Comparative Financial Performance Analysis of ASOS Plc and NEXT Plc

Executive Summary
ASOS Plc and NEXT Plc are retail-based clothing companies operating mainly in the United
Kingdom. Both companies have retail chains worldwide and are heavily focused on online
businesses. ASOS Plc is currently in the growth phase, and NEXT Plc reached the maturity
phase of the business. Thus, the topline and bottom-line growth are substantially higher for
ASOS Plc compared to NEXT Plc, which will help ASOS Plc grow big in the coming years.
The management of ASOS Plc is more efficient in managing the working capital that, reflects
in its Cash Conversion Cycle. ASOS Plc is a low-risk taker compared to NEXT Plc as the
ASOS Plc's leverage ratio is low compared to NEXT Plc. However, ASOS Plc is taking debt
to increase its capacity and thus to grow bigger. The Free Cash Flow of NEXT Plc is much
higher than ASOS Plc, but the growth of ASOS Plc's is significantly higher. Thus, on a future
growth basis, ASOS Plc has better growth prospects. ASOS Plc is also trading at relatively
cheap multiples, implying future higher price upside potential than NEXT Plc. Thus, being an
employee, one should choose ASOS Plc for better business growth and lucrative stock option.
Background of the Companies
ASOS Plc is an online retail clothing company segmented in United Kingdom, Europe, United
States, and the rest of the world. The company is enjoying the growth face with a continuous
surge in customer base and acquisition of new brands in its portfolio. Currently, the company
sells over 90,000 products for men and women under more than 850 brands and has 26.4m,
active customers, according to the annual report of 2021. The company was founded on June
2, 2000 and is headquartered in London, the United Kingdom.
NEXT Plc is one of the largest clothing retailers in the United Kingdom, with around 500 stores
in the United Kingdom and around 200 stores in Europe, Asia and the Middle East. This
company is enjoying the maturity stage mainly with stable revenue growth by maintaining
product quality. The company was founded in 1864. until the 1990s, the company mainly
focused on the United Kingdom and Ireland. However, the company is now continuously
exploring other countries with a franchising approach.
Comparative Financial Performance of ASOS Plc and NEXT Plc
ASOS Plc is in the growth face, whereas the NEXT Plc is in the maturity face
The revenue of ASOS Plc has been growing at 22.0% CAGR in the last five years, whereas
the revenue of NEXT Plc has been growing at only 2.5% CAGR. Both the companies
maintained a consistent topline growth. The healthy growth of ASOS Plc's topline indicates
that the company is in its growth phase. However, the slow growth of NEXT Plc implies that
NEXT Plc is in its maturity face. Thus, in the coming years, the bottom line of ASOS Plc might
grow better than the NEXT Plc. Also, from the growth, we can conclude that the ASOS Plc is
a growth stock, and the NEXT Plc is a value stock.
 Revenue of ASOS Plc Revenue of NEXT Plc
5,000 40.0% 5,000 40.0%
4,626
33.1% 30.9% 30.0%
3,911
4,000 30.0% 4,500
4,266
25.7% 3,264 4,167 20.0%
4,091
3,000 2,734 19.4% 19.8% 20.0% 4,000 10.0%
2,417
1.9% 2.4% 3,534 0.0%
1,924 13.1% -0.2%
2,000 10.0% 3,500
-10.0%
-17.2%
1,000 0.0% 3,000 -20.0%
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

Revenue of ASOS Plc (£m) Growth (YoY) Revenue of NEXT Plc (£m) Growth (YoY)

However, in 2021, the revenue of ASOS Plc grew by 19.8%, while the revenue of NEXT Plc
grew by 30.9%. The revenue growth of ASOS Plc is in line with its historical average, but the
revenue growth of the NEXT Plc was very high in 2021 as the company recovered from the
pandemic. In 2020, the revenue of NEXT Plc declined 17.2% due to COVID 19 impact;
however, the company successfully recovered from the downturn in 2021.
ASOS Plc has lower profit margins than NEXT Plc, mainly for higher administrative
costs
In the last five years, the ASOS Plc generated a higher Gross Profit margin (48.5% on
average) compared to NEXT Plc's (37.6% on average); however, the Net Profit margin of
ASOS Plc was substantially lower (2.9% on average) than NEXT Plc's (13.2% on average)
mainly due to higher administrative cost of ASOS Plc. This difference in their administrative
cost is due to their business strategy difference. The administrative expenses comprised
30.1% of earnings from revenue (on average) of ASOS Plc. In contrast, this percentage is only
6.7% for NEXT Plc, indicative of the effective cost management capabilities.

