Wynn Macau Ltd reports 62.6% Net Income decline and 5.9 pp EBITDA Margin decline from 27.0% to 21.1%
30/03/2016 • About Wynn Macau Ltd (
$1128) • By InTwits
Wynn Macau Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Wynn Macau Ltd is a company in decline: 2015 revenue growth was -35.1%, 5 years revenue CAGR was -3.2%
- Wynn Macau Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.8%. At the same time it's in pair with industry average of 21.1%.
- CAPEX is quite volatile: 12,710 in 2015, 8,312 in 2014, 3,442 in 2013, 1,491 in 2012, 931 in 2011
- The company has business model with low profitability: ROIC is at 9.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Wynn Macau Ltd ($1128) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 29,498 | 28,452 | 31,341 | 29,445 | 19,096 | -35.1% |
| Gross Profit | 28,793 | 27,858 | 30,807 | 28,992 | 18,797 | -35.2% |
| EBITDA | 6,999 | 7,616 | 8,731 | 7,952 | 4,032 | -49.3% |
| Net Income | 5,921 | 6,440 | 7,701 | 6,445 | 2,410 | -62.6% |
Balance Sheet
|
|---|
| Cash | 5,157 | 10,475 | 14,130 | 10,790 | 6,731 | -37.6% |
| Short Term Debt | 2,303 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 2,501 | 5,494 | 11,683 | 18,605 | 31,318 | 68.3% |
Cash flow
|
|---|
| Capex | 931 | 1,491 | 3,442 | 8,312 | 12,710 | 52.9% |
Ratios
|
|---|
| Revenue growth | 31.5% | -3.5% | 10.2% | -6.0% | -35.1% | |
| EBITDA growth | 23.1% | 8.8% | 14.6% | -8.9% | -49.3% | |
| Gross Margin | 97.6% | 97.9% | 98.3% | 98.5% | 98.4% | -0.0% |
| EBITDA Margin | 23.7% | 26.8% | 27.9% | 27.0% | 21.1% | -5.9% |
| Net Income Margin | 20.1% | 22.6% | 24.6% | 21.9% | 12.6% | -9.3% |
| CAPEX, % of revenue | 3.2% | 5.2% | 11.0% | 28.2% | 66.6% | 38.3% |
| ROIC | 66.1% | 53.9% | 42.3% | 29.9% | 9.9% | -20.0% |
| ROE | 142.2% | 88.6% | 78.1% | 79.3% | 43.3% | -36.0% |
| Net Debt/EBITDA | -0.1x | -0.7x | -0.3x | 1.0x | 6.1x | 5.1x |
Revenue and profitability
Wynn Macau Ltd's Revenue dropped on 35.1% in 2015. 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 2015.
Net Income marign decreased on 9.3 pp from 21.9% to 12.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 66.6% in 2015. The company showed fast CAPEX/Revenue growth of 61.3 pp from 5.2% in 2012 to 66.6% in 2015. Average CAPEX/Revenue for the last three years was 35.3%.Battling declining revenue the company made large investments to CAPEX (315% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at good ROE (43.25%) while ROIC is low (9.92%). ROIC dropped on 20.0 pp from 29.9% to 9.9% in 2015. ROE dropped on 36.0 pp from 79.3% to 43.3% in 2015.
Leverage (Debt)
Debt level is 6.1x Net Debt / EBITDA and 7.8x Debt / EBITDA. Net Debt / EBITDA surged on 5.1x from 1.0x to 6.1x in 2015. Debt jumped on 68.3% in 2015 while cash dropped on 37.6% in 2015.
Management team
Stephen A Wynn "Steve" is a the company's CEO. Stephen A Wynn "Steve" has spent 9 years at the company. The company's CFO is Frank Anthony Cassella. Frank Anthony Cassella has 4 years tenure at the company.
