Evertec, Inc. reports 4.8% revenue growth in 2020 and 2.1 pp EBITDA Margin decline from 45.2% to 43.1%
03/01/2021 • About Evertec, Inc. (
$EVTC) • By InTwits
Evertec, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Evertec, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.7%. At the same time it's in pair with industry average of 3.2%
- CAPEX is quite volatile: $80m in 2020, $41m in 2019, $25m in 2018, $13m in 2017, $9m in 2016
- In the last 5 years the company invested considerably less than D&A: $84m vs. $187m
- The company has highly profitable business model: ROIC is 16.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.5x while industry average is 1.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Evertec, Inc.'s Revenue increased on 4.8%. Revenue growth showed acceleration in 20Q4 - it increased 5.5% YoY. During 2016-2020 Revenue growth topped in 2018 at 11.5% and was decelerating since that time. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.1 pp from 45.2% to 43.1% in 2020.
Gross Margin decreased slightly on 0.65 pp from 56.2% to 55.6% in 2020. SG&A as a % of Revenue increased slightly on 1.3 pp from 12.6% to 13.9% in 2020.
Net Income margin decreased slightly on 0.78 pp from 21.2% to 20.5% in 2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 3.3% in 2020. CAPEX/Revenue increased slightly on 0.57 pp from 2.8% in 2017 to 3.3% in 2020. It's average level of CAPEX/Revenue for the last three years was 3.7%.
Return on investment
The company operates at high and attractive ROE (34.5%) while ROIC is a bit lower (16.7%). ROIC decreased slightly on 1.5 pp from 18.1% to 16.7% in 2020. ROE decreased on 8.7 pp from 43.2% to 34.5% in 2020.
Leverage (Debt)
Debt level is 1.5x Net Debt / EBITDA and 2.4x Debt / EBITDA. Net Debt / EBITDA dropped on 0.6x from 2.0x to 1.5x in 2020. Debt decreased on 5.8% while cash surged on 82.5%. Net Debt/EBITDA followed a declining trend at -0.6x per annum in the last 5 years.
Evertec, Inc. has no short term refinancing risk: cash is higher than short term debt (1,009.2%).
Valuation and dividends
Evertec, Inc.'s trades at EV/EBITDA 13.8x and P/E 25.9x.
Management team
Evertec, Inc.'s CEO Morgan M Schuessler Jr "Mac" has spent 5 years with the company. The company's CFO Joaquin Castrillo has spent 2 years with the company.
Financial and operational results
FY ended 12/31/2020
Evertec, Inc. ($EVTC) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 389.5 | 407.1 | 453.9 | 487.4 | 510.6 | 4.8% |
| Gross Profit | 213.7 | 206.5 | 256.9 | 274.0 | 283.7 | 3.5% |
| SG&A | 47.0 | 56.2 | 68.7 | 61.4 | 70.8 | 15.3% |
| EBITDA | 166.7 | 150.3 | 188.2 | 220.2 | 219.9 | -0.1% |
| EBIT | 107.1 | 86.1 | 125.1 | | | |
| Interest expence | 24.6 | 29.9 | 30.0 | | | |
| Tax | 8.3 | 4.8 | 12.6 | | | |
| Net Income | 75.0 | 55.1 | 86.3 | 103.5 | 104.4 | 0.9% |
