Konami Corp CAPEX surged on 17.8% and Revenue increased on 4.2%
10 May 2018 • About Konami Corp (
$KNM) • By InTwits
Konami Corp reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is expanding: 24.1% in FY2018 vs. 22.9% in FY2017 vs. 13.3% in FY2014
- Konami Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.0%. At the same time it's a lot of higher than industry average of 2.9%.
- CAPEX is quite volatile: 17,631 JPYm in FY2018, 14,969 JPYm in FY2017, 19,079 JPYm in FY2016, 25,769 JPYm in FY2015, 47,237 JPYm in FY2014
- The company has highly profitable business model: ROIC is 17.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 4.2%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.2 pp from 22.9% to 24.1% in FY2018. EBITDA Margin grew at 2.8 pp per annum in the last 5 years.
Gross Margin increased on 2.0 pp from 38.6% to 40.6% in FY2018. Gross Margin followed a growing trend at 2.4 pp per annum in FY2014-FY2018. SG&A as a % of Revenue decreased on 5.3 pp from 9.2% to 3.9% in FY2018.
Net Income margin increased slightly on 1.5 pp from 11.3% to 12.7% in FY2018. Net Income margin stuck to a growing trend at 2.8 pp per annum in FY2014-FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 Konami Corp had CAPEX/Revenue of 7.4%. CAPEX/Revenue decreased on 4.5 pp from 11.8% in FY2015 to 7.4% in FY2018. It's average CAPEX/Revenue for the last three years was 7.2%. During FY2014-FY2018 CAPEX as a % of Revenue bottomed in FY2017 at 6.5%.
Return on investment
The company operates at good ROIC (17.5%) and ROE (12.5%). ROIC increased on 2.5 pp from 15.0% to 17.5% in FY2018. ROE increased slightly on 0.89 pp from 11.6% to 12.5% in FY2018. ROIC grew at 3.7 pp per annum in FY2014-FY2018. ROE followed a growing trend at 2.8 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.2x and Debt / EBITDA is 0.5x. Debt dropped on 11.3% while cash surged on 14.7%.
Konami Corp has no short term refinancing risk: cash is higher than short term debt (1,128.2%).
Financial and operational results
FY ended 31 Mar 2018
Konami Corp ($KNM) key annual financial indicators| mln. JPY | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 217,595 | 218,157 | 249,902 | 229,922 | 239,497 | 4.2% |
| Gross Profit | 68,141 | 71,454 | 87,452 | 88,731 | 97,272 | 9.6% |
| SG&A | 16,991 | 13,778 | 23,583 | 21,162 | 9,355 | -55.8% |
| EBITDA | 29,048 | 35,936 | 53,766 | 52,645 | 57,671 | 9.5% |
| Net Income | 4,465 | 9,918 | 10,516 | 25,951 | 30,507 | 17.6% |
Balance Sheet
|
|---|
| Cash | 50,024 | 64,654 | 113,907 | 134,743 | 154,485 | 14.7% |
| Short Term Debt | 8,536 | 8,005 | 9,014 | 12,397 | 13,693 | 10.5% |
| Long Term Debt | 35,412 | 33,391 | 27,293 | 19,678 | 14,744 | -25.1% |
Cash flow
|
|---|
| Capex | 47,237 | 25,769 | 19,079 | 14,969 | 17,631 | 17.8% |
Ratios
|
|---|
| Revenue growth | -3.7% | 0.3% | 14.6% | -8.0% | 4.2% | |
| EBITDA growth | -10.3% | 23.7% | 49.6% | -2.1% | 9.5% | |
|
|---|
| Gross Margin | 31.3% | 32.8% | 35.0% | 38.6% | 40.6% | 2.0% |
| EBITDA Margin | 13.3% | 16.5% | 21.5% | 22.9% | 24.1% | 1.2% |
| SG&A, % of revenue | 7.8% | 6.3% | 9.4% | 9.2% | 3.9% | -5.3% |
