Focus Media Network Ltd CAPEX dropped on 39.5% in 2015 and Revenue decreased on 5.2%
23/03/2016 • About Focus Media Network Ltd (
$8112) • By InTwits
Focus Media Network Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Focus Media Network Ltd doesn't have a profitable business model yet: 2015 ROIC is -16.7%
- The company operates at negative EBITDA Margin: -14.2%
- Focus Media Network Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 is 0.0%. Average EBITDA Margin for the same period was -8.1%0
- Focus Media Network Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.8%. At the same time it's a lot of higher than industry average of 38.8%.
- CAPEX is quite volatile: 4.4 in 2015, 7.3 in 2014, 1.7 in 2013, 1.4 in 2012, 2.0 in 2011
- The company has unprofitable business model: ROIC is at -16.7%
- It operates with high leverage: Net Debt/EBITDA is 82.7x while industry average is -1.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Focus Media Network Ltd ($8112) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 60.033 | 53.662 | 72.253 | 76.305 | 72.307 | -5.2% |
| Gross Profit | 48.597 | 36.511 | 48.546 | 38.764 | 41.630 | 7.4% |
| SG&A | | | | 52.991 | 56.891 | 7.4% |
| EBITDA | 5.456 | -23.965 | 8.340 | -6.635 | -10.247 | 54.4% |
| Net Income | 2.037 | -27.049 | 4.016 | -13.004 | -18.139 | 39.5% |
Balance Sheet
|
|---|
| Cash | 61.192 | 53.614 | 50.692 | 37.891 | 28.221 | -25.5% |
| Short Term Debt | 0.753 | 1.328 | 0.924 | 1.048 | 0.000 | -100.0% |
| Long Term Debt | 0.646 | 0.249 | 0.143 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 2.043 | 1.431 | 1.748 | 7.308 | 4.419 | -39.5% |
Ratios
|
|---|
| Revenue growth | 23.7% | -10.6% | 34.6% | 5.6% | -5.2% | |
| EBITDA growth | -60.5% | -539.2% | -134.8% | -179.6% | 54.4% | |
| Gross Margin | 81.0% | 68.0% | 67.2% | 50.8% | 57.6% | 6.8% |
| EBITDA Margin | 9.1% | -44.7% | 11.5% | -8.7% | -14.2% | -5.5% |
| Net Income Margin | 3.4% | -50.4% | 5.6% | -17.0% | -25.1% | -8.0% |
| SG&A, % of revenue | | | | 69.4% | 78.7% | 9.2% |
| CAPEX, % of revenue | 3.4% | 2.7% | 2.4% | 9.6% | 6.1% | -3.5% |
| ROIC | 3.7% | -32.8% | 6.1% | -15.9% | -16.7% | -0.8% |
| ROE | 3.0% | -33.0% | 5.6% | -19.4% | -22.9% | -3.5% |
| Net Debt/EBITDA | -11.0x | | -6.0x | | | 0.0x |
Revenue and profitability
Focus Media Network Ltd's Revenue decreased on 5.2% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from -6.1% to -4.6% in 2015.
Gross Margin increased on 6.8 pp from 50.8% to 57.6% in 2015. SG&A as a % of Revenue increased on 9.2 pp from 69.4% to 78.7% in 2015.
Net Income marign decreased on 8.0 pp from -17.0% to -25.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 6.1% in 2015. Focus Media Network Ltd's CAPEX/Revenue increased on 3.4 pp from 2.7% in 2012 to 6.1% in 2015. Average CAPEX/Revenue for the last three years was 6.0%.
Return on investment
The company operates at negative ROIC (-16.65%) and ROE (-22.90%). ROIC decreased slightly on 0.78 pp from -15.9% to -16.7% in 2015. ROE decreased on 3.5 pp from -19.4% to -22.9% in 2015.
Leverage (Debt)
The company paid down all the debt in 2015. Cash dropped on 25.5% in 2015.
