Far Eastern New Century Corp CAPEX dropped on 15.0% in 2015 and Revenue decreased on 7.5%
31 Mar 2016 • About Far Eastern New Century Corp (
$FETD) • By InTwits
Far Eastern New Century Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Far Eastern New Century Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.7%. At the same time it's a lot of higher than industry average of 5.0%.
- CAPEX is quite volatile: 25,769 in FY2015, 47,237 in FY2014, 9,927 in FY2013, 9,260 in FY2012, 10,554 in FY2011
- The company has potentially unprofitable business model: ROIC is at 3.0%
- It operates with high leverage: Net Debt/EBITDA is 5.1x while industry average is 1.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Far Eastern New Century Corp ($FETD) key annual financial indicators
| mln. TWD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 235,561 | 236,792 | 238,841 | 235,507 | 217,948 | -7.5% |
| Gross Profit | 46,312 | 44,294 | 46,604 | 47,733 | 50,484 | 5.8% |
| SG&A | | 32,077 | 33,172 | 36,040 | 35,970 | -0.2% |
| EBITDA | 33,182 | 29,224 | 29,955 | 28,601 | 32,778 | 14.6% |
| Net Income | 11,088 | 4,918 | 13,216 | 10,853 | 8,035 | -26.0% |
Balance Sheet
|
|---|
| Cash | 28,331 | 30,645 | 26,646 | 25,985 | 40,879 | 57.3% |
| Short Term Debt | 40,662 | 36,086 | 59,731 | 60,446 | 69,302 | 14.7% |
| Long Term Debt | 61,451 | 73,958 | 109,261 | 124,711 | 140,368 | 12.6% |
Cash flow
|
|---|
| Capex | 18,167 | 17,537 | 24,988 | 28,368 | 24,118 | -15.0% |
Ratios
|
|---|
| Revenue growth | 17.7% | 0.5% | 0.9% | -1.4% | -7.5% | |
| EBITDA growth | -11.7% | -11.9% | 2.5% | -4.5% | 14.6% | |
| Gross Margin | 19.7% | 18.7% | 19.5% | 20.3% | 23.2% | 2.9% |
| EBITDA Margin | 14.1% | 12.3% | 12.5% | 12.1% | 15.0% | 2.9% |
| Net Income Margin | 4.7% | 2.1% | 5.5% | 4.6% | 3.7% | -0.9% |
| SG&A, % of revenue | | 13.5% | 13.9% | 15.3% | 16.5% | 1.2% |
| CAPEX, % of revenue | 7.7% | 7.4% | 10.5% | 12.0% | 11.1% | -1.0% |
| ROIC | 6.9% | 4.3% | 3.6% | 2.6% | 3.0% | 0.5% |
| ROE | 10.6% | 4.4% | 8.7% | 5.5% | 4.0% | -1.5% |
| Net Debt/EBITDA | 2.2x | 2.7x | 4.8x | 5.6x | 5.1x | -0.4x |
Revenue and profitability
The company's Revenue decreased on 7.5% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.9 pp from 12.1% to 15.0% in 2015.
Gross Margin increased on 2.9 pp from 20.3% to 23.2% in 2015. SG&A as a % of Revenue increased slightly on 1.2 pp from 15.3% to 16.5% in 2015.
Net Income marign decreased slightly on 0.92 pp from 4.6% to 3.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 11.1%. CAPEX/Revenue increased on 3.7 pp from 7.4% in 2012 to 11.1% in 2015. It's average CAPEX/Revenue for the last three years was 11.2%.Battling declining revenue the company invested a large share of EBITDA (73.6%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (3.04%) and ROE (4.05%). ROIC showed almost no change in 2015. ROE decreased slightly on 1.5 pp from 5.5% to 4.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.1x and Debt / EBITDA is 6.4x. Net Debt / EBITDA dropped on 0.4x from 5.6x to 5.1x in 2015. Debt jumped on 13.2% in 2015 while cash jumped on 57.3% in 2015.
