Norsk Hydro Asa EBITDA dropped on 37.2% and Revenue decreased on 6.0%
07 Feb 2020 • About Norsk Hydro Asa (
$NHY) • By InTwits
Norsk Hydro Asa reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- Norsk Hydro Asa has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.3%. At the same time it's a lot of higher than industry average of 8.9%.
- CAPEX is quite volatile: £39m in FY2019, £28m in FY2018, £22m in FY2017, £28m in FY2016, £8m in FY2015
- The company has potentially unprofitable business model: ROIC is 0.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.3x while industry average is 1.5x
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 6.0%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 3.3 pp from 10.0% to 6.7% in FY2019.
Net Income margin decreased on 3.9 pp from 2.7% to -1.2% in FY2019. During FY2015-FY2019 Net Income margin topped in FY2017 at 8.0% and was declining since that time.
Investments (CAPEX, working capital and M&A)
Norsk Hydro Asa's CAPEX/Revenue was 5.8% in FY2019. CAPEX/Revenue decreased on 2.6 pp from 8.4% in FY2016 to 5.8% in FY2019. It's average level of CAPEX/Revenue for the last three years was 5.7%. Norsk Hydro Asa invested a big chunk of EBITDA (87.4%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (0.4%) and negative ROE (-2.2%). ROIC decreased on 7.2 pp from 7.6% to 0.45% in FY2019. ROE decreased on 7.1 pp from 4.9% to -2.2% in FY2019. During FY2015-FY2019 ROE topped in FY2017 at 10.4% and was declining since that time.
Leverage (Debt)
Debt level is 1.3x Net Debt / EBITDA and 2.5x Debt / EBITDA. Net Debt / EBITDA jumped on 0.7x from 0.6x to 1.3x in FY2019. Debt surged on 60.1% while cash jumped on 105%. Net Debt/EBITDA stuck to a growing trend at 0.3x per annum in the last 5 years.
Norsk Hydro Asa has no short term refinancing risk: cash is higher than short term debt (199.5%).
Management team
The company's CEO is Hilde Merete Aasheim. Hilde Merete Aasheim is a founder and has 0 years tenure with the company. Norsk Hydro Asa's CFO Pal Kildemo has spent 0 years with the company.
Financial and operational results
FY ended 30 Nov -0001
Norsk Hydro Asa ($NHY) key annual financial indicators| mln. NOK | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 87,694 | 81,953 | 109,220 | 159,377 | 149,766 | -6.0% |
| EBITDA | 12,771 | 11,067 | 18,345 | 15,891 | 9,984 | -37.2% |
| EBIT | | | | 8,522 | | |
| Interest expence | | | | 699 | | |
| Tax | | | | 2,139 | | |
| Net Income | 2,020 | 6,388 | 8,783 | 4,256 | -1,811 | -142.6% |
Balance Sheet
|
|---|
| Cash | 6,917 | 8,037 | 11,828 | 5,995 | 12,286 | 104.9% |
| Inventory | | | | 26,483 | | |
| Short Term Debt | 3,562 | 3,283 | 8,244 | 8,543 | 6,157 | -27.9% |
| Long Term Debt | 3,969 | 3,397 | 9,012 | 7,080 | 18,858 | 166.4% |
Cash flow
|
|---|
| Capex | 5,254 | 6,913 | 7,296 | 7,219 | 8,726 | 20.9% |
| Dividends | | | | 3,622 | | |
Ratios
|
|---|
| Revenue growth | 12.6% | -6.5% | 33.3% | 45.9% | -6.0% | |
| EBITDA growth | 30.0% | -13.3% | 65.8% | -13.4% | -37.2% | |
|
|---|
| EBITDA Margin | 14.6% | 13.5% | 16.8% | 10.0% | 6.7% | -3.3% |
| EBIT Margin | | | | 5.3% | |
