Frutarom Industries revenue surged on 31.4% in 2016 while EBITDA Margin decreased slightly on 1.8 pp from 18.5% to 16.7%
23 Mar 2017 • About Frutarom Industries (
$FRUT) • By InTwits
Frutarom Industries reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Frutarom Industries is a fast growth stock: 2016 revenue growth was 31.4%, 5 year revenue CAGR was 17.2% at 2016 ROIC 12.8%
- Frutarom Industries has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's in pair with industry average of 17.1%.
- CAPEX is quite volatile: 8.6 in 2016, 10.2 in 2015, 10.8 in 2014, 1.5 in 2013, 23.6 in 2012
- The company has highly profitable business model: ROIC is at 12.8%
- It operates with high leverage: Net Debt/EBITDA is 2.2x while industry average is 1.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Frutarom Industries ($FRUT) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 618 | 674 | 820 | 873 | 1,147 | 31.4% |
| Gross Profit | 226 | 257 | 321 | 338 | 438 | 29.4% |
| SG&A | 141 | 154 | 184 | 185 | 250 | 35.2% |
| EBITDA | 99 | 114 | 149 | 162 | 191 | 18.3% |
| Net Income | 52 | 63 | 87 | 95 | 109 | 15.2% |
Balance Sheet
|
|---|
| Cash | 54 | 58 | 64 | 69 | 114 | 64.5% |
| Short Term Debt | 52 | 108 | 68 | 264 | 234 | -11.4% |
| Long Term Debt | 138 | 140 | 164 | 219 | 300 | 36.5% |
Cash flow
|
|---|
| Capex | 13 | 20 | 21 | 24 | 28 | 19.2% |
Ratios
|
|---|
| Revenue growth | 19.2% | 9.0% | 21.6% | 6.5% | 31.4% | |
| EBITDA growth | 24.7% | 15.8% | 30.6% | 8.1% | 18.3% | |
| Gross Margin | 36.6% | 38.1% | 39.1% | 38.7% | 38.1% | -0.6% |
| EBITDA Margin | 16.0% | 17.0% | 18.2% | 18.5% | 16.7% | -1.8% |
| Net Income Margin | 8.3% | 9.4% | 10.6% | 10.9% | 9.5% | -1.3% |
| SG&A, % of revenue | 22.9% | 22.8% | 22.5% | 21.2% | 21.8% | 0.6% |
| CAPEX, % of revenue | 2.0% | 3.0% | 2.6% | 2.7% | 2.5% | -0.3% |
| ROIC | 12.0% | 11.9% | 15.1% | 14.1% | 12.8% | -1.3% |
| ROE | 12.3% | 13.1% | 16.7% | 17.8% | 18.2% | 0.3% |
| Net Debt/EBITDA | 1.4x | 1.7x | 1.1x | 2.6x | 2.2x | -0.4x |
Revenue and profitability
Frutarom Industries's Revenue surged on 31.4% in 2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.0 pp from 6.9% to 11.9% in FY2016.
Gross Margin decreased slightly on 0.59 pp from 38.7% to 38.1% in 2016. SG&A as a % of Revenue increased slightly on 0.60 pp from 21.2% to 21.8% in 2016.
Net Income marign decreased slightly on 1.3 pp from 10.9% to 9.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.5% in 2016. The company's CAPEX/Revenue decreased slightly on 0.50 pp from 3.0% in 2013 to 2.5% in 2016. It's average CAPEX/Revenue for the last three years was 2.6%.
Return on investment
The company operates at good ROIC (12.78%) and ROE (18.19%). ROIC decreased slightly on 1.3 pp from 14.1% to 12.8% in 2016. ROE showed almost no change in 2016.
Leverage (Debt)
Debt level is 2.2x Net Debt / EBITDA and 2.8x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from 2.6x to 2.2x in 2016. Debt jumped on 10.3% in 2016 while cash jumped on 64.5% in 2016.
Valuation
The company's trades at EV/EBITDA 2.4x and P/E 0.3x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 2.8x with the industry average at 19.0x.