Margins of ASOS Plc Margins of NEXT Plc

42.6%
38.5%
51.2%

37.3%
49.8%

48.8%

47.4%

35.3%
34.2%
45.4%

60.0% 45.0%

45.0%
20.2%

20.0%

19.6%
18.6%

30.0%

17.8%
17.8%

17.6%

17.5%

14.6%
14.5%

14.4%

14.3%

12.6%

30.0%
9.7%
8.1%

15.0%
4.9%
4.6%

4.5%
4.4%
4.2%
4.2%
4.2%
4.1%

3.5%
3.4%
3.3%

3.3%

15.0%
1.3%
1.2%
0.9%

0.0% 0.0%
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
Gross Profit Margin EBIT Margin Gross Profit Margin EBIT Margin
Profit Before Tax Margin Net Profit Margin Profit Before Tax Margin Net Profit Margin

ASOS Plc Common Size Analysis

2017 2018 2019 2020 2021 Avg.
Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales -50.2% -48.8% -51.2% -52.6% -54.6% -51.5%
Gross profit 49.8% 51.2% 48.8% 47.4% 45.4% 48.5%
Distribution expenses -15.6% -15.8% -15.2% -13.6% -13.0% -14.6%
Administrative expenses -30.1% -31.2% -32.3% -29.2% -27.5% -30.1%
Operating profit 4.1% 4.2% 1.3% 4.6% 4.9% 3.8%
Finance income 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Finance expense 0.0% 0.0% -0.1% -0.3% -0.3% -0.1%
Profit before tax 4.2% 4.2% 1.2% 4.4% 4.5% 3.7%
Income tax expense -0.8% -0.8% -0.3% -0.9% -1.2% -0.8%
Profit for the year 3.3% 3.4% 0.9% 3.5% 3.3% 2.9%
 NEXT Plc Common Size Analysis
2017 2018 2019 2020 2021 Avg.
Revenue 94.5% 94.0% 93.7% 92.9% 94.6% 94.0%
Credit Account Interest 5.5% 6.0% 6.3% 7.1% 5.4% 6.0%
Total Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Sales -65.2% -61.5% -60.6% -63.1% -56.8% -61.4%
Impairment Losses -0.6% -1.3% -1.0% -1.6% -0.6% -1.0%
Gross Profit 34.2% 37.3% 38.5% 35.3% 42.6% 37.6%
Distribution Costs -9.8% -11.0% -12.1% -15.7% -15.0% -12.7%
Administrative Expenses -5.8% -6.1% -6.3% -7.0% -8.2% -6.7%
Other gains/(losses) 0.0% 0.0% 0.0% 0.0% 0.1% 0.0%
Trading Profit 18.6% 20.2% 20.0% 12.6% 19.5% 18.2%
Share of results of Associates and JV 0.0% 0.0% 0.0% 0.0% 0.1% 0.0%
Oeprating Profit 18.6% 20.2% 20.0% 12.6% 19.6% 18.2%
Finance Income 0.0% 0.0% 0.0% 0.0% 0.1% 0.0%
Finance Costs -0.9% -2.6% -2.5% -2.9% -1.9% -2.1%
Profit before Taxation 17.8% 17.6% 17.5% 9.7% 17.8% 16.1%
Taxation -3.3% -3.2% -3.2% -1.6% -3.1% -2.9%
Profit attributable to equity holders 14.5% 14.4% 14.3% 8.1% 14.6% 13.2%

