Ferguson Plc EBITDA surged on 19.8% and EBITDA Margin increased slightly on 1.6 pp from 7.7% to 9.3%
29 Sep 2020 • About Ferguson Plc (
$FERG) • By InTwits
Ferguson Plc reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ferguson Plc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's a lot of higher than industry average of 1.0%.
- CAPEX is quite volatile: £6m in FY2020, £8m in FY2019, £1m in FY2018, £1m in FY2017, £1m in FY2016
- The company has highly profitable business model: ROIC is 17.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.2x while industry average is 1.2x
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 slightly on 0.87%. During FY2016-FY2020 Revenue growth topped in FY2018 at 7.6% and was decelerating since that time. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.6 pp from 7.7% to 9.3% in FY2020.
Gross Margin showed almost no change in FY2020. Gross Margin stuck to a growing trend at 0.20 pp per annum in FY2016-FY2020.
Net Income margin decreased slightly on 0.63 pp from 5.0% to 4.4% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 0.99%. The company's CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average level of CAPEX/Revenue for the last three years was 1.3%.
Return on investment
The company operates at high and attractive ROE (22.0%) while ROIC is a bit lower (17.8%). ROIC decreased on 3.5 pp from 21.3% to 17.8% in FY2020. ROE decreased on 4.3 pp from 26.4% to 22.0% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.2x and Debt / EBITDA is 2.2x. Net Debt / EBITDA surged on 0.5x from 0.7x to 1.2x in FY2020. Debt jumped on 92.4% while cash jumped on 86.7%. During FY2016-FY2020 Net Debt/EBITDA bottomed in FY2017 at 0.4x and was growing since that time.
Ferguson Plc has no short term refinancing risk: cash is higher than short term debt (260.5%).
Management team
The company's CEO is Kevin Murphy. Kevin Murphy has 1 year tenure with the company. The company's CFO is Mike Powell. Mike Powell has 1 year tenure at the company.
Financial and operational results
Ferguson Plc ($FERG) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 18,367 | 19,284 | 20,752 | 22,010 | 21,819 | -0.9% |
| Gross Profit | 5,257 | 5,583 | 6,044 | 6,458 | 6,421 | -0.6% |
| EBITDA | 1,461 | 1,905 | 1,605 | 1,690 | 2,024 | 19.8% |
| Net Income | 965 | 920 | 1,267 | 1,108 | 961 | -13.3% |
Balance Sheet
|
|---|
| Cash | 1,243 | 2,525 | 833 | 1,133 | 2,115 | 86.7% |
| Short Term Debt | 933 | 2,154 | 386 | 54 | 812 | 1,403.7% |
| Long Term Debt | 1,590 | 1,103 | 1,525 | 2,296 | 3,709 | 61.5% |
Cash flow
|
|---|
| Capex | 274 | 192 | 265 | 382 | 215 | -43.7% |
Ratios
|
|---|
| Revenue growth | -11.8% | 5.0% | 7.6% | 6.1% | -0.9% | |
| EBITDA growth | -3.7% | 30.4% | -15.7% | 5.3% | 19.8% | |
|
|---|
| Gross Margin | 28.6% | 29.0% | 29.1% | 29.3% | 29.4% | 0.1% |
| EBITDA Margin | 8.0% | 9.9% | 7.7% | 7.7% | 9.3% | 1.6% |
| Net Income Margin | 5.3% | 4.8% | 6.1% | 5.0% | 4.4% | -0.6% |
| CAPEX, % of revenue | 1.5% | 1.0% | 1.3% | 1.7% | 1.0% | -0.8% |
|
|---|
| ROIC | 15.0% | 20.4% | 19.3% | 21.3% | 17.8% | -3.5% |
| ROE | 24.0% | 21.9% | 29.5% | 26.4% | 22.0% | -4.3% |
| Net Debt/EBITDA | 0.9x | 0.4x | 0.7x | 0.7x | 1.2x | 0.5x |
Peers in Trading Companies & Distributo
Below we provide Ferguson Plc benchmarking against other companies in Trading Companies & Distributo 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.
