Just Eat reports 243% Net Income decline and 32.1 pp EBITDA Margin decline from 25.8% to -6.2%
06 Mar 2018 • About Just Eat (
$JE.) • By InTwits
Just Eat reported 2017 financial results today. Overall looking at the company's long term financial model we can say that:
- Just Eat doesn't have a profitable business model yet: 2017 ROIC is -9.2%
- EBITDA Margin is quite volatile: -6.2% in 2017, 25.8% in 2016, 21.0% in 2015, 16.3% in 2014, 11.3% in 2013
- Just Eat has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's in pair with industry average of 2.7%.
- CAPEX is quite volatile: 14.6 in 2017, 9.5 in 2016, 5.8 in 2015, 5.4 in 2014, 3.3 in 2013
- The company has unprofitable business model: ROIC is at -9.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Just Eat ($JE.) key annual financial indicators
| mln. £ | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 96.8 | 157.0 | 247.6 | 375.7 | 546.3 | 45.4% |
| Gross Profit | 86.8 | 140.9 | 223.4 | 340.5 | 450.3 | 32.2% |
| SG&A | 73.7 | 113.5 | 176.2 | 250.2 | 324.5 | 29.7% |
| EBITDA | 10.9 | 25.6 | 52.1 | 97.1 | -34.0 | -135.0% |
| Net Income | 7.0 | 52.0 | 23.1 | 71.7 | -102.7 | -243.2% |
Balance Sheet
|
|---|
| Cash | 61.6 | 164.4 | 192.7 | 130.6 | 265.1 | 103.0% |
| Short Term Debt | 0.0 | 0.3 | 0.0 | 0.4 | 0.4 | 0.0% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.6 | 0.3 | -50.0% |
Cash flow
|
|---|
| Capex | 3.3 | 5.4 | 5.8 | 9.5 | 14.6 | 53.7% |
Ratios
|
|---|
| Revenue growth | 61.9% | 62.3% | 57.7% | 51.7% | 45.4% | |
| EBITDA growth | -262.6% | 133.9% | 103.5% | 86.4% | -135.0% | |
| Gross Margin | 89.7% | 89.7% | 90.2% | 90.6% | 82.4% | -8.2% |
| EBITDA Margin | 11.3% | 16.3% | 21.0% | 25.8% | -6.2% | -32.1% |
| Net Income Margin | 7.2% | 33.1% | 9.3% | 19.1% | -18.8% | -37.9% |
| SG&A, % of revenue | 76.1% | 72.3% | 71.2% | 66.6% | 59.4% | -7.2% |
| CAPEX, % of revenue | 3.4% | 3.4% | 2.3% | 2.5% | 2.7% | 0.1% |
| ROIC | 14.6% | 16.4% | 9.1% | 9.8% | -9.2% | -19.1% |
| ROE | 13.9% | 44.0% | 5.7% | 9.9% | -13.4% | -23.3% |
| Net Debt/EBITDA | -5.6x | -6.4x | -3.7x | -1.3x | | 1.3x |
Revenue and profitability
The company's Revenue jumped on 45.4% in 2017. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.2 pp from 23.1% to 19.9% in FY2017.
Gross Margin decreased on 8.2 pp from 90.6% to 82.4% in 2017. SG&A as a % of Revenue decreased on 7.2 pp from 66.6% to 59.4% in 2017.
Net Income marign dropped on 37.9 pp from 19.1% to -18.8% in 2017.
Capital expenditures (CAPEX) and working capital investments
In 2017 Just Eat had CAPEX/Revenue of 2.7%. Just Eat showed small CAPEX/Revenue decline of 0.77 pp from 3.4% in 2014 to 2.7% in 2017. It's average level of CAPEX/Revenue for the last three years was 2.5%.
Return on investment
The company operates at negative ROIC (-9.24%) and ROE (-13.37%). ROIC dropped on 19.1 pp from 9.8% to -9.2% in 2017. ROE dropped on 23.3 pp from 9.9% to -13.4% in 2017.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.6x and Debt / EBITDA is . Net Debt / EBITDA jumped on 1.3x from -1.3x to in 2017. Debt dropped on 30% in 2017 while cash jumped on 103% in 2017.
Valuation
The company's trades at EV/EBITDA 11.6x and P/E 75.7x.
