Moneygram International, Inc. revenue decreased on 9.6% and EBITDA Margin increased slightly on 0.95 pp from 5.6% to 6.5%
02/11/2019 • About Moneygram International, Inc. (
$MGI) • By InTwits
Moneygram International, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Moneygram International, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.5%. At the same time it's in pair with industry average of 13.3%
- CAPEX is quite volatile: $3m in 2018, $2m in 2017, $3m in 2016, $29m in 2015, $3m in 2014
- The company has potentially unprofitable business model: ROIC is 2.9%
- It operates with high leverage: Net Debt/EBITDA is 8.0x while industry average is 2.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Moneygram International, Inc.'s Revenue decreased on 9.6%. Revenue decline showed acceleration in 18Q4 - it was 15.3% YoY. During the last 5 years Revenue growth topped in 2016 at 5.9% and was decelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.95 pp from 5.6% to 6.5% in 2018.
Gross Margin decreased slightly on 0.70 pp from 51.8% to 51.1% in 2018.
Net Income margin showed almost no change in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 4.0%. CAPEX/Revenue decreased on 3.1 pp from 7.1% in 2015 to 4.0% in 2018. Average CAPEX/Revenue for the last three years was 4.8%. The company invested a big chunk of EBITDA (61.0%) to CAPEX which didn't stop revenue from falling.
Leverage (Debt)
Company's Net Debt / EBITDA is 8.0x and Debt / EBITDA is 9.5x. Net Debt / EBITDA decreased on 0.036x from 8.0x to 8.0x in 2018. Debt decreased slightly on 0.78% while cash dropped on 23.4%.
The company has no short term refinancing risk: short term debt is zero.
Management team
Moneygram International, Inc.'s CEO W Alexander Holmes "Alex" is a founder and has spent 3 years with the company. Moneygram International, Inc.'s CFO Lawrence Angelilli "Larry" has spent 3 years with the company.
Financial and operational results
FY ended 12/31/2018
Moneygram International, Inc. ($MGI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 1,455 | 1,539 | 1,630 | 1,602 | 1,448 | -9.6% |
| Gross Profit | 788 | 778 | 835 | 830 | 740 | -10.9% |
| EBITDA | 127 | 82 | 168 | 90 | 95 | 5.7% |
| Net Income | 72 | -77 | 16 | -30 | -24 | |
Balance Sheet
|
|---|
| Cash | 251 | 165 | 157 | 190 | 146 | -23.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 950 | 943 | 915 | 908 | 901 | -0.8% |
Cash flow
|
|---|
| Capex | 86 | 110 | 83 | 84 | 58 | -30.9% |
Ratios
|
|---|
| Revenue growth | -1.3% | 5.8% | 5.9% | -1.7% | -9.6% | |
| EBITDA growth | -44.5% | -35.1% | 103.8% | -46.5% | 5.7% | |
|
|---|
| Gross Margin | 54.2% | 50.6% | 51.2% | 51.8% | 51.1% | -0.7% |
| EBITDA Margin | 8.7% | 5.3% | 10.3% | 5.6% | 6.5% | 0.9% |
| Net Income Margin | 5.0% | -5.0% | 1.0% | -1.9% | -1.7% | 0.2% |
| CAPEX, % of revenue | 5.9% | 7.1% | 5.1% | 5.2% | 4.0% | -1.2% |
|
|---|
| ROIC | 9.3% | 2.2% | 12.4% | 2.1% | 2.9% | 0.7% |
| Net Debt/EBITDA | 5.5x | 9.5x | 4.5x | 8.0x | 8.0x | -0.0x |
Moneygram International, Inc. ($MGI) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 380 | 375 | 347 | 346 | | -1.6% | -8.6% | -12.7% | -15.3% |
| EBITDA | 24 | 30 | 9 | 32 | | -41.1% | -24.4% | -80.4% | |
| Net Income | 7 | 2 | -21 | -13 | | -19.3% | -62.9% | -371.4% | |
Balance Sheet
|
|---|
| Cash | 200 | 200 | 209 | 146 | | 56.8% | 38.1% | 22.5% | -23.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 906 | 905 | 903 | 901 | | -0.8% | -0.8% | -0.8% | -0.8% |
Ratios
|
|---|
