Megafon OJSC reports 8.3% CAPEX growth and almost no change in Revenue of 313,383
17 Mar 2016 • About Megafon OJSC (
$MFON) • By InTwits
Megafon OJSC reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Megafon OJSC has high CAPEX intensity: 5 year average CAPEX/Revenue was 20.1%. At the same time it's a lot of higher than industry average of 12.8%.
- CAPEX is quite volatile: 34,936 in FY2015, 43,361 in FY2014, 42,702 in FY2013, 53,507 in FY2012, 92,321 in FY2011
- The company has highly profitable business model: ROIC is at 19.6%
- It operates with high leverage: Net Debt/EBITDA is 1.5x while industry average is 0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Megafon OJSC ($MFON) key annual financial indicators
| mln. RUB | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 242,608 | 272,336 | 297,229 | 314,795 | 313,383 | -0.4% |
| Gross Profit | 183,712 | 205,382 | 221,837 | 230,166 | 228,973 | -0.5% |
| SG&A | 81,147 | 86,914 | 87,208 | 90,248 | 94,516 | 4.7% |
| EBITDA | 100,822 | 115,436 | 131,392 | 137,083 | 131,444 | -4.1% |
| Net Income | 43,579 | 44,393 | 51,608 | 36,726 | 39,041 | 6.3% |
Balance Sheet
|
|---|
| Cash | 2,887 | 2,387 | 9,939 | 22,223 | 17,449 | -21.5% |
| Short Term Debt | 9,965 | 20,457 | 21,184 | 51,149 | 47,037 | -8.0% |
| Long Term Debt | 36,294 | 125,575 | 130,825 | 156,319 | 172,643 | 10.4% |
Cash flow
|
|---|
| Capex | 73,332 | 46,674 | 43,022 | 58,146 | 62,956 | 8.3% |
Ratios
|
|---|
| Revenue growth | 12.6% | 12.3% | 9.1% | 5.9% | -0.4% | |
| EBITDA growth | 3.1% | 14.5% | 13.8% | 4.3% | -4.1% | |
| Gross Margin | 75.7% | 75.4% | 74.6% | 73.1% | 73.1% | -0.1% |
| EBITDA Margin | 41.6% | 42.4% | 44.2% | 43.5% | 41.9% | -1.6% |
| Net Income Margin | 18.0% | 16.3% | 17.4% | 11.7% | 12.5% | 0.8% |
| SG&A, % of revenue | 33.4% | 31.9% | 29.3% | 28.7% | 30.2% | 1.5% |
| CAPEX, % of revenue | 30.2% | 17.1% | 14.5% | 18.5% | 20.1% | 1.6% |
| ROIC | 17.4% | 21.0% | 27.7% | 23.7% | 19.6% | -4.1% |
| ROE | 17.1% | 22.6% | 40.4% | 24.8% | 25.6% | 0.7% |
| Net Debt/EBITDA | 0.4x | 1.2x | 1.1x | 1.4x | 1.5x | 0.2x |
Revenue and profitability
Megafon OJSC's Revenue showed almost no change in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.7 pp from 5.9% to 8.6% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue increased slightly on 1.5 pp from 28.7% to 30.2% in 2015.
Net Income marign increased slightly on 0.79 pp from 11.7% to 12.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
Megafon OJSC's CAPEX/Revenue was 20.1% in 2015. CAPEX/Revenue increased on 3.0 pp from 17.1% in 2012 to 20.1% in 2015. Average CAPEX/Revenue for the last three years was 17.7%.
Return on investment
The company operates at high and attractive ROE (25.55%) while ROIC is a bit lower (19.61%). ROIC decreased on 4.1 pp from 23.7% to 19.6% in 2015. ROE increased slightly on 0.71 pp from 24.8% to 25.6% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.5x and Debt / EBITDA is 1.7x. Net Debt / EBITDA jumped on 0.2x from 1.4x to 1.5x in 2015. Debt increased on 5.9% in 2015 while cash dropped on 21.5% in 2015.
