Barloworld reports 134% Net Income growth in 2018 and 2.4% Revenue growth
19 Nov 2018 • About Barloworld (
$BWO) • By InTwits
Barloworld reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 14.6% in FY2018 vs. 11.0% in FY2017 vs. 10.0% in FY2014
- Barloworld has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's a lot of higher than industry average of 2.8%.
- CAPEX is quite volatile: ₹3,588m in FY2018, ₹1,382m in FY2017, ₹1,545m in FY2016, ₹1,792m in FY2015, ₹2,037m in FY2014
- The company has highly profitable business model: ROIC is 13.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Barloworld's Revenue increased on 2.4%. During FY2014-FY2018 Revenue growth bottomed in FY2016 at -1.0% and was accelerating since that time. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.6 pp from 11.0% to 14.6% in FY2018. EBITDA Margin followed a growing trend in FY2014-FY2018.
Net Income margin increased on 3.4 pp from 2.7% to 6.1% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.97% in FY2018. CAPEX/Revenue decreased slightly on 1.2 pp from 2.2% in FY2015 to 0.97% in FY2018. For the last three years the average CAPEX/Revenue was 1.3%. CAPEX as a % of Revenue declined at -0.32 pp per annum in FY2014-FY2018.
Return on investment
The company operates at good ROIC (13.2%) and ROE (18.1%). ROIC showed almost no change in FY2018. ROE increased on 9.7 pp from 8.4% to 18.1% in FY2018. During the last 5 years ROIC bottomed in FY2016 at 12.7% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.4x and Debt / EBITDA is 1.2x. Net Debt / EBITDA dropped on 0.5x from 0.8x to 0.4x in FY2018. Debt jumped on 15.4% while cash jumped on 101%. During the last 5 years Net Debt/EBITDA topped in FY2015 at 1.7x and was declining since that time.
Barloworld has no short term refinancing risk: cash is higher than short term debt (152.6%).
Financial and operational results
FY ended 30 Nov -0001
Barloworld ($BWO) key annual financial indicators| mln. ZAR | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 62,101 | 62,720 | 62,074 | 61,959 | 63,420 | 2.4% |
| Gross Profit | 13,326 | 13,666 | 13,589 | 14,127 | | |
| SG&A | 6,231 | | | | | |
| EBITDA | 6,180 | 6,479 | 6,626 | 6,829 | 9,278 | 35.9% |
| Net Income | 2,143 | 1,713 | 1,883 | 1,643 | 3,846 | 134.1% |
Balance Sheet
|
|---|
| Cash | 4,162 | 2,372 | 3,028 | 3,925 | 7,893 | 101.1% |
| Short Term Debt | 4,395 | 4,050 | 2,665 | 2,055 | 5,174 | 151.8% |
| Long Term Debt | 6,921 | 9,074 | 8,379 | 7,623 | 5,995 | -21.4% |
Cash flow
|
|---|
| Capex | 1,323 | 1,363 | 980 | 773 | 618 | -20.1% |
Ratios
|
|---|
| Revenue growth | 4.4% | 1.0% | -1.0% | -0.2% | 2.4% | |
| EBITDA growth | 14.3% | 4.8% | 2.3% | 3.1% | 35.9% | |
|
|---|
| Gross Margin | 21.5% | 21.8% | 21.9% | 22.8% | | |
| EBITDA Margin | 10.0% | 10.3% | 10.7% | 11.0% | 14.6% | 3.6% |
| SG&A, % of revenue | 10.0% | | | | | |
| Net Income Margin | 3.5% | 2.7% | 3.0% | 2.7% | 6.1% | 3.4% |
| CAPEX, % of revenue | 2.1% | 2.2% | 1.6% | 1.2% | 1.0% | -0.3% |
|
|---|
| ROIC | 14.1% | 12.9% | 12.7% | 13.2% | 13.2% | 0.0% |
| ROE | 13.3% | 9.4% | 9.8% | 8.4% | 18.1% | 9.7% |