Appendix 1: Peers in Chemicals
Below we provide Frutarom Industries benchmarking against other companies in Chemicals 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Phosagro OJSC ($PHOR) | 4.8% | -0.7% | 17.7% | 54.1% | |
| Acron JSC ($AKRN) | 8.7% | -4.5% | 9.9% | 42.1% | |
| Plastics Capital ($PLA) | | -2.1% | 3.3% | 21.9% | 28.4% |
| Croda International ($50GP) | | 2.4% | -2.8% | 3.4% | 15.0% |
| Arab Potash Co ($APOD) | -18.6% | -11.1% | 2.7% | -1.5% | |
| |
|---|
| Median (9 companies) | 6.7% | -0.7% | 3.3% | -1.5% | 2.2% |
|---|
| Frutarom Industries ($FRUT) | | 9.0% | 21.6% | 6.5% | 31.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Uralkali PJSC ($URKA) | | 71.6% | 74.3% | 81.8% | 75.9% |
| Phosagro OJSC ($PHOR) | 42.9% | 34.8% | 45.2% | 56.2% | |
| Acron JSC ($AKRN) | 43.1% | 38.1% | 42.8% | 52.7% | |
| Arab Potash Co ($APOD) | 51.3% | 35.2% | 26.2% | 40.5% | |
| Halosource Inc ($HALO) | 32.9% | 40.7% | 44.8% | 40.2% | |
| |
|---|
| Median (9 companies) | 35.1% | 35.2% | 36.0% | 40.2% | 33.2% |
|---|
| Frutarom Industries ($FRUT) | 36.6% | 38.1% | 39.1% | 38.7% | 38.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Uralkali PJSC ($URKA) | | 44.5% | 48.6% | 62.3% | 51.9% |
| Phosagro OJSC ($PHOR) | 32.9% | 22.9% | 30.5% | 43.5% | |
| Arab Potash Co ($APOD) | 47.2% | 36.3% | 27.7% | 39.6% | |
| Acron JSC ($AKRN) | 28.4% | 22.7% | 27.2% | 36.2% | |
| Croda International ($50GP) | 27.2% | 27.6% | 26.7% | 27.7% | 26.7% |
| |
|---|
| Median (9 companies) | 21.0% | 22.7% | 26.7% | 27.7% | 18.6% |
|---|
| Frutarom Industries ($FRUT) | 16.0% | 17.0% | 18.2% | 18.5% | 16.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Phosagro OJSC ($PHOR) | 12.7% | 17.0% | 16.7% | 22.4% | |
| Acron JSC ($AKRN) | 22.7% | 21.3% | 15.4% | 14.2% | |
| Uralkali PJSC ($URKA) | | 12.5% | 9.8% | 10.9% | 13.9% |
| Croda International ($50GP) | 4.8% | 4.1% | 6.0% | 8.6% | 8.3% |
| Basf Se ($BFA) | 5.6% | 6.6% | 7.1% | 8.2% | 7.2% |
| |
|---|
| Median (9 companies) | 6.5% | 6.6% | 6.3% | 8.2% | 7.2% |
|---|
| Frutarom Industries ($FRUT) | 2.0% | 3.0% | 2.6% | 2.7% | 2.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Phosagro OJSC ($PHOR) | 28.5% | 15.0% | 21.6% | 41.2% | |
| Croda International ($50GP) | 46.5% | 42.3% | 35.3% | 30.5% | 27.7% |
| Uralkali PJSC ($URKA) | | | 13.2% | 23.1% | 14.1% |
| Acron JSC ($AKRN) | 14.4% | 9.2% | 10.6% | 17.9% | |
| Arab Potash Co ($APOD) | 21.2% | 13.5% | 9.8% | 16.7% | |
| |
|---|
| Median (9 companies) | 14.9% | 12.8% | 10.6% | 16.7% | 13.0% |
|---|
| Frutarom Industries ($FRUT) | 12.0% | 11.9% | 15.1% | 14.1% | 12.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Uralkali PJSC ($URKA) | | 2.8x | 1.8x | 2.8x | 4.7x |
| Plastics Capital ($PLA) | 2.1x | 1.9x | 1.4x | 2.2x | 2.3x |
| Acron JSC ($AKRN) | 1.6x | 2.4x | 2.8x | 1.4x | |
| Phosagro OJSC ($PHOR) | 0.8x | 1.8x | 2.5x | 1.3x | |
| Basf Se ($BFA) | 1.2x | 1.2x | 1.3x | 1.2x | 1.4x |
| |
|---|
| Median (8 companies) | 0.8x | 1.5x | 1.3x | 1.2x | 1.4x |
|---|
| Frutarom Industries ($FRUT) | 1.4x | 1.7x | 1.1x | 2.6x | 2.2x |
