Andrew Yule & Company reports 54.2% Net Income decline in 2016 and 1.7 pp EBITDA Margin decline from 4.9% to 3.3%
30-05-2016 • About Andrew Yule & Company (
$ANDREWYU) • By InTwits
Andrew Yule & Company reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Andrew Yule & Company has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 10.3%.
- CAPEX is quite volatile: ₹175m in FY2016, ₹0m in FY2015, ₹0m in FY2014, ₹9,546m in FY2013, ₹14,414m in FY2012
- The company has potentially unprofitable business model: ROIC is 1.1%
- It operates with high leverage: Net Debt/EBITDA is 4.7x while industry average is 1.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Andrew Yule & Company's Revenue increased slightly on 0.98%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.7 pp from 4.9% to 3.3% in FY2016.
Net Income margin decreased on 6.8 pp from 12.4% to 5.7% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 1.6%. Andrew Yule & Company showed almost no change in CAPEX/Revenue from FY2013 to FY2016. It's average CAPEX/Revenue for the last three years was 2.3%. The company maintained rich investment policy and has spent a big chunk of EBITDA (50.2%) to CAPEX.
Return on investment
The company operates at low ROIC (1.1%) and ROE (6.0%). ROIC decreased slightly on 1.5 pp from 2.6% to 1.1% in FY2016. ROE decreased on 8.3 pp from 14.2% to 6.0% in FY2016.
Leverage (Debt)
Debt level is 4.7x Net Debt / EBITDA and 7.3x Debt / EBITDA. Net Debt / EBITDA surged on 3.1x from 1.7x to 4.7x in FY2016. Debt decreased on 9.3% while cash dropped on 54.3%.
Andrew Yule & Company has short term refinancing risk: cash is only 44.9% of short term debt.
Valuation and dividends
Andrew Yule & Company's trades at EV/EBITDA 64.0x and P/E 34.2x while industy averages are 17.8x and 21.9x. Andrew Yule & Company's EV/(EBITDA-CAPEX) is 128.5x with the industry average at 22.8x.
Financial and operational results
Andrew Yule & Company ($ANDREWYU) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,061 | 3,203 | 3,821 | 3,706 | 3,742 | 1.0% |
| EBITDA | 197 | 199 | 314 | 182 | 122 | -33.1% |
| Net Income | 257 | 244 | 352 | 461 | 212 | -54.2% |
Balance Sheet
|
|---|
| Cash | 1,026 | 319 | 343 | 671 | 307 | -54.3% |
| Short Term Debt | 742 | 779 | 381 | 667 | 684 | 2.5% |
| Long Term Debt | 695 | 617 | 556 | 309 | 201 | -35.0% |
Cash flow
|
|---|
| Capex | 86 | 59 | 90 | 109 | 61 | -43.7% |
Ratios
|
|---|
| Revenue growth | 17.1% | 4.7% | 19.3% | -3.0% | 1.0% | |
| EBITDA growth | -17.0% | 0.7% | 58.0% | -41.9% | -33.1% | |
|
|---|
| EBITDA Margin | 6.4% | 6.2% | 8.2% | 4.9% | 3.3% | -1.7% |
| Net Income Margin | 8.4% | 7.6% | 9.2% | 12.4% | 5.7% | -6.8% |
| CAPEX, % of revenue | 2.8% | 1.8% | 2.4% | 2.9% | 1.6% | -1.3% |
|
|---|
| ROIC | 4.0% | 3.7% | 6.5% | 2.6% | 1.1% | -1.5% |
| ROE | 13.5% | 11.3% | 13.2% | 14.2% | 6.0% | -8.3% |
| Net Debt/EBITDA | 2.1x | 5.4x | 1.9x | 1.7x | 4.7x | 3.1x |
