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Yougov Net Income dropped on 36.2% while Revenue jumped on 11.7%

06 Oct 2020 • About Yougov ($YOU) • By InTwits

Yougov reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
  • Yougov is a growth stock: FY2020 revenue growth was 11.7%, 5 year revenue CAGR was 14.9% at FY2020 ROIC 14.0%
  • Yougov has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's in pair with industry average of 2.3%
  • CAPEX is quite volatile: £1m in FY2020, £3m in FY2019, £1m in FY2018, £1m in FY2017, £1m in FY2016
  • The company has highly profitable business model: ROIC is 14.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

Yougov's Revenue surged on 11.7%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 0.53 pp from 6.7% to 6.2% in FY2020. EBITDA Margin stuck to a growing trend at 2.4 pp per annum in the last 5 years.

Gross Margin increased on 2.4 pp from 82.3% to 84.7% in FY2020. Gross Margin grew at 1.6 pp per annum in FY2016-FY2020. SG&A as a % of Revenue increased on 7.0 pp from 67.7% to 74.7% in FY2020.

Net Income margin decreased on 4.7 pp from 11.0% to 6.3% in FY2020. During FY2016-FY2020 Net Income margin topped in FY2019 at 11.0%.

Investments (CAPEX, working capital and M&A)

In FY2020 the company had CAPEX/Revenue of 0.70%. CAPEX/Revenue showed almost no change from FY2017 to FY2020. For the last three years the average CAPEX/Revenue was 1.2%.

Return on investment

The company operates at good ROIC (14.0%) while ROE is low (8.7%). ROIC decreased on 7.1 pp from 21.1% to 14.0% in FY2020. ROE decreased on 6.2 pp from 14.9% to 8.7% in FY2020. During the last 5 years ROIC topped in FY2019 at 21.1%. During FY2016-FY2020 ROE topped in FY2019 at 14.9%.

Leverage (Debt)

Company's Net Debt / EBITDA is -0.9x and Debt / EBITDA is 0.3x. Debt jumped while cash decreased on 6.9%.

Yougov has no short term refinancing risk: cash is higher than short term debt (1,417.5%).

Valuation and dividends

Yougov's trades at EV/EBITDA 31.8x and P/E 104.1x.

Financial and operational results

Yougov ($YOU) key annual financial indicators

mln. £201620172018201920202020/2019
Gross Profit68.785.795.1112.3129.114.9%
Net Income3.
Balance Sheet
Short Term Debt0.
Long Term Debt0.
Cash flow
Revenue growth15.9%21.4%8.9%17.1%11.7%
EBITDA growth4.6%42.2%31.3%50.4%1.2%

Gross Margin77.9%80.1%81.6%82.3%84.7%2.4%
EBITDA Margin12.2%14.2%17.2%22.1%20.0%-2.1%
SG&A, % of revenue67.7%74.7%7.0%
Net Income Margin3.9%4.4%7.0%11.0%6.3%-4.7%
CAPEX, % of revenue1.1%0.8%0.8%2.0%0.7%-1.3%

Net Debt/EBITDA-1.5x-1.5x-1.5x-1.3x-0.9x0.4x

Peers in Media

Below we provide Yougov benchmarking against other companies in Media 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 FY2016 FY2017 FY2018 FY2019 FY2020
Ite Group ($ITE)-1.0%13.5%15.1%25.6%-
Reed Elsevier ($REL)15.4%6.6%2.1%5.1%-
Dods(Group ($DODS)-1.8%3.1%3.5%30.5%
Wilmington Group ($WIL)-13.8%0.8%1.0%-7.7%
Catalyst Media Group ($CMX)0.0%0.0%0.0%0.0%-
Median (6 companies)3.4%3.1%8.0%2.2%11.4%
Yougov ($YOU)-21.4%8.9%17.1%11.7%

Top companies by Gross margin, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Reed Elsevier ($REL)63.9%64.2%64.7%65.0%-
Ite Group ($ITE)43.6%38.9%38.7%39.6%-
Dods(Group ($DODS)38.0%41.3%40.5%37.0%32.2%
Wilmington Group ($WIL)71.2%17.0%18.0%17.2%12.1%
Median (4 companies)41.9%39.5%40.7%38.3%22.1%
Yougov ($YOU)77.9%80.1%81.6%82.3%84.7%

Top companies by EBITDA margin, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Reed Elsevier ($REL)33.9%34.4%34.5%34.8%-
Wilmington Group ($WIL)5.9%21.7%10.6%20.2%16.5%
Ite Group ($ITE)7.0%4.5%3.7%16.3%-
Daily Mail & General Trust ($DMGT)9.8%-3.7%8.2%10.1%-
Dods(Group ($DODS)12.3%15.9%12.3%-15.3%6.3%
Median (6 companies)7.0%6.8%8.8%13.2%11.4%
Yougov ($YOU)12.2%14.2%17.2%22.1%20.0%

Top companies by CAPEX/Revenue, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Ite Group ($ITE)1.8%2.1%2.4%1.7%-
Daily Mail & General Trust ($DMGT)1.4%1.3%20.0%1.2%-
Wilmington Group ($WIL)0.6%1.1%2.5%1.1%0.5%
Reed Elsevier ($REL)0.7%0.7%0.7%0.6%-
Dods(Group ($DODS)0.6%12.7%1.3%0.5%0.7%
Median (6 companies)0.7%0.9%1.3%0.8%0.6%
Yougov ($YOU)1.1%0.8%0.8%2.0%0.7%

Top companies by ROIC, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Reed Elsevier ($REL)21.4%21.4%21.0%21.6%-
Wilmington Group ($WIL)-1.4%17.9%4.3%18.8%8.9%
Daily Mail & General Trust ($DMGT)11.4%-11.1%2.9%6.2%-
Ite Group ($ITE)-4.4%-5.3%-2.9%1.8%-
Catalyst Media Group ($CMX)-0.3%-0.4%-0.4%-0.5%-
Median (6 companies)1.4%0.8%3.3%4.0%3.3%
Yougov ($YOU)6.7%10.2%14.4%21.1%14.0%

Top companies by Net Debt / EBITDA

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Ite Group ($ITE)6.3x7.3x12.7x3.1x-
Reed Elsevier ($REL)2.2x2.0x2.4x2.3x-
Wilmington Group ($WIL)5.5x1.5x3.1x1.4x2.2x
Daily Mail & General Trust ($DMGT)3.7x--0.1x-0.6x-
Median (4 companies)0.4x0.7x0.3x1.8x3.3x
Yougov ($YOU)-1.5x-1.5x-1.5x-1.3x-0.9x