Mitsubishi Corp Net Debt / EBITDA dropped on 1.7x from 14.3x to 12.5x in 2015 while EBITDA surged on 10.9%
08 May 2015 • About Mitsubishi Corp (
$MBC) • By InTwits
Mitsubishi Corp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Mitsubishi Corp doesn't have a profitable business model yet: FY2015 ROIC is 1.3%
- Mitsubishi Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.4%. At the same time it's a lot of higher than industry average of 2.8%.
- CAPEX is quite volatile: 307,539 in FY2015, 496,108 in FY2014, 581,786 in FY2013, 412,991 in FY2012, 228,654 in FY2011
- The company has potentially unprofitable business model: ROIC is at 1.3%
- It operates with high leverage: Net Debt/EBITDA is 12.5x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Mitsubishi Corp ($MBC) key annual financial indicators
| mln. JPY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 5,206,873 | 5,565,832 | 6,009,887 | 7,635,168 | 7,669,489 | 0.4% |
| Gross Profit | 1,149,902 | 1,127,860 | 1,054,933 | 1,186,005 | 1,209,894 | 2.0% |
| SG&A | 820,080 | 845,234 | 885,912 | 952,898 | 998,751 | 4.8% |
| EBITDA | 457,403 | 409,465 | 288,510 | 336,486 | 373,267 | 10.9% |
| Net Income | 463,188 | 452,344 | 323,457 | 361,359 | 400,574 | 10.9% |
Balance Sheet
|
|---|
| Cash | 1,208,742 | 1,252,951 | 1,345,920 | 1,332,036 | 1,725,189 | 29.5% |
| Short Term Debt | 1,277,181 | 1,519,168 | 1,404,281 | 1,396,337 | 1,527,456 | 9.4% |
| Long Term Debt | 3,234,442 | 3,803,587 | 4,540,420 | 4,736,331 | 4,875,298 | 2.9% |
Cash flow
|
|---|
| Capex | 228,654 | 412,991 | 581,786 | 496,108 | 307,539 | -38.0% |
Ratios
|
|---|
| Revenue growth | 14.7% | 6.9% | 8.0% | 27.0% | 0.4% | |
| EBITDA growth | 49.9% | -10.5% | -29.5% | 16.6% | 10.9% | |
| Gross Margin | 22.1% | 20.3% | 17.6% | 15.5% | 15.8% | 0.2% |
| EBITDA Margin | 8.8% | 7.4% | 4.8% | 4.4% | 4.9% | 0.5% |
| Net Income Margin | 8.9% | 8.1% | 5.4% | 4.7% | 5.2% | 0.5% |
| SG&A, % of revenue | 15.7% | 15.2% | 14.7% | 12.5% | 13.0% | 0.5% |
| CAPEX, % of revenue | 4.4% | 7.4% | 9.7% | 6.5% | 4.0% | -2.5% |
| ROIC | 3.8% | 3.0% | 1.3% | 1.3% | 1.3% | 0.0% |
| ROE | 14.8% | 13.3% | 8.1% | 7.5% | 7.5% | -0.0% |
| Net Debt/EBITDA | 7.2x | 9.9x | 15.9x | 14.3x | 12.5x | -1.7x |
Revenue and profitability
Mitsubishi Corp's Revenue showed almost no change in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 4.3 pp from 10.9% to 15.2% in 2015.
Gross Margin showed almost no change in FY2015. SG&A as a % of Revenue increased slightly on 0.54 pp from 12.5% to 13.0% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.0% in FY2015. CAPEX/Revenue decreased on 3.4 pp from 7.4% in FY2012 to 4.0% in FY2015. It's average level of CAPEX/Revenue for the last three years was 6.7%.Mitsubishi Corp maintained rich investment policy and has spent a big chunk of EBITDA (82.4%) to CAPEX.
Return on investment
The company operates at low ROIC (1.32%) and ROE (7.53%). ROIC showed almost no change in FY2015. ROE showed almost no change in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 12.5x and Debt / EBITDA is 17.2x. Net Debt / EBITDA dropped on 1.7x from 14.3x to 12.5x in FY2015. Debt increased on 4.4% in FY2015 while cash surged on 29.5% in FY2015.
