With the publishing of all the FY 2021 results by the CROBEX10 constituents, we decided to bring you an overview of the change in their EBITDA and profit margins during 2021.
One thing that should immediately be noted is the fact that comparing margins across different industries these companies operate is not necessarily the best way to give a comparable overview. This is because the EBITDA and profit margins depend on the industry they operate in, so a real comparison to any of these companies would be to their peer average or median. Even so, it is still worth looking at which of these companies are more profitable and therefore have a larger cushion to potentially reduce prices of their goods or services if necessary, while maintaining a higher level of profitability.
2021 results include the impact of Croatia’s tourist season, which had a strong recovery during the year and as such influenced directly or indirectly many of CROBEX10 constituents. Also, increasing energy as well as commodity prices, semiconductor shortages, etc. also had a direct/indirect influence on the business operations of these companies.
EBITDA margin of CROBEX10 constituents in 2021 (%)
Out of all the selected companies, the company which has the highest EBITDA margin is Atlantska Plovidba, standing at 54%. This number refers to the adjusted EBITDA as the company had a cancellation of previous write-offs of fixed assets in 2021, which significantly increased 2021 EBITDA. This adjustment amounted to HRK +295.5m and was due to the fact that the price of scrap increased from 400 USD/lt to 600 USD/lt. Therefore, we adjusted for this change and took it out of the EBITDA. Without this change, the company’s EBITDA margin would stand at 71%. Even so, the 54% EBITDA margin is largely due to the recovery of the global economies during 2021, and an increase in average daily freight rates.
Next up we have Hrvatski Telekom, which had an EBITDA margin of 42.9%, an increase of 1.6 p.p. YoY. This was mostly due to decrease in material expenses of 6% YoY and employee expenses of 4.5% YoY. Following them are three tourist companies (Valamar Riviera, Arena Hospitality Group, Adris), with EBITDA margins of 39.3%, 29.7%, and 18.1%, respectively. Compared to 2020, this is an increase of 24 p.p., 50.3 p.p., and 5.9 p.p., respectively. With the strong recovery of the tourism industry, especially in Q3 2021, this comes as no surprise. Adris also operates in the insurance (Croatia osiguranje) and food production (Cromaris) industries, which both experienced expansion and growth in 2021, also contributing to the Company’s EBITDA increase.
Next up, we have the food production companies (Podravka and Atlantic Grupa), with EBITDA margins of 12.8%, and 12.5%, respectively. This represents a slight change from 2020 of 0.4 p.p. and -0.9 p.p., respectively. Both of the companies were influenced by commodity prices in 2021 (e.g. coffee, cocoa, sugar…) and thus their margins remained at similar levels or decreased slightly.
Lastly, we have Ericsson NT, Končar, and AD Plastik with EBITDA margins of 11%, 9.4%, and 5.5%, respectively. Compared to 2020, this is a change of 2.6 p.p., 2.2. p.p., and -8.1. p.p., respectively. Ericsson NT and Končar both had a good performance during the year, with strong revenue growth and slower OPEX growth driving higher EBITDA margins. On the other hand, AD Plastik, a company that was impacted by the semiconductor shortages the most, had the aforementioned decrease in EBITDA.
Change in EBITDA & Profit margin (2021 vs 2020, p.p.)
Looking over to the profit margins, the company with the highest margin is still Atlantska Plovidba, with 30.5%. Following them, we have Hrvatski Telekom and Ericsson NT, with 8.2% and 8%, respectively. On the flip side, the only company with a profit margin lower than 5% was AD Plastik, at 3.1%.
Profit margins of CROBEX10 constituents (%)