San Miguel Brewery Hong Kong Ltd reports 79.9% EBITDA decline and 21.8% Revenue decline
04/02/2016 • About San Miguel Brewery Hong Kong Ltd (
$236) • By InTwits
San Miguel Brewery Hong Kong Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- San Miguel Brewery Hong Kong Ltd doesn't have a profitable business model yet: 2015 ROIC is -2.0%
- EBITDA Margin is quite volatile: 2.0% in 2015, 7.7% in 2014, 6.7% in 2013, -4.4% in 2012, -6.0% in 2011
- San Miguel Brewery Hong Kong Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: 5.0 in 2015, 11.3 in 2014, 5.0 in 2013, 14.2 in 2012, 15.4 in 2011
- The company has unprofitable business model: ROIC is at -2.0%
- It operates with high leverage: Net Debt/EBITDA is 3.8x while industry average is 3.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
San Miguel Brewery Hong Kong Ltd ($236) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 683.9 | 686.4 | 687.1 | 728.6 | 569.5 | -21.8% |
| Gross Profit | 296.8 | 293.9 | 290.3 | 311.8 | 237.7 | -23.8% |
| SG&A | | 358.0 | 295.5 | 315.2 | 281.0 | -10.9% |
| EBITDA | -41.0 | -29.9 | 45.9 | 55.8 | 11.2 | -79.9% |
| Net Income | -53.5 | 237.7 | 26.0 | 35.3 | -16.1 | -145.5% |
Balance Sheet
|
|---|
| Cash | 45.6 | 100.9 | 112.7 | 135.6 | 148.6 | 9.6% |
| Short Term Debt | 313.7 | 86.7 | 12.7 | 50.9 | 0.0 | -100.0% |
| Long Term Debt | 0.0 | 145.1 | 190.8 | 140.0 | 190.7 | 36.3% |
Cash flow
|
|---|
| Capex | 15.4 | 14.2 | 5.0 | 11.3 | 5.0 | -55.6% |
Ratios
|
|---|
| Revenue growth | 16.0% | 0.4% | 0.1% | 6.0% | -21.8% | |
| EBITDA growth | -16.9% | -27.1% | -253.6% | 21.6% | -79.9% | |
| Gross Margin | 43.4% | 42.8% | 42.2% | 42.8% | 41.7% | -1.1% |
| EBITDA Margin | -6.0% | -4.4% | 6.7% | 7.7% | 2.0% | -5.7% |
| Net Income Margin | -7.8% | 34.6% | 3.8% | 4.8% | -2.8% | -7.7% |
| SG&A, % of revenue | | 52.2% | 43.0% | 43.3% | 49.3% | 6.1% |
| CAPEX, % of revenue | 2.3% | 2.1% | 0.7% | 1.5% | 0.9% | -0.7% |
| ROIC | -9.2% | -6.8% | 2.8% | 3.9% | -2.0% | -6.0% |
| ROE | -15.1% | 55.6% | 4.7% | 6.0% | -2.7% | -8.8% |
| Net Debt/EBITDA | | | 2.0x | 1.0x | 3.8x | 2.8x |
Revenue and profitability
The company's Revenue dropped on 21.8% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.7 pp from 7.7% to 2.0% in 2015.
Gross Margin decreased slightly on 1.1 pp from 42.8% to 41.7% in 2015. SG&A as a % of Revenue increased on 6.1 pp from 43.3% to 49.3% in 2015.
Net Income marign decreased on 7.7 pp from 4.8% to -2.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 0.88%. CAPEX/Revenue decreased slightly on 1.2 pp from 2.1% in 2012 to 0.88% in 2015. Average CAPEX/Revenue for the last three years was 1.1%.
Return on investment
The company operates at negative ROIC (-2.02%) and ROE (-2.74%). ROIC decreased on 6.0 pp from 3.9% to -2.0% in 2015. ROE decreased on 8.8 pp from 6.0% to -2.7% in 2015.
Leverage (Debt)
Debt level is 3.8x Net Debt / EBITDA and 17.0x Debt / EBITDA. Net Debt / EBITDA surged on 2.8x from 1.0x to 3.8x in 2015. Debt showed almost no change in 2015 while cash increased on 9.6% in 2015.
