Naspers Net Debt / EBITDA surged on 8.5x from 6.2x to 14.7x in 2016 while EBITDA dropped on 67.2%
24 Jun 2016 • About Naspers (
$NPSN) • By InTwits
Naspers reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Naspers doesn't have a profitable business model yet: FY2016 ROIC is -1.0%
- The company has unprofitable business model: ROIC is at -1.0%
- It operates with high leverage: Net Debt/EBITDA is 14.7x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Naspers ($NPSN) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 5,331 | 5,874 | 6,154 | 6,569 | 5,930 | -9.7% |
| Gross Profit | 2,514 | 2,614 | 2,679 | 2,745 | 2,538 | -7.5% |
| SG&A | 1,672 | 1,857 | 2,341 | 2,377 | 2,276 | -4.2% |
| EBITDA | 782 | 821 | | 458 | 150 | -67.2% |
| Net Income | 391 | 712 | 571 | 1,257 | 994 | -20.9% |
Balance Sheet
|
|---|
| Cash | 1,285 | 1,694 | 1,298 | 1,226 | 1,714 | 39.8% |
| Short Term Debt | 346 | 402 | 353 | 380 | 228 | -40.0% |
| Long Term Debt | 2,025 | 2,878 | 3,244 | 3,691 | 3,694 | 0.1% |
Cash flow
|
|---|
| Capex | 248 | 287 | | 262 | 186 | -29.0% |
Ratios
|
|---|
| Revenue growth | 15.7% | 10.2% | 4.8% | 6.7% | -9.7% | |
| EBITDA growth | -16.3% | 5.0% | | | -67.2% | |
| Gross Margin | 47.2% | 44.5% | 43.5% | 41.8% | 42.8% | 1.0% |
| EBITDA Margin | 14.7% | 14.0% | 0.0% | 7.0% | 2.5% | -4.4% |
| Net Income Margin | 7.3% | 12.1% | 9.3% | 19.1% | 16.8% | -2.4% |
| SG&A, % of revenue | 31.4% | 31.6% | 38.0% | 36.2% | 38.4% | 2.2% |
| CAPEX, % of revenue | 4.7% | 4.9% | | 4.0% | 3.1% | -0.9% |
| ROIC | 5.4% | 5.6% | 2.1% | 1.6% | -1.0% | -2.6% |
| ROE | 6.6% | 11.9% | 9.4% | 19.4% | 11.8% | -7.7% |
| Net Debt/EBITDA | 1.4x | 1.9x | | 6.2x | 14.7x | 8.5x |
Revenue and profitability
Naspers's Revenue decreased on 9.7% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.7 pp from 48.9% to 51.6% in FY2016.
Gross Margin increased slightly on 1.0 pp from 41.8% to 42.8% in FY2016. SG&A as a % of Revenue increased on 2.2 pp from 36.2% to 38.4% in FY2016.
Net Income marign decreased on 2.4 pp from 19.1% to 16.8% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Naspers's CAPEX/Revenue was 3.1% in FY2016. Naspers showed small CAPEX/Revenue decline of 1.8 pp from 4.9% in FY2013 to 3.1% in FY2016.The company has spent a lot to CAPEX (124% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-1.01%) and low but positive ROE (11.76%). ROIC decreased on 2.6 pp from 1.6% to -1.0% in FY2016. ROE decreased on 7.7 pp from 19.4% to 11.8% in FY2016.
Leverage (Debt)
Debt level is 14.7x Net Debt / EBITDA and 26.1x Debt / EBITDA. Net Debt / EBITDA jumped on 8.5x from 6.2x to 14.7x in FY2016. Debt decreased on 3.7% in FY2016 while cash jumped on 39.8% in FY2016.
Valuation
Naspers's trades at EV/EBITDA 18.9x and P/E 0.6x while industy averages are 15.6x and 19.1x.
