Relaxo Footwears CAPEX jumped on 84.6% in 2015 and Revenue surged on 22.2%
11-05-2015 • About Relaxo Footwears (
$RELAXO) • By InTwits
Relaxo Footwears reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Relaxo Footwears has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.5%. At the same time it's a lot of higher than industry average of 5.6%.
- CAPEX is quite volatile: 1,313 in FY2015, 711 in FY2014, 838 in FY2013, 488 in FY2012, 627 in FY2011
- The company has highly profitable business model: ROIC is at 28.3%
- It operates with high leverage: Net Debt/EBITDA is 1.2x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Relaxo Footwears ($RELAXO) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 6,916 | 8,647 | 10,098 | 12,123 | 14,808 | 22.2% |
| EBITDA | 723 | 968 | 1,098 | 1,478 | 2,008 | 35.8% |
| Net Income | 268 | 418 | 448 | 656 | 1,031 | 57.0% |
Balance Sheet
|
|---|
| Cash | 11 | 7 | 17 | 56 | 44 | -21.7% |
| Short Term Debt | 601 | 827 | 751 | 840 | 949 | 12.9% |
| Long Term Debt | 964 | 925 | 1,502 | 1,143 | 1,445 | 26.4% |
Cash flow
|
|---|
| Capex | 627 | 488 | 838 | 711 | 1,313 | 84.6% |
Ratios
|
|---|
| Revenue growth | -60.7% | 25.0% | 16.8% | 20.0% | 22.2% | |
| EBITDA growth | -21.1% | 33.8% | 13.5% | 34.6% | 35.8% | |
| EBITDA Margin | 10.5% | 11.2% | 10.9% | 12.2% | 13.6% | 1.4% |
| Net Income Margin | 3.9% | 4.8% | 4.4% | 5.4% | 7.0% | 1.5% |
| CAPEX, % of revenue | 9.1% | 5.6% | 8.3% | 5.9% | 8.9% | 3.0% |
| ROIC | 17.4% | 21.2% | 19.9% | 24.1% | 28.3% | 4.2% |
| ROE | 21.9% | 27.3% | 23.2% | 26.7% | 32.0% | 5.2% |
| Net Debt/EBITDA | 2.1x | 1.8x | 2.0x | 1.3x | 1.2x | -0.1x |
Revenue and profitability
Relaxo Footwears's Revenue jumped on 22.2% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.6 pp from 2.4% to 5.0% in FY2015.
Net Income marign increased slightly on 1.5 pp from 5.4% to 7.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Relaxo Footwears had CAPEX/Revenue of 8.9%. The company's CAPEX/Revenue increased on 3.2 pp from 5.6% in FY2012 to 8.9% in FY2015. For the last three years the average CAPEX/Revenue was 7.7%.Relaxo Footwears invested a big chunk of EBITDA (65.4%) to CAPEX to fuel its growth.
Return on investment
The company operates at high and attractive ROIC (28.31%) and ROE (31.98%). ROIC increased on 4.2 pp from 24.1% to 28.3% in FY2015. ROE increased on 5.2 pp from 26.7% to 32.0% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.2x and Debt / EBITDA is 1.2x. Net Debt / EBITDA dropped on 0.1x from 1.3x to 1.2x in FY2015. Debt jumped on 20.7% in FY2015 while cash dropped on 21.7% in FY2015.
Valuation
The company's trades at EV/EBITDA 26.3x and P/E 49.0x while industy averages are 10.5x and 26.1x. Relaxo Footwears's EV/(EBITDA-CAPEX) is 76.1x with the industry average at 4.7x.
Appendix 1: Peers in Footwear
Below we provide Relaxo Footwears benchmarking against other companies in Footwear 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 |
|---|
| Superhouse ($SUPERHOUSE) | -50.6% | 18.1% | 9.8% | 28.1% | |
| |
|---|
| Median (1 company) | -50.6% | 18.1% | 9.8% | 28.1% | |
|---|
| Relaxo Footwears ($RELAXO) | | 25.0% | 16.8% | 20.0% | 22.2% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Superhouse ($SUPERHOUSE) | 9.4% | 10.8% | 10.0% | 11.7% | |
| |
|---|
| Median (1 company) | 9.4% | 10.8% | 10.0% | 11.7% | |
|---|
| Relaxo Footwears ($RELAXO) | 10.5% | 11.2% | 10.9% | 12.2% | 13.6% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Superhouse ($SUPERHOUSE) | 5.3% | 5.4% | 4.5% | 2.4% | |
| |
|---|
| Median (1 company) | 5.3% | 5.4% | 4.5% | 2.4% | |
|---|
| Relaxo Footwears ($RELAXO) | 9.1% | 5.6% | 8.3% | 5.9% | 8.9% |
Top companies by ROIC, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Superhouse ($SUPERHOUSE) | 13.4% | 16.7% | 14.1% | 19.2% | |
| Sreeleathers ($SREEL2) | | | | 5.7% | |
| Nb Footwear ($NBFOOT) | -23.3% | | | | |
| |
|---|
| Median (3 companies) | -5.0% | 16.7% | 14.1% | 12.5% | |
|---|
| Relaxo Footwears ($RELAXO) | 17.4% | 21.2% | 19.9% | 24.1% | 28.3% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Superhouse ($SUPERHOUSE) | 2.6x | 2.1x | 2.7x | 2.0x | |
| Sreeleathers ($SREEL2) | | | -0.1x | -0.5x | |
| |
|---|
| Median (2 companies) | 2.6x | 2.1x | 1.3x | 0.8x | |
|---|
| Relaxo Footwears ($RELAXO) | 2.1x | 1.8x | 2.0x | 1.3x | 1.2x |