Appendix 1: Peers in Personal Goods
Below you can find Far Eastern New Century Corp benchmarking vs. other companies in Personal Goods 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 |
|---|
| Svenska Cellulosa Ab-Sca ($0MCK) | | 5.0% | 8.7% | 12.0% | 10.8% |
| Creightons ($CRL) | | 15.6% | 6.1% | 11.7% | 4.2% |
| Swallowfield ($SWL) | | 0.7% | -16.0% | 3.0% | -1.2% |
| Pittards ($PTD) | | -3.1% | -3.3% | -3.0% | -12.1% |
| Bagir Grp Ltd ($BAGR) | | 1.6% | 14.8% | -2.5% | -22.5% |
| |
|---|
| Median (5 companies) | | 1.6% | 6.1% | 3.0% | -1.2% |
|---|
| Far Eastern New Century Corp ($FETD) | | | 0.9% | -1.4% | -7.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Creightons ($CRL) | 42.0% | 42.1% | 42.8% | 40.8% | 39.2% |
| Svenska Cellulosa Ab-Sca ($0MCK) | 23.3% | 24.2% | 24.8% | 25.1% | 25.9% |
| Pittards ($PTD) | 23.2% | 17.4% | 20.5% | 20.3% | 21.7% |
| Swallowfield ($SWL) | 10.9% | 10.6% | 8.2% | 10.3% | 11.8% |
| Bagir Grp Ltd ($BAGR) | 13.0% | 17.0% | 19.1% | 17.4% | 9.8% |
| |
|---|
| Median (5 companies) | 23.2% | 17.4% | 20.5% | 20.3% | 21.7% |
|---|
| Far Eastern New Century Corp ($FETD) | | 18.7% | 19.5% | 20.3% | 23.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Svenska Cellulosa Ab-Sca ($0MCK) | 10.0% | 12.6% | 15.0% | 15.2% | 14.6% |
| Pittards ($PTD) | 8.9% | 4.6% | 6.6% | 6.9% | 6.2% |
| Creightons ($CRL) | 3.4% | 4.0% | 4.6% | 4.7% | 5.0% |
| Swallowfield ($SWL) | 4.5% | 4.9% | 1.8% | 4.0% | 4.5% |
| Bagir Grp Ltd ($BAGR) | -23.3% | 3.9% | 6.1% | 3.4% | -3.9% |
| |
|---|
| Median (5 companies) | 4.5% | 4.6% | 6.1% | 4.7% | 5.0% |
|---|
| Far Eastern New Century Corp ($FETD) | | 12.3% | 12.5% | 12.1% | 15.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pittards ($PTD) | 3.3% | 1.7% | 1.0% | 1.7% | 14.3% |
| Svenska Cellulosa Ab-Sca ($0MCK) | 7.3% | 6.6% | 6.1% | 5.5% | 6.6% |
| Swallowfield ($SWL) | 2.6% | 2.1% | 1.5% | 1.8% | 3.1% |
| Creightons ($CRL) | 0.8% | 1.9% | 0.6% | 1.1% | 0.8% |
| Bagir Grp Ltd ($BAGR) | 0.6% | 0.2% | 0.3% | 0.2% | 0.1% |
| |
|---|
| Median (5 companies) | 2.6% | 1.9% | 1.0% | 1.7% | 3.1% |
|---|
| Far Eastern New Century Corp ($FETD) | | 7.4% | 10.5% | 12.0% | 11.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Svenska Cellulosa Ab-Sca ($0MCK) | 2.0% | 5.5% | 8.2% | 8.7% | 9.0% |
| Creightons ($CRL) | 5.3% | 6.3% | 7.0% | 8.4% | 8.8% |
| Swallowfield ($SWL) | 8.5% | 10.9% | -3.1% | 5.1% | 8.4% |
| Pittards ($PTD) | 14.5% | 4.7% | 9.1% | 8.2% | 5.2% |
| Bagir Grp Ltd ($BAGR) | | 4.7% | 18.8% | 1.9% | -24.8% |
| |
|---|
| Median (5 companies) | 6.9% | 5.5% | 8.2% | 8.2% | 8.4% |
|---|
| Far Eastern New Century Corp ($FETD) | | 4.3% | 3.6% | 2.6% | 3.0% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pittards ($PTD) | 1.5x | 3.3x | 3.0x | 3.2x | 3.4x |
| Svenska Cellulosa Ab-Sca ($0MCK) | 4.4x | 2.9x | 2.6x | 2.2x | 1.7x |
| Swallowfield ($SWL) | -0.1x | -0.0x | -0.8x | -0.3x | 0.3x |
| Creightons ($CRL) | 1.1x | 1.2x | 1.2x | 0.7x | 0.1x |
| |
|---|
| Median (4 companies) | 1.3x | 2.9x | 2.6x | 2.2x | 1.0x |
|---|
| Far Eastern New Century Corp ($FETD) | | 2.7x | 4.8x | 5.6x | 5.1x |
