Marginal expansion is alive and well with A2M, forecasted to continue expanding as economies of scale takeover.
CAPEX is almost negligible, huge possibility they will put capital to earnings accretive opportunities (not forecasted possible upside)
Assuming* that 4M18 will be a higher proportion of FY18 revenues than 4M17 was to FY17... lower Q seq. growth.
4M17/FY17A = 28%
4M18/FY18E = 32%
Room for upside if sequential growth performed similarly with last year.
31% revenue growth over the next 3 years, I am told, is on the conservative side as well.
However the marginal expansion forecasted could be considered optimistic as net profitability rises to 24%
A2 MILK COMPANY |
|
FY13A |
|
FY14A |
|
FY15A |
|
FY16A |
|
FY17A |
|
FY18E |
|
FY19E |
|
FY20E |
CAGR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING REVENUES GENERATED |
|
94.5 |
|
110.8 |
|
155.1 |
|
352.8 |
|
549.2 |
|
817.0 |
|
1025.0 |
|
1240.0 |
31.19% |
Cost of goods sold as a proportion |
|
64.30% |
|
64.00% |
|
64.80% |
|
57.20% |
|
52.03% |
|
49.00% |
|
47.00% |
|
45.00% |
|
Cost of marketing as a proportion |
|
4.80% |
|
8.90% |
|
9.40% |
|
10.30% |
|
7.65% |
|
8.00% |
|
7.50% |
|
7.50% |
|
Cost of logistics as a proportion |
|
7.90% |
|
7.20% |
|
6.00% |
|
4.40% |
|
3.67% |
|
3.60% |
|
3.50% |
|
3.50% |
|
Cost of corporate + other as a proportion |
|
10.70% |
|
15.00% |
|
15.30% |
|
11.40% |
|
11.47% |
|
11.00% |
|
11.00% |
|
11.00% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses - NZDm |
|
-84.8 |
|
-106.6 |
|
-151.0 |
|
-297.3 |
|
-410.9 |
|
-585.0 |
|
-707.3 |
|
-830.8 |
26.45% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNDERLYING EBITDA GENERATED |
|
9.7 |
|
4.2 |
|
4.1 |
|
55.5 |
|
138.3 |
|
232.0 |
|
317.8 |
|
409.2 |
43.57% |
EBITDA margin |
|
10.26% |
|
3.81% |
|
2.64% |
|
15.73% |
|
25.18% |
|
28.40% |
|
31.00% |
|
33.00% |
|
Depreciation and Amortisation |
|
- |
|
- |
|
- |
|
-2.74 |
|
-2.69 |
|
-2.80 |
|
-2.80 |
|
-2.80 |
|
Interest income |
|
- |
|
- |
|
- |
|
0.50 |
|
0.89 |
|
2.10 |
|
2.79 |
|
3.80 |
|
Finance costs |
|
- |
|
- |
|
- |
|
-0.20 |
|
-0.14 |
|
-0.80 |
|
-0.80 |
|
-0.80 |
|
Income tax expense |
|
- |
|
- |
|
- |
|
-21.86 |
|
-48.71 |
|
-64.55 |
|
-88.74 |
|
-114.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNDERLYING NPAT - NZDm |
|
4.0 |
|
0.7 |
|
-1.1 |
|
31.4 |
|
90.6 |
|
166.0 |
|
228.2 |
|
294.8 |
48.18% |
Net Profitability |
|
4.20% |
|
0.60% |
|
0.00% |
|
8.90% |
|
16.50% |
|
20.32% |
|
22.26% |
|
23.77% |
|
Operating Cashflow - NZDm |
|
- |
|
- |
|
- |
|
21.50 |
|
99.90 |
|
164.74 |
|
227.19 |
|
296.67 |
|
Capital expenditure |
|
- |
|
- |
|
- |
|
2.10 |
|
2.50 |
|
2.50 |
|
2.50 |
|
2.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DISTRIBUTABLE CASHFLOW |
|
- |
|
- |
|
- |
|
19.40 |
|
66.20 |
|
162.24 |
|
224.69 |
|
294.17 |
64.40% |
Cash and equivalents - NZDm |
|
20.20 |
|
16.00 |
|
6.10 |
|
69.40 |
|
121.00 |
|
185.00 |
|
320.00 |
|
480.00 |
|
DCF per share - CPS |
|
- |
|
- |
|
- |
|
2.68 |
|
9.15 |
|
22.83 |
|
31.06 |
|
40.67 |
|
Underlying EPS - CPS |
|
- |
|
- |
|
- |
|
4.32 |
|
12.29 |
|
22.95 |
|
31.55 |
|
40.75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATM.NZX |
2017 |
2018 |
2019 |
2020 |
EARNINGS PER SHARE |
12.29 |
22.95 |
31.55 |
40.75 |
FORWARD PER AT $850 |
37.00 |
26.94 |
20.86 |
19.54 |
SP AT 30 x FORWARD PE |
688 |
946 |
1223 |
1500 |
PEG RATIO AT 30 x EARNINGS |
0.35 |
0.80 |
1.03 |
1.22 |
SP AT 40 x FORWARD PE |
918 |
1262 |
1630 |
2000 |
PEG RATIO AT 40 x EARNINGS |
0.46 |
1.01 |
1.37 |
1.63 |
|
|
|
|
|
FORWARD EARNINGS GROWTH |
90.01% |
35.09% |
29.17% |
22.70% |