Zambeef Products Debt jumped on 66.5% and Net Debt / EBITDA surged on 0.6x from 2.0x to 2.7x
09 Dec 2019 • About Zambeef Products (
$ZAM) • By InTwits
Zambeef Products reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Zambeef Products is a growth stock: FY2019 revenue growth was 12.7%, 5 year revenue CAGR was 13.8% at FY2019 ROIC 4.2%
- EBITDA Margin is quite volatile: 9.0% in FY2019, 8.1% in FY2018, 5.3% in FY2017, 9.7% in FY2016, 14.7% in FY2015
- Zambeef Products has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.7%. At the same time it's in pair with industry average of 6.1%
- CAPEX is quite volatile: 114 ZMWm in FY2019, 150 ZMWm in FY2018, 155 ZMWm in FY2017, 50 ZMWm in FY2016, 247 ZMWm in FY2015
- The company has potentially unprofitable business model: ROIC is 4.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Zambeef Products's Revenue surged on 12.7%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.1 pp from 23.7% to 20.6% in FY2019. During the last 5 years EBITDA Margin bottomed in FY2017 at 5.3% and was growing since that time.
Gross Margin decreased slightly on 0.87 pp from 35.0% to 34.2% in FY2019. SG&A as a % of Revenue decreased slightly on 0.89 pp from 30.3% to 29.4% in FY2019.
Net Income margin showed almost no change in FY2019.
Investments (CAPEX, working capital and M&A)
In FY2019 Zambeef Products had CAPEX/Revenue of 3.6%. CAPEX/Revenue increased slightly on 1.5 pp from 2.1% in FY2016 to 3.6% in FY2019. Average CAPEX/Revenue for the last three years was 5.1%.
Return on investment
The company operates at low ROIC (4.2%) and ROE (0.6%). ROIC increased slightly on 0.76 pp from 3.5% to 4.2% in FY2019. ROE showed almost no change in FY2019. During FY2015-FY2019 ROIC bottomed in FY2017 at 2.9% and was growing since that time.
Leverage (Debt)
Debt level is 2.7x Net Debt / EBITDA and 2.7x Debt / EBITDA. Net Debt / EBITDA surged on 0.6x from 2.0x to 2.7x in FY2019. Debt surged on 66.5% while cash didn't change in FY2019.
Zambeef Products has short term refinancing risk: cash is only 0.0% of short term debt.
Valuation and dividends
Zambeef Products's trades at EV/EBITDA 2.7x and P/E 1.0x.
Financial and operational results
FY ended 30 Sep 2019
Zambeef Products ($ZAM) key annual financial indicators| mln. ZMW | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 1,555 | 2,376 | 2,435 | 2,781 | 3,135 | 12.7% |
| Gross Profit | 671 | 863 | 802 | 974 | 1,071 | 9.9% |
| SG&A | 505 | 690 | 715 | 841 | 921 | 9.4% |
| EBITDA | 229 | 231 | 128 | 224 | 283 | 26.4% |
| Net Income | -64 | 137 | 4 | 11 | 18 | 70.7% |
Balance Sheet
|
|---|
| Cash | 0 | 65 | 0 | 0 | 0 | |
| Short Term Debt | 224 | 255 | 158 | 125 | 508 | 305.1% |
| Long Term Debt | 454 | 293 | 356 | 328 | 247 | -24.7% |
Cash flow
|
|---|
| Capex | 247 | 50 | 155 | 150 | 114 | -24.1% |
Ratios
|
|---|
| Revenue growth | -5.4% | 52.8% | 2.5% | 14.2% | 12.7% | |
| EBITDA growth | 83.0% | 1.0% | -44.5% | 74.6% | 26.4% | |
|
|---|
| Gross Margin | 43.2% | 36.3% | 32.9% | 35.0% | 34.2% | -0.9% |
| EBITDA Margin | 14.7% | 9.7% | 5.3% | 8.1% | 9.0% | 1.0% |
| SG&A, % of revenue | 32.5% | 29.0% | 29.4% | 30.3% | 29.4% | -0.9% |
| Net Income Margin | -4.1% | 5.8% | 0.2% | 0.4% | 0.6% | 0.2% |
