Esprit Holdings Ltd EBITDA dropped on 348% in 2015 and EBITDA Margin dropped on 19.5 pp from 4.8% to -14.7%
23/09/2015 • About Esprit Holdings Ltd (
$330) • By InTwits
Esprit Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Esprit Holdings Ltd is a company in decline: FY2015 revenue growth was -19.8%, 5 years revenue CAGR was -10.5%
- The company operates at negative EBITDA Margin: -14.7%
- Esprit Holdings Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 is 0.0%. Average EBITDA Margin for the same period was -1.2%0
- Esprit Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.2%. At the same time it's a lot of higher than industry average of 6.2%.
- CAPEX is quite volatile: 349 in FY2015, 375 in FY2014, 919 in FY2013, 1,420 in FY2012, 1,436 in FY2011
- The company has unprofitable business model: ROIC is at -23.3%
- It operates with high leverage: Net Debt/EBITDA is 1.3x while industry average is -0.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Esprit Holdings Ltd ($330) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 33,767 | 30,165 | 25,902 | 24,227 | 19,421 | -19.8% |
| Gross Profit | 18,198 | 15,206 | 12,837 | 12,156 | 9,695 | -20.2% |
| SG&A | 2,450 | 3,031 | 2,480 | 2,109 | 1,868 | -11.4% |
| EBITDA | 1,587 | 1,848 | -3,312 | 1,153 | -2,856 | -347.7% |
| Net Income | 79 | 873 | -4,388 | 210 | -3,696 | -1,860.0% |
Balance Sheet
|
|---|
| Cash | 4,794 | 3,171 | 2,182 | 3,661 | 3,688 | 0.7% |
| Short Term Debt | 520 | 642 | 520 | 260 | 0 | -100.0% |
| Long Term Debt | 1,560 | 1,040 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 1,436 | 1,420 | 919 | 375 | 349 | -6.9% |
Ratios
|
|---|
| Revenue growth | 0.1% | -10.7% | -14.1% | -6.5% | -19.8% | |
| EBITDA growth | -65.1% | 16.4% | -279.2% | -134.8% | -347.7% | |
| Gross Margin | 53.9% | 50.4% | 49.6% | 50.2% | 49.9% | -0.3% |
| EBITDA Margin | 4.7% | 6.1% | -12.8% | 4.8% | -14.7% | -19.5% |
| Net Income Margin | 0.2% | 2.9% | -16.9% | 0.9% | -19.0% | -19.9% |
| SG&A, % of revenue | 7.3% | 10.0% | 9.6% | 8.7% | 9.6% | 0.9% |
| CAPEX, % of revenue | 4.3% | 4.7% | 3.5% | 1.5% | 1.8% | 0.2% |
| ROIC | 3.5% | 5.7% | -22.7% | 1.4% | -23.3% | -24.7% |
| ROE | 0.5% | 5.5% | -27.3% | 1.3% | -25.7% | -26.9% |
| Net Debt/EBITDA | -1.7x | -0.8x | | -2.9x | | 2.9x |
Revenue and profitability
Esprit Holdings Ltd's Revenue dropped on 19.8% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 11.3 pp from 42.3% to 53.6% in 2015.
Gross Margin showed almost no change in FY2015. SG&A as a % of Revenue increased slightly on 0.91 pp from 8.7% to 9.6% in FY2015.
Net Income marign dropped on 19.9 pp from 0.87% to -19.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.8% in FY2015. CAPEX/Revenue decreased on 2.9 pp from 4.7% in FY2012 to 1.8% in FY2015. It's average CAPEX/Revenue for the last three years was 2.3%.
Return on investment
The company operates at negative ROIC (-23.31%) and ROE (-25.66%). ROIC dropped on 24.7 pp from 1.4% to -23.3% in FY2015. ROE dropped on 26.9 pp from 1.3% to -25.7% in FY2015.
Leverage (Debt)
The company paid down all the debt in FY2015. Cash increased slightly on 0.74% in FY2015.
Management team
Jose Manuel Martinez Gutierrez is a Esprit Holdings Ltd's CEO. Jose Manuel Martinez Gutierrez has spent 6 years at the company. The company's CFO Tang Wing Yung "Thomas" has spent 6 years at the company.
