Vianet Group Net Income surged on 60.1% and Revenue increased on 2.1%
05 Jun 2018 • About Vianet Group (
$VNET) • By InTwits
Vianet Group reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Vianet Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's in pair with industry average of 2.4%
- CAPEX is quite volatile: £0m in FY2018, £0m in FY2017, £0m in FY2016, £0m in FY2015, £1m in FY2014
- The company has potentially unprofitable business model: ROIC is 3.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Vianet Group's Revenue increased on 2.1%. During the last 5 years Revenue growth bottomed in FY2015 at -21.7% and was accelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.00 pp from 12.4% to 11.4% in FY2018.
Gross Margin showed almost no change in FY2018. SG&A as a % of Revenue decreased on 4.4 pp from 53.2% to 48.7% in FY2018.
Net Income margin increased on 4.5 pp from 7.9% to 12.4% in FY2018. During the last 5 years Net Income margin bottomed in FY2016 at 7.1% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 2.7%. Vianet Group showed almost no change in CAPEX/Revenue from FY2015 to FY2018. It's average CAPEX/Revenue for the last three years was 2.6%.
Return on investment
The company operates at low ROIC (3.5%) and ROE (7.3%). ROIC increased slightly on 1.2 pp from 2.3% to 3.5% in FY2018. ROE increased on 2.7 pp from 4.6% to 7.3% in FY2018. During the last 5 years ROIC bottomed in FY2017 at 2.3%. During the last 5 years ROE bottomed in FY2016 at 4.1% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.4x and Debt / EBITDA is 0.9x. Debt surged on 177% while cash decreased on 4.9%.
Vianet Group has no short term refinancing risk: cash is higher than short term debt (407.2%).
Financial and operational results
FY ended 31 Mar 2018
Vianet Group ($VNET) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 18.335 | 14.358 | 14.290 | 14.263 | 14.561 | 2.1% |
| Gross Profit | 10.778 | 9.935 | 10.011 | 9.936 | 10.180 | 2.5% |
| SG&A | | 7.280 | 7.433 | 7.585 | 7.097 | -6.4% |
| EBITDA | 3.606 | 3.895 | 3.156 | 2.493 | 3.319 | 33.1% |
| Net Income | 3.133 | 1.290 | 1.017 | 1.130 | 1.809 | 60.1% |
Balance Sheet
|
|---|
| Cash | 0.183 | 0.548 | 3.605 | 4.549 | 4.324 | -4.9% |
| Short Term Debt | 1.183 | 1.043 | 0.489 | 0.325 | 1.062 | 226.8% |
| Long Term Debt | 1.245 | 1.594 | 1.103 | 0.778 | 1.994 | 156.3% |
Cash flow
|
|---|
| Capex | 0.455 | 0.363 | 0.383 | 0.325 | 0.398 | 22.5% |
Ratios
|
|---|
| Revenue growth | -13.0% | -21.7% | -0.5% | -0.2% | 2.1% | |
| EBITDA growth | -1.0% | 8.0% | -19.0% | -21.0% | 33.1% | |
|
|---|
| Gross Margin | 58.8% | 69.2% | 70.1% | 69.7% | 69.9% | 0.3% |
| EBITDA Margin | 19.7% | 27.1% | 22.1% | 17.5% | 22.8% | 5.3% |
| SG&A, % of revenue | | 50.7% | 52.0% | 53.2% | 48.7% | -4.4% |
| Net Income Margin | 17.1% | 9.0% | 7.1% | 7.9% | 12.4% | 4.5% |
| CAPEX, % of revenue | 2.5% | 2.5% | 2.7% | 2.3% | 2.7% | 0.5% |
|
|---|
| ROIC | 8.7% | 6.6% | 3.0% | 2.3% | 3.5% | 1.2% |
| ROE | 13.0% | 5.2% | 4.1% | 4.6% | 7.3% | 2.7% |
| Net Debt/EBITDA | 0.6x | 0.5x | -0.6x | -1.4x | -0.4x | 1.0x |