| CAPEX, % of revenue | 15.9% | 2.1% | 6.4% | 5.4% | 3.6% | -1.8% |
|
|---|
| ROIC | 8.0% | 7.8% | 2.9% | 3.5% | 4.2% | 0.8% |
| ROE | -4.6% | 7.7% | 0.2% | 0.4% | 0.6% | 0.2% |
| Net Debt/EBITDA | 3.0x | 2.1x | 4.0x | 2.0x | 2.7x | 0.6x |
Peers in Food Producers
Below you can find Zambeef Products 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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Real Good Food ($RGD) | -5.1% | -4.0% | 7.3% | 20.5% | |
| Wynnstay Group ($WYN) | -8.7% | -2.4% | 6.1% | 18.4% | |
| Carr'S Milling Industries ($CRM) | -22.8% | -4.9% | 9.9% | 16.5% | |
| Cherkizovo Group OJSC ($CHE) | 11.1% | 7.0% | 9.8% | 11.0% | |
| Origin Enterprises ($OGN) | 3.0% | 4.3% | 0.5% | 6.5% | |
| |
|---|
| Median (10 companies) | 1.3% | 0.5% | 7.3% | 4.8% | |
|---|
| Zambeef Products ($ZAM) | | 52.8% | 2.5% | 14.2% | 12.7% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Unilever ($ULVR) | 42.2% | 42.7% | 43.1% | 43.6% | |
| Produce Investments ($PIL) | 36.4% | 37.9% | 35.7% | 37.8% | |
| Cherkizovo Group OJSC ($CHE) | 24.9% | 21.7% | 26.0% | 25.0% | |
| Tongaat Hulett Ltd ($THL) | 22.4% | 19.9% | 22.9% | 20.6% | |
| Real Good Food ($RGD) | 24.4% | 26.6% | 24.4% | 19.2% | |
| |
|---|
| Median (9 companies) | 24.4% | 24.1% | 24.4% | 19.2% | |
|---|
| Zambeef Products ($ZAM) | 43.2% | 36.3% | 32.9% | 35.0% | 34.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Unilever ($ULVR) | 16.8% | 18.0% | 19.8% | 28.1% | |
| Cherkizovo Group OJSC ($CHE) | 14.7% | 12.0% | 16.7% | 21.6% | |
| Tongaat Hulett Ltd ($THL) | 16.5% | 17.5% | 19.3% | 17.5% | |
| Tate & Lyle ($BD15) | 6.1% | 10.3% | 13.9% | 16.4% | |
| Kerry Group ($KYGA) | 13.8% | 13.0% | 12.3% | 13.3% | |
| |
|---|
| Median (11 companies) | 10.4% | 11.2% | 13.7% | 5.1% | |
|---|
| Zambeef Products ($ZAM) | 14.7% | 9.7% | 5.3% | 8.1% | 9.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Tongaat Hulett Ltd ($THL) | 5.0% | 10.9% | 6.0% | 12.1% | |
| Cherkizovo Group OJSC ($CHE) | 12.2% | 10.4% | 10.9% | 9.1% | |
| Real Good Food ($RGD) | 1.4% | 6.4% | 10.0% | 8.4% | |
| Kerry Group ($KYGA) | 4.1% | 3.7% | 4.7% | 4.5% | |
| Tate & Lyle ($BD15) | 5.2% | 7.6% | 4.6% | 4.1% | |
| |
|---|
| Median (11 companies) | 4.1% | 5.0% | 4.6% | 2.8% | |
|---|
| Zambeef Products ($ZAM) | 15.9% | 2.1% | 6.4% | 5.4% | 3.6% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Unilever ($ULVR) | 26.0% | 24.3% | 24.6% | 31.6% | |
| Tate & Lyle ($BD15) | 1.8% | 7.2% | 12.1% | 14.4% | |
| Cherkizovo Group OJSC ($CHE) | 8.9% | 5.6% | 10.2% | 13.3% | |
| Origin Enterprises ($OGN) | 20.1% | 15.3% | 11.1% | 13.0% | |
| Kerry Group ($KYGA) | 15.8% | 12.8% | 11.9% | 11.3% | |
| |
|---|
| Median (13 companies) | 9.7% | 8.1% | 9.1% | 9.9% | |
|---|
| Zambeef Products ($ZAM) | 8.0% | 7.8% | 2.9% | 3.5% | 4.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Cherkizovo Group OJSC ($CHE) | 3.1x | 3.8x | 3.2x | 2.7x | |
| Tongaat Hulett Ltd ($THL) | 1.8x | 2.1x | 1.5x | 2.3x | |
| Kerry Group ($KYGA) | 2.2x | 1.9x | 1.8x | 2.0x | |
| Unilever ($ULVR) | 1.4x | 1.4x | 2.0x | 1.5x | |
| Tate & Lyle ($BD15) | 4.0x | 1.8x | 1.1x | 0.9x | |
| |
|---|
| Median (8 companies) | 1.6x | 1.4x | 1.8x | 1.2x | |
|---|
| Zambeef Products ($ZAM) | 3.0x | 2.1x | 4.0x | 2.0x | 2.7x |