Appendix 1: Peers in Retail
Below we provide Esprit Holdings Ltd benchmarking against other companies in Retail 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Household Holdings Ltd ($692) | -87.0% | -32.8% | 5,357.9% | 76.2% | |
| Ming Fung Jewellery Group Ltd ($860) | 21.9% | 3.3% | -14.9% | 54.3% | |
| Merry Garden Holdings Ltd ($1237) | 53.9% | 37.1% | 12.8% | 47.6% | |
| Luk Fook Holdings International Ltd ($590) | | 47.2% | 12.6% | 43.3% | -17.1% |
| NewOcean Energy Holdings Ltd ($342) | 19.3% | 23.1% | 15.9% | 36.0% | |
| |
|---|
| Median (109 companies) | 21.9% | 10.3% | 6.0% | 3.1% | -2.6% |
|---|
| Esprit Holdings Ltd ($330) | | -10.7% | -14.1% | -6.5% | -19.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Culture Landmark Investment Ltd ($674) | 77.5% | 91.1% | 99.4% | 99.5% | |
| Modern Beauty Salon Holdings Ltd ($919) | 97.3% | 97.4% | 95.9% | 96.8% | 96.7% |
| Vongroup Ltd ($318) | | | | 95.1% | 99.1% |
| Nanjing Sinolife United Co Ltd ($3332) | 80.6% | 86.5% | 89.3% | 90.9% | |
| Embry Holdings Ltd ($1388) | 82.3% | 81.2% | 80.4% | 82.3% | |
| |
|---|
| Median (98 companies) | 39.4% | 37.2% | 36.4% | 35.1% | 45.6% |
|---|
| Esprit Holdings Ltd ($330) | 53.9% | 50.4% | 49.6% | 50.2% | 49.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Maoye International Holdings Ltd ($848) | 45.5% | 47.4% | 46.3% | 73.2% | |
| China Dongxiang Group Co Ltd ($3818) | 5.6% | 6.0% | 5.6% | 58.3% | |
| Nanjing Sinolife United Co Ltd ($3332) | 47.8% | 51.6% | 56.9% | 54.4% | |
| Lifestyle International Holdings Ltd ($1212) | 49.6% | 47.5% | 47.0% | 44.7% | |
| Golden Eagle Retail Group Ltd ($3308) | 52.1% | 48.5% | 47.3% | 42.8% | |
| |
|---|
| Median (109 companies) | 13.3% | 9.9% | 7.2% | 8.8% | 7.1% |
|---|
| Esprit Holdings Ltd ($330) | 4.7% | 6.1% | -12.8% | 4.8% | -14.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Intime Retail Group Co Ltd ($1833) | 58.4% | 28.3% | 55.4% | 37.0% | |
| Future Bright Holdings Ltd ($703) | 6.2% | 2.6% | 3.7% | 36.8% | |
| Sage International Group Ltd ($8082) | 20.4% | 236.6% | 28.2% | 35.4% | |
| Maoye International Holdings Ltd ($848) | 30.9% | 32.8% | 24.1% | 31.5% | |
| Tsui Wah Holdings Ltd ($1314) | 5.2% | 8.3% | 9.3% | 30.5% | 10.6% |
| |
|---|
| Median (109 companies) | 3.8% | 4.0% | 3.6% | 3.5% | 2.5% |
|---|
| Esprit Holdings Ltd ($330) | 4.3% | 4.7% | 3.5% | 1.5% | 1.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 48.1% | 50.7% | -4.6% | 81.3% | 71.8% |
| Starbucks Corp ($4337) | 36.4% | 36.4% | -6.0% | 52.8% | |
| Sa Sa International Holdings Ltd ($178) | 45.7% | 53.5% | 52.7% | 49.0% | 39.8% |
| Coach Inc ($6388) | 82.0% | 82.3% | 68.7% | 45.0% | 20.8% |
| Nanjing Sinolife United Co Ltd ($3332) | 57.4% | 67.3% | 68.1% | 32.2% | |
| |
|---|
| Median (109 companies) | 17.2% | 12.0% | 8.2% | 8.4% | 5.3% |
|---|
| Esprit Holdings Ltd ($330) | 3.5% | 5.7% | -22.7% | 1.4% | -23.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sparkle Roll Group Ltd ($970) | -0.8x | 0.6x | 4.0x | 9.3x | 23.5x |
| China Yongda Automobiles Services Holdings Ltd ($3669) | 3.3x | 3.4x | 4.7x | 5.5x | |
| Zhongsheng Group Holdings Ltd ($881) | 2.2x | 4.6x | 4.5x | 5.3x | |
| NewOcean Energy Holdings Ltd ($342) | 35.2x | 6.2x | 6.1x | 5.3x | |
| Century Ginwa Retail Holdings Ltd ($162) | 6.5x | 2.0x | 2.5x | 4.8x | |
| |
|---|
| Median (85 companies) | -0.8x | -0.5x | -0.9x | -0.2x | -0.6x |
|---|
| Esprit Holdings Ltd ($330) | -1.7x | -0.8x | | -2.9x | |
