X5 Retail Group N.V reports 82.6% CAPEX growth and 27.6% Revenue growth

21 Mar 2016 • About X5 Retail Group N.V ($89VS) • By InTwits

X5 Retail Group N.V reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

X5 Retail Group N.V is a fast growth stock: 2015 revenue growth was 27.6%, 5 year revenue CAGR was 18.7% at 2015 ROIC 15.7%
EBITDA Margin is relatively stable: 7.2% in 2015 vs. 7.7% in 2014 vs. 7.3% in 2011
X5 Retail Group N.V has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.9%. At the same time it's in pair with industry average of 5.6%.
CAPEX is quite volatile: 51,605 in 2015, 28,260 in 2014, 20,333 in 2013, 22,511 in 2012, 23,283 in 2011
The company has highly profitable business model: ROIC is at 15.7%
It operates with high leverage: Net Debt/EBITDA is 2.3x while industry average is 0.5x

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

X5 Retail Group N.V ($89VS) key annual financial indicators

mln. RUB	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	454,367	490,655	534,836	633,873	808,818	27.6%
Gross Profit	108,158	115,686	130,415	154,982	198,390	28.0%
SG&A			110,814	133,512	170,065	27.4%
EBITDA	33,228	33,908	37,971	48,520	58,065	19.7%
Net Income	8,862	-3,929	10,990	12,691	14,174	11.7%
Balance Sheet
Cash	12,368	12,464	7,650	25,623	8,958	-65.0%
Short Term Debt	29,407	51,405	30,838	15,834	42,670	169.5%
Long Term Debt	86,680	71,703	80,246	115,152	101,545	-11.8%
Cash flow
Capex	23,283	22,511	20,333	28,260	51,605	82.6%
Ratios
Revenue growth	32.6%	8.0%	9.0%	18.5%	27.6%
EBITDA growth	29.7%	2.0%	12.0%	27.8%	19.7%
Gross Margin	23.8%	23.6%	24.4%	24.5%	24.5%	0.1%
EBITDA Margin	7.3%	6.9%	7.1%	7.7%	7.2%	-0.5%
Net Income Margin	2.0%	-0.8%	2.1%	2.0%	1.8%	-0.2%
SG&A, % of revenue			20.7%	21.1%	21.0%	-0.0%
CAPEX, % of revenue	5.1%	4.6%	3.8%	4.5%	6.4%	1.9%
ROIC	11.9%	3.1%	13.0%	14.9%	15.7%	0.8%
ROE	14.2%	-5.8%	15.1%	15.0%	14.5%	-0.5%
Net Debt/EBITDA	3.1x	3.3x	2.7x	2.2x	2.3x	0.2x

Revenue and profitability

X5 Retail Group N.V's Revenue surged on 27.6% in 2015. EBITDA Margin showed almost no change in 2015.

Gross Margin showed almost no change in 2015. SG&A as a % of Revenue showed almost no change in 2015.

Net Income marign showed almost no change in 2015.

Capital expenditures (CAPEX) and working capital investments

The company's CAPEX/Revenue was 6.4% in 2015. CAPEX/Revenue increased slightly on 1.8 pp from 4.6% in 2012 to 6.4% in 2015. For the last three years the average CAPEX/Revenue was 4.9%.To deliver this fast growth X5 Retail Group N.V invested a large share of EBITDA (88.9%) to CAPEX.

Return on investment

The company operates at good ROIC (15.69%) and ROE (14.52%). ROIC increased slightly on 0.81 pp from 14.9% to 15.7% in 2015. ROE decreased slightly on 0.52 pp from 15.0% to 14.5% in 2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 2.3x and Debt / EBITDA is 2.5x. Net Debt / EBITDA surged on 0.2x from 2.2x to 2.3x in 2015. Debt surged on 10.1% in 2015 while cash dropped on 65.0% in 2015.

Appendix 1: Peers in Food & Drug Retailers

Below we provide X5 Retail Group N.V benchmarking against other companies in Food & Drug Retailers 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
Lenta Ltd ($LNTA)		22.4%	31.3%	34.5%	30.3%
Magnit PJSC ($MGNT)		33.5%	29.4%	32.3%	24.4%
Crawshaw Group ($CRAW)		-0.9%	-0.6%	11.9%	17.1%
Total Produce ($TOT)		6.4%	8.5%	1.1%	7.8%
Dairy Farm International Hldgs ($DFIB)		7.3%	5.7%	6.3%	1.2%
Median (7 companies)	12.7%	14.9%	7.1%	7.6%	7.8%
X5 Retail Group N.V ($89VS)		8.0%	9.0%	18.5%	27.6%

