Salzer Electronics reports 130% CAPEX growth and 15.9% Revenue growth
13-05-2015 • About Salzer Electronics (
$SALZER) • By InTwits
Salzer Electronics reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 12.6% in FY2015 vs. 12.4% in FY2014 vs. 14.3% in FY2011
- Salzer Electronics has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.1%. At the same time it's in pair with industry average of 7.2%.
- CAPEX is quite volatile: 231 in FY2015, 101 in FY2014, 128 in FY2013, 152 in FY2012, 102 in FY2011
- The company has highly profitable business model: ROIC is at 14.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Salzer Electronics ($SALZER) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,807 | 2,229 | 2,287 | 2,445 | 2,833 | 15.9% |
| EBITDA | 258 | 288 | 285 | 303 | 356 | 17.6% |
| Net Income | 91 | 82 | 71 | 84 | 120 | 41.9% |
Balance Sheet
|
|---|
| Cash | 39 | 42 | 82 | 26 | 17 | -34.5% |
| Short Term Debt | 526 | 545 | 699 | 780 | 793 | 1.7% |
| Long Term Debt | 48 | 46 | 25 | 47 | 176 | 270.1% |
Cash flow
|
|---|
| Capex | 102 | 152 | 128 | 101 | 231 | 129.9% |
Ratios
|
|---|
| Revenue growth | -46.1% | 23.4% | 2.6% | 6.9% | 15.9% | |
| EBITDA growth | 8.7% | 11.4% | -0.8% | 6.0% | 17.6% | |
| EBITDA Margin | 14.3% | 12.9% | 12.5% | 12.4% | 12.6% | 0.2% |
| Net Income Margin | 5.0% | 3.7% | 3.1% | 3.5% | 4.2% | 0.8% |
| CAPEX, % of revenue | 5.7% | 6.8% | 5.6% | 4.1% | 8.2% | 4.0% |
| ROIC | 14.6% | 14.6% | 12.7% | 13.0% | 14.6% | 1.5% |
| ROE | 12.2% | 10.1% | 8.1% | 9.0% | 11.7% | 2.7% |
| Net Debt/EBITDA | 2.1x | 1.9x | 2.2x | 2.6x | 2.7x | 0.0x |
Revenue and profitability
Salzer Electronics's Revenue surged on 15.9% in FY2015. EBITDA Margin showed almost no change in FY2015.
Net Income marign increased slightly on 0.78 pp from 3.5% to 4.2% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 8.2%. The company's CAPEX/Revenue increased slightly on 1.3 pp from 6.8% in FY2012 to 8.2% in FY2015. Average CAPEX/Revenue for the last three years was 6.0%.To deliver this fast growth Salzer Electronics invested a large share of EBITDA (65.0%) to CAPEX.
Return on investment
The company operates at good ROIC (14.58%) while ROE is low (11.71%). ROIC increased slightly on 1.5 pp from 13.0% to 14.6% in FY2015. ROE increased on 2.7 pp from 9.0% to 11.7% in FY2015.
Leverage (Debt)
Debt level is 2.7x Net Debt / EBITDA and 2.7x Debt / EBITDA. Net Debt / EBITDA increased on 0.025x from 2.6x to 2.7x in FY2015. Debt surged on 17.1% in FY2015 while cash dropped on 34.5% in FY2015.
Valuation
Salzer Electronics's trades at EV/EBITDA 9.2x and P/E 19.4x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 26.3x with the industry average at 4.7x.
Appendix 1: Peers in Other Elect.Equip./ Prod.
