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Mulberry Group EBITDA surged on 317% and EBITDA Margin increased on 7.0 pp from 1.9% to 8.9%

05 Oct 2020 • About Mulberry Group ($MUL) • By InTwits

Mulberry Group reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
  • EBITDA Margin is quite volatile: 8.9% in FY2020, 1.9% in FY2019, 8.6% in FY2018, 9.8% in FY2017, 9.5% in FY2016
  • Mulberry Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's a lot of higher than industry average of 2.4%.
  • CAPEX is quite volatile: £5m in FY2020, £9m in FY2019, £5m in FY2018, £4m in FY2017, £5m in FY2016
  • The company has unprofitable business model: ROIC is -44.6%
  • It operates with high leverage: Net Debt/EBITDA is 6.8x 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 dropped on 10.2%. Revenue decline was accelerating on average at -4.0 pp per annum in FY2016-FY2020. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 7.0 pp from 1.9% to 8.9% in FY2020.

Gross Margin showed almost no change in FY2020.

Net Income margin dropped on 28.1 pp from -1.5% to -29.6% in FY2020. During FY2016-FY2020 Net Income margin topped in FY2018 at 3.8% and was declining since that time.

Investments (CAPEX, working capital and M&A)


Mulberry Group's CAPEX/Revenue was 3.4% in FY2020. Mulberry Group showed small growth in CAPEX/Revenue of 0.81 pp from 2.6% in FY2017 to 3.4% in FY2020. Average CAPEX/Revenue for the last three years was 4.0%.

Return on investment


The company operates at negative ROIC (-44.6%) and ROE (-88.7%). ROIC dropped on 38.9 pp from -5.8% to -44.6% in FY2020. ROE dropped on 85.8 pp from -2.9% to -88.7% in FY2020. During FY2016-FY2020 ROIC topped in FY2017 at 8.5% and was declining since that time. During the last 5 years ROE topped in FY2018 at 7.4% and was declining since that time.

Leverage (Debt)


Company's Net Debt / EBITDA is 6.8x and Debt / EBITDA is 7.4x. Net Debt / EBITDA jumped on 9.8x from -3.0x to 6.8x in FY2020. Debt jumped on 3,522% while cash dropped on 35.4%. During FY2016-FY2020 Net Debt/EBITDA bottomed in FY2019 at -3.0x.

Mulberry Group has short term refinancing risk: cash is only 42.6% of short term debt.

Financial and operational results


Mulberry Group ($MUL) key annual financial indicators

mln. £201620172018201920202020/2019
P&L
Revenue155.9168.1169.7166.3149.3-10.2%
Gross Profit96.6103.6107.7102.391.1-10.9%
EBITDA14.816.414.63.213.3317.4%
Net Income2.75.36.4-2.5-44.1
Balance Sheet
Cash14.021.125.112.48.0-35.4%
Short Term Debt0.00.00.02.718.8592.2%
Long Term Debt0.00.00.00.079.4
Cash flow
Capex5.14.44.79.55.1-45.8%
Ratios
Revenue growth4.8%7.9%0.9%-2.0%-10.2%
EBITDA growth28.6%10.9%-11.0%-78.2%317.4%

Gross Margin62.0%61.6%63.5%61.5%61.0%-0.5%
EBITDA Margin9.5%9.8%8.6%1.9%8.9%7.0%
Net Income Margin1.7%3.2%3.8%-1.5%-29.6%-28.1%
CAPEX, % of revenue3.2%2.6%2.8%5.7%3.4%-2.3%

ROIC7.2%8.5%8.3%-5.8%-44.6%-38.9%
ROE3.4%6.5%7.4%-2.9%-88.7%-85.8%
Net Debt/EBITDA-0.9x-1.3x-1.7x-3.0x6.8x9.8x

Peers in Personal Goods


Below you can find Mulberry Group benchmarking vs. other companies in Personal Goods 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  FY2016 FY2017 FY2018 FY2019 FY2020
Creightons ($CRL)-45.6%13.8%26.5%8.6%
Pz Cussons ($PZC)--1.5%-8.6%-15.3%-6.3%
Paternoster Resources ($PRS)-0.1%-40.3%16.9%-31.9%-
 
Median (3 companies)-6.2%4.7%6.7%-15.3%1.1%
Mulberry Group ($MUL)-7.9%0.9%-2.0%-10.2%


Top companies by Gross margin, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Creightons ($CRL)42.2%42.5%40.6%39.4%42.2%
Pz Cussons ($PZC)37.9%38.5%35.5%37.9%38.7%
 
Median (2 companies)23.7%23.1%35.5%38.7%40.4%
Mulberry Group ($MUL)62.0%61.6%63.5%61.5%61.0%


Top companies by EBITDA margin, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Pz Cussons ($PZC)13.1%13.1%11.8%9.8%9.6%
Creightons ($CRL)4.7%6.1%6.4%8.9%11.1%
Paternoster Resources ($PRS)53.4%-159.4%50.2%-110.5%-
 
Median (3 companies)9.9%6.3%10.4%8.9%10.3%
Mulberry Group ($MUL)9.5%9.8%8.6%1.9%8.9%


Top companies by CAPEX/Revenue, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Paternoster Resources ($PRS)102.1%3.6%2.6%34.4%-
Creightons ($CRL)3.7%1.8%1.8%2.3%9.7%
Pz Cussons ($PZC)4.3%5.0%3.0%2.3%1.1%
 
Median (3 companies)4.3%2.9%2.4%2.3%5.4%
Mulberry Group ($MUL)3.2%2.6%2.8%5.7%3.4%


Top companies by ROIC, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Creightons ($CRL)6.7%15.5%14.4%23.6%21.8%
Pz Cussons ($PZC)9.8%9.8%7.6%4.8%4.3%
Paternoster Resources ($PRS)2.3%-26.4%3.0%-22.4%-
 
Median (3 companies)2.7%3.3%11.0%4.8%13.1%
Mulberry Group ($MUL)7.2%8.5%8.3%-5.8%-44.6%


Top companies by Net Debt / EBITDA

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Pz Cussons ($PZC)1.4x1.4x1.9x2.5x1.1x
Creightons ($CRL)-0.8x-1.1x-0.1x0.1x0.2x
 
Median (2 companies)1.4x1.4x1.2x1.3x0.7x
Mulberry Group ($MUL)-0.9x-1.3x-1.7x-3.0x6.8x