Prada SpA reports 26.6% Net Income decline and almost no change in Revenue of 3,548
08/04/2016 • About Prada SpA (
$1913) • By InTwits
Prada SpA reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Prada SpA has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.4%. At the same time it's a lot of higher than industry average of 4.2%.
- CAPEX is quite volatile: 227 in 2016, 169 in 2015, 135 in 2014, 91.1 in 2013, 574 in 2012
- The company has highly profitable business model: ROIC is at 14.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Prada SpA ($1913) key annual financial indicators
| mln. € | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,556 | 3,297 | 3,587 | 3,552 | 3,548 | -0.1% |
| Gross Profit | 1,828 | 2,377 | 2,649 | 2,551 | 2,568 | 0.7% |
| SG&A | 1,096 | 1,375 | 1,580 | 1,716 | 1,930 | 12.5% |
| EBITDA | 755 | 1,045 | 1,138 | 950 | 793 | -16.5% |
| Net Income | 432 | 626 | 628 | 451 | 331 | -26.6% |
Balance Sheet
|
|---|
| Cash | 362 | 572 | 568 | 709 | 681 | -4.0% |
| Short Term Debt | 167 | 176 | 62 | 263 | 271 | 2.8% |
| Long Term Debt | 180 | 79 | 208 | 255 | 520 | 103.9% |
Cash flow
|
|---|
| Capex | 249 | 350 | 549 | 362 | 394 | 8.9% |
Ratios
|
|---|
| Revenue growth | 24.9% | 29.0% | 8.8% | -1.0% | -0.1% | |
| EBITDA growth | 42.5% | 38.3% | 8.9% | -16.5% | -16.5% | |
| Gross Margin | 71.5% | 72.1% | 73.8% | 71.8% | 72.4% | 0.6% |
| EBITDA Margin | 29.6% | 31.7% | 31.7% | 26.8% | 22.4% | -4.4% |
| Net Income Margin | 16.9% | 19.0% | 17.5% | 12.7% | 9.3% | -3.4% |
| SG&A, % of revenue | 42.9% | 41.7% | 44.0% | 48.3% | 54.4% | 6.1% |
| CAPEX, % of revenue | 9.7% | 10.6% | 15.3% | 10.2% | 11.1% | 0.9% |
| ROIC | 32.1% | 37.4% | 34.0% | 21.9% | 14.0% | -7.9% |
| ROE | 28.5% | 30.2% | 25.1% | 15.8% | 10.9% | -5.0% |
| Net Debt/EBITDA | -0.0x | -0.3x | -0.3x | -0.2x | 0.1x | 0.3x |
Revenue and profitability
The company's Revenue showed almost no change in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.4 pp from 26.8% to 22.4% in FY2016.
Gross Margin increased slightly on 0.56 pp from 71.8% to 72.4% in FY2016. SG&A as a % of Revenue increased on 6.1 pp from 48.3% to 54.4% in FY2016.
Net Income marign decreased on 3.4 pp from 12.7% to 9.3% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 11.1% in FY2016. Prada SpA showed almost no change in CAPEX/Revenue from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 12.2%.
Return on investment
The company operates at good ROIC (14.03%) while ROE is low (10.88%). ROIC decreased on 7.9 pp from 21.9% to 14.0% in FY2016. ROE decreased on 5.0 pp from 15.8% to 10.9% in FY2016.
Leverage (Debt)
Debt level is 0.1x Net Debt / EBITDA and 1.0x Debt / EBITDA. Net Debt / EBITDA jumped on 0.3x from -0.2x to 0.1x in FY2016. Debt surged on 52.6% while cash decreased on 4.0%.
Management team
Patrizio Bertelli is a Prada SpA's CEO. Patrizio Bertelli has spent 4 years at the company. Alessandra Cozzani is a Prada SpA's CFO. Alessandra Cozzani has spent 2 years at the company.