ASOS Plc's margins declined in recent years, whereas NEXT Plc's margins improved
considerably. NEXT Plc sources its product in over 40 countries worldwide, which helps
reduce costs despite the market's raw materials price volatilities. Thus, the Gross Profit margin
of NEXT Plc reached 42.6% in 2021 from 35.3% in 2020. On the other hand, the Gross Profit
margin of ASOS Plc declined to 45.4% in 2021 from 47.4% in 2020 due to product sourcing
at a higher cost. This margin deterioration also indicates that ASOS Plc has lower bargaining
power over suppliers than NEXT Plc. The other margins of these companies changed
chronologically with the gross margins in 2021.
ASOS Plc manages its working capital more efficiently than NEXT Plc
The Cash Conversion Cycle (CCC) of ASOS Plc is negative 35 days (last five years average),
whereas the CCC of NEXT Plc is 97 days (last five years average). The Receivable Turnover
ratio of ASOS Plc (63.8x time in last five years average) is significantly higher than the NEXT
Plc's (3.4x in last five years average), indicating ASOS Plc's better cash collection capabilities
from its receivable.
The Inventory Turnover of ASOS Plc (3.2x time in last five-year average) is lower than NEXT
Plc's (5.0x time in last five-year average). However, the inventory of ASOS Plc grew at 25.7%
CAGR in the last five years against 24.2% growth of COGS. On the other hand, the inventory
of NEXT Plc grew at 7.0% CAGR against 0.4% down in COGS which is the major reason
behind the higher inventory turnover of NEXT Plc than ASOS's.
 Efficiency Ratio of ASOS Plc Efficiency Ratio of NEXT Plc
75.0x 67.9x 66.3x 6.0x 5.4x
5.1x
4.4x 4.4x 4.3x 4.5x
60.0x 4.8x
47.4x 49.0x 4.0x 3.9x 3.9x
45.0x 3.6x 3.3x 3.3x
2.9x
30.0x 2.4x

15.0x 1.2x
3.2x 2.3x 3.0x 2.3x 3.2x 2.4x 3.2x 2.5x
0.0x 0.0x
2017 2018 2019 2020 2017 2018 2019 2020

Inventory Turnover Ratio Receivable Turnover Ratio Inventory Turnover Ratio Receivable Turnover Ratio
Payable Turnover Ratio Payable Turnover Ratio

Cash Conversion Cycle of ASOS Plc Cash Conversion Cycle of NEXT Plc
- 140
119
(7) 120
97 100
(14) 100
82
(21) 80

(28) 60
(28) (28)
(35) (32) 40

(42) 20
(41)
(49) -
2017 2018 2019 2020 2017 2018 2019 2020

The Payable Turnover ratio of NEXT Plc is moderately better than ASOS Plc's. If we combine
these three turnover ratios, we can find the CCC and decide that ASOS Plc's working capital
management capability is better than NEXT Plc's mainly for better cash collection ability from
receivables. That is also a reason for the lower leverage of ASOS Plc than NEXT Plc.
ASOS Plc is less financially levered than NEXT Plc's due to better cash management
Despite lower profit margins, ASOS Plc has lower leverage than NEXT Plc. The average Debt
to Equity ratio of ASOS Plc is only 0.3x, while the ratio is 4.3x for NEXT Plc. In 2021, the Debt-
to-Equity ratio of ASOS Plc was 0.8x, while the ratio is 2.1x for NEXT Plc. The Debt to Asset
and Debt to Capital ratios are 0.1x & 0.2x, for ASOS Plc, and 0.6x & 0.8x for NEXT Plc
respectively.

Leverage Ratio of ASOS Plc Leverage Ratio of NEXT Plc

0.9x 9.0x
0.8x
7.3x
0.8x 7.5x
5.7x
0.6x 6.0x
0.4x
0.5x 0.4x 4.5x 3.8x
0.3x 0.3x
0.3x 3.0x 2.4x 2.1x
0.2x 0.2x 0.2x
0.2x 0.1x 1.5x
0.5x0.7x 0.7x0.9x 0.7x0.9x 0.7x0.8x 0.5x0.7x
0.0x0.0x0.0x 0.0x0.0x0.0x
0.0x 0.0x
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