Appendix 1: Peers in Mobile Telecommunications
Below you can find Megafon OJSC benchmarking vs. other companies in Mobile Telecommunications 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 |
|---|
| Zamano ($ZMNO) | | 28.0% | -16.5% | 23.9% | 22.3% |
| Sk Telecom ($SKMD) | | 1.3% | 2.9% | 3.4% | -0.2% |
| Monitise ($MONI) | | 136.2% | 101.7% | 30.6% | -5.7% |
| Kcell JSC ($KCEL) | | 1.8% | 3.1% | -0.0% | -10.2% |
| Global Telecom Hldg Sae ($GLTD) | | -0.2% | -4.6% | -3.6% | -13.3% |
| |
|---|
| Median (5 companies) | 19.1% | 5.7% | -0.9% | 6.0% | -5.7% |
|---|
| Megafon OJSC ($MFON) | | 12.3% | 9.1% | 5.9% | -0.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sk Telecom ($SKMD) | 94.0% | 92.0% | 92.2% | 90.2% | 88.6% |
| Global Telecom Hldg Sae ($GLTD) | 55.9% | 57.6% | 82.1% | 83.4% | 81.8% |
| Monitise ($MONI) | 61.5% | 66.4% | 75.8% | 64.9% | 51.8% |
| Kcell JSC ($KCEL) | 60.9% | 58.1% | 57.6% | 55.1% | 46.6% |
| Zamano ($ZMNO) | 24.8% | 28.2% | 31.0% | 24.1% | 21.0% |
| |
|---|
| Median (5 companies) | 60.2% | 58.8% | 66.7% | 60.0% | 51.8% |
|---|
| Megafon OJSC ($MFON) | 75.7% | 75.4% | 74.6% | 73.1% | 73.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kcell JSC ($KCEL) | 59.2% | 55.3% | 55.8% | 55.5% | 45.8% |
| Global Telecom Hldg Sae ($GLTD) | 49.2% | 50.8% | 12.1% | 42.8% | 43.9% |
| Monitise ($MONI) | -88.9% | -36.7% | -5.1% | -21.1% | 40.0% |
| Sk Telecom ($SKMD) | 29.7% | 26.9% | 29.2% | 27.5% | 27.4% |
| Zamano ($ZMNO) | 2.4% | 13.1% | 15.9% | 13.4% | 12.0% |
| |
|---|
| Median (5 companies) | 25.6% | 23.5% | 22.5% | 25.7% | 40.0% |
|---|
| Megafon OJSC ($MFON) | 41.6% | 42.4% | 44.2% | 43.5% | 41.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Global Telecom Hldg Sae ($GLTD) | 12.4% | 8.6% | 15.7% | 36.5% | 26.2% |
| Sk Telecom ($SKMD) | 18.6% | 21.0% | 17.3% | 17.5% | 14.5% |
| Kcell JSC ($KCEL) | 13.7% | 12.8% | 9.2% | 9.6% | 9.5% |
| Monitise ($MONI) | 15.0% | 8.7% | 7.0% | 5.1% | 4.6% |
| Zamano ($ZMNO) | 0.2% | 0.2% | 0.6% | 0.4% | 0.4% |
| |
|---|
| Median (5 companies) | 13.1% | 10.0% | 11.2% | 11.9% | 9.5% |
|---|
| Megafon OJSC ($MFON) | 30.2% | 17.1% | 14.5% | 18.5% | 20.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kcell JSC ($KCEL) | 69.2% | 63.7% | 66.0% | 62.9% | 40.2% |
| Zamano ($ZMNO) | -4.4% | 31.4% | 30.9% | 25.5% | 23.3% |
| Global Telecom Hldg Sae ($GLTD) | 15.4% | 17.8% | -6.9% | 17.4% | 14.7% |
| Sk Telecom ($SKMD) | 11.9% | 8.9% | 9.8% | 8.3% | 7.3% |
| Monitise ($MONI) | -63.1% | -16.7% | -9.4% | -13.1% | -24.3% |
| |
|---|
| Median (5 companies) | 12.0% | 14.8% | 11.0% | 12.9% | 14.7% |
|---|
| Megafon OJSC ($MFON) | 17.4% | 21.0% | 27.7% | 23.7% | 19.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Global Telecom Hldg Sae ($GLTD) | 1.7x | 1.5x | 5.6x | 2.0x | 1.6x |
| Sk Telecom ($SKMD) | 0.9x | 1.4x | 1.1x | 1.3x | 1.5x |
| Kcell JSC ($KCEL) | -0.0x | 0.5x | 0.1x | 0.1x | 0.2x |
| Zamano ($ZMNO) | 12.4x | -0.1x | -0.8x | -1.7x | -2.1x |
| Monitise ($MONI) | | | | | -2.2x |
| |
|---|
| Median (5 companies) | 1.7x | 1.4x | 1.1x | 1.3x | 0.2x |
|---|
| Megafon OJSC ($MFON) | 0.4x | 1.2x | 1.1x | 1.4x | 1.5x |
