AFC Ajax NV :AJAX-NL: Earnings Analysis: For the six months ended June 30, 2017 : October 6, 2017

AFC Ajax NV reports financial results for the half-year ended June 30, 2017.


  • Summary numbers: Revenues of EUR 63.43 million, Net Earnings of EUR 20.31 million.
  • Gross margins widened from 14.03% to 25.87% compared to the same period last year, operating (EBITDA) margins now 11.79% from -0.53%.
  • Change in operating cash flow of 213525% compared to same period last year is about the same as change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2017-06-30 2016-12-31 2016-06-30 2015-12-31 2015-06-30
Relevant Numbers (Semi-Annual)
Revenues 63.43 54.8 41.24 52.19 40.51
Revenue Growth (YOY) 53.81 5 1.79 -19.59 6.74
Earnings 20.31 29.16 -2.49 1.76 -6.24
Earnings Growth (YOY) 915.13 1555.65 60.11 -93.77 14.61
Net Margin 32.01 53.21 -6.04 3.37 -15.41
EPS 1.11 1.59 N/A N/A N/A
Return on Equity 13.65 23.55 -2.26 1.59 -5.51
Return on Assets 18.21 31.48 -2.97 2.05 -7.23

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Market Share Versus Profits

Revenues History
Earnings History

Compared to the same period last year, AJAX-NL’s change in revenue was close to the amount of its change in earnings. It remains to be seen how the rest of its peer group’s results will turn out and if AJAX-NL’s performance is a sign of any major shift in the composition of market share in this sector. Also, for comparison purposes, revenues changed by 15.74% and earnings by -30.36% compared to the previous period.

Earnings Growth Analysis

The company’s earnings growth was influenced by year-on-year improvement in gross margins from 14.03% to 25.87% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from -0.53% to 11.79% compared to the same period last year. For comparison, gross margins were 23.43% and EBITDA margins were 7.44% in the last reporting period.

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

AJAX-NL’s improvement in gross margin has been accompanied by an improvement in its balance sheet as well. This suggests that gross margin improvements are likely from operating decisions and not accounting gimmicks. Its working capital days are now 413.10 days compared to 419.00 days for the same period last year.

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

AJAX-NL’s year-on-year change in operating cash flow of 213525% is around its change in earnings. This suggests that there are likely no significant movement in accruals or reserves for managing earnings this period.


The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from -21.81% to -5.76% and (2) one-time items. The company’s pretax margins are now 43.93% compared to -7.79% for the same period last year.

EBIT Margin History
PreTax Margin History

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Company Profile

AFC Ajax NV engages in the management and operation of a football team. It also sells telecast rights, tickets, caps, apparel, and sports equipment. The company operates in the following segments: Football, Retail, Merchandising, and Other. The company was founded on May 1, 1998 and is headquartered in Amsterdam, the Netherlands.

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