Peers in Support Services
Below we provide Vianet Group benchmarking against other companies in Support Services 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 |
|---|
| Mortice Ltd ($MORT) | 11.0% | 18.9% | 51.1% | 36.1% | |
| Rws Hldgs ($RWS) | 20.9% | 1.8% | 28.1% | 34.5% | |
| Empresaria Group ($EMR) | -3.3% | -0.3% | 44.4% | 32.1% | |
| Norish ($NSH) | 3.7% | 16.4% | 16.7% | 31.4% | |
| Capital Drilling Ltd ($CAPD) | -15.0% | -20.4% | 18.7% | 28.0% | |
| |
|---|
| Median (47 companies) | 5.1% | 7.2% | 3.5% | 7.0% | 9.2% |
|---|
| Vianet Group ($VNET) | | -21.7% | -0.5% | -0.2% | 2.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inspired Energy ($INSE) | 78.7% | 76.2% | 80.5% | 83.1% | |
| Ienergizer Ltd ($IBPO) | 76.8% | 72.7% | 71.3% | 71.2% | |
| Spectra Systems Corp ($SPSY) | 51.4% | 47.6% | 68.3% | 71.1% | |
| Grafenia ($GRA) | 56.1% | 70.8% | 66.3% | 63.0% | |
| Billing Services Group ($BILL) | 48.0% | 51.0% | 53.0% | 56.6% | |
| |
|---|
| Median (41 companies) | 29.2% | 28.1% | 27.0% | 27.9% | 18.7% |
|---|
| Vianet Group ($VNET) | 58.8% | 69.2% | 70.1% | 69.7% | 69.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Northgate ($67GX) | 40.6% | 39.4% | 38.3% | 35.9% | 35.4% |
| Spectra Systems Corp ($SPSY) | 12.3% | 6.0% | 19.7% | 34.0% | |
| Inspired Energy ($INSE) | 1.5% | 35.4% | 34.4% | 32.4% | |
| Vp ($VP.) | 24.2% | 26.2% | 28.4% | 28.6% | 27.2% |
| Rws Hldgs ($RWS) | 22.8% | 23.1% | 26.4% | 25.5% | |
| |
|---|
| Median (47 companies) | 6.7% | 6.9% | 4.9% | 5.7% | 8.2% |
|---|
| Vianet Group ($VNET) | 19.7% | 27.1% | 22.1% | 17.5% | 22.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vp ($VP.) | 21.6% | 25.7% | 24.1% | 26.0% | 23.6% |
| Augean ($AUG) | 12.3% | 12.3% | 11.0% | 10.0% | |
| Petards Group ($PEG) | 0.5% | 0.9% | 1.7% | 10.0% | |
| Capital Drilling Ltd ($CAPD) | 13.9% | 10.1% | 13.7% | 9.0% | |
| Billing Services Group ($BILL) | 2.1% | 4.1% | 3.0% | 4.5% | |
| |
|---|
| Median (47 companies) | 1.0% | 0.9% | 1.0% | 0.9% | 2.5% |
|---|
| Vianet Group ($VNET) | 2.5% | 2.5% | 2.7% | 2.3% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Sthree ($STHR) | 38.1% | 50.2% | 46.2% | 43.4% | |
| Mortice Ltd ($MORT) | 19.6% | 21.9% | 14.5% | 23.2% | |
| Petards Group ($PEG) | 24.7% | 23.9% | 22.7% | 20.3% | |
| Rws Hldgs ($RWS) | 24.5% | 23.3% | 23.5% | 20.2% | |
| Latham(James) ($LTHM) | 17.5% | 16.8% | 19.2% | 19.3% | 17.4% |
| |
|---|
| Median (48 companies) | 11.1% | 10.7% | 7.9% | 8.1% | 7.4% |
|---|
| Vianet Group ($VNET) | 8.7% | 6.6% | 3.0% | 2.3% | 3.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Nakama Group ($NAK) | 5.2x | 1.4x | 3.1x | 48.5x | |
| 21St Century Technology ($C21) | -0.8x | -0.2x | | 11.2x | |
| Ceps ($CEPS) | 6.6x | 3.8x | 13.9x | 5.8x | |
| Ibex Global Solutions ($IBEX) | 2.7x | 1.0x | 1.7x | 4.5x | |
| Menzies(John) ($68HN) | 2.0x | 2.4x | 1.2x | 3.0x | |
| |
|---|
| Median (42 companies) | 0.1x | -0.1x | 0.3x | 0.5x | 2.0x |
|---|
| Vianet Group ($VNET) | 0.6x | 0.5x | -0.6x | -1.4x | -0.4x |
