Birla Ericsson Optical reports 35.1% Net Income decline and 11.3% Revenue decline
15-05-2015 • About Birla Ericsson Optical (
$BIRLAERIC) • By InTwits
Birla Ericsson Optical reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Birla Ericsson Optical is a company in decline: FY2015 revenue growth was -11.3%, 5 years revenue CAGR was -3.1%
- EBITDA Margin is quite volatile: 11.3% in FY2015, 12.3% in FY2014, 9.0% in FY2013, 2.6% in FY2012, -3.3% in FY2011
- Birla Ericsson Optical has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.5%. At the same time it's a lot of higher than industry average of 1.2%.
- CAPEX is quite volatile: 89.1 in FY2015, 116 in FY2014, 54.1 in FY2013, 9.6 in FY2012, 62.2 in FY2011
- The company has highly profitable business model: ROIC is at 16.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Birla Ericsson Optical ($BIRLAERIC) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 664 | 751 | 1,238 | 2,906 | 2,578 | -11.3% |
| EBITDA | -22 | 20 | 111 | 356 | 290 | -18.5% |
| Net Income | -44 | -48 | 57 | 192 | 125 | -35.1% |
Balance Sheet
|
|---|
| Cash | 8 | 10 | 21 | 17 | 102 | 501.1% |
| Short Term Debt | 228 | 286 | 340 | 326 | 439 | 34.6% |
| Long Term Debt | 1 | 7 | 1 | 151 | 136 | -10.2% |
Cash flow
|
|---|
| Capex | 62 | 10 | 54 | 116 | 89 | -23.1% |
Ratios
|
|---|
| Revenue growth | -78.0% | 13.1% | 64.8% | 134.7% | -11.3% | |
| EBITDA growth | -138.8% | -188.3% | 470.7% | 219.8% | -18.5% | |
| EBITDA Margin | -3.3% | 2.6% | 9.0% | 12.3% | 11.3% | -1.0% |
| Net Income Margin | -6.6% | -6.4% | 4.6% | 6.6% | 4.8% | -1.8% |
| CAPEX, % of revenue | 9.4% | 1.3% | 4.4% | 4.0% | 3.5% | -0.5% |
| ROIC | -6.6% | -2.2% | 8.2% | 27.3% | 16.6% | -10.7% |
| ROE | -6.9% | -8.2% | 9.6% | 27.4% | 15.2% | -12.3% |
| Net Debt/EBITDA | | 14.5x | 2.9x | 1.3x | 1.6x | 0.3x |
Revenue and profitability
The company's Revenue dropped on 11.3% in FY2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased slightly on 1.00 pp from 12.3% to 11.3% in FY2015.
Net Income marign decreased slightly on 1.8 pp from 6.6% to 4.8% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.5% in FY2015. The company's CAPEX/Revenue increased on 2.2 pp from 1.3% in FY2012 to 3.5% in FY2015. It's average CAPEX/Revenue for the last three years was 3.9%.
Return on investment
The company operates at good ROIC (16.58%) and ROE (15.16%). ROIC dropped on 10.7 pp from 27.3% to 16.6% in FY2015. ROE dropped on 12.3 pp from 27.4% to 15.2% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.6x and Debt / EBITDA is 2.0x. Net Debt / EBITDA surged on 0.3x from 1.3x to 1.6x in FY2015. Debt jumped on 20.4% in FY2015 while cash jumped on 501% in FY2015.
Valuation
Birla Ericsson Optical's trades at EV/EBITDA 8.0x and P/E 14.8x while industy averages are 10.5x and 26.1x. Birla Ericsson Optical's EV/(EBITDA-CAPEX) is 11.5x with the industry average at 4.7x.
Appendix 1: Peers in Other Elect.Equip./ Prod.
Below you can find Birla Ericsson Optical benchmarking vs. other companies in Other Elect.Equip./ Prod. industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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) ($ULTRACAB) | 49.2% | 43.1% | 26.2% | 10.5% | |
| Salzer Electronics ($SALZER) | | 23.4% | 2.6% | 6.9% | 15.9% |
| B.C. Power Controls ($BCP) | -82.4% | 129.0% | -2.2% | 2.2% | |
| |
|---|
| Median (13 companies) | -7.4% | 23.4% | -3.1% | -11.0% | 35.9% |
|---|
| Birla Ericsson Optical ($BIRLAERIC) | | 13.1% | 64.8% | 134.7% | -11.3% |
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% | |
| Salzer Electronics ($SALZER) | 14.3% | 12.9% | 12.5% | 12.4% | 12.6% |
| Cords Cable Industries ($CORDSCABLE) | 9.1% | 9.9% | 9.9% | 9.8% | |
| |
|---|
| Median (11 companies) | 9.1% | 10.0% | 9.4% | 8.9% | 12.3% |
|---|
| Birla Ericsson Optical ($BIRLAERIC) | -3.3% | 2.6% | 9.0% | 12.3% | 11.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Indosolar ($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% | |
| Salzer Electronics ($SALZER) | 5.7% | 6.8% | 5.6% | 4.1% | 8.2% |
| Ultracab (India) ($ULTRACAB) | 0.2% | 2.8% | 4.0% | 3.2% | |
| |
|---|
| Median (7 companies) | 5.6% | 3.4% | 4.8% | 4.1% | 17.5% |
|---|
| Birla Ericsson Optical ($BIRLAERIC) | 9.4% | 1.3% | 4.4% | 4.0% | 3.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ultracab (India) ($ULTRACAB) | 14.3% | 14.8% | 11.6% | 18.4% | |
| Salzer Electronics ($SALZER) | 14.6% | 14.6% | 12.7% | 13.0% | 14.6% |
| Genus Power Infrastructures ($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) | 13.7% | 9.7% | 10.1% | 9.7% | 2.2% |
|---|
| Birla Ericsson Optical ($BIRLAERIC) | -6.6% | -2.2% | 8.2% | 27.3% | 16.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Easun Reyrolle ($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) | 2.9x | 3.3x | 4.2x | 2.9x | 1.3x |
|---|
| Birla Ericsson Optical ($BIRLAERIC) | | 14.5x | 2.9x | 1.3x | 1.6x |
