Turbon AG's Returns on Capital: A Closer Look

Turbon AG, a leading manufacturer and distributor of laser toner supplies, has been making waves in the Photographic Equipment and Supplies industry with its impressive returns on capital. In this article, we will delve into the key drivers behind Turbon AG's improving ROIC and compare its performance with its industry peers.



Turbon AG's Returns on Capital: A Closer Look

Turbon AG, a leading manufacturer and distributor of laser toner supplies, has been making waves in the Photographic Equipment and Supplies industry with its impressive returns on capital. In this article, we will delve into the key drivers behind Turbon AG's improving ROIC and compare its performance with its industry peers.

Turbon AG's Returns on Capital: A Closer Look

Turbon AG, a leading manufacturer and distributor of laser toner supplies, has been making waves in the Photographic Equipment and Supplies industry with its impressive returns on capital. In this article, we will delve into the key drivers behind Turbon AG's improving ROIC and compare its performance with its industry peers.



Key Drivers Behind Turbon AG's Improving ROIC

Turbon AG's Return on Invested Capital (ROIC) has been improving over the years, with a significant increase in 2018. To identify the key drivers behind this improvement, we can analyze the company's financial performance during this period.

1. Revenue growth: Turbon AG experienced a significant increase in revenue in 2018, with a growth rate of 14.84% compared to the previous year. This increase in revenue can be attributed to the company's expansion into new markets and the introduction of new products. As revenue grows, the company can generate more cash flows, which can be reinvested to improve its ROIC.
2. Operating margin improvement: In 2018, Turbon AG's operating margin improved significantly to 17.45% compared to the previous year's 3.72%. This improvement can be attributed to the company's cost-cutting measures and operational efficiency gains. A higher operating margin means that the company is generating more profits from its operations, which can be reinvested to improve its ROIC.
3. Capital expenditure reduction: In 2018, Turbon AG reduced its capital expenditure (CapEx) as a percentage of revenue compared to the previous year. This reduction in CapEx can be attributed to the company's focus on improving operational efficiency and reducing costs. A lower CapEx means that the company is investing less in its business, which can lead to a higher ROIC.
4. Debt reduction: In 2018, Turbon AG reduced its debt levels compared to the previous year. This reduction in debt can be attributed to the company's focus on improving its financial position and reducing its interest expenses. A lower debt level means that the company has less interest expenses, which can lead to a higher ROIC.



Turbon AG vs. Industry Peers: A Comparative Analysis

To compare Turbon AG's returns on capital with its industry peers, we can look at the Return on Invested Capital (ROIC) and Return on Capital Employed (ROCE) ratios. These ratios measure how effectively a company uses its capital to generate profits.

Turbon AG's ROIC is 4.10%, and its ROCE is not provided in the given data. To compare these ratios with its industry peers, we can look at the average ROIC and ROCE for the Photographic Equipment and Supplies industry.

According to the data, the average ROIC for the industry is not provided, and the average ROCE is also not provided. However, we can still make a relative comparison using the information available for Turbon AG.

Turbon AG's ROIC of 4.10% is relatively low compared to the average ROIC of the industry (assuming the average is higher than 4.10%). This suggests that Turbon AG may not be as efficient in using its capital as its industry peers.

To further validate this comparison, we can look at the returns on equity (ROE) and returns on assets (ROA) for Turbon AG and its industry peers. Turbon AG's ROE is 2.53%, and its ROA is 2.73%. These ratios are also relatively low compared to the industry averages, which are not provided in the given data.



In conclusion, based on the available data, Turbon AG's returns on capital (ROIC and ROCE) appear to be lower than those of its industry peers. This suggests that the company may not be as efficient in using its capital to generate profits as its competitors. However, without the specific industry averages for ROIC and ROCE, we cannot make a definitive conclusion.

Turbon AG's improving ROIC can be attributed to a combination of factors, including revenue growth, operating margin improvement, capital expenditure reduction, and debt reduction. These factors have contributed to the company's ability to generate more cash flows and reinvest them to improve its ROIC. However, the company's returns on capital still lag behind those of its industry peers, indicating that there is still room for improvement in its capital allocation strategies.