Cherkizovo Group OJSC Net Income jumped on 107% and Revenue surged on 11.0%
14 Feb 2019 • About Cherkizovo Group OJSC (
$CHE) • By InTwits
Cherkizovo Group OJSC reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cherkizovo Group OJSC is a growth stock: 2018 revenue growth was 11.0%, 5 year revenue CAGR was 13.7% at 2018 ROIC 13.3%
- Cherkizovo Group OJSC has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.5%. At the same time it's a lot of higher than industry average of 6.2%.
- 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 13.3%
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 11.0%. During 2014-2018 Revenue growth bottomed in 2016 at 7.0% and was accelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 7.6 pp from 19.7% to 12.1% in FY2018. During the last 5 years EBITDA Margin bottomed in 2016 at 12.0% and was growing since that time.
Gross Margin decreased slightly on 1.0 pp from 26.0% to 25.0% in 2018. SG&A as a % of Revenue decreased slightly on 0.96 pp from 14.8% to 13.8% in 2018. During 2014-2018 SG&A as a % of Revenue topped in 2016 at 15.2% and was declining since that time.
Net Income margin increased on 5.5 pp from 6.4% to 12.0% in 2018. During 2014-2018 Net Income margin bottomed in 2016 at 2.3% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 9.1% in 2018. CAPEX/Revenue decreased on 3.1 pp from 12.2% in 2015 to 9.1% in 2018. For the last three years the average CAPEX/Revenue was 10.2%.
Return on investment
The company operates at high and attractive ROE (21.5%) while ROIC is a bit lower (13.3%). ROIC increased on 3.1 pp from 10.2% to 13.3% in 2018. ROE jumped on 10.4 pp from 11.1% to 21.5% in 2018. During the last 5 years ROIC bottomed in 2016 at 5.6% and was growing since that time. During 2014-2018 ROE bottomed in 2016 at 3.7% and was growing since that time.
Leverage (Debt)
Debt level is 2.7x Net Debt / EBITDA and 3.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 3.2x to 2.7x in 2018. Debt surged on 38.0% while cash surged on 1,264%. During the last 5 years Net Debt/EBITDA topped in 2016 at 3.8x and was declining since that time.
Cherkizovo Group OJSC has good short term financial stability: Interest coverage ratio (ICR) is 4.6x. Cherkizovo Group OJSC has short term refinancing risk: cash is only 40.4% of short term debt.
Average interest expence paid by the company was 4.9% in 2018.
The company paid 32.7% of Net Income as dividends in 2018.
Management team
Cherkizovo Group OJSC's CEO Sergey Mikhailov has spent 4 years with the company. Ludmila Mikhailova is a the company's CFO. Ludmila Mikhailova has spent 4 years at the company.
The company has 23,496 employees. Average revenue per employee in 2018 was 4,274,004 RUB.
Financial and operational results
FY ended 31 Dec 2018
Cherkizovo Group OJSC ($CHE) key annual financial indicators| mln. RUB | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 69,352 | 77,033 | 82,417 | 90,465 | 100,422 | 11.0% |
| Gross Profit | 22,947 | 19,149 | 17,855 | 23,559 | 25,104 | 6.6% |
| SG&A | 9,656 | 11,575 | 12,562 | 13,363 | 13,865 | 3.8% |
| EBITDA | 16,945 | 11,361 | 9,917 | 15,100 | 21,657 | 43.4% |
| EBIT | | | | | 15,612 | |
| Interest expence | | | | | 3,375 | |
| Tax | | | | | -187 | |
| Net Income | 13,352 | 6,007 | 1,919 | 5,800 | 12,004 | 107.0% |
Balance Sheet
|
|---|
