Starbucks Corp reports 14.7% EBITDA growth and 11.2% Revenue growth
03/11/2016 • About Starbucks Corp (
$4337) • By InTwits
Starbucks Corp reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Starbucks Corp is a growth stock: FY2016 revenue growth was 11.2%, 5 year revenue CAGR was 12.7% at FY2016 ROIC 46.2%
- EBITDA Margin is quite volatile: 24.4% in FY2016, 23.7% in FY2015, 23.3% in FY2014, 2.2% in FY2013, 19.4% in FY2012
- Starbucks Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.0%. At the same time it's a lot of higher than industry average of 5.5%.
- CAPEX is quite volatile: 262 in FY2016, 349 in FY2015, 375 in FY2014, 919 in FY2013, 1,420 in FY2012
- The company has highly profitable business model: ROIC is at 46.2%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.3x while industry average is 0.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Starbucks Corp ($4337) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 13,300 | 14,867 | 16,448 | 19,163 | 21,316 | 11.2% |
| Gross Profit | 3,568 | 4,198 | 4,951 | 5,964 | 6,741 | 13.0% |
| SG&A | 801 | 938 | 991 | 1,197 | 1,361 | 13.7% |
| EBITDA | 2,578 | 330 | 3,830 | 4,535 | 5,202 | 14.7% |
| Net Income | 1,384 | 8 | 2,068 | 2,757 | 2,818 | 2.2% |
Balance Sheet
|
|---|
| Cash | 1,189 | 2,576 | 1,708 | 1,530 | 2,129 | 39.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | 400 | |
| Long Term Debt | 550 | 1,299 | 2,048 | 2,348 | 3,202 | 36.4% |
Cash flow
|
|---|
| Capex | 856 | 1,151 | 1,161 | 1,304 | 1,440 | 10.5% |
Ratios
|
|---|
| Revenue growth | 13.7% | 11.8% | 10.6% | 16.5% | 11.2% | |
| EBITDA growth | 13.1% | -87.2% | 1,059.8% | 18.4% | 14.7% | |
| Gross Margin | 26.8% | 28.2% | 30.1% | 31.1% | 31.6% | 0.5% |
| EBITDA Margin | 19.4% | 2.2% | 23.3% | 23.7% | 24.4% | 0.7% |
| Net Income Margin | 10.4% | 0.1% | 12.6% | 14.4% | 13.2% | -1.2% |
| SG&A, % of revenue | 6.0% | 6.3% | 6.0% | 6.2% | 6.4% | 0.1% |
| CAPEX, % of revenue | 6.4% | 7.7% | 7.1% | 6.8% | 6.8% | -0.0% |
| ROIC | 36.4% | -6.0% | 52.8% | 51.4% | 46.2% | -5.2% |
| ROE | 29.2% | 0.2% | 42.4% | 49.7% | 48.2% | -1.6% |
| Net Debt/EBITDA | -0.2x | -3.9x | 0.1x | 0.2x | 0.3x | 0.1x |
Revenue and profitability
The company's Revenue jumped on 11.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 14.3 pp from -14.7% to -0.42% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased slightly on 1.2 pp from 14.4% to 13.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Starbucks Corp's CAPEX/Revenue was 6.8% in FY2016. CAPEX/Revenue decreased slightly on 0.99 pp from 7.7% in FY2013 to 6.8% in FY2016. It's average level of CAPEX/Revenue for the last three years was 6.9%.
Return on investment
The company operates at high and attractive ROIC (46.25%) and ROE (48.16%). ROIC decreased on 5.2 pp from 51.4% to 46.2% in FY2016. ROE decreased slightly on 1.6 pp from 49.7% to 48.2% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.3x and Debt / EBITDA is 0.7x. Net Debt / EBITDA surged on 0.1x from 0.2x to 0.3x in FY2016. Debt surged on 53.4% while cash surged on 39.1%.