| Gross Margin | 51.2% | 49.2% | 48.2% | 48.9% | | -0.3% | -1.8% | -1.9% | -1.6% |
| EBITDA Margin | 6.3% | 8.0% | 2.5% | 9.3% | | -4.2% | -1.7% | -8.6% | 18.1% |
| Net Income Margin | 1.9% | 0.6% | -6.0% | -3.6% | | -0.4% | -0.9% | -8.0% | 9.2% |
Peers in Data Processing & Outsourced S
Below we provide Moneygram International, Inc. benchmarking against other companies in Data Processing & Outsourced S 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Verra Mobility Corp ($VRRM) | | | | | 167.8% |
| StoneCo Ltd ($STNE) | | | | 74.3% | 106.0% |
| PagSeguro Digital Ltd. ($PAGS) | | 107.1% | 68.7% | 121.7% | 71.8% |
| Payment Data Systems, Inc. ($PYDS) | | 7.4% | -16.0% | 20.7% | 71.7% |
| StarTek, Inc. ($SRT) | | 12.8% | 8.9% | -4.8% | 66.4% |
| |
|---|
| Median (55 companies) | | 7.1% | 7.7% | 11.8% | 7.5% |
|---|
| Moneygram International, Inc. ($MGI) | | 5.8% | 5.9% | -1.7% | -9.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Verra Mobility Corp ($VRRM) | | | | 97.4% | 97.5% |
| Everi Holdings Inc. ($EVRI) | 25.8% | 38.3% | 36.1% | 34.5% | 79.9% |
| StoneCo Ltd ($STNE) | | | 69.7% | 70.8% | 79.5% |
| Paychex, Inc. ($PAYX) | 70.9% | 70.5% | 71.0% | 70.8% | 69.9% |
| Global Payments Inc. ($GPN) | 62.7% | 63.2% | 60.4% | 51.5% | 67.5% |
| |
|---|
| Median (44 companies) | 38.4% | 39.5% | 39.2% | 38.9% | 40.9% |
|---|
| Moneygram International, Inc. ($MGI) | 54.2% | 50.6% | 51.2% | 51.8% | 51.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Visa Inc. ($V) | 64.0% | 68.9% | 55.6% | 69.2% | 65.8% |
| FleetCor Technologies, Inc. ($FLT) | 56.1% | 50.4% | 52.0% | 50.8% | 55.9% |
| StoneCo Ltd ($STNE) | | | 31.4% | 26.0% | 53.0% |
| Mastercard Incorporated ($MA) | 57.5% | 56.3% | 56.9% | 56.5% | 51.8% |
| Everi Holdings Inc. ($EVRI) | 9.6% | 14.7% | 3.0% | 20.4% | 45.2% |
| |
|---|
| Median (56 companies) | 20.6% | 21.2% | 21.3% | 21.1% | 19.4% |
|---|
| Moneygram International, Inc. ($MGI) | 8.7% | 5.3% | 10.3% | 5.6% | 6.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Crypto Co/The ($CRCW) | 0.0% | 0.0% | | 1,216.6% | 853.5% |
| Steel Connect, Inc. ($STCN) | 0.6% | 1.5% | 1.7% | 1.1% | 75.6% |
| Everi Holdings Inc. ($EVRI) | 3.0% | 9.3% | 9.4% | 9.9% | 21.9% |
| StoneCo Ltd ($STNE) | | | 7.2% | 18.4% | 8.9% |
| Cardtronics plc ($CATM) | 10.2% | 11.9% | 9.9% | 9.6% | 8.0% |
| |
|---|
| Median (56 companies) | 3.1% | 3.0% | 3.2% | 2.9% | 3.0% |
|---|
| Moneygram International, Inc. ($MGI) | 5.9% | 7.1% | 5.1% | 5.2% | 4.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| GreenSky, Inc. ($GSKY) | | | | 156.4% | 93.7% |
| Mastercard Incorporated ($MA) | 63.5% | 57.5% | 57.5% | 60.6% | 64.7% |
| Paychex, Inc. ($PAYX) | 54.5% | 58.7% | 61.9% | 63.9% | 64.5% |
| NIC Inc. ($EGOV) | 64.6% | 61.2% | 63.1% | 52.1% | 39.3% |
| Automatic Data Processing, Inc. ($ADP) | 23.9% | 28.9% | 37.9% | 36.6% | 37.5% |
| |
|---|
| Median (62 companies) | 14.1% | 13.1% | 11.1% | 10.7% | 12.1% |
|---|
| Moneygram International, Inc. ($MGI) | 9.3% | 2.2% | 12.4% | 2.1% | 2.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| StarTek, Inc. ($SRT) | -0.1x | | 2.2x | 2.3x | 18.4x |
| Square, Inc. ($SQ) | | | | | 13.3x |
| Steel Connect, Inc. ($STCN) | -12.5x | | | | 12.6x |
| Exela Technologies Inc ($XELAU) | | | 8.1x | | 9.7x |
| Alliance Data Systems Corporation ($ADS) | 9.3x | 9.1x | 10.7x | 10.1x | 9.0x |
| |
|---|
| Median (54 companies) | 0.4x | 0.5x | 1.3x | 2.3x | 2.0x |
|---|
| Moneygram International, Inc. ($MGI) | 5.5x | 9.5x | 4.5x | 8.0x | 8.0x |
