Lotte Shopping Co Ltd Net Debt / EBITDA jumped on 0.9x from 3.5x to 4.5x in 2018 while EBITDA decreased on 6.3%
14 Feb 2019 • About Lotte Shopping Co Ltd (
$LOTS) • By InTwits
Lotte Shopping Co Ltd reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 7.5% in 2018 vs. 7.8% in 2017 vs. 7.4% in 2014
- Lotte Shopping Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.7%. At the same time it's in pair with industry average of 4.3%
- CAPEX is quite volatile: 597,125 KRWm in 2018, 883,863 KRWm in 2017, 1,206,957 KRWm in 2016, 1,094,939 KRWm in 2015, 1,863,149 KRWm in 2014
- The company has potentially unprofitable business model: ROIC is 2.7%
- It operates with high leverage: Net Debt/EBITDA is 4.5x while industry average is 2.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Lotte Shopping Co Ltd's Revenue decreased slightly on 2.0%. Having stable revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 25.2 pp from -416% to -390% in FY2018.
Gross Margin showed almost no change in 2018. Gross Margin followed a growing trend at 3.3 pp per annum in 2014-2018. SG&A as a % of Revenue showed almost no change in 2018. SG&A as a % of Revenue stuck to a growing trend at 3.3 pp per annum in the last 5 years.
Net Income margin decreased on 2.3 pp from -0.75% to -3.1% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 Lotte Shopping Co Ltd had CAPEX/Revenue of 3.4%. Lotte Shopping Co Ltd's CAPEX/Revenue showed almost no change from 2015 to 2018. For the last three years the average CAPEX/Revenue was 4.4%.
Return on investment
The company operates at low but positive ROIC (2.7%) and negative ROE (-4.6%). ROIC increased slightly on 0.82 pp from 1.9% to 2.7% in 2018. ROE decreased on 3.5 pp from -1.0% to -4.6% in 2018. During 2014-2018 ROIC bottomed in 2017 at 1.9%.
Leverage (Debt)
Debt level is 4.5x Net Debt / EBITDA and 5.8x Debt / EBITDA. Net Debt / EBITDA surged on 0.9x from 3.5x to 4.5x in 2018. Debt increased slightly on 1.5% while cash dropped on 30.8%.
Lotte Shopping Co Ltd has short term refinancing risk: cash is only 91.8% of short term debt.
Financial and operational results
FY ended 31 Dec 2018
Lotte Shopping Co Ltd ($LOTS) key annual financial indicators| mln. KRW | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 28,099,567 | 29,127,655 | 24,114,329 | 18,179,871 | 17,820,781 | -2.0% |
| Gross Profit | 8,762,896 | 8,910,511 | 7,871,620 | 7,636,213 | 7,507,670 | -1.7% |
| SG&A | 6,747,774 | 7,107,426 | 6,353,787 | 6,356,531 | 6,245,286 | -1.8% |
| EBITDA | 2,087,753 | 1,839,904 | 1,724,551 | 1,423,054 | 1,333,923 | -6.3% |
| Net Income | 526,650 | -383,067 | 168,195 | -136,395 | -544,874 | |
Balance Sheet
|
|---|
| Cash | 1,928,136 | 1,751,268 | 2,269,177 | 2,626,244 | 1,818,473 | -30.8% |
| Short Term Debt | 4,569,650 | 4,278,421 | 5,084,334 | 3,080,435 | 1,980,853 | -35.7% |
| Long Term Debt | 8,182,399 | 9,849,308 | 9,444,162 | 4,597,334 | 5,814,745 | 26.5% |
Cash flow
|
|---|
| Capex | 1,863,149 | 1,094,939 | 1,206,957 | 883,863 | 597,125 | -32.4% |
Ratios
|
|---|
| Revenue growth | -0.4% | 3.7% | -17.2% | -24.6% | -2.0% | |
| EBITDA growth | -9.5% | -11.9% | -6.3% | -17.5% | -6.3% | |
|
|---|
| Gross Margin | 31.2% | 30.6% | 32.6% | 42.0% | 42.1% | 0.1% |
| EBITDA Margin | 7.4% | 6.3% | 7.2% | 7.8% | 7.5% | -0.3% |
| SG&A, % of revenue | 24.0% | 24.4% | 26.3% | 35.0% | 35.0% | 0.1% |