| Stock Based Compensation | 6.4 | 9.6 | 12.6 | | | |
Balance Sheet
|
|---|
| Cash | 51.9 | 50.4 | 70.0 | 111.0 | 202.6 | 82.5% |
| Accounts Receivable | 77.8 | 83.3 | 100.3 | | | |
| Accounts Payable | 40.8 | 41.1 | 47.3 | | | |
| Short Term Debt | 47.8 | 58.5 | 14.3 | 20.0 | 20.1 | 0.3% |
| Long Term Debt | 599.7 | 557.3 | 524.1 | 535.6 | 503.4 | -6.0% |
Cash flow
|
|---|
| Capex | 18.5 | 11.3 | 13.9 | 23.0 | 17.1 | -25.7% |
| Dividends | 30.0 | 22.0 | 7.0 | | | |
| Acquisitions | 15.6 | 42.8 | | | | |
Ratios
|
|---|
| Revenue growth | 4.3% | 4.5% | 11.5% | 7.4% | 4.8% | |
| EBITDA growth | -1.0% | -9.8% | 25.2% | 17.0% | -0.1% | |
|
|---|
| Gross Margin | 54.9% | 50.7% | 56.6% | 56.2% | 55.6% | -0.7% |
| EBITDA Margin | 42.8% | 36.9% | 41.5% | 45.2% | 43.1% | -2.1% |
| EBIT Margin | 27.5% | 21.1% | 27.6% | | |
| SG&A, % of revenue | 12.1% | 13.8% | 15.1% | 12.6% | 13.9% | 1.3% |
| SBC, % of revenue | 1.6% | 2.4% | 2.8% | | |
| Net Income Margin | 19.3% | 13.5% | 19.0% | 21.2% | 20.5% | -0.8% |
| CAPEX, % of revenue | 4.7% | 2.8% | 3.1% | 4.7% | 3.3% | -1.4% |
|
|---|
| ROIC | 13.9% | 11.3% | 16.3% | 18.1% | 16.7% | -1.5% |
| ROE | 74.0% | 44.2% | 48.5% | 43.2% | 34.5% | -8.7% |
| Net Debt/EBITDA | 3.6x | 3.8x | 2.5x | 2.0x | 1.5x | -0.6x |
| Interest coverage ratio (ICR) | 4.4x | 2.9x | 4.2x | | |
| Interest expence / Average debt | 3.8% | 4.7% | 5.2% | | | |
People
|
|---|
| Insider ownership | 1.9% | 1.9% | 1.9% | | | |
| Employees | 1,650 | 2,100 | 2,100 | | | |
| Revenue/Employee, th. $ | 236 | 194 | 216 | | | |
Evertec, Inc. ($EVTC) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 122 | 118 | 137 | 134 | | 2.6% | -3.8% | 14.9% | 5.5% |
| EBITDA | 51 | 43 | 62 | 57 | | -9.1% | -23.7% | 15.4% | 8.3% |
| Net Income | 22 | 15 | 34 | 32 | | -16.6% | -42.8% | 39.2% | 29.0% |
Balance Sheet
|
|---|
| Cash | 104 | 147 | 144 | 203 | | 41.5% | 129.5% | 40.6% | 82.5% |
| Short Term Debt | 20 | 35 | 20 | 20 | | -48.4% | 70.6% | 0.9% | 0.3% |
| Long Term Debt | 514 | 509 | 506 | 503 | | -6.0% | -6.4% | -6.3% | -6.0% |
Ratios
|
|---|
| Gross Margin | 55.7% | 51.7% | 57.6% | 56.8% | | -2.2% | -5.4% | 1.3% | 3.1% |
| EBITDA Margin | 41.5% | 36.8% | 45.4% | 42.4% | | -5.3% | -9.6% | 0.2% | 1.1% |
| Net Income Margin | 18.2% | 13.1% | 25.2% | 24.1% | | -4.2% | -9.0% | 4.4% | 4.4% |
Peers in Data Processing & Outsourced Services
Below you can find Evertec, Inc. benchmarking vs. other companies in Data Processing & Outsourced 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 |
|---|
| Square, Inc. ($SQ) | - | 29.6% | 49.0% | 42.9% | 101.5% |
| Global Payments Inc. ($GPN) | - | 37.2% | -15.3% | 45.9% | 51.1% |
| Fiserv, Inc. ($FISV) | - | 3.5% | 2.2% | 74.9% | 45.8% |
| NIC Inc. ($EGOV) | - | 5.8% | 2.5% | 2.7% | 30.0% |
