Zambeef Products reports 316% Net Income growth while 3.6 pp EBITDA Margin decline from 14.7% to 11.2%
25 Nov 2016 • About Zambeef Products (
$ZAM) • By InTwits
Zambeef Products reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Zambeef Products has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.4%. At the same time it's in pair with industry average of 7.7%.
- CAPEX is quite volatile: 179 in FY2016, 247 in FY2015, 79.4 in FY2014, 73.8 in FY2013, 120 in FY2012
- The company has business model with low profitability: ROIC is at 7.8%
- It operates with high leverage: Net Debt/EBITDA is 1.8x while industry average is 1.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Zambeef Products ($ZAM) key annual financial indicators
| mln. ZMW | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,296 | 1,595 | 1,643 | 1,555 | 2,376 | 52.8% |
| Gross Profit | 436 | 550 | 554 | 671 | 863 | 28.5% |
| SG&A | | | | 505 | 690 | 36.6% |
| EBITDA | 103 | 129 | 125 | 229 | 265 | 15.8% |
| Net Income | 15 | 14 | -25 | -64 | 137 | -315.5% |
Balance Sheet
|
|---|
| Cash | 0 | 107 | | 0 | 65 | |
| Short Term Debt | 296 | 371 | 227 | 224 | 255 | 13.5% |
| Long Term Debt | 359 | 344 | 368 | 454 | 293 | -35.5% |
Cash flow
|
|---|
| Capex | 120 | 74 | 79 | 247 | 179 | -27.5% |
Ratios
|
|---|
| Revenue growth | 31.9% | 23.0% | 3.0% | -5.4% | 52.8% | |
| EBITDA growth | 1.8% | 25.1% | -3.2% | 83.0% | 15.8% | |
| Gross Margin | 33.6% | 34.5% | 33.7% | 43.2% | 36.3% | -6.9% |
| EBITDA Margin | 8.0% | 8.1% | 7.6% | 14.7% | 11.2% | -3.6% |
| Net Income Margin | 1.1% | 0.9% | -1.5% | -4.1% | 5.8% | 9.9% |
| SG&A, % of revenue | | | | 32.5% | 29.0% | -3.5% |
| CAPEX, % of revenue | 9.2% | 4.6% | 4.8% | 15.9% | 7.5% | -8.3% |
| ROIC | 5.0% | 4.5% | 3.2% | 8.0% | 7.8% | -0.1% |
| ROE | 1.9% | 1.3% | -1.9% | -4.6% | 7.7% | 12.3% |
| Net Debt/EBITDA | 6.3x | 4.7x | 4.8x | 3.0x | 1.8x | -1.1x |
Revenue and profitability
The company's Revenue surged on 52.8% in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 40.2 pp from 12.9% to -27.3% in FY2016.
Gross Margin decreased on 6.9 pp from 43.2% to 36.3% in FY2016. SG&A as a % of Revenue decreased on 3.5 pp from 32.5% to 29.0% in FY2016.
Net Income marign increased on 9.9 pp from -4.1% to 5.8% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 7.5%. The company showed CAPEX/Revenue growth of 2.9 pp from 4.6% in FY2013 to 7.5% in FY2016. For the last three years the average CAPEX/Revenue was 9.4%.To fuel this fast growth the company invested a large share of EBITDA (67.4%) to CAPEX.
Return on investment
The company operates at low ROIC (7.82%) and ROE (7.67%). ROIC showed almost no change in FY2016. ROE jumped on 12.3 pp from -4.6% to 7.7% in FY2016.
Leverage (Debt)
Debt level is 1.8x Net Debt / EBITDA and 2.1x Debt / EBITDA. Net Debt / EBITDA dropped on 1.1x from 3.0x to 1.8x in FY2016. Debt dropped on 19.3% in FY2016 while cash surged.