Appendix 1: Peers in Media
Below we provide Naspers benchmarking against other companies in Media 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tla Worldwide ($TLA) | 5,338.4% | 25.0% | 6.3% | 130.0% | |
| Porta Communications ($PTCM) | 970.2% | 10.7% | 150.9% | 46.5% | |
| Jaywing ($JWNG) | -16.6% | -27.9% | -0.7% | 26.6% | |
| Marimedia Ltd ($MARI) | 24.4% | 71.1% | 45.7% | 20.1% | |
| Nahl Group ($NAH) | 12.6% | -3.2% | -10.7% | 15.7% | |
| |
|---|
| Median (22 companies) | -2.8% | -3.2% | 1.0% | 1.5% | |
|---|
| Naspers ($NPSN) | | 10.2% | 4.8% | 6.7% | -9.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jaywing ($JWNG) | 79.8% | 76.8% | 81.0% | 89.0% | |
| Brainjuicer Group ($BJU) | 77.2% | 78.0% | 78.8% | 80.4% | |
| Porta Communications ($PTCM) | 55.3% | 89.2% | 83.4% | 79.0% | |
| Tla Worldwide ($TLA) | 96.1% | 96.6% | 99.9% | 78.8% | |
| Haynes Publishing Group ($HYNS) | 59.9% | 59.6% | 52.9% | 60.2% | |
| |
|---|
| Median (23 companies) | 41.3% | 41.9% | 44.0% | 42.6% | |
|---|
| Naspers ($NPSN) | 47.2% | 44.5% | 43.5% | 41.8% | 42.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dq Entertainment ($DQE) | 42.8% | 49.2% | 62.4% | 59.1% | |
| Haynes Publishing Group ($HYNS) | 25.7% | 23.4% | 38.8% | 33.5% | |
| Nahl Group ($NAH) | 36.6% | 39.6% | 28.8% | 29.5% | |
| Tla Worldwide ($TLA) | 43.5% | 39.1% | 40.6% | 28.5% | |
| Quarto Group Inc ($QRT) | 20.0% | 25.9% | 27.8% | 28.4% | |
| |
|---|
| Median (23 companies) | 14.8% | 13.9% | 13.7% | 11.2% | |
|---|
| Naspers ($NPSN) | 14.7% | 14.0% | | 7.0% | 2.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Avesco Group ($AVS) | 22.7% | 13.2% | 18.6% | 14.4% | |
| Mood Media Corp ($MM.) | 8.6% | 6.4% | 6.9% | 8.2% | |
| Spaceandpeople ($SAL) | 3.2% | 4.1% | 1.6% | 5.0% | |
| Dq Entertainment ($DQE) | 6.8% | 2.0% | 0.0% | 4.6% | |
| Tangent Communications ($TNG) | 4.5% | 3.3% | 1.9% | 3.2% | |
| |
|---|
| Median (23 companies) | 1.1% | 1.6% | 1.5% | 1.1% | |
|---|
| Naspers ($NPSN) | 4.7% | 4.9% | | 4.0% | 3.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Independent News & Media ($INM) | -43.9% | 136.2% | 29.6% | 65.1% | |
| Brainjuicer Group ($BJU) | 24.3% | 49.0% | 60.0% | 58.5% | |
| Cellcast Group ($CLTV) | -63.1% | | | 28.4% | |
| Nahl Group ($NAH) | 37.1% | 42.3% | 31.5% | 26.0% | |
| Tla Worldwide ($TLA) | | 5.3% | 8.6% | 13.9% | |
| |
|---|
| Median (23 companies) | 5.6% | 5.3% | 7.8% | 6.4% | |
|---|
| Naspers ($NPSN) | 5.4% | 5.6% | 2.1% | 1.6% | -1.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Johnston Press ($JPR) | 5.8x | | 11.4x | 15.6x | |
| Mood Media Corp ($MM.) | 5.2x | 8.1x | 8.2x | 9.8x | |
| Grupo Clarin Sa ($GCLA) | 0.9x | 0.8x | 0.7x | 4.3x | |
| Dq Entertainment ($DQE) | 1.1x | 1.5x | 1.5x | 2.8x | |
| Porta Communications ($PTCM) | | | 3.4x | 2.7x | |
| |
|---|
| Median (21 companies) | 0.7x | 0.7x | 1.0x | 0.6x | |
|---|
| Naspers ($NPSN) | 1.4x | 1.9x | | 6.2x | 14.7x |
