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Robertet SA (EPA:RBT): Has Recent Earnings Growth Beaten Long-Term Trend?

Simply Wall St

Understanding how Robertet SA (EPA:RBT) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how Robertet is doing by comparing its latest earnings with its long-term trend as well as the performance of its chemicals industry peers.

View our latest analysis for Robertet

Were RBT's earnings stronger than its past performances and the industry?

RBT's trailing twelve-month earnings (from 31 December 2018) of €52m has increased by 6.6% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 15%, indicating the rate at which RBT is growing has slowed down. Why could this be happening? Well, let's examine what's going on with margins and whether the whole industry is facing the same headwind.

ENXTPA:RBT Income Statement, August 21st 2019

In terms of returns from investment, Robertet has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 8.5% exceeds the FR Chemicals industry of 4.6%, indicating Robertet has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Robertet’s debt level, has increased over the past 3 years from 14% to 14%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 38% to 27% over the past 5 years.

What does this mean?

Robertet's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Robertet to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for RBT’s future growth? Take a look at our free research report of analyst consensus for RBT’s outlook.
  2. Financial Health: Are RBT’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.