Zicom Electronic Security Systems EBITDA surged on 28.9% in 2015 and Revenue jumped on 19.7%

27-05-2015 • About Zicom Electronic Security Systems ($ZICOM) • By InTwits

Zicom Electronic Security Systems reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Zicom Electronic Security Systems has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.0%. At the same time it's a lot of higher than industry average of 4.4%.
CAPEX is quite volatile: 489 in FY2015, 606 in FY2014, 926 in FY2013, 189 in FY2012, 243 in FY2011
The company has highly profitable business model: ROIC is at 12.7%
It operates with high leverage: Net Debt/EBITDA is 3.9x while industry average is 1.3x

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

Zicom Electronic Security Systems ($ZICOM) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	3,734	4,841	6,913	9,261	11,081	19.7%
EBITDA	282	508	826	1,089	1,403	28.9%
Net Income	445	168	303	419	506	20.6%
Balance Sheet
Cash	139	32	168	96	92	-4.1%
Short Term Debt	1,204	1,508	1,930	2,931	4,102	40.0%
Long Term Debt	150	95	1,253	1,437	1,455	1.2%
Cash flow
Capex	243	189	926	606	489	-19.3%
Ratios
Revenue growth	-71.6%	29.6%	42.8%	34.0%	19.7%
EBITDA growth	-48.9%	80.0%	62.5%	31.7%	28.9%
EBITDA Margin	7.6%	10.5%	12.0%	11.8%	12.7%	0.9%
Net Income Margin	11.9%	3.5%	4.4%	4.5%	4.6%	0.0%
CAPEX, % of revenue	6.5%	3.9%	13.4%	6.5%	4.4%	-2.1%
ROIC	3.8%	10.4%	13.2%	12.4%	12.7%	0.3%
ROE	30.8%	9.5%	14.1%	16.4%	15.9%	-0.5%
Net Debt/EBITDA	4.3x	3.1x	3.6x	3.9x	3.9x	-0.0x

Revenue and profitability

The company's Revenue surged on 19.7% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.91 pp from 11.8% to 12.7% in FY2015.

Net Income marign showed almost no change in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 the company had CAPEX/Revenue of 4.4%. CAPEX/Revenue increased slightly on 0.51 pp from 3.9% in FY2012 to 4.4% in FY2015. Average CAPEX/Revenue for the last three years was 8.1%.

Return on investment

The company operates at good ROIC (12.66%) and ROE (15.90%). ROIC showed almost no change in FY2015. ROE decreased slightly on 0.53 pp from 16.4% to 15.9% in FY2015.

Leverage (Debt)

Debt level is 3.9x Net Debt / EBITDA and 4.0x Debt / EBITDA. Net Debt / EBITDA decreased on 0.030x from 3.9x to 3.9x in FY2015. Debt surged on 27.2% in FY2015 while cash decreased on 4.1% in FY2015.

Appendix 1: Peers in Electronic Components

Below we provide Zicom Electronic Security Systems benchmarking against other companies in Electronic Components 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 Gross margin, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Nubal (India) ($NUBALIN)		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	FY2011	FY2012	FY2013	FY2014	FY2015
Ruttonsha International Rectifier ($RIR)					8.7%
Median (1 company)					8.7%
Zicom Electronic Security Systems ($ZICOM)	7.6%	10.5%	12.0%	11.8%	12.7%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Nubal (India) ($NUBALIN)		0.0%	0.0%	0.0%	0.0%
Eco Recycling ($ECORECO)	2.3%	2.5%	3.0%	-2.2%
Precision Electronics ($PRECISIO)	5.2%	6.3%	5.7%	-8.8%
Kilburn Office Automation ($KILBURN)	12.3%	-8.7%
Bcc Fuba India ($BCCFUBA)			-14.0%
Median (9 companies)	8.8%	4.4%	4.3%	-2.2%	0.0%
Zicom Electronic Security Systems ($ZICOM)	3.8%	10.4%	13.2%	12.4%	12.7%

Top companies by Net Debt / EBITDA


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Ruttonsha International Rectifier ($RIR)	1.3x	1.5x	1.7x		0.0x
Median (1 company)	1.0x	0.9x	1.6x	0.0x	0.0x
Zicom Electronic Security Systems ($ZICOM)	4.3x	3.1x	3.6x	3.9x	3.9x

Zicom Electronic Security Systems stock price chart

Zicom Electronic Security Systems financials

mln.	FY2010	FY2011	FY2012

Revenue	13,128	3,734	4,841
EBITDA	553.3	282.5	508.5
Net income	286.5	444.6	168.4
CAPEX	358.8	242.8	189.0
Debt	2,241	1,354	1,604
Cash	127.5	139.2	32.466

About Zicom Electronic Security Systems

Zicom Electronic Security Systems Limited, together with its subsidiaries, manufactures and sells electronic security systems and equipments in India and internationally. Its products and solutions include closed circuit television (CCTV) surveillance systems, access control systems, fire alarm systems, multi-apartment video door phones, video door phones, intruder alarm systems, push video alarm systems, fingerprint locks, baby watch and office alarm systems, and remote managed services. The company also provides annual maintenance services for electronic security products; remote alarm management service; fire alarm monitoring services; a solution to monitor and register the attendance of employees; video surveillance service to monitor and manage CCTV surveillance at various locations; and people counting solution that provides details on footfalls for business enterprises. In addition, it offers basic hydrant and sprinkler systems, analogue addressable fire alarm systems, specialized gaseous fire suppression systems, dry and wet chemical extinguishing systems, and water mist fire extinguishing systems to government and corporate clients, refineries, shopping malls, multi storey buildings, resorts, and others. Further, the company provides turnkey solutions, including design, engineering, integration, testing, and commissioning of fire safety, security, and building management systems; and remote managed electronic security services to banks, retail chains, and residential societies. Zicom Electronic Security Systems Limited was founded in 1994 and is based in Mumbai, India.