Peers in Tea & Coffee
Below we provide Andrew Yule & Company benchmarking against other companies in Tea & Coffee 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mcleod Russel India ($MCLEODRUSS) | - | 15.4% | 7.2% | -8.0% | 17.0% |
| Rossell India ($ROSSELLIND) | - | 27.9% | 33.6% | -0.3% | 14.2% |
| Bombay Burmah Trading Corp ($BBTC) | - | 10.0% | 11.5% | 12.7% | 10.3% |
| Ccl Products (India) ($CCL) | - | 29.6% | 10.2% | 22.8% | 5.9% |
| Warren Tea ($WARRENTEA) | - | -44.0% | 17.7% | -7.5% | 5.7% |
| |
|---|
| Median (8 companies) | 2.5% | 10.2% | 8.9% | 5.0% | 5.9% |
|---|
| Andrew Yule & Company ($ANDREWYU) | - | 4.7% | 19.3% | -3.0% | 1.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ccl Products (India) ($CCL) | 20.3% | 20.1% | 21.5% | 20.6% | 22.0% |
| Tata Coffee ($TATACOFFEE) | 12.8% | 19.2% | 19.9% | 20.2% | 17.7% |
| Rossell India ($ROSSELLIND) | 31.0% | 27.5% | 26.5% | 14.7% | 14.7% |
| Bombay Burmah Trading Corp ($BBTC) | 6.0% | 6.8% | 8.6% | 10.5% | 13.4% |
| Tata Global Beverages ($TATAGLOBAL) | 9.5% | 10.6% | 9.9% | 9.7% | 10.0% |
| |
|---|
| Median (8 companies) | 11.1% | 17.4% | 18.5% | 10.5% | 11.7% |
|---|
| Andrew Yule & Company ($ANDREWYU) | 6.4% | 6.2% | 8.2% | 4.9% | 3.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Rossell India ($ROSSELLIND) | 11.0% | 6.7% | 14.8% | 11.1% | 15.8% |
| Ccl Products (India) ($CCL) | 11.1% | 5.8% | 8.3% | 2.4% | 9.4% |
| Mcleod Russel India ($MCLEODRUSS) | 10.0% | 6.0% | 9.4% | 9.8% | 6.7% |
| Tata Coffee ($TATACOFFEE) | 3.2% | 4.3% | 4.0% | 3.6% | 3.6% |
| Bombay Burmah Trading Corp ($BBTC) | 4.7% | 3.6% | 2.3% | 1.6% | 3.1% |
| |
|---|
| Median (7 companies) | 5.2% | 4.0% | 3.3% | 3.0% | 3.6% |
|---|
| Andrew Yule & Company ($ANDREWYU) | 2.8% | 1.8% | 2.4% | 2.9% | 1.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bombay Burmah Trading Corp ($BBTC) | 10.7% | 13.9% | 20.6% | 23.7% | 31.0% |
| Ccl Products (India) ($CCL) | 16.1% | 18.0% | 19.7% | 23.0% | 25.7% |
| Tata Coffee ($TATACOFFEE) | 10.9% | 16.2% | 14.0% | 14.0% | 11.5% |
| Tata Global Beverages ($TATAGLOBAL) | 8.2% | 9.6% | 8.1% | 8.0% | 6.5% |
| Rossell India ($ROSSELLIND) | - | 12.1% | 12.7% | 4.1% | 5.0% |
| |
|---|
| Median (11 companies) | 10.9% | 14.8% | 15.4% | 11.0% | 6.5% |
|---|
| Andrew Yule & Company ($ANDREWYU) | 4.0% | 3.7% | 6.5% | 2.6% | 1.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jay Shree Tea & Industries ($JAYSHREETEA) | - | - | - | - | 10.2x |
| Mcleod Russel India ($MCLEODRUSS) | 0.4x | 0.5x | 0.7x | 4.2x | 4.7x |
| Rossell India ($ROSSELLIND) | 0.0x | 1.9x | 1.5x | 2.6x | 2.9x |
| Tata Coffee ($TATACOFFEE) | 3.6x | 2.6x | 2.7x | 2.5x | 2.7x |
| Tata Global Beverages ($TATAGLOBAL) | 1.4x | 1.5x | 1.0x | 1.0x | 1.3x |
| |
|---|
| Median (8 companies) | 1.4x | 1.7x | 0.4x | 1.0x | 2.0x |
|---|
| Andrew Yule & Company ($ANDREWYU) | 2.1x | 5.4x | 1.9x | 1.7x | 4.7x |
