BlackBerry Ltd EBITDA Margin jumped on 94.6 pp from -86.5% to 8.1% in 2015 while Revenue dropped on 51.0%
27.03.2015 • About BlackBerry Ltd (
$BB) • By InTwits
BlackBerry Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- BlackBerry Ltd is a company in decline: FY2015 revenue growth was -51.0%, 5 years revenue CAGR was -25.9%
- BlackBerry Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 1.8%.
- CAPEX is quite volatile: 87 in FY2015, 283 in FY2014, 418 in FY2013, 902 in FY2012, 1,039 in FY2011
- The company has unprofitable business model: ROIC is at -8.1%
- It operates with high leverage: Net Debt/EBITDA is 1.7x while industry average is -2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
BlackBerry Ltd ($BB) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 19,907 | 18,423 | 11,073 | 6,813 | 3,335 | -51.0% |
| Gross Profit | 8,825 | 6,575 | 3,434 | -43 | 1,604 | |
| SG&A | 2,400 | 2,600 | 2,111 | 2,103 | 904 | -57.0% |
| EBITDA | 5,563 | 3,020 | 683 | -5,893 | 271 | |
| Net Income | 3,411 | 1,164 | -646 | -5,873 | -304 | |
Balance Sheet
|
|---|
| Cash | 1,791 | 1,527 | 1,549 | 1,579 | 1,233 | -21.9% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 1,627 | 1,707 | 4.9% |
Cash flow
|
|---|
| Capex | 1,039 | 902 | 418 | 283 | 87 | -69.3% |
Ratios
|
|---|
| Revenue growth | 33.1% | -7.5% | -39.9% | -38.5% | -51.0% | |
| EBITDA growth | 44.4% | -45.7% | -77.4% | -962.8% | -104.6% | |
| Gross Margin | 44.3% | 35.7% | 31.0% | -0.6% | 48.1% | 48.7% |
| EBITDA Margin | 27.9% | 16.4% | 6.2% | -86.5% | 8.1% | 94.6% |
| Net Income Margin | 17.1% | 6.3% | -5.8% | -86.2% | -9.1% | 77.1% |
| SG&A, % of revenue | 12.1% | 14.1% | 19.1% | 30.9% | 27.1% | -3.8% |
| CAPEX, % of revenue | 5.2% | 4.9% | 3.8% | 4.2% | 2.6% | -1.5% |
| ROIC | 53.8% | 15.2% | -12.3% | -95.6% | -8.1% | 87.5% |
| ROE | 41.2% | 12.2% | -6.6% | -89.8% | -8.6% | 81.2% |
| Net Debt/EBITDA | -0.3x | -0.5x | -2.3x | | 1.7x | 1.7x |
Revenue and profitability
BlackBerry Ltd's Revenue dropped on 51.0% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 94.6 pp from -86.5% to 8.1% in FY2015.
Gross Margin jumped on 48.7 pp from -0.63% to 48.1% in FY2015. SG&A as a % of Revenue decreased on 3.8 pp from 30.9% to 27.1% in FY2015.
Net Income marign surged on 77.1 pp from -86.2% to -9.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 2.6%. The company showed decline in CAPEX/Revenue of 2.3 pp from 4.9% in FY2012 to 2.6% in FY2015. It's average CAPEX/Revenue for the last three years was 3.5%.
Return on investment
The company operates at negative ROIC (-8.08%) and ROE (-8.62%). ROIC jumped on 87.5 pp from -95.6% to -8.1% in FY2015. ROE jumped on 81.2 pp from -89.8% to -8.6% in FY2015.
Leverage (Debt)
Debt level is 1.7x Net Debt / EBITDA and 6.3x Debt / EBITDA. Net Debt / EBITDA jumped1.7x from to 1.7x in FY2015. Debt increased on 4.9% in FY2015 while cash dropped on 21.9% in FY2015.
Management team
John S Chen is a the company's CEO. John S Chen has spent 5 years at the company.
