Eye on Exco Technologies Ltd as a growth stock: its revenue grew 22.0% and EBITDA 23.6% annually over the last three years
03.12.2014 • About Exco Technologies Ltd (
$XTC) • By InTwits
Exco Technologies Ltd is a growth stock in Industrial industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Exco Technologies Ltd showed growth in the last financial year. The company's revenue surged on 50.5% in FY2014. In addition to revenue Exco Technologies Ltd also keeps delivering EBITDA growth. It was 25.6% in FY2014
In the last 3 years the company showed fast revenue growth of 22.0% from FY2011 to FY2014 annually. EBITDA surged on 23.6% from FY2011 to FY2014 annually.
Exco Technologies Ltd ($XTC) financials for the last 5 years
| mln. CAD | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 166 | 203 | 243 | 245 | 368 |
|---|
| Revenue growth, % | | 22.4% | 19.7% | 0.9% | 50.5% |
|---|
| Gross margin, % | 26.0% | 25.8% | 28.8% | 29.1% | 24.3% |
|---|
| SG&A, % | 12.7% | 11.8% | 11.2% | 11.5% | 9.63% |
|---|
| EBITDA | 22 | 29 | 43 | 43 | 54 |
|---|
| EBITDA growth, % | | 27.2% | 49.2% | 0.8% | 25.6% |
|---|
| EBITDA margin, % | 13.6% | 14.1% | 17.6% | 17.6% | 14.6% |
|---|
| Net Income | 10 | 13 | 24 | 24 | 31 |
|---|
| Net Income margin, % | 6.09% | 6.55% | 10.1% | 9.66% | 8.32% |
|---|
| |
| CAPEX | 5 | 9 | 8 | 22 | 25 |
|---|
| CAPEX/Revenue, % | 3.13% | 4.41% | 3.19% | 8.81% | 6.72% |
|---|
| Debt | 0 | 0 | 0 | 0 | 23 |
|---|
| Cash | 20 | 15 | 31 | 26 | 31 |
|---|
| Net Debt/EBITDA | -0.9x | -0.5x | -0.7x | -0.6x | -0.1x |
|---|
| |
| ROIC, % | 11.5% | 14.0% | 23.2% | 21.1% | 20.4% |
|---|
| ROE, % | 8.6% | 10.6% | 17.8% | 15.4% | 16.7% |
|---|
Profitability and return on investment
EBITDA margin declined slightly from 17.6% in FY2013 to 14.6% in FY2014. In the last 3 years EBITDA margin increased slightly on 0.500 pp from 14.1% in FY2011 to 14.6% in FY2014.
Exco Technologies Ltd shows attractive ROIC at 20.4% for the last 12 months which assumes stable development model. During the last three years it surged - it was 14.0% in FY2011. It's average ROIC for the last three years was 21.6%.
Exco Technologies Ltd showed big decline in Net Income margin of 1.40 pp from 9.70% to 8.30% in FY2014. In the longer period Net Income margin surged on 1.80 pp from 6.50% in FY2011 to 8.30% in FY2014.
Exco Technologies Ltd operates at ROE of 16.7%. It's average ROE for the last three years was 16.6%.
Capital expenditures (CAPEX)
To this fast growth Exco Technologies Ltd had to invest in CAPEX.In FY2014 the company had CAPEX/Revenue of 6.72%. Exco Technologies Ltd showed fast CAPEX/Revenue growth of 2.31 pp from 4.41% in FY2011 to 6.72% in FY2014. It's average CAPEX/Revenue for the last three years was 6.24%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -0.1x Net Debt/EBITDA. If we look for the longer period Exco Technologies Ltd showed fast leverage growth of 0.39x from -0.54x in FY2011 to -0.15x in FY2014.
Valuation vs. comparable companies
The company trades at 9.0x EV/EBITDA which is 44.7% lower than 16.3x Industrial industry avearge calculated based on 168 companies. At the end of trading day today Exco Technologies Ltd traded at 16.1x P/E which is 31.2% lower than 23.5x Industrial peer group avearge calculated on the basis of 47 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. At the end of trading day today Exco Technologies Ltd traded at 16.7x EV/(EBITDA-CAPEX) which is 587% higher than 2.4x Industrial peer group avearge calculated on the basis of 44 companies.