| Net Debt/EBITDA | 1.2x | 1.7x | 1.2x | 0.8x | 0.4x | -0.5x |
Peers in General Industrials
Below you can find Barloworld benchmarking vs. other companies in General Industrials 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Coral Products ($CRU) | | 1.2% | 7.4% | 14.5% | 9.2% |
| Macfarlane Group ($MACF) | 6.9% | 10.0% | 6.3% | 9.0% | |
| Robinson ($RBN) | | 3.8% | -5.8% | 8.6% | |
| Jardine Strategic Hldgs ($88EI) | -1.3% | -8.8% | 0.5% | 6.8% | |
| Press Corp ($PESD) | 20.3% | 17.8% | 17.2% | 6.2% | |
| |
|---|
| Median (9 companies) | 5.7% | 1.2% | 1.9% | 6.2% | 9.2% |
|---|
| Barloworld ($BWO) | | 1.0% | -1.0% | -0.2% | 2.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Press Corp ($PESD) | 56.0% | 54.5% | 59.6% | 59.1% | |
| Coral Products ($CRU) | 23.7% | 29.6% | 33.1% | 34.1% | 34.6% |
| Honeywell International Inc ($HON) | 28.2% | 30.7% | 30.9% | 32.0% | |
| Macfarlane Group ($MACF) | 30.9% | 31.5% | 31.0% | 30.8% | |
| Smurfit Kappa Group ($SKG) | 29.5% | 30.0% | 30.3% | 29.8% | |
| |
|---|
| Median (9 companies) | 25.4% | 29.6% | 30.3% | 29.8% | 34.6% |
|---|
| Barloworld ($BWO) | 21.5% | 21.8% | 21.9% | 22.8% | |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Press Corp ($PESD) | 29.2% | 25.3% | 27.7% | 35.2% | |
| Jardine Strategic Hldgs ($88EI) | 13.5% | 15.1% | 21.4% | 27.4% | |
| Honeywell International Inc ($HON) | 16.8% | 20.0% | 19.6% | 20.4% | |
| Smurfit Kappa Group ($SKG) | 12.7% | 14.3% | 14.9% | 14.0% | |
| Robinson ($RBN) | 15.1% | 4.1% | 14.3% | 9.9% | |
| |
|---|
| Median (9 companies) | 13.3% | 10.4% | 14.3% | 9.9% | 5.9% |
|---|
| Barloworld ($BWO) | 10.0% | 10.3% | 10.7% | 11.0% | 14.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Press Corp ($PESD) | 12.1% | 9.0% | 8.8% | 11.3% | |
| Robinson ($RBN) | 3.5% | 3.7% | 6.5% | 8.8% | |
| General Electric Co. ($GEC) | 6.1% | 6.3% | 6.0% | 6.1% | |
| Smurfit Kappa Group ($SKG) | 5.3% | 5.3% | 5.2% | 5.2% | |
| Coral Products ($CRU) | 2.2% | 2.5% | 8.9% | 4.3% | 3.9% |
| |
|---|
| Median (9 companies) | 3.5% | 2.9% | 5.2% | 4.3% | 3.9% |
|---|
| Barloworld ($BWO) | 2.1% | 2.2% | 1.6% | 1.2% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Honeywell International Inc ($HON) | 21.3% | 23.2% | 19.6% | 19.0% | |
| Macfarlane Group ($MACF) | 19.0% | 17.8% | 16.9% | 15.4% | |
| Smurfit Kappa Group ($SKG) | 11.8% | 13.9% | 14.1% | 13.4% | |
| Thyssenkrupp Ag ($0O1C) | 10.8% | 9.5% | 12.7% | 12.2% | |
| Jardine Strategic Hldgs ($88EI) | 6.2% | 6.3% | 9.2% | 11.7% | |
| |
|---|
| Median (9 companies) | 10.8% | 9.5% | 12.7% | 11.9% | -0.9% |
|---|
| Barloworld ($BWO) | 14.1% | 12.9% | 12.7% | 13.2% | 13.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Coral Products ($CRU) | 3.4x | 2.7x | 2.5x | 3.0x | 5.3x |
| Smurfit Kappa Group ($SKG) | 2.7x | 2.6x | 2.4x | 2.4x | |
| Robinson ($RBN) | 1.0x | 0.9x | 1.2x | 2.2x | |
| Honeywell International Inc ($HON) | 0.3x | 0.9x | 1.0x | 1.3x | |
| Thyssenkrupp Ag ($0O1C) | 2.0x | 1.8x | 1.8x | 1.3x | |
| |
|---|
| Median (8 companies) | 1.3x | 1.3x | 1.4x | 1.3x | 5.3x |
|---|
| Barloworld ($BWO) | 1.2x | 1.7x | 1.2x | 0.8x | 0.4x |
