Constellation Software Inc/Canada Net Income surged on 71.9% in 2015 and Revenue surged on 10.1%
17.02.2016 • About Constellation Software Inc/Canada (
$CSU) • By InTwits
Constellation Software Inc/Canada reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Constellation Software Inc/Canada is a fast growth stock: 2015 revenue growth was 10.1%, 5 year revenue CAGR was 23.7% at 2015 ROIC 38.5%
- Constellation Software Inc/Canada has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has highly profitable business model: ROIC is at 38.5%
- It operates with high leverage: Net Debt/EBITDA is 0.4x while industry average is -1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Constellation Software Inc/Canada ($CSU) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 773 | 891 | 1,211 | 1,669 | 1,838 | 10.1% |
| Gross Profit | 661 | 768 | 1,035 | 1,438 | 1,584 | 10.2% |
| EBITDA | 168 | 186 | 244 | 365 | 463 | 26.9% |
| Net Income | 157 | 93 | 93 | 103 | 177 | 71.9% |
Balance Sheet
|
|---|
| Cash | 33 | 41 | 78 | 71 | 178 | 152.5% |
| Short Term Debt | 0 | 44 | 477 | 66 | 9 | -86.8% |
| Long Term Debt | 0 | 0 | 0 | 228 | 346 | 51.8% |
Cash flow
|
|---|
| Capex | 7 | 6 | 11 | 14 | 13 | -7.0% |
Ratios
|
|---|
| Revenue growth | 22.0% | 15.2% | 35.9% | 37.9% | 10.1% | |
| EBITDA growth | 44.5% | 10.6% | 31.1% | 49.5% | 26.9% | |
| Gross Margin | 85.5% | 86.2% | 85.5% | 86.1% | 86.2% | 0.1% |
| EBITDA Margin | 21.7% | 20.9% | 20.1% | 21.8% | 25.2% | 3.3% |
| Net Income Margin | 20.3% | 10.4% | 7.7% | 6.2% | 9.6% | 3.5% |
| CAPEX, % of revenue | 1.0% | 0.7% | 0.9% | 0.8% | 0.7% | -0.1% |
| ROIC | 45.8% | 45.9% | 22.4% | 24.7% | 38.5% | 13.8% |
| ROE | 78.7% | 36.0% | 35.5% | 39.2% | 59.4% | 20.2% |
| Net Debt/EBITDA | -0.2x | 0.0x | 1.6x | 0.6x | 0.4x | -0.2x |
Revenue and profitability
The company's Revenue surged on 10.1% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.6 pp from 15.8% to 24.3% in 2015.
Gross Margin showed almost no change in 2015.
Net Income marign increased on 3.5 pp from 6.2% to 9.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 0.70%. The company showed almost no change in CAPEX/Revenue from 2012 to 2015. It's average level of CAPEX/Revenue for the last three years was 0.82%.
Return on investment
The company operates at high and attractive ROIC (38.45%) and ROE (59.37%). ROIC surged on 13.8 pp from 24.7% to 38.5% in 2015. ROE jumped on 20.2 pp from 39.2% to 59.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.4x and Debt / EBITDA is 0.8x. Net Debt / EBITDA dropped on 0.2x from 0.6x to 0.4x in 2015. Debt jumped on 20.6% in 2015 while cash surged on 153% in 2015.