Peers in Industrial
Below you can find Exco Technologies Ltd benchmarking vs. other companies in Industrial industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Lumenpulse Inc ($LMP) | | | 56.7% | 33.9% | 47.0% |
| International Barrier Technology Inc ($IBH) | | 24.9% | 27.3% | 44.6% | 36.0% |
| Epicore BioNetworks Inc ($EBN) | | 30.4% | 12.4% | -0.4% | 35.7% |
| Pacific Safety Products Inc ($PSP) | | -24.4% | -26.2% | -30.1% | 22.6% |
| ATS Automation Tooling Systems Inc ($ATA) | | -16.0% | 22.7% | -0.7% | 15.6% |
| |
|---|
| Median (17 companies) | | 9.8% | 17.6% | 1.4% | 8.5% |
|---|
| Exco Technologies Ltd ($XTC) | | 22.4% | 19.7% | 0.9% | 50.5% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Epicore BioNetworks Inc ($EBN) | 61.3% | 59.0% | 60.8% | 63.2% | 64.1% |
| Evertz Technologies Ltd ($ET) | 58.3% | 57.7% | 56.6% | 57.5% | 57.2% |
| IWG Technologies Inc ($IWG) | 53.0% | 54.3% | 53.3% | 54.0% | 49.0% |
| Lumenpulse Inc ($LMP) | | 24.8% | 40.4% | 36.2% | 41.6% |
| Opsens Inc ($OPS) | 39.9% | 30.8% | 32.4% | 36.5% | 35.2% |
| |
|---|
| Median (17 companies) | 21.7% | 24.1% | 23.0% | 24.8% | 26.6% |
|---|
| Exco Technologies Ltd ($XTC) | 26.0% | 25.8% | 28.8% | 29.1% | 24.3% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Epicore BioNetworks Inc ($EBN) | 15.9% | 17.7% | 22.4% | 16.4% | 27.7% |
| Evertz Technologies Ltd ($ET) | 37.2% | 37.2% | 29.6% | 29.1% | 23.0% |
| CAE Inc ($CAE) | 23.4% | 24.1% | 23.5% | 18.5% | 21.8% |
| IWG Technologies Inc ($IWG) | 5.0% | 10.8% | 12.7% | 25.5% | 20.0% |
| Student Transportation Inc ($STB) | 18.3% | 16.0% | 15.1% | 14.9% | 13.4% |
| |
|---|
| Median (15 companies) | 5.0% | 7.5% | 7.3% | 9.7% | 12.0% |
|---|
| Exco Technologies Ltd ($XTC) | 13.6% | 14.1% | 17.6% | 17.6% | 14.6% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Heroux-Devtek Inc ($HRX) | 4.3% | 5.5% | 4.9% | 4.5% | 8.2% |
| Reko International Group Inc ($REK) | 2.2% | 2.2% | 4.7% | 3.8% | 7.9% |
| Student Transportation Inc ($STB) | 13.7% | 4.4% | 13.2% | 9.9% | 7.7% |
| CAE Inc ($CAE) | 8.6% | 6.8% | 9.1% | 4.8% | 7.6% |
| Opsens Inc ($OPS) | 2.4% | 6.2% | 3.6% | 6.3% | 5.7% |
| |
|---|
| Median (17 companies) | 2.2% | 2.2% | 3.6% | 3.8% | 2.6% |
|---|
| Exco Technologies Ltd ($XTC) | 3.1% | 4.4% | 3.2% | 8.8% | 6.7% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Epicore BioNetworks Inc ($EBN) | 20.4% | 24.8% | 28.1% | 16.1% | 32.5% |
| IWG Technologies Inc ($IWG) | 6.2% | 13.4% | 17.0% | 36.3% | 23.4% |
| International Barrier Technology Inc ($IBH) | -39.9% | -22.2% | -20.9% | -0.0% | 20.8% |
| Evertz Technologies Ltd ($ET) | 32.3% | 30.0% | 19.9% | 20.5% | 16.5% |
| ATS Automation Tooling Systems Inc ($ATA) | -1.9% | 7.1% | 15.0% | 14.8% | 13.2% |
| |
|---|
| Median (17 companies) | 4.6% | 2.6% | 3.5% | 5.0% | 6.2% |
|---|
| Exco Technologies Ltd ($XTC) | 11.5% | 14.0% | 23.2% | 21.1% | 20.4% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Sigma Industries Inc ($SSG) | | | 4.4x | 11.3x | 225.9x |
| H2O Innovation Inc ($HEO) | | | | 4.2x | 73.2x |
| Student Transportation Inc ($STB) | 2.9x | 4.0x | 3.8x | 3.4x | 4.0x |
| Reko International Group Inc ($REK) | | | 5.7x | 3.3x | 3.0x |
| CAE Inc ($CAE) | 0.5x | 1.0x | 1.2x | 2.2x | 1.9x |
| |
|---|
| Median (13 companies) | -1.2x | -0.8x | 1.4x | 2.1x | 1.0x |
|---|
| Exco Technologies Ltd ($XTC) | -0.9x | -0.5x | -0.7x | -0.6x | -0.1x |
