Zambeef Products CAPEX jumped on 211% in 2015 while Revenue decreased on 5.4%
25 Nov 2015 • About Zambeef Products (
$ZAM) • By InTwits
Zambeef Products reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Zambeef Products has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.2%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: 247 in FY2015, 79.4 in FY2014, 73.8 in FY2013, 120 in FY2012, 311 in FY2011
- The company has business model with low profitability: ROIC is at 8.0%
- It operates with high leverage: Net Debt/EBITDA is 3.0x while industry average is 0.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Zambeef Products ($ZAM) key annual financial indicators
| mln. ZMW | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 983 | 1,296 | 1,595 | 1,643 | 1,555 | -5.4% |
| Gross Profit | 318 | 436 | 550 | 554 | 671 | 21.1% |
| SG&A | | | | | 505 | |
| EBITDA | 102 | 103 | 129 | 125 | 229 | 83.0% |
| Net Income | 44 | 15 | 14 | -25 | -64 | 158.5% |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 107 | | 0 | |
| Short Term Debt | 127 | 296 | 371 | 227 | 224 | -1.2% |
| Long Term Debt | 180 | 359 | 344 | 368 | 454 | 23.6% |
Cash flow
|
|---|
| Capex | 311 | 120 | 74 | 79 | 247 | 210.6% |
Ratios
|
|---|
| Revenue growth | 27.6% | 31.9% | 23.0% | 3.0% | -5.4% | |
| EBITDA growth | 62.6% | 1.8% | 25.1% | -3.2% | 83.0% | |
| Gross Margin | 32.3% | 33.6% | 34.5% | 33.7% | 43.2% | 9.4% |
| EBITDA Margin | 10.3% | 8.0% | 8.1% | 7.6% | 14.7% | 7.1% |
| Net Income Margin | 4.5% | 1.1% | 0.9% | -1.5% | -4.1% | -2.6% |
| SG&A, % of revenue | | | | | 32.5% | 32.5% |
| CAPEX, % of revenue | 31.6% | 9.2% | 4.6% | 4.8% | 15.9% | 11.0% |
| ROIC | 8.0% | 5.0% | 4.5% | 3.2% | 8.0% | 4.8% |
| ROE | 7.4% | 1.9% | 1.3% | -1.9% | -4.6% | -2.8% |
| Net Debt/EBITDA | 3.0x | 6.3x | 4.7x | 4.8x | 3.0x | -1.8x |
Revenue and profitability
The company's Revenue decreased on 5.4% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.1 pp from 7.6% to 14.7% in FY2015.
Gross Margin increased on 9.4 pp from 33.7% to 43.2% in FY2015.
Net Income marign decreased on 2.6 pp from -1.5% to -4.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 15.9%. CAPEX/Revenue increased on 6.6 pp from 9.2% in FY2012 to 15.9% in FY2015. Average CAPEX/Revenue for the last three years was 8.4%.The company has spent a lot to CAPEX (108% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (7.95%) and negative ROE (-4.61%). ROIC increased on 4.8 pp from 3.2% to 8.0% in FY2015. ROE decreased on 2.8 pp from -1.9% to -4.6% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.0x and Debt / EBITDA is 3.0x. Net Debt / EBITDA dropped on 1.8x from 4.8x to 3.0x in FY2015. Debt jumped on 14.1% in FY2015 while cash surged.
