Kumho Tire Co Inc reports 45.9% CAPEX decline and 3.1% Revenue decline
09 Feb 2017 • About Kumho Tire Co Inc (
$KHTC) • By InTwits
Kumho Tire Co Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kumho Tire Co Inc is a company in decline: 2016 revenue growth was -3.1%, 5 years revenue CAGR was -5.5%
- Kumho Tire Co Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.8%. At the same time it's a lot of higher than industry average of 6.7%.
- CAPEX is quite volatile: 365,465 in 2016, 675,758 in 2015, 282,816 in 2014, 244,824 in 2013, 192,566 in 2012
- The company has potentially unprofitable business model: ROIC is at 3.1%
- It operates with high leverage: Net Debt/EBITDA is 7.5x while industry average is 6.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kumho Tire Co Inc ($KHTC) key annual financial indicators
| mln. KRW | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,070,644 | 3,698,542 | 3,437,869 | 3,040,407 | 2,947,228 | -3.1% |
| Gross Profit | 1,031,552 | 978,830 | 1,012,380 | 775,315 | 745,476 | -3.8% |
| SG&A | 629,722 | 605,732 | 625,888 | 609,858 | 595,751 | -2.3% |
| EBITDA | 557,101 | 532,250 | 544,518 | 340,496 | 344,227 | 1.1% |
| Net Income | 123,667 | 95,441 | 129,551 | -69,366 | -36,049 | -48.0% |
Balance Sheet
|
|---|
| Cash | 147,444 | 163,516 | 197,113 | 243,881 | 163,518 | -33.0% |
| Short Term Debt | 1,581,678 | 2,568,937 | 897,321 | 1,697,475 | 1,586,374 | -6.5% |
| Long Term Debt | 1,335,618 | 27,199 | 1,524,285 | 1,083,073 | 1,146,770 | 5.9% |
Cash flow
|
|---|
| Capex | 192,566 | 244,824 | 282,816 | 675,758 | 365,465 | -45.9% |
Ratios
|
|---|
| Revenue growth | 4.0% | -9.1% | -7.0% | -11.6% | -3.1% | |
| EBITDA growth | 47.7% | -4.5% | 2.3% | -37.5% | 1.1% | |
| Gross Margin | 25.3% | 26.5% | 29.4% | 25.5% | 25.3% | -0.2% |
| EBITDA Margin | 13.7% | 14.4% | 15.8% | 11.2% | 11.7% | 0.5% |
| Net Income Margin | 3.0% | 2.6% | 3.8% | -2.3% | -1.2% | 1.1% |
| SG&A, % of revenue | 15.5% | 16.4% | 18.2% | 20.1% | 20.2% | 0.2% |
| CAPEX, % of revenue | 4.7% | 6.6% | 8.2% | 22.2% | 12.4% | -9.8% |
| ROIC | 10.2% | 9.3% | 9.7% | 3.6% | 3.1% | -0.5% |
| ROE | 19.6% | 10.5% | 11.6% | -5.9% | -3.2% | 2.7% |
| Net Debt/EBITDA | 5.0x | 4.6x | 4.1x | 7.4x | 7.5x | 0.0x |
Revenue and profitability
Kumho Tire Co Inc's Revenue decreased on 3.1% in 2016. EBITDA Margin showed almost no change in 2016.
Gross Margin showed almost no change in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign increased slightly on 1.1 pp from -2.3% to -1.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
Kumho Tire Co Inc's CAPEX/Revenue was 12.4% in 2016. Kumho Tire Co Inc showed CAPEX/Revenue growth of 5.8 pp from 6.6% in 2013 to 12.4% in 2016. It's average CAPEX/Revenue for the last three years was 14.3%.Kumho Tire Co Inc has spent a lot to CAPEX (106% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (3.09%) and negative ROE (-3.21%). ROIC showed almost no change in 2016. ROE increased on 2.7 pp from -5.9% to -3.2% in 2016.
Leverage (Debt)
Debt level is 7.5x Net Debt / EBITDA and 7.9x Debt / EBITDA. Net Debt / EBITDA increased slightly on 0.015x from 7.4x to 7.5x in 2016. Debt decreased slightly on 1.7% in 2016 while cash dropped on 33.0% in 2016.
Appendix 1: Peers in Automobiles & Parts
Below we provide Kumho Tire Co Inc benchmarking against other companies in Automobiles & Parts 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Toyota Motor Corp ($TYT) | | 18.7% | 16.4% | 6.0% | 4.3% |
| Hyundai Motor Co ($HYUD) | | 3.4% | 2.2% | 3.0% | 1.8% |
| |
|---|
| Median (2 companies) | | 11.0% | 9.3% | 4.5% | 3.1% |
|---|
| Kumho Tire Co Inc ($KHTC) | | -9.1% | -7.0% | -11.6% | -3.1% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Toyota Motor Corp ($TYT) | 11.8% | 15.5% | 19.0% | 19.8% | 20.4% |
| Hyundai Motor Co ($HYUD) | 23.1% | 22.3% | 21.4% | 19.9% | 18.9% |
| |
|---|
| Median (2 companies) | 17.4% | 18.9% | 20.2% | 19.8% | 19.7% |
|---|
| Kumho Tire Co Inc ($KHTC) | 25.3% | 26.5% | 29.4% | 25.5% | 25.3% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Toyota Motor Corp ($TYT) | 7.7% | 11.0% | 13.8% | 15.3% | 15.8% |
| Hyundai Motor Co ($HYUD) | 13.0% | 12.4% | 11.3% | 10.0% | 9.1% |
| |
|---|
| Median (2 companies) | 10.3% | 11.7% | 12.6% | 12.6% | 12.5% |
|---|
| Kumho Tire Co Inc ($KHTC) | 13.7% | 14.4% | 15.8% | 11.2% | 11.7% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Toyota Motor Corp ($TYT) | 3.9% | 3.9% | 3.8% | 4.2% | 4.5% |
| Hyundai Motor Co ($HYUD) | 3.6% | 3.6% | 3.8% | 8.9% | 3.2% |
| |
|---|
| Median (2 companies) | 3.7% | 3.8% | 3.8% | 6.5% | 3.8% |
|---|
| Kumho Tire Co Inc ($KHTC) | 4.7% | 6.6% | 8.2% | 22.2% | 12.4% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Toyota Motor Corp ($TYT) | 1.5% | 5.0% | 7.3% | 7.5% | 7.3% |
| Hyundai Motor Co ($HYUD) | 9.3% | 8.2% | 6.6% | 4.9% | 3.6% |
| |
|---|
| Median (2 companies) | 5.4% | 6.6% | 7.0% | 6.2% | 5.5% |
|---|
| Kumho Tire Co Inc ($KHTC) | 10.2% | 9.3% | 9.7% | 3.6% | 3.1% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hyundai Motor Co ($HYUD) | 3.5x | 3.8x | 4.7x | 6.3x | 7.7x |
| Toyota Motor Corp ($TYT) | 7.3x | 5.1x | 4.0x | 4.0x | 3.4x |
| |
|---|
| Median (2 companies) | 5.4x | 4.5x | 4.4x | 5.2x | 5.5x |
|---|
| Kumho Tire Co Inc ($KHTC) | 5.0x | 4.6x | 4.1x | 7.4x | 7.5x |
