Severstal PJSC Net Income jumped on 168% in 2016 while EBITDA Margin decreased slightly on 1.2 pp from 32.4% to 31.2%
02 Feb 2017 • About Severstal PJSC (
$SVST) • By InTwits
Severstal PJSC reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Severstal PJSC is a company in decline: 2016 revenue growth was -7.5%, 5 years revenue CAGR was -17.9%
- Severstal PJSC has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.6%. At the same time it's in pair with industry average of 10.3%.
- CAPEX is quite volatile: 494 in 2016, 412 in 2015, 700 in 2014, 968 in 2013, 1,336 in 2012
- The company has highly profitable business model: ROIC is at 29.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Severstal PJSC ($SVST) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14,104 | 9,434 | 8,296 | 6,396 | 5,916 | -7.5% |
| Gross Profit | 3,318 | 2,819 | 2,856 | 2,586 | 2,343 | -9.4% |
| SG&A | 1,803 | 1,488 | 1,136 | 808 | 741 | -8.3% |
| EBITDA | 2,095 | 1,820 | 2,187 | 2,071 | 1,846 | -10.9% |
| Net Income | 762 | 83 | -1,595 | 605 | 1,621 | 167.9% |
Balance Sheet
|
|---|
| Cash | 1,726 | 1,036 | 1,897 | 1,647 | 1,154 | -29.9% |
| Short Term Debt | 1,384 | 629 | 775 | 507 | 673 | 32.7% |
| Long Term Debt | 4,329 | 4,128 | 2,655 | 1,945 | 1,340 | -31.1% |
Cash flow
|
|---|
| Capex | 1,336 | 968 | 700 | 412 | 494 | 19.9% |
Ratios
|
|---|
| Revenue growth | -10.8% | -33.1% | -12.1% | -22.9% | -7.5% | |
| EBITDA growth | -41.1% | -13.1% | 20.2% | -5.3% | -10.9% | |
| Gross Margin | 23.5% | 29.9% | 34.4% | 40.4% | 39.6% | -0.8% |
| EBITDA Margin | 14.9% | 19.3% | 26.4% | 32.4% | 31.2% | -1.2% |
| Net Income Margin | 5.4% | 0.9% | -19.2% | 9.5% | 27.4% | 17.9% |
| SG&A, % of revenue | 12.8% | 15.8% | 13.7% | 12.6% | 12.5% | -0.1% |
| CAPEX, % of revenue | 9.5% | 10.3% | 8.4% | 6.4% | 8.4% | 1.9% |
| ROIC | 10.3% | 9.6% | 17.7% | 30.3% | 29.7% | -0.6% |
| ROE | 11.0% | 1.2% | -32.6% | 23.9% | 61.4% | 37.5% |
| Net Debt/EBITDA | 1.9x | 2.0x | 0.7x | 0.4x | 0.5x | 0.1x |
Revenue and profitability
The company's Revenue decreased on 7.5% in 2016. 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 decreased slightly on 0.83 pp from 40.4% to 39.6% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign surged on 17.9 pp from 9.5% to 27.4% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 8.4% in 2016. CAPEX/Revenue decreased slightly on 1.9 pp from 10.3% in 2013 to 8.4% in 2016. Average CAPEX/Revenue for the last three years was 7.7%.
Return on investment
The company operates at high and attractive ROIC (29.72%) and ROE (61.41%). ROIC decreased slightly on 0.59 pp from 30.3% to 29.7% in 2016. ROE surged on 37.5 pp from 23.9% to 61.4% in 2016.
Leverage (Debt)
Debt level is 0.5x Net Debt / EBITDA and 1.1x Debt / EBITDA. Net Debt / EBITDA increased on 0.1x from 0.4x to 0.5x in 2016. Debt dropped on 17.9% in 2016 while cash dropped on 29.9% in 2016.
