Carnival CAPEX surged on 44.8% and Revenue jumped on 10.3%
29 Jan 2020 • About Carnival (
$CCL) • By InTwits
Carnival reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Carnival has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.2%. At the same time it's in pair with industry average of 20.1%
- CAPEX is quite volatile: $5,429m in FY2019, $3,749m in FY2018, $2,944m in FY2017, $3,062m in FY2016, $2,294m in FY2015
- The company has business model with low profitability: ROIC is 9.1%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.0x while industry average is 2.3x
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 surged on 10.3%. Revenue growth was accelerating on average by 2.6 pp per annum in the last 5 years. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.2 pp from 28.3% to 26.1% in FY2019.
Gross Margin decreased on 3.3 pp from 41.3% to 38.0% in FY2019. SG&A as a % of Revenue decreased slightly on 1.1 pp from 13.0% to 11.9% in FY2019.
Net Income margin decreased on 2.3 pp from 16.7% to 14.4% in FY2019.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 26.1% in FY2019. Carnival showed CAPEX/Revenue growth of 7.4 pp from 18.7% in FY2016 to 26.1% in FY2019. Average CAPEX/Revenue for the last three years was 20.9%. To maintain its fast growth Carnival invested a large share of EBITDA (99.9%) to CAPEX. CAPEX as a % of Revenue grew at 2.4 pp per annum in the last 5 years.
Return on investment
The company operates at good ROE (12.0%) while ROIC is low (9.1%). ROIC decreased slightly on 0.61 pp from 9.8% to 9.1% in FY2019. ROE decreased slightly on 0.95 pp from 13.0% to 12.0% in FY2019.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.0x and Debt / EBITDA is 2.1x. Net Debt / EBITDA jumped on 0.3x from 1.7x to 2.0x in FY2019. Debt jumped on 11.4% while cash dropped on 47.3%.
Carnival has short term refinancing risk: cash is only 28.4% of short term debt.
Valuation and dividends
Carnival's trades at EV/EBITDA 2.9x and P/E 1.7x.
Management team
Carnival's CEO is Arnold W Donald. Arnold W Donald is a founder and has 6 years tenure with the company. David Bernstein is a the company's CFO. David Bernstein has spent 13 years at the company.
Financial and operational results
FY ended 30 Nov -0001
Carnival ($CCL) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 15,714 | 16,389 | 17,510 | 18,881 | 20,825 | 10.3% |
| Gross Profit | 6,267 | 7,006 | 7,009 | 7,792 | 7,916 | 1.6% |
| SG&A | 2,067 | 2,197 | 2,265 | 2,450 | 2,480 | 1.2% |
| EBITDA | 4,200 | 4,809 | 4,655 | 5,342 | 5,435 | 1.7% |
| Net Income | 1,757 | 2,779 | 2,606 | 3,152 | 2,990 | -5.1% |
Balance Sheet
|
|---|
| Cash | 1,395 | 603 | 395 | 982 | 518 | -47.3% |
| Short Term Debt | 1,374 | 1,097 | 2,202 | 2,426 | 1,827 | -24.7% |
| Long Term Debt | 7,413 | 8,357 | 6,993 | 7,897 | 9,676 | 22.5% |
Cash flow
|
|---|
| Capex | 2,294 | 3,062 | 2,944 | 3,749 | 5,429 | 44.8% |
Ratios
|
|---|
| Revenue growth | -1.1% | 4.3% | 6.8% | 7.8% | 10.3% | |
| EBITDA growth | 23.2% | 14.5% | -3.2% | 14.8% | 1.7% | |
|
|---|
| Gross Margin | 39.9% | 42.7% | 40.0% | 41.3% | 38.0% | -3.3% |
| EBITDA Margin | 26.7% | 29.3% | 26.6% | 28.3% | 26.1% | -2.2% |
| SG&A, % of revenue | 13.2% | 13.4% | 12.9% | 13.0% | 11.9% | -1.1% |
| Net Income Margin | 11.2% | 17.0% | 14.9% | 16.7% | 14.4% | -2.3% |
