Campbell Soup Company Net Income surged on 672% and Revenue increased on 7.2%
09/03/2020 • About Campbell Soup Company (
$CPB) • By InTwits
Campbell Soup Company reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- Campbell Soup Company has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.9%. At the same time it's a lot of higher than industry average of 3.5%.
- CAPEX is quite volatile: $1m in FY2020, $1m in FY2019, $0m in FY2018, $1m in FY2017, $1m in FY2016
- The company has business model with average profitability: ROIC is 11.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.6x while industry average is 3.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Campbell Soup Company's Revenue increased on 7.2%. Revenue growth showed acceleration in FY20Q4 - it increased 18.4% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.3 pp from 10.7% to 9.4% in FY2020. During the last 5 years EBITDA Margin topped in FY2017 at 30.0% and was declining since that time.
Gross Margin increased slightly on 1.3 pp from 33.2% to 34.5% in FY2020. SG&A as a % of Revenue showed almost no change in FY2020.
Net Income margin surged on 16.1 pp from 2.6% to 18.7% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Campbell Soup Company had CAPEX/Revenue of 3.4%. The company showed decline in CAPEX/Revenue of 2.4 pp from 5.8% in FY2017 to 3.4% in FY2020. It's average CAPEX/Revenue for the last three years was 4.8%. During the last 5 years CAPEX as a % of Revenue topped in FY2018 at 6.2% and was declining since that time.
Return on investment
The company operates at good ROE (88.8%) while ROIC is low (11.0%). ROIC increased on 2.2 pp from 8.7% to 11.0% in FY2020. ROE surged on 71.7 pp from 17.1% to 88.8% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.6x and Debt / EBITDA is 4.1x. Net Debt / EBITDA dropped on 2.4x from 5.9x to 3.6x in FY2020. Debt dropped on 26.1% while cash surged on 2,671%.
Campbell Soup Company has short term refinancing risk: cash is only 67.7% of short term debt.
Valuation and dividends
Campbell Soup Company's trades at EV/EBITDA 12.6x and P/E 8.4x.
Management team
The company's CEO is Mark A Clouse. Mark A Clouse has 2 years tenure with the company. Campbell Soup Company's CFO Mick J Beekhuizen has spent 1 year with the company.
Financial and operational results
FY ended 08/02/2020
Campbell Soup Company ($CPB) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 7,961 | 5,837 | 6,615 | 8,107 | 8,691 | 7.2% |
| Gross Profit | 2,928 | 2,442 | 2,374 | 2,693 | 2,999 | 11.4% |
| SG&A | 1,427 | 1,123 | 1,291 | 1,452 | 1,569 | 8.1% |
| EBITDA | 1,268 | 1,749 | 1,446 | 1,425 | 1,513 | 6.2% |
| Net Income | 563 | 887 | 261 | 211 | 1,628 | 671.6% |
Balance Sheet
|
|---|
| Cash | 296 | 319 | 49 | 31 | 859 | 2,671.0% |
| Short Term Debt | 1,219 | 1,037 | 1,525 | 1,371 | 1,269 | -7.4% |
| Long Term Debt | 2,314 | 2,499 | 7,991 | 7,103 | 4,994 | -29.7% |
Cash flow
|
|---|
| Capex | 341 | 338 | 407 | 384 | 299 | -22.1% |
Ratios
|
|---|
| Revenue growth | -1.5% | -26.7% | 13.3% | 22.6% | 7.2% | |
| EBITDA growth | -6.6% | 37.9% | -17.3% | -1.5% | 6.2% | |
