CCL Industries Inc demonstrated fast growth in recent years. Will the growth continue?
05.03.2015 • About CCL Industries Inc (
$CCL.B) • By InTwits
CCL Industries Inc is a fast-growing stock in Industrial industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
CCL Industries Inc showed growth in the last financial year. The company's revenue surged on 36.8% in FY2014. At the same time CCL Industries Inc well managed its profitability and showed even faster growth in EBITDA of 61.2% for the same period.
If we look for the longer period CCL Industries Inc showed fast revenue growth of 26.8% from 2011 to 2014 annually. EBITDA surged on 25.7% from 2011 to 2014 annually.
CCL Industries Inc ($CCL.B) financials for the last 5 years
| mln. CAD | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 1,192 | 1,268 | 1,309 | 1,889 | 2,586 |
|---|
| Revenue growth, % | | 6.4% | 3.2% | 44.4% | 36.8% |
|---|
| Gross margin, % | 23.0% | 23.1% | 23.9% | 25.2% | 26.8% |
|---|
| SG&A, % | 12.6% | 12.2% | 12.3% | 13.6% | 13.9% |
|---|
| EBITDA | 220 | 240 | 257 | 295 | 476 |
|---|
| EBITDA growth, % | | 8.9% | 7.2% | 15.1% | 61.2% |
|---|
| EBITDA margin, % | 18.5% | 18.9% | 19.6% | 15.6% | 18.4% |
|---|
| Net Income | 71 | 84 | 97 | 104 | 217 |
|---|
| Net Income margin, % | 5.96% | 6.63% | 7.45% | 5.48% | 8.38% |
|---|
| |
| CAPEX | 86 | 81 | 94 | 116 | 154 |
|---|
| CAPEX/Revenue, % | 7.20% | 6.42% | 7.15% | 6.14% | 5.94% |
|---|
| Debt | 422 | 354 | 329 | 712 | 659 |
|---|
| Cash | 173 | 141 | 189 | 209 | 222 |
|---|
| Net Debt/EBITDA | 1.1x | 0.9x | 0.5x | 1.7x | 0.9x |
|---|
| |
| ROIC, % | 9.6% | 11.2% | 12.2% | 11.4% | 17.7% |
|---|
| ROE, % | 9.3% | 10.6% | 11.4% | 10.9% | 19.4% |
|---|
Profitability and return on investment
EBITDA growth was supported by margin expansion. EBITDA margin surged on 2.80 pp from 15.6% to 18.4% in 2014. In the longer period EBITDA margin decreased slightly on 0.500 pp from 18.9% in 2011 to 18.4% in 2014.
We call CCL Industries Inc an attractive growth stock as together with the growth it delivers high ROIC at 17.7%. During the last three years it surged - it was 11.2% in FY2011. For the last three years the average ROIC was 13.8%.
The company's Net Income margin surged on 2.90 pp from 5.50% to 8.40% in 2014. If we look for the longer period Net Income margin surged on 1.80 pp from 6.60% in 2011 to 8.40% in 2014.
CCL Industries Inc operates at ROE of 19.4%. Average ROE for the last three years was 13.9%.
Capital expenditures (CAPEX)
To fuel this fast growth the company had to invest in CAPEX.CCL Industries Inc's CAPEX/Revenue was 5.94% in FY2014. CCL Industries Inc showed decline of 0.478 pp from 6.42% in 2011 to 5.94% in 2014. It's average level of CAPEX/Revenue for the last three years was 6.41%.
Leverage (Debt)
Having such a fast growth profile the company keeps low debt level at 0.9x Net Debt/EBITDA. In the longer period the company showed small growth in leverage of 0.03x from 0.89x in 2011 to 0.92x in 2014.