Appendix 1: Peers in Food Producers
Below we provide Zambeef Products benchmarking against other companies in Food Producers 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 |
|---|
| Ros Agro ($AGRO) | 29.7% | -13.2% | 8.2% | 78.6% | |
| Cherkizovo Group OJSC ($CHE) | 20.0% | 12.6% | 8.1% | 31.5% | |
| Kakuzi ($KAKU) | -26.2% | 0.3% | -11.5% | 22.1% | |
| R.E.A.Hldgs ($RE.B) | 29.6% | -15.7% | -11.3% | 13.9% | |
| Tongaat Hulett Ltd ($THL) | | 24.8% | 19.0% | 9.3% | 2.8% |
| |
|---|
| Median (19 companies) | 20.0% | 10.3% | 6.3% | -1.4% | -11.0% |
|---|
| Zambeef Products ($ZAM) | | 31.9% | 23.0% | 3.0% | -5.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Walcom Group Ltd ($WALG) | 63.5% | 62.6% | 63.2% | 62.2% | |
| Narborough Plantations ($NBP) | | 64.9% | 55.5% | 59.7% | 54.6% |
| R.E.A.Hldgs ($RE.B) | 56.7% | 44.4% | 37.3% | 36.8% | |
| Ros Agro ($AGRO) | 19.5% | 28.8% | 22.1% | 33.6% | |
| Produce Investments ($PIL) | 24.1% | 27.9% | 25.0% | 33.5% | 36.4% |
| |
|---|
| Median (16 companies) | 24.6% | 28.8% | 22.0% | 29.6% | 15.5% |
|---|
| Zambeef Products ($ZAM) | 32.3% | 33.6% | 34.5% | 33.7% | 43.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Narborough Plantations ($NBP) | | 58.1% | 42.5% | 39.6% | 37.4% |
| Mhp Sa ($MHPC) | 32.6% | 33.2% | 26.1% | 37.0% | |
| R.E.A.Hldgs ($RE.B) | 52.8% | 35.3% | 34.0% | 33.2% | |
| Avangardco Investments Public Ltd ($AVGR) | 44.4% | 44.5% | 45.6% | 30.9% | |
| Ros Agro ($AGRO) | 10.9% | 20.6% | 15.5% | 28.1% | |
| |
|---|
| Median (19 companies) | 10.9% | 16.4% | 10.9% | 11.8% | 7.0% |
|---|
| Zambeef Products ($ZAM) | 10.3% | 8.0% | 8.1% | 7.6% | 14.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Agriterra Ltd ($AGTA) | 18.9% | 54.8% | 49.5% | 43.0% | 11.2% |
| Kakuzi ($KAKU) | 15.5% | 20.1% | 20.8% | 22.0% | |
| Avangardco Investments Public Ltd ($AVGR) | 26.3% | 51.1% | 28.0% | 18.4% | |
| Asian Citrus Hldgs ($ACHL) | 14.9% | 19.3% | 28.6% | 17.7% | 14.3% |
| R.E.A.Hldgs ($RE.B) | 13.2% | 40.3% | 10.9% | 11.8% | |
| |
|---|
| Median (19 companies) | 8.3% | 6.1% | 8.2% | 4.8% | 5.1% |
|---|
| Zambeef Products ($ZAM) | 31.6% | 9.2% | 4.6% | 4.8% | 15.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ros Agro ($AGRO) | 5.4% | 7.2% | 4.0% | 23.8% | |
| Cherkizovo Group OJSC ($CHE) | 11.7% | 13.5% | 4.8% | 22.4% | |
| Fyffes ($FFY) | 8.8% | 16.4% | 17.2% | 18.5% | |
| Mhp Sa ($MHPC) | 19.4% | 18.4% | 11.2% | 17.6% | |
| Origin Enterprises ($OGN) | 15.4% | 13.2% | 15.3% | 16.9% | 20.1% |
| |
|---|
| Median (19 companies) | 14.0% | 12.3% | 10.5% | 12.4% | 5.6% |
|---|
| Zambeef Products ($ZAM) | 8.0% | 5.0% | 4.5% | 3.2% | 8.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| R.E.A.Hldgs ($RE.B) | 1.2x | 3.1x | 4.4x | 3.9x | |
| Ukrproduct Group ($UKR) | 4.3x | 2.7x | 4.4x | 3.4x | |
| Glanbia ($GLB) | 3.1x | 1.9x | 1.7x | 2.3x | |
| Mhp Sa ($MHPC) | 2.0x | 2.2x | 2.9x | 2.2x | |
| Tongaat Hulett Ltd ($THL) | 2.5x | 2.4x | 2.1x | 1.8x | 1.8x |
| |
|---|
| Median (17 companies) | 1.3x | 1.0x | 1.3x | 1.5x | 1.6x |
|---|
| Zambeef Products ($ZAM) | 3.0x | 6.3x | 4.7x | 4.8x | 3.0x |
