Novolipetsk Iron And Steel Corp revenue dropped on 23.0% in 2015 while EBITDA Margin increased on 2.5 pp from 21.8% to 24.3%
24 Mar 2016 • About Novolipetsk Iron And Steel Corp (
$NLMK) • By InTwits
Novolipetsk Iron And Steel Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Novolipetsk Iron And Steel Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.9%. At the same time it's in pair with industry average of 10.5%.
- CAPEX is quite volatile: 619 in 2015, 560 in 2014, 756 in 2013, 1,453 in 2012, 2,048 in 2011
- The company has highly profitable business model: ROIC is at 15.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Novolipetsk Iron And Steel Corp ($NLMK) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 11,729 | 12,157 | 10,909 | 10,396 | 8,008 | -23.0% |
| Gross Profit | 3,360 | 2,894 | 2,119 | 2,937 | 2,513 | -14.5% |
| SG&A | 1,529 | 1,592 | 1,341 | 1,203 | 1,063 | -11.7% |
| EBITDA | 2,254 | 1,900 | 1,505 | 2,269 | 1,948 | -14.1% |
| Net Income | 1,358 | 596 | 189 | 845 | 967 | 14.5% |
Balance Sheet
|
|---|
| Cash | 797 | 951 | 970 | 549 | 343 | -37.5% |
| Short Term Debt | 1,321 | 1,838 | 1,137 | 804 | 560 | -30.4% |
| Long Term Debt | 3,100 | 2,850 | 3,054 | 1,964 | 2,116 | 7.7% |
Cash flow
|
|---|
| Capex | 2,048 | 1,453 | 756 | 560 | 619 | 10.4% |
Ratios
|
|---|
| Revenue growth | 40.4% | 3.6% | -10.3% | -4.7% | -23.0% | |
| EBITDA growth | -0.4% | -15.7% | -20.8% | 50.7% | -14.1% | |
| Gross Margin | 28.6% | 23.8% | 19.4% | 28.3% | 31.4% | 3.1% |
| EBITDA Margin | 19.2% | 15.6% | 13.8% | 21.8% | 24.3% | 2.5% |
| Net Income Margin | 11.6% | 4.9% | 1.7% | 8.1% | 12.1% | 4.0% |
| SG&A, % of revenue | 13.0% | 13.1% | 12.3% | 11.6% | 13.3% | 1.7% |
| CAPEX, % of revenue | 17.5% | 12.0% | 6.9% | 5.4% | 7.7% | 2.3% |
| ROIC | 11.8% | 7.2% | 4.1% | 12.0% | 15.7% | 3.7% |
| ROE | 13.7% | 5.6% | 1.8% | 10.2% | 16.9% | 6.7% |
| Net Debt/EBITDA | 1.6x | 2.0x | 2.1x | 1.0x | 1.2x | 0.2x |
Revenue and profitability
The company's Revenue dropped on 23.0% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.5 pp from 21.8% to 24.3% in 2015.
Gross Margin increased on 3.1 pp from 28.3% to 31.4% in 2015. SG&A as a % of Revenue increased slightly on 1.7 pp from 11.6% to 13.3% in 2015.
Net Income marign increased on 4.0 pp from 8.1% to 12.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
Novolipetsk Iron And Steel Corp's CAPEX/Revenue was 7.7% in 2015. Novolipetsk Iron And Steel Corp's CAPEX/Revenue decreased on 4.2 pp from 12.0% in 2012 to 7.7% in 2015. For the last three years the average CAPEX/Revenue was 6.7%.
Return on investment
The company operates at good ROIC (15.71%) and ROE (16.92%). ROIC increased on 3.7 pp from 12.0% to 15.7% in 2015. ROE increased on 6.7 pp from 10.2% to 16.9% in 2015.
Leverage (Debt)
Debt level is 1.2x Net Debt / EBITDA and 1.4x Debt / EBITDA. Net Debt / EBITDA surged on 0.2x from 1.0x to 1.2x in 2015. Debt decreased on 3.3% in 2015 while cash dropped on 37.5% in 2015.
Valuation
Novolipetsk Iron And Steel Corp's trades at EV/EBITDA 1.2x and P/E 0.1x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 1.8x with the industry average at 4.7x.