Peers in Industrial
Below we provide CCL Industries Inc benchmarking against other companies in Industrial 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Electrovaya Inc ($EFL) | | 104.3% | -4.0% | -71.2% | 160.5% |
| Exco Technologies Ltd ($XTC) | | 22.4% | 19.7% | 0.9% | 50.5% |
| Lumenpulse Inc ($LMP) | | | 56.7% | 33.9% | 47.0% |
| International Barrier Technology Inc ($IBH) | | 24.9% | 27.3% | 44.6% | 36.0% |
| Conifex Timber Inc ($CFF) | | 117.4% | 74.4% | 19.3% | 35.9% |
| |
|---|
| Median (41 companies) | | 12.4% | 11.5% | 4.9% | 8.4% |
|---|
| CCL Industries Inc ($CCL.B) | | 6.4% | 3.2% | 44.4% | 36.8% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Alarmforce Industries Inc ($AF) | 69.7% | 76.4% | 75.0% | 76.5% | 72.2% |
| Epicore BioNetworks Inc ($EBN) | 61.3% | 59.0% | 60.8% | 63.2% | 64.1% |
| Evertz Technologies Ltd ($ET) | 58.3% | 57.7% | 56.6% | 57.5% | 57.2% |
| Stantec Inc ($STN) | 56.1% | 55.4% | 55.0% | 54.7% | 54.9% |
| Titan Logix Corp ($TLA) | 35.3% | 44.7% | 52.3% | 53.9% | 51.0% |
| |
|---|
| Median (39 companies) | 24.2% | 25.3% | 25.5% | 24.7% | 25.0% |
|---|
| CCL Industries Inc ($CCL.B) | 23.0% | 23.1% | 23.9% | 25.2% | 26.8% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Canadian National Railway Co ($CNR) | 46.5% | 46.3% | 46.5% | 45.9% | 46.8% |
| Canadian Pacific Railway Ltd ($CP) | 32.2% | 28.1% | 26.1% | 32.4% | 43.7% |
| Vitreous Glass Inc ($VCI) | 31.8% | 29.0% | 31.4% | 32.2% | 37.8% |
| Progressive Waste Solutions Ltd ($BIN) | 31.8% | 32.2% | 30.7% | 33.1% | 34.0% |
| Epicore BioNetworks Inc ($EBN) | 15.9% | 17.7% | 22.4% | 16.4% | 27.7% |
| |
|---|
| Median (37 companies) | 9.0% | 9.3% | 12.1% | 12.2% | 12.0% |
|---|
| CCL Industries Inc ($CCL.B) | 18.5% | 18.9% | 19.6% | 15.6% | 18.4% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Newalta Corp ($NAL) | 11.9% | 17.2% | 21.7% | 34.5% | 35.1% |
| Horizon North Logistics Inc ($HNL) | 17.4% | 25.1% | 26.5% | 16.3% | 24.1% |
| Canadian Pacific Railway Ltd ($CP) | 14.6% | 21.3% | 20.2% | 20.2% | 21.9% |
| Conifex Timber Inc ($CFF) | 46.0% | 10.1% | 13.3% | 18.1% | 20.6% |
| Canadian National Railway Co ($CNR) | 19.1% | 18.0% | 17.4% | 18.7% | 18.9% |
| |
|---|
| Median (41 companies) | 2.7% | 2.4% | 3.9% | 4.3% | 3.3% |
|---|
| CCL Industries Inc ($CCL.B) | 7.2% | 6.4% | 7.1% | 6.1% | 5.9% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Vitreous Glass Inc ($VCI) | 28.8% | 26.1% | 30.5% | 32.3% | 48.3% |
| Alarmforce Industries Inc ($AF) | 26.8% | 18.3% | 5.3% | 24.0% | 33.9% |
| Epicore BioNetworks Inc ($EBN) | 20.4% | 24.8% | 28.1% | 16.1% | 32.5% |
| Toromont Industries Ltd ($TIH) | 9.1% | 13.8% | 28.8% | 25.8% | 24.3% |
| IWG Technologies Inc ($IWG) | 6.2% | 13.4% | 17.0% | 36.3% | 23.4% |
| |
|---|
| Median (41 companies) | 7.2% | 8.7% | 8.6% | 9.6% | 9.9% |
|---|
| CCL Industries Inc ($CCL.B) | 9.6% | 11.2% | 12.2% | 11.4% | 17.7% |
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 |
| Conifex Timber Inc ($CFF) | | | | 2.7x | 6.1x |
| Norbord Inc ($NBD) | 3.7x | 9.4x | 1.6x | 0.8x | 5.7x |
| Tree Island Steel Ltd ($TSL) | 710.9x | 42.8x | 11.1x | 6.3x | 5.6x |
| |
|---|
| Median (32 companies) | 0.7x | 0.7x | 1.0x | 0.8x | 1.3x |
|---|
| CCL Industries Inc ($CCL.B) | 1.1x | 0.9x | 0.5x | 1.7x | 0.9x |