Debt to Equity Debt to Assets Debt to Capital Debt to Equity Debt to Assets Debt to Capital

ASOS Plc's liquidity need is lower than NEXT Plc's due to better receivable collection.
However, NEXT Plc is gradually minimizing its debt capital while ASOS Plc is increasing its
debt mainly to expand its business. The business of ASOS Plc is growing rapidly; thus, the
company is expanding its capacity gradually, which needs financing. The debt of ASOS Plc is
still at a considerable level. The company might use more debt to improve its profitability in
the near term.
The Profitability Ratios of NEXT Plc are enormously lucrative than ASOS Plc
If we see the last five years' average performance, ASOS Plc ROA, ROE and ROIC ratio
stands 6.4%, 17.3% and 15.3%, respectively, while these ratios are 16.9%, 108.9% and
23.0%, respectively, for NEXT Plc.
NEXT Plc improved its profitability by taking high leverage along with high margins. The
company has used low-cost debt to expand its business, generating significantly better returns
than the cost of debt. Moreover, NEXT Plc manages its operating expenses more efficiently
than ASOS Plc.
DuPont Analysis
𝐍𝐞𝐭 𝐈𝐧𝐜𝐨𝐦𝐞 𝐏𝐫𝐞𝐭𝐚𝐱 𝐈𝐧𝐜𝐨𝐦𝐞 𝐄𝐁𝐈𝐓 𝐑𝐞𝐯𝐞𝐧𝐮𝐞 𝐀𝐯𝐠. 𝐓𝐨𝐭𝐚𝐥 𝐀𝐬𝐬𝐞𝐭𝐬
ROE = × × × ×
𝐏𝐫𝐞𝐭𝐚𝐱 𝐈𝐧𝐜𝐨𝐦𝐞 𝐄𝐁𝐈𝐓 𝐑𝐞𝐯𝐞𝐧𝐮𝐞 𝐀𝐯𝐠. 𝐓𝐨𝐭𝐚𝐥 𝐀𝐬𝐬𝐞𝐭𝐬 𝐀𝐯𝐠. 𝐓𝐨𝐭𝐚𝐥 𝐄𝐪𝐮𝐢𝐭𝐲

ROE of ASOS Plc in 2021 = 72.5% × 93.2% × 4.9% × 160.5% × 264.3%

= 13.9%
ROE of NEXT Plc in 2021 = 82.3% × 90.9% × 19.6% × 119.5% × 463.2%
= 81.1%
From the above analysis, we can see, that the significant deviation of ROE of these two
companies mainly comes from the Equity Multiplier (264.3% vs. 463.2%) and EBIT margin
(4.9% vs. 19.6%). This analysis clarifies that NEXT Plc generated higher ROE using higher
debt capital and efficient operating cost management than ASOS Plc.
Free Cash Flow of ASOS Plc is growing at
The Free Cash Flow of the Firm (FCFF) and Free Cash Flow to Equity (FCFE) of a company
indicate the capacity to pay a dividend, pay debt and future growth prospects of the company.
The FCFF and FCFE of ASOS Plc are growing rapidly, whereas this growth is meagre for
NEXT Plc, which we can see in the chart below.

FCFF of ASOS Plc FCFF of NEXT Plc

700 625 140% 2,500 2,220 50%
2,080
600 119.1%120% 1,850 1,904 38.3% 40%
2,000
500 100% 1,605 30%
1,500 20%
400 80%
285 9.3% 10%
300 60% 1,000 2.9%
54.2% 192 0%
48.8%
200 140 36.6% 40% -10%
91 500
100 20% -20%
-22.9%
- 0% - -30%
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

FCFF Growth (YoY) FCFF Growth (YoY)

FCFE of ASOS Plc FCFE of NEXT Plc

1,200 1,095 140% 5,000 4,436 60%
4,327
47.8% 50%
1,000 118.8%120% 3,823
4,000 40%
3,390
100.2% 100%
800 2,928 30%
80% 3,000
78.2% 20%
600 500 12.8% 10%
60% 2,000
54.0% 2.5%
400 281 0%
40%
140 1,000 -10%
200 91 20% -20%
-23.6%
- 0% - -30%
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

