Eastpharma Ltd EBITDA surged on 44.4% in 2015 and Revenue showed almost no change
09 Mar 2016 • About Eastpharma Ltd (
$EAST) • By InTwits
Eastpharma Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 23.3% in 2015, 16.1% in 2014, 15.6% in 2013, 21.1% in 2012, 2.8% in 2011
- Eastpharma Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.4%. At the same time it's a lot of higher than industry average of 6.5%.
- CAPEX is quite volatile: 3.0 in FY2015, 7.5 in FY2014, 3.7 in FY2013, 2.7 in FY2012, 1.1 in FY2011
- The company has business model with low profitability: ROIC is at 7.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.7x while industry average is 2.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Eastpharma Ltd ($EAST) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 242.3 | 232.0 | 217.1 | 210.5 | 209.9 | -0.3% |
| Gross Profit | 88.2 | 99.0 | 88.3 | 79.9 | 92.4 | 15.7% |
| SG&A | | 68.0 | 46.6 | 61.5 | 57.6 | -6.3% |
| EBITDA | 6.8 | 48.9 | 33.9 | 33.9 | 49.0 | 44.4% |
| Net Income | -15.7 | 9.1 | -0.5 | -1.6 | 8.7 | -637.7% |
Balance Sheet
|
|---|
| Cash | 14.7 | 18.2 | 34.0 | 23.3 | 15.9 | -32.0% |
| Short Term Debt | 82.2 | 120.6 | 78.3 | 85.5 | 129.8 | 51.8% |
| Long Term Debt | 39.0 | 30.2 | 85.2 | 85.0 | 16.7 | -80.4% |
Cash flow
|
|---|
| Capex | 23.1 | 27.6 | 26.8 | 15.0 | 13.0 | -13.4% |
Ratios
|
|---|
| Revenue growth | -4.6% | -4.2% | -6.4% | -3.0% | -0.3% | |
| EBITDA growth | -65.4% | 616.8% | -30.7% | 0.3% | 44.4% | |
| Gross Margin | 36.4% | 42.7% | 40.7% | 37.9% | 44.0% | 6.1% |
| EBITDA Margin | 2.8% | 21.1% | 15.6% | 16.1% | 23.3% | 7.2% |
| Net Income Margin | -6.5% | 3.9% | -0.2% | -0.8% | 4.1% | 4.9% |
| SG&A, % of revenue | | 29.3% | 21.5% | 29.2% | 27.5% | -1.8% |
| CAPEX, % of revenue | 9.5% | 11.9% | 12.3% | 7.1% | 6.2% | -0.9% |
| ROIC | -2.9% | 6.3% | 3.0% | 3.5% | 7.8% | 4.3% |
| ROE | -4.8% | 3.0% | -0.2% | -0.6% | 4.0% | 4.6% |
| Net Debt/EBITDA | 15.6x | 2.7x | 3.8x | 4.3x | 2.7x | -1.7x |
Revenue and profitability
Eastpharma Ltd's Revenue showed almost no change in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 7.2 pp from 16.1% to 23.3% in 2015.
Gross Margin increased on 6.1 pp from 37.9% to 44.0% in 2015. SG&A as a % of Revenue decreased slightly on 1.8 pp from 29.2% to 27.5% in 2015.
Net Income marign increased on 4.9 pp from -0.77% to 4.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
Eastpharma Ltd's CAPEX/Revenue was 6.2% in 2015. The company showed decline in CAPEX/Revenue of 5.7 pp from 11.9% in 2012 to 6.2% in 2015. It's average CAPEX/Revenue for the last three years was 8.6%.
Return on investment
The company operates at low ROIC (7.82%) and ROE (3.97%). ROIC increased on 4.3 pp from 3.5% to 7.8% in 2015. ROE increased on 4.6 pp from -0.64% to 4.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.7x and Debt / EBITDA is 3.0x. Net Debt / EBITDA dropped on 1.7x from 4.3x to 2.7x in 2015. Debt dropped on 14.1% in 2015 while cash dropped on 32.0% in 2015.
Valuation
The company's trades at EV/EBITDA 2.7x and P/E 0.1x while industy averages are 10.5x and 26.1x. Eastpharma Ltd's EV/(EBITDA-CAPEX) is 3.6x with the industry average at 4.7x.
