Russell Breweries Inc reports 2,496% Net Income growth while 4.9 pp EBITDA Margin decline from 10.1% to 5.1%
28.10.2015 • About Russell Breweries Inc (
$RB) • By InTwits
Russell Breweries Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Russell Breweries Inc doesn't have a profitable business model yet: FY2015 ROIC is 0.3%
- EBITDA Margin is quite volatile: 5.1% in FY2015, 10.1% in FY2014, 4.7% in FY2013, 0.5% in FY2012, -12.0% in FY2011
- Russell Breweries Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's a lot of higher than industry average of 65.1%.
- CAPEX is quite volatile: 0.26 in FY2015, 0.12 in FY2014, 0.030 in FY2013, 0.036 in FY2012, 0.038 in FY2011
- The company has potentially unprofitable business model: ROIC is at 0.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Russell Breweries Inc ($RB) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 5.874 | 6.478 | 6.732 | 7.545 | 7.938 | 5.2% |
| Gross Profit | 