Appendix 1: Peers in General Retailers
Below you can find Just Eat benchmarking vs. other companies in General Retailers 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 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| AO World ($AO.) | 31.3% | 40.0% | 23.8% | 25.7% | |
| 7Digital Group ($7DIG) | 16.6% | 171.6% | 1.5% | 14.8% | |
| Signet Jewelers Ltd ($SIG) | 6.2% | 5.7% | 36.3% | 14.2% | |
| Caffyns ($78GL) | -3.1% | 17.1% | 8.9% | 10.5% | |
| Mysale Group ($MYSL) | 62.1% | 23.4% | 5.1% | 7.0% | |
| |
|---|
| Median (10 companies) | 9.4% | 5.7% | 5.1% | 4.2% | |
|---|
| Just Eat ($JE.) | | | 57.7% | 51.7% | 45.4% |
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| 7Digital Group ($7DIG) | 13.9% | 59.0% | 68.1% | 71.0% | |
| Aa ($AA.) | 63.9% | 64.7% | 64.8% | 64.3% | |
| French Connection Group ($FCCN) | 47.9% | 47.6% | 46.7% | 46.3% | |
| Stanley Gibbons Group ($SGI) | 43.2% | | 51.5% | 40.3% | |
| Signet Jewelers Ltd ($SIG) | 38.6% | 37.5% | 36.2% | 37.3% | |
| |
|---|
| Median (9 companies) | 33.5% | 31.6% | 34.3% | 37.3% | |
|---|
| Just Eat ($JE.) | | 89.7% | 90.2% | 90.6% | 82.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Aa ($AA.) | 37.0% | 42.2% | 37.9% | 36.8% | |
| Signet Jewelers Ltd ($SIG) | 16.6% | 16.2% | 12.7% | 13.4% | |
| Lotte Shopping Co Ltd ($LOTS) | 8.2% | 7.4% | 6.3% | 6.5% | |
| Caffyns ($78GL) | 3.0% | 2.0% | 6.5% | 2.2% | |
| Mysale Group ($MYSL) | 3.5% | 2.3% | -4.7% | 1.8% | |
| |
|---|
| Median (9 companies) | 5.2% | 2.3% | 7.5% | 1.8% | |
|---|
| Just Eat ($JE.) | | 16.3% | 21.0% | 25.8% | -6.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Aa ($AA.) | 0.7% | 1.0% | 3.8% | 7.7% | |
| Lotte Shopping Co Ltd ($LOTS) | 6.5% | 6.6% | 3.8% | 4.1% | |
| 7Digital Group ($7DIG) | 0.3% | 3.4% | 8.2% | 3.8% | |
| Signet Jewelers Ltd ($SIG) | 3.4% | 3.6% | 3.8% | 3.5% | |
| Caffyns ($78GL) | 2.2% | 3.9% | 1.4% | 1.6% | |
| |
|---|
| Median (9 companies) | 0.8% | 1.0% | 1.9% | 1.6% | |
|---|
| Just Eat ($JE.) | | 3.4% | 2.3% | 2.5% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Aa ($AA.) | 134.4% | 61.1% | 34.9% | 32.8% | |
| Signet Jewelers Ltd ($SIG) | 21.5% | 20.4% | 15.5% | 15.2% | |
| Caffyns ($78GL) | 15.4% | 11.1% | 37.3% | 10.4% | |
| Lotte Shopping Co Ltd ($LOTS) | 4.9% | 3.8% | 2.6% | 2.9% | |
| Mysale Group ($MYSL) | | 10.0% | -19.0% | 0.3% | |
| |
|---|
| Median (10 companies) | 15.4% | 6.9% | 10.0% | 0.3% | |
|---|
| Just Eat ($JE.) | | 16.4% | 9.1% | 9.8% | -9.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Aa ($AA.) | -0.0x | 7.7x | 7.9x | 7.8x | |
| Lotte Shopping Co Ltd ($LOTS) | 4.9x | 5.2x | 6.7x | 6.4x | |
| Caffyns ($78GL) | 2.0x | 3.0x | 0.7x | 2.2x | |
| Signet Jewelers Ltd ($SIG) | -0.5x | -0.3x | 1.7x | 1.4x | |
| Mysale Group ($MYSL) | -2.1x | -14.4x | | -6.0x | |
| |
|---|
| Median (5 companies) | -0.2x | 1.4x | 0.7x | 2.2x | |
|---|
| Just Eat ($JE.) | | -6.4x | -3.7x | -1.3x | |