Appendix 1: Peers in Technology
Below we provide BlackBerry Ltd 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) | 25.9% | -4.5% | 151.6% | 81.4% | |
| Intrinsyc Technologies Corp ($ITC) | -19.0% | -26.8% | -21.7% | 70.8% | |
| Espial Group Inc ($ESP) | 10.2% | -9.5% | -5.5% | 59.4% | |
| Sylogist Ltd ($SYZ) | 1.5% | -5.8% | 25.7% | 50.5% | |
| |
|---|
| Median (25 companies) | 11.0% | 6.6% | 12.4% | 15.8% | 12.9% |
|---|
| BlackBerry Ltd ($BB) | | -7.5% | -39.9% | -38.5% | -51.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ProntoForms Corp ($PFM) | 90.1% | 96.1% | 98.1% | 98.0% | |
| Constellation Software Inc/Canada ($CSU) | 85.5% | 86.2% | 85.5% | 86.1% | |
| Espial Group Inc ($ESP) | 77.9% | 77.5% | 81.7% | 78.5% | |
| Absolute Software Corp ($ABT) | 71.6% | 73.6% | 76.3% | 78.4% | |
| Sandvine Corp ($SVC) | 74.3% | 67.5% | 74.1% | 76.8% | |
| |
|---|
| Median (23 companies) | 58.3% | 66.9% | 55.6% | 53.5% | 67.9% |
|---|
| BlackBerry Ltd ($BB) | 44.3% | 35.7% | 31.0% | -0.6% | 48.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi-LAN Inc ($WIN) | 26.5% | 40.9% | 12.2% | 56.2% | |
| Computer Modelling Group Ltd ($CMG) | 51.5% | 53.8% | 52.2% | 51.5% | |
| Open Text Corp ($OTC) | 27.1% | 26.5% | 29.1% | 30.0% | |
| Sandvine Corp ($SVC) | 5.1% | 0.9% | 24.0% | 28.2% | |
| Enghouse Systems Ltd ($ESL) | 24.8% | 25.4% | 23.6% | 24.7% | |
| |
|---|
| Median (25 companies) | 9.1% | 10.6% | 8.1% | 11.5% | 27.9% |
|---|
| BlackBerry Ltd ($BB) | 27.9% | 16.4% | 6.2% | -86.5% | 8.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Halogen Software Inc ($HGN) | | 4.9% | 9.0% | 8.4% | |
| Kinaxis Inc ($KXS) | 2.2% | 2.9% | 2.3% | 5.0% | |
| ProntoForms Corp ($PFM) | 1.3% | 1.1% | 0.8% | 3.6% | |
| Sandvine Corp ($SVC) | 7.3% | 4.9% | 3.2% | 3.2% | |
| Open Text Corp ($OTC) | 3.5% | 2.1% | 1.7% | 2.6% | |
| |
|---|
| Median (25 companies) | 1.4% | 1.9% | 1.4% | 1.2% | 1.6% |
|---|
| BlackBerry Ltd ($BB) | 5.2% | 4.9% | 3.8% | 4.2% | 2.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kinaxis Inc ($KXS) | | | 61.8% | 63.6% | |
| Computer Modelling Group Ltd ($CMG) | 75.5% | 74.2% | 68.6% | 62.9% | |
| SMART Technologies Inc ($SMA) | 43.2% | 21.4% | -18.9% | 28.1% | |
| Constellation Software Inc/Canada ($CSU) | 45.8% | 45.9% | 22.4% | 24.7% | |
| Sandvine Corp ($SVC) | -1.7% | -4.9% | 16.9% | 20.2% | |
| |
|---|
| Median (25 companies) | 5.5% | 8.0% | 7.3% | 7.4% | 6.7% |
|---|
| BlackBerry Ltd ($BB) | 53.8% | 15.2% | -12.3% | -95.6% | -8.1% |
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 | |
| CGI Group Inc ($GIB.A) | 1.3x | 6.0x | 2.4x | 1.3x | |
| |
|---|
| Median (19 companies) | -0.4x | -0.8x | -0.2x | -1.3x | -2.5x |
|---|
