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Procter & Gamble Hygiene & Health Care is an attractive growth stock: revenue grew 26.9% and EBITDA 36.7% annually over the last three years

20-08-2014 • About Procter & Gamble Hygiene & Health Care ($PGHH) • By InTwits

Procter & Gamble Hygiene & Health Care is an attractive growth stock in Personal Products industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story


Procter & Gamble Hygiene & Health Care showed fast growth in the last financial year. Procter & Gamble Hygiene & Health Care's revenue surged on 21.5% in FY2014. The growth also happened in EBITDA of 63.8% for the same period.

In the longer period Procter & Gamble Hygiene & Health Care showed fast revenue growth of 26.9% from FY2011 to FY2014 annually. EBITDA surged on 36.7% from FY2011 to FY2014 annually.

Procter & Gamble Hygiene & Health Care ($PGHH) financials for the last 5 years

mln. INR FY2010 FY2011 FY2012 FY2013 FY2014
Revenue28,92710,02912,97416,84920,472
Revenue growth, %-65.3%29.4%29.9%21.5%
SG&A, %
EBITDA2,3331,6602,1112,5894,241
EBITDA growth, %-28.8%27.2%22.6%63.8%
EBITDA margin, %8.06%16.6%16.3%15.4%20.7%
Net Income1,7981,5091,8132,0323,020
Net Income margin, % 6.21%15.0%14.0%12.1%14.8%
 
CAPEX6585545453781,471
CAPEX/Revenue, %2.27%5.52%4.20%2.24%7.19%
Debt00000
Cash881,2551,7621,6392,677
Net Debt/EBITDA-0.0x-0.8x-0.8x-0.6x-0.6x
 
ROIC, %42.4%25.2%28.1%30.3%43.2%
ROE, %36.9%26.6%27.9%27.1%33.4%

Profitability and return on investment


EBITDA growth was partly attributed to margin expansion. EBITDA margin surged on 5.30 pp from 15.4% to 20.7% in FY2014. If we look for the longer period Procter & Gamble Hygiene & Health Care's EBITDA margin surged on 4.10 pp from 16.6% in FY2011 to 20.7% in FY2014.

We call Procter & Gamble Hygiene & Health Care an attractive growth stock as together with the growth it delivers high ROIC at 43.2%. During the last three years it surged - it was 25.2% in FY2011. It's average level of ROIC for the last three years was 33.9%.

Procter & Gamble Hygiene & Health Care showed fast Net Income margin growth of 2.70 pp from 12.1% to 14.8% in FY2014. In the longer period Procter & Gamble Hygiene & Health Care showed small Net Income margin decline of 0.200 pp from 15% in FY2011 to 14.8% in FY2014.

Procter & Gamble Hygiene & Health Care operates at ROE of 33.4%. For the last three years the average ROE was 29.5%.

Capital expenditures (CAPEX)


To this fast growth the company had to invest in CAPEX.Procter & Gamble Hygiene & Health Care's CAPEX/Revenue was 7.19% in FY2014. CAPEX/Revenue surged on 1.66 pp from 5.52% in FY2011 to 7.19% in FY2014. Average CAPEX/Revenue for the last three years was 4.54%.

Leverage (Debt)


Procter & Gamble Hygiene & Health Care has negative net debt at -0.6x Net Debt/EBITDA - at the same time with high growth. In the longer period the company showed fast leverage growth of 0.13x from -0.76x in FY2011 to -0.63x in FY2014.

Peers in Personal Products


Below we provide Procter & Gamble Hygiene & Health Care benchmarking against other companies in Personal Products 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, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Godrej Consumer Products ($GODREJCP)-61.4%32.0%31.7%18.6%
Dabur India ($DABUR)-56.2%29.3%16.3%15.0%
Colgate-Palmolive (India) ($COLPAL)-55.8%17.8%17.5%13.1%
Hindustan Unilever ($HINDUNILVR)-60.1%17.0%14.5%8.4%
Emami ($EMAMILTD)-53.7%16.6%16.9%7.2%
 
Median (7 companies)-56.0%22.4%16.9%8.4%
Procter & Gamble Hygiene & Health Care ($PGHH)-65.3%29.4%29.9%21.5%


Top companies by EBITDA margin, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Emami ($EMAMILTD)9.1%21.8%20.9%20.5%24.3%
Bliss Gvs Pharma ($BLISSGVS)27.2%28.1%20.9%
Colgate-Palmolive (India) ($COLPAL)9.5%22.6%21.7%21.0%18.6%
Hindustan Unilever ($HINDUNILVR)5.8%14.0%15.2%16.0%16.6%
Dabur India ($DABUR)6.6%18.7%16.2%16.0%16.3%
 
Median (7 companies)6.2%18.2%18.1%16.0%16.6%
Procter & Gamble Hygiene & Health Care ($PGHH)8.1%16.6%16.3%15.4%20.7%


Top companies by CAPEX/Revenue, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Bliss Gvs Pharma ($BLISSGVS)8.7%5.0%16.7%
Colgate-Palmolive (India) ($COLPAL)0.7%1.8%3.8%4.9%9.0%
Emami ($EMAMILTD)1.5%4.0%8.0%5.0%3.6%
Dabur India ($DABUR)1.7%22.7%4.4%3.9%3.0%
Hindustan Unilever ($HINDUNILVR)1.2%1.7%1.2%1.7%2.1%
 
Median (7 companies)1.2%4.9%3.8%4.9%3.0%
Procter & Gamble Hygiene & Health Care ($PGHH)2.3%5.5%4.2%2.2%7.2%


Top companies by ROIC, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Hindustan Unilever ($HINDUNILVR)108.0%96.0%99.9%114.4%133.0%
Colgate-Palmolive (India) ($COLPAL)175.3%134.8%121.4%120.4%104.4%
Emami ($EMAMILTD)28.0%28.2%31.5%36.7%43.3%
Dabur India ($DABUR)43.3%36.5%29.4%28.7%30.8%
Marico ($MARICO)34.7%25.9%23.2%22.6%26.9%
 
Median (9 companies)38.2%27.1%26.3%28.7%26.9%
Procter & Gamble Hygiene & Health Care ($PGHH)42.4%25.2%28.1%30.3%43.2%


Top companies by Net Debt / EBITDA

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Bliss Gvs Pharma ($BLISSGVS)0.0x1.1x1.9x
Godrej Consumer Products ($GODREJCP)-0.7x2.7x1.6x1.7x1.5x
Cupid ($CUPID)2.2x1.7x0.5x1.4x
Marico ($MARICO)1.1x1.4x1.5x1.3x0.9x
Dabur India ($DABUR)-0.0x1.0x0.8x1.2x0.3x
 
Median (8 companies)-0.0x0.9x0.8x0.8x0.6x
Procter & Gamble Hygiene & Health Care ($PGHH)-0.0x-0.8x-0.8x-0.6x-0.6x


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