50.4% | 49.4% |
|---|
| NXP Semiconductors N.V. ($NXPI) | 42.8% | 49.9% | 51.6% | 52.0% | 49.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| 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. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.3% | 12.9% | 17.3% |
|---|
| NXP Semiconductors N.V. ($NXPI) | 21.6% | 46.2% | 49.9% | 30.9% | 27.9% |
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% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| |
|---|
| Median (40 companies) | 3.6% | 4.7% | 4.2% | 3.7% | 3.6% |
|---|
| NXP Semiconductors N.V. ($NXPI) | 4.1% | 6.0% | 6.5% | 5.9% | 4.6% |
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 ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.7% | 3.2% | 2.2% | 2.3% | 5.5% |
|---|
| NXP Semiconductors N.V. ($NXPI) | -0.7% | 10.0% | 13.9% | 3.7% | 2.5% |
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. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (31 companies) | -0.0x | 0.4x | 0.3x | 0.5x | 0.1x |
|---|
| NXP Semiconductors N.V. ($NXPI) | 3.5x | 0.7x | 1.0x | 2.4x | 2.2x |
