Frutarom Industries Debt jumped on 109% in 2015 and Revenue increased on 6.5%
17 Mar 2016 • About Frutarom Industries (
$FRUT) • By InTwits
Frutarom Industries reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Frutarom Industries is a growth stock: 2015 revenue growth was 6.5%, 5 year revenue CAGR was 14.1% at 2015 ROIC 14.1%
- Frutarom Industries has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's in pair with industry average of 17.1%.
- CAPEX is quite volatile: 23.9 in 2015, 21.4 in 2014, 20.1 in 2013, 12.6 in 2012, 7.8 in 2011
- The company has highly profitable business model: ROIC is at 14.1%
- It operates with high leverage: Net Debt/EBITDA is 2.6x while industry average is 1.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Frutarom Industries ($FRUT) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 518.4 | 618.0 | 673.7 | 819.5 | 872.8 | 6.5% |
| Gross Profit | 188.6 | 226.3 | 256.8 | 320.6 | 338.1 | 5.5% |
| SG&A | 94.1 | 141.3 | 153.7 | 184.2 | 185.2 | 0.5% |
| EBITDA | 79.3 | 98.9 | 114.5 | 149.5 | 161.6 | 8.1% |
| Net Income | 42.0 | 51.6 | 63.1 | 86.7 | 94.9 | 9.5% |
Balance Sheet
|
|---|
| Cash | 36.5 | 53.9 | 57.6 | 64.0 | 69.0 | 7.8% |
| Short Term Debt | 52.7 | 52.2 | 108.2 | 67.8 | 264.5 | 290.4% |
| Long Term Debt | 88.9 | 137.8 | 140.1 | 163.7 | 219.4 | 34.1% |
Cash flow
|
|---|
| Capex | 7.8 | 12.6 | 20.1 | 21.4 | 23.9 | 11.7% |
Ratios
|
|---|
| Revenue growth | 14.9% | 19.2% | 9.0% | 21.6% | 6.5% | |
| EBITDA growth | -2.2% | 24.7% | 15.8% | 30.6% | 8.1% | |
| Gross Margin | 36.4% | 36.6% | 38.1% | 39.1% | 38.7% | -0.4% |
| EBITDA Margin | 15.3% | 16.0% | 17.0% | 18.2% | 18.5% | 0.3% |
| Net Income Margin | 8.1% | 8.3% | 9.4% | 10.6% | 10.9% | 0.3% |
| SG&A, % of revenue | 18.2% | 22.9% | 22.8% | 22.5% | 21.2% | -1.3% |
| CAPEX, % of revenue | 1.5% | 2.0% | 3.0% | 2.6% | 2.7% | 0.1% |
| ROIC | 11.7% | 12.0% | 11.9% | 15.1% | 14.1% | -1.0% |
| ROE | 11.2% | 12.3% | 13.1% | 16.7% | 17.8% | 1.1% |
| Net Debt/EBITDA | 1.3x | 1.4x | 1.7x | 1.1x | 2.6x | 1.4x |
Revenue and profitability
Frutarom Industries's Revenue increased on 6.5% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.0 pp from 9.8% to 12.8% in FY2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue decreased slightly on 1.3 pp from 22.5% to 21.2% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.7% in 2015. Frutarom Industries showed small growth in CAPEX/Revenue of 0.71 pp from 2.0% in 2012 to 2.7% in 2015. Average CAPEX/Revenue for the last three years was 2.8%.
Return on investment
The company operates at good ROIC (14.10%) and ROE (17.84%). ROIC decreased slightly on 1.0 pp from 15.1% to 14.1% in 2015. ROE increased slightly on 1.1 pp from 16.7% to 17.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is 3.0x. Net Debt / EBITDA surged on 1.4x from 1.1x to 2.6x in 2015. Debt jumped on 109% in 2015 while cash increased on 7.8% in 2015.
Valuation
The company's trades at EV/EBITDA 2.7x and P/E 0.3x while industy averages are 10.5x and 26.1x. Frutarom Industries's EV/(EBITDA-CAPEX) is 3.2x with the industry average at 4.7x.
