Euronet Worldwide, Inc. reports 101% Net Income decline in 2020 and 15.7 pp EBITDA Margin decline from 26.1% to 10.3%
02/09/2021 • About Euronet Worldwide, Inc. (
$EEFT) • By InTwits
Euronet Worldwide, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Euronet Worldwide, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.4%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: $57m in FY2020, $69m in FY2019, $68m in FY2018, $44m in FY2017, $26m in FY2016
- The company has potentially unprofitable business model: ROIC is 1.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Euronet Worldwide, Inc.'s Revenue decreased on 9.7%. Annual revenue decline showed slowdown in 20Q4 - revenue increased slightly on 1.9%. During the last 5 years Revenue growth topped in 2017 at 15.0% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.8 pp from 19.0% to 20.8% in FY2020.
Gross Margin decreased on 6.9 pp from 43.4% to 36.5% in 2020. SG&A as a % of Revenue increased slightly on 1.2 pp from 7.7% to 8.9% in 2020.
Net Income margin dropped on 12.7 pp from 12.6% to -0.14% in 2020.
Investments (CAPEX, working capital and M&A)
Euronet Worldwide, Inc.'s CAPEX/Revenue was 3.9% in 2020. CAPEX/Revenue showed almost no change from 2017 to 2020. For the last three years the average CAPEX/Revenue was 4.4%.
Return on investment
The company operates at low but positive ROIC (1.7%) and negative ROE (-0.2%). ROIC dropped on 17.5 pp from 19.2% to 1.7% in 2020. ROE dropped on 24.9 pp from 24.7% to -0.22% in 2020.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.9x and Debt / EBITDA is 6.3x. Debt increased on 8.8% while cash surged on 26.1%.
Euronet Worldwide, Inc. has no short term refinancing risk: cash is higher than short term debt (3,070.8%).
Management team
Euronet Worldwide, Inc.'s CEO Michael J Brown has spent 19 years with the company. Euronet Worldwide, Inc.'s CFO is Rick L Weller. Rick L Weller has 18 years tenure at the company.
Financial and operational results
FY ended 12/31/2020
Euronet Worldwide, Inc. ($EEFT) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1,959 | 2,252 | 2,537 | 2,750 | 2,483 | -9.7% |
| Gross Profit | 784 | 896 | 1,048 | 1,194 | 906 | -24.1% |
| SG&A | 165 | 190 | 217 | 212 | 222 | 4.6% |
| EBITDA | 330 | 361 | 464 | 717 | 257 | -64.2% |
| EBIT | 250 | 266 | 358 | | | |
| Interest expence | 28 | 33 | 38 | | | |
| Tax | 59 | 99 | 63 | | | |
| Net Income | 174 | 157 | 233 | 347 | -3 | -101.0% |
| Stock Based Compensation | 15 | 16 | 17 | | | |
Balance Sheet
|
|---|
| Cash | 734 | 819 | 1,054 | 1,452 | 1,831 | 26.1% |
| Accounts Receivable | 503 | 745 | 694 | | | |
| Inventory | 78 | 96 | | | | |
| Accounts Payable | 457 | 495 | 529 | | | |