Appendix 1: Peers in Support Services
Below you can find Mitsubishi Corp benchmarking vs. other companies in Support Services 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 |
|---|
| Petards Group ($PEG) | 6.5% | -25.7% | -30.6% | 115.1% | |
| Optimal Payments ($OPAY) | 107.9% | 39.9% | 41.5% | 44.0% | |
| 1Spatial ($SPA) | 15.4% | 98.7% | 131.4% | 42.7% | |
| Inspired Energy ($INSE) | 32.9% | 83.8% | 44.8% | 42.2% | |
| Interquest Group ($ITQ) | 7.8% | -6.8% | 2.0% | 31.2% | |
| |
|---|
| Median (50 companies) | 9.8% | 6.8% | 4.0% | 5.1% | -0.2% |
|---|
| Mitsubishi Corp ($MBC) | | 6.9% | 8.0% | 27.0% | 0.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Inspired Energy ($INSE) | | 94.6% | 86.8% | 78.7% | |
| Ienergizer Ltd ($IBPO) | 48.1% | 56.2% | 78.4% | 76.8% | |
| Vianet Group ($VNET) | 53.1% | 53.3% | 51.3% | 58.8% | |
| Prime People ($PRP) | 57.6% | 63.4% | 58.3% | 57.7% | |
| Murgitroyd Group ($MUR) | 59.9% | 58.4% | 61.4% | 57.6% | |
| |
|---|
| Median (44 companies) | 30.4% | 31.4% | 28.6% | 29.8% | 22.6% |
|---|
| Mitsubishi Corp ($MBC) | 22.1% | 20.3% | 17.6% | 15.5% | 15.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Northgate ($67GX) | | 41.2% | 40.4% | 40.6% | 39.4% |
| 21St Century Technology ($C21) | 11.4% | 13.4% | -0.2% | 36.0% | |
| Vp ($VP.) | 24.4% | 23.9% | 24.5% | 24.2% | |
| Ienergizer Ltd ($IBPO) | 34.5% | 27.6% | 27.8% | 23.6% | |
| Capital Drilling Ltd ($CAPD) | 26.3% | 24.1% | 15.7% | 21.7% | |
| |
|---|
| Median (50 companies) | 7.1% | 6.8% | 6.6% | 7.3% | 6.9% |
|---|
| Mitsubishi Corp ($MBC) | 8.8% | 7.4% | 4.8% | 4.4% | 4.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vp ($VP.) | 15.5% | 21.4% | 17.7% | 21.6% | |
| Norish ($NSH) | 5.0% | 10.2% | 1.4% | 15.4% | |
| Capital Drilling Ltd ($CAPD) | 20.5% | 18.9% | 4.9% | 13.9% | |
| Falkland Islands Hldgs ($FKL) | 2.6% | 3.7% | 6.8% | 12.9% | |
| Augean ($AUG) | 11.2% | 9.8% | 15.9% | 12.3% | |
| |
|---|
| Median (50 companies) | 0.9% | 1.0% | 1.0% | 1.1% | 0.7% |
|---|
| Mitsubishi Corp ($MBC) | 4.4% | 7.4% | 9.7% | 6.5% | 4.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 21St Century Technology ($C21) | 16.2% | 20.3% | -2.9% | 45.6% | |
| Petards Group ($PEG) | 25.6% | 35.5% | -78.0% | 24.7% | |
| Driver Group ($DRV) | 6.5% | 18.7% | 27.9% | 24.0% | |
| Optimal Payments ($OPAY) | -2.9% | 7.1% | 27.7% | 23.8% | |
| Premier Farnell ($PFLA) | | 33.2% | 21.0% | 23.2% | 18.5% |
| |
|---|
| Median (50 companies) | 10.1% | 10.7% | 8.8% | 10.7% | 12.7% |
|---|
| Mitsubishi Corp ($MBC) | 3.8% | 3.0% | 1.3% | 1.3% | 1.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Inspired Energy ($INSE) | -0.8x | 0.8x | 0.6x | 19.4x | |
| Ceps ($CEPS) | 4.1x | | 3.0x | 6.6x | |
| Redhall Group ($RHL) | | 22.8x | 5.8x | 6.6x | |
| Kellan Group(The ($KLN) | 194.4x | | | 6.5x | |
| Nakama Group ($NAK) | -0.5x | 3.4x | 39.8x | 5.2x | |
| |
|---|
| Median (49 companies) | 0.6x | 0.8x | 0.7x | 0.6x | 1.4x |
|---|
| Mitsubishi Corp ($MBC) | 7.2x | 9.9x | 15.9x | 14.3x | 12.5x |
