Zambeef Products reports 74.6% EBITDA growth in 2018 and 2.8 pp EBITDA Margin growth from 5.3% to 8.1%
21 Nov 2018 • About Zambeef Products (
$ZAM) • By InTwits
Zambeef Products reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Zambeef Products is a growth stock: FY2018 revenue growth was 14.2%, 5 year revenue CAGR was 11.8% at FY2018 ROIC 3.5%
- EBITDA Margin is quite volatile: 8.1% in FY2018, 5.3% in FY2017, 9.7% in FY2016, 14.7% in FY2015, 7.6% in FY2014
- Zambeef Products has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.9%. At the same time it's in pair with industry average of 6.3%
- CAPEX is quite volatile: 150 ZMWm in FY2018, 155 ZMWm in FY2017, 50 ZMWm in FY2016, 247 ZMWm in FY2015, 79 ZMWm 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
The company's Revenue surged on 14.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.4 pp from 24.6% to 26.0% in 2018.
Gross Margin increased on 2.1 pp from 32.9% to 35.0% in FY2018. SG&A as a % of Revenue increased slightly on 0.91 pp from 29.4% to 30.3% in FY2018.
Net Income margin showed almost no change in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 Zambeef Products had CAPEX/Revenue of 5.4%. The company's CAPEX/Revenue dropped on 10.5 pp from 15.9% in FY2015 to 5.4% in FY2018. For the last three years the average CAPEX/Revenue was 4.6%. To deliver its fast growth Zambeef Products invested a large share of EBITDA (67.0%) to CAPEX.
Return on investment
The company operates at low ROIC (3.5%) and ROE (0.4%). ROIC increased slightly on 0.60 pp from 2.9% to 3.5% in FY2018. ROE showed almost no change in FY2018.
Leverage (Debt)
Debt level is 2.0x Net Debt / EBITDA and 2.0x Debt / EBITDA. Net Debt / EBITDA dropped on 2.0x from 4.0x to 2.0x in FY2018. Debt dropped on 11.8% while cash didn't change in FY2018.
Zambeef Products has short term refinancing risk: cash is only 0.0% of short term debt.
Financial and operational results
FY ended 30 Sep 2018
Zambeef Products ($ZAM) key annual financial indicators| mln. ZMW | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 1,643 | 1,555 | 2,376 | 2,435 | 2,781 | 14.2% |
| Gross Profit | 554 | 671 | 863 | 802 | 974 | 21.5% |
| SG&A | | 505 | 690 | 715 | 841 | 17.7% |
| EBITDA | 125 | 229 | 231 | 128 | 224 | 74.6% |
| Net Income | -25 | -64 | 137 | 4 | 11 | 162.6% |
Balance Sheet
|
|---|
| Cash | | 0 | 65 | 0 | 0 | |
| Short Term Debt | 227 | 224 | 255 | 158 | 125 | -20.7% |
| Long Term Debt | 368 | 454 | 293 | 356 | 328 | -7.8% |
Cash flow
|
|---|
| Capex | 79 | 247 | 50 | 155 | 150 | -3.1% |
Ratios
|
|---|
| Revenue growth | 3.0% | -5.4% | 52.8% | 2.5% | 14.2% | |
| EBITDA growth | -3.2% | 83.0% | 1.0% | -44.5% | 74.6% | |
|
|---|
| Gross Margin | 33.7% | 43.2% | 36.3% | 32.9% | 35.0% | 2.1% |
| EBITDA Margin | 7.6% | 14.7% | 9.7% | 5.3% | 8.1% | 2.8% |
| SG&A, % of revenue | | 32.5% | 29.0% | 29.4% | 30.3% | 0.9% |
| Net Income Margin | -1.5% | -4.1% | 5.8% | 0.2% | 0.4% | 0.2% |
| CAPEX, % of revenue | 4.8% | 15.9% | 2.1% | 6.4% | 5.4% | -1.0% |
|
|---|
| ROIC | 3.2% | 8.0% | 7.8% | 2.9% | 3.5% | 0.6% |
| ROE | -1.9% | -4.6% | 7.7% | 0.2% | 0.4% | 0.2% |
