Carnival Net Income dropped on 442% and Revenue dropped on 73.1%
11 Mar 2021 • About Carnival (
$CCL) • By InTwits
Carnival reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Carnival is a company in decline: FY2020 revenue growth was -73.1%, 5 years revenue CAGR was -18.7%
- Carnival has high CAPEX intensity: 5 year average CAPEX/Revenue was 29.2%. At the same time it's a lot of higher than industry average of 22.2%.
- CAPEX is quite volatile: £0m in FY2020, £1m in FY2019, £0m in FY2018, £0m in FY2017, £0m in FY2016
- The company has unprofitable business model: ROIC is -20.7%
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 73.1%. During FY2016-FY2020 Revenue growth topped in FY2019 at 10.3%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 142 pp from 26.1% to -116% in FY2020.
Gross Margin dropped on 85.4 pp from 38.0% to -47.4% in FY2020. SG&A as a % of Revenue surged on 21.7 pp from 11.9% to 33.6% in FY2020.
Net Income margin dropped on 197 pp from 14.4% to -183% in FY2020.
Investments (CAPEX, working capital and M&A)
Carnival's CAPEX/Revenue was 64.7% in FY2020. The company showed fast CAPEX/Revenue growth of 47.9 pp from 16.8% in FY2017 to 64.7% in FY2020. For the last three years the average CAPEX/Revenue was 36.9%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2017 at 16.8% and was growing since that time.
Return on investment
The company operates at negative ROIC (-20.7%) and ROE (-44.6%). ROIC dropped on 29.8 pp from 9.1% to -20.7% in FY2020. ROE dropped on 56.6 pp from 12.0% to -44.6% in FY2020.
Leverage (Debt)
Debt level is -0.6x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 2.0x from 2.0x to in FY2020. Debt jumped on 147% while cash surged on 1,736%.
Carnival has no short term refinancing risk: cash is higher than short term debt (191.3%).
Management team
Arnold W Donald is a the company's CEO. Arnold W Donald has spent 7 years with the company. The company's CFO David Bernstein has spent 14 years with the company.
Financial and operational results
FY ended 30 Nov 2020
Carnival ($CCL) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 16,389 | 17,510 | 18,881 | 20,825 | 5,594 | -73.1% |
| Gross Profit | 7,006 | 7,009 | 7,792 | 7,916 | -2,651 | -133.5% |
| SG&A | 2,197 | 2,265 | 2,450 | 2,480 | 1,878 | -24.3% |
| EBITDA | 4,809 | 4,655 | 5,342 | 5,435 | -6,483 | -219.3% |
| Net Income | 2,779 | 2,606 | 3,152 | 2,990 | -10,236 | -442.3% |
Balance Sheet
|
|---|
| Cash | 603 | 395 | 982 | 518 | 9,513 | 1,736.5% |
| Short Term Debt | 1,097 | 2,202 | 2,426 | 1,827 | 4,973 | 172.2% |
| Long Term Debt | 8,357 | 6,993 | 7,897 | 9,676 | 23,408 | 141.9% |
Cash flow
|
|---|
| Capex | 3,062 | 2,944 | 3,749 | 5,429 | 3,620 | -33.3% |
Ratios
|
|---|
| Revenue growth | 4.3% | 6.8% | 7.8% | 10.3% | -73.1% | |
| EBITDA growth | 14.5% | -3.2% | 14.8% | 1.7% | -219.3% | |
|
|---|
| Gross Margin | 42.7% | 40.0% | 41.3% | 38.0% | -47.4% | -85.4% |
| EBITDA Margin | 29.3% | 26.6% | 28.3% | 26.1% | -115.9% | -142.0% |
| SG&A, % of revenue | 13.4% | 12.9% | 13.0% | 11.9% | 33.6% | 21.7% |
| Net Income Margin | 17.0% | 14.9% | 16.7% | 14.4% | -183.0% | -197.3% |
| CAPEX, % of revenue | 18.7% | 16.8% | 19.9% | 26.1% | 64.7% | 38.6% |
