Victrex EBITDA jumped on 12.6% and Revenue jumped on 12.3%
04 Dec 2018 • About Victrex (
$VCT) • By InTwits
Victrex reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 44.4% in FY2018 vs. 44.3% in FY2017 vs. 44.4% in FY2014
- Victrex has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.1%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: £10m in FY2018, £17m in FY2017, £26m in FY2016, £41m in FY2015, £66m in FY2014
- The company has highly profitable business model: ROIC is 25.3%
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 jumped on 12.3%. EBITDA Margin showed almost no change in FY2018.
Gross Margin showed almost no change in FY2018. During the last 5 years Gross Margin bottomed in FY2016 at 62.9% and was growing since that time. SG&A as a % of Revenue showed almost no change in FY2018. SG&A as a % of Revenue stuck to a growing trend at 4.7 pp per annum in FY2014-FY2018.
Net Income margin showed almost no change in FY2018. Net Income margin grew at 0.70 pp per annum in the last 5 years. The efficient tax rate was 13.3% in FY2018.
Investments (CAPEX, working capital and M&A)
Victrex's CAPEX/Revenue was 3.0% in FY2018. CAPEX/Revenue dropped on 12.6 pp from 15.6% in FY2015 to 3.0% in FY2018. For the last three years the average CAPEX/Revenue was 6.4%. CAPEX as a % of Revenue stuck to a declining trend at -5.6 pp per annum in FY2014-FY2018.
Return on investment
The company operates at high and attractive ROIC (25.3%) and ROE (22.8%). ROIC showed almost no change in FY2018. ROE showed almost no change in FY2018. ROIC declined at -1.3 pp per annum in FY2014-FY2018.
Leverage (Debt)
The company has no debt. Cash dropped on 40.7%.
Valuation and dividends
Victrex's trades at EV/EBITDA 12.5x and P/E 17.0x.
The company paid 95.8% of Net Income as dividends in FY2018.
Management team
The company's CEO Jakob Sigurdsson is a founder and has spent 2 years with the company. CEO total compensation was £1,071,351 in FY2018 which included £500,000 salary and £406,250 annual bonus. Victrex's CFO is Richard Armitage. Richard Armitage has 1 year tenure at the company.
Insider ownership is 3.0%.
The company has 874 employees. Average revenue per employee in FY2018 was £372,998.
Financial and operational results
FY ended 30 Sep 2018
Victrex ($VCT) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 252.6 | 263.5 | 252.3 | 290.2 | 326.0 | 12.3% |
| Gross Profit | 163.2 | 168.2 | 158.7 | 183.8 | 208.0 | 13.2% |
| SG&A | 23.8 | 24.0 | 58.4 | 72.7 | 81.1 | 11.6% |
| EBITDA | 112.2 | 119.2 | 115.9 | 128.7 | 144.9 | 12.6% |
| EBIT | | | | | 126.9 | |
| Tax | | | | | 16.9 | |
| Net Income | 80.2 | 83.5 | 82.5 | 99.5 | 110.6 | 11.2% |
| Stock Based Compensation | | | | | 2.6 | |
Balance Sheet
|
|---|
| Cash | 89.6 | 53.8 | 64.0 | 120.1 | 71.2 | -40.7% |
| Inventory | | | | | 69.3 | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 65.6 | 41.2 | 25.9 | 16.7 | 9.9 | -40.7% |
| Dividends | | | | | 106.0 | |
Ratios
|
|---|
| Revenue growth | 13.8% | 4.3% | -4.3% | 15.0% | 12.3% | |
| EBITDA growth | 8.4% | 6.2% | -2.8% | 11.0% | 12.6% | |
|
|---|
| Gross Margin | 64.6% | 63.8% | 62.9% | 63.3% | 63.8% | 0.5% |
| EBITDA Margin | 44.4% | 45.2% | 45.9% | 44.3% | 44.4% | 0.1% |
| EBIT Margin | | | | | 38.9% |
| SG&A, % of revenue | 9.4% | 9.1% | 23.1% | 25.1% | 24.9% | -0.2% |
| SBC, % of revenue | | | | | 0.8% |