Appendix 1: Peers in Apparel
Below you can find Prada SpA benchmarking vs. other companies in Apparel 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Symphony Holdings Ltd/Hong Kong ($1223) | -94.0% | 46.8% | 20.4% | 33.1% | |
| Highlight China IoT International Ltd ($1682) | 0.8% | 17.7% | -73.7% | 29.6% | |
| Koradior Holdings Ltd ($3709) | 48.3% | 44.7% | 47.7% | 23.9% | |
| Kingmaker Footwear Holdings Ltd ($1170) | 10.0% | 9.3% | 6.3% | 23.7% | |
| Cosmo Lady China Holdings Co Ltd ($2298) | 36.3% | 29.2% | 37.4% | 23.6% | |
| |
|---|
| Median (51 companies) | 5.6% | 5.4% | 5.4% | -2.1% | |
|---|
| Prada SpA ($1913) | | 29.0% | 8.8% | -1.0% | -0.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Symphony Holdings Ltd/Hong Kong ($1223) | 38.5% | 42.3% | 59.6% | 75.6% | |
| Koradior Holdings Ltd ($3709) | 62.8% | 69.3% | 73.3% | 73.7% | |
| China Outfitters Holdings Ltd ($1146) | 74.9% | 74.3% | 70.0% | 65.7% | |
| Crocodile Garments ($122) | 64.7% | 60.7% | 60.4% | 62.1% | |
| S Culture International Holdings Ltd ($1255) | 64.7% | 63.7% | 62.9% | 61.9% | |
| |
|---|
| Median (50 companies) | 24.8% | 23.5% | 24.9% | 24.2% | |
|---|
| Prada SpA ($1913) | 71.5% | 72.1% | 73.8% | 71.8% | 72.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Lilang Ltd ($1234) | 26.3% | 26.9% | 29.4% | 30.6% | |
| Cabbeen Fashion Ltd ($2030) | 25.0% | 29.7% | 28.4% | 29.0% | |
| Fuguiniao Co Ltd ($1819) | 24.5% | 26.1% | 26.7% | 27.9% | |
| Shenzhou International Group Holdings Ltd ($2313) | 26.4% | 26.2% | 26.1% | 26.7% | |
| HOSA International Ltd ($2200) | 44.4% | 42.2% | 37.6% | 26.7% | |
| |
|---|
| Median (51 companies) | 10.5% | 10.2% | 7.2% | 6.4% | |
|---|
| Prada SpA ($1913) | 29.6% | 31.7% | 31.7% | 26.8% | 22.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Symphony Holdings Ltd/Hong Kong ($1223) | 136.9% | 70.3% | 13.5% | 28.5% | |
| Shenzhou International Group Holdings Ltd ($2313) | 7.3% | 7.9% | 10.2% | 16.1% | |
| Crocodile Garments ($122) | 20.1% | 22.1% | 1.8% | 13.5% | |
| Texhong Textile Group Ltd ($2678) | 8.9% | 11.8% | 5.8% | 10.5% | |
| Citychamp Watch & Jewellery Group Ltd ($256) | 6.5% | 5.6% | 3.6% | 8.6% | |
| |
|---|
| Median (50 companies) | 2.2% | 3.0% | 2.3% | 2.1% | |
|---|
| Prada SpA ($1913) | 9.7% | 10.6% | 15.3% | 10.2% | 11.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Koradior Holdings Ltd ($3709) | 45.2% | 69.5% | 36.5% | 31.0% | |
| Cosmo Lady China Holdings Co Ltd ($2298) | 41.7% | 56.0% | 38.6% | 27.8% | |
| Cabbeen Fashion Ltd ($2030) | 32.3% | 32.9% | 26.5% | 27.0% | |
| Sitoy Group Holdings Ltd ($1023) | 39.3% | 28.7% | 31.8% | 22.0% | |
| China Lilang Ltd ($1234) | 27.3% | 19.1% | 19.7% | 20.2% | |
| |
|---|
| Median (51 companies) | 10.5% | 7.2% | 4.4% | 4.5% | |
|---|
| Prada SpA ($1913) | 32.1% | 37.4% | 34.0% | 21.9% | 14.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| S Culture International Holdings Ltd ($1255) | 1.4x | 0.7x | 2.4x | 158.1x | |
| High Fashion International Ltd ($608) | 16.7x | 27.7x | 11.2x | 5.2x | |
| Global Brands Group Holding Ltd ($787) | -0.4x | -0.3x | 1.3x | 2.1x | |
| Fuguiniao Co Ltd ($1819) | -0.0x | -0.7x | 0.3x | 1.9x | |
| Texhong Textile Group Ltd ($2678) | 1.4x | 1.3x | 2.3x | 1.4x | |
| |
|---|
| Median (37 companies) | -0.3x | -0.7x | -0.4x | -1.2x | |
|---|
| Prada SpA ($1913) | -0.0x | -0.3x | -0.3x | -0.2x | 0.1x |