| Net Income Margin | 1.9% | -1.3% | 0.7% | -0.8% | -3.1% | -2.3% |
| CAPEX, % of revenue | 6.6% | 3.8% | 5.0% | 4.9% | 3.4% | -1.5% |
|
|---|
| ROIC | 3.8% | 2.6% | 2.3% | 1.9% | 2.7% | 0.8% |
| ROE | 3.1% | -2.4% | 1.0% | -1.0% | -4.6% | -3.5% |
| Net Debt/EBITDA | 5.2x | 6.7x | 7.1x | 3.5x | 4.5x | 0.9x |
Peers in General Retailers
Below you can find Lotte Shopping Co Ltd benchmarking vs. other companies in General Retailers 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 |
|---|
| AO World ($AO.) | | 23.8% | 25.7% | 17.0% | 13.6% |
| Mysale Group ($MYSL) | | 5.1% | 7.0% | 6.4% | 8.9% |
| Aa ($AA.) | | 1.0% | -5.0% | -0.2% | 2.9% |
| United Carpets Group ($UCG) | | -4.4% | 6.1% | -0.8% | 2.5% |
| Shoe Zone ($SHOE) | | -3.5% | -4.2% | -1.3% | 1.8% |
| |
|---|
| Median (9 companies) | 84.1% | 3.3% | 6.1% | -0.8% | 1.8% |
|---|
| Lotte Shopping Co Ltd ($LOTS) | | 3.7% | -17.2% | -24.6% | -2.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 64.7% | 64.8% | 64.0% | 63.5% | 62.5% |
| United Carpets Group ($UCG) | 61.7% | 64.3% | 63.8% | 61.2% | 61.5% |
| French Connection Group ($FCCN) | 47.6% | 46.7% | 46.3% | 45.8% | 45.2% |
| Stanley Gibbons Group ($SGI) | | 51.5% | 40.3% | 31.6% | 40.0% |
| Signet Jewelers Ltd ($SIG) | 37.5% | 36.2% | 37.3% | 36.8% | 35.0% |
| |
|---|
| Median (9 companies) | 34.6% | 36.2% | 37.3% | 36.8% | 35.0% |
|---|
| Lotte Shopping Co Ltd ($LOTS) | 31.2% | 30.6% | 32.6% | 42.0% | 42.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 42.2% | 37.9% | 37.4% | 37.6% | 39.4% |
| Signet Jewelers Ltd ($SIG) | 16.2% | 12.7% | 13.4% | 14.9% | 12.5% |
| Shoe Zone ($SHOE) | 9.3% | 8.4% | 8.5% | 8.1% | 9.0% |
| United Carpets Group ($UCG) | 4.8% | 6.6% | 7.9% | 8.2% | 8.1% |
| Mysale Group ($MYSL) | 2.3% | -4.7% | 1.8% | 2.0% | 1.8% |
| |
|---|
| Median (9 companies) | 4.1% | 8.4% | 1.8% | 1.9% | 1.8% |
|---|
| Lotte Shopping Co Ltd ($LOTS) | 7.4% | 6.3% | 7.2% | 7.8% | 7.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 1.0% | 3.8% | 8.0% | 7.6% | 6.6% |
| Signet Jewelers Ltd ($SIG) | 3.6% | 3.8% | 3.5% | 4.3% | 3.8% |
| Shoe Zone ($SHOE) | 1.2% | 1.1% | 2.0% | 3.3% | 3.2% |
| United Carpets Group ($UCG) | 1.7% | 2.8% | 5.7% | 2.1% | 2.9% |
| Caffyns ($78GL) | 3.9% | 1.4% | 1.6% | 2.2% | 2.6% |
| |
|---|
| Median (9 companies) | 1.2% | 1.9% | 1.6% | 2.2% | 2.6% |
|---|
| Lotte Shopping Co Ltd ($LOTS) | 6.6% | 3.8% | 5.0% | 4.9% | 3.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 61.1% | 34.9% | 32.0% | 30.8% | 32.3% |
| Shoe Zone ($SHOE) | 34.2% | 30.0% | 30.6% | 30.7% | 31.7% |
| United Carpets Group ($UCG) | | 36.7% | 37.1% | 33.7% | 29.9% |
| Signet Jewelers Ltd ($SIG) | 20.4% | 15.5% | 15.2% | 16.0% | 13.0% |
| Caffyns ($78GL) | 11.1% | 37.3% | 10.4% | 7.1% | 5.5% |
| |
|---|
| Median (11 companies) | 10.5% | 15.5% | 5.1% | -0.0% | 5.5% |
|---|
| Lotte Shopping Co Ltd ($LOTS) | 3.8% | 2.6% | 2.3% | 1.9% | 2.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 7.7x | 7.9x | 8.0x | 7.6x | 7.0x |
| Caffyns ($78GL) | 3.0x | 0.7x | 2.2x | 2.2x | 4.0x |
| Mysale Group ($MYSL) | -14.4x | | -6.0x | -1.7x | 1.2x |
| Signet Jewelers Ltd ($SIG) | -0.3x | 1.7x | 1.4x | 1.4x | 0.6x |
| Shoe Zone ($SHOE) | -0.6x | -1.0x | -1.1x | -0.9x | -1.1x |
| |
|---|
| Median (6 companies) | -0.6x | -0.8x | -0.9x | 0.2x | 0.9x |
|---|
| Lotte Shopping Co Ltd ($LOTS) | 5.2x | 6.7x | 7.1x | 3.5x | 4.5x |