Appendix 1: Peers in Food Producers
Below you can find Zambeef Products benchmarking vs. other companies in Food Producers 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 |
|---|
| Kakuzi ($KAKU) | 0.3% | -11.5% | 22.1% | 46.9% | |
| Fyffes ($FFY) | 18.9% | 6.6% | 2.0% | 15.6% | |
| Cherkizovo Group OJSC ($CHE) | 12.6% | 8.1% | 31.5% | 11.1% | |
| Glanbia ($GLB) | 14.4% | 7.7% | 6.6% | 9.3% | |
| Kerry Group ($KYGA) | 10.3% | -0.2% | -1.4% | 6.1% | |
| |
|---|
| Median (20 companies) | 13.2% | 6.3% | -4.1% | -1.9% | 1.9% |
|---|
| Zambeef Products ($ZAM) | | 23.0% | 3.0% | -5.4% | 52.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Walcom Group Ltd ($WALG) | 62.6% | 63.2% | 62.2% | 60.5% | |
| Narborough Plantations ($NBP) | 64.9% | 55.5% | 59.7% | 54.6% | 56.2% |
| Kakuzi ($KAKU) | 42.8% | 29.8% | 33.0% | 49.2% | |
| Ros Agro ($AGRO) | 28.8% | 22.1% | 33.6% | 42.1% | |
| Produce Investments ($PIL) | 27.9% | 25.0% | 33.5% | 36.4% | 37.9% |
| |
|---|
| Median (18 companies) | 28.8% | 22.0% | 26.8% | 23.4% | 20.2% |
|---|
| Zambeef Products ($ZAM) | 33.6% | 34.5% | 33.7% | 43.2% | 36.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mhp Sa ($MHPC) | 33.2% | 26.1% | 37.0% | 38.8% | |
| Narborough Plantations ($NBP) | 58.1% | 42.5% | 39.6% | 37.4% | 40.8% |
| Ros Agro ($AGRO) | 20.6% | 15.5% | 28.1% | 34.6% | |
| R.E.A.Hldgs ($RE.B) | 35.3% | 34.0% | 33.2% | 31.1% | |
| Kakuzi ($KAKU) | 28.0% | 14.9% | 11.8% | 29.4% | |
| |
|---|
| Median (20 companies) | 16.4% | 10.1% | 10.3% | 8.8% | 7.3% |
|---|
| Zambeef Products ($ZAM) | 8.0% | 8.1% | 7.6% | 14.7% | 11.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kakuzi ($KAKU) | 20.1% | 20.8% | 22.0% | 24.9% | |
| R.E.A.Hldgs ($RE.B) | 40.3% | 10.9% | 11.8% | 17.4% | |
| Avangardco Investments Public Ltd ($AVGR) | 51.1% | 28.0% | 18.4% | 16.2% | |
| Ros Agro ($AGRO) | 20.0% | 10.5% | 7.3% | 15.3% | |
| Asian Citrus Hldgs ($ACHL) | 19.3% | 28.6% | 17.7% | 14.3% | |
| |
|---|
| Median (20 companies) | 6.1% | 6.1% | 5.5% | 5.1% | 2.5% |
|---|
| Zambeef Products ($ZAM) | 9.2% | 4.6% | 4.8% | 15.9% | 7.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ros Agro ($AGRO) | 7.2% | 4.0% | 23.8% | 23.2% | |
| Origin Enterprises ($OGN) | 13.2% | 15.3% | 16.9% | 20.1% | 15.3% |
| Mhp Sa ($MHPC) | 18.4% | 11.2% | 17.6% | 17.6% | |
| Kakuzi ($KAKU) | 11.4% | 4.7% | 4.3% | 17.4% | |
| Kerry Group ($KYGA) | 10.6% | 5.2% | 16.6% | 15.8% | |
| |
|---|
| Median (20 companies) | 12.3% | 8.6% | 12.0% | 8.7% | 7.3% |
|---|
| Zambeef Products ($ZAM) | 5.0% | 4.5% | 3.2% | 8.0% | 7.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| R.E.A.Hldgs ($RE.B) | 3.1x | 4.4x | 3.9x | 7.2x | |
| Tate & Lyle ($BD15) | 1.0x | 1.2x | 1.2x | 4.0x | 1.8x |
| Real Good Food ($RGD) | | 2.5x | 5.7x | 3.2x | 1.3x |
| Cherkizovo Group OJSC ($CHE) | 2.7x | 4.4x | 1.6x | 3.1x | |
| Mhp Sa ($MHPC) | 2.2x | 2.9x | 2.2x | 2.7x | |
| |
|---|
| Median (17 companies) | 1.0x | 1.5x | 1.6x | 1.8x | 1.1x |
|---|
| Zambeef Products ($ZAM) | 6.3x | 4.7x | 4.8x | 3.0x | 1.8x |