| StoneCo Ltd ($STNE) | - | 74.3% | 106.0% | 63.1% | 28.9% |
| |
|---|
| Median (39 companies) | 6.7% | 11.8% | 7.4% | 11.5% | -3.3% |
|---|
| Evertec, Inc. ($EVTC) | - | 4.5% | 11.5% | 7.4% | 4.8% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Verra Mobility Corp ($VRRM) | - | 97.4% | 97.5% | 95.7% | 91.5% |
| EVO Payments, Inc. ($EVOP) | - | - | - | 80.2% | 80.8% |
| StoneCo Ltd ($STNE) | 69.7% | 70.8% | 79.5% | 83.4% | 76.8% |
| WEX Inc. ($WEX) | 54.7% | 58.8% | 63.3% | 61.7% | 56.8% |
| Sabre Corporation ($SABR) | 32.2% | 30.1% | 27.8% | 56.6% | 56.6% |
| |
|---|
| Median (31 companies) | 39.2% | 38.9% | 40.9% | 40.3% | 36.5% |
|---|
| Evertec, Inc. ($EVTC) | 54.9% | 50.7% | 56.6% | 56.2% | 55.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Visa Inc. ($V) | 55.6% | 69.2% | 65.8% | 68.1% | 68.5% |
| Mastercard Incorporated ($MA) | 56.9% | 56.5% | 51.8% | 60.9% | 56.6% |
| FleetCor Technologies, Inc. ($FLT) | 52.0% | 50.8% | 55.9% | 57.6% | 52.2% |
| StoneCo Ltd ($STNE) | 31.4% | 26.0% | 53.0% | 62.4% | 52.1% |
| Black Knight, Inc. ($BKI) | 43.0% | 44.6% | 43.3% | 46.0% | 44.9% |
| |
|---|
| Median (38 companies) | 21.2% | 20.6% | 19.2% | 21.7% | 18.2% |
|---|
| Evertec, Inc. ($EVTC) | 42.8% | 36.9% | 41.5% | 45.2% | 43.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| PagSeguro Digital Ltd. ($PAGS) | 6.4% | 4.3% | 1.4% | 5.8% | 22.3% |
| StoneCo Ltd ($STNE) | 7.2% | 18.4% | 8.9% | 12.9% | 11.2% |
| Cardtronics plc ($CATM) | 9.9% | 9.6% | 8.0% | 9.3% | 8.3% |
| Verra Mobility Corp ($VRRM) | - | 11.5% | 7.2% | 6.6% | 6.2% |
| Fiserv, Inc. ($FISV) | 5.3% | 5.0% | 6.2% | 7.1% | 6.1% |
| |
|---|
| Median (38 companies) | 3.2% | 2.9% | 3.1% | 3.0% | 3.0% |
|---|
| Evertec, Inc. ($EVTC) | 4.7% | 2.8% | 3.1% | 4.7% | 3.3% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mastercard Incorporated ($MA) | 57.5% | 60.6% | 64.7% | 72.7% | 47.6% |
| International Money Express, Inc. ($IMXI) | -1.3% | -1.4% | 12.1% | 36.0% | 31.4% |
| NIC Inc. ($EGOV) | 63.1% | 52.1% | 39.3% | 26.5% | 30.8% |
| Visa Inc. ($V) | 18.1% | 21.9% | 23.0% | 27.2% | 23.2% |
| Western Union Company (The) ($WU) | 10.7% | 11.9% | 27.8% | 21.5% | 22.1% |
| |
|---|
| Median (39 companies) | 11.1% | 10.6% | 10.2% | 8.2% | 5.5% |
|---|
| Evertec, Inc. ($EVTC) | 13.9% | 11.3% | 16.3% | 18.1% | 16.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| WEX Inc. ($WEX) | 6.7x | 4.4x | 3.1x | 3.4x | 12.1x |
| Exela Technologies Inc ($XELAU) | 8.1x | - | 9.7x | - | 10.7x |
| Alliance Data Systems Corporation ($ADS) | 10.7x | 10.1x | 9.0x | 11.7x | 9.2x |
| Verra Mobility Corp ($VRRM) | - | 10.7x | 6.9x | 3.5x | 4.7x |
| GreenSky, Inc. ($GSKY) | -1.5x | -1.5x | 0.5x | 1.5x | 4.6x |
| |
|---|
| Median (35 companies) | 1.3x | 2.3x | 2.0x | 2.3x | 2.1x |
|---|
| Evertec, Inc. ($EVTC) | 3.6x | 3.8x | 2.5x | 2.0x | 1.5x |
