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Xenia Hotellerie Solution SpA (MIL:XHS) ROIC % : 6.36% (As of Jun. 2023)


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What is Xenia Hotellerie Solution SpA ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Xenia Hotellerie Solution SpA's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2023 was 6.36%.

As of today (2024-06-21), Xenia Hotellerie Solution SpA's WACC % is 4.41%. Xenia Hotellerie Solution SpA's ROIC % is 6.01% (calculated using TTM income statement data). Xenia Hotellerie Solution SpA generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.


Xenia Hotellerie Solution SpA ROIC % Historical Data

The historical data trend for Xenia Hotellerie Solution SpA's ROIC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Xenia Hotellerie Solution SpA ROIC % Chart

Xenia Hotellerie Solution SpA Annual Data
Trend Dec21 Dec22
ROIC %
0.33 4.74

Xenia Hotellerie Solution SpA Semi-Annual Data
Dec21 Jun22 Dec22 Jun23
ROIC % - 3.93 5.57 6.36

Competitive Comparison of Xenia Hotellerie Solution SpA's ROIC %

For the Lodging subindustry, Xenia Hotellerie Solution SpA's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Xenia Hotellerie Solution SpA's ROIC % Distribution in the Travel & Leisure Industry

For the Travel & Leisure industry and Consumer Cyclical sector, Xenia Hotellerie Solution SpA's ROIC % distribution charts can be found below:

* The bar in red indicates where Xenia Hotellerie Solution SpA's ROIC % falls into.



Xenia Hotellerie Solution SpA ROIC % Calculation

Xenia Hotellerie Solution SpA's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2022 is calculated as:

ROIC % (A: Dec. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2021 ) + Invested Capital (A: Dec. 2022 ))/ count )
=1.798 * ( 1 - 31.76% )/( (25.811 + 26.011)/ 2 )
=1.2269552/25.911
=4.74 %

where

Xenia Hotellerie Solution SpA's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2023 is calculated as:

ROIC % (Q: Jun. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2022 ) + Invested Capital (Q: Jun. 2023 ))/ count )
=2.414 * ( 1 - 32.46% )/( (26.011 + 25.224)/ 2 )
=1.6304156/25.6175
=6.36 %

where

Note: The Operating Income data used here is two times the semi-annual (Jun. 2023) data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Xenia Hotellerie Solution SpA  (MIL:XHS) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Xenia Hotellerie Solution SpA's WACC % is 4.41%. Xenia Hotellerie Solution SpA's ROIC % is 6.01% (calculated using TTM income statement data). Xenia Hotellerie Solution SpA generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases. Xenia Hotellerie Solution SpA earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.


Xenia Hotellerie Solution SpA ROIC % Related Terms

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Xenia Hotellerie Solution SpA (MIL:XHS) Business Description

Comparable Companies
Traded in Other Exchanges
N/A
Address
Via Falzarego 1, Baranzate, Milan, ITA, 20021
Xenia Hotellerie Solution SpA is a company involved in hotel management industry with its divisions PHI Hotels, GDS Distribution and Crew Accommodation also offering consultancy, products and services to businesses of all sizes which are hotels, airlines, railways and maritime companies, public and private companies, travel management companies all over the world.

Xenia Hotellerie Solution SpA (MIL:XHS) Headlines