Appendix 1: Peers in Lodging
Below you can find Wynn Macau Ltd benchmarking vs. other companies in Lodging 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 New City Commercial Development Ltd ($1321) | | -16.9% | 433.0% | -76.2% | 141.3% |
| Zhuhai Holdings Investment Group Ltd ($908) | | 229.8% | 14.5% | 57.0% | 76.3% |
| Century City International Holdings Ltd ($355) | | 283.6% | 108.7% | -35.8% | 25.9% |
| Far East Consortium International Ltd/HK ($35) | | 6.4% | 111.9% | 9.0% | 25.7% |
| NagaCorp Ltd ($3918) | | 24.6% | 23.7% | 17.2% | 24.6% |
| |
|---|
| Median (22 companies) | 7.0% | 14.4% | 13.8% | 0.8% | -6.8% |
|---|
| Wynn Macau Ltd ($1128) | | -3.5% | 10.2% | -6.0% | -35.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SJM Holdings Ltd ($880) | 99.7% | 99.7% | 99.7% | 99.7% | 99.5% |
| Emperor Entertainment Hotel Ltd ($296) | 70.9% | 77.1% | 75.6% | 76.8% | 70.9% |
| Asia Standard Hotel Group Ltd ($292) | 52.5% | 60.7% | 73.4% | 72.1% | 67.6% |
| Sino Hotels Holdings Ltd ($1221) | 69.7% | 71.3% | 70.4% | 68.9% | 65.8% |
| NagaCorp Ltd ($3918) | 73.2% | 72.9% | 72.1% | 67.4% | 65.1% |
| |
|---|
| Median (16 companies) | 52.5% | 55.7% | 46.3% | 51.3% | 48.6% |
|---|
| Wynn Macau Ltd ($1128) | 97.6% | 97.9% | 98.3% | 98.5% | 98.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| NagaCorp Ltd ($3918) | 49.2% | 49.8% | 50.1% | 42.8% | 45.3% |
| Emperor Entertainment Hotel Ltd ($296) | 38.7% | 44.9% | 46.4% | 46.9% | 43.1% |
| Jinmao Investments and Jinmao China Investments Holdings Ltd ($6139) | 40.9% | 41.2% | 40.5% | 25.8% | 41.5% |
| Asia Standard Hotel Group Ltd ($292) | 69.1% | -23.9% | 65.2% | 49.9% | 40.4% |
| Sino Hotels Holdings Ltd ($1221) | 42.8% | 46.5% | 45.9% | 43.1% | 39.6% |
| |
|---|
| Median (22 companies) | 26.7% | 26.7% | 26.4% | 25.8% | 24.4% |
|---|
| Wynn Macau Ltd ($1128) | 23.7% | 26.8% | 27.9% | 27.0% | 21.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Macau Legend Development Ltd ($1680) | 1.3% | 5.0% | 24.2% | 73.0% | 68.5% |
| Legend Strategy International Holdings Group Co Ltd ($1355) | 15.7% | 17.0% | 38.0% | 1.2% | 62.6% |
| Century City International Holdings Ltd ($355) | 0.3% | 21.2% | 32.9% | 13.4% | 35.8% |
| Shangri-La Asia Ltd ($69) | 26.5% | 48.5% | 33.1% | 41.2% | 34.3% |
| NagaCorp Ltd ($3918) | 20.3% | 25.9% | 17.2% | 24.0% | 27.8% |
| |
|---|
| Median (22 companies) | 6.5% | 7.4% | 8.9% | 10.8% | 13.7% |
|---|
| Wynn Macau Ltd ($1128) | 3.2% | 5.2% | 11.0% | 28.2% | 66.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| NagaCorp Ltd ($3918) | 27.6% | 30.6% | 28.9% | 22.6% | 28.6% |
| MGM China Holdings Ltd ($2282) | 47.3% | 46.2% | 53.8% | 54.5% | 24.0% |
| Sands China Ltd ($1928) | 14.5% | 14.2% | 24.4% | 26.7% | 15.8% |
| Emperor Entertainment Hotel Ltd ($296) | 13.0% | 22.2% | 21.1% | 18.4% | 12.0% |
| Galaxy Entertainment Group Ltd ($27) | 14.7% | 25.2% | 30.0% | 27.5% | 10.2% |
| |
|---|
| Median (22 companies) | 5.2% | 5.7% | 5.6% | 3.6% | 3.1% |
|---|
| Wynn Macau Ltd ($1128) | 66.1% | 53.9% | 42.3% | 29.9% | 9.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China New City Commercial Development Ltd ($1321) | 18.7x | 26.0x | 7.9x | | 100.1x |
| Century City International Holdings Ltd ($355) | -58.1x | 6.5x | 9.3x | 11.2x | 12.3x |
| Regal Hotels International Holdings Ltd ($78) | | 5.0x | 8.7x | 11.8x | 11.1x |
| Shangri-La Asia Ltd ($69) | 4.0x | 6.0x | 6.8x | 6.9x | 9.8x |
| Macau Legend Development Ltd ($1680) | 2.2x | 2.2x | 0.6x | 0.2x | 7.1x |
| |
|---|
| Median (20 companies) | 1.0x | 1.2x | 0.8x | 0.5x | 3.9x |
|---|
| Wynn Macau Ltd ($1128) | -0.1x | -0.7x | -0.3x | 1.0x | 6.1x |