FCFE Growth (YoY) FCFE Growth (YoY)

However, on a per share basis, ASOS Plc generates EUR 5.9 as FCFF and EUR 10.3 as
FCFE. In contrast, the NEXT Plc generated EUR 16.6 as FCFF and EUR 28.6 as FCFE in
2021. This differences indicates that the financial health of NEXT Plc is better than ASOS Plc.
But for the future sustainability of the business, higher growth of ASOS Plc implies a better
prospect than NEXT Plc's.
On a valuation ratio basis, the price of ASOS Plc has better upside potential than NEXT
Plc's
As of March 2022, the ASOS Plc is trading at 13.3x P/E and 1.7x P/B multiples, while in its
last five years, Median P/E and P/B were 51.6x and 7.3x, respectively. Thus, ASOS Plc is
trading at a cheap multiple compared to its historical trend.

P/E of ASOS Plc P/E of NEXT Plc

140.0x 40.0x 35.5x
115.3x
120.0x 35.0x

100.0x 30.0x
25.0x
80.0x
51.6x 51.9x 20.0x
60.0x 41.2x 11.9x
15.0x 11.7x
9.8x 8.6x
40.0x 10.0x
13.3x
20.0x 5.0x
0.0x 0.0x
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

P/E 5 Year Median P/E P/E 5 Year Median P/E

P/B of ASOS Plc P/B of NEXT Plc

30.0x 25.0x
25.7x
25.0x 19.2x
20.0x
15.4x
20.0x
15.0x 12.0x 11.9x
15.0x
10.0x 8.0x
10.0x 7.7x 7.3x

5.0x 2.8x 5.0x

1.7x
0.0x 0.0x
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

P/B 5 Year Median P/B P/B 5 Year Median P/B

On the other hand, NEXT Plc is trading at 11.9x P/E and 8.0x P/B multiples, while its last five
years, Median P/E and P/B were 11.7x and 12.0x, respectively. Thus, NEXT Plc is trading
near its historical median multiples, indicating less upside potential than ASOS Plc.
Recommendation
ASOS Plc is a growing company with consistently high growth in both topline and bottom-line.
In contrast, NEXT Plc is a mature company with meager growth in both topline and bottom-
line. Being in the growth face, the profitability ratio of ASOS Plc is lower than NEXT Plc.
However, the company is improving its profitability with higher topline growth. On a risk-
adjusted basis, ASOS Plc's leverage position is better than NEXT Plc's. The growth of the
Free Cash Flow of ASOS Plc is much better than NEXT Plc, indicating better future
sustainability of ASOS Plc. From a relative valuation perspective, ASOS Plc is trading at cheap
multiples than its historical median. In contrast, NEXT Plc is trading close to its historical
multiples indicating a higher upside potential of the price of ASOS Plc in the coming years
than NEXT Plc. Thus, the employee should choose ASOS Plc for growth prospects.
Appendix

