Gazit-Globe Ltd Net Debt / EBITDA dropped on 6.9x from 22.1x to 15.2x in 2016 and Revenue showed almost no change
27.03.2017 • About Gazit-Globe Ltd (
$GZT) • By InTwits
Gazit-Globe Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Gazit-Globe Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 68.1%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 109 in 2016, 88.1 in 2015, 39.6 in 2014, 22.3 in 2013, 16.6 in 2012
- The company has potentially unprofitable business model: ROIC is at 3.1%
- It operates with high leverage: Net Debt/EBITDA is 15.2x while industry average is 6.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Gazit-Globe Ltd ($GZT) key annual financial indicators
| mln. ILS | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 7,162 | 7,036 | 6,325 | 4,836 | 4,838 | 0.0% |
| EBITDA | 3,131 | 3,009 | 2,413 | 1,949 | 2,506 | 28.6% |
| Net Income | 957 | 927 | 73 | 620 | 787 | 26.9% |
Balance Sheet
|
|---|
| Cash | 1,683 | 1,018 | 650 | 2,037 | 1,520 | -25.4% |
| Short Term Debt | 2,733 | 3,171 | 3,264 | 3,341 | 3,818 | 14.3% |
| Long Term Debt | 39,130 | 36,144 | 34,239 | 41,858 | 35,798 | -14.5% |
Cash flow
|
|---|
| Capex | 5,741 | 3,044 | 3,296 | 3,353 | 4,620 | 37.8% |
Ratios
|
|---|
| Revenue growth | 22.8% | -1.8% | -10.1% | -23.5% | 0.0% | |
| EBITDA growth | 21.9% | -3.9% | -19.8% | -19.2% | 28.6% | |
| EBITDA Margin | 43.7% | 42.8% | 38.2% | 40.3% | 51.8% | 11.5% |
| Net Income Margin | 13.4% | 13.2% | 1.2% | 12.8% | 16.3% | 3.4% |
| CAPEX, % of revenue | 80.2% | 43.3% | 52.1% | 69.3% | 95.5% | 26.2% |
| ROIC | 4.8% | 4.5% | 3.6% | 2.5% | 3.1% | 0.6% |
| ROE | 12.6% | 11.8% | 0.9% | 8.0% | 10.0% | 2.1% |
| Net Debt/EBITDA | 12.8x | 12.7x | 15.3x | 22.1x | 15.2x | -6.9x |
Gazit-Globe Ltd ($GZT) key quoterly financial indicators
| mln. ILS | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,548 | 1,554 | 1,512 | 224 | -17.7% | -15.1% | -3.2% | -87.4% |
| EBITDA | 876 | 898 | 882 | -150 | 151.7% | 7.0% | 16.8% | |
| Net Income | -278 | 97 | 381 | 587 | -173.9% | -25.4% | | 185.0% |
Balance Sheet
|
|---|
| Cash | 2,433 | 1,427 | 1,398 | 1,520 | -18.7% | -28.3% | -18.6% | -25.4% |
| Short Term Debt | 3,707 | 3,898 | 2,821 | 3,818 | 550.4% | 434.0% | -16.8% | 14.3% |
| Long Term Debt | 41,107 | 41,034 | 41,614 | 35,798 | -0.1% | 1.1% | -1.9% | -14.5% |
Ratios
|
|---|
| EBITDA Margin | 56.6% | 57.8% | 58.3% | -67.0% | 38.1% | 11.9% | 10.0% | -34.6% |
| Net Income Margin | -18.0% | 6.2% | 25.2% | 262.1% | -38.0% | -0.9% | 31.1% | 250.5% |
Revenue and profitability
Gazit-Globe Ltd's Revenue showed almost no change in 2016. Revenue growth showed slow down in 16Q4 - it was -87.4% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 11.5 pp from 40.3% to 51.8% in 2016.
Net Income marign increased on 3.4 pp from 12.8% to 16.3% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Gazit-Globe Ltd had CAPEX/Revenue of 95.5%. CAPEX/Revenue jumped on 52.2 pp from 43.3% in 2013 to 95.5% in 2016. It's average level of CAPEX/Revenue for the last three years was 72.3%.The company investments to CAPEX were large: 184% of EBITDA.
Return on investment
The company operates at low ROIC (3.10%) and ROE (10.04%). ROIC increased slightly on 0.59 pp from 2.5% to 3.1% in 2016. ROE increased on 2.1 pp from 8.0% to 10.0% in 2016.
Leverage (Debt)
Debt level is 15.2x Net Debt / EBITDA and 15.8x Debt / EBITDA. Net Debt / EBITDA dropped on 6.9x from 22.1x to 15.2x in 2016. Debt dropped on 12.4% while cash dropped on 25.4%.
Management team
The company's CEO is Dori Joseph Segal. Dori Joseph Segal is a founder and has 1 year tenure at the company. Gazit-Globe Ltd's CFO is Adi Jemini. Adi Jemini has 2 years tenure at the company.