| Net Income Margin | 2.3% | 7.8% | 8.0% | 2.7% | -1.2% | -3.9% |
| CAPEX, % of revenue | 6.0% | 8.4% | 6.7% | 4.5% | 5.8% | 1.3% |
|
|---|
| ROIC | 8.7% | 6.6% | 11.8% | 7.6% | 0.4% | -7.2% |
| ROE | 2.7% | 8.2% | 10.4% | 4.9% | -2.2% | -7.1% |
| Net Debt/EBITDA | 0.0x | -0.1x | 0.3x | 0.6x | 1.3x | 0.7x |
| Interest expence / Average debt | | | | 4.3% | | |
People
|
|---|
| Insider ownership | | | | 0.0% | | |
| Employees | | | | 36,236 | | |
| Revenue/Employee, th. NOK | | | | 4,398 | | |
Peers in Industrial Metals & Mining
Below we provide Norsk Hydro Asa benchmarking against other companies in Industrial Metals & Mining 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 |
|---|
| 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 ($NLMK) | -23.0% | -4.6% | 31.8% | 19.7% | |
| Severstal PJSC ($SVST) | | -7.5% | 32.7% | 9.3% | -4.9% |
| Posco ($PIDD) | | -8.8% | 14.3% | 7.1% | -0.9% |
| |
|---|
| Median (7 companies) | -14.2% | -3.6% | 29.5% | 9.3% | -2.9% |
|---|
| Norsk Hydro Asa ($NHY) | | -6.5% | 33.3% | 45.9% | -6.0% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Severstal PJSC ($SVST) | 40.4% | 39.6% | 39.7% | 42.7% | 39.8% |
| Base Resources Ltd ($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 ($PIDD) | 11.2% | 12.6% | 13.8% | 12.3% | 9.7% |
| |
|---|
| Median (7 companies) | 17.0% | 21.0% | 23.9% | 24.7% | 24.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Base Resources Ltd ($BSE) | 37.7% | 35.8% | 50.9% | 54.9% | |
| First Quantum Minerals ($FQM) | 17.8% | 36.1% | 32.5% | 42.2% | |
| Severstal PJSC ($SVST) | 32.4% | 31.2% | 32.6% | 36.1% | 34.0% |
| Novolipetsk Iron And Steel Corp ($NLMK) | 24.3% | 25.4% | 26.4% | 29.8% | |
| Posco ($PIDD) | 9.7% | 11.4% | 13.1% | 13.6% | |
| |
|---|
| Median (7 companies) | 17.3% | 20.7% | 24.0% | 29.8% | 34.0% |
|---|
| Norsk Hydro Asa ($NHY) | 14.6% | 13.5% | 16.8% | 10.0% | 6.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| First Quantum Minerals ($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% | |
| Severstal PJSC ($SVST) | 6.4% | 8.4% | 7.1% | 7.6% | 14.2% |
| Novolipetsk Iron And Steel Corp ($NLMK) | 7.7% | 7.3% | 5.9% | 5.6% | |
| |
|---|
| Median (7 companies) | 6.3% | 5.9% | 5.9% | 7.6% | 14.2% |
|---|
| Norsk Hydro Asa ($NHY) | 6.0% | 8.4% | 6.7% | 4.5% | 5.8% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Severstal PJSC ($SVST) | 30.3% | 29.7% | 38.8% | 49.5% | 39.4% |
| 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 ($PIDD) | 3.3% | 4.0% | 6.6% | 8.0% | |
| First Quantum Minerals ($FQM) | -0.4% | 1.6% | 1.1% | 4.3% | |
| |
|---|
| Median (11 companies) | 5.4% | 4.9% | 8.3% | 6.2% | 18.6% |
|---|
| Norsk Hydro Asa ($NHY) | 8.7% | 6.6% | 11.8% | 7.6% | 0.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Aluminium Bahrain Bsc ($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 | |
| Base Resources Ltd ($BSE) | 4.4x | 3.7x | 1.4x | 0.5x | |
| Severstal PJSC ($SVST) | 0.4x | 0.5x | 0.4x | 0.4x | 0.6x |
| |
|---|
| Median (7 companies) | 1.1x | 0.9x | 1.4x | 0.5x | 0.6x |
|---|
| Norsk Hydro Asa ($NHY) | 0.0x | -0.1x | 0.3x | 0.6x | 1.3x |
