Network18 Media & Investments EBITDA jumped on 57.1% in 2015 and EBITDA Margin increased slightly on 1.3 pp from 3.7% to 5.0%

15-04-2015 • About Network18 Media & Investments ($NETWORK18) • By InTwits

Network18 Media & Investments reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Network18 Media & Investments doesn't have a profitable business model yet: FY2015 ROIC is 1.6%
EBITDA Margin is expanding: 5.0% in FY2015 vs. 3.7% in FY2014 vs. 2.2% in FY2011
Network18 Media & Investments spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 is 0.0%. Average EBITDA Margin for the same period was -0.2%0
Network18 Media & Investments has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.6%. At the same time it's in pair with industry average of 4.7%.
CAPEX is quite volatile: 1,326 in FY2015, 1,170 in FY2014, 699 in FY2013, 862 in FY2012, 327 in FY2011
The company has potentially unprofitable business model: ROIC is at 1.6%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Network18 Media & Investments ($NETWORK18) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	14,779	19,719	23,545	26,841	31,088	15.8%
SG&A					8,254
EBITDA	331	-2,741	-408	997	1,567	57.1%
Net Income	-367	-3,927	-1,055	-368	-10,599
Balance Sheet
Cash	3,253	1,339	3,922	3,110	2,970	-4.5%
Short Term Debt	10,873	12,814	7,115	8,950	8,068	-9.8%
Long Term Debt	5,929	5,908	2,450	1,525	1,551	1.7%
Cash flow
Capex	327	862	699	1,170	1,326	13.3%
Ratios
Revenue growth	-59.9%	33.4%	19.4%	14.0%	15.8%
EBITDA growth	406.3%	-928.7%	-85.1%	-344.2%	57.1%
EBITDA Margin	2.2%	-13.9%	-1.7%	3.7%	5.0%	1.3%
Net Income Margin	-2.5%	-19.9%	-4.5%	-1.4%	-34.1%	-32.7%
SG&A, % of revenue					26.6%	26.6%
CAPEX, % of revenue	2.2%	4.4%	3.0%	4.4%	4.3%	-0.1%
ROIC	-0.7%	-10.8%	-2.8%	0.3%	1.6%	1.3%
ROE	-3.8%	-74.1%	-7.4%	-1.4%	-49.2%	-47.9%
Net Debt/EBITDA	41.0x			7.4x	4.2x	-3.1x

Revenue and profitability

Network18 Media & Investments's Revenue jumped on 15.8% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.6 pp from 6.6% to 1.0% in FY2015.

Net Income marign dropped on 32.7 pp from -1.4% to -34.1% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 Network18 Media & Investments had CAPEX/Revenue of 4.3%. The company's CAPEX/Revenue showed almost no change from FY2012 to FY2015. Average CAPEX/Revenue for the last three years was 3.9%.Network18 Media & Investments invested a big chunk of EBITDA (84.6%) to CAPEX to fuel its growth.

Return on investment

The company operates at low but positive ROIC (1.61%) and negative ROE (-49.24%). ROIC increased slightly on 1.3 pp from 0.30% to 1.6% in FY2015. ROE dropped on 47.9 pp from -1.4% to -49.2% in FY2015.

Leverage (Debt)

Debt level is 4.2x Net Debt / EBITDA and 6.1x Debt / EBITDA. Net Debt / EBITDA dropped on 3.1x from 7.4x to 4.2x in FY2015. Debt decreased on 8.2% in FY2015 while cash decreased on 4.5% in FY2015.

