Paddy Power revenue surged on 24.1% in 2015 while EBITDA Margin decreased on 3.7 pp from 24.0% to 20.4%
08 Mar 2016 • About Paddy Power (
$PAP) • By InTwits
Paddy Power reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Paddy Power is a fast growth stock: 2015 revenue growth was 24.1%, 5 year revenue CAGR was 20.7% at 2015 ROIC 53.2%
- Paddy Power has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.7%. At the same time it's a lot of higher than industry average of 1.5%.
- CAPEX is quite volatile: 227 in 2015, 115 in 2014, 162 in 2013, 325 in 2012, 200 in 2011
- The company has highly profitable business model: ROIC is at 53.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Paddy Power ($PAP) key annual financial indicators
| mln. € | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 499 | 654 | 745 | 882 | 1,094 | 24.1% |
| Gross Profit | 455 | 554 | 617 | 714 | 818 | 14.5% |
| SG&A | 43 | 68 | 76 | 101 | 118 | 16.9% |
| EBITDA | 169 | 168 | 177 | 212 | 223 | 5.2% |
| Net Income | 121 | 121 | 123 | 145 | 147 | 1.6% |
Balance Sheet
|
|---|
| Cash | 111 | 171 | 175 | 246 | 152 | -38.0% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 193 | |
Cash flow
|
|---|
| Capex | 34 | 33 | 35 | 39 | 28 | -28.1% |
Ratios
|
|---|
| Revenue growth | 17.0% | 30.9% | 14.0% | 18.3% | 24.1% | |
| EBITDA growth | 31.9% | -0.4% | 5.2% | 19.8% | 5.2% | |
| Gross Margin | 91.2% | 84.7% | 82.8% | 81.0% | 74.7% | -6.2% |
| EBITDA Margin | 33.8% | 25.7% | 23.7% | 24.0% | 20.4% | -3.7% |
| Net Income Margin | 24.3% | 18.5% | 16.5% | 16.4% | 13.5% | -3.0% |
| SG&A, % of revenue | 8.7% | 10.4% | 10.2% | 11.4% | 10.8% | -0.7% |
| CAPEX, % of revenue | 6.7% | 5.0% | 4.7% | 4.4% | 2.5% | -1.8% |
| ROIC | 58.5% | 53.4% | 47.2% | 47.6% | 53.2% | 5.6% |
| ROE | 53.0% | 47.6% | 41.9% | 41.5% | 64.6% | 23.0% |
| Net Debt/EBITDA | -0.7x | -1.0x | -1.0x | -1.2x | 0.2x | 1.3x |
Revenue and profitability
Paddy Power's Revenue jumped on 24.1% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.7 pp from 40.2% to 44.9% in 2015.
Gross Margin decreased on 6.2 pp from 81.0% to 74.7% in 2015. SG&A as a % of Revenue decreased slightly on 0.66 pp from 11.4% to 10.8% in 2015.
Net Income marign decreased on 3.0 pp from 16.4% to 13.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Paddy Power had CAPEX/Revenue of 2.5%. The company's CAPEX/Revenue decreased on 2.5 pp from 5.0% in 2012 to 2.5% in 2015. Average CAPEX/Revenue for the last three years was 3.9%.
Return on investment
The company operates at high and attractive ROIC (53.23%) and ROE (64.56%). ROIC increased on 5.6 pp from 47.6% to 53.2% in 2015. ROE surged on 23.0 pp from 41.5% to 64.6% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.2x and Debt / EBITDA is 0.9x. Net Debt / EBITDA surged on 1.3x from -1.2x to 0.2x in 2015. Debt jumped while cash dropped on 38.0% in 2015.
Appendix 1: Peers in Travel & Leisure
Below you can find Paddy Power benchmarking vs. other companies in Travel & Leisure 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 |
|---|
| 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 ($EMAN) | 23.0% | 23.4% | 26.5% | 22.4% | |
| Eclectic Bar Grp ($BAR) | | 27.6% | 3.8% | 10.5% | -1.9% |
| Richoux Group ($RIC) | 54.2% | 9.4% | 16.5% | 10.4% | |
| |
|---|
| Median (23 companies) | 21.3% | 9.4% | 8.2% | 6.1% | 7.6% |
|---|
| Paddy Power ($PAP) | | 30.9% | 14.0% | 18.3% | 24.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | |
| Mandarin Oriental International ($MDOB) | 38.6% | 36.0% | 38.9% | 39.7% | 40.4% |
| |
|---|
| Median (11 companies) | 20.4% | 23.0% | 22.6% | 20.7% | 22.1% |
|---|
| Paddy Power ($PAP) | 91.2% | 84.7% | 82.8% | 81.0% | 74.7% |
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% | 23.6% |
| Mandarin Oriental International ($MDOB) | 20.9% | 19.5% | 22.4% | 24.0% | 26.2% |
| Young & Co'S Brewery ($YNGN) | 22.3% | 21.2% | 21.8% | 21.7% | 22.9% |
| Ryanair Hldgs ($RYA) | 21.1% | 22.6% | 21.5% | 20.1% | 25.1% |
| |
|---|
| Median (23 companies) | 13.4% | 12.8% | 12.9% | 12.3% | 14.0% |
|---|
| Paddy Power ($PAP) | 33.8% | 25.7% | 23.7% | 24.0% | 20.4% |
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 ($MARS) | | 18.0% | 19.3% | 17.5% | 16.2% |
| |
|---|
| Median (23 companies) | 3.4% | 3.7% | 5.4% | 4.6% | 8.5% |
|---|
| Paddy Power ($PAP) | 6.7% | 5.0% | 4.7% | 4.4% | 2.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Irish Continental Group ($ICGC) | 14.3% | 14.6% | 18.9% | 40.0% | 33.9% |
| Air Partner ($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% | |
| Ryanair Hldgs ($RYA) | 7.6% | 9.7% | 10.0% | 9.5% | 13.3% |
| |
|---|
| Median (24 companies) | 7.5% | 6.4% | 6.9% | 4.2% | 5.9% |
|---|
| Paddy Power ($PAP) | 58.5% | 53.4% | 47.2% | 47.6% | 53.2% |
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 ($AIRC) | 4.7x | 4.7x | 6.4x | 5.6x | |
| |
|---|
| Median (21 companies) | 1.9x | 1.4x | 2.3x | 1.3x | 2.4x |
|---|
| Paddy Power ($PAP) | -0.7x | -1.0x | -1.0x | -1.2x | 0.2x |
