Naspers reports 386% Net Income growth in 2018 and 9.2% Revenue growth
22 Jun 2018 • About Naspers (
$NPSN) • By InTwits
Naspers reported FY2018 financial results today. Here are the key drivers of the company's long term financial model: The company has unprofitable business model: ROIC is -1.0%.
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 9.2%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.7 pp from -0.16% to 1.6% in FY2018.
Gross Margin decreased slightly on 1.8 pp from 41.4% to 39.6% in FY2018. Gross Margin declined at -0.83 pp per annum in FY2014-FY2018. SG&A as a % of Revenue decreased on 4.3 pp from 43.3% to 38.9% in FY2018.
Net Income margin jumped on 132 pp from 38.3% to 171% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.0% in FY2018. CAPEX/Revenue decreased slightly on 2.0 pp from 4.0% in FY2015 to 2.0% in FY2018. For the last three years the average CAPEX/Revenue was 2.5%. Naspers investments to CAPEX were large: 128% of EBITDA.
Return on investment
The company operates at negative ROIC (-1.0%) and low but positive ROE (59.2%). ROIC increased slightly on 1.1 pp from -2.2% to -1.0% in FY2018. ROE surged on 39.0 pp from 20.2% to 59.2% in FY2018. During the last 5 years ROIC bottomed in FY2017 at -2.2%.
Leverage (Debt)
Debt level is -65.3x Net Debt / EBITDA and 44.1x Debt / EBITDA. Debt increased on 7.5% while cash jumped on 184%.
Naspers has no short term refinancing risk: cash is higher than short term debt (4,045.9%).
Financial and operational results
FY ended 31 Mar 2018
Naspers ($NPSN) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 6,154 | 6,569 | 5,930 | 6,098 | 6,660 | 9.2% |
| Gross Profit | 2,679 | 2,745 | 2,538 | 2,524 | 2,635 | 4.4% |
| SG&A | 2,341 | 2,377 | 2,276 | 2,640 | 2,594 | -1.7% |
| EBITDA | | 458 | 150 | -10 | 104 | |
| Net Income | 571 | 1,257 | 994 | 2,337 | 11,357 | 386.0% |
Balance Sheet
|
|---|
| Cash | 1,298 | 1,226 | 1,714 | 4,007 | 11,369 | 183.7% |
| Short Term Debt | 353 | 380 | 228 | 919 | 281 | -69.4% |
| Long Term Debt | 3,244 | 3,691 | 3,694 | 3,342 | 4,301 | 28.7% |
Cash flow
|
|---|
| Capex | | 262 | 186 | 152 | 133 | -12.5% |
Ratios
|
|---|
| Revenue growth | 4.8% | 6.7% | -9.7% | 2.8% | 9.2% | |
| EBITDA growth | | | -67.2% | -106.7% | -1,140.0% | |
|
|---|
| Gross Margin | 43.5% | 41.8% | 42.8% | 41.4% | 39.6% | -1.8% |
| EBITDA Margin | | 7.0% | 2.5% | -0.2% | 1.6% | 1.7% |
| SG&A, % of revenue | 38.0% | 36.2% | 38.4% | 43.3% | 38.9% | -4.3% |
| Net Income Margin | 9.3% | 19.1% | 16.8% | 38.3% | 170.5% | 132.2% |
| CAPEX, % of revenue | | 4.0% | 3.1% | 2.5% | 2.0% | -0.5% |
|
|---|
| ROIC | 2.1% | 1.6% | -1.0% | -2.2% | -1.0% | 1.1% |
| ROE | 9.4% | 19.4% | 11.8% | 20.2% | 59.2% | 39.0% |
| Net Debt/EBITDA | | 6.2x | 14.7x | | -65.3x |
Peers in Media
