Travelport Worldwide Limited Net Income dropped on 49.0% while Revenue increased on 4.2%
02/22/2019 • About Travelport Worldwide Limited (
$TVPT) • By InTwits
Travelport Worldwide Limited reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Travelport Worldwide Limited has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.0%. At the same time it's in pair with industry average of 5.2%
- CAPEX is quite volatile: $78m in 2018, $42m in 2017, $24m in 2016, $14m in 2015, $6m in 2014
- In the last 5 years the company invested considerably less than D&A: $588m vs. $1,454m. In 2018 this situation was still the same: CAPEX was 145 while D&A was 281
- The company has business model with average profitability: ROIC is 10.2%
- It operates with high leverage: Net Debt/EBITDA is 4.1x 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
The company's Revenue increased on 4.2%. Revenue growth showed slowdown in 18Q4 - it was 2.6% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.9 pp from 18.2% to 22.1% in 2018.
Gross Margin decreased on 2.4 pp from 38.5% to 36.1% in 2018. During 2014-2018 Gross Margin topped in 2015 at 39.7% and was declining since that time. SG&A as a % of Revenue increased slightly on 1.5 pp from 18.3% to 19.8% in 2018. Stock Based Compensation (SBC) as a % of Revenue decreased slightly on 0.68 pp from 1.3% to 0.67% in 2018. SBC as a % of Revenue declined at -0.25 pp per annum in 2014-2018.
Net Income margin decreased on 3.0 pp from 5.8% to 2.8% in 2018. The efficient tax rate was 34.4% in 2018 while the average for the last five years was 33.2%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 5.7% in 2018. CAPEX/Revenue increased slightly on 0.90 pp from 4.8% in 2015 to 5.7% in 2018. It's average level of CAPEX/Revenue for the last three years was 5.0%. During the last 5 years CAPEX as a % of Revenue bottomed in 2016 at 4.6% and was growing since that time.
Accounts receivable as a % of Revenue showed almost no change in 2018. Accounts payable as a % of Revenue decreased slightly on 0.82 pp from 4.9% to 4.0% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.1x and Debt / EBITDA is 4.5x. Net Debt / EBITDA jumped on 0.4x from 3.7x to 4.1x in 2018. Debt increased slightly on 0.99% while cash jumped on 74.5%. During the last 5 years Net Debt/EBITDA bottomed in 2017 at 3.7x.
Travelport Worldwide Limited has no short term refinancing risk: cash is higher than short term debt (370.5%).
Valuation and dividends
Travelport Worldwide Limited's trades at EV/EBITDA 8.1x and P/E 27.2x.
The company paid 52.3% of Net Income as dividends in 2018. Dividends grew on average at 33.4% per annum in the last 5 years).
Management team
CEO total compensation was
$6,565,710 in 2018 which included
$726,998 salary.
0.0015% of the company is owned by insiders. Insider ownership didn't change in 2018.
The company has 3,700 employees. The number of employees decreased on 7.5%. Average revenue per employee in 2018 was
$689,477 and it surged on 12.7%.
Financial and operational results
FY ended 12/31/2018
Travelport Worldwide Limited ($TVPT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 2,148 | 2,221 | 2,351 | 2,447 | 2,551 | 4.2% |
| Gross Profit | 824 | 881 | 921 | 941 | 921 | -2.2% |
| SG&A | 430 | 456 | 511 | 448 | 505 | 12.7% |
| EBITDA | 470 | 492 | 481 | 568 | 498 | -12.3% |
| EBIT | 161 | 191 | 201 | 286 | 217 | -24.1% |
| Tax | 39 | 27 | 30 | 32 | 38 | 18.2% |
| Net Income | 86 | 16 | 17 | 142 | 73 | -49.0% |
| Stock Based Compensation | 41 | 30 | 32 | 33 | 17 | -48.5% |
Balance Sheet
|
|---|
| Cash | 139 | 155 | 140 | 122 | 213 | 74.5% |
| Accounts Receivable | 184 | 206 | 218 | 207 | 210 | 1.6% |
| Accounts Payable | 73 | 74 | 59 | 73 | 66 | -10.0% |
