Severstal PJSC CAPEX surged on 77.2% while Revenue decreased on 4.9%
17 Jan 2020 • About Severstal PJSC (
$SVST) • By InTwits
Severstal PJSC reported 2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Severstal PJSC has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.7%. At the same time it's a lot of higher than industry average of 4.0%.
- CAPEX is quite volatile: $1,157m in 2019, $653m in 2018, $560m in 2017, $494m in 2016, $412m in 2015
- The company has highly profitable business model: ROIC is 39.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 4.9%. During the last 5 years Revenue growth topped in 2017 at 32.7% and was decelerating since that time. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 2.1 pp from 36.1% to 34.0% in 2019.
Gross Margin decreased on 2.8 pp from 42.7% to 39.8% in 2019. SG&A as a % of Revenue increased slightly on 0.60 pp from 10.3% to 10.9% in 2019. SG&A as a % of Revenue followed a declining trend at -0.57 pp per annum in the last 5 years.
Net Income margin decreased on 2.3 pp from 23.9% to 21.7% in 2019.
Investments (CAPEX, working capital and M&A)
In 2019 Severstal PJSC had CAPEX/Revenue of 14.2%. Severstal PJSC's CAPEX/Revenue increased on 5.8 pp from 8.4% in 2016 to 14.2% in 2019. It's average CAPEX/Revenue for the last three years was 9.6%.
Return on investment
The company operates at high and attractive ROIC (39.4%) and ROE (55.8%). ROIC dropped on 10.1 pp from 49.5% to 39.4% in 2019. ROE decreased on 9.8 pp from 65.7% to 55.8% in 2019.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.6x and Debt / EBITDA is 1.0x. Net Debt / EBITDA jumped on 0.2x from 0.4x to 0.6x in 2019. Debt surged on 83.4% while cash jumped on 374%.
Severstal PJSC has no short term refinancing risk: cash is higher than short term debt (354.4%).
Valuation and dividends
The company's trades at EV/EBITDA 0.7x and P/E 0.1x.
Management team
Severstal PJSC's CEO Alexander Shevelev is a founder and has spent 3 years with the company. The company's CFO is Alexey G Kulichenko. Alexey G Kulichenko has 3 years tenure at the company.
Financial and operational results
FY ended 31 Dec 2019
Severstal PJSC ($SVST) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 6,396 | 5,916 | 7,848 | 8,580 | 8,157 | -4.9% |
| Gross Profit | 2,586 | 2,343 | 3,113 | 3,662 | 3,249 | -11.3% |
| SG&A | 808 | 741 | 884 | 884 | 889 | 0.6% |
| EBITDA | 2,071 | 1,846 | 2,556 | 3,098 | 2,771 | -10.6% |
| Net Income | 605 | 1,621 | 1,356 | 2,051 | 1,766 | -13.9% |
Balance Sheet
|
|---|
| Cash | 1,647 | 1,154 | 1,031 | 228 | 1,081 | 374.1% |
| Short Term Debt | 507 | 673 | 586 | 116 | 305 | 162.9% |
| Long Term Debt | 1,945 | 1,340 | 1,507 | 1,412 | 2,498 | 76.9% |
Cash flow
|
|---|
| Capex | 412 | 494 | 560 | 653 | 1,157 | 77.2% |
Ratios
|
|---|
| Revenue growth | -22.9% | -7.5% | 32.7% | 9.3% | -4.9% | |
| EBITDA growth | -5.3% | -10.9% | 38.5% | 21.2% | -10.6% | |
|
|---|
| Gross Margin | 40.4% | 39.6% | 39.7% | 42.7% | 39.8% | -2.8% |
| EBITDA Margin | 32.4% | 31.2% | 32.6% | 36.1% | 34.0% | -2.1% |
| SG&A, % of revenue | 12.6% | 12.5% | 11.3% | 10.3% | 10.9% | 0.6% |
| Net Income Margin | 9.5% | 27.4% | 17.3% | 23.9% | 21.7% | -2.3% |
| CAPEX, % of revenue | 6.4% | 8.4% | 7.1% | 7.6% | 14.2% | 6.6% |
|
|---|
| ROIC | 30.3% | 29.7% | 38.8% | 49.5% | 39.4% | -10.1% |
