OTCPK:EUSH.Y

Stock Analysis Report

Executive Summary

Eurocash S.A. distributes fast moving consumer goods (FMCG) in Poland.

Rewards

Trading at 69.4% below its fair value

Earnings are forecast to grow 16.72% per year

Earnings grew by 21.5% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 4.73% is not well covered by earnings

Large one-off items impacting financial results



Snowflake Analysis

Average dividend payer with acceptable track record.


Similar Companies

Share Price & News

How has Eurocash's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: EUSH.Y has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

EUSH.Y

-0.3%

US Consumer Retailing

-1.2%

US Market


1 Year Return

n/a

EUSH.Y

17.4%

US Consumer Retailing

22.3%

US Market

Return vs Industry: Insufficient data to determine how EUSH.Y performed against the US Consumer Retailing industry.

Return vs Market: Insufficient data to determine how EUSH.Y performed against the US Market.


Shareholder returns

EUSH.YIndustryMarket
7 Day0%-0.3%-1.2%
30 Day0%-2.7%1.6%
90 Dayn/a-1.0%8.8%
1 Yearn/a19.6%17.4%25.0%22.3%
3 Year-41.5%-45.4%54.4%44.6%49.9%40.3%
5 Year-41.2%-46.6%48.1%32.1%77.6%58.0%

Price Volatility Vs. Market

How volatile is Eurocash's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Eurocash undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: EUSH.Y ($5.55) is trading below our estimate of fair value ($18.11)

Significantly Below Fair Value: EUSH.Y is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: EUSH.Y is poor value based on its PE Ratio (36.6x) compared to the Consumer Retailing industry average (22.9x).

PE vs Market: EUSH.Y is poor value based on its PE Ratio (36.6x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: EUSH.Y is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: EUSH.Y is overvalued based on its PB Ratio (3.4x) compared to the US Consumer Retailing industry average (2.4x).


Next Steps

Future Growth

How is Eurocash forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

16.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EUSH.Y's forecast earnings growth (16.7% per year) is above the savings rate (1.7%).

Earnings vs Market: EUSH.Y's earnings (16.7% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: EUSH.Y's earnings are forecast to grow, but not significantly.

Revenue vs Market: EUSH.Y's revenue (2.9% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: EUSH.Y's revenue (2.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EUSH.Y's Return on Equity is forecast to be low in 3 years time (17.4%).


Next Steps

Past Performance

How has Eurocash performed over the past 5 years?

-26.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EUSH.Y has a large one-off gain of PLN65.5M impacting its September 30 2019 financial results.

Growing Profit Margin: EUSH.Y's current net profit margins (0.3%) are higher than last year (0.3%).


Past Earnings Growth Analysis

Earnings Trend: EUSH.Y's earnings have declined by -26.7% per year over the past 5 years.

Accelerating Growth: EUSH.Y's earnings growth over the past year (21.5%) exceeds its 5-year average (-26.7% per year).

Earnings vs Industry: EUSH.Y earnings growth over the past year (21.5%) exceeded the Consumer Retailing industry -24.1%.


Return on Equity

High ROE: EUSH.Y's Return on Equity (9.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Eurocash's financial position?


Financial Position Analysis

Short Term Liabilities: EUSH.Y's short term assets (PLN3.1B) do not cover its short term liabilities (PLN5.4B).

Long Term Liabilities: EUSH.Y's short term assets (PLN3.1B) exceed its long term liabilities (PLN1.6B).


Debt to Equity History and Analysis

Debt Level: EUSH.Y's debt to equity ratio (73.2%) is considered high.

Reducing Debt: EUSH.Y's debt to equity ratio has reduced from 86.6% to 73.2% over the past 5 years.

Debt Coverage: EUSH.Y's debt is well covered by operating cash flow (107.8%).

Interest Coverage: EUSH.Y's interest payments on its debt are not well covered by EBIT (1.4x coverage).


Balance Sheet

Inventory Level: EUSH.Y has a high level of physical assets or inventory.

Debt Coverage by Assets: EUSH.Y's debt is covered by short term assets (assets are 4.7x debt).


Next Steps

Dividend

What is Eurocash's current dividend yield, its reliability and sustainability?

4.88%

Current Dividend Yield


Dividend Yield vs Market

company4.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years4.0%

Current dividend yield vs market & industry

Notable Dividend: EUSH.Y's dividend (4.73%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: EUSH.Y's dividend (4.73%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: EUSH.Y's dividend payments have been volatile in the past 10 years.