Appendix 1: Peers in Industrial Metals & Mining
Below we provide Severstal PJSC benchmarking against other companies in Industrial Metals & Mining 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 |
|---|
| Base Resources Ltd ($BSE) | | | | 399.7% | 16.2% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 2.4% | -0.1% | 26.4% | 45.5% | |
| Norsk Hydro Asa ($NHY) | -10.2% | 1.1% | 20.1% | 12.6% | |
| Afarak Group ($AFRK) | -19.2% | 5.4% | 27.4% | 8.7% | |
| Vimetco Nv ($VICO) | -13.4% | -6.5% | -12.8% | -5.3% | |
| |
|---|
| Median (15 companies) | -5.6% | 0.3% | 2.4% | -10.6% | 16.2% |
|---|
| Severstal PJSC ($SVST) | | -33.1% | -12.1% | -22.9% | -7.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 49.1% | 43.4% | 52.2% | 55.7% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 23.8% | 19.4% | 28.3% | 31.4% | |
| Magnitogorsk Iron & Steel Works ($MMK) | 15.5% | 14.9% | 21.9% | 30.6% | |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 17.7% | 15.1% | 28.6% | 24.8% | |
| Base Resources Ltd ($BSE) | | | 11.8% | 21.2% | 21.0% |
| |
|---|
| Median (13 companies) | 14.8% | 14.9% | 18.0% | 13.5% | 12.6% |
|---|
| Severstal PJSC ($SVST) | 23.5% | 29.9% | 34.4% | 40.4% | 39.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 38.6% | 29.2% | 46.8% | 47.0% | |
| Base Resources Ltd ($BSE) | | | -1.8% | 37.7% | 35.8% |
| Magnitogorsk Iron & Steel Works ($MMK) | 13.1% | 14.0% | 19.5% | 28.3% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 15.6% | 13.8% | 21.8% | 24.3% | |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 12.7% | 5.7% | 25.3% | 24.1% | |
| |
|---|
| Median (15 companies) | 12.9% | 12.1% | 12.6% | 14.6% | 11.4% |
|---|
| Severstal PJSC ($SVST) | 14.9% | 19.3% | 26.4% | 32.4% | 31.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| First Quantum Minerals ($FQM) | 46.5% | 73.2% | 81.7% | 72.5% | |
| Mmc Norilsk Nickel ($MNOD) | 22.3% | 17.1% | 10.8% | 19.0% | |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 7.0% | 7.9% | 9.9% | 8.1% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 12.0% | 6.9% | 5.4% | 7.7% | |
| Ezz Steel ($AEZD) | 2.3% | 3.9% | 6.4% | 6.8% | |
| |
|---|
| Median (15 companies) | 6.7% | 7.6% | 6.3% | 6.3% | 2.9% |
|---|
| Severstal PJSC ($SVST) | 9.5% | 10.3% | 8.4% | 6.4% | 8.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 21.8% | 14.2% | 34.1% | 31.7% | |
| Zibao Metals Recycling Hldgs Ltd ($ZBO) | 41.7% | 56.6% | 55.8% | 26.6% | 0.9% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 6.2% | -2.7% | 25.6% | 24.4% | |
| Magnitogorsk Iron & Steel Works ($MMK) | 1.8% | 1.4% | 9.1% | 18.1% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 7.2% | 4.1% | 12.0% | 15.7% | |
| |
|---|
| Median (15 companies) | 5.4% | 4.1% | 7.4% | 5.6% | 2.7% |
|---|
| Severstal PJSC ($SVST) | 10.3% | 9.6% | 17.7% | 30.3% | 29.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vimetco Nv ($VICO) | 7.7x | | 10.9x | 14.6x | |
| Ezz Steel ($AEZD) | 4.8x | 3.6x | 19.4x | 13.3x | |
| First Quantum Minerals ($FQM) | 0.0x | 2.5x | 4.0x | 10.5x | |
| Base Resources Ltd ($BSE) | | | | 4.4x | 3.7x |
| OAO TMK ($TMKS) | 3.6x | 3.9x | 3.8x | 4.3x | |
| |
|---|
| Median (14 companies) | 2.0x | 2.1x | 1.2x | 1.1x | 3.4x |
|---|
| Severstal PJSC ($SVST) | 1.9x | 2.0x | 0.7x | 0.4x | 0.5x |