ASOS PLC
5-Yr
Financials (£m) 2017 2018 2019 2020 2021
CAGR
Income Statement 2017 2018 2019 2020 2021
Revenue 1,924 2,417 2,734 3,264 3,911 22.0%
Cost of sales (965) (1,180) (1,399) (1,716) (2,134) 24.2%
Gross profit 958 1,237 1,334 1,547 1,776 19.7%
Operating Expense (879) (1,135) (1,299) (1,396) (1,586) 18.5%
Operating profit (EBIT) 80 102 35 151 190 35.2%
Finance expense - (0) (2) (10) (13) NA
Profit before tax 80 102 33 142 177 32.8%
Income tax expense (16) (20) (9) (29) (49) 43.2%
Profit for the year 64 82 25 113 128 29.9%
EPS (Restated Basis) in £p 60.4 77.6 23.2 106.7 120.9 29.9%
Balance Sheet 2017 2018 2019 2020 2021
Property, plant and equipment 137 242 296 617 659 53.6%
Total Non-current assets 326 503 622 970 1,325 45.4%
Inventories 323 408 537 532 807 25.7%
Trade and other receivables 29 43 73 60 58 30.9%
Cash and cash equivalents 160 43 - 408 663 30.8%
Total current assets 515 504 623 1,020 1,560 28.5%
Total Assets 840 1,007 1,246 1,989 2,885 34.7%
Trade and other payables 481 550 669 770 956 20.9%
Total Debt - - 91 313 792 NA
Total Liabilities 553 568 792 1,179 1,851 32.7%
Total equity 287 439 454 810 1,034 38.8%
Total Invested Capital 287 439 544 1,123 1,826 55.6%
NAV Per Share (Restated Basis) in £p 270 413 427 763 974 38.8%
Growth (YoY) 2017 2018 2019 2020 2021
Revenue 33.1% 25.7% 13.1% 19.4% 19.8%
Cost of sales 33.6% 22.3% 18.6% 22.6% 24.4%
Gross profit 32.7% 29.1% 7.9% 16.0% 14.8%
Operating Expense 29.2% 29.2% 14.4% 7.5% 13.6%
Operating profit (EBIT) 89.1% 28.0% -65.6% 330.5% 25.8%
Finance expense NA NA 900.0% 375.0% 38.9%
Profit before tax 86.9% 27.5% -67.5% 329.3% 24.6%
Income tax expense 96.3% 23.3% -56.6% 238.8% 69.1%
Profit for the year 84.7% 28.5% -70.1% 360.6% 13.3%
5-Yr
Margin Ratio 2017 2018 2019 2020 2021
Avg.
Gross Profit Margin 49.8% 51.2% 48.8% 47.4% 45.4% 48.5%
EBIT Margin 4.1% 4.2% 1.3% 4.6% 4.9% 3.8%
Profit Before Tax Margin 4.2% 4.2% 1.2% 4.4% 4.5% 3.7%
Net Profit Margin 3.3% 3.4% 0.9% 3.5% 3.3% 2.9%
 5-Yr
Liquidity Ratio 2017 2018 2019 2020 2021
Avg.
Current Ratio 0.9x 0.9x 0.8x 1.2x 1.6x 1.1x
Quick Ratio 0.4x 0.2x 0.1x 0.6x 0.8x 0.4x
Cash Ratio 0.3x 0.1x 0.0x 0.5x 0.7x 0.3x
5-Yr
Profitability Ratio 2017 2018 2019 2020 2021
Avg.
Return on Assets (ROA) 8.6% 8.9% 2.2% 7.0% 5.3% 6.4%
Return on Equity (ROE) 26.3% 22.7% 5.5% 17.9% 13.9% 17.3%
Return on Invested Capital (ROIC) 26.3% 22.7% 5.0% 13.6% 8.7% 15.3%
5-Yr
Efficiency Ratio 2017 2018 2019 2020 2021
Avg.
Asset Turnover Ratio 2.6x 2.6x 2.4x 2.0x 1.6x 2.2x
Inventory Turnover Ratio 3.3x 3.2x 3.0x 3.2x 3.2x 3.2x
Receivable Turnover Ratio 88.2x 67.9x 47.4x 49.0x 66.3x 63.8x
Payable Turnover Ratio 2.3x 2.3x 2.3x 2.4x 2.5x 2.3x