| ROE | 23.9% | 61.4% | 42.3% | 65.7% | 55.8% | -9.8% |
| Net Debt/EBITDA | 0.4x | 0.5x | 0.4x | 0.4x | 0.6x | 0.2x |
Peers in Industrial Metals & Mining
Below you can find Severstal PJSC benchmarking vs. other companies in Industrial Metals & Mining 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 |
|---|
| Norsk Hydro Asa ($NHY) | 12.6% | -6.5% | 33.3% | 45.9% | |
| Base Resources Ltd ($BSE) | 444.2% | 16.2% | -3.9% | 22.4% | |
| First Quantum Minerals ($FQM) | -29.1% | 6.5% | 23.8% | 19.8% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | -23.0% | -4.6% | 31.8% | 19.7% | |
| Posco ($PIDD) | -10.6% | -8.8% | 14.3% | 7.1% | |
| |
|---|
| Median (7 companies) | -10.6% | -3.6% | 29.5% | 19.7% | |
|---|
| Severstal PJSC ($SVST) | | -7.5% | 32.7% | 9.3% | -4.9% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Base Resources Ltd ($BSE) | 21.2% | 21.0% | 35.9% | 39.7% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 31.4% | 33.6% | 32.5% | 36.2% | |
| First Quantum Minerals ($FQM) | 11.4% | 12.7% | 10.1% | 24.7% | |
| Posco ($PIDD) | 11.2% | 12.6% | 13.8% | 12.3% | |
| Aluminium Bahrain Bsc ($ALBH) | 13.5% | 12.3% | 15.7% | 9.3% | |
| |
|---|
| Median (6 companies) | 13.5% | 16.8% | 19.9% | 18.5% | |
|---|
| Severstal PJSC ($SVST) | 40.4% | 39.6% | 39.7% | 42.7% | 39.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Base Resources Ltd ($BSE) | 37.7% | 35.8% | 50.9% | 54.9% | |
| First Quantum Minerals ($FQM) | 17.8% | 36.1% | 32.5% | 42.2% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 24.3% | 25.4% | 26.4% | 29.8% | |
| Posco ($PIDD) | 9.7% | 11.4% | 13.1% | 13.6% | |
| Aluminium Bahrain Bsc ($ALBH) | 17.3% | 18.4% | 18.4% | 11.2% | |
| |
|---|
| Median (7 companies) | 14.6% | 16.8% | 18.4% | 13.6% | |
|---|
| Severstal PJSC ($SVST) | 32.4% | 31.2% | 32.6% | 36.1% | 34.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| First Quantum Minerals ($FQM) | 72.5% | 56.0% | 60.9% | 65.2% | |
| Aluminium Bahrain Bsc ($ALBH) | 6.3% | 16.1% | 54.2% | 57.7% | |
| Base Resources Ltd ($BSE) | 6.3% | 2.9% | 4.5% | 55.8% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 7.7% | 7.3% | 5.9% | 5.6% | |
| Norsk Hydro Asa ($NHY) | 6.0% | 8.4% | 6.7% | 4.5% | |
| |
|---|
| Median (7 companies) | 6.3% | 5.9% | 5.9% | 5.6% | |
|---|
| Severstal PJSC ($SVST) | 6.4% | 8.4% | 7.1% | 7.6% | 14.2% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Novolipetsk Iron And Steel Corp ($NLMK) | 15.7% | 17.5% | 22.3% | 34.5% | |
| Base Resources Ltd ($BSE) | 2.9% | 2.7% | 13.2% | 17.1% | |
| Posco ($PIDD) | 3.3% | 4.0% | 6.6% | 8.0% | |
| Norsk Hydro Asa ($NHY) | 8.7% | 6.6% | 11.8% | 7.6% | |
| First Quantum Minerals ($FQM) | -0.4% | 1.6% | 1.1% | 4.3% | |
| |
|---|
| Median (11 companies) | 5.4% | 4.9% | 8.3% | 6.0% | -2.3% |
|---|
| Severstal PJSC ($SVST) | 30.3% | 29.7% | 38.8% | 49.5% | 39.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Aluminium Bahrain Bsc ($ALBH) | -0.2x | -0.1x | 2.5x | 7.4x | |
| First Quantum Minerals ($FQM) | 10.5x | 4.5x | 5.2x | 3.9x | |
| Posco ($PIDD) | 3.6x | 3.4x | 2.3x | 2.0x | |
| Norsk Hydro Asa ($NHY) | 0.0x | -0.1x | 0.3x | 0.6x | |
| Base Resources Ltd ($BSE) | 4.4x | 3.7x | 1.4x | 0.5x | |
| |
|---|
| Median (7 companies) | 1.1x | 0.9x | 1.4x | 0.6x | |
|---|
| Severstal PJSC ($SVST) | 0.4x | 0.5x | 0.4x | 0.4x | 0.6x |
