North West Co Inc/The reports 9.0 pp EBITDA Margin decline from 9.0% to in 2015
12.03.2015 • About North West Co Inc/The (
$NWC) • By InTwits
North West Co Inc/The reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- North West Co Inc/The has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.8%. At the same time it's a lot of higher than industry average of 28.7%.
- CAPEX is quite volatile: 116 in 2015, 242 in 2014, 1,072 in 2013, 2,480 in 2012, 2,628 in 2011
- The company has highly profitable business model: ROIC is at 19.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
North West Co Inc/The ($NWC) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,448 | 1,495 | 1,514 | 1,543 | 1,624 | 5.3% |
| Gross Profit | 413 | 428 | 445 | 455 | 464 | 2.0% |
| SG&A | 323 | 339 | 348 | 355 | 367 | 3.3% |
| EBITDA | 126 | | | 138 | | -100.0% |
| Net Income | 70 | 58 | 65 | 64 | 63 | -2.1% |
Balance Sheet
|
|---|
| Cash | 31 | 27 | 39 | 22 | 29 | 30.3% |
| Short Term Debt | 68 | 1 | 40 | 78 | 6 | -91.9% |
| Long Term Debt | 124 | 175 | 123 | 105 | 195 | 85.7% |
Cash flow
|
|---|
| Capex | 35 | 46 | 42 | 40 | 49 | 24.0% |
Ratios
|
|---|
| Revenue growth | 0.3% | 3.2% | 1.2% | 1.9% | 5.3% | |
| Gross Margin | 28.5% | 28.6% | 29.4% | 29.5% | 28.6% | -0.9% |
| EBITDA Margin | 8.7% | 0.0% | 0.0% | 9.0% | 0.0% | -9.0% |
| Net Income Margin | 4.8% | 3.9% | 4.3% | 4.2% | 3.9% | -0.3% |
| SG&A, % of revenue | 22.3% | 22.7% | 23.0% | 23.0% | 22.6% | -0.4% |
| CAPEX, % of revenue | 2.4% | 3.0% | 2.8% | 2.6% | 3.0% | 0.5% |
| ROIC | 18.8% | 19.3% | 20.9% | 20.9% | 19.6% | -1.3% |
| ROE | 24.2% | 20.3% | 22.5% | 20.8% | 19.3% | -1.5% |
| Net Debt/EBITDA | 1.3x | | | 1.2x | | -1.2x |
Revenue and profitability
The company's Revenue increased on 5.3% in FY2015.
Gross Margin decreased slightly on 0.91 pp from 29.5% to 28.6% in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.0% in FY2015. CAPEX/Revenue showed almost no change from FY2012 to FY2015. Average CAPEX/Revenue for the last three years was 2.8%.
Return on investment
The company operates at good ROIC (19.56%) and ROE (19.30%). ROIC decreased slightly on 1.3 pp from 20.9% to 19.6% in FY2015. ROE decreased slightly on 1.5 pp from 20.8% to 19.3% in FY2015.
Leverage (Debt)
Debt jumped on 10.1% in FY2015 while cash jumped on 30.3% in FY2015.
Management team
The company's CEO Edward S Kennedy is a founder and has spent 22 years at the company. North West Co Inc/The's CFO is John D King. John D King has 8 years tenure at the company.