Top companies by Gross margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Snacktime ($SNAK)	55.0%	56.6%	51.8%	55.1%	53.9%
Crawshaw Group ($CRAW)	43.6%	43.3%	43.7%	43.8%	44.4%
Dairy Farm International Hldgs ($DFIB)	29.4%	28.9%	29.8%	29.9%	29.5%
Magnit PJSC ($MGNT)	24.3%	26.5%	28.5%	28.9%	28.5%
Jardine Matheson Hldgs ($J36)	22.6%	22.4%	22.3%	23.4%	23.3%
Median (7 companies)	23.6%	25.0%	26.2%	26.7%	28.5%
X5 Retail Group N.V ($89VS)	23.8%	23.6%	24.4%	24.5%	24.5%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Jardine Matheson Hldgs ($J36)	24.4%	13.1%	11.6%	11.8%	12.8%
Lenta Ltd ($LNTA)	9.3%	10.7%	11.2%	11.0%	11.1%
Magnit PJSC ($MGNT)	7.8%	10.3%	11.0%	11.3%	10.9%
Crawshaw Group ($CRAW)	5.4%	3.7%	3.4%	6.5%	6.4%
Dairy Farm International Hldgs ($DFIB)	7.6%	6.6%	6.9%	6.6%	5.8%
Median (7 companies)	7.9%	7.3%	7.1%	6.9%	6.4%
X5 Retail Group N.V ($89VS)	7.3%	6.9%	7.1%	7.7%	7.2%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Lenta Ltd ($LNTA)	4.4%	13.4%	16.2%	17.9%	12.3%
Crawshaw Group ($CRAW)	3.6%	1.1%	1.0%	1.2%	6.3%
Magnit PJSC ($MGNT)	14.5%	10.5%	8.6%	7.3%	5.7%
Jardine Matheson Hldgs ($J36)	3.6%	4.9%	4.4%	3.5%	3.6%
Snacktime ($SNAK)	2.6%	5.3%	4.3%	3.4%	2.5%
Median (7 companies)	3.6%	5.1%	4.3%	3.4%	3.6%
X5 Retail Group N.V ($89VS)	5.1%	4.6%	3.8%	4.5%	6.4%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Magnit PJSC ($MGNT)	17.9%	23.1%	26.0%	33.2%	32.6%
Dairy Farm International Hldgs ($DFIB)	39.6%	32.8%	34.6%	31.1%	21.6%
Lenta Ltd ($LNTA)	44.1%	42.9%	34.0%	24.5%	20.3%
Total Produce ($TOT)	8.8%	9.0%	11.9%	10.3%	9.5%
Crawshaw Group ($CRAW)	5.5%	1.2%	2.1%	8.6%	7.1%
Median (7 companies)	18.1%	16.1%	16.8%	13.7%	9.5%
X5 Retail Group N.V ($89VS)	11.9%	3.1%	13.0%	14.9%	15.7%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Snacktime ($SNAK)	0.8x	2.0x	6.0x	4.4x
Lenta Ltd ($LNTA)	2.4x	2.2x	2.5x	2.8x	1.9x
O'Key Group Sa ($OKEY)	1.2x	1.0x	1.3x	2.4x
Jardine Matheson Hldgs ($J36)	0.6x	1.4x	1.3x	1.3x	1.3x
Magnit PJSC ($MGNT)	1.3x	1.1x	1.1x	0.9x	0.9x
Median (8 companies)	1.0x	1.0x	1.2x	1.1x	0.8x
X5 Retail Group N.V ($89VS)	3.1x	3.3x	2.7x	2.2x	2.3x

X5 Retail Group N.V stock price chart

X5 Retail Group N.V financials

mln.	FY2010	FY2011	FY2012

Revenue	342,588	454,367	490,655
EBITDA	25,620	33,228	33,908
Net income	8,251	8,862	-3,929.430
CAPEX	11,120	23,283	22,511
Debt	112,650	116,087	123,108
Cash	8,268	12,368	12,464

About X5 Retail Group N.V

X5 Retail Group N.V. develops and operates grocery retail stores primarily in the Russian Federation. It operates proximity stores chain under the Pyaterochka brand, supermarket chain under the Perekrestok brand, hypermarket chain under the Karusel brand, and convenience stores under the Perekrestok Express brand, as well as operates soft discounter stores in the Samara region of the Russian Federation, as well as provides franchise services. As of December 31, 2014, the company had 5,483 company-operated stores, including 4,789 Pyaterochka proximity stores; 403 Perekrestok supermarkets; 82 Karusel hypermarkets; and 209 Perekrestok Express convenience stores, as well as operated 312 stores by franchise partners. X5 Retail Group N.V. was founded in 1975 and is based in Moscow, the Russian Federation.