Appendix 1: Peers in Technology
Below we provide Constellation Software Inc/Canada benchmarking against other companies in Technology industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mitel Networks Corp ($MNW) | -9.0% | 3.8% | -5.7% | 91.4% | |
| Redknee Solutions Inc ($RKN) | | -4.5% | 151.6% | 81.4% | -13.6% |
| Intrinsyc Technologies Corp ($ITC) | -19.0% | -26.8% | -21.7% | 70.8% | |
| Espial Group Inc ($ESP) | 10.2% | -9.5% | -5.5% | 59.4% | |
| iLOOKABOUT Corp ($ILA) | -7.6% | 19.6% | 8.9% | 58.8% | |
| |
|---|
| Median (33 companies) | 5.3% | 3.7% | 11.4% | 13.7% | 11.5% |
|---|
| Constellation Software Inc/Canada ($CSU) | | 15.2% | 35.9% | 37.9% | 10.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ProntoForms Corp ($PFM) | 90.1% | 96.1% | 98.1% | 98.0% | |
| Symbility Solutions Inc ($SY) | 82.1% | 80.6% | 79.9% | 81.0% | |
| Espial Group Inc ($ESP) | 77.9% | 77.5% | 81.7% | 78.5% | |
| Absolute Software Corp ($ABT) | 71.6% | 73.6% | 76.3% | 78.4% | 81.1% |
| Sandvine Corp ($SVC) | 74.3% | 67.5% | 74.1% | 76.8% | 77.8% |
| |
|---|
| Median (31 companies) | 49.7% | 52.4% | 48.8% | 51.1% | 48.1% |
|---|
| Constellation Software Inc/Canada ($CSU) | 85.5% | 86.2% | 85.5% | 86.1% | 86.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi-LAN Inc ($WIN) | 26.5% | 40.9% | 12.2% | 56.2% | 53.2% |
| Computer Modelling Group Ltd ($CMG) | 51.5% | 53.8% | 52.2% | 51.5% | 50.8% |
| Open Text Corp ($OTC) | 27.1% | 26.5% | 29.1% | 30.0% | 31.8% |
| Sandvine Corp ($SVC) | 5.1% | 0.9% | 24.0% | 28.2% | 35.1% |
| Enghouse Systems Ltd ($ESL) | 24.8% | 25.4% | 23.6% | 24.7% | 21.9% |
| |
|---|
| Median (33 companies) | 8.5% | 8.3% | 5.5% | 7.0% | 18.0% |
|---|
| Constellation Software Inc/Canada ($CSU) | 21.7% | 20.9% | 20.1% | 21.8% | 25.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Halogen Software Inc ($HGN) | | 4.9% | 9.0% | 8.4% | |
| Intermap Technologies Corp ($IMP) | 0.4% | 1.0% | 3.2% | 7.4% | |
| Kinaxis Inc ($KXS) | 2.2% | 2.9% | 2.3% | 5.0% | 4.7% |
| BlackBerry Ltd ($BB) | 5.2% | 4.9% | 3.8% | 4.2% | 2.6% |
| ProntoForms Corp ($PFM) | 1.3% | 1.1% | 0.8% | 3.6% | |
| |
|---|
| Median (33 companies) | 1.3% | 1.6% | 1.5% | 1.3% | 1.5% |
|---|
| Constellation Software Inc/Canada ($CSU) | 1.0% | 0.7% | 0.9% | 0.8% | 0.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kinaxis Inc ($KXS) | | | 61.8% | 63.6% | 44.0% |
| Computer Modelling Group Ltd ($CMG) | 75.5% | 74.2% | 68.6% | 62.9% | 63.5% |
| SMART Technologies Inc ($SMA) | 43.2% | 21.4% | -18.9% | 28.1% | 43.8% |
| Sandvine Corp ($SVC) | -1.7% | -4.9% | 16.9% | 20.2% | 21.7% |
| CGI Group Inc ($GIB.A) | 14.7% | 5.7% | 10.9% | 17.1% | 18.0% |
| |
|---|
| Median (33 companies) | 4.7% | 2.9% | -4.8% | 0.5% | 9.8% |
|---|
| Constellation Software Inc/Canada ($CSU) | 45.8% | 45.9% | 22.4% | 24.7% | 38.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Data Group Ltd ($DGI) | 3.2x | 3.5x | 3.7x | 4.0x | |
| Critical Control Energy Services Corp ($CCZ) | 1.9x | | 1.4x | 2.7x | |
| Mitel Networks Corp ($MNW) | 4.9x | 3.7x | 3.8x | 2.6x | |
| Open Text Corp ($OTC) | 0.0x | 0.1x | 0.2x | 1.8x | 1.5x |
| CGI Group Inc ($GIB.A) | 1.3x | 6.0x | 2.4x | 1.3x | 1.0x |
| |
|---|
| Median (21 companies) | -0.5x | -0.4x | -0.6x | -1.3x | -0.8x |
|---|
| Constellation Software Inc/Canada ($CSU) | -0.2x | 0.0x | 1.6x | 0.6x | 0.4x |