| Net Debt/EBITDA | 4.8x | 3.0x | 2.1x | 4.0x | 2.0x | -2.0x |
Peers in Food Producers
Below we provide Zambeef Products benchmarking against other companies in Food Producers 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 |
|---|
| Ukrproduct Group ($UKR) | -38.9% | -36.8% | 0.2% | 51.2% | |
| Narborough Plantations ($NBP) | | 3.5% | 0.5% | 38.2% | |
| R.E.A.Hldgs ($RE.B) | 13.9% | -28.1% | -12.4% | 26.5% | |
| Tate & Lyle ($BD15) | | -15.0% | 0.6% | 16.9% | -1.6% |
| Mhp Sa ($MHPC) | | -14.2% | -4.0% | 13.4% | |
| |
|---|
| Median (19 companies) | 1.0% | 1.3% | 0.5% | 7.3% | 2.5% |
|---|
| Zambeef Products ($ZAM) | | -5.4% | 52.8% | 2.5% | 14.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Narborough Plantations ($NBP) | 59.7% | 54.6% | 56.1% | 63.0% | |
| Walcom Group Ltd ($WALG) | 62.2% | 60.5% | 58.8% | 54.6% | |
| Kakuzi ($KAKU) | 33.0% | 49.2% | 46.4% | 44.7% | |
| Unilever ($ULVR) | 41.4% | 42.2% | 42.7% | 43.1% | |
| Produce Investments ($PIL) | 33.5% | 36.4% | 37.9% | 35.7% | 37.8% |
| |
|---|
| Median (17 companies) | 29.6% | 24.4% | 24.1% | 24.4% | 16.9% |
|---|
| Zambeef Products ($ZAM) | 33.7% | 43.2% | 36.3% | 32.9% | 35.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Narborough Plantations ($NBP) | 39.6% | 37.4% | 40.8% | 48.6% | |
| Mhp Sa ($MHPC) | 37.0% | 38.8% | 37.0% | 35.3% | |
| Kakuzi ($KAKU) | 11.8% | 29.4% | 31.8% | 32.7% | |
| R.E.A.Hldgs ($RE.B) | 33.2% | 31.1% | 22.9% | 20.7% | |
| Unilever ($ULVR) | 19.4% | 16.8% | 18.0% | 19.8% | |
| |
|---|
| Median (19 companies) | 11.8% | 10.4% | 11.2% | 13.7% | 4.5% |
|---|
| Zambeef Products ($ZAM) | 7.6% | 14.7% | 9.7% | 5.3% | 8.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| R.E.A.Hldgs ($RE.B) | 11.8% | 17.4% | 39.3% | 32.8% | |
| Ros Agro ($AGRO) | 7.3% | 15.3% | 19.7% | 21.9% | |
| Cherkizovo Group OJSC ($CHE) | 9.7% | 12.2% | 10.4% | 10.9% | |
| Kakuzi ($KAKU) | 22.0% | 24.9% | 13.7% | 10.3% | |
| Real Good Food ($RGD) | 6.3% | 1.4% | 6.4% | 10.0% | 8.4% |
| |
|---|
| Median (19 companies) | 4.1% | 4.1% | 5.0% | 4.6% | 2.8% |
|---|
| Zambeef Products ($ZAM) | 4.8% | 15.9% | 2.1% | 6.4% | 5.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Unilever ($ULVR) | 29.9% | 26.0% | 24.3% | 24.6% | |
| Mhp Sa ($MHPC) | 17.6% | 17.6% | 16.1% | 17.6% | |
| Kakuzi ($KAKU) | 4.3% | 17.4% | 15.8% | 15.6% | |
| Tate & Lyle ($BD15) | 13.2% | 1.8% | 7.2% | 12.1% | 14.4% |
| Kerry Group ($KYGA) | 16.6% | 15.8% | 12.8% | 11.9% | |
| |
|---|
| Median (20 companies) | 12.4% | 9.7% | 8.1% | 9.1% | 8.3% |
|---|
| Zambeef Products ($ZAM) | 3.2% | 8.0% | 7.8% | 2.9% | 3.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Avangardco Investments Public Ltd ($AVGR) | 1.7x | | 241.4x | 29.9x | |
| R.E.A.Hldgs ($RE.B) | 3.9x | 7.2x | 10.6x | 10.8x | |
| Ukrproduct Group ($UKR) | 3.4x | | 17.7x | 6.2x | |
| Ros Agro ($AGRO) | 0.6x | 1.8x | 1.9x | 3.7x | |
| Cherkizovo Group OJSC ($CHE) | 1.6x | 3.1x | 3.8x | 3.2x | |
| |
|---|
| Median (17 companies) | 1.4x | 1.6x | 1.4x | 1.8x | 0.9x |
|---|
| Zambeef Products ($ZAM) | 4.8x | 3.0x | 2.1x | 4.0x | 2.0x |