Appendix 1: Peers in Holding Companies

Below we provide Network18 Media & Investments benchmarking against other companies in Holding Companies 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	FY2011	FY2012	FY2013	FY2014	FY2015
Binani Industries ($BINANIIND)	-55.2%	26.5%	46.0%	5.7%
Kirloskar Brothers Investments ($KBIL)	-98.9%	8,068.8%	-2.8%	-4.6%
Median (2 companies)	-77.1%	4,047.6%	21.6%	0.5%
Network18 Media & Investments ($NETWORK18)		33.4%	19.4%	14.0%	15.8%

Top companies by EBITDA margin, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Kirloskar Brothers Investments ($KBIL)	95.9%	13.2%	14.6%	13.2%
Binani Industries ($BINANIIND)	11.5%	10.1%	11.8%	7.0%
Median (2 companies)	53.7%	11.7%	13.2%	10.1%
Network18 Media & Investments ($NETWORK18)	2.2%	-13.9%	-1.7%	3.7%	5.0%

Top companies by CAPEX/Revenue, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Binani Industries ($BINANIIND)	20.0%	79.8%	6.4%	5.6%
Kirloskar Brothers Investments ($KBIL)	0.3%	3.7%	4.8%	4.3%
Median (2 companies)	10.2%	41.8%	5.6%	5.0%
Network18 Media & Investments ($NETWORK18)	2.2%	4.4%	3.0%	4.4%	4.3%

Top companies by ROIC, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Kirloskar Brothers Investments ($KBIL)	30.4%	34.9%	20.6%	15.8%
Binani Industries ($BINANIIND)	4.4%	3.2%	4.9%	0.7%
Median (2 companies)	17.4%	19.1%	12.7%	8.2%
Network18 Media & Investments ($NETWORK18)	-0.7%	-10.8%	-2.8%	0.3%	1.6%

Top companies by Net Debt / EBITDA


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Binani Industries ($BINANIIND)	8.2x	13.0x	8.0x	15.2x
Kirloskar Brothers Investments ($KBIL)	-1.9x	0.3x	-0.1x	-0.2x
Median (2 companies)	3.2x	6.6x	4.0x	7.5x
Network18 Media & Investments ($NETWORK18)	41.0x			7.4x	4.2x

Network18 Media & Investments stock price chart

Network18 Media & Investments financials

mln.	FY2010	FY2011	FY2012

Revenue	36,810	14,779	19,719
EBITDA	65.339	330.8	-2,741.249
Net income	-1,344.360	-366.842	-3,926.640
CAPEX	4,121	327.0	862.2
Debt	21,106	16,802	18,722
Cash	5,159	3,253	1,339

About Network18 Media & Investments

Network18 Media & Investments Limited operates as a media and entertainment company in India. It is engaged in broadcasting, telecasting, relaying, and transmitting general news programs. The company operates business news channels, including CNBC-TV18, CNBC Awaaz, and CNBC-TV18 Prime HD; general news channels, such as CNN-IBN, IBN 7, and News18; and regional news channels, such as IBN-Lokmat and ETV News. It also operates general and regional entertainment channels, including Colors, Colors HD, Rishtey, MTV India, MTV Indies, Vh1, Sonic, Nick, Nick Jr., Comedy Central, ETV Marathi, ETV Kannada, ETV Bangla, ETV Gujarati, and ETV Oriya channels; and HistoryTV18, a factual entertainment channel. In addition, the company is engaged in the acquisition, production, syndication, marketing, and distribution of feature films in India; and distribution of Indian films in international markets. Further, it operates content Websites, including moneycontrol.com, in.com, Firstpost.com, IBNLive.com, and News18.coml; and digital commerce Websites, such as HomeShop18 for home shopping, as well as bookmyshow.com that provides online booking for movies, plays, sporting events, and shows in India and internationally. Additionally, the company provides business-to-consumer publications and business-to-business publications; operates B2B online properties; and offers mobile applications. It also provides investment, strategic, research, advisory, and consultancy services to clients in media and other industries; printing services; and content development for television and film entertainment, as well as engaged in multiplex operation and management business under the brand GLITZ Cinemas. The company was formerly known as Network18 Fincap Private Limited and changed its name to Network18 Media & Investments Limited in December 2007. Network18 Media & Investments Limited was incorporated in 1996 and is based in Noida, India.