Appendix 1: Peers in Financial
Below we provide Gazit-Globe Ltd benchmarking against other companies in Financial 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 |
|---|
| Grenville Strategic Royalty Corp ($GRC) | | | | 317.2% | |
| StorageVault Canada Inc ($SVI) | | 22.2% | 7.5% | 111.8% | |
| Slate Retail REIT ($SRT.UN) | | 316.8% | 229.7% | 92.5% | 21.6% |
| Mogo Finance Technology Inc ($GO) | | 13.7% | 34.6% | 86.0% | 14.6% |
| Morguard Corp ($MRC) | | 27.2% | 9.2% | 58.8% | 4.6% |
| |
|---|
| Median (53 companies) | | 7.5% | 9.1% | 3.6% | 5.8% |
|---|
| Gazit-Globe Ltd ($GZT) | | -1.8% | -10.1% | -23.5% | 0.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Olympia Financial Group Inc ($OLY) | 80.9% | 82.6% | 83.2% | 84.5% | 83.5% |
| Morguard Corp ($MRC) | 74.0% | 69.9% | 68.6% | 76.5% | 75.5% |
| Mogo Finance Technology Inc ($GO) | 70.4% | 64.5% | 63.4% | 62.3% | |
| StorageVault Canada Inc ($SVI) | 18.2% | 22.6% | 18.3% | 52.4% | |
| Clarke Inc ($CKI) | 28.1% | 20.0% | 18.9% | 43.4% | 41.6% |
| |
|---|
| Median (9 companies) | 28.1% | 30.7% | 28.3% | 43.4% | 30.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Firm Capital Mortgage Investment Corp ($FC) | 87.6% | 87.9% | 88.8% | 86.6% | |
| Equitable Group Inc ($EQB) | 88.1% | 87.4% | 86.0% | 84.7% | 83.0% |
| Atrium Mortgage Investment Corp ($AI) | 79.8% | | | 81.9% | 83.2% |
| Trez Capital Mortgage Investment Corp ($TZZ) | | | | 76.2% | |
| First National Financial Corp ($FN) | 67.8% | 76.5% | 77.1% | 74.6% | |
| |
|---|
| Median (36 companies) | 39.7% | 32.1% | 41.4% | 30.0% | 42.2% |
|---|
| Gazit-Globe Ltd ($GZT) | 43.7% | 42.8% | 38.2% | 40.3% | 51.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dundee Corp ($DC.A) | 10.3% | 14.1% | 88.8% | 123.6% | |
| First Capital Realty Inc ($FCR) | 127.9% | 76.1% | 73.8% | 56.7% | 79.7% |
| Killam Properties Inc ($KMP) | 80.7% | 114.1% | 143.5% | 46.7% | 59.9% |
| StorageVault Canada Inc ($SVI) | 150.5% | 73.3% | 79.1% | 21.4% | |
| Morguard Corp ($MRC) | 114.3% | 71.2% | 11.4% | 21.1% | 16.3% |
| |
|---|
| Median (55 companies) | 0.5% | 0.5% | 0.6% | 0.7% | 0.6% |
|---|
| Gazit-Globe Ltd ($GZT) | 80.2% | 43.3% | 52.1% | 69.3% | 95.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CI Financial Corp ($CIX) | | | | | 24.1% |
| FirstService Corp ($FSV) | | | | | 17.4% |
| IGM Financial Inc ($IGM) | 14.2% | 14.2% | 13.7% | 13.7% | 13.1% |
| Alaris Royalty Corp ($AD) | 9.5% | 10.1% | 10.7% | 7.3% | 12.3% |
| Genworth MI Canada Inc ($MIC) | 11.9% | 9.6% | 9.7% | 9.5% | 9.4% |
| |
|---|
| Median (55 companies) | 4.4% | 3.3% | 4.3% | 3.5% | 3.0% |
|---|
| Gazit-Globe Ltd ($GZT) | 4.8% | 4.5% | 3.6% | 2.5% | 3.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Element Financial Corp ($EFN) | 140.2x | 31.9x | 37.6x | 79.9x | 22.6x |
| First National Financial Corp ($FN) | 34.3x | 33.7x | 40.9x | 37.4x | |
| StorageVault Canada Inc ($SVI) | 11.2x | 9.7x | 13.6x | 35.7x | |
| Equitable Group Inc ($EQB) | 11.8x | 10.2x | 9.8x | 12.3x | 13.7x |
| Temple Hotels Inc ($TPH) | 10.6x | 8.8x | 11.2x | 11.7x | 11.2x |
| |
|---|
| Median (27 companies) | 5.2x | 4.4x | 4.5x | 5.6x | 6.0x |
|---|
| Gazit-Globe Ltd ($GZT) | 12.8x | 12.7x | 15.3x | 22.1x | 15.2x |
