H2O Innovation Inc EBITDA jumped on 4,310% in 2015 and Revenue jumped on 39.8%
22.09.2015 • About H2O Innovation Inc (
$HEO) • By InTwits
H2O Innovation Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 5.2% in FY2015, 0.2% in FY2014, 4.1% in FY2013, -0.3% in FY2012, -0.6% in FY2011
- H2O Innovation Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.7%.
- The company has potentially unprofitable business model: ROIC is at 4.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
H2O Innovation Inc ($HEO) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 27.632 | 35.910 | 36.137 | 34.832 | 48.700 | 39.8% |
| Gross Profit | 8.164 | 8.275 | 9.252 | 9.250 | 13.566 | 46.7% |
| SG&A | | | 7.042 | 8.143 | 9.318 | 14.4% |
| EBITDA | -0.174 | -0.112 | 1.475 | 0.058 | 2.546 | 4,310.5% |
| Net Income | -1.359 | -8.055 | 0.313 | -1.456 | 0.272 | -118.7% |
Balance Sheet
|
|---|
| Cash | 0.440 | 0.577 | 0.304 | 0.498 | 1.336 | 168.4% |
| Short Term Debt | 1.964 | 5.604 | 6.441 | 4.394 | 4.978 | 13.3% |
| Long Term Debt | 3.225 | 1.102 | 0.065 | 0.331 | 0.500 | 50.9% |
Cash flow
|
|---|
| Capex | 0.206 | 0.259 | 0.159 | 0.099 | 0.596 | 503.2% |
Ratios
|
|---|
| Revenue growth | -0.3% | 30.0% | 0.6% | -3.6% | 39.8% | |
| EBITDA growth | -91.7% | -35.9% | -1,421.6% | -96.1% | 4,310.5% | |
| Gross Margin | 29.5% | 23.0% | 25.6% | 26.6% | 27.9% | 1.3% |
| EBITDA Margin | -0.6% | -0.3% | 4.1% | 0.2% | 5.2% | 5.1% |
| Net Income Margin | -4.9% | -22.4% | 0.9% | -4.2% | 0.6% | 4.7% |
| SG&A, % of revenue | | | 19.5% | 23.4% | 19.1% | -4.2% |
| CAPEX, % of revenue | 0.7% | 0.7% | 0.4% | 0.3% | 1.2% | 0.9% |
| ROIC | -4.9% | -4.7% | 2.6% | -5.5% | 4.9% | 10.4% |
| ROE | -5.4% | -44.5% | 2.2% | -7.9% | 1.1% | 9.0% |
| Net Debt/EBITDA | | | 4.2x | 73.2x | 1.6x | -71.6x |
Revenue and profitability
The company's Revenue jumped on 39.8% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.4 pp from 59.8% to 69.2% in 2015.
Gross Margin increased slightly on 1.3 pp from 26.6% to 27.9% in FY2015. SG&A as a % of Revenue decreased on 4.2 pp from 23.4% to 19.1% in FY2015.
Net Income marign increased on 4.7 pp from -4.2% to 0.56% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 H2O Innovation Inc had CAPEX/Revenue of 1.2%. The company showed small growth in CAPEX/Revenue of 0.50 pp from 0.72% in FY2012 to 1.2% in FY2015. It's average level of CAPEX/Revenue for the last three years was 0.65%.
Return on investment
The company operates at low ROIC (4.92%) and ROE (1.12%). ROIC jumped on 10.4 pp from -5.5% to 4.9% in FY2015. ROE increased on 9.0 pp from -7.9% to 1.1% in FY2015.
Leverage (Debt)
Debt level is 1.6x Net Debt / EBITDA and 2.2x Debt / EBITDA. Net Debt / EBITDA dropped on 71.6x from 73.2x to 1.6x in FY2015. Debt surged on 15.9% in FY2015 while cash jumped on 168% in FY2015.