Appendix 1: Peers in Consumer, Non-cyclical
Below we provide North West Co Inc/The benchmarking against other companies in Consumer, Non-cyclical 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 |
|---|
| Cardiome Pharma Corp ($COM) | -97.7% | -47.6% | 471.7% | 566.0% | |
| Covalon Technologies Ltd ($COV) | -19.9% | 46.6% | 9.0% | 119.2% | |
| Medicure Inc ($MPH) | 9.4% | 32.2% | -45.7% | 94.1% | |
| Feronia Inc/Canada ($FRN) | 83.2% | -3.3% | -3.3% | 73.6% | |
| Biosyent Inc ($RX) | 67.1% | 78.9% | 55.2% | 56.6% | |
| |
|---|
| Median (60 companies) | 9.8% | 7.0% | 5.2% | 11.8% | 6.6% |
|---|
| North West Co Inc/The ($NWC) | | 3.2% | 1.2% | 1.9% | 5.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cipher Pharmaceuticals Inc ($CPH) | | | 99.5% | 98.3% | |
| Ritchie Bros Auctioneers Inc ($RBA) | 87.9% | 88.7% | 88.4% | 88.0% | |
| Merus Labs International Inc ($MSL) | | 88.6% | 91.4% | 82.8% | |
| Medicure Inc ($MPH) | 58.3% | 77.7% | 74.4% | 82.8% | |
| Biosyent Inc ($RX) | 78.6% | 79.3% | 79.2% | 78.1% | |
| |
|---|
| Median (51 companies) | 32.6% | 34.5% | 35.6% | 34.6% | 66.5% |
|---|
| North West Co Inc/The ($NWC) | 28.5% | 28.6% | 29.4% | 29.5% | 28.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cipher Pharmaceuticals Inc ($CPH) | -50.0% | 40.6% | 71.4% | 63.7% | |
| Merus Labs International Inc ($MSL) | | 32.9% | 64.7% | 46.2% | |
| Valeant Pharmaceuticals International Inc ($VRX) | 37.0% | 30.6% | 27.8% | 45.6% | |
| EnerCare Inc ($ECI) | 59.0% | 52.8% | 51.0% | 45.5% | |
| Ritchie Bros Auctioneers Inc ($RBA) | 36.9% | 36.8% | 36.3% | 36.4% | |
| |
|---|
| Median (60 companies) | 8.3% | 8.8% | 8.2% | 11.2% | -195.9% |
|---|
| North West Co Inc/The ($NWC) | 8.7% | | | 9.0% | |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Neptune Technologies & Bioressources Inc ($NTB) | 6.0% | 4.7% | 73.6% | 84.6% | |
| CanaDream Corp ($CDN) | 68.6% | 43.3% | 38.1% | 70.4% | |
| Feronia Inc/Canada ($FRN) | 129.0% | 191.4% | 117.4% | 42.4% | |
| Microbix Biosystems Inc ($MBX) | 1.0% | 1.2% | 3.0% | 40.3% | |
| ProMetic Life Sciences Inc ($PLI) | | 2.1% | 33.6% | 34.6% | 23.3% |
| |
|---|
| Median (60 companies) | 2.1% | 2.1% | 2.3% | 2.5% | 23.3% |
|---|
| North West Co Inc/The ($NWC) | 2.4% | 3.0% | 2.8% | 2.6% | 3.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Biosyent Inc ($RX) | 45.5% | 71.7% | 62.4% | 62.9% | |
| Covalon Technologies Ltd ($COV) | -49.6% | -75.8% | -30.1% | 50.6% | |
| Cipher Pharmaceuticals Inc ($CPH) | -22.9% | 21.8% | 81.4% | 44.6% | |
| Calian Technologies Ltd ($CTY) | 28.9% | 28.4% | 25.4% | 20.4% | |
| Ten Peaks Coffee Co Inc ($TPK) | 6.4% | 1.6% | 6.4% | 20.0% | |
| |
|---|
| Median (60 companies) | 7.3% | 7.5% | 6.1% | 6.6% | -27.7% |
|---|
| North West Co Inc/The ($NWC) | 18.8% | 19.3% | 20.9% | 20.9% | 19.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Amica Mature Lifestyles Inc ($ACC) | 11.7x | 9.4x | 14.7x | 13.8x | |
| Cott Corp ($BCB) | 2.6x | 2.0x | 2.2x | 13.4x | |
| CRH Medical Corp ($CRH) | -2.3x | -3.1x | -3.5x | 12.0x | |
| Centric Health Corp ($CHH) | 10.3x | 5.6x | 10.2x | 11.2x | |
| Sienna Senior Living Inc ($SIA) | 10.6x | 9.5x | 11.8x | 9.2x | |
| |
|---|
| Median (50 companies) | 2.1x | 2.5x | 2.3x | 2.9x | |
|---|
| North West Co Inc/The ($NWC) | 1.3x | | | 1.2x | |
