Mmc Norilsk Nickel reports 46.3% Net Income growth and almost no change in EBITDA Margin of 46.5%
15 Mar 2017 • About Mmc Norilsk Nickel (
$MNOD) • By InTwits
Mmc Norilsk Nickel reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Mmc Norilsk Nickel is a company in decline: 2016 revenue growth was -3.3%, 5 years revenue CAGR was -10.2%
- Mmc Norilsk Nickel has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.8%. At the same time it's a lot of higher than industry average of 10.1%.
- CAPEX is quite volatile: 180 in 2016, 240 in 2015, 717 in 2014, 203 in 2013, 133 in 2012
- The company has highly profitable business model: ROIC is at 28.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Mmc Norilsk Nickel ($MNOD) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 12,065 | 11,499 | 11,869 | 8,542 | 8,259 | -3.3% |
| Gross Profit | 5,920 | 4,993 | 6,195 | 4,761 | 4,100 | -13.9% |
| SG&A | 1,509 | 1,373 | 1,120 | 679 | 661 | -2.7% |
| EBITDA | 4,653 | 3,357 | 5,551 | 4,012 | 3,838 | -4.3% |
| Net Income | 2,170 | 774 | 2,003 | 1,734 | 2,536 | 46.3% |
Balance Sheet
|
|---|
| Cash | 1,037 | 1,621 | 2,793 | 4,054 | 3,301 | -18.6% |
| Short Term Debt | 2,526 | 1,032 | 652 | 1,124 | 578 | -48.6% |
| Long Term Debt | 2,497 | 5,173 | 5,678 | 7,142 | 7,274 | 1.8% |
Cash flow
|
|---|
| Capex | 2,692 | 1,970 | 1,277 | 1,626 | 1,648 | 1.4% |
Ratios
|
|---|
| Revenue growth | -14.6% | -4.7% | 3.2% | -28.0% | -3.3% | |
| EBITDA growth | -33.5% | -27.9% | 65.4% | -27.7% | -4.3% | |
| Gross Margin | 49.1% | 43.4% | 52.2% | 55.7% | 49.6% | -6.1% |
| EBITDA Margin | 38.6% | 29.2% | 46.8% | 47.0% | 46.5% | -0.5% |
| Net Income Margin | 18.0% | 6.7% | 16.9% | 20.3% | 30.7% | 10.4% |
| SG&A, % of revenue | 12.5% | 11.9% | 9.4% | 7.9% | 8.0% | 0.1% |
| CAPEX, % of revenue | 22.3% | 17.1% | 10.8% | 19.0% | 20.0% | 0.9% |
| ROIC | 21.8% | 14.2% | 34.1% | 31.7% | 28.8% | -2.9% |
| ROE | 18.1% | 6.9% | 27.8% | 49.5% | 83.7% | 34.2% |
| Net Debt/EBITDA | 0.9x | 1.4x | 0.6x | 1.0x | 1.2x | 0.1x |
Revenue and profitability
Mmc Norilsk Nickel's Revenue decreased on 3.3% in 2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.0 pp from 34.7% to 37.7% in FY2016.
Gross Margin decreased on 6.1 pp from 55.7% to 49.6% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign jumped on 10.4 pp from 20.3% to 30.7% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Mmc Norilsk Nickel had CAPEX/Revenue of 20.0%. The company showed CAPEX/Revenue growth of 2.8 pp from 17.1% in 2013 to 20.0% in 2016. For the last three years the average CAPEX/Revenue was 16.6%.
Return on investment
The company operates at high and attractive ROIC (28.76%) and ROE (83.68%). ROIC decreased on 2.9 pp from 31.7% to 28.8% in 2016. ROE jumped on 34.2 pp from 49.5% to 83.7% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.2x and Debt / EBITDA is 2.0x. Net Debt / EBITDA surged on 0.1x from 1.0x to 1.2x in 2016. Debt decreased on 5.0% in 2016 while cash dropped on 18.6% in 2016.
Appendix 1: Peers in Industrial Metals & Mining
Below you can find Mmc Norilsk Nickel benchmarking vs. other companies in Industrial Metals & Mining 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 |
|---|
| 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 ($VICO) | -13.4% | -6.5% | -12.8% | -5.3% | |
| |
|---|
| Median (15 companies) | -5.5% | 0.3% | 0.7% | -10.6% | -6.5% |
|---|
| Mmc Norilsk Nickel ($MNOD) | | -4.7% | 3.2% | -28.0% | -3.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Severstal PJSC ($SVST) | 23.5% | 29.9% | 34.4% | 40.4% | 39.6% |
| Novolipetsk Iron And Steel Corp ($NLMK) | 23.8% | 19.4% | 28.3% | 31.4% | 33.6% |
| 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 ($BSE) | | | 11.8% | 21.2% | 21.0% |
| |
|---|
| Median (13 companies) | 14.8% | 14.9% | 18.0% | 13.5% | 21.0% |
|---|
| Mmc Norilsk Nickel ($MNOD) | 49.1% | 43.4% | 52.2% | 55.7% | 49.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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 ($MMK) | 13.1% | 14.0% | 19.5% | 28.3% | 34.5% |
| Novolipetsk Iron And Steel Corp ($NLMK) | 15.6% | 13.8% | 21.8% | 24.3% | 25.4% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 12.7% | 5.7% | 25.3% | 24.1% | |
| |
|---|
| Median (15 companies) | 12.9% | 12.1% | 12.6% | 14.6% | 18.4% |
|---|
| Mmc Norilsk Nickel ($MNOD) | 38.6% | 29.2% | 46.8% | 47.0% | 46.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| First Quantum Minerals ($FQM) | 46.5% | 73.2% | 81.7% | 72.5% | 56.0% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 7.0% | 7.9% | 9.9% | 8.1% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 12.0% | 6.9% | 5.4% | 7.7% | 7.3% |
| Ezz Steel ($AEZD) | 2.3% | 3.9% | 6.4% | 6.8% | |
| Vimetco Nv ($VICO) | | | 8.8% | 6.6% | |
| |
|---|
| Median (15 companies) | 6.7% | 7.6% | 6.3% | 6.3% | 7.3% |
|---|
| Mmc Norilsk Nickel ($MNOD) | 22.3% | 17.1% | 10.8% | 19.0% | 20.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% |
| Novolipetsk Iron And Steel Corp ($NLMK) | 7.2% | 4.1% | 12.0% | 15.7% | 17.5% |
| |
|---|
| Median (15 companies) | 5.4% | 4.1% | 7.4% | 5.6% | 5.0% |
|---|
| Mmc Norilsk Nickel ($MNOD) | 21.8% | 14.2% | 34.1% | 31.7% | 28.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| OAO TMK ($TMKS) | 3.6x | 3.9x | 3.8x | 4.3x | 5.2x |
| First Quantum Minerals ($FQM) | 0.0x | 2.5x | 4.0x | 10.5x | 4.5x |
| Base Resources Ltd ($BSE) | | | | 4.4x | 3.7x |
| Posco ($PIDD) | 3.3x | 3.9x | 3.7x | 3.6x | 3.4x |
| Novolipetsk Iron And Steel Corp ($NLMK) | 2.0x | 2.1x | 1.0x | 1.2x | 0.9x |
| |
|---|
| Median (11 companies) | 2.0x | 2.1x | 1.2x | 1.0x | 0.5x |
|---|
| Mmc Norilsk Nickel ($MNOD) | 0.9x | 1.4x | 0.6x | 1.0x | 1.2x |