Appendix 1: Peers in Pharmaceuticals & Biotechnology
Below you can find Eastpharma Ltd benchmarking vs. other companies in Pharmaceuticals & Biotechnology 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 |
|---|
| Cathay International Hldgs Ltd ($CTI) | 12.0% | 19.6% | 5.1% | 30.6% | |
| Source Bioscience ($SBS) | 12.6% | 8.2% | 18.8% | 28.9% | |
| Cyprotex ($CRX) | 33.5% | 5.3% | 17.3% | 18.5% | |
| Beximco Pharmaceuticals ($BXP) | 21.6% | 17.7% | 12.9% | 6.8% | |
| Animalcare Group ($ANCR) | | -8.2% | 11.6% | 6.3% | 5.1% |
| |
|---|
| Median (9 companies) | 27.6% | 8.2% | 12.4% | 6.3% | -0.5% |
|---|
| Eastpharma Ltd ($EAST) | | -4.2% | -6.4% | -3.0% | -0.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pfizer Inc ($PFZ) | 78.4% | 82.0% | 81.4% | 80.7% | 80.3% |
| Cyprotex ($CRX) | 83.2% | 81.9% | 80.0% | 75.0% | |
| Animalcare Group ($ANCR) | 54.0% | 54.0% | 56.0% | 55.4% | 55.9% |
| Source Bioscience ($SBS) | 44.4% | 45.1% | 46.0% | 48.6% | |
| Cathay International Hldgs Ltd ($CTI) | 51.2% | 52.2% | 49.1% | 47.1% | |
| |
|---|
| Median (9 companies) | 48.0% | 47.3% | 46.1% | 47.1% | 55.9% |
|---|
| Eastpharma Ltd ($EAST) | 36.4% | 42.7% | 40.7% | 37.9% | 44.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pfizer Inc ($PFZ) | 36.3% | 41.9% | 41.9% | 37.9% | 34.8% |
| Pharmstandard OJSC ($PHST) | 28.1% | 26.1% | 30.3% | 30.9% | |
| Beximco Pharmaceuticals ($BXP) | 30.5% | 29.1% | 26.9% | 27.2% | |
| Animalcare Group ($ANCR) | 29.9% | 24.2% | 25.2% | 24.5% | 25.4% |
| Source Bioscience ($SBS) | -6.8% | 16.1% | 16.7% | 20.1% | |
| |
|---|
| Median (9 companies) | 23.2% | 16.3% | 16.7% | 20.1% | 25.4% |
|---|
| Eastpharma Ltd ($EAST) | 2.8% | 21.1% | 15.6% | 16.1% | 23.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Beximco Pharmaceuticals ($BXP) | 14.1% | 11.1% | 26.1% | 24.8% | |
| Cyprotex ($CRX) | 4.0% | 3.5% | 12.0% | 12.9% | |
| Pharmstandard OJSC ($PHST) | 4.1% | 2.7% | 2.6% | 5.8% | |
| Source Bioscience ($SBS) | 46.3% | 13.7% | 7.9% | 5.3% | |
| Cathay International Hldgs Ltd ($CTI) | 19.0% | 16.7% | 12.1% | 4.0% | |
| |
|---|
| Median (9 companies) | 4.0% | 2.7% | 3.1% | 4.0% | 1.3% |
|---|
| Eastpharma Ltd ($EAST) | 9.5% | 11.9% | 12.3% | 7.1% | 6.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pharmstandard OJSC ($PHST) | 37.1% | 34.0% | 42.6% | 28.8% | |
| Animalcare Group ($ANCR) | 18.1% | 14.0% | 15.4% | 14.2% | 14.8% |
| Anpario ($ANP) | 11.9% | 15.9% | 14.7% | 13.6% | 13.8% |
| Pfizer Inc ($PFZ) | 10.8% | 11.6% | 10.9% | 9.9% | 9.1% |
| Beximco Pharmaceuticals ($BXP) | 9.4% | 9.7% | 8.9% | 8.7% | |
| |
|---|
| Median (9 companies) | 9.7% | 9.7% | 8.9% | 8.7% | 13.8% |
|---|
| Eastpharma Ltd ($EAST) | -2.9% | 6.3% | 3.0% | 3.5% | 7.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cyprotex ($CRX) | -0.2x | 0.6x | -4.3x | 20.0x | |
| Cathay International Hldgs Ltd ($CTI) | 8.2x | 15.0x | 12.2x | 6.3x | |
| Pfizer Inc ($PFZ) | 1.5x | 1.2x | 1.6x | 1.8x | 2.1x |
| Beximco Pharmaceuticals ($BXP) | 0.6x | 1.1x | 1.5x | 1.5x | |
| Source Bioscience ($SBS) | | 0.3x | 1.5x | 0.8x | |
| |
|---|
| Median (9 companies) | -0.3x | 0.3x | -0.5x | 0.8x | -1.7x |
|---|
| Eastpharma Ltd ($EAST) | 15.6x | 2.7x | 3.8x | 4.3x | 2.7x |