Appendix 1: Peers in Chemicals
Below we provide Frutarom Industries benchmarking against other companies in Chemicals 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 |
|---|
| Phosagro OJSC ($PHOR) | 30.6% | 4.8% | -0.7% | 17.7% | |
| Halosource Inc ($HALO) | | 10.3% | 21.0% | 11.6% | -22.3% |
| Acron JSC ($AKRN) | 40.0% | 8.7% | -4.5% | 9.9% | |
| Uralkali PJSC ($URKA) | 105.7% | 13.0% | -15.9% | 7.1% | |
| Plastics Capital ($PLA) | | -4.2% | -2.1% | 3.3% | 21.9% |
| |
|---|
| Median (9 companies) | 35.3% | 3.7% | -0.7% | 3.3% | -5.2% |
|---|
| Frutarom Industries ($FRUT) | | 19.2% | 9.0% | 21.6% | 6.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Uralkali PJSC ($URKA) | 74.6% | | 71.6% | 74.3% | |
| Phosagro OJSC ($PHOR) | 44.1% | 42.9% | 34.8% | 45.2% | |
| Halosource Inc ($HALO) | 34.8% | 32.9% | 40.7% | 44.8% | 40.2% |
| Acron JSC ($AKRN) | 45.8% | 43.1% | 38.1% | 42.8% | |
| Plastics Capital ($PLA) | 40.6% | 36.2% | 36.6% | 36.0% | 35.3% |
| |
|---|
| Median (9 companies) | 42.3% | 35.1% | 35.2% | 36.0% | 34.9% |
|---|
| Frutarom Industries ($FRUT) | 36.4% | 36.6% | 38.1% | 39.1% | 38.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Uralkali PJSC ($URKA) | 59.2% | | 44.5% | 48.6% | |
| Phosagro OJSC ($PHOR) | 35.2% | 32.9% | 22.9% | 30.5% | |
| Arab Potash Co ($APOD) | 51.0% | 47.2% | 36.3% | 27.7% | |
| Acron JSC ($AKRN) | 44.8% | 28.4% | 22.7% | 27.2% | |
| Croda International ($50GP) | | 27.2% | 27.6% | 26.7% | 27.7% |
| |
|---|
| Median (9 companies) | 25.8% | 21.0% | 22.7% | 26.7% | 15.2% |
|---|
| Frutarom Industries ($FRUT) | 15.3% | 16.0% | 17.0% | 18.2% | 18.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Phosagro OJSC ($PHOR) | 12.8% | 12.7% | 17.0% | 16.7% | |
| Acron JSC ($AKRN) | 16.6% | 22.7% | 21.3% | 15.4% | |
| Uralkali PJSC ($URKA) | 10.4% | | 12.5% | 9.8% | |
| Basf Se ($BFA) | 4.6% | 5.6% | 6.6% | 7.1% | 8.2% |
| Lg Chem ($LGCD) | 9.7% | 8.2% | 5.9% | 6.3% | 8.1% |
| |
|---|
| Median (9 companies) | 10.1% | 6.5% | 6.6% | 6.3% | 8.1% |
|---|
| Frutarom Industries ($FRUT) | 1.5% | 2.0% | 3.0% | 2.6% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Croda International ($50GP) | | 46.5% | 42.3% | 35.3% | 30.5% |
| Phosagro OJSC ($PHOR) | 32.4% | 28.5% | 15.0% | 21.6% | |
| Basf Se ($BFA) | 20.8% | 15.4% | 16.6% | 16.6% | 13.5% |
| Uralkali PJSC ($URKA) | 23.7% | | | 13.2% | |
| Acron JSC ($AKRN) | 27.7% | 14.4% | 9.2% | 10.6% | |
| |
|---|
| Median (9 companies) | 24.1% | 14.9% | 12.8% | 10.6% | 11.6% |
|---|
| Frutarom Industries ($FRUT) | 11.7% | 12.0% | 11.9% | 15.1% | 14.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Acron JSC ($AKRN) | 1.2x | 1.6x | 2.4x | 2.8x | |
| Phosagro OJSC ($PHOR) | 0.4x | 0.8x | 1.8x | 2.5x | |
| Uralkali PJSC ($URKA) | 1.1x | | 2.8x | 1.8x | |
| Plastics Capital ($PLA) | 2.3x | 2.1x | 1.9x | 1.4x | 2.2x |
| Basf Se ($BFA) | 0.9x | 1.2x | 1.2x | 1.3x | 1.2x |
| |
|---|
| Median (8 companies) | 0.9x | 0.8x | 1.5x | 1.3x | 1.0x |
|---|
| Frutarom Industries ($FRUT) | 1.3x | 1.4x | 1.7x | 1.1x | 2.6x |
