Today we decided to bring you an overview of the TTM EBITDA and profit margins of Slovenian companies
Over the course of November, Slovenian companies have been posting their updated 9M 2021 results. As a result, we decided to bring you an updated EBITDA and profit margin analysis. One thing that is important to point out is that comparing the margins across the selected companies is not necessarily the best way to do the comparison, considering that many companies operate in different industries. Since both EBITDA and profit margins reflect to a large extent the industry a certain company operates in, it is more advisable to use the peer average or median.
Even so, it is worth seeing which Slovenian companies are more profitable and therefore have a better position in managing their prices and services (reducing costs, increasing prices of goods/services) thus increasing these margins. It should also be noted that financials (Triglav, Sava Re, and NLB) were excluded from these comparisons
EBITDA (TTM) margin of Selected Slovenian Companies (%)
Out of the five observed companies, Telekom Slovenije recorded the highest TTM EBITDA margin at 34.2%. If we were to look at 9M 2021 vs. 9M 2020, the margin increases to 36.5%, a 3.4 p.p. increase YoY. This increase is mostly due to higher sales revenue as well as lower operating expenses. Next up, we have Krka, which recorded an EBITDA margin of 30%. When looking at 9M 2021 vs. 9M 2020, the Company experienced a 3.2 p.p. decrease YoY (33.15% to 29.98%). The main reason for the lower margin is the rising COGS. Following these two, we have Luka Koper and Cinkarna Celje, with EBITDA margins of 29% and 26.5% respectively. For Luka Koper, the increase in EBITDA of +7% YoY has come from the higher sales growth when compared to operating expenses growth. Even so, when looking at 9M 2021 vs. 9M 2020, the Company actually experienced a 41 bps decrease in the margin (from 27.52% to 27.11%), mostly due to sales revenue growing faster than EBITDA in this period.
For Cinkarna Celje, which experienced an EBITDA margin increase of 68% YoY, the increase comes from higher sales revenue due to higher value in titanium oxide (which increased by 10% YoY) as well as operating expenses remaining almost flat. At a 9M 2021 vs. 9M 2020 level, this represents a 9.7 p.p increase (from 12.46% to 22.14%). Lastly, we have Petrol, which had an EBITDA margin of only 5.9%, and considering the specificity of the industry the Company operates in, this comes as no surprise. At the 9M 2021 vs. 9M 2020 level, this represents a 72 bps increase YoY.
Profit (TTM) margin of Selected Slovenian Companies (%)
Taking a look into the TTM profit margins, we can see that Krka leads the way with 20.6%, followed by Cinkarna Celje with 16.7% and Luka Koper with 14.7%. If we were to break this down further to 9M 2021 vs. 9M 2020, we can see that Krka increased its margin by 2.3 p.p. (from 18.11% to 20.41%), Cinkarna Celje had an increase of 7.4 p.p. (from 10.55% to 17.92%), while Luka Koper experienced a slight decrease of -70 bps YoY.
On the flip side, we have Telekom Slovenije and Petrol, with 4.9% and 3.2% profit margins respectively, which when looked at as 9M 2021 vs. 9M 2020, represents a 125 bps (6.09% to 7.34%) and 120 bps (1.77% to 2.97%) increase respectively.