Growing Dividend: EUSH.Y's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (173.1%), EUSH.Y's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: EUSH.Y's dividends in 3 years are forecast to be covered by earnings (77% payout ratio).


Next Steps

Management

What is the CEO of Eurocash's salary, the management and board of directors tenure and is there insider trading?

4.2yrs

Average board tenure


CEO

Rui Amaral 0

0yrs

Tenure

zł1,577,316

Compensation

Mr. Rui Amaral serves as the Chief Executive Officer, General Manager and a Member of the Management Board at Eurocash SA. Mr. Amaral serves as the President of the Management Board and Member of the Manag ...


CEO Compensation Analysis

Compensation vs Market: Rui's total compensation ($USD415.82K) is below average for companies of similar size in the US market ($USD2.53M).

Compensation vs Earnings: Rui's compensation has been consistent with company performance over the past year.


Board Age and Tenure

4.2yrs

Average Tenure

67yo

Average Age

Experienced Board: EUSH.Y's board of directors are considered experienced (4.2 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Luis do Amaral

    President of the Management Board

    • Compensation: zł497.32k
  • Pedro Martinho

    Sales Director & Member of Management Board

    • Compensation: zł1.23m
  • Rui Amaral

    CEO & Member of the Mgmt Board

    • Compensation: zł1.58m
  • Katarzyna Kopaczewska

    Human Resources Director & Member of Management Board

    • Compensation: zł977.32k
  • Arnaldo Guerreiro

    Member of Management Board

    • Compensation: zł1.05m
  • Jacek Owczarek

    Financial Director & Member of the Management Board

    • Compensation: zł1.11m
  • Przemyslaw Cias

    Member of the Management Board

    • Tenure: 2.9yrs
    • Compensation: zł809.88k
  • Cezary Giza

    Investor Relations Director


    Board Members

    • Jacek Szwajcowski (55yo)

      Member of Supervisory Board

      • Tenure: 6.7yrs
      • Compensation: zł213.98k
    • Hans-Joachim Koerber (73yo)

      Chairman of Supervisory Board

      • Tenure: 0.5yrs
      • Compensation: zł213.98k
    • Alicja Kornasiewicz (67yo)

      Member of Supervisory Board

      • Tenure: 1.8yrs
      • Compensation: zł147.06k
    • Francisco José Valente dos Santos

      Member of Supervisory Board

      • Tenure: 6.7yrs
      • Compensation: zł213.98k

    Company Information

    Eurocash S.A.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Eurocash S.A.
    • Ticker: EUSH.Y
    • Exchange: OTCPK
    • Founded:
    • Industry: Food Retail
    • Sector: Consumer Retailing
    • Market Cap: zł2.853b
    • Listing Market Cap: zł738.907m
    • Shares outstanding: 139.16m
    • Website: https://www.eurocash.pl

    Number of Employees


    Location

    • Eurocash S.A.
    • ul. Wisniowa 11
    • Komorniki
    • 62-052
    • Poland

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    EURWSE (Warsaw Stock Exchange)YesOrdinary SharesPLPLNFeb 2005
    0LTMLSE (London Stock Exchange)YesOrdinary SharesGBPLNFeb 2005
    EUSH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDFeb 2005
    E07DB (Deutsche Boerse AG)YesOrdinary SharesDEEURFeb 2005
    EUSH.YOTCPK (Pink Sheets LLC)UNSPONSOR ADRUSUSDMar 2013

    Biography

    Eurocash S.A. distributes fast moving consumer goods (FMCG) in Poland. Its FMCG products include food products, soft drinks, alcoholic beverages, tobacco products, and household chemicals and cosmetics. The company markets its products to traditional retail stores, including small supermarkets, grocery stores, and specialized grocery stores; and kiosks, retail outlets, and convenience stores at petrol stations, restaurants, hotels, cafeterias, and catering outlets. As of December 31, 2018, it operated a network of 180 Cash & Carry warehouses; 1,328 Delikatesy Centrum network supermarkets; 448 Inmedio press salons; 8,708 abc network grocery stores; and 5,024 franchise and partner stores of Eurocash distribution. Eurocash S.A. is headquartered in Komorniki, Poland. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/27 00:53
    End of Day Share Price2019/12/19 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.