Novolipetsk Iron And Steel Corp reports 9.7% CAPEX decline and 4.6% Revenue decline
06 Mar 2017 • About Novolipetsk Iron And Steel Corp (
$NLMK) • By InTwits
Novolipetsk Iron And Steel Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Novolipetsk Iron And Steel Corp is a company in decline: 2016 revenue growth was -4.6%, 5 years revenue CAGR was -8.2%
- EBITDA Margin is expanding: 25.4% in 2016 vs. 24.3% in 2015 vs. 15.6% in 2012
- Novolipetsk Iron And Steel Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.9%. At the same time it's in pair with industry average of 10.0%.
- CAPEX is quite volatile: 559 in 2016, 619 in 2015, 560 in 2014, 756 in 2013, 1,453 in 2012
- The company has highly profitable business model: ROIC is at 17.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Novolipetsk Iron And Steel Corp ($NLMK) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 12,157 | 10,909 | 10,396 | 8,008 | 7,636 | -4.6% |
| Gross Profit | 2,894 | 2,119 | 2,937 | 2,513 | 2,563 | 2.0% |
| SG&A | 1,592 | 1,341 | 1,203 | 1,063 | 1,021 | -4.0% |
| EBITDA | 1,900 | 1,505 | 2,269 | 1,948 | 1,941 | -0.4% |
| Net Income | 596 | 189 | 845 | 967 | 935 | -3.3% |
Balance Sheet
|
|---|
| Cash | 951 | 970 | 549 | 343 | 610 | 77.8% |
| Short Term Debt | 1,838 | 1,137 | 804 | 560 | 468 | -16.5% |
| Long Term Debt | 2,850 | 3,054 | 1,964 | 2,116 | 1,801 | -14.9% |
Cash flow
|
|---|
| Capex | 1,453 | 756 | 560 | 619 | 559 | -9.7% |
Ratios
|
|---|
| Revenue growth | 3.6% | -10.3% | -4.7% | -23.0% | -4.6% | |
| EBITDA growth | -15.7% | -20.8% | 50.7% | -14.1% | -0.4% | |
| Gross Margin | 23.8% | 19.4% | 28.3% | 31.4% | 33.6% | 2.2% |
| EBITDA Margin | 15.6% | 13.8% | 21.8% | 24.3% | 25.4% | 1.1% |
| Net Income Margin | 4.9% | 1.7% | 8.1% | 12.1% | 12.2% | 0.2% |
| SG&A, % of revenue | 13.1% | 12.3% | 11.6% | 13.3% | 13.4% | 0.1% |
| CAPEX, % of revenue | 12.0% | 6.9% | 5.4% | 7.7% | 7.3% | -0.4% |
| ROIC | 7.2% | 4.1% | 12.0% | 15.7% | 17.5% | 1.8% |
| ROE | 5.6% | 1.8% | 10.2% | 16.9% | 16.4% | -0.5% |
| Net Debt/EBITDA | 2.0x | 2.1x | 1.0x | 1.2x | 0.9x | -0.3x |
Revenue and profitability
Novolipetsk Iron And Steel Corp's Revenue decreased on 4.6% in 2016. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.1 pp from 24.3% to 25.4% in 2016.
Gross Margin increased on 2.2 pp from 31.4% to 33.6% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 7.3%. CAPEX/Revenue showed almost no change from 2013 to 2016. It's average CAPEX/Revenue for the last three years was 6.8%.
Return on investment
The company operates at good ROIC (17.48%) and ROE (16.38%). ROIC increased slightly on 1.8 pp from 15.7% to 17.5% in 2016. ROE decreased slightly on 0.54 pp from 16.9% to 16.4% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.9x and Debt / EBITDA is 1.2x. Net Debt / EBITDA dropped on 0.3x from 1.2x to 0.9x in 2016. Debt dropped on 15.2% in 2016 while cash surged on 77.8% in 2016.
Valuation
Novolipetsk Iron And Steel Corp's trades at EV/EBITDA 0.9x and P/E 0.1x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 1.3x with the industry average at 19.0x.
Appendix 1: Peers in Industrial Metals & Mining
Below we provide Novolipetsk Iron And Steel Corp 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 ($NHY) | | 1.1% | 20.1% | 12.6% | -6.5% |
| Afarak Group ($AFRK) | | 5.4% | 27.4% | 8.7% | -18.2% |
| Vimetco Nv ($VICO) | -13.4% | -6.5% | -12.8% | -5.3% | |
| |
|---|
| Median (15 companies) | -7.2% | 0.3% | 2.4% | -10.6% | -6.5% |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | | -10.3% | -4.7% | -23.0% | -4.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 49.1% | 43.4% | 52.2% | 55.7% | |
| Severstal PJSC ($SVST) | 23.5% | 29.9% | 34.4% | 40.4% | 39.6% |
| Magnitogorsk Iron & Steel Works ($MMK) | 15.5% | 14.9% | 21.9% | 30.6% | 32.2% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 17.7% | 15.1% | 28.6% | 24.8% | |
| Base Resources Ltd ($BSE) | | | 11.8% | 21.2% | 21.0% |
| |
|---|
| Median (13 companies) | 14.8% | 14.9% | 18.0% | 13.5% | 12.7% |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | 23.8% | 19.4% | 28.3% | 31.4% | 33.6% |
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% |
| Severstal PJSC ($SVST) | 14.9% | 19.3% | 26.4% | 32.4% | 31.2% |
| Magnitogorsk Iron & Steel Works ($MMK) | 13.1% | 14.0% | 19.5% | 28.3% | 34.5% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 12.7% | 5.7% | 25.3% | 24.1% | |
| |
|---|
| Median (15 companies) | 12.9% | 12.1% | 12.6% | 14.6% | 18.4% |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | 15.6% | 13.8% | 21.8% | 24.3% | 25.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| First Quantum Minerals ($FQM) | 46.5% | 73.2% | 81.7% | 72.5% | 56.0% |
| Mmc Norilsk Nickel ($MNOD) | 22.3% | 17.1% | 10.8% | 19.0% | |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 7.0% | 7.9% | 9.9% | 8.1% | |
| Ezz Steel ($AEZD) | 2.3% | 3.9% | 6.4% | 6.8% | |
| Vimetco Nv ($VICO) | | | 8.8% | 6.6% | |
| |
|---|
| Median (15 companies) | 6.7% | 7.7% | 6.4% | 6.3% | 8.2% |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | 12.0% | 6.9% | 5.4% | 7.7% | 7.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 21.8% | 14.2% | 34.1% | 31.7% | |
| Severstal PJSC ($SVST) | 10.3% | 9.6% | 17.7% | 30.3% | 29.7% |
| 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 ($MMK) | 1.8% | 1.4% | 9.1% | 18.1% | 26.7% |
| |
|---|
| Median (15 companies) | 5.4% | 4.9% | 7.4% | 5.6% | 4.0% |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | 7.2% | 4.1% | 12.0% | 15.7% | 17.5% |
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 ($FQM) | 0.0x | 2.5x | 4.0x | 10.5x | 4.5x |
| Base Resources Ltd ($BSE) | | | | 4.4x | 3.7x |
| OAO TMK ($TMKS) | 3.6x | 3.9x | 3.8x | 4.3x | |
| |
|---|
| Median (14 companies) | 1.9x | 2.0x | 1.1x | 1.0x | 0.1x |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | 2.0x | 2.1x | 1.0x | 1.2x | 0.9x |
