Cherkizovo Group OJSC Net Income dropped on 68.1% in 2016 while Revenue increased on 7.0%
01 Mar 2017 • About Cherkizovo Group OJSC (
$CHE) • By InTwits
Cherkizovo Group OJSC reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 12.0% in 2016, 14.7% in 2015, 24.4% in 2014, 10.9% in 2013, 19.9% in 2012
- Cherkizovo Group OJSC has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.8%. At the same time it's a lot of higher than industry average of 7.5%.
- CAPEX is quite volatile: 7,270 in FY2016, 9,857 in FY2015, 5,603 in FY2014, 2,893 in FY2013, 1,051 in FY2012
- The company has potentially unprofitable business model: ROIC is at 5.6%
- It operates with high leverage: Net Debt/EBITDA is 3.8x while industry average is 1.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cherkizovo Group OJSC ($CHE) key annual financial indicators
| mln. RUB | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 48,779 | 52,733 | 69,353 | 77,033 | 82,417 | 7.0% |
| Gross Profit | 14,067 | 11,422 | 22,947 | 19,149 | 17,855 | -6.8% |
| SG&A | 6,576 | 8,207 | 9,656 | 11,575 | 12,562 | 8.5% |
| EBITDA | 9,731 | 5,753 | 16,945 | 11,361 | 9,917 | -12.7% |
| Net Income | 6,996 | 2,054 | 13,352 | 6,007 | 1,919 | -68.1% |
Balance Sheet
|
|---|
| Cash | 1,258 | 2,118 | 1,043 | 5,561 | 1,002 | -82.0% |
| Short Term Debt | 11,216 | 10,435 | 13,945 | 24,730 | 13,824 | -44.1% |
| Long Term Debt | 16,278 | 17,230 | 14,791 | 16,119 | 24,470 | 51.8% |
Cash flow
|
|---|
| Capex | 5,712 | 5,272 | 6,758 | 9,415 | 8,570 | -9.0% |
Ratios
|
|---|
| Revenue growth | 12.6% | 8.1% | 31.5% | 11.1% | 7.0% | |
| EBITDA growth | 40.8% | -40.9% | 194.6% | -33.0% | -12.7% | |
| Gross Margin | 28.8% | 21.7% | 33.1% | 24.9% | 21.7% | -3.2% |
| EBITDA Margin | 19.9% | 10.9% | 24.4% | 14.7% | 12.0% | -2.7% |
| Net Income Margin | 14.3% | 3.9% | 19.3% | 7.8% | 2.3% | -5.5% |
| SG&A, % of revenue | 13.5% | 15.6% | 13.9% | 15.0% | 15.2% | 0.2% |
| CAPEX, % of revenue | 11.7% | 10.0% | 9.7% | 12.2% | 10.4% | -1.8% |
| ROIC | 13.5% | 4.8% | 22.4% | 8.9% | 5.6% | -3.3% |
| ROE | 26.8% | 6.8% | 40.3% | 12.4% | 3.7% | -8.8% |
| Net Debt/EBITDA | 2.7x | 4.4x | 1.6x | 3.1x | 3.8x | 0.7x |
Revenue and profitability
The company's Revenue increased on 7.0% in 2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.9 pp from 12.0% to 13.9% in FY2016.
Gross Margin decreased on 3.2 pp from 24.9% to 21.7% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign decreased on 5.5 pp from 7.8% to 2.3% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 10.4% in 2016. The company showed almost no change in CAPEX/Revenue from 2013 to 2016. For the last three years the average CAPEX/Revenue was 10.8%.Cherkizovo Group OJSC invested a large share of EBITDA (86.4%) to CAPEX.
Return on investment
The company operates at low ROIC (5.64%) and ROE (3.65%). ROIC decreased on 3.3 pp from 8.9% to 5.6% in 2016. ROE decreased on 8.8 pp from 12.4% to 3.7% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.8x and Debt / EBITDA is 3.9x. Net Debt / EBITDA jumped on 0.7x from 3.1x to 3.8x in 2016. Debt decreased on 6.3% in 2016 while cash dropped on 82.0% in 2016.
Appendix 1: Peers in Food Producers
Below we provide Cherkizovo Group OJSC benchmarking against other companies in Food Producers 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 |
|---|
| Kakuzi ($KAKU) | 0.3% | -11.5% | 22.1% | 46.9% | |
| Fyffes ($FFY) | 18.9% | 6.6% | 2.0% | 15.6% | |
| Glanbia ($GLB) | | 7.7% | 6.6% | 9.3% | 2.7% |
| Kerry Group ($KYGA) | | -0.2% | -1.4% | 6.1% | 0.4% |
| Ros Agro ($AGRO) | -13.2% | 8.2% | 78.6% | 4.1% | |
| |
|---|
| Median (20 companies) | 13.7% | 6.3% | -4.1% | -5.3% | 2.7% |
|---|
| Cherkizovo Group OJSC ($CHE) | | 8.1% | 31.5% | 11.1% | 7.0% |
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 ($KAKU) | 42.8% | 29.8% | 33.0% | 49.2% | |
| Zambeef Products ($ZAM) | 33.6% | 34.5% | 33.7% | 43.2% | 36.3% |
| Ros Agro ($AGRO) | 28.8% | 22.1% | 33.6% | 42.1% | |
| |
|---|
| Median (18 companies) | 28.8% | 22.1% | 26.8% | 23.4% | 26.6% |
|---|
| Cherkizovo Group OJSC ($CHE) | 28.8% | 21.7% | 33.1% | 24.9% | 21.7% |
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 ($KAKU) | 28.0% | 14.9% | 11.8% | 29.4% | |
| |
|---|
| Median (20 companies) | 9.9% | 8.7% | 8.7% | 8.8% | 10.3% |
|---|
| Cherkizovo Group OJSC ($CHE) | 19.9% | 10.9% | 24.4% | 14.7% | 12.0% |
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 ($AVGR) | 51.1% | 28.0% | 18.4% | 16.2% | |
| Zambeef Products ($ZAM) | 9.2% | 4.6% | 4.8% | 15.9% | 7.5% |
| Ros Agro ($AGRO) | 20.0% | 10.5% | 7.3% | 15.3% | |
| |
|---|
| Median (20 companies) | 6.1% | 4.3% | 4.8% | 5.1% | 2.5% |
|---|
| Cherkizovo Group OJSC ($CHE) | 11.7% | 10.0% | 9.7% | 12.2% | 10.4% |
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 ($KYGA) | 10.6% | 5.2% | 16.6% | 15.8% | 13.1% |
| |
|---|
| Median (20 companies) | 12.2% | 8.6% | 9.7% | 8.2% | 7.8% |
|---|
| Cherkizovo Group OJSC ($CHE) | 13.5% | 4.8% | 22.4% | 8.9% | 5.6% |
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 ($RGD) | | 2.5x | 5.7x | 3.2x | 1.3x |
| Zambeef Products ($ZAM) | 6.3x | 4.7x | 4.8x | 3.0x | 1.8x |
| Mhp Sa ($MHPC) | 2.2x | 2.9x | 2.2x | 2.7x | |
| |
|---|
| Median (17 companies) | 1.0x | 1.5x | 1.6x | 1.8x | 1.3x |
|---|
| Cherkizovo Group OJSC ($CHE) | 2.7x | 4.4x | 1.6x | 3.1x | 3.8x |
