Village Super Market, Inc. Debt jumped on 766% and EBITDA surged on 37.8%
10/07/2020 • About Village Super Market, Inc. (
$VLGEA) • By InTwits
Village Super Market, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 4.7% in FY2020 vs. 3.8% in FY2019 vs. 4.2% in FY2016
- Village Super Market, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's in pair with industry average of 37.4%
- CAPEX is quite volatile: $54m in FY2020, $28m in FY2019, $35m in FY2018, $28m in FY2017, $20m in FY2016
- The company has business model with low profitability: ROIC is 7.5%
- 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
The company's Revenue increased on 9.8%. Revenue growth showed acceleration in FY20Q4 - it increased 19.9% YoY. During FY2016-FY2020 Revenue growth bottomed in FY2017 at -1.9% and was accelerating since that time. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.96 pp from 3.8% to 4.7% in FY2020. During FY2016-FY2020 EBITDA Margin bottomed in FY2018 at 3.6% and was growing since that time.
Gross Margin showed almost no change in FY2020. Gross Margin grew at 0.23 pp per annum in the last 5 years. SG&A as a % of Revenue increased slightly on 0.63 pp from 24.0% to 24.7% in FY2020. SG&A as a % of Revenue grew at 0.41 pp per annum in the last 5 years.
Net Income margin showed almost no change in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 3.0%. Village Super Market, Inc.'s CAPEX/Revenue increased slightly on 1.3 pp from 1.7% in FY2017 to 3.0% in FY2020. Average CAPEX/Revenue for the last three years was 2.3%. The company invested a large share of EBITDA (63.8%) to CAPEX.
Return on investment
The company operates at low ROIC (7.5%) and ROE (7.7%). ROIC decreased on 2.0 pp from 9.5% to 7.5% in FY2020. ROE decreased slightly on 0.55 pp from 8.2% to 7.7% in FY2020. ROIC stuck to a declining trend at -1.7 pp per annum in FY2016-FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.6x and Debt / EBITDA is 4.9x. Net Debt / EBITDA jumped on 4.5x from -0.8x to 3.6x in FY2020. Debt surged on 766% while cash surged on 10.4%. During FY2016-FY2020 Net Debt/EBITDA bottomed in FY2019 at -0.8x.
Village Super Market, Inc. has no short term refinancing risk: cash is higher than short term debt (424.5%).
Valuation and dividends
The company's trades at EV/EBITDA 6.4x and P/E 9.5x.
Management team
Village Super Market, Inc.'s CEO Robert Sumas has spent 2 years with the company. Village Super Market, Inc.'s CFO is John L Van Orden. John L Van Orden has 5 years tenure at the company.
Financial and operational results
FY ended 07/25/2020
Village Super Market, Inc. ($VLGEA) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1,635 | 1,605 | 1,615 | 1,644 | 1,805 | 9.8% |
| Gross Profit | 445 | 437 | 443 | 457 | 506 | 10.9% |
| SG&A | 377 | 371 | 385 | 395 | 445 | 12.7% |
| EBITDA | 68 | 65 | 58 | 62 | 85 | 37.8% |
| Net Income | 25 | 23 | 25 | 26 | 25 | -2.3% |
Balance Sheet
|
|---|
| Cash | 88 | 87 | 96 | 101 | 112 | 10.4% |
| Short Term Debt | 1 | 1 | 1 | 1 | 26 | 2,370.5% |
| Long Term Debt | 44 | 43 | 48 | 48 | 396 | 730.1% |
Cash flow
|
|---|
| Capex | 20 | 28 | 35 | 28 | 54 | 94.7% |
Ratios
|
|---|
| Revenue growth | 3.2% | -1.9% | 0.7% | 1.8% | 9.8% | |
| EBITDA growth | 2.3% | -4.7% | -10.4% | 6.0% | 37.8% | |
|
|---|
| Gross Margin | 27.2% | 27.2% | 27.4% | 27.8% | 28.1% | 0.3% |
| EBITDA Margin | 4.2% | 4.1% | 3.6% | 3.8% | 4.7% | 1.0% |
| SG&A, % of revenue | 23.0% | 23.2% | 23.8% | 24.0% | 24.7% | 0.6% |
| Net Income Margin | 1.5% | 1.4% | 1.6% | 1.6% | 1.4% | -0.2% |
| CAPEX, % of revenue | 1.2% | 1.7% | 2.2% | 1.7% | 3.0% | 1.3% |
|
|---|
| ROIC | 14.3% | 12.4% | 9.6% | 9.5% | 7.5% | -2.0% |
| ROE | 9.5% | 8.2% | 8.5% | 8.2% | 7.7% | -0.6% |
| Net Debt/EBITDA | -0.6x | -0.7x | -0.8x | -0.8x | 3.6x | 4.5x |
Village Super Market, Inc. ($VLGEA) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 407 | 437 | 458 | 501 | | 1.5% | 2.2% | 15.9% | 19.9% |
| EBITDA | 15 | 15 | 27 | 28 | | -4.0% | -17.3% | 105.9% | 86.3% |
| Net Income | 3 | 2 | 11 | 9 | | -59.1% | -73.5% | 124.4% | 37.2% |
Balance Sheet
|
|---|
| Cash | 78 | 75 | 90 | 112 | | -12.3% | -30.5% | -14.0% | 10.4% |
| Short Term Debt | 12 | 13 | 12 | 26 | | 690.8% | 1,275.3% | 1,163.6% | 2,370.5% |
| Long Term Debt | 128 | 128 | 125 | 396 | | 162.1% | 165.3% | 161.1% | 730.1% |
Ratios
|
|---|
| Gross Margin | 27.9% | 27.0% | 28.3% | 28.9% | | -0.0% | -0.5% | 0.4% | 1.1% |
| EBITDA Margin | 3.7% | 3.3% | 6.0% | 5.6% | | -0.2% | -0.8% | 2.6% | 2.0% |
| Net Income Margin | 0.6% | 0.5% | 2.4% | 1.8% | | -0.9% | -1.3% | 1.2% | 0.2% |
Peers in Food Retail
Below you can find Village Super Market, Inc. benchmarking vs. other companies in Food Retail 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.