Days Sales in Inventory 110 113 123 114 115 115
Days Sales Outstanding 4 5 8 7 6 6
Days Payable Outstanding 161 159 159 153 148 156
Cash Conversion Cycle (47) (41) (28) (32) (28) (35)
5-Yr
Leverage Ratio 2017 2018 2019 2020 2021
Avg.
Debt to Equity 0.0x 0.0x 0.2x 0.4x 0.8x 0.3x
Debt to Assets 0.0x 0.0x 0.1x 0.2x 0.3x 0.1x
Debt to Capital 0.0x 0.0x 0.2x 0.3x 0.4x 0.2x
Financial Leverage Ratio (Equity Multiplier) 2.9x 2.3x 2.7x 2.5x 2.8x 2.6x
Interest Coverage Ratio NA 509.5 17.6 15.9 14.4 139.3
5-Yr
Others Ratio 2017 2018 2019 2020 2021
Avg.
Effective Tax Rate 19.9% 19.2% 25.7% 20.3% 27.5% 22.5%
P/E 115.3x 41.2x 51.6x 51.9x 13.3x 51.6x
P/B 25.7x 7.7x 2.8x 7.3x 1.7x 7.3x
5-Yr
DuPont Analysis 2017 2018 2019 2020 2021
Avg.
Net Income/Pretax Income 80.1% 80.8% 74.3% 79.7% 72.5% 77.5%
Pretax Income/EBIT 100.5% 100.1% 94.3% 94.0% 93.2% 96.4%
EBIT/Revenue 4.1% 4.2% 1.3% 4.6% 4.9% 3.8%
Revenue/Average Total Assets 258.1% 261.7% 242.7% 201.8% 160.5% 225.0%
Avg. Total Asset/Avg. Total Equity 305.7% 254.5% 252.4% 255.9% 264.3% 266.6%
ROE 26.3% 22.7% 5.5% 17.9% 13.9% 17.3%
Free Cash Flow 2017 2018 2019 2020 2021
FCFF 91 140 192 285 625 61.9%
Growth (YoY) 54.2% 36.6% 48.8% 119.1% 64.7%
FCFE 91 140 281 500 1,095 86.2%
Growth (YoY) 54.0% 100.2% 78.2% 118.8% 87.8%
 NEXT PLC
5-Yr
Financials (£m) 2017 2018 2019 2020 2021
CAGR
Income Statement 2017 2018 2019 2020 2021
Total Revenue 4,091 4,167 4,266 3,534 4,626 2.5%
Total Cost of sales (2,693) (2,615) (2,626) (2,287) (2,654) -0.4%
Gross profit 1,398 1,553 1,641 1,248 1,972 7.3%
Operating Expense (638) (713) (785) (803) (1,074) 13.9%
Operating profit (EBIT) 760 841 854 445 905 1.8%
Finance expense (35) (108) (106) (103) (87) NA
Profit before tax 726 734 749 342 823 0.8%
Income tax expense (134) (135) (138) (56) (146) -1.2%
Profit for the year 592 599 610 287 677 1.3%
EPS (Restated Basis) in £p 442.0 447.4 455.7 214.1 506.0 1.3%
Balance Sheet 2017 2018 2019 2020 2021
Property, plant and equipment 559 565 579 475 601 0.8%
Total Non-current assets 764 1,765 1,718 1,469 1,575 16.2%
Inventories 467 503 528 537 633 7.0%
Trade and other receivables 1,248 1,285 1,315 1,108 1,281 2.6%
Cash and cash equivalents 54 156 87 608 433 54.2%
Total current assets 1,798 1,978 1,955 2,289 2,407 7.7%
Total Assets 2,562 3,743 3,673 3,758 3,982 10.6%
Trade and other payables 580 596 592 555 798 5.3%
Total Debt 1,160 2,667 2,529 2,480 2,107 NA
Total Liabilities -100.0%
Total equity 483 366 442 661 1,010 14.6%
Total Invested Capital 1,643 3,034 2,970 3,140 3,117 16.1%
NAV Per Share (Restated Basis) in £p 360 273 330 494 754 14.6%
Growth (YoY) 2017 2018 2019 2020 2021
Revenue -0.2% 1.9% 2.4% -17.2% 30.9%
