Over the last few years Magnit PJSC showed solid growth in fundamentals
03 Feb 2016 • About Magnit PJSC (
$MGNT) • By InTwits
Magnit PJSC is an attractive growth stock in Food & Drug Retailers industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Magnit PJSC showed fast growth in the last financial year. The company's revenue surged on 24.4% in FY2015. In addition to revenue Magnit PJSC also keeps delivering EBITDA growth. It was 19.7% in FY2015
In the last 3 years the company showed fast revenue growth of 28.7% from 2012 to 2015 annually. EBITDA surged on 31.0% from 2012 to 2015 annually.
Magnit PJSC ($MGNT) financials for the last 5 years
| mln. RUB | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 335,835 | 448,234 | 579,994 | 767,556 | 955,100 |
|---|
| Revenue growth, % | | 33.5% | 29.4% | 32.3% | 24.4% |
|---|
| Gross margin, % | 24.3% | 26.5% | 28.5% | 28.9% | 28.5% |
|---|
| SG&A, % | 16.5% | 16.2% | 17.6% | 17.6% | 17.7% |
|---|
| EBITDA | 26,348 | 46,231 | 63,575 | 86,867 | 103,978 |
|---|
| EBITDA growth, % | | 75.5% | 37.5% | 36.6% | 19.7% |
|---|
| EBITDA margin, % | 7.85% | 10.3% | 11.0% | 11.3% | 10.9% |
|---|
| Net Income | 12,309 | 25,093 | 35,639 | 47,937 | 59,340 |
|---|
| Net Income margin, % | 3.67% | 5.60% | 6.14% | 6.25% | 6.21% |
|---|
| |
| CAPEX | 48,711 | 47,265 | 50,077 | 56,006 | 54,255 |
|---|
| CAPEX/Revenue, % | 14.5% | 10.5% | 8.63% | 7.30% | 5.68% |
|---|
| Debt | 51,935 | 63,754 | 74,134 | 99,055 | 102,554 |
|---|
| Cash | 17,167 | 12,528 | 5,961 | 18,318 | 8,396 |
|---|
| Net Debt/EBITDA | 1.3x | 1.1x | 1.1x | 0.9x | 0.9x |
|---|
| |
| ROIC, % | 17.9% | 23.1% | 26.0% | 33.2% | 32.6% |
|---|
| ROE, % | 20.1% | 28.3% | 31.4% | 38.7% | 40.2% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. In the last 3 years Magnit PJSC's EBITDA margin increased on 0.600 pp from 10.3% in 2012 to 10.9% in 2015.
We call Magnit PJSC an attractive growth stock as together with the growth it delivers high ROIC at 32.6%. During the last three years it surged - it was 23.1% in FY2012. It's average ROIC for the last three years was 30.6%.
Net Income margin didn't change on 0 pp from 6.20% to 6.20% in 2015. In the longer period the company's Net Income margin surged on 0.600 pp from 5.60% in 2012 to 6.20% in 2015.
Magnit PJSC operates at ROE of 40.2%. It's average ROE for the last three years was 36.8%.
Capital expenditures (CAPEX)
To this fast growth Magnit PJSC had to invest in CAPEX.In FY2015 the company had CAPEX/Revenue of 5.68%. Magnit PJSC showed big decline in CAPEX/Revenue of 4.86 pp from 10.5% in 2012 to 5.68% in 2015. Average CAPEX/Revenue for the last three years was 7.20%.
Leverage (Debt)
Having such a fast growth profile Magnit PJSC keeps low debt level at 0.9x Net Debt/EBITDA. In the longer period Magnit PJSC showed big decline in leverage of 0.20x from 1.11x in 2012 to 0.91x in 2015.
Valuation vs. comparable companies
The company trades at 0.9x EV/EBITDA which is 93.5% lower than 13.9x Food & Drug Retailers industry avearge calculated based on 20 companies. The company trades at 0.0x P/E which is 100% lower than 11.2x Food & Drug Retailers industry avearge calculated based on 4 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 1.9x EV/(EBITDA-CAPEX) which is higher vs. -212.7x Food & Drug Retailers industry avearge calculated based on 3 companies.