Appendix 1: Peers in Industrial Metals & Mining
Below we provide Novolipetsk Iron And Steel Corp benchmarking against other companies in Industrial Metals & Mining 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 |
|---|
| Base Resources Ltd ($BSE) | | | | | 399.7% |
| Norsk Hydro Asa ($NHY) | | -10.2% | 1.1% | 20.1% | 12.6% |
| Afarak Group ($AFRK) | | -19.2% | 5.4% | 27.4% | 8.7% |
| Aluminium Bahrain Bsc ($ALBH) | | -15.8% | 0.8% | 9.7% | -6.7% |
| Zibao Metals Recycling Hldgs Ltd ($ZBO) | | 196.8% | 8.2% | 1.7% | -9.0% |
| |
|---|
| Median (11 companies) | 15.2% | -9.0% | 0.3% | 2.4% | -10.6% |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | | 3.6% | -10.3% | -4.7% | -23.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 59.0% | 49.1% | 43.4% | 52.2% | 55.7% |
| Severstal PJSC ($SVST) | 31.0% | 23.5% | 29.9% | 34.4% | 40.4% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 22.5% | 17.7% | 15.1% | 28.6% | |
| First Quantum Minerals ($FQM) | 50.6% | 37.3% | 31.9% | 28.2% | 11.4% |
| Magnitogorsk Iron & Steel Works ($MMK) | 16.7% | 15.5% | 14.9% | 21.9% | 30.6% |
| |
|---|
| Median (13 companies) | 19.0% | 14.8% | 14.9% | 18.0% | 20.5% |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | 28.6% | 23.8% | 19.4% | 28.3% | 31.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 49.5% | 38.6% | 29.2% | 46.8% | 47.0% |
| First Quantum Minerals ($FQM) | 47.7% | 80.0% | 38.1% | 39.9% | 17.8% |
| Severstal PJSC ($SVST) | 22.5% | 14.9% | 19.3% | 26.4% | 32.4% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 17.1% | 12.7% | 5.7% | 25.3% | |
| Aluminium Bahrain Bsc ($ALBH) | 28.6% | 18.5% | 18.4% | 21.6% | 17.3% |
| |
|---|
| Median (15 companies) | 15.3% | 12.9% | 12.1% | 12.6% | 17.3% |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | 19.2% | 15.6% | 13.8% | 21.8% | 24.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Base Resources Ltd ($BSE) | | | | 401.9% | 6.3% |
| First Quantum Minerals ($FQM) | 40.6% | 46.5% | 73.2% | 81.7% | 72.5% |
| Mmc Norilsk Nickel ($MNOD) | 15.6% | 22.3% | 17.1% | 10.8% | 19.0% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 9.0% | 7.0% | 7.9% | 9.9% | |
| Vimetco Nv ($VICO) | | | | 8.8% | |
| |
|---|
| Median (15 companies) | 6.0% | 6.7% | 7.7% | 6.4% | 6.0% |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | 17.5% | 12.0% | 6.9% | 5.4% | 7.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Zibao Metals Recycling Hldgs Ltd ($ZBO) | | 41.7% | 56.6% | 55.8% | 26.6% |
| Mmc Norilsk Nickel ($MNOD) | 32.4% | 21.8% | 14.2% | 34.1% | 31.7% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 13.6% | 6.2% | -2.7% | 25.6% | |
| Severstal PJSC ($SVST) | 21.3% | 10.3% | 9.6% | 17.7% | 30.3% |
| Aluminium Bahrain Bsc ($ALBH) | 15.6% | 5.4% | 5.6% | 9.3% | 5.6% |
| |
|---|
| Median (15 companies) | 11.0% | 5.4% | 4.9% | 7.4% | 8.1% |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | 11.8% | 7.2% | 4.1% | 12.0% | 15.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| First Quantum Minerals ($FQM) | -0.3x | 0.0x | 2.5x | 4.0x | 10.5x |
| Base Resources Ltd ($BSE) | | | | | 4.4x |
| OAO TMK ($TMKS) | 3.5x | 3.6x | 3.9x | 3.8x | 4.3x |
| Posco ($PIDD) | 2.9x | 3.3x | 3.9x | 3.7x | 3.6x |
| Mmc Norilsk Nickel ($MNOD) | 0.5x | 0.9x | 1.4x | 0.6x | 1.0x |
| |
|---|
| Median (11 companies) | 3.0x | 1.9x | 2.0x | 1.1x | 0.9x |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | 1.6x | 2.0x | 2.1x | 1.0x | 1.2x |
