Datatec reports 7.2% EBITDA decline and almost no change in Revenue of 6,455
11 May 2016 • About Datatec (
$DTC) • By InTwits
Datatec reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 3.0% in FY2016 vs. 3.3% in FY2015 vs. 3.7% in FY2012
- Datatec has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has business model with low profitability: ROIC is at 9.8%
- It operates with high leverage: Net Debt/EBITDA is 1.1x while industry average is -0.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Datatec ($DTC) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 5,033 | 5,064 | 5,688 | 6,444 | 6,455 | 0.2% |
| Gross Profit | 705 | 598 | 841 | 933 | 869 | -6.9% |
| EBITDA | 185 | 193 | 184 | 210 | 195 | -7.2% |
| Net Income | 81 | 78 | 56 | 74 | 40 | -45.8% |
Balance Sheet
|
|---|
| Cash | 248 | 314 | 379 | 366 | 413 | 12.8% |
| Short Term Debt | 246 | 241 | 420 | 432 | 597 | 38.3% |
| Long Term Debt | 14 | 10 | 17 | 22 | 21 | -1.4% |
Cash flow
|
|---|
| Capex | 20 | 26 | 33 | 35 | 32 | -8.0% |
Ratios
|
|---|
| Revenue growth | 17.0% | 0.6% | 12.3% | 13.3% | 0.2% | |
| EBITDA growth | 34.0% | 4.4% | -4.5% | 13.9% | -7.2% | |
| Gross Margin | 14.0% | 11.8% | 14.8% | 14.5% | 13.5% | -1.0% |
| EBITDA Margin | 3.7% | 3.8% | 3.2% | 3.3% | 3.0% | -0.2% |
| Net Income Margin | 1.6% | 1.5% | 1.0% | 1.1% | 0.6% | -0.5% |
| CAPEX, % of revenue | 0.4% | 0.5% | 0.6% | 0.5% | 0.5% | -0.0% |
| ROIC | 13.8% | 12.8% | 10.6% | 11.6% | 9.8% | -1.8% |
| ROE | 10.4% | 9.2% | 6.4% | 8.5% | 4.7% | -3.8% |
| Net Debt/EBITDA | 0.1x | -0.3x | 0.3x | 0.4x | 1.1x | 0.6x |
Revenue and profitability
The company's Revenue showed almost no change in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.4 pp from 7.0% to 2.5% in FY2016.
Gross Margin decreased slightly on 1.0 pp from 14.5% to 13.5% in FY2016.
Net Income marign decreased slightly on 0.53 pp from 1.1% to 0.62% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Datatec's CAPEX/Revenue was 0.50% in FY2016. CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 0.54%.
Return on investment
The company operates at low ROIC (9.76%) and ROE (4.70%). ROIC decreased slightly on 1.8 pp from 11.6% to 9.8% in FY2016. ROE decreased on 3.8 pp from 8.5% to 4.7% in FY2016.
Leverage (Debt)
Debt level is 1.1x Net Debt / EBITDA and 3.2x Debt / EBITDA. Net Debt / EBITDA surged on 0.6x from 0.4x to 1.1x in FY2016. Debt surged on 36.4% in FY2016 while cash jumped on 12.8% in FY2016.
Appendix 1: Peers in Software & Computer Services
Below you can find Datatec benchmarking vs. other companies in Software & Computer Services 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Coms ($COMS) | -68.6% | 46.8% | 763.3% | 110.4% | |
| Proactis Holdings ($PHD) | 20.4% | 7.0% | 26.2% | 69.6% | |
| Progility ($PGY) | 4.6% | | | 51.0% | |
| Dotdigital Group ($DOTD) | 6.6% | 27.8% | 32.9% | 31.8% | |
| Accesso Technology Grp ($ACSO) | 16.8% | 28.2% | 27.3% | 24.1% | |
| |
|---|
| Median (41 companies) | 7.2% | 6.6% | 4.4% | 3.1% | |
|---|
| Datatec ($DTC) | | 0.6% | 12.3% | 13.3% | 0.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lombard Risk Management ($LRM) | 99.0% | 98.8% | 99.2% | 98.6% | |
| Phoenix It Group ($PNX) | 97.0% | 97.2% | 97.6% | 97.9% | |
| Wandisco ($WAND) | 91.8% | 80.3% | 80.7% | 93.2% | |
| Netcall ($NET) | 88.2% | 89.7% | 91.0% | 90.9% | |
| Idox ($IDOX) | 90.4% | 90.8% | 89.4% | 89.3% | |
| |
|---|
| Median (34 companies) | 63.5% | 62.1% | 60.0% | 61.3% | |
|---|
| Datatec ($DTC) | 14.0% | 11.8% | 14.8% | 14.5% | 13.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mail.Ru Group Ltd ($61HE) | 43.1% | 47.4% | 50.5% | 34.6% | |
| Dotdigital Group ($DOTD) | 31.4% | 39.4% | 29.2% | 32.0% | |
| Idox ($IDOX) | 30.9% | 26.1% | 26.0% | 28.6% | |
| Oxford Metrics ($OMG) | 15.7% | 6.0% | 14.7% | 28.4% | |
| Microgen ($MCGN) | 31.5% | 32.8% | 24.5% | 26.8% | |
| |
|---|
| Median (41 companies) | 14.3% | 13.4% | 13.0% | 12.2% | |
|---|
| Datatec ($DTC) | 3.7% | 3.8% | 3.2% | 3.3% | 3.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Coms ($COMS) | 0.5% | 0.9% | 3.4% | 7.5% | |
| Csf Group ($CSFG) | 1.5% | 4.0% | 2.4% | 7.1% | |
| Nasstar ($NASA) | 17.9% | | 2.1% | 5.2% | |
| Unisys Corp ($USY) | 2.1% | 2.5% | 4.1% | 5.0% | |
| International Bus Mach Corp ($IBM) | 3.9% | 3.7% | 4.0% | 4.4% | |
| |
|---|
| Median (41 companies) | 1.5% | 1.6% | 1.9% | 1.5% | |
|---|
| Datatec ($DTC) | 0.4% | 0.5% | 0.6% | 0.5% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Triad Group ($TRD) | 4.1% | -3.8% | 24.5% | 61.5% | |
| Dotdigital Group ($DOTD) | 26.4% | 38.0% | 28.5% | 31.4% | |
| International Bus Mach Corp ($IBM) | 36.1% | 31.0% | 28.1% | 25.7% | |
| Instem ($INS) | 20.6% | 14.7% | 10.9% | 20.4% | |
| Kalibrate Technologies ($KLBT) | 12.5% | 40.2% | 29.2% | 18.8% | |
| |
|---|
| Median (41 companies) | 11.6% | 11.4% | 9.0% | 4.0% | |
|---|
| Datatec ($DTC) | 13.8% | 12.8% | 10.6% | 11.6% | 9.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Progility ($PGY) | 2.0x | | 1.8x | 12.8x | |
| Parity Group ($PTY) | 4.7x | | 4.9x | 5.1x | |
| Nasstar ($NASA) | -5.3x | | 0.0x | 1.9x | |
| Phoenix It Group ($PNX) | 4.3x | | | 1.9x | |
| International Bus Mach Corp ($IBM) | 0.9x | 1.2x | 1.4x | 1.7x | |
| |
|---|
| Median (31 companies) | -0.5x | -0.5x | -0.3x | -0.4x | |
|---|
| Datatec ($DTC) | 0.1x | -0.3x | 0.3x | 0.4x | 1.1x |