Cost of sales -0.7% -2.9% 0.4% -12.9% 16.1%
Gross profit 0.8% 11.1% 5.7% -23.9% 58.0%
Operating Expense 13.9% 11.8% 10.1% 2.3% 33.8%
Operating profit (EBIT) -8.2% 10.7% 1.5% -47.9% 103.7%
Finance expense -7.1% 207.4% -2.1% -2.7% -15.8%
Profit before tax -8.1% 1.0% 2.0% -54.3% 140.4%
Income tax expense -13.3% 0.1% 2.8% -59.7% 161.4%
Profit for the year -6.8% 1.2% 1.9% -53.0% 136.3%
5-Yr
Margin Ratio 2017 2018 2019 2020 2021
Avg.
Gross Profit Margin 34.2% 37.3% 38.5% 35.3% 42.6% 37.6%
EBIT Margin 18.6% 20.2% 20.0% 12.6% 19.6% 18.2%
Profit Before Tax Margin 17.8% 17.6% 17.5% 9.7% 17.8% 16.1%
Net Profit Margin 14.5% 14.4% 14.3% 8.1% 14.6% 13.2%
5-Yr
Liquidity Ratio 2017 2018 2019 2020 2021
Avg.
Current Ratio 2.0x 1.6x 2.1x 1.9x 2.0x 1.9x
Quick Ratio 1.5x 1.2x 1.5x 1.5x 1.5x 1.4x
Cash Ratio 0.1x 0.1x 0.1x 0.5x 0.4x 0.2x
5-Yr
Profitability Ratio 2017 2018 2019 2020 2021
Avg.
Return on Assets (ROA) 23.8% 19.0% 16.5% 7.7% 17.5% 16.9%
Return on Equity (ROE) 119.2% 141.2% 151.1% 52.0% 81.1% 108.9%
Return on Invested Capital (ROIC) 37.9% 25.6% 20.3% 9.4% 21.7% 23.0%
 5-Yr
Efficiency Ratio 2017 2018 2019 2020 2021
Avg.
Asset Turnover Ratio 1.6x 1.3x 1.2x 1.0x 1.2x 1.3x
Inventory Turnover Ratio 5.9x 5.4x 5.1x 4.3x 4.5x 5.0x
Receivable Turnover Ratio 3.4x 3.3x 3.3x 2.9x 3.9x 3.4x
Payable Turnover Ratio 4.5x 4.4x 4.4x 4.0x 3.9x 4.3x
Days Sales in Inventory 62 68 72 85 80 73
Days Sales Outstanding 106 111 111 125 94 110
Days Payable Outstanding 81 82 83 92 93 86
Cash Conversion Cycle 87 97 100 119 82 97
5-Yr
Leverage Ratio 2017 2018 2019 2020 2021
Avg.
Debt to Equity 2.4x 7.3x 5.7x 3.8x 2.1x 4.3x
Debt to Assets 0.5x 0.7x 0.7x 0.7x 0.5x 0.6x
Debt to Capital 0.7x 0.9x 0.9x 0.8x 0.7x 0.8x
Financial Leverage Ratio (Equity Multiplier) 5.3x 10.2x 8.3x 5.7x 3.9x 6.7x
Interest Coverage Ratio 21.6 7.8 8.1 4.3 10.5 10.5
5-Yr
Others Ratio 2017 2018 2019 2020 2021
Avg.
Effective Tax Rate 18.5% 18.3% 18.5% 16.3% 17.7% 17.9%
P/E 9.8x 11.7x 8.6x 35.5x 11.9x 11.7x
P/B 12.0x 19.2x 11.9x 15.4x 8.0x 12.0x
5-Yr
DuPont Analysis 2017 2018 2019 2020 2021
Avg.
Net Income/Pretax Income 81.5% 81.7% 81.5% 83.7% 82.3% 82.1%
Pretax Income/EBIT 95.6% 87.2% 87.7% 77.0% 90.9% 87.7%
EBIT/Revenue 18.6% 20.2% 20.0% 12.6% 19.6% 18.2%
Revenue/Average Total Assets 164.7% 132.2% 115.1% 95.1% 119.5% 125.3%
Avg. Total Asset/Avg. Total Equity 500.1% 742.7% 918.2% 674.1% 463.2% 659.7%
ROE 119.2% 141.2% 151.1% 52.0% 81.1% 108.9%
Free Cash Flow 2017 2018 2019 2020 2021
Free Cash Flow of the Firm 1,850 1,904 2,080 1,605 2,220 4.7%
Growth (YoY) 2.9% 9.3% -22.9% 38.3% 6.9%
Free Cash Flow to Equity 2,928 4,327 4,436 3,390 3,823 6.9%
Growth (YoY) 47.8% 2.5% -23.6% 12.8% 9.9%