| Net Income Margin | 2.1% | 4.5% | 4.2% | 11.3% | 12.7% | 1.5% |
| CAPEX, % of revenue | 21.7% | 11.8% | 7.6% | 6.5% | 7.4% | 0.9% |
|
|---|
| ROIC | 3.2% | 6.6% | 10.4% | 15.0% | 17.5% | 2.5% |
| ROE | 2.1% | 4.7% | 4.9% | 11.6% | 12.5% | 0.9% |
| Net Debt/EBITDA | -0.2x | -0.6x | -1.4x | -2.0x | -2.2x | -0.2x |
Peers in Leisure Goods
Below we provide Konami Corp benchmarking against other companies in Leisure Goods 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lightwaverf ($LWRF) | 188.5% | -30.9% | -31.3% | 110.1% | |
| Lg Electronics Inc ($39IB) | 1.5% | -4.3% | -2.0% | 10.9% | |
| Tandem Group ($TND) | 10.5% | 9.8% | 11.7% | -4.1% | |
| Character Group ($CCT) | 45.7% | 1.2% | 22.1% | -4.7% | |
| Vmoto Ltd ($VMT) | 70.6% | 10.9% | -63.7% | -12.7% | |
| |
|---|
| Median (6 companies) | 28.1% | 5.5% | -3.1% | -4.4% | |
|---|
| Konami Corp ($KNM) | | 0.3% | 14.6% | -8.0% | 4.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hornby ($HRN) | 45.2% | 46.7% | 39.0% | 38.3% | |
| Lightwaverf ($LWRF) | 33.9% | | 32.5% | 35.5% | |
| Character Group ($CCT) | 29.8% | 37.0% | 31.6% | 32.6% | |
| Tandem Group ($TND) | 30.5% | 29.4% | 26.0% | 29.6% | |
| Lg Electronics Inc ($39IB) | 23.3% | 22.8% | 24.8% | 23.9% | |
| |
|---|
| Median (6 companies) | 30.2% | 29.4% | 28.8% | 31.1% | |
|---|
| Konami Corp ($KNM) | 31.3% | 32.8% | 35.0% | 38.6% | 40.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Character Group ($CCT) | 10.0% | 14.1% | 13.1% | 13.9% | |
| Tandem Group ($TND) | 5.3% | 4.7% | 4.2% | 7.0% | |
| Lg Electronics Inc ($39IB) | 6.4% | 5.5% | 5.6% | 6.9% | |
| Hornby ($HRN) | 1.8% | 7.4% | -17.3% | -11.9% | |
| Lightwaverf ($LWRF) | -7.5% | | -43.8% | -15.2% | |
| |
|---|
| Median (6 companies) | 3.6% | 7.4% | -6.6% | -2.5% | |
|---|
| Konami Corp ($KNM) | 13.3% | 16.5% | 21.5% | 22.9% | 24.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lg Electronics Inc ($39IB) | 3.7% | 3.1% | 3.6% | 4.2% | |
| Vmoto Ltd ($VMT) | 2.6% | 1.8% | 3.0% | 3.9% | |
| Hornby ($HRN) | 7.9% | 7.0% | 5.8% | 3.7% | |
| Lightwaverf ($LWRF) | 2.0% | | 0.3% | 0.9% | |
| Character Group ($CCT) | 0.4% | 0.4% | 0.2% | 0.2% | |
| |
|---|
| Median (6 companies) | 2.3% | 1.8% | 1.7% | 2.3% | |
|---|
| Konami Corp ($KNM) | 21.7% | 11.8% | 7.6% | 6.5% | 7.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Character Group ($CCT) | 26.8% | 37.3% | 33.7% | 29.9% | |
| Tandem Group ($TND) | 37.6% | 16.6% | 13.2% | 24.9% | |
| Lg Electronics Inc ($39IB) | 8.9% | 5.8% | 6.5% | 11.3% | |
| Hornby ($HRN) | -7.7% | 0.5% | -36.6% | -28.0% | |
| Vmoto Ltd ($VMT) | 1.4% | 24.2% | -34.5% | -33.0% | |
| |
|---|
| Median (6 companies) | 5.2% | 16.6% | -14.0% | -8.3% | |
|---|
| Konami Corp ($KNM) | 3.2% | 6.6% | 10.4% | 15.0% | 17.5% |
Top companies by Net Debt / EBITDA
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lg Electronics Inc ($39IB) | 1.8x | 2.0x | 1.8x | 1.4x | |
| Character Group ($CCT) | 0.5x | -0.3x | -0.4x | -0.7x | |
| Tandem Group ($TND) | -1.1x | 3.5x | 0.6x | -0.9x | |
| |
|---|
| Median (3 companies) | 1.0x | 1.7x | 0.6x | -0.7x | |
|---|
| Konami Corp ($KNM) | -0.2x | -0.6x | -1.4x | -2.0x | -2.2x |