| Cash | 1,043 | 5,561 | 1,002 | 705 | 9,613 | 1,264.2% |
| Accounts Receivable | | | | | 5,733 | |
| Inventory | | | | | 27,824 | |
| Accounts Payable | | | | | 10,830 | |
| Short Term Debt | 13,945 | 24,730 | 13,824 | 18,995 | 23,798 | 25.3% |
| Long Term Debt | 14,791 | 16,119 | 24,470 | 30,603 | 44,643 | 45.9% |
Cash flow
|
|---|
| Capex | 6,758 | 9,415 | 8,570 | 9,882 | 9,182 | -7.1% |
| Dividends | | | | | 3,922 | |
Ratios
|
|---|
| Revenue growth | 31.5% | 11.1% | 7.0% | 9.8% | 11.0% | |
| EBITDA growth | 194.6% | -33.0% | -12.7% | 52.3% | 43.4% | |
|
|---|
| Gross Margin | 33.1% | 24.9% | 21.7% | 26.0% | 25.0% | -1.0% |
| EBITDA Margin | 24.4% | 14.7% | 12.0% | 16.7% | 21.6% | 4.9% |
| EBIT Margin | | | | | 15.5% |
| SG&A, % of revenue | 13.9% | 15.0% | 15.2% | 14.8% | 13.8% | -1.0% |
| Net Income Margin | 19.3% | 7.8% | 2.3% | 6.4% | 12.0% | 5.5% |
| CAPEX, % of revenue | 9.7% | 12.2% | 10.4% | 10.9% | 9.1% | -1.8% |
|
|---|
| ROIC | 22.4% | 8.9% | 5.6% | 10.2% | 13.3% | 3.1% |
| ROE | 40.3% | 12.4% | 3.7% | 11.1% | 21.5% | 10.4% |
| Net Debt/EBITDA | 1.6x | 3.1x | 3.8x | 3.2x | 2.7x | -0.5x |
| Interest coverage ratio (ICR) | | | | | 4.6x |
| Interest expence / Average debt | | | | | 4.9% | |
People
|
|---|
| Employees | | | | | 23,496 | |
| Revenue/Employee, th. RUB | | | | | 4,274 | |
Peers in Food Producers
Below you can find Cherkizovo Group OJSC benchmarking vs. other companies in Food Producers 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 |
|---|
| 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 ($MHPC) | | -14.2% | -4.0% | 13.4% | |
| |
|---|
| Median (19 companies) | 2.0% | -5.1% | 0.5% | 7.0% | 6.5% |
|---|
| Cherkizovo Group OJSC ($CHE) | | 11.1% | 7.0% | 9.8% | 11.0% |
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% | 43.6% |
| Produce Investments ($PIL) | 33.5% | 36.4% | 37.9% | 35.7% | 37.8% |
| |
|---|
| Median (17 companies) | 29.6% | 24.4% | 26.8% | 24.4% | 19.2% |
|---|
| Cherkizovo Group OJSC ($CHE) | 33.1% | 24.9% | 21.7% | 26.0% | 25.0% |
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 ($ULVR) | 19.4% | 16.8% | 18.0% | 19.8% | 28.1% |
| |
|---|
| Median (19 companies) | 8.9% | 10.4% | 10.0% | 12.3% | 4.8% |
|---|
| Cherkizovo Group OJSC ($CHE) | 24.4% | 14.7% | 12.0% | 16.7% | 21.6% |
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% | |
| Kakuzi ($KAKU) | 22.0% | 24.9% | 13.7% | 10.3% | |
| Real Good Food ($RGD) | 6.3% | 1.4% | 6.4% | 10.0% | 8.4% |
| Mhp Sa ($MHPC) | 8.2% | 12.3% | 8.1% | 7.9% | |
| |
|---|
| Median (19 companies) | 4.1% | 4.1% | 3.5% | 4.6% | 2.7% |
|---|
| Cherkizovo Group OJSC ($CHE) | 9.7% | 12.2% | 10.4% | 10.9% | 9.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Unilever ($ULVR) | 29.9% | 26.0% | 24.3% | 24.6% | 31.6% |
| Mhp Sa ($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 ($KYGA) | 16.6% | 15.8% | 12.8% | 11.9% | |
| |
|---|
| Median (20 companies) | 11.6% | 9.7% | 8.1% | 7.3% | 8.3% |
|---|
| Cherkizovo Group OJSC ($CHE) | 22.4% | 8.9% | 5.6% | 10.2% | 13.3% |
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 ($UKR) | 3.4x | | 17.7x | 6.2x | |
| Zambeef Products ($ZAM) | 4.8x | 3.0x | 2.1x | 4.0x | 2.0x |
| Ros Agro ($AGRO) | 0.6x | 1.8x | 1.9x | 3.7x | |
| |
|---|
| Median (17 companies) | 1.4x | 1.6x | 1.4x | 1.8x | 0.9x |
|---|
| Cherkizovo Group OJSC ($CHE) | 1.6x | 3.1x | 3.8x | 3.2x | 2.7x |