| CAPEX, % of revenue | 14.6% | 18.7% | 16.8% | 19.9% | 26.1% | 6.2% |
|
|---|
| ROIC | 7.8% | 9.5% | 8.6% | 9.8% | 9.1% | -0.6% |
| ROE | 7.3% | 12.0% | 11.1% | 13.0% | 12.0% | -0.9% |
| Net Debt/EBITDA | 1.8x | 1.8x | 1.9x | 1.7x | 2.0x | 0.3x |
Peers in Travel & Leisure
Below we provide Carnival benchmarking against other companies in Travel & Leisure industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Nektan ($NKTN) | | 995.3% | 129.1% | 50.1% | 13.5% |
| Easyhotel ($EZH) | | 8.7% | 39.7% | 33.7% | 56.0% |
| Webis Holdings ($WEB) | 29.7% | 45.3% | 65.8% | 24.0% | |
| Hanatour Service Inc ($TOUR) | 19.2% | 29.6% | 14.6% | 21.4% | |
| Meikles Ltd ($MIK) | 7.6% | 9.7% | 0.9% | 16.9% | |
| |
|---|
| Median (17 companies) | 7.6% | 8.7% | 7.9% | 7.6% | 13.5% |
|---|
| Carnival ($CCL) | | 4.3% | 6.8% | 7.8% | 10.3% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Intercontinental Hotels Group ($IHG) | 64.5% | 86.0% | 86.0% | 83.7% | |
| Eclectic Bar Grp ($BAR) | 79.4% | 80.7% | 82.3% | 82.9% | |
| Air Partner ($AIP) | 11.5% | 12.9% | 14.7% | 74.4% | |
| Nektan ($NKTN) | 42.6% | 67.9% | 64.1% | 62.2% | 56.9% |
| Easyhotel ($EZH) | 68.8% | 64.3% | 61.3% | 53.5% | 48.1% |
| |
|---|
| Median (9 companies) | 41.5% | 47.3% | 36.2% | 53.5% | 48.1% |
|---|
| Carnival ($CCL) | 39.9% | 42.7% | 40.0% | 41.3% | 38.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Ryanair Hldgs ($RYA) | 25.1% | 28.9% | 30.6% | 31.2% | |
| Celtic ($CCP) | -1.3% | 14.6% | 18.5% | 28.4% | |
| Heavitree Brewery ($HVT) | 23.7% | 25.0% | 27.8% | 24.5% | |
| Young & Co'S Brewery ($YNGN) | 22.9% | 22.6% | 23.5% | 23.4% | |
| Easyhotel ($EZH) | 21.7% | 21.6% | 18.0% | 19.4% | 13.5% |
| |
|---|
| Median (16 companies) | 12.5% | 15.9% | 16.7% | 15.1% | 5.0% |
|---|
| Carnival ($CCL) | 26.7% | 29.3% | 26.6% | 28.3% | 26.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Easyhotel ($EZH) | 46.8% | 153.2% | 269.8% | 412.1% | 142.5% |
| Ryanair Hldgs ($RYA) | 13.9% | 18.6% | 21.8% | 20.6% | |
| Marston'S ($MARS) | 16.2% | 15.3% | 19.4% | 14.3% | |
| Ana Hldgs Inc ($ANA) | 14.1% | 14.1% | 12.7% | 13.5% | |
| Young & Co'S Brewery ($YNGN) | 14.3% | 16.9% | 12.8% | 10.9% | |
| |
|---|
| Median (16 companies) | 5.7% | 8.1% | 5.7% | 6.1% | 5.5% |
|---|
| Carnival ($CCL) | 14.6% | 18.7% | 16.8% | 19.9% | 26.1% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Intercontinental Hotels Group ($IHG) | 96.6% | 51.2% | 92.2% | 45.0% | |
| Air Partner ($AIP) | 20.0% | 20.4% | 24.6% | 34.6% | |
| Celtic ($CCP) | -14.7% | 1.5% | 11.6% | 23.7% | |
| Ryanair Hldgs ($RYA) | 13.3% | 17.2% | 17.7% | 18.4% | |
| Meikles Ltd ($MIK) | -3.5% | 1.0% | 6.1% | 12.2% | |
| |
|---|
| Median (20 companies) | 5.9% | 5.3% | 6.5% | 8.1% | 1.9% |
|---|
| Carnival ($CCL) | 7.8% | 9.5% | 8.6% | 9.8% | 9.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Marston'S ($MARS) | 8.2x | 6.2x | 6.9x | 8.7x | |
| Peel Hotels ($PHO) | 4.4x | 3.9x | 0.4x | 4.3x | |
| Heavitree Brewery ($HVT) | 4.6x | 4.1x | 3.7x | 3.7x | |
| Eclectic Bar Grp ($BAR) | 1.5x | 6.8x | 2.1x | 3.4x | |
| Intercontinental Hotels Group ($IHG) | 0.3x | 1.9x | 2.3x | 3.1x | |
| |
|---|
| Median (15 companies) | 0.8x | 2.3x | 2.0x | 2.2x | 1.8x |
|---|
| Carnival ($CCL) | 1.8x | 1.8x | 1.9x | 1.7x | 2.0x |
