SIMGrupo Simec, S.A.B. de C.V.
Is the business good?
The checks split: mostly cash-backed earnings (0.9×) and margins steady.
Operating profit is mostly backed by cash. Conversion is improving vs a year ago.
Margins have held roughly steady, a stable cost structure.
Margin-driven, fat margins on slower asset turns. ROE 18% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is SIM?
Grupo Simec, S.A.B. de C.V. earns 20% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 11 points above what the capital costs: growth creates value
- Operating margin
- 23%
Operating margin · Steel median 5.3% · fiscal year to FY2024
- Cash conversion
- 0.87×
Cash conversion · 0.60× a year ago · most of the operating profit arrived as cash, working capital took the rest
- Share count, year on year
- −0.08%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2019 | 9.3% |
| FY2020 | 16% |
| FY2021 | 28% |
| FY2022 | 27% |
| FY2023 | 24% |
| FY2024 | 23% |
Details›
- Gross marginfiscal year to FY2024
- 23%
- Operating marginfiscal year to FY2024
- 23%
- Net marginfiscal year to FY2024
- 31%
- Free cash flow margin
- 10%
- Revenue, trailing twelve months
- $33.7B
- Free cash flow, trailing twelve months
- $3.42B
- Net income, trailing twelve months
- $10.5B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 20%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Steel
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