Mandarin Oriental International reports 70.1% CAPEX growth while 10.7% Revenue decline
03 Mar 2016 • About Mandarin Oriental International (
$MDOB) • By InTwits
Mandarin Oriental International reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 26.2% in 2015 vs. 24.0% in 2014 vs. 20.9% in 2011
- Mandarin Oriental International has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.2%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: 5.7 in 2015, 3.3 in 2014, 13.6 in 2013, 6.5 in 2012, 39.6 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Mandarin Oriental International ($MDOB) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 614.2 | 648.3 | 668.6 | 679.9 | 607.3 | -10.7% |
| Gross Profit | 236.9 | 233.1 | 260.2 | 269.9 | 245.2 | -9.2% |
| SG&A | | 149.2 | 148.4 | 149.1 | 137.9 | -7.5% |
| EBITDA | 128.1 | 126.4 | 149.8 | 163.2 | 158.9 | -2.6% |
| Net Income | 67.5 | 70.7 | 96.3 | 97.0 | 89.3 | -7.9% |
Balance Sheet
|
|---|
| Cash | 470.1 | 453.7 | 316.4 | 324.6 | 308.6 | -4.9% |
| Short Term Debt | 4.0 | 9.7 | 556.2 | 217.0 | 4.2 | -98.1% |
| Long Term Debt | 578.5 | 580.5 | 238.7 | 510.7 | 436.2 | -14.6% |
Cash flow
|
|---|
| Capex | 62.4 | 50.5 | 35.9 | 29.4 | 50.0 | 70.1% |
Ratios
|
|---|
| Revenue growth | 19.7% | 5.6% | 3.1% | 1.7% | -10.7% | |
| EBITDA growth | 28.5% | -1.3% | 18.5% | 8.9% | -2.6% | |
| Gross Margin | 38.6% | 36.0% | 38.9% | 39.7% | 40.4% | 0.7% |
| EBITDA Margin | 20.9% | 19.5% | 22.4% | 24.0% | 26.2% | 2.2% |
| Net Income Margin | 11.0% | 10.9% | 14.4% | 14.3% | 14.7% | 0.4% |
| SG&A, % of revenue | | 23.0% | 22.2% | 21.9% | 22.7% | 0.8% |
| CAPEX, % of revenue | 10.2% | 7.8% | 5.4% | 4.3% | 8.2% | 3.9% |
| ROIC | 5.0% | 4.6% | 5.2% | 5.4% | 6.1% | 0.6% |
| ROE | 7.5% | 7.6% | 10.0% | 10.0% | 8.2% | -1.8% |
| Net Debt/EBITDA | 0.9x | 1.1x | 3.2x | 2.5x | 0.8x | -1.6x |
Revenue and profitability
The company's Revenue dropped on 10.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.2 pp from 24.0% to 26.2% in 2015.
Gross Margin increased slightly on 0.68 pp from 39.7% to 40.4% in 2015. SG&A as a % of Revenue increased slightly on 0.78 pp from 21.9% to 22.7% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
Mandarin Oriental International's CAPEX/Revenue was 8.2% in 2015. Mandarin Oriental International showed almost no change in CAPEX/Revenue from 2012 to 2015. It's average CAPEX/Revenue for the last three years was 6.0%.
Return on investment
The company operates at low ROIC (6.06%) and ROE (8.18%). ROIC increased slightly on 0.64 pp from 5.4% to 6.1% in 2015. ROE decreased slightly on 1.8 pp from 10.0% to 8.2% in 2015.
Leverage (Debt)
Debt level is 0.8x Net Debt / EBITDA and 2.8x Debt / EBITDA. Net Debt / EBITDA dropped on 1.6x from 2.5x to 0.8x in 2015. Debt dropped on 39.5% in 2015 while cash decreased on 4.9% in 2015.
