Fast Retailing Co Ltd reports 47.6% Net Income growth and almost no change in EBITDA Margin of 11.7%
08/10/2015 • About Fast Retailing Co Ltd (
$6288) • By InTwits
Fast Retailing Co Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Fast Retailing Co Ltd is a fast growth stock: FY2015 revenue growth was 21.6%, 5 year revenue CAGR was 15.6% at FY2015 ROIC 19.8%
- Fast Retailing Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's in pair with industry average of 13.0%.
- CAPEX is quite volatile: 44,663 in FY2015, 41,414 in FY2014, 27,668 in FY2013, 23,980 in FY2012, 18,902 in FY2011
- The company has highly profitable business model: ROIC is at 19.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Fast Retailing Co Ltd ($6288) key annual financial indicators
| mln. JPY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 820,349 | 928,669 | 1,142,971 | 1,382,935 | 1,681,781 | 21.6% |
| Gross Profit | 425,768 | 475,467 | 565,145 | 699,774 | 848,538 | 21.3% |
| SG&A | 288,101 | 324,779 | 402,570 | 518,387 | 634,105 | 22.3% |
| EBITDA | 141,716 | 150,687 | 157,708 | 157,286 | 196,414 | 24.9% |
| Net Income | 54,354 | 71,654 | 104,595 | 74,546 | 110,027 | 47.6% |
Balance Sheet
|
|---|
| Cash | 64,386 | 132,238 | 296,708 | 314,049 | 355,212 | 13.1% |
| Short Term Debt | 9,291 | 8,641 | 3,417 | 3,894 | 4,188 | 7.6% |
| Long Term Debt | 18,970 | 14,544 | 30,077 | 27,604 | 25,513 | -7.6% |
Cash flow
|
|---|
| Capex | 18,902 | 23,980 | 27,668 | 41,414 | 44,663 | 7.8% |
Ratios
|
|---|
| Revenue growth | 0.7% | 13.2% | 23.1% | 21.0% | 21.6% | |
| EBITDA growth | -6.9% | 6.3% | 4.7% | -0.3% | 24.9% | |
| Gross Margin | 51.9% | 51.2% | 49.4% | 50.6% | 50.5% | -0.1% |
| EBITDA Margin | 17.3% | 16.2% | 13.8% | 11.4% | 11.7% | 0.3% |
| Net Income Margin | 6.6% | 7.7% | 9.2% | 5.4% | 6.5% | 1.2% |
| SG&A, % of revenue | 35.1% | 35.0% | 35.2% | 37.5% | 37.7% | 0.2% |
| CAPEX, % of revenue | 2.3% | 2.6% | 2.4% | 3.0% | 2.7% | -0.3% |
| ROIC | 33.3% | 31.6% | 23.7% | 17.9% | 19.8% | 1.9% |
| ROE | 18.1% | 20.4% | 21.8% | 12.5% | 16.1% | 3.5% |
| Net Debt/EBITDA | -0.3x | -0.7x | -1.7x | -1.8x | -1.7x | 0.1x |
Revenue and profitability
The company's Revenue surged on 21.6% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.1 pp from 15.2% to 16.3% in 2015.
Gross Margin showed almost no change in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign increased slightly on 1.2 pp from 5.4% to 6.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Fast Retailing Co Ltd's CAPEX/Revenue was 2.7% in FY2015. Fast Retailing Co Ltd's CAPEX/Revenue showed almost no change from FY2012 to FY2015. Average CAPEX/Revenue for the last three years was 2.7%.
Return on investment
The company operates at good ROIC (19.77%) and ROE (16.07%). ROIC increased slightly on 1.9 pp from 17.9% to 19.8% in FY2015. ROE increased on 3.5 pp from 12.5% to 16.1% in FY2015.
Leverage (Debt)
Debt level is -1.7x Net Debt / EBITDA and 0.2x Debt / EBITDA. Net Debt / EBITDA jumped on 0.1x from -1.8x to -1.7x in FY2015. Debt decreased on 5.7% in FY2015 while cash jumped on 13.1% in FY2015.
Management team
Tadashi Yanai is a Fast Retailing Co Ltd's CEO. Tadashi Yanai has spent 13 years at the company.
Appendix 1: Peers in Retail
Below you can find Fast Retailing Co Ltd benchmarking vs. other companies in Retail 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 | 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) | 21.8% | 10.0% | 5.9% | 2.8% | -6.4% |
|---|
| Fast Retailing Co Ltd ($6288) | | 13.2% | 23.1% | 21.0% | 21.6% |
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% | 45.3% |
|---|
| Fast Retailing Co Ltd ($6288) | 51.9% | 51.2% | 49.4% | 50.6% | 50.5% |
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) | 13.1% | 9.6% | 7.1% | 7.9% | 6.0% |
|---|
| Fast Retailing Co Ltd ($6288) | 17.3% | 16.2% | 13.8% | 11.4% | 11.7% |
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) | 3.9% | 4.0% | 3.6% | 3.5% | 2.2% |
|---|
| Fast Retailing Co Ltd ($6288) | 2.3% | 2.6% | 2.4% | 3.0% | 2.7% |
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) | 16.6% | 11.8% | 8.2% | 8.2% | 3.1% |
|---|
| Fast Retailing Co Ltd ($6288) | 33.3% | 31.6% | 23.7% | 17.9% | 19.8% |
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 | -0.8x | -0.2x | -0.6x |
|---|
| Fast Retailing Co Ltd ($6288) | -0.3x | -0.7x | -1.7x | -1.8x | -1.7x |