Appendix 1: Peers in Retail
Below we provide Starbucks Corp benchmarking against other companies in Retail 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Nuclear Industry 23 International Corp Ltd ($611) | 1.4% | 85.6% | -42.1% | 419.8% | |
| Noble House China Holdings Ltd ($8246) | -5.0% | -20.2% | -24.8% | 117.2% | |
| Vongroup Ltd ($318) | | 23.7% | -80.2% | 90.3% | -7.2% |
| Nanjing Sinolife United Co Ltd ($3332) | 45.6% | 29.5% | 29.6% | 57.3% | |
| Shanghai La Chapelle Fashion Co Ltd ($6116) | 54.9% | 72.8% | 23.0% | 48.3% | |
| |
|---|
| Median (117 companies) | 7.4% | 6.1% | 2.9% | -1.0% | -8.2% |
|---|
| Starbucks Corp ($4337) | | 11.8% | 10.6% | 16.5% | 11.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vongroup Ltd ($318) | | | 95.1% | 99.1% | 99.0% |
| Modern Beauty Salon Holdings Ltd ($919) | 97.4% | 95.9% | 96.8% | 96.7% | 96.8% |
| Moiselle International Holdings Ltd ($130) | 81.2% | 83.8% | 80.6% | 83.2% | 77.6% |
| Embry Holdings Ltd ($1388) | 81.2% | 80.4% | 82.3% | 81.6% | |
| Nanjing Sinolife United Co Ltd ($3332) | 86.5% | 89.3% | 90.9% | 80.6% | |
| |
|---|
| Median (103 companies) | 37.2% | 36.4% | 35.5% | 33.9% | 44.7% |
|---|
| Starbucks Corp ($4337) | 26.8% | 28.2% | 30.1% | 31.1% | 31.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Energy Development Holdings Ltd ($228) | -58.1% | -72.3% | -84.0% | 1,070.6% | |
| Golden Eagle Retail Group Ltd ($3308) | 48.5% | 47.3% | 42.8% | 55.4% | |
| Nanjing Sinolife United Co Ltd ($3332) | 51.6% | 56.9% | 54.4% | 44.8% | |
| Lifestyle International Holdings Ltd ($1212) | 47.5% | 47.0% | 44.7% | 43.4% | |
| China Dongxiang Group Co Ltd ($3818) | 6.0% | 5.6% | 58.3% | 41.4% | |
| |
|---|
| Median (117 companies) | 10.3% | 7.8% | 8.9% | 7.1% | 5.1% |
|---|
| Starbucks Corp ($4337) | 19.4% | 2.2% | 23.3% | 23.7% | 24.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Culture Landmark Investment Ltd ($674) | 11.6% | 19.4% | 15.7% | 47.2% | 3.9% |
| Springland International Holdings Ltd ($1700) | 31.9% | 17.4% | 26.5% | 36.9% | |
| Merry Garden Holdings Ltd ($1237) | 18.6% | 28.6% | 15.1% | 34.2% | |
| China Energy Development Holdings Ltd ($228) | 1.6% | 0.2% | 0.0% | 27.4% | |
| Golden Eagle Retail Group Ltd ($3308) | 28.5% | 9.4% | 26.7% | 25.4% | |
| |
|---|
| Median (117 companies) | 4.0% | 3.6% | 3.7% | 3.1% | 1.9% |
|---|
| Starbucks Corp ($4337) | 6.4% | 7.7% | 7.1% | 6.8% | 6.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 50.7% | -4.6% | 81.3% | 71.8% | 13.3% |
| JC Group Holdings Ltd ($8326) | | 215.6% | 92.8% | 66.3% | 81.7% |
| Sa Sa International Holdings Ltd ($178) | 53.5% | 52.7% | 49.0% | 39.8% | 19.0% |
| Noble House China Holdings Ltd ($8246) | 17.7% | -67.7% | -113.8% | 35.6% | |
| Fairwood Holdings Ltd ($52) | 28.0% | 29.1% | 28.6% | 32.1% | 36.4% |
| |
|---|
| Median (117 companies) | 12.2% | 8.9% | 8.5% | 5.8% | 2.0% |
|---|
| Starbucks Corp ($4337) | 36.4% | -6.0% | 52.8% | 51.4% | 46.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sparkle Roll Group Ltd ($970) | 0.6x | 4.0x | 9.3x | 23.5x | 8.5x |
| Trinity Ltd ($891) | -0.2x | 0.2x | 0.6x | 18.2x | |
| Parkson Retail Group Ltd ($3368) | 0.8x | 2.3x | 3.6x | 9.8x | |
| Maoye International Holdings Ltd ($848) | 2.9x | 3.3x | 3.4x | 9.0x | |
| Century Ginwa Retail Holdings Ltd ($162) | 2.0x | 2.5x | 4.8x | 7.3x | |
| |
|---|
| Median (91 companies) | -0.5x | -0.5x | -0.2x | -0.5x | -0.7x |
|---|
| Starbucks Corp ($4337) | -0.2x | -3.9x | 0.1x | 0.2x | 0.3x |