Appendix 1: Peers in Travel & Leisure
Below we provide Mandarin Oriental International benchmarking against other companies in Travel & Leisure 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 |
|---|
| Dalata Hotel Group ($DAL) | | 55.4% | 12.0% | 30.4% | 185.4% |
| Action Hotels ($AHCG) | 19.5% | 12.3% | 5.4% | 26.2% | |
| Everyman Media Group ($EMAN) | 23.0% | 23.4% | 26.5% | 22.4% | |
| Paddy Power ($PAP) | 17.0% | 30.9% | 14.0% | 18.3% | |
| Eclectic Bar Grp ($BAR) | | 27.6% | 3.8% | 10.5% | -1.9% |
| |
|---|
| Median (23 companies) | 19.4% | 12.3% | 8.8% | 7.2% | 7.6% |
|---|
| Mandarin Oriental International ($MDOB) | | 5.6% | 3.1% | 1.7% | -10.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Paddy Power ($PAP) | 91.2% | 84.7% | 82.8% | 81.0% | |
| Eclectic Bar Grp ($BAR) | 80.1% | 79.1% | 78.9% | 79.0% | 79.4% |
| Action Hotels ($AHCG) | 73.2% | 75.1% | 75.0% | 73.3% | |
| Dalata Hotel Group ($DAL) | 61.8% | 61.2% | 62.0% | 62.8% | 61.5% |
| Everyman Media Group ($EMAN) | 59.9% | 57.6% | 59.2% | 58.9% | |
| |
|---|
| Median (11 companies) | 20.4% | 23.0% | 22.6% | 20.7% | 20.8% |
|---|
| Mandarin Oriental International ($MDOB) | 38.6% | 36.0% | 38.9% | 39.7% | 40.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Action Hotels ($AHCG) | 24.0% | 31.0% | 27.9% | 28.6% | |
| Irish Continental Group ($ICGC) | 18.9% | 17.1% | 18.6% | 27.3% | |
| Paddy Power ($PAP) | 33.8% | 25.7% | 23.7% | 24.0% | |
| Young & Co'S Brewery ($YNGN) | 22.3% | 21.2% | 21.8% | 21.7% | 22.9% |
| Ryanair Hldgs ($RYA) | 21.1% | 22.6% | 21.5% | 20.1% | 25.1% |
| |
|---|
| Median (23 companies) | 13.4% | 12.8% | 12.9% | 12.3% | 12.4% |
|---|
| Mandarin Oriental International ($MDOB) | 20.9% | 19.5% | 22.4% | 24.0% | 26.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Action Hotels ($AHCG) | 47.8% | 21.0% | 25.6% | 90.0% | |
| Dalata Hotel Group ($DAL) | 2.0% | 0.7% | 6.2% | 26.7% | 12.7% |
| Everyman Media Group ($EMAN) | 0.0% | 0.0% | 36.4% | 25.9% | |
| Air China ($AIRC) | 23.9% | 16.8% | 19.1% | 18.7% | |
| Marston'S ($MARS) | | 18.0% | 19.3% | 17.5% | 16.2% |
| |
|---|
| Median (23 companies) | 3.4% | 3.7% | 4.8% | 4.6% | 7.4% |
|---|
| Mandarin Oriental International ($MDOB) | 10.2% | 7.8% | 5.4% | 4.3% | 8.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Paddy Power ($PAP) | 58.5% | 53.4% | 47.2% | 47.6% | |
| Irish Continental Group ($ICGC) | 14.3% | 14.6% | 18.9% | 40.0% | |
| Air Partner ($AIP) | 51.1% | 34.8% | 27.5% | 21.2% | 20.0% |
| Hanatour Service Inc ($TOUR) | 17.4% | 22.5% | 19.9% | 19.6% | 19.4% |
| Netplay Tv ($NPT) | | | 26.3% | 10.2% | |
| |
|---|
| Median (24 companies) | 7.6% | 6.8% | 7.8% | 4.2% | 5.4% |
|---|
| Mandarin Oriental International ($MDOB) | 5.0% | 4.6% | 5.2% | 5.4% | 6.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Marston'S ($MARS) | | | 6.5x | 14.0x | 8.2x |
| Meikles Ltd ($MIK) | | | 5.1x | 10.7x | 73.1x |
| Action Hotels ($AHCG) | 14.1x | 11.2x | 7.8x | 9.6x | |
| Peel Hotels ($PHO) | 5.8x | 8.2x | 7.3x | 5.9x | 4.4x |
| Air China ($AIRC) | 4.7x | 4.7x | 6.4x | 5.6x | |
| |
|---|
| Median (21 companies) | 1.9x | 1.4x | 2.2x | 1.1x | 2.5x |
|---|
| Mandarin Oriental International ($MDOB) | 0.9x | 1.1x | 3.2x | 2.5x | 0.8x |