|
|---|
| ROIC | 9.5% | 8.6% | 9.8% | 9.1% | -20.7% | -29.8% |
| ROE | 12.0% | 11.1% | 13.0% | 12.0% | -44.6% | -56.6% |
| Net Debt/EBITDA | 1.8x | 1.9x | 1.7x | 2.0x | |
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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Easyhotel ($EZH) | 8.7% | 39.7% | 33.7% | 56.0% | - |
| Nektan ($NKTN) | 995.3% | 129.1% | 50.1% | 13.5% | - |
| Intercontinental Hotels Group ($IHG) | 117.0% | 4.2% | 6.4% | 6.7% | - |
| Go-Ahead Group ($GOG) | - | 3.6% | -0.6% | 6.1% | 6.1% |
| Tui Ag ($TUI) | - | 7.9% | -0.4% | 2.5% | -58.0% |
| |
|---|
| Median (9 companies) | 9.0% | 6.6% | 6.4% | 2.5% | -12.8% |
|---|
| Carnival ($CCL) | - | 6.8% | 7.8% | 10.3% | -73.1% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intercontinental Hotels Group ($IHG) | 86.0% | 86.0% | 83.7% | 82.9% | - |
| Nektan ($NKTN) | 67.9% | 64.1% | 62.2% | 56.9% | - |
| Easyhotel ($EZH) | 64.3% | 61.3% | 53.5% | 48.1% | - |
| Rank Group ($RNK) | 44.7% | 44.7% | 45.5% | 45.6% | 42.7% |
| Eclectic Bar Grp ($BAR) | 80.7% | 82.3% | 82.9% | 35.6% | - |
| |
|---|
| Median (6 companies) | 44.7% | 40.4% | 49.5% | 46.8% | 8.9% |
|---|
| Carnival ($CCL) | 42.7% | 40.0% | 41.3% | 38.0% | -47.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Heavitree Brewery ($HVT) | 25.0% | 27.8% | 24.5% | 27.4% | - |
| Eclectic Bar Grp ($BAR) | 6.1% | 11.1% | 13.0% | 21.0% | - |
| Intercontinental Hotels Group ($IHG) | 20.2% | 19.7% | 14.9% | 16.1% | - |
| Easyhotel ($EZH) | 21.6% | 18.0% | 19.4% | 13.5% | - |
| Rank Group ($RNK) | 19.4% | 18.4% | 13.5% | 12.1% | 15.5% |
| |
|---|
| Median (8 companies) | 15.9% | 16.7% | 14.2% | 12.8% | 12.6% |
|---|
| Carnival ($CCL) | 29.3% | 26.6% | 28.3% | 26.1% | -115.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Easyhotel ($EZH) | 153.2% | 269.8% | 412.1% | 142.5% | - |
| Heavitree Brewery ($HVT) | 17.8% | 15.3% | 10.2% | 6.7% | - |
| Eclectic Bar Grp ($BAR) | 5.5% | 5.4% | 10.5% | 5.5% | - |
| Tui Ag ($TUI) | 4.4% | 6.0% | 5.4% | 5.5% | 8.5% |
| Rank Group ($RNK) | 5.4% | 4.2% | 3.7% | 3.3% | 5.1% |
| |
|---|
| Median (7 companies) | 5.5% | 5.2% | 4.9% | 5.5% | 5.1% |
|---|
| Carnival ($CCL) | 18.7% | 16.8% | 19.9% | 26.1% | 64.7% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Go-Ahead Group ($GOG) | 33.1% | 25.4% | 22.9% | 12.8% | 1.8% |
| Heavitree Brewery ($HVT) | 8.5% | 10.3% | 8.7% | 9.6% | - |
| Rank Group ($RNK) | 19.7% | 17.3% | 10.2% | 8.1% | 3.6% |
| Eclectic Bar Grp ($BAR) | 1.2% | 8.3% | 8.1% | 6.4% | - |
| Tui Ag ($TUI) | 15.5% | 14.4% | 12.1% | 6.2% | -35.1% |
| |
|---|
| Median (9 companies) | 6.3% | 7.1% | 8.7% | 7.2% | 1.8% |
|---|
| Carnival ($CCL) | 9.5% | 8.6% | 9.8% | 9.1% | -20.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Heavitree Brewery ($HVT) | 4.1x | 3.7x | 3.7x | 2.9x | - |
| Easyhotel ($EZH) | -5.0x | -14.0x | -11.4x | 2.5x | - |
| Tui Ag ($TUI) | -0.0x | -0.5x | 0.0x | 1.1x | - |
| Eclectic Bar Grp ($BAR) | 6.8x | 2.1x | 3.4x | 0.7x | - |
| Intercontinental Hotels Group ($IHG) | 1.9x | 2.3x | 3.1x | 0.0x | - |
| |
|---|
| Median (7 companies) | 1.9x | 1.6x | 1.1x | 0.7x | 2.0x |
|---|
| Carnival ($CCL) | 1.8x | 1.9x | 1.7x | 2.0x | - |
