Dairy Farm International Hldgs reports 3.1 pp ROIC decline from 21.6% to 18.5% in 2016 while 2.5% EBITDA growth
02 Mar 2017 • About Dairy Farm International Hldgs (
$DFIB) • By InTwits
Dairy Farm International Hldgs reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 6.0% in FY2016 vs. 5.8% in FY2015 vs. 6.6% in FY2012
- Dairy Farm International Hldgs has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's a lot of higher than industry average of 14.2%.
- CAPEX is quite volatile: 5,169 in 2016, 1,998 in 2015, 2,153 in 2014, 2,180 in 2013, 2,344 in 2012
- The company has highly profitable business model: ROIC is at 18.5%
- It operates with high leverage: Net Debt/EBITDA is 1.0x while industry average is 0.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dairy Farm International Hldgs ($DFIB) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 9,801 | 10,357 | 11,008 | 11,137 | 11,201 | 0.6% |
| Gross Profit | 2,830 | 3,087 | 3,291 | 3,285 | 3,386 | 3.1% |
| SG&A | 2,499 | 2,714 | 2,926 | 3,025 | 3,105 | 2.6% |
| EBITDA | 644 | 717 | 721 | 651 | 667 | 2.5% |
| Net Income | 447 | 501 | 509 | 424 | 469 | 10.5% |
Balance Sheet
|
|---|
| Cash | 667 | 728 | 662 | 259 | 324 | 25.3% |
| Short Term Debt | 56 | 48 | 93 | 730 | 370 | -49.3% |
| Long Term Debt | 91 | 43 | 94 | 11 | 595 | 5,513.2% |
Cash flow
|
|---|
| Capex | 290 | 296 | 297 | 262 | 213 | -18.9% |
Ratios
|
|---|
| Revenue growth | 7.3% | 5.7% | 6.3% | 1.2% | 0.6% | |
| EBITDA growth | -7.5% | 11.3% | 0.5% | -9.7% | 2.5% | |
| Gross Margin | 28.9% | 29.8% | 29.9% | 29.5% | 30.2% | 0.7% |
| EBITDA Margin | 6.6% | 6.9% | 6.6% | 5.8% | 6.0% | 0.1% |
| Net Income Margin | 4.6% | 4.8% | 4.6% | 3.8% | 4.2% | 0.4% |
| SG&A, % of revenue | 25.5% | 26.2% | 26.6% | 27.2% | 27.7% | 0.6% |
| CAPEX, % of revenue | 3.0% | 2.9% | 2.7% | 2.4% | 1.9% | -0.5% |
| ROIC | 32.8% | 34.6% | 31.1% | 21.6% | 18.5% | -3.1% |
| ROE | 42.2% | 40.5% | 37.6% | 30.3% | 32.6% | 2.3% |
| Net Debt/EBITDA | -0.8x | -0.9x | -0.7x | 0.7x | 1.0x | 0.2x |
Revenue and profitability
The company's Revenue increased slightly on 0.57% in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 17.2 pp from 29.1% to 11.9% in 2016.
Gross Margin increased slightly on 0.73 pp from 29.5% to 30.2% in FY2016. SG&A as a % of Revenue increased slightly on 0.56 pp from 27.2% to 27.7% in FY2016.
Net Income marign showed almost no change in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Dairy Farm International Hldgs had CAPEX/Revenue of 1.9%. Dairy Farm International Hldgs showed small CAPEX/Revenue decline of 0.96 pp from 2.9% in FY2013 to 1.9% in FY2016. For the last three years the average CAPEX/Revenue was 2.3%.
Return on investment
The company operates at high and attractive ROE (32.56%) while ROIC is a bit lower (18.54%). ROIC decreased on 3.1 pp from 21.6% to 18.5% in FY2016. ROE increased on 2.3 pp from 30.3% to 32.6% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.0x and Debt / EBITDA is 1.4x. Net Debt / EBITDA jumped on 0.2x from 0.7x to 1.0x in FY2016. Debt surged on 30.3% in FY2016 while cash jumped on 25.3% in FY2016.
