Cherkizovo Group OJSC Net Income dropped on 55.0% in 2015 while Revenue surged on 11.1%
02 Mar 2016 • About Cherkizovo Group OJSC (
$CHE) • By InTwits
Cherkizovo Group OJSC reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cherkizovo Group OJSC has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.8%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: 9,857 in FY2015, 5,603 in FY2014, 2,893 in FY2013, 1,051 in FY2012, 1,905 in FY2011
- The company has business model with low profitability: ROIC is at 8.9%
- It operates with high leverage: Net Debt/EBITDA is 3.1x while industry average is 0.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cherkizovo Group OJSC ($CHE) key annual financial indicators
| mln. RUB | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 43,302 | 48,779 | 52,733 | 69,353 | 77,033 | 11.1% |
| Gross Profit | 10,840 | 14,067 | 11,422 | 22,947 | 19,149 | -16.6% |
| SG&A | 5,567 | 6,576 | 8,207 | 9,656 | 11,575 | 19.9% |
| EBITDA | 6,911 | 9,731 | 5,753 | 16,945 | 11,361 | -33.0% |
| Net Income | 4,263 | 6,996 | 2,054 | 13,352 | 6,007 | -55.0% |
Balance Sheet
|
|---|
| Cash | 937 | 1,258 | 2,118 | 1,043 | 5,561 | 433.0% |
| Short Term Debt | 6,880 | 11,216 | 10,435 | 13,945 | 24,730 | 77.3% |
| Long Term Debt | 17,143 | 16,278 | 17,230 | 14,791 | 16,119 | 9.0% |
Cash flow
|
|---|
| Capex | 6,628 | 5,712 | 5,272 | 6,758 | 9,415 | 39.3% |
Ratios
|
|---|
| Revenue growth | 20.0% | 12.6% | 8.1% | 31.5% | 11.1% | |
| EBITDA growth | 4.6% | 40.8% | -40.9% | 194.6% | -33.0% | |
| Gross Margin | 25.0% | 28.8% | 21.7% | 33.1% | 24.9% | -8.2% |
| EBITDA Margin | 16.0% | 19.9% | 10.9% | 24.4% | 14.7% | -9.7% |
| Net Income Margin | 9.8% | 14.3% | 3.9% | 19.3% | 7.8% | -11.5% |
| SG&A, % of revenue | 12.9% | 13.5% | 15.6% | 13.9% | 15.0% | 1.1% |
| CAPEX, % of revenue | 15.3% | 11.7% | 10.0% | 9.7% | 12.2% | 2.5% |
| ROIC | 11.7% | 13.5% | 4.8% | 22.4% | 8.9% | -13.5% |
| ROE | 21.2% | 26.8% | 6.8% | 40.3% | 12.4% | -27.9% |
| Net Debt/EBITDA | 3.3x | 2.7x | 4.4x | 1.6x | 3.1x | 1.5x |
Revenue and profitability
The company's Revenue surged on 11.1% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 9.7 pp from 24.4% to 14.7% in 2015.
Gross Margin decreased on 8.2 pp from 33.1% to 24.9% in 2015. SG&A as a % of Revenue increased slightly on 1.1 pp from 13.9% to 15.0% in 2015.
Net Income marign dropped on 11.5 pp from 19.3% to 7.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
Cherkizovo Group OJSC's CAPEX/Revenue was 12.2% in 2015. Cherkizovo Group OJSC showed small growth in CAPEX/Revenue of 0.51 pp from 11.7% in 2012 to 12.2% in 2015. It's average level of CAPEX/Revenue for the last three years was 10.7%.Cherkizovo Group OJSC invested a big chunk of EBITDA (82.9%) to CAPEX to secure its growth.
Return on investment
The company operates at good ROE (12.44%) while ROIC is low (8.95%). ROIC dropped on 13.5 pp from 22.4% to 8.9% in 2015. ROE dropped on 27.9 pp from 40.3% to 12.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.1x and Debt / EBITDA is 3.6x. Net Debt / EBITDA jumped on 1.5x from 1.6x to 3.1x in 2015. Debt surged on 42.2% in 2015 while cash jumped on 433% in 2015.
Appendix 1: Peers in Food Producers
Below you can find Cherkizovo Group OJSC benchmarking vs. other companies in Food Producers 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 |
|---|
| Ros Agro ($AGRO) | 29.7% | -13.2% | 8.2% | 78.6% | |
| Kakuzi ($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% |
| Glanbia ($GLB) | | 14.4% | 7.7% | 6.6% | 9.3% |
| |
|---|
| Median (19 companies) | 29.6% | 10.3% | 6.3% | -1.4% | -1.3% |
|---|
| Cherkizovo Group OJSC ($CHE) | | 12.6% | 8.1% | 31.5% | 11.1% |
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 ($RE.B) | 56.7% | 44.4% | 37.3% | 36.8% | |
| Zambeef Products ($ZAM) | 32.3% | 33.6% | 34.5% | 33.7% | 43.2% |
| Ros Agro ($AGRO) | 19.5% | 28.8% | 22.1% | 33.6% | |
| |
|---|
| Median (16 companies) | 25.9% | 28.8% | 23.5% | 29.6% | 19.0% |
|---|
| Cherkizovo Group OJSC ($CHE) | 25.0% | 28.8% | 21.7% | 33.1% | 24.9% |
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 ($AGRO) | 10.9% | 20.6% | 15.5% | 28.1% | |
| |
|---|
| Median (19 companies) | 10.8% | 9.9% | 9.3% | 8.9% | 8.8% |
|---|
| Cherkizovo Group OJSC ($CHE) | 16.0% | 19.9% | 10.9% | 24.4% | 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 ($RE.B) | 13.2% | 40.3% | 10.9% | 11.8% | |
| |
|---|
| Median (19 companies) | 8.3% | 6.1% | 4.6% | 4.8% | 4.6% |
|---|
| Cherkizovo Group OJSC ($CHE) | 15.3% | 11.7% | 10.0% | 9.7% | 12.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ros Agro ($AGRO) | 5.4% | 7.2% | 4.0% | 23.8% | |
| Fyffes ($FFY) | 8.8% | 16.4% | 17.2% | 18.5% | 14.7% |
| Mhp Sa ($MHPC) | 19.4% | 18.4% | 11.2% | 17.6% | |
| Origin Enterprises ($OGN) | 15.4% | 13.2% | 15.3% | 16.9% | 20.1% |
| Kerry Group ($KYGA) | 14.0% | 10.6% | 5.2% | 16.6% | 15.8% |
| |
|---|
| Median (19 companies) | 14.0% | 12.2% | 10.5% | 11.6% | 9.1% |
|---|
| Cherkizovo Group OJSC ($CHE) | 11.7% | 13.5% | 4.8% | 22.4% | 8.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Zambeef Products ($ZAM) | 3.0x | 6.3x | 4.7x | 4.8x | 3.0x |
| R.E.A.Hldgs ($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 | 2.0x |
| Mhp Sa ($MHPC) | 2.0x | 2.2x | 2.9x | 2.2x | |
| |
|---|
| Median (17 companies) | 1.3x | 1.0x | 1.3x | 1.5x | 1.6x |
|---|
| Cherkizovo Group OJSC ($CHE) | 3.3x | 2.7x | 4.4x | 1.6x | 3.1x |