| Short Term Debt | 56 | 74 | 64 | 64 | 57 | -10.6% |
| Long Term Debt | 2,384 | 2,363 | 2,281 | 2,166 | 2,195 | 1.3% |
Cash flow
|
|---|
| Capex | 112 | 106 | 107 | 118 | 145 | 23.1% |
| Dividends | 9 | 37 | 37 | 39 | 38 | -2.6% |
| Acquisitions | 18 | 66 | 15 | | | |
Ratios
|
|---|
| Revenue growth | 3.5% | 3.4% | 5.9% | 4.1% | 4.2% | |
| EBITDA growth | -1.5% | 4.7% | -2.2% | 18.0% | -12.3% | |
|
|---|
| Gross Margin | 38.4% | 39.7% | 39.2% | 38.5% | 36.1% | -2.4% |
| EBITDA Margin | 21.9% | 22.2% | 20.5% | 23.2% | 19.5% | -3.7% |
| EBIT Margin | 7.5% | 8.6% | 8.5% | 11.7% | 8.5% | -3.2% |
| SG&A, % of revenue | 20.0% | 20.5% | 21.7% | 18.3% | 19.8% | 1.5% |
| SBC, % of revenue | 1.9% | 1.4% | 1.4% | 1.3% | 0.7% | -0.7% |
| Net Income Margin | 4.0% | 0.7% | 0.7% | 5.8% | 2.8% | -3.0% |
| CAPEX, % of revenue | 5.2% | 4.8% | 4.6% | 4.8% | 5.7% | 0.9% |
|
|---|
| ROIC | 7.2% | 8.7% | 9.4% | 13.6% | 10.2% | -3.4% |
| Net Debt/EBITDA | 4.9x | 4.6x | 4.6x | 3.7x | 4.1x | 0.4x |
People
|
|---|
| Insider ownership | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Employees | 3,400 | 4,000 | 4,000 | 4,000 | 3,700 | -7.5% |
| Revenue/Employee, th. $ | 632 | 555 | 588 | 612 | 689 | 12.7% |
Travelport Worldwide Limited ($TVPT) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 678 | 662 | 623 | 589 | | 4.2% | 8.2% | 1.9% | 2.6% |
| EBITDA | 149 | 114 | 114 | 121 | | -12.9% | -22.4% | -12.6% | 0.7% |
| Net Income | 59 | 6 | 5 | 3 | | 4.9% | -82.4% | 5.3% | -94.5% |
Balance Sheet
|
|---|
| Cash | 127 | 184 | 200 | 213 | | -32.1% | -15.2% | -2.1% | 74.5% |
| Short Term Debt | 54 | 57 | 58 | 57 | | -13.4% | -10.6% | -8.1% | -10.6% |
| Long Term Debt | 2,169 | 2,216 | 2,206 | 2,195 | | -4.5% | -2.2% | -0.2% | 1.3% |
Ratios
|
|---|
| Gross Margin | 37.1% | 35.4% | 35.6% | 36.2% | | -3.5% | -4.2% | -0.8% | -0.8% |
| EBITDA Margin | 21.9% | 17.2% | 18.4% | 20.6% | | -4.3% | -6.8% | -3.1% | -0.4% |
| Net Income Margin | 8.7% | 0.9% | 0.8% | 0.4% | | 0.1% | -4.8% | 0.0% | -7.7% |
Peers in Data Processing & Outsourced S
Below you can find Travelport Worldwide Limited benchmarking vs. other companies in Data Processing & Outsourced S 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 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. ($SRT) | | 12.8% | 8.9% | -4.8% | 66.4% |
| |
|---|
| Median (55 companies) | | 7.1% | 7.7% | 11.8% | 7.5% |
|---|
| Travelport Worldwide Limited ($TVPT) | | 3.4% | 5.9% | 4.1% | 4.2% |
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. ($GPN) | 62.7% | 63.2% | 60.4% | 51.5% | 67.5% |
| |
|---|
| Median (44 companies) | 39.3% | 39.5% | 39.5% | 39.5% | 41.0% |
|---|
| Travelport Worldwide Limited ($TVPT) | 38.4% | 39.7% | 39.2% | 38.5% | 36.1% |
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. ($EVRI) | 9.6% | 14.7% | 3.0% | 20.4% | 45.2% |
| |
|---|
| Median (56 companies) | 20.4% | 21.0% | 21.3% | 20.6% | 19.2% |
|---|
| Travelport Worldwide Limited ($TVPT) | 21.9% | 22.2% | 20.5% | 23.2% | 19.5% |
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 ($CATM) | 10.2% | 11.9% | 9.9% | 9.6% | 8.0% |
| |
|---|
| Median (56 companies) | 3.1% | 3.0% | 3.2% | 2.9% | 3.0% |
|---|
| Travelport Worldwide Limited ($TVPT) | 5.2% | 4.8% | 4.6% | 4.8% | 5.7% |
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. ($ADP) | 23.9% | 28.9% | 37.9% | 36.6% | 37.5% |
| |
|---|
| Median (62 companies) | 14.1% | 13.1% | 11.7% | 10.6% | 12.1% |
|---|
| Travelport Worldwide Limited ($TVPT) | 7.2% | 8.7% | 9.4% | 13.6% | 10.2% |
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 ($ADS) | 9.3x | 9.1x | 10.7x | 10.1x | 9.0x |
| |
|---|
| Median (54 companies) | 0.4x | 0.5x | 1.3x | 2.3x | 2.0x |
|---|
| Travelport Worldwide Limited ($TVPT) | 4.9x | 4.6x | 4.6x | 3.7x | 4.1x |