Appendix 1: Peers in Food & Drug Retailers
Below we provide Dairy Farm International Hldgs benchmarking against other companies in Food & Drug Retailers 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 |
|---|
| Lenta Ltd ($LNTA) | | 31.3% | 34.5% | 30.3% | 21.2% |
| X5 Retail Group N.V ($89VS) | 8.0% | 9.0% | 18.5% | 27.6% | |
| Magnit PJSC ($MGNT) | 33.5% | 29.4% | 32.3% | 24.4% | |
| Crawshaw Group ($CRAW) | | -0.6% | 11.9% | 17.1% | 50.5% |
| Total Produce ($TOT) | | 8.5% | 1.1% | 7.8% | 8.0% |
| |
|---|
| Median (8 companies) | 26.0% | 8.7% | 10.5% | 12.5% | 8.0% |
|---|
| Dairy Farm International Hldgs ($DFIB) | | 5.7% | 6.3% | 1.2% | 0.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Snacktime ($SNAK) | 56.6% | 51.8% | 55.1% | 53.9% | 54.0% |
| Crawshaw Group ($CRAW) | 43.3% | 43.7% | 43.8% | 44.4% | 45.1% |
| Magnit PJSC ($MGNT) | 26.5% | 28.5% | 28.9% | 28.5% | |
| X5 Retail Group N.V ($89VS) | 23.6% | 24.4% | 24.5% | 24.5% | |
| O'Key Group Sa ($OKEY) | 23.5% | 23.9% | 24.5% | 23.6% | |
| |
|---|
| Median (8 companies) | 23.6% | 24.1% | 24.5% | 24.1% | 23.8% |
|---|
| Dairy Farm International Hldgs ($DFIB) | 28.9% | 29.8% | 29.9% | 29.5% | 30.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jardine Matheson Hldgs ($J36) | 13.1% | 11.6% | 11.8% | 12.8% | 18.2% |
| Lenta Ltd ($LNTA) | 10.7% | 11.2% | 11.0% | 11.1% | 10.2% |
| Magnit PJSC ($MGNT) | 10.3% | 11.0% | 11.3% | 10.9% | |
| X5 Retail Group N.V ($89VS) | 6.9% | 7.1% | 7.7% | 7.2% | |
| Crawshaw Group ($CRAW) | 3.7% | 3.4% | 6.5% | 6.4% | 1.5% |
| |
|---|
| Median (8 companies) | 7.5% | 7.2% | 7.5% | 6.8% | 2.3% |
|---|
| Dairy Farm International Hldgs ($DFIB) | 6.6% | 6.9% | 6.6% | 5.8% | 6.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lenta Ltd ($LNTA) | 13.4% | 16.2% | 17.9% | 12.3% | 13.8% |
| X5 Retail Group N.V ($89VS) | 4.6% | 3.8% | 4.5% | 6.4% | |
| Crawshaw Group ($CRAW) | 1.1% | 1.0% | 1.2% | 6.3% | 6.1% |
| Magnit PJSC ($MGNT) | 10.5% | 8.6% | 7.3% | 5.7% | |
| O'Key Group Sa ($OKEY) | 7.1% | 8.7% | 10.6% | 5.1% | |
| |
|---|
| Median (8 companies) | 5.1% | 4.3% | 4.0% | 5.4% | 3.9% |
|---|
| Dairy Farm International Hldgs ($DFIB) | 3.0% | 2.9% | 2.7% | 2.4% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Magnit PJSC ($MGNT) | 23.1% | 26.0% | 33.2% | 32.6% | |
| Lenta Ltd ($LNTA) | 42.9% | 34.0% | 24.5% | 20.3% | 16.0% |
| X5 Retail Group N.V ($89VS) | 3.1% | 13.0% | 14.9% | 15.7% | |
| O'Key Group Sa ($OKEY) | 25.0% | 21.8% | 17.1% | 10.4% | |
| Total Produce ($TOT) | 9.0% | 11.9% | 10.3% | 9.5% | 9.2% |
| |
|---|
| Median (8 companies) | 8.5% | 12.4% | 12.6% | 10.0% | 9.2% |
|---|
| Dairy Farm International Hldgs ($DFIB) | 32.8% | 34.6% | 31.1% | 21.6% | 18.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| O'Key Group Sa ($OKEY) | 1.0x | 1.3x | 2.4x | 2.6x | |
| X5 Retail Group N.V ($89VS) | 3.3x | 2.7x | 2.2x | 2.3x | |
| Lenta Ltd ($LNTA) | 2.2x | 2.5x | 2.8x | 1.9x | 2.8x |
| Jardine Matheson Hldgs ($J36) | 1.4x | 1.3x | 1.3x | 1.3x | 0.8x |
| Magnit PJSC ($MGNT) | 1.1x | 1.1x | 0.9x | 0.9x | |
| |
|---|
| Median (7 companies) | 1.3x | 1.3x | 1.7x | 1.3x | 0.8x |
|---|
| Dairy Farm International Hldgs ($DFIB) | -0.8x | -0.9x | -0.7x | 0.7x | 1.0x |