| Net Income Margin | 31.7% | 31.7% | 32.7% | 34.3% | 33.9% | -0.4% |
| CAPEX, % of revenue | 26.0% | 15.6% | 10.3% | 5.8% | 3.0% | -2.7% |
|
|---|
| ROIC | 29.7% | 28.9% | 26.0% | 24.9% | 25.3% | 0.4% |
| ROE | 24.0% | 23.5% | 22.1% | 22.9% | 22.8% | -0.1% |
| Net Debt/EBITDA | -0.8x | -0.5x | -0.6x | -0.9x | -0.5x | 0.4x |
People
|
|---|
| Insider ownership | | | | | 3.0% | |
| Employees | | | | | 874 | |
| Revenue/Employee, th. £ | | | | | 373 | |
Peers in Chemicals
Below you can find Victrex benchmarking vs. other companies in Chemicals 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 |
|---|
| Hardide ($HDD) | 28.4% | -0.9% | -28.7% | 51.3% | |
| Plastics Capital ($PLA) | | 21.9% | 28.4% | 29.5% | 16.6% |
| Lg Chem ($LGCD) | -2.4% | -10.5% | 2.2% | 24.4% | |
| Uralkali PJSC ($URKA) | | -12.2% | -27.1% | 21.2% | |
| Frutarom Industries ($FRUT) | 21.6% | 6.5% | 31.4% | 18.8% | |
| |
|---|
| Median (10 companies) | 15.8% | -0.9% | -15.7% | 16.6% | 16.6% |
|---|
| Victrex ($VCT) | | 4.3% | -4.3% | 15.0% | 12.3% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Uralkali PJSC ($URKA) | 74.3% | 81.8% | 75.9% | 73.2% | |
| Hardide ($HDD) | 68.8% | | 32.0% | 49.1% | |
| Acron JSC ($AKRN) | 42.8% | 52.7% | 49.3% | 45.0% | |
| Phosagro OJSC ($PHOR) | 45.2% | 56.2% | 54.0% | 44.1% | |
| Frutarom Industries ($FRUT) | 39.1% | 38.7% | 38.1% | 38.5% | |
| |
|---|
| Median (10 companies) | 39.1% | 39.5% | 33.2% | 38.1% | 31.4% |
|---|
| Victrex ($VCT) | 64.6% | 63.8% | 62.9% | 63.3% | 63.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Uralkali PJSC ($URKA) | 48.6% | 62.3% | 51.9% | 48.6% | |
| Acron JSC ($AKRN) | 27.2% | 36.2% | 33.2% | 31.5% | |
| Arab Potash Co ($APOD) | 27.7% | 39.6% | 19.0% | 29.9% | |
| Phosagro OJSC ($PHOR) | 30.5% | 43.5% | 38.5% | 28.3% | |
| Croda International ($50GP) | 26.7% | 27.7% | 26.7% | 27.5% | |
| |
|---|
| Median (10 companies) | 18.2% | 23.1% | 18.6% | 23.3% | 8.6% |
|---|
| Victrex ($VCT) | 44.4% | 45.2% | 45.9% | 44.3% | 44.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Phosagro OJSC ($PHOR) | 16.7% | 22.4% | 21.4% | 19.8% | |
| Acron JSC ($AKRN) | 15.4% | 14.2% | 13.6% | 12.0% | |
| Croda International ($50GP) | 6.0% | 8.6% | 8.3% | 11.3% | |
| Uralkali PJSC ($URKA) | 9.8% | 10.9% | 13.9% | 9.8% | |
| Lg Chem ($LGCD) | 6.3% | 8.1% | 6.8% | 8.8% | |
| |
|---|
| Median (10 companies) | 6.2% | 8.2% | 7.8% | 7.5% | 4.8% |
|---|
| Victrex ($VCT) | 26.0% | 15.6% | 10.3% | 5.8% | 3.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Croda International ($50GP) | 35.3% | 30.5% | 27.7% | 27.5% | |
| Phosagro OJSC ($PHOR) | 21.6% | 41.2% | 31.1% | 17.0% | |
| Lg Chem ($LGCD) | 8.6% | 11.6% | 12.0% | 16.0% | |
| Basf Se ($BFA) | 16.6% | 13.5% | 13.0% | 15.5% | |
| Frutarom Industries ($FRUT) | 15.1% | 14.1% | 12.8% | 14.9% | |
| |
|---|
| Median (11 companies) | 10.6% | 15.4% | 12.7% | 14.3% | 6.7% |
|---|
| Victrex ($VCT) | 29.7% | 28.9% | 26.0% | 24.9% | 25.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Uralkali PJSC ($URKA) | 1.8x | 2.8x | 4.7x | 4.0x | |
| Plastics Capital ($PLA) | 1.4x | 2.2x | 2.3x | 2.8x | 2.3x |
| Phosagro OJSC ($PHOR) | 2.5x | 1.3x | 1.5x | 2.3x | |
| Acron JSC ($AKRN) | 2.8x | 1.4x | 1.8x | 2.0x | |
| Frutarom Industries ($FRUT) | 1.1x | 2.6x | 2.2x | 2.0x | |
| |
|---|
| Median (9 companies) | 1.2x | 1.3x | 1.5x | 2.0x | 2.3x |
|---|
| Victrex ($VCT) | -0.8x | -0.5x | -0.6x | -0.9x | -0.5x |
