Magnit PJSC demonstrated fast growth over the last few years. Will the growth continue?
03 Feb 2015 • About Magnit PJSC (
$MGNT) • By InTwits
Magnit PJSC is an attractive growth stock in Food & Drug Retailers industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Magnit PJSC showed growth in the last financial year. The company's revenue surged on 32.3% in FY2014. In addition to revenue Magnit PJSC also keeps delivering EBITDA growth. It was 36.6% in FY2014
In the longer period Magnit PJSC showed fast revenue growth of 31.7% from 2011 to 2014 annually. EBITDA surged on 48.8% from 2011 to 2014 annually.
Magnit PJSC ($MGNT) financials for the last 5 years
mln. RUB | 2010 | 2011 | 2012 | 2013 | 2014 |
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Revenue | 236,199 | 335,835 | 448,234 | 579,994 | 767,556 |
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Revenue growth, % | | 42.2% | 33.5% | 29.4% | 32.3% |
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Gross margin, % | 22.4% | 24.3% | 26.5% | 28.5% | 28.9% |
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SG&A, % | 14.5% | 16.5% | 16.2% | 17.6% | 17.6% |
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EBITDA | 18,629 | 26,348 | 46,231 | 63,575 | 86,867 |
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EBITDA growth, % | | 41.4% | 75.5% | 37.5% | 36.6% |
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EBITDA margin, % | 7.89% | 7.85% | 10.3% | 11.0% | 11.3% |
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Net Income | 10,134 | 12,309 | 25,093 | 35,639 | 47,937 |
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Net Income margin, % | 4.29% | 3.67% | 5.60% | 6.14% | 6.25% |
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|
CAPEX | 35,808 | 48,711 | 47,265 | 50,077 | 56,006 |
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CAPEX/Revenue, % | 15.2% | 14.5% | 10.5% | 8.63% | 7.30% |
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Debt | 30,205 | 51,935 | 63,754 | 74,134 | 99,055 |
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Cash | 4,050 | 17,167 | 12,528 | 5,961 | 18,318 |
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Net Debt/EBITDA | 1.4x | 1.3x | 1.1x | 1.1x | 0.9x |
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|
ROIC, % | 19.9% | 17.9% | 23.1% | 26.0% | 33.2% |
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ROE, % | 21.2% | 20.1% | 28.3% | 31.4% | 38.7% |
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Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. The company showed small growth in EBITDA margin of 0.300 pp from 11% to 11.3% in 2014. If we look for the longer period EBITDA margin surged on 3.50 pp from 7.80% in 2011 to 11.3% in 2014.
Magnit PJSC shows attractive ROIC at 33.2% for the last 12 months which assumes stable development model. Three years ago it was considerably lower at 17.9%. It's average level of ROIC for the last three years was 27.4%.
The company's Net Income margin increased slightly on 0.100 pp from 6.10% to 6.20% in 2014. In the longer period the company showed fast Net Income margin growth of 2.50 pp from 3.70% in 2011 to 6.20% in 2014.
Magnit PJSC operates at ROE of 38.7%. It's average ROE for the last three years was 32.8%.
Capital expenditures (CAPEX)
To this fast growth Magnit PJSC had to invest in CAPEX.In FY2014 the company had CAPEX/Revenue of 7.30%. CAPEX/Revenue dropped on 7.21 pp from 14.5% in 2011 to 7.30% in 2014. It's average level of CAPEX/Revenue for the last three years was 8.83%.
Leverage (Debt)
The company has low debt level at 0.9x Net Debt/EBITDA - at the same time with high growth. In the longer period the company showed big decline in leverage of 0.39x from 1.32x in 2011 to 0.93x in 2014.
Valuation vs. comparable companies
The market closed today at 0.9x EV/EBITDA for Magnit PJSC which is 94.2% lower than 16.0x Food & Drug Retailers peer group avearge calculated on the basis of 20 companies. The company trades at 0.0x P/E which is 96.2% lower than 0.1x Food & Drug Retailers industry avearge calculated based on 5 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The market closed today at 2.6x EV/(EBITDA-CAPEX) for Magnit PJSC which is 134% higher than 1.1x Food & Drug Retailers peer group avearge calculated on the basis of 3 companies.
Peers in Food & Drug Retailers
Below you can find Magnit PJSC benchmarking vs. other companies in Food & Drug Retailers 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Top |
---|
Crawshaw Group ($CRAW) | | 0.6% | -0.9% | -0.6% | 11.9% |
Snacktime ($SNAK) | | 130.3% | 25.9% | -7.6% | -8.3% |
|
---|
Median (2 companies) | | 65.4% | 12.5% | -4.1% | 1.8% |
---|
Magnit PJSC ($MGNT) | | 42.2% | 33.5% | 29.4% | 32.3% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Top |
---|
Snacktime ($SNAK) | 59.0% | 55.0% | 56.6% | 51.8% | 55.1% |
Crawshaw Group ($CRAW) | 43.0% | 43.6% | 43.3% | 43.7% | 43.8% |
|
---|
Median (2 companies) | 51.0% | 49.3% | 49.9% | 47.8% | 49.4% |
---|
Magnit PJSC ($MGNT) | 22.4% | 24.3% | 26.5% | 28.5% | 28.9% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Top |
---|
Crawshaw Group ($CRAW) | 3.8% | 5.4% | 3.7% | 3.4% | 6.5% |
Snacktime ($SNAK) | -13.3% | 11.9% | 6.1% | 3.1% | 5.8% |
|
---|
Median (2 companies) | -4.7% | 8.6% | 4.9% | 3.3% | 6.1% |
---|
Magnit PJSC ($MGNT) | 7.9% | 7.8% | 10.3% | 11.0% | 11.3% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Top |
---|
Snacktime ($SNAK) | 3.9% | 2.6% | 5.3% | 4.3% | 3.4% |
Crawshaw Group ($CRAW) | 3.4% | 3.6% | 1.1% | 1.0% | 1.2% |
|
---|
Median (2 companies) | 3.7% | 3.1% | 3.2% | 2.6% | 2.3% |
---|
Magnit PJSC ($MGNT) | 15.2% | 14.5% | 10.5% | 8.6% | 7.3% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Top |
---|
Crawshaw Group ($CRAW) | 2.8% | 5.5% | 1.2% | 2.1% | 8.6% |
Snacktime ($SNAK) | -18.1% | 2.9% | -2.5% | -7.2% | -6.4% |
|
---|
Median (2 companies) | -7.6% | 4.2% | -0.6% | -2.6% | 1.1% |
---|
Magnit PJSC ($MGNT) | 19.9% | 17.9% | 23.1% | 26.0% | 33.2% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Top |
---|
Snacktime ($SNAK) | | 0.8x | 2.0x | 6.0x | 4.4x |
Crawshaw Group ($CRAW) | 1.3x | 0.5x | 0.3x | -0.0x | -0.7x |
|
---|
Median (2 companies) | 1.3x | 0.6x | 1.2x | 3.0x | 1.9x |
---|
Magnit PJSC ($MGNT) | 1.4x | 1.3x | 1.1x | 1.1x | 0.9x |