Liabilities to assets ratio of the largest Russian perfume and cosmetics manufacturers

ranking 31/10/2016

Information Agency Credinform has prepared the ranking of the largest Russian perfume and cosmetics manufacturers by liabilities to assets ratio.

Previously, we have already referred to this category of producers in the ranking «Accounts payable turnover of manufacturers of perfumery products».

The largest enterprises (TOP-10) in terms of revenue were selected according to the data from the Statistical Register for the latest available period (for the year 2015). Then, the companies were ranged by liabilities to assets ratio (Table 1).

Liabilities to assets ratio (х) is calculated as a ratio of long-term and short-term borrowed funds to total assets and specifies the share of company’s assets, which is funded with borrowings.

The recommended value is from 0,2 to 0,5. The ratio higher than normative value testifies the excessive debt load, which may stimulate development as well as negatively influence on the sustainability of corporate finance. The ratio value lower than normative may indicate about conservative strategy of financial management and excessive caution in attracting new borrowed funds.

For the most full and fair opinion about the company’s financial position, the whole set of financial indicators and other ratios should be taken into account.

Table 1. Net profit, revenue, liabilities to assets ratio and solvency index Globas-i of the largest perfume and cosmetics manufacturers (TOP-10)
Name, INN, Region2015 net profit, mln RUB2015 revenue, mln RUB2015/2014revenue, %Liabilities to assets ratio, (х)Solvency index Globas-i
JSC NEVSKAYA COSMETICA
INN 7811038047 Saint-Petersburg
3 007,0 12 737,6 122 0,09 162
The highest
LLC UNICOSMETIC
INN 7826704356 Saint-Petersburg
809,5 4 970,7 128 0,17 172
The highest
JSC FABERLIC
INN 5001026970 Moscow
3 097,5 12 782,4 161 0,37 151
The highest
SOCIETE PAR ACTIONS FERMEE L`OREAL
INN 7726059896 Moscow
2 001,8 42 395,4 116 0,54 203
High
JSC ARNEST
INN 2631006752 Stavropol region
567,7 6 913,5 141 0,57 202
High
ORIFLAME PRODUCTS, LLC
INN 5024055294 Moscow region
-356,5 2 636,8 118 0,62 320
Satisfactory
JSC PARFYUMERNO-KOSMETICHESKAYA KOMPANIYA VESNA
INN 6311064600 Samara region
101,7 3 378,9 129 0,63 204
High
LLC PERVOE RESHENIE
INN 7701298966 Moscow
160,9 6 409,3 126 0,69 229
High
PAO KOSMETICHESKOE OB’EDINEBNIE SVOBODA
INN 7714078157 Moscow
8,6 1 968,4 127 0,71 236
High
NAO MEZOPLAST
INN 7721025967 Moscow
12,8 3 379,6 112 0,85 205
High

In 2015 the average liabilities to assets ratio of the TOP-10 companies amounted to 0,52. The same ratio of the TOP-100 companies amounted to 0,68 with average industry value 0,52.

There is only one enterprise in the TOP-10 list with the recommended value - JSC FABERLIC. There are 11 enterprises with the recommended ratio value in the TOP-100 list, 74 enterprises have the ratio above the recommended value and 15 companies have the ratio below the recommended value.

9 companies out of TOP-10 list have the highest and high solvency index Globas-i, that shows the ability of enterprises to meet their obligations in time and fully.

ORIFLAME PRODUCTS, LLC has satisfactory solvency index Globas-i due to information about participation as a defendant in arbitration court cases on debt collection, outstanding enforcement orders and losses in the balance.

Picture 1. Liabilities to assets ratio and revenue of the largest perfume and cosmetics manufacturers (TOP-10)
Liabilities to assets ratio and revenue of the largest perfume and cosmetics manufacturers (TOP-10)

According to 2015 results, the annual revenue of TOP-10 enterprises amounted to 97,5 bln RUB, that is 25% higher than total revenue in 2014. In addition to this, the total net profit of this group of companies increased by 53%. The only company from the group, which showed the decrease in net profit and loss - is ORIFLAME PRODUCTS, LLC. Total revenue of TOP-100 group of companies for the same period increased by 26%, while total net profit increased by 58%.

In general the industry of manufacture of perfume and cosmetics is relatively stable against the background of economy indicators as a whole. This testifies the data from the Federal State Statistics Service (Picture 2).

Picture 2. Manufacture of perfume and cosmetics (mln RUB)
Manufacture of perfume and cosmetics (mln RUB)

In addition to above, the dependence of production growth rate from the overall economic situation is observed (Picture 3).

Picture 3. The growth rate (drawdown) of perfume and cosmetics manufacture from year to year * (%)
Темпы роста (снижения) производства парфюмерных и косметических средств от года к году * (%)

*) – data for 6 months 2016 is given to the corresponding 2015 period

Manufacture of perfume and cosmetics significantly concentrates in the largest industrial centers of the country - Moscow, Moscow region and Saint-Petersburg. This fact is confirmed by the data from the Information and analytical system Globas-i on distribution across the country of 100 largest manufacturers of perfume and cosmetics in terms of 2015 revenue (TOP 7 of Regions):

RegionThe number of registered companies
Moscow 37
Moscow region 25
Saint-Petersburg 9
Altai region 4
Krasnodar region 3
Novgorod region 3
Stavropol region 3

Thus, 71% of the largest perfume and cosmetics manufacturers are concentrated in Moscow, Moscow region and Saint-Petersburg.