Appendix 1: Peers in Industrial
Below we provide H2O Innovation 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Electrovaya Inc ($EFL) | 104.3% | -4.0% | -71.2% | 160.5% | |
| Enterprise Group Inc ($E) | 14.5% | 3.5% | 88.3% | 128.5% | |
| Carmanah Technologies Corp ($CMH) | 5.8% | -26.4% | -2.0% | 68.8% | |
| Exco Technologies Ltd ($XTC) | 22.4% | 19.7% | 0.9% | 50.5% | |
| Lumenpulse Inc ($LMP) | | 56.7% | 33.9% | 47.0% | 61.8% |
| |
|---|
| Median (91 companies) | 12.9% | 10.3% | 5.1% | 9.2% | 19.0% |
|---|
| H2O Innovation Inc ($HEO) | | 30.0% | 0.6% | -3.6% | 39.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| WSP Global Inc ($WSP) | 81.1% | 81.1% | 83.2% | 81.0% | |
| Pure Technologies Ltd ($PUR) | 75.7% | 77.9% | 78.0% | 77.5% | |
| Alarmforce Industries Inc ($AF) | 76.4% | 75.0% | 76.5% | 72.2% | |
| Epicore BioNetworks Inc ($EBN) | 59.0% | 60.8% | 63.2% | 64.1% | |
| FLYHT Aerospace Solutions Ltd ($FLY) | 54.0% | 57.2% | 59.2% | 62.9% | |
| |
|---|
| Median (87 companies) | 23.2% | 23.0% | 23.3% | 22.3% | 26.0% |
|---|
| H2O Innovation Inc ($HEO) | 29.5% | 23.0% | 25.6% | 26.6% | 27.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Canadian National Railway Co ($CNR) | 46.3% | 46.5% | 45.9% | 46.8% | |
| Canadian Pacific Railway Ltd ($CP) | 28.1% | 26.1% | 32.4% | 43.7% | |
| Vitreous Glass Inc ($VCI) | 29.0% | 31.4% | 32.2% | 37.8% | |
| Questor Technology Inc ($QST) | 25.1% | 25.7% | 34.9% | 34.1% | |
| Progressive Waste Solutions Ltd ($BIN) | 32.2% | 30.7% | 33.1% | 34.0% | |
| |
|---|
| Median (84 companies) | 8.2% | 9.3% | 8.3% | 7.4% | 10.0% |
|---|
| H2O Innovation Inc ($HEO) | -0.6% | -0.3% | 4.1% | 0.2% | 5.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cargojet Inc ($CJT.A) | 6.8% | 7.0% | 6.3% | 54.1% | |
| Newalta Corp ($NAL) | 17.2% | 21.7% | 34.5% | 35.1% | |
| Enterprise Group Inc ($E) | 3.6% | 17.4% | 27.2% | 32.7% | |
| ENTREC Corp ($ENT) | | 35.0% | 26.7% | 29.5% | |
| Horizon North Logistics Inc ($HNL) | 25.1% | 26.5% | 16.3% | 24.1% | |
| |
|---|
| Median (91 companies) | 2.7% | 3.1% | 3.7% | 3.3% | 2.8% |
|---|
| H2O Innovation Inc ($HEO) | 0.7% | 0.7% | 0.4% | 0.3% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vitreous Glass Inc ($VCI) | 26.1% | 30.5% | 32.3% | 48.3% | |
| Photon Control Inc ($PHO) | 10.1% | 21.0% | 44.4% | 38.0% | |
| SNC-Lavalin Group Inc ($SNC) | 14.6% | 10.7% | 4.0% | 35.2% | |
| Alarmforce Industries Inc ($AF) | 18.3% | 5.3% | 24.0% | 33.9% | |
| Epicore BioNetworks Inc ($EBN) | 24.8% | 28.1% | 16.1% | 32.5% | |
| |
|---|
| Median (92 companies) | 9.1% | 9.7% | 8.5% | 8.8% | 9.3% |
|---|
| H2O Innovation Inc ($HEO) | -4.9% | -4.7% | 2.6% | -5.5% | 4.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sigma Industries Inc ($SSG) | | 4.4x | 11.3x | 225.9x | 2.9x |
| Grand Power Logistics Group Inc ($GPW) | | 47.8x | | 53.1x | |
| Cargojet Inc ($CJT.A) | 1.8x | 1.5x | 1.5x | 31.5x | |
| IBI Group Inc ($IBG) | 4.2x | 6.5x | | 8.3x | |
| Conifex Timber Inc ($CFF) | | | 2.7x | 6.1x | |
| |
|---|
| Median (71 companies) | 1.1x | 1.5x | 1.5x | 1.3x | 1.8x |
|---|
| H2O Innovation Inc ($HEO) | | | 4.2x | 73.2x | 1.6x |