Below we provide Salzer Electronics benchmarking against other companies in Other Elect.Equip./ Prod. 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Birla Ericsson Optical ($BIRLAERIC) | -78.0% | 13.1% | 64.8% | 134.7% | |
| Diamond Power Infrastructure ($DIAPOWER) | -52.4% | 32.7% | 27.9% | 23.1% | |
| Genus Power Infrastructures ($GENUSPOWER) | -34.5% | -1.2% | -7.5% | 17.4% | |
| Ultracab (India) ($ULTRACAB) | 49.2% | 43.1% | 26.2% | 10.5% | |
| B.C. Power Controls ($BCP) | -82.4% | 129.0% | -2.2% | 2.2% | |
| |
|---|
| Median (13 companies) | -8.7% | 13.1% | -3.1% | -11.0% | 916.5% |
|---|
| Salzer Electronics ($SALZER) | | 23.4% | 2.6% | 6.9% | 15.9% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Malvica Engineering ($MALVICAE) | | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (1 company) | | 0.0% | 0.0% | 0.0% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Genus Power Infrastructures ($GENUSPOWER) | 14.4% | 14.1% | 11.0% | 13.8% | |
| Pitti Laminations ($PITTILAM) | 12.9% | 15.6% | 13.6% | 13.2% | 12.0% |
| Ultracab (India) ($ULTRACAB) | 9.8% | 10.0% | 7.9% | 13.0% | |
| Birla Ericsson Optical ($BIRLAERIC) | -3.3% | 2.6% | 9.0% | 12.3% | |
| Cords Cable Industries ($CORDSCABLE) | 9.1% | 9.9% | 9.9% | 9.8% | |
| |
|---|
| Median (11 companies) | 7.2% | 9.9% | 8.9% | 8.9% | 12.0% |
|---|
| Salzer Electronics ($SALZER) | 14.3% | 12.9% | 12.5% | 12.4% | 12.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Indosolar ($INDOSOLAR) | 24.2% | 311.2% | 148.3% | 42.3% | 26.9% |
| Easun Reyrolle ($EASUNREYRL) | 19.3% | 26.5% | 30.7% | 19.4% | |
| Diamond Power Infrastructure ($DIAPOWER) | | | 6.8% | 8.4% | |
| Birla Ericsson Optical ($BIRLAERIC) | 9.4% | 1.3% | 4.4% | 4.0% | |
| Ultracab (India) ($ULTRACAB) | 0.2% | 2.8% | 4.0% | 3.2% | |
| |
|---|
| Median (7 companies) | 6.3% | 3.1% | 4.2% | 4.0% | 26.9% |
|---|
| Salzer Electronics ($SALZER) | 5.7% | 6.8% | 5.6% | 4.1% | 8.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Birla Ericsson Optical ($BIRLAERIC) | -6.6% | -2.2% | 8.2% | 27.3% | |
| Ultracab (India) ($ULTRACAB) | 14.3% | 14.8% | 11.6% | 18.4% | |
| Genus Power Infrastructures ($GENUSPOWER) | 15.2% | 12.4% | 8.0% | 12.2% | |
| Diamond Power Infrastructure ($DIAPOWER) | 19.6% | 16.1% | 11.7% | 11.3% | |
| Pitti Laminations ($PITTILAM) | 17.2% | 26.4% | 12.8% | 9.7% | |
| |
|---|
| Median (22 companies) | 10.2% | 7.7% | 8.2% | 9.7% | 1.1% |
|---|
| Salzer Electronics ($SALZER) | 14.6% | 14.6% | 12.7% | 13.0% | 14.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Easun Reyrolle ($EASUNREYRL) | 11.1x | 19.4x | 11.3x | 11.6x | |
| Hbl Power Systems ($HBLPOWER) | 8.6x | 4.1x | 4.4x | 6.8x | |
| Diamond Power Infrastructure ($DIAPOWER) | 2.5x | 3.3x | 5.2x | 4.8x | |
| Ultracab (India) ($ULTRACAB) | 4.8x | 4.9x | 5.2x | 3.8x | |
| Pitti Laminations ($PITTILAM) | 2.9x | 2.4x | 3.3x | 3.2x | 0.0x |
| |
|---|
| Median (11 companies) | 3.0x | 3.4x | 4.2x | 2.9x | 0.0x |
|---|
| Salzer Electronics ($SALZER) | 2.1x | 1.9x | 2.2x | 2.6x | 2.7x |