Appendix 1: Peers in Media
Below we provide Focus Media Network Ltd benchmarking against other companies in Media 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 |
|---|
| SCMP Group Ltd ($583) | | 7.8% | 12.5% | -95.9% | 12.5% |
| Hong Kong Economic Times Holdings Ltd ($423) | | 5.6% | 2.7% | 3.1% | 5.3% |
| Modern Media Holdings ($72) | | 11.8% | -3.7% | -4.3% | -1.3% |
| Sing Tao News Corp Ltd ($1105) | | -7.5% | -7.9% | -2.4% | -6.2% |
| Oriental Press Group ($18) | | -5.3% | -3.2% | -1.4% | -7.8% |
| |
|---|
| Median (15 companies) | 3.8% | 4.5% | -1.9% | -4.3% | -9.0% |
|---|
| Focus Media Network Ltd ($8112) | | -10.6% | 34.6% | 5.6% | -5.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| I-CABLE Communications Ltd ($1097) | 95.6% | 94.8% | 94.7% | 94.1% | 94.4% |
| Television Broadcasts Ltd ($511) | 65.3% | 62.9% | 60.9% | 59.0% | 54.9% |
| Modern Media Holdings ($72) | 57.1% | 57.5% | 55.8% | 55.6% | 50.8% |
| One Media Group Ltd ($426) | 52.0% | 57.3% | 56.7% | 54.5% | 52.7% |
| Next Media Ltd ($282) | 33.1% | 36.6% | 37.4% | 41.3% | 38.5% |
| |
|---|
| Median (16 companies) | 43.6% | 37.5% | 38.5% | 36.1% | 37.9% |
|---|
| Focus Media Network Ltd ($8112) | 81.0% | 68.0% | 67.2% | 50.8% | 57.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 26.9% | 23.5% | 20.5% | 218.1% | 193.5% |
| Media Chinese International Ltd ($685) | 20.0% | 20.0% | 18.3% | 18.1% | 16.5% |
| One Media Group Ltd ($426) | 14.4% | 18.7% | 23.0% | 22.8% | 15.2% |
| Phoenix Satellite Television Holdings Ltd ($2008) | 29.8% | 30.1% | 31.1% | 24.6% | 14.1% |
| Oriental Press Group ($18) | 20.6% | 9.5% | 12.8% | 14.6% | 13.9% |
| |
|---|
| Median (15 companies) | 15.1% | 12.9% | 11.6% | 12.5% | 10.1% |
|---|
| Focus Media Network Ltd ($8112) | 9.1% | -44.7% | 11.5% | -8.7% | -14.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 3.6% | 7.0% | 5.3% | 52.2% | 85.2% |
| Evergrande Health Industry Group Ltd ($708) | 58.0% | 14.6% | 2.4% | 2.9% | 13.5% |
| I-CABLE Communications Ltd ($1097) | 10.6% | 10.1% | 7.6% | 11.3% | 13.0% |
| Hong Kong Economic Times Holdings Ltd ($423) | 9.0% | 8.4% | 8.5% | 1.3% | 10.0% |
| Tom Group Ltd ($2383) | 10.0% | 11.9% | 8.4% | 9.4% | 9.5% |
| |
|---|
| Median (15 companies) | 4.6% | 3.9% | 5.3% | 2.3% | 3.9% |
|---|
| Focus Media Network Ltd ($8112) | 3.4% | 2.7% | 2.4% | 9.6% | 6.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Media Chinese International Ltd ($685) | 18.7% | 18.6% | 17.8% | 18.4% | 15.6% |
| One Media Group Ltd ($426) | 17.1% | 25.6% | 21.8% | 16.0% | 8.9% |
| Next Media Ltd ($282) | 1.7% | 8.5% | 6.7% | 8.2% | 6.8% |
| Modern Media Holdings ($72) | 23.8% | 20.6% | 10.4% | 9.3% | 5.5% |
| Hong Kong Economic Times Holdings Ltd ($423) | 23.3% | 11.5% | -1.5% | 3.2% | 5.2% |
| |
|---|
| Median (15 companies) | 9.8% | 5.6% | 4.3% | 2.6% | 3.2% |
|---|
| Focus Media Network Ltd ($8112) | 3.7% | -32.8% | 6.1% | -15.9% | -16.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tom Group Ltd ($2383) | | | | 8.1x | 16.7x |
| I-CABLE Communications Ltd ($1097) | -2.0x | -4.0x | -0.8x | 0.2x | 2.0x |
| One Media Group Ltd ($426) | -3.8x | -2.3x | -0.6x | -1.1x | 1.5x |
| Modern Media Holdings ($72) | -0.9x | -0.8x | -0.9x | 0.1x | 1.0x |
| Media Chinese International Ltd ($685) | -1.1x | -1.4x | 0.8x | 0.6x | 0.2x |
| |
|---|
| Median (12 companies) | -1.3x | -1.7x | -1.1x | -1.3x | -0.2x |
|---|