| Short Term Debt | 35 | 47 | 43 | 139 | 60 | -57.2% |
| Long Term Debt | 569 | 414 | 598 | 1,341 | 1,550 | 15.6% |
Cash flow
|
|---|
| Capex | 87 | 97 | 112 | 131 | 98 | -25.6% |
| Acquisitions | 68 | | 13 | | | |
Ratios
|
|---|
| Revenue growth | 10.5% | 15.0% | 12.6% | 8.4% | -9.7% | |
| EBITDA growth | 20.2% | 9.3% | 28.5% | 54.6% | -64.2% | |
|
|---|
| Gross Margin | 40.0% | 39.8% | 41.3% | 43.4% | 36.5% | -6.9% |
| EBITDA Margin | 16.9% | 16.0% | 18.3% | 26.1% | 10.3% | -15.7% |
| EBIT Margin | 12.8% | 11.8% | 14.1% | | |
| SG&A, % of revenue | 8.4% | 8.4% | 8.5% | 7.7% | 8.9% | 1.2% |
| SBC, % of revenue | 0.8% | 0.7% | 0.7% | | |
| Net Income Margin | 8.9% | 7.0% | 9.2% | 12.6% | -0.1% | -12.7% |
| CAPEX, % of revenue | 4.5% | 4.3% | 4.4% | 4.8% | 3.9% | -0.8% |
|
|---|
| ROIC | 17.6% | 16.2% | 19.5% | 19.2% | 1.7% | -17.5% |
| ROE | 20.2% | 15.0% | 19.2% | 24.7% | -0.2% | -24.9% |
| Net Debt/EBITDA | -0.4x | -1.0x | -0.9x | 0.0x | -0.9x | -0.9x |
| Interest coverage ratio (ICR) | 8.8x | 8.2x | 9.5x | | |
| Interest expence / Average debt | 4.7% | 6.1% | 6.8% | | | |
People
|
|---|
| Insider ownership | 4.1% | 4.1% | 4.1% | | | |
| Employees | 6,200 | 6,600 | 7,100 | | | |
| Revenue/Employee, th. $ | 316 | 341 | 357 | | | |
Euronet Worldwide, Inc. ($EEFT) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 584 | 528 | 664 | 707 | | 1.1% | -23.7% | -15.6% | 1.9% |
| EBITDA | 96 | -50 | 113 | 98 | | -15.5% | -128.0% | -55.9% | -41.9% |
| Net Income | 2 | -116 | 40 | 70 | | -94.4% | -269.9% | -70.8% | -34.1% |
Balance Sheet
|
|---|
| Cash | 1,268 | 1,275 | 1,418 | 1,831 | | 4.3% | -18.2% | -18.1% | 26.1% |
| Short Term Debt | 139 | 60 | 59 | 60 | | -71.1% | -60.8% | -59.5% | -57.2% |
| Long Term Debt | 1,335 | 1,210 | 1,247 | 1,550 | | 106.7% | -10.2% | -4.6% | 15.6% |
Ratios
|
|---|
| Gross Margin | 38.4% | 33.7% | 38.6% | 35.0% | | -0.3% | -9.4% | -9.9% | -6.8% |
| EBITDA Margin | 16.4% | -9.5% | 17.0% | 13.9% | | -3.2% | -35.3% | -15.6% | -10.4% |
| Net Income Margin | 0.3% | -21.9% | 6.1% | 9.9% | | -5.7% | -31.8% | -11.4% | -5.4% |
Peers in Data Processing & Outsourced Services
Below you can find Euronet Worldwide, Inc. benchmarking vs. other companies in Data Processing & Outsourced Services 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Square, Inc. ($SQ) | - | 29.6% | 49.0% | 42.9% | 101.5% |
| Global Payments Inc. ($GPN) | - | 37.2% | -15.3% | 45.9% | 51.1% |
| Fiserv, Inc. ($FISV) | - | 3.5% | 2.2% | 74.9% | 45.8% |
| NIC Inc. ($EGOV) | - | 5.8% | 2.5% | 2.7% | 30.0% |
| StoneCo Ltd ($STNE) | - | 74.3% | 106.0% | 63.1% | 28.9% |
| |
|---|
| Median (39 companies) | 6.7% | 10.1% | 7.4% | 11.5% | -2.7% |
|---|
