Tata Global Beverages reports 13.0% EBITDA decline while 1.5% Revenue growth
24 May 2016 • About Tata Global Beverages (
$TGBL) • By InTwits
Tata Global Beverages reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tata Global Beverages has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's in pair with industry average of 2.0%.
- CAPEX is quite volatile: 2,119 in FY2016, 2,509 in FY2015, 4,081 in FY2014, 6,492 in FY2013, 6,978 in FY2012
- The company has potentially unprofitable business model: ROIC is at 6.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.0x while industry average is 1.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tata Global Beverages ($TGBL) key annual financial indicators
| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 66,400 | 73,510 | 77,376 | 79,934 | 81,105 | 1.5% |
| SG&A | | | | | 13,688 | |
| EBITDA | 6,231 | 7,702 | 7,521 | 7,759 | 6,747 | -13.0% |
| Net Income | 3,561 | 3,728 | 4,805 | 2,478 | 3,259 | 31.5% |
Balance Sheet
|
|---|
| Cash | 595 | 2,631 | 7,182 | 5,365 | 5,308 | -1.1% |
| Short Term Debt | 1,766 | 7,161 | 3,844 | 4,401 | 6,768 | 53.8% |
| Long Term Debt | 7,393 | 6,727 | 10,537 | 8,839 | 5,055 | -42.8% |
Cash flow
|
|---|
| Capex | 1,310 | 1,793 | 2,037 | 1,792 | 1,662 | -7.2% |
Ratios
|
|---|
| Revenue growth | 11.0% | 10.7% | 5.3% | 3.3% | 1.5% | |
| EBITDA growth | 2.2% | 23.6% | -2.4% | 3.2% | -13.0% | |
| EBITDA Margin | 9.4% | 10.5% | 9.7% | 9.7% | 8.3% | -1.4% |
| Net Income Margin | 5.4% | 5.1% | 6.2% | 3.1% | 4.0% | 0.9% |
| SG&A, % of revenue | | | | | 16.9% | 16.9% |
| CAPEX, % of revenue | 2.0% | 2.4% | 2.6% | 2.2% | 2.0% | -0.2% |
| ROIC | 8.2% | 9.6% | 8.1% | 8.0% | 6.7% | -1.2% |
| ROE | 8.4% | 8.0% | 9.0% | 4.4% | 5.8% | 1.4% |
| Net Debt/EBITDA | 1.4x | 1.5x | 1.0x | 1.0x | 1.0x | -0.0x |
Revenue and profitability
Tata Global Beverages's Revenue increased slightly on 1.5% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 10.5 pp from 4.0% to 14.5% in FY2016.
Net Income marign increased slightly on 0.92 pp from 3.1% to 4.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Tata Global Beverages had CAPEX/Revenue of 2.0%. The company's CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 2.3%.
Return on investment
The company operates at low ROIC (6.75%) and ROE (5.81%). ROIC decreased slightly on 1.2 pp from 8.0% to 6.7% in FY2016. ROE increased slightly on 1.4 pp from 4.4% to 5.8% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.0x and Debt / EBITDA is 1.8x. Net Debt / EBITDA decreased on 0.049x from 1.0x to 1.0x in FY2016. Debt dropped on 10.7% in FY2016 while cash decreased slightly on 1.1% in FY2016.
Management team
Ajoy Kumar Misra is a the company's CEO. Ajoy Kumar Misra is a founder and has spent 4 years at the company. The company's CFO L Krishnakumar has spent 4 years at the company.
Appendix 1: Peers in Tea & Coffee
Below you can find Tata Global Beverages benchmarking vs. other companies in Tea & Coffee 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.
