Examining Société BIC SA's (EPA:BB) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess BB's latest performance announced on 30 June 2019 and compare these figures to its longer term trend and industry movements.
Did BB perform worse than its track record and industry?
BB's trailing twelve-month earnings (from 30 June 2019) of €192m has declined by -16% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of -6.7%, indicating the rate at which BB is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Société BIC has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 7.5% exceeds the FR Commercial Services industry of 3.6%, indicating Société BIC has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Société BIC’s debt level, has declined over the past 3 years from 20% to 17%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 13% to 13% over the past 5 years.
What does this mean?
Though Société BIC's past data is helpful, it is only one aspect of my investment thesis. Generally companies that endure a drawn out period of decline in earnings are going through some sort of reinvestment phase However, if the whole industry is struggling to grow over time, it may be a sign of a structural shift, which makes Société BIC and its peers a higher risk investment. You should continue to research Société BIC to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for BB’s future growth? Take a look at our free research report of analyst consensus for BB’s outlook.
- Financial Health: Are BB’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.
- 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 30 June 2019. 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 firstname.lastname@example.org. 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.