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AKZO NOBEL 2017-18 Annual Report Analysis

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AKZO NOBEL 2017-18 Annual Report Analysis
Wed, 3 Apr

AKZO NOBEL has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

AKZO NOBEL Income Statement Analysis

  • Operating income during the year rose 5.7% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 9.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.0% in FY18 as against 12.8% in FY17.
  • Depreciation charges increased by 7.2% and finance costs increased by 9.4% YoY, respectively.
  • Other income declined by 10.4% YoY.
  • Net profit for the year declined by 12.3% YoY.
  • Net profit margins during the year declined from 8.9% in FY17 to 7.4% in FY18.

AKZO NOBEL Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 25,725 27,193 5.7%
Other income Rs m 489 438 -10.4%
Total Revenues Rs m 26,214 27,631 5.4%
Gross profit Rs m 3,285 2,986 -9.1%
Depreciation Rs m 543 582 7.2%
Interest Rs m 32 35 9.4%
Profit before tax Rs m 3,199 2,807 -12.3%
Tax Rs m 896 775 -13.5%
Profit after tax Rs m 2,341 2,052 -12.3%
Gross profit margin % 12.8 11.0
Effective tax rate % 28.0 27.6
Net profit margin % 8.9 7.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



AKZO NOBEL Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 9 billion as compared to Rs 8 billion in FY17, thereby witnessing an increase of 9.7%.
  • Long-term debt down at Rs 29 million as compared to Rs 29 million during FY17, a fall of 0.0%.
  • Current assets rose 27% and stood at Rs 15 billion, while fixed assets rose 4% and stood at Rs 6 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 22 billion as against Rs 19 billion during FY17, thereby witnessing a growth of 18%.

AKZO NOBEL Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 10,096 12,909 27.9
 
Current Liabilities Rs m 7,926 8,691 9.7
Long-term Debt Rs m 29 29 0.0
Total Liabilities Rs m 18,845 22,326 18.5
 
Current assets Rs m 12,023 15,304 27.3
Fixed Assets Rs m 5,423 5,657 4.3
Total Assets Rs m 18,845 22,326 18.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



AKZO NOBEL Cash Flow Statement Analysis

  • AKZO NOBEL's cash flow from operating activities (CFO) during FY18 stood at Rs 2 billion, an improvement of 27.4% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -56 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -1 billion, an improvement of 68% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 514 million from the Rs -240 million net cash flows seen during FY17.

AKZO NOBEL Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 1,433 1,826 27.4%
Cash Flow from Investing Activities Rs m 2,251 -56 -
Cash Flow from Financing Activities Rs m -3,924 -1,256 -
Net Cash Flow Rs m -240 514 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for AKZO NOBEL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 44.0, an decline from the EPS of Rs 50.2 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,791.9, stands at 46.0 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 6.8 times, while the price to sales ratio stands at 3.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 32.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 551.3 582.8
TTM Earnings per share Rs 50.2 44.0
Diluted earnings per share Rs 48.8 42.8
Price to Cash Flow x 29.0 32.6
TTM P/E ratio x 44.8 46.0
Price / Book Value ratio x 7.4 6.8
Market Cap Rs m 83,608 85,937
Dividends per share (Unadj.) Rs 22.0 22.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for AKZO NOBEL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.8x during FY18, from 1.5x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

    Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 81.2x during FY18, from 101.0x during FY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

  • Profitability Ratios
  • Return on Equity (ROE): The ROE for the company declined and down at 15.9% during FY18, from 23.2% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

    Return on Capital Employed (ROCE): The ROCE for the company declined and down at 22.1% during FY18, from 32.3% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

    Return on Assets (ROA): The ROA of the company declined and down at 9.3% during FY18, from 12.6% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 1.5 1.8
Debtors’ Days Days 58 53
Interest coverage x 101.0 81.2
Debt to equity ratio x 0.0 0.0
Return on assets % 12.6 9.3
Return on equity % 23.2 15.9
Return on capital employed % 32.3 22.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



To see how AKZO NOBEL has performed over the last 5 years, please visit here.

AKZO NOBEL Share Price Performance

Over the last one year, AKZO NOBEL share price has moved up from Rs 1,801.5 to Rs 1,791.9, registering a loss of Rs 9.7 or around 0.5%.

Overall, the S&P BSE SENSEX is up 17.5% over the year.

(To know more, check out historical annual results for AKZO NOBEL and quarterly results for AKZO NOBEL)

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Related Views on News

AKZO NOBEL Announces Quarterly Results (4QFY19); Net Profit Up 52.4% (Quarterly Result Update)

May 7, 2019 | Updated on May 7, 2019

For the quarter ended March 2019, AKZO NOBEL has posted a net profit of Rs 703 m (up 52.4% YoY). Sales on the other hand came in at Rs 7 bn (up 0.7% YoY). Read on for a complete analysis of AKZO NOBEL's quarterly results.

AKZO NOBEL Announces Quarterly Results (3QFY19); Net Profit Down 24.2% (Quarterly Result Update)

Feb 4, 2019 | Updated on Feb 4, 2019

For the quarter ended December 2018, AKZO NOBEL has posted a net profit of Rs 604 m (down 24.2% YoY). Sales on the other hand came in at Rs 8 bn (up 10.0% YoY). Read on for a complete analysis of AKZO NOBEL's quarterly results.

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