Ros Agro reports 45.7% CAPEX growth and 13.3% Revenue growth
13 Mar 2017 • About Ros Agro (
$AGRO) • By InTwits
Ros Agro reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ros Agro is a growth stock: 2016 revenue growth was 13.3%, 5 year revenue CAGR was 14.7% at 2016 ROIC 11.1%
- Ros Agro has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.6%. At the same time it's a lot of higher than industry average of 7.7%.
- CAPEX is quite volatile: 16,643 in 2016, 11,423 in 2015, 5,206 in 2014, 4,233 in 2013, 7,433 in 2012
- The company has business model with average profitability: ROIC is at 11.1%
- It operates with high leverage: Net Debt/EBITDA is 1.9x while industry average is 1.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ros Agro ($AGRO) key annual financial indicators
| mln. RUB | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 37,100 | 40,155 | 71,731 | 74,704 | 84,641 | 13.3% |
| Gross Profit | 10,682 | 8,858 | 24,082 | 31,433 | 25,725 | -18.2% |
| SG&A | 5,075 | 5,333 | 4,061 | 8,963 | 12,907 | 44.0% |
| EBITDA | 7,634 | 6,217 | 20,190 | 25,877 | 20,059 | -22.5% |
| Net Income | 4,084 | 3,202 | 20,134 | 23,482 | 13,684 | -41.7% |
Balance Sheet
|
|---|
| Cash | 2,020 | 2,673 | 10,316 | 4,402 | 6,752 | 53.4% |
| Short Term Debt | 24,308 | 18,088 | 12,450 | 25,677 | 11,704 | -54.4% |
| Long Term Debt | 24,126 | 14,369 | 9,806 | 24,038 | 32,798 | 36.4% |
Cash flow
|
|---|
| Capex | 7,433 | 4,233 | 5,206 | 11,423 | 16,643 | 45.7% |
Ratios
|
|---|
| Revenue growth | -13.2% | 8.2% | 78.6% | 4.1% | 13.3% | |
| EBITDA growth | 63.4% | -18.6% | 224.7% | 28.2% | -22.5% | |
| Gross Margin | 28.8% | 22.1% | 33.6% | 42.1% | 30.4% | -11.7% |
| EBITDA Margin | 20.6% | 15.5% | 28.1% | 34.6% | 23.7% | -10.9% |
| Net Income Margin | 11.0% | 8.0% | 28.1% | 31.4% | 16.2% | -15.3% |
| SG&A, % of revenue | 13.7% | 13.3% | 5.7% | 12.0% | 15.2% | 3.3% |
| CAPEX, % of revenue | 20.0% | 10.5% | 7.3% | 15.3% | 19.7% | 4.4% |
| ROIC | 7.2% | 4.0% | 23.8% | 23.2% | 11.1% | -12.1% |
| ROE | 14.0% | 9.7% | 46.8% | 38.4% | 16.6% | -21.8% |
| Net Debt/EBITDA | 6.1x | 4.8x | 0.6x | 1.8x | 1.9x | 0.1x |
Revenue and profitability
Ros Agro's Revenue surged on 13.3% 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 dropped on 11.7 pp from 42.1% to 30.4% in 2016. SG&A as a % of Revenue increased on 3.3 pp from 12.0% to 15.2% in 2016.
Net Income marign dropped on 15.3 pp from 31.4% to 16.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Ros Agro had CAPEX/Revenue of 19.7%. The company's CAPEX/Revenue increased on 9.1 pp from 10.5% in 2013 to 19.7% in 2016. It's average level of CAPEX/Revenue for the last three years was 14.1%.The company invested a big chunk of EBITDA (83.0%) to CAPEX to secure its growth.
Return on investment
The company operates at good ROE (16.62%) while ROIC is low (11.14%). ROIC dropped on 12.1 pp from 23.2% to 11.1% in 2016. ROE dropped on 21.8 pp from 38.4% to 16.6% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.9x and Debt / EBITDA is 2.2x. Net Debt / EBITDA jumped on 0.1x from 1.8x to 1.9x in 2016. Debt dropped on 10.5% in 2016 while cash jumped on 53.4% in 2016.
Valuation
Ros Agro's trades at EV/EBITDA 1.9x and P/E 0.0x while industy averages are 15.6x and 19.1x. Ros Agro's EV/(EBITDA-CAPEX) is 11.1x with the industry average at 19.0x.
Appendix 1: Peers in Food Producers
Below you can find Ros Agro benchmarking vs. other companies in Food Producers industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
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% | |
| Cherkizovo Group OJSC ($CHE) | | 8.1% | 31.5% | 11.1% | 7.0% |
| Glanbia ($GLB) | | 7.7% | 6.6% | 9.3% | 2.7% |
| Kerry Group ($KYGA) | | -0.2% | -1.4% | 6.1% | 0.4% |
| |
|---|
| Median (20 companies) | 14.1% | 6.3% | -4.1% | -5.3% | 2.9% |
|---|
| Ros Agro ($AGRO) | | 8.2% | 78.6% | 4.1% | 13.3% |
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% |
| Produce Investments ($PIL) | 27.9% | 25.0% | 33.5% | 36.4% | 37.9% |
| |
|---|
| Median (18 companies) | 28.8% | 22.0% | 26.8% | 23.4% | 24.1% |
|---|
| Ros Agro ($AGRO) | 28.8% | 22.1% | 33.6% | 42.1% | 30.4% |
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% |
| R.E.A.Hldgs ($RE.B) | 35.3% | 34.0% | 33.2% | 31.1% | |
| Kakuzi ($KAKU) | 28.0% | 14.9% | 11.8% | 29.4% | |
| Tongaat Hulett Ltd ($THL) | 18.7% | 18.2% | 19.0% | 16.5% | 14.5% |
| |
|---|
| Median (20 companies) | 9.9% | 8.7% | 8.7% | 8.8% | 10.7% |
|---|
| Ros Agro ($AGRO) | 20.6% | 15.5% | 28.1% | 34.6% | 23.7% |
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% |
| Asian Citrus Hldgs ($ACHL) | 19.3% | 28.6% | 17.7% | 14.3% | |
| |
|---|
| Median (20 companies) | 6.1% | 4.3% | 4.8% | 5.1% | 3.1% |
|---|
| Ros Agro ($AGRO) | 20.0% | 10.5% | 7.3% | 15.3% | 19.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% |
| Fyffes ($FFY) | 16.4% | 17.2% | 18.5% | 14.7% | |
| |
|---|
| Median (20 companies) | 12.3% | 8.6% | 9.7% | 8.2% | 7.6% |
|---|
| Ros Agro ($AGRO) | 7.2% | 4.0% | 23.8% | 23.2% | 11.1% |
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 ($RGD) | | 2.5x | 5.7x | 3.2x | 1.3x |
| Cherkizovo Group OJSC ($CHE) | 2.7x | 4.4x | 1.6x | 3.1x | 3.8x |
| Zambeef Products ($ZAM) | 6.3x | 4.7x | 4.8x | 3.0x | 1.8x |
| |
|---|
| Median (17 companies) | 1.0x | 1.5x | 1.7x | 1.8x | 1.3x |
|---|
| Ros Agro ($AGRO) | 6.1x | 4.8x | 0.6x | 1.8x | 1.9x |