Below we provide Naspers benchmarking against other companies in Media 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 |
|---|
| Marimedia Ltd ($MARI) | 45.7% | 20.1% | 66.0% | 67.6% | |
| Future ($FUTR) | -20.1% | -9.4% | -1.3% | 43.1% | |
| Grupo Clarin Sa ($GCLA) | 39.8% | -57.9% | 37.2% | 24.4% | |
| Jaywing ($JWNG) | -0.7% | 26.6% | 6.5% | 23.8% | |
| Tla Worldwide ($TLA) | 6.3% | 130.0% | 10.6% | 23.4% | |
| |
|---|
| Median (24 companies) | 1.5% | 0.8% | 4.0% | 3.0% | 3.1% |
|---|
| Naspers ($NPSN) | | 6.7% | -9.7% | 2.8% | 9.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Porta Communications ($PTCM) | 83.4% | 79.0% | 80.1% | 84.9% | |
| Jaywing ($JWNG) | 81.0% | 89.0% | 88.4% | 80.8% | |
| Tla Worldwide ($TLA) | 99.9% | 78.8% | 75.5% | 68.1% | |
| Spaceandpeople ($SAL) | 62.2% | 58.8% | 57.2% | 66.1% | |
| Reed Elsevier ($REL) | 65.3% | 64.3% | 63.9% | 64.2% | |
| |
|---|
| Median (22 companies) | 44.0% | 41.6% | 38.5% | 39.5% | 61.5% |
|---|
| Naspers ($NPSN) | 43.5% | 41.8% | 42.8% | 41.4% | 39.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Haynes Publishing Group ($HYNS) | 38.8% | 33.5% | 15.4% | 35.0% | |
| Reed Elsevier ($REL) | 32.7% | 32.7% | 33.9% | 34.4% | |
| Nahl Group ($NAH) | 28.8% | 29.5% | 34.9% | 27.4% | |
| Uls Technology ($ULS) | 16.7% | 21.1% | 19.8% | 21.2% | |
| Spaceandpeople ($SAL) | 10.5% | 11.2% | 1.6% | 17.2% | |
| |
|---|
| Median (24 companies) | 13.8% | 12.5% | 7.0% | 6.8% | 10.5% |
|---|
| Naspers ($NPSN) | | 7.0% | 2.5% | -0.2% | 1.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Trader Media East ($TME) | 3.8% | 2.3% | | 47.5% | |
| Dods(Group ($DODS) | 0.6% | 0.4% | 0.6% | 12.7% | 1.3% |
| Grupo Clarin Sa ($GCLA) | 12.8% | 1.6% | 2.7% | 2.7% | |
| Ite Group ($ITE) | 1.7% | 1.3% | 1.8% | 2.1% | |
| Jaywing ($JWNG) | 1.5% | 1.3% | 1.3% | 1.8% | |
| |
|---|
| Median (24 companies) | 1.5% | 1.1% | 0.7% | 0.8% | 0.8% |
|---|
| Naspers ($NPSN) | | 4.0% | 3.1% | 2.5% | 2.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Uls Technology ($ULS) | 44.1% | 39.6% | 39.3% | 31.3% | |
| Independent News & Media ($INM) | 29.6% | 65.1% | 118.5% | 24.4% | |
| Marimedia Ltd ($MARI) | 39.0% | 6.4% | 39.6% | 23.9% | |
| Reed Elsevier ($REL) | 21.0% | 21.4% | 21.4% | 21.4% | |
| Nahl Group ($NAH) | 31.5% | 26.0% | 23.0% | 17.3% | |
| |
|---|
| Median (26 companies) | 8.2% | 7.6% | 2.6% | 0.8% | 14.6% |
|---|
| Naspers ($NPSN) | 2.1% | 1.6% | -1.0% | -2.2% | -1.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ite Group ($ITE) | 0.3x | 1.4x | 6.3x | 7.3x | |
| Porta Communications ($PTCM) | 3.4x | 2.7x | | 5.0x | |
| Quarto Group Inc ($QRT) | 1.4x | 1.1x | 1.8x | 3.9x | |
| Reed Elsevier ($REL) | 1.9x | 1.9x | 2.2x | 2.0x | |
| Future ($FUTR) | | 1.6x | | 1.9x | |
| |
|---|
| Median (18 companies) | 0.9x | 1.1x | -0.1x | 0.6x | -2.7x |
|---|