| Euronet Worldwide, Inc. ($EEFT) | - | 15.0% | 12.6% | 8.4% | -9.7% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Verra Mobility Corp ($VRRM) | - | 97.4% | 97.5% | 95.7% | 91.5% |
| EVO Payments, Inc. ($EVOP) | - | - | - | 80.2% | 80.8% |
| StoneCo Ltd ($STNE) | 69.7% | 70.8% | 79.5% | 83.4% | 76.8% |
| WEX Inc. ($WEX) | 54.7% | 58.8% | 63.3% | 61.7% | 56.8% |
| Sabre Corporation ($SABR) | 32.2% | 30.1% | 27.8% | 56.6% | 56.6% |
| |
|---|
| Median (31 companies) | 39.2% | 38.9% | 40.9% | 40.3% | 36.7% |
|---|
| Euronet Worldwide, Inc. ($EEFT) | 40.0% | 39.8% | 41.3% | 43.4% | 36.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Visa Inc. ($V) | 55.6% | 69.2% | 65.8% | 68.1% | 68.5% |
| Mastercard Incorporated ($MA) | 56.9% | 56.5% | 51.8% | 60.9% | 56.6% |
| FleetCor Technologies, Inc. ($FLT) | 52.0% | 50.8% | 55.9% | 57.6% | 52.2% |
| StoneCo Ltd ($STNE) | 31.4% | 26.0% | 53.0% | 62.4% | 52.1% |
| Black Knight, Inc. ($BKI) | 43.0% | 44.6% | 43.3% | 46.0% | 44.9% |
| |
|---|
| Median (38 companies) | 21.3% | 21.1% | 19.4% | 21.7% | 19.1% |
|---|
| Euronet Worldwide, Inc. ($EEFT) | 16.9% | 16.0% | 18.3% | 26.1% | 10.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| PagSeguro Digital Ltd. ($PAGS) | 6.4% | 4.3% | 1.4% | 5.8% | 22.3% |
| StoneCo Ltd ($STNE) | 7.2% | 18.4% | 8.9% | 12.9% | 11.2% |
| Cardtronics plc ($CATM) | 9.9% | 9.6% | 8.0% | 9.3% | 8.3% |
| Verra Mobility Corp ($VRRM) | - | 11.5% | 7.2% | 6.6% | 6.2% |
| Fiserv, Inc. ($FISV) | 5.3% | 5.0% | 6.2% | 7.1% | 6.1% |
| |
|---|
| Median (38 companies) | 3.2% | 2.9% | 3.0% | 3.0% | 3.0% |
|---|
| Euronet Worldwide, Inc. ($EEFT) | 4.5% | 4.3% | 4.4% | 4.8% | 3.9% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mastercard Incorporated ($MA) | 57.5% | 60.6% | 64.7% | 72.7% | 47.6% |
| International Money Express, Inc. ($IMXI) | -1.3% | -1.4% | 12.1% | 36.0% | 31.4% |
| NIC Inc. ($EGOV) | 63.1% | 52.1% | 39.3% | 26.5% | 30.8% |
| Visa Inc. ($V) | 18.1% | 21.9% | 23.0% | 27.2% | 23.2% |
| Western Union Company (The) ($WU) | 10.7% | 11.9% | 27.8% | 21.5% | 22.1% |
| |
|---|
| Median (39 companies) | 11.1% | 10.6% | 10.2% | 8.2% | 6.4% |
|---|
| Euronet Worldwide, Inc. ($EEFT) | 17.6% | 16.2% | 19.5% | 19.2% | 1.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| WEX Inc. ($WEX) | 6.7x | 4.4x | 3.1x | 3.4x | 12.1x |
| Exela Technologies Inc ($XELAU) | 8.1x | - | 9.7x | - | 10.7x |
| Alliance Data Systems Corporation ($ADS) | 10.7x | 10.1x | 9.0x | 11.7x | 9.2x |
| Verra Mobility Corp ($VRRM) | - | 10.7x | 6.9x | 3.5x | 4.7x |
| GreenSky, Inc. ($GSKY) | -1.5x | -1.5x | 0.5x | 1.5x | 4.6x |
| |
|---|
| Median (35 companies) | 1.6x | 2.3x | 2.2x | 2.3x | 2.1x |
|---|
| Euronet Worldwide, Inc. ($EEFT) | -0.4x | -1.0x | -0.9x | 0.0x | -0.9x |
