Auteur(s) : Gross, Alizée, Beni-Touzine, Souhail, Grass, Noémie, Wintz, Thomas
Composante : EMS
Date de création : 30-06-2018

Description : Finance Comptabilité, Netflix is the world-leading entertainment service with 109 million members in over 190 countries. It offers different services: online and offline streaming, original contents, and DVD rental services. Netflix competes with other challengers on this market. Its principal competitors are Amazon Prime video, HBO and Hulu. Apple also plans to develop the same type of services in 2018. Despite the competition, Netflix remains leader. Reed Hastings, the company founder and CEO for 20 years, is currently still the biggest shareholder and in charge of Netflix’s strategic orientation. Netflix presents various strengths such as its affordable price, its partnerships with the biggest American studio and its original content production capacities on a growing market. In 2017, the company made the acquisition of Millarworld, a superhero fiction production, shedding light on Netflix’s innovation ambition. Nevertheless, existing legislation protecting movies can be restraining for the company, such as "l’exception culturelle" in France. Since contenders become more competitive, Netflix has to find new strategies in order to gain and keep its members. The international revenues increased while domestic DVD revenue decreased. However, it is part of Netflix’s strategy to focus on the international streaming market while the DVD market kept declining over the period. For 3 years now, domestic and international contribution margins have constantly grown. About the ongoing objectives, Netflix plans to reduce subscriber turnout, while investing huge amounts in infrastructure, R-D and technology, especially on original contents. Concerning financial results, Netflix’s total revenue went from USD 5.5 billion in 2014 to USD 8.8 billion in 2016, highlighting how well the company develops. Netflix’s operating margins decreased over the period, from 7.3% in 2014 to 4.3% in 2016. The drop can be mainly explained by the rise of R-D expenses without fully sales compensation. For the same reason, the net profit margin decreased from 4.8% in 2014 to 2.1% in 2016 and so did the Asset Turnover ratio. The working capital is completely under control since Netflix's main advantage is that subscribers pay without any delay. Furthermore, the capital employed became 4 times bigger over the period, and it affected the RoCE decreasing from 25.8% to 6.3%. Over the period, Netflix stock increased by almost 140%, from USD 51.8 in 2014 to USD 123.8 in 2016, showing how well the company performed on the Nasdaq stock index. These results also highlighted investors' and shareholders’ positions and expectations on the company for the future. An all-time record has been reached in 2015 with a PBR of 397, meaning that investors are confident about the future since the market capitalization represented almost 400 times the book value. Its confidence is also found over the PER results. In 2015, it exceeded 300 meaning that investors expected huge financial results in the next years. Over the period, the Beta factor of the company was estimated at 1.28 implying that Netflix amplified the market changes. Moreover, the WACC decreased from 15.3% to 6.54%. It is due to important change over Netflix debt. The company surged its debt weight over the period. Debt was non-existent in 2014 thanks to an important excess of cash while it represented 32% of the capital employed in 2016. Netflix future looks bright for investors. In the last couple of month, the company decided to increase its monthly subscription price by USD 2. It looks insignificant for the client. However, a USD 2 rise can turn into a 15% turnover upsurge for the company. With more than a hundred million subscribers over the world, Netflix still plans to attract new customers in the next years thanks to crucial original content investments.
Mots-clés libres : Netflix, Netflix, financial analysis, analyse financière, case study, étude de cas, 650 Gestion et organisation de l'entreprise
Couverture : FR