Peers in Food & Drug Retailers
Below we provide Magnit PJSC benchmarking against other companies in Food & Drug Retailers 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Lenta Ltd ($LNTA) | 27.1% | 22.4% | 31.3% | 34.5% | |
| X5 Retail Group N.V ($89VS) | 32.6% | 8.0% | 9.0% | 18.5% | |
| Crawshaw Group ($CRAW) | | -0.9% | -0.6% | 11.9% | 17.1% |
| O'Key Group Sa ($OKEY) | 12.7% | 26.0% | 18.9% | 9.0% | |
| Dairy Farm International Hldgs ($DFIB) | 14.6% | 7.3% | 5.7% | 6.3% | |
| |
|---|
| Median (8 companies) | 26.3% | 7.6% | 7.1% | 7.6% | 17.1% |
|---|
| Magnit PJSC ($MGNT) | | 33.5% | 29.4% | 32.3% | 24.4% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Snacktime ($SNAK) | 55.0% | 56.6% | 51.8% | 55.1% | |
| Crawshaw Group ($CRAW) | 43.6% | 43.3% | 43.7% | 43.8% | 44.4% |
| Dairy Farm International Hldgs ($DFIB) | 29.4% | 28.9% | 29.8% | 29.9% | |
| O'Key Group Sa ($OKEY) | 22.8% | 23.5% | 23.9% | 24.5% | |
| X5 Retail Group N.V ($89VS) | 23.8% | 23.6% | 24.4% | 24.5% | |
| |
|---|
| Median (8 companies) | 23.3% | 23.6% | 24.1% | 24.5% | 44.4% |
|---|
| Magnit PJSC ($MGNT) | 24.3% | 26.5% | 28.5% | 28.9% | 28.5% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Jardine Matheson Hldgs ($J36) | 24.4% | 13.1% | 11.6% | 11.8% | |
| Lenta Ltd ($LNTA) | 9.3% | 10.7% | 11.2% | 11.0% | |
| X5 Retail Group N.V ($89VS) | 7.3% | 6.9% | 7.1% | 7.7% | |
| O'Key Group Sa ($OKEY) | 7.9% | 8.1% | 7.3% | 7.3% | |
| Dairy Farm International Hldgs ($DFIB) | 7.6% | 6.6% | 6.9% | 6.6% | |
| |
|---|
| Median (8 companies) | 7.8% | 6.7% | 7.0% | 6.9% | 6.4% |
|---|
| Magnit PJSC ($MGNT) | 7.8% | 10.3% | 11.0% | 11.3% | 10.9% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Lenta Ltd ($LNTA) | 4.4% | 13.4% | 16.2% | 17.9% | |
| O'Key Group Sa ($OKEY) | 9.3% | 7.1% | 8.7% | 10.6% | |
| X5 Retail Group N.V ($89VS) | 5.1% | 4.6% | 3.8% | 4.5% | |
| Jardine Matheson Hldgs ($J36) | 3.6% | 4.9% | 4.4% | 3.5% | |
| Snacktime ($SNAK) | 2.6% | 5.3% | 4.3% | 3.4% | |
| |
|---|
| Median (8 companies) | 3.6% | 4.7% | 4.1% | 3.4% | 6.3% |
|---|
| Magnit PJSC ($MGNT) | 14.5% | 10.5% | 8.6% | 7.3% | 5.7% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Dairy Farm International Hldgs ($DFIB) | 39.6% | 32.8% | 34.6% | 31.1% | |
| Lenta Ltd ($LNTA) | 44.1% | 42.9% | 34.0% | 24.5% | |
| O'Key Group Sa ($OKEY) | 21.7% | 25.0% | 21.8% | 17.1% | |
| X5 Retail Group N.V ($89VS) | 11.9% | 3.1% | 13.0% | 14.9% | |
| Total Produce ($TOT) | 8.8% | 9.0% | 11.9% | 10.3% | |
| |
|---|
| Median (8 companies) | 15.0% | 8.5% | 12.4% | 12.6% | 7.1% |
|---|
| Magnit PJSC ($MGNT) | 17.9% | 23.1% | 26.0% | 33.2% | 32.6% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Snacktime ($SNAK) | 0.8x | 2.0x | 6.0x | 4.4x | |
| Lenta Ltd ($LNTA) | 2.4x | 2.2x | 2.5x | 2.8x | |
| O'Key Group Sa ($OKEY) | 1.2x | 1.0x | 1.3x | 2.4x | |
| X5 Retail Group N.V ($89VS) | 3.1x | 3.3x | 2.7x | 2.2x | |
| Jardine Matheson Hldgs ($J36) | 0.6x | 1.4x | 1.3x | 1.3x | |
| |
|---|
| Median (8 companies) | 1.0x | 1.2x | 1.3x | 1.7x | -5.8x |
|---|
| Magnit PJSC ($MGNT) | 1.3x | 1.1x | 1.1x | 0.9x | 0.9x |