Appendix 1: Peers in Beverages
Below we provide San Miguel Brewery Hong Kong Ltd benchmarking against other companies in Beverages 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 Tontine Wines Group Ltd ($389) | 18.0% | -20.7% | -73.3% | 62.7% | |
| Silver base Group Holdings Ltd ($886) | | 34.1% | -86.9% | 25.4% | -14.4% |
| Besunyen Holdings Co Ltd ($926) | -3.9% | -43.5% | 2.6% | 15.7% | |
| Vitasoy International Holdings Ltd ($345) | | 11.6% | 9.0% | 10.9% | 12.4% |
| China Tianyi Holdings Ltd ($756) | | 43.0% | -19.2% | 8.3% | -17.3% |
| |
|---|
| Median (15 companies) | 18.3% | -2.7% | -13.0% | 2.0% | -14.4% |
|---|
| San Miguel Brewery Hong Kong Ltd ($236) | | 0.4% | 0.1% | 6.0% | -21.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Besunyen Holdings Co Ltd ($926) | 87.8% | 82.5% | 83.3% | 84.3% | |
| Tibet 5100 Water Resources Holdings Ltd ($1115) | 78.8% | 81.4% | 73.2% | 62.7% | |
| Tenfu Cayman Holdings Co Ltd ($6868) | 61.6% | 64.1% | 61.2% | 62.2% | |
| Vitasoy International Holdings Ltd ($345) | 48.1% | 47.4% | 47.5% | 48.4% | 49.7% |
| JLF Investment Co Ltd ($472) | 54.4% | 50.9% | 48.7% | 42.4% | |
| |
|---|
| Median (15 companies) | 46.1% | 44.8% | 34.7% | 34.7% | 36.1% |
|---|
| San Miguel Brewery Hong Kong Ltd ($236) | 43.4% | 42.8% | 42.2% | 42.8% | 41.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tibet 5100 Water Resources Holdings Ltd ($1115) | 72.2% | 73.3% | 73.2% | 69.2% | |
| China Tianyi Holdings Ltd ($756) | 17.7% | 28.4% | 26.1% | 29.7% | 23.0% |
| Tenfu Cayman Holdings Co Ltd ($6868) | 27.4% | 27.5% | 25.3% | 26.1% | |
| Yantai North Andre Juice Co ($2218) | 16.1% | 14.1% | 11.9% | 15.5% | |
| China Haisheng Juice Holdings Co Ltd ($359) | 15.2% | 5.8% | 6.6% | 14.9% | |
| |
|---|
| Median (15 companies) | 17.7% | 17.3% | 10.5% | 11.3% | -5.2% |
|---|
| San Miguel Brewery Hong Kong Ltd ($236) | -6.0% | -4.4% | 6.7% | 7.7% | 2.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Culiangwang Beverages Holdings Ltd ($904) | 39.1% | 26.8% | 52.2% | 81.8% | 75.8% |
| China Tianyi Holdings Ltd ($756) | 7.5% | 5.8% | 6.2% | 33.6% | 6.1% |
| China Tontine Wines Group Ltd ($389) | 5.3% | 15.3% | 129.4% | 16.7% | |
| China Haisheng Juice Holdings Co Ltd ($359) | 3.6% | 4.8% | 6.3% | 15.3% | |
| Tenfu Cayman Holdings Co Ltd ($6868) | 11.2% | 18.3% | 8.8% | 12.0% | |
| |
|---|
| Median (15 companies) | 7.5% | 11.1% | 7.3% | 8.8% | 6.1% |
|---|
| San Miguel Brewery Hong Kong Ltd ($236) | 2.3% | 2.1% | 0.7% | 1.5% | 0.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vitasoy International Holdings Ltd ($345) | 23.8% | 20.8% | 20.6% | 21.7% | 23.5% |
| Tenfu Cayman Holdings Co Ltd ($6868) | 26.1% | 19.4% | 17.9% | 15.7% | |
| Tibet 5100 Water Resources Holdings Ltd ($1115) | 41.0% | 23.3% | 20.3% | 14.9% | |
| Tsingtao Brewery Co Ltd ($168) | 16.4% | 13.4% | 12.0% | 12.2% | |
| China Tianyi Holdings Ltd ($756) | 7.3% | 12.0% | 6.1% | 6.7% | 3.2% |
| |
|---|
| Median (15 companies) | 14.9% | 12.7% | 3.7% | 2.7% | -2.4% |
|---|
| San Miguel Brewery Hong Kong Ltd ($236) | -9.2% | -6.8% | 2.8% | 3.9% | -2.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sino Distillery Group Ltd ($39) | | | 4.6x | 17.7x | |
| China Haisheng Juice Holdings Co Ltd ($359) | 3.0x | 11.9x | 16.2x | 8.9x | |
| China Huiyuan Juice Group Ltd ($1886) | 8.6x | 5.4x | 4.3x | 7.9x | |
| Yantai North Andre Juice Co ($2218) | 2.6x | 2.3x | 2.4x | 2.2x | |
| China Tianyi Holdings Ltd ($756) | -3.7x | -1.0x | -0.8x | 0.9x | 1.1x |
| |
|---|
| Median (10 companies) | -0.8x | -1.0x | 0.0x | 0.9x | 0.4x |
|---|
| San Miguel Brewery Hong Kong Ltd ($236) | | | 2.0x | 1.0x | 3.8x |