|
|---|
| Gross Margin | 36.8% | 41.8% | 35.9% | 33.2% | 34.5% | 1.3% |
| EBITDA Margin | 15.9% | 30.0% | 21.9% | 17.6% | 17.4% | -0.2% |
| SG&A, % of revenue | 17.9% | 19.2% | 19.5% | 17.9% | 18.1% | 0.1% |
| Net Income Margin | 7.1% | 15.2% | 3.9% | 2.6% | 18.7% | 16.1% |
| CAPEX, % of revenue | 4.3% | 5.8% | 6.2% | 4.7% | 3.4% | -1.3% |
|
|---|
| ROIC | 16.8% | 25.7% | 11.5% | 8.7% | 11.0% | 2.2% |
| ROE | 38.7% | 56.1% | 17.4% | 17.1% | 88.8% | 71.7% |
| Net Debt/EBITDA | 2.6x | 1.8x | 6.5x | 5.9x | 3.6x | -2.4x |
Campbell Soup Company ($CPB) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 2,183 | 2,162 | 2,238 | 2,108 | | -0.9% | -0.5% | 14.6% | 18.4% |
| EBITDA | 417 | 450 | 371 | 326 | | -6.9% | 1.4% | 5.1% | 81.1% |
| Net Income | 166 | 1,208 | 168 | 86 | | -14.4% | - | 100.0% | - |
Balance Sheet
|
|---|
| Cash | 61 | 58 | 1,242 | 859 | | -70.2% | -71.4% | 514.9% | 2,671.0% |
| Short Term Debt | 1,695 | 962 | 1,570 | 1,269 | | -8.1% | -33.8% | -11.4% | -7.4% |
| Long Term Debt | 6,905 | 5,122 | 5,378 | 4,994 | | -13.7% | -36.0% | -28.4% | -29.7% |
Ratios
|
|---|
| Gross Margin | 33.8% | 34.3% | 34.5% | 35.4% | | 0.8% | 1.8% | 1.0% | 1.4% |
| EBITDA Margin | 19.1% | 20.8% | 16.6% | 15.5% | | -1.2% | 0.4% | -1.5% | 5.4% |
| Net Income Margin | 7.6% | 55.9% | 7.5% | 4.1% | | -1.2% | 58.6% | 3.2% | 4.5% |
Peers in Packaged Foods & Meats
Below you can find Campbell Soup Company benchmarking vs. other companies in Packaged Foods & Meats 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 |
|---|
| Farmer Brothers Company ($FARM) | - | -0.5% | 12.0% | -1.7% | -15.9% |
| |
|---|
| Median (1 company) | - | -0.5% | 12.0% | -1.7% | -15.9% |
|---|
| Campbell Soup Company ($CPB) | - | -26.7% | 13.3% | 22.6% | 7.2% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Farmer Brothers Company ($FARM) | 31.4% | 34.5% | 34.2% | 30.1% | 27.6% |
| |
|---|
| Median (1 company) | 31.4% | 34.5% | 34.2% | 30.1% | 27.6% |
|---|
| Campbell Soup Company ($CPB) | 36.8% | 41.8% | 35.9% | 33.2% | 34.5% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Farmer Brothers Company ($FARM) | 3.4% | 11.5% | 5.2% | 2.7% | -1.5% |
| |
|---|
| Median (1 company) | 3.4% | 11.5% | 5.2% | 2.7% | -1.5% |
|---|
| Campbell Soup Company ($CPB) | 15.9% | 30.0% | 21.9% | 17.6% | 17.4% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Farmer Brothers Company ($FARM) | 9.3% | 15.7% | 6.1% | 5.8% | 3.5% |
| |
|---|
| Median (1 company) | 9.3% | 15.7% | 6.1% | 5.8% | 3.5% |
|---|
| Campbell Soup Company ($CPB) | 4.3% | 5.8% | 6.2% | 4.7% | 3.4% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Farmer Brothers Company ($FARM) | -2.2% | 25.3% | 0.4% | -5.5% | -16.5% |
| |
|---|
| Median (1 company) | -2.2% | 25.3% | 0.4% | -5.5% | -16.5% |
|---|
| Campbell Soup Company ($CPB) | 16.8% | 25.7% | 11.5% | 8.7% | 11.0% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Farmer Brothers Company ($FARM) | -1.0x | 0.4x | 2.8x | 5.2x | - |
| |
|---|
| Median (1 company) | -1.0x | 0.4x | 2.8x | 5.2x | - |
|---|
| Campbell Soup Company ($CPB) | 2.6x | 1.8x | 6.5x | 5.9x | 3.6x |
