Montupet CASE

Financial Analysis and Reporting (2009-2011)

Alexis MIDOL

Introduction
Montupet

is a old-firm founded in 1894,

present in Ireland, Mexico, France, Spain
and Bulgaria
Large-Cap firm (>200MK of turnover)
Owned by several shareholders (including
minorities)
A sector currently changing and very
competititve (environment-friendly
legislation+ economic crisis): automobile
equipment industry
Profitability: yes excepting in 2009

How did this firm face and recover

after the financial crisis of 2009?
Cyclical activity!!!!

Core data
Unstable

growth rate partly due to the

crisis
EBITDA/Sales 11%
0,67 < Gearing < 0,82 (decreasing)
1,09 < Current ratio < 1,27 (decreasing)
WC ratio decreased from 18% (2008) to
11% in 2011
ROE quite constant on average 5%
ROCE:4.9% to 6.3%

P&L Analysis
Over

the period, turnover increased by 3%.

Excluding 2009, the firm is profitable and
generate an average profit of 9.254M
including the loss of 2009.
EBITDA
Still positive
Constant EBITDA/Sales on average of 12%

(excluding 2009).
The firm succeeded to recover their EBITDA
amount from 2008 in 2010. Positive sign of
recovery and adaptability

P&L Analysis
Earnings per share: decrease as shows
the low Pay-out ratio (15% in 2011)
During years of growth, inventories
increased proportionnaly to the amount
of sales. Sign of quality of topmanagement.
The drop in 2009 of turnover, salaries
can be explained by the financial crisis:
contraction of the demand in the
automobile market.

Balance Sheet Analysis

Net fixed assets increased over the

period development of the firm to remain
competitive in this
investment sector.

highly

demanding-

CAPEX/EBITDA = 78% on average

DEPRECIATION/CAPEX = 75%. It means that the company is
increasing its capacity of production.

Debtors/accounts receivables increased: customers

have difficulties to repay. In the same time, accounts
payable and creditors increase more than debtors.
=> Degradation of economic situation of the market.

Balance Sheet Analysis

Working

Capital

Positive it exists a need of funding to finance

operating cycle
WC ratio decreased (<20%): from 18% to 11% due
to the increase of suppliers payment duration.
Financial

structure:

NFD decreased by 15M

Equity increased by 8M due to retained earnings

Change in the financial structure (cf. evolution of

gearing)

Cash Flow Statement

Analysis
Cash

Flow from Operating Activities

CFO before changes in WC is positive and also is

increasing thanks to increase in sales and especially

EBITDA growth. Indeed, CFO variation is mainly
explained with margins variation.
Changes in WC is negative which means the operating
cycle generates cash-out for the firm.
Finally, CFO is positive and is still growing.

Cash

Flow from Investing Activities

It is negative! Obvious
Quite constant excluding in 2009
In 2009: reduction of investments due to the crisis

Cash Flow Statement

Analysis
Cash

Flow from Financing Activities

It is negative mainly due to the

reimbursement of the debt.

No particular events
FCF:
Unstable but quite high
Decreasing over the period

Financial Structure
Financial

ratios

Leverage ratio (2008: 2.44; 2010: 2.3 ; 2011: 1.9)

It decreased over the period
Positive sign (<3-4): the company will take less than
approximately 2 years to pay all its debts back.
Gearing (0.67-0.83):
Such low ratio means that the company can raise funds by
borrowing.
Cash Coverage Ratio (on average 11.75)
A measure of a company's ability to meet its financial
obligations. In broad terms, the higher the coverage ratio, the
better the ability of the enterprise to fulfill its obligations to its
lenders.

Rates of return
During

the period the ROCE increased

from 4.9% to 6.3% returns are even
higher for the operating cycle.
In 2008, 2010 and 2011 the ROCE is
higher than capital cost. So the firm can
activate the leverage effect to increase
its ROE (10% in 2010 and 14% in 2011)
For 2009 low results explain the negative
ROCE (-6.2%). Thus, the debt deteriored
the ROE (-8%)

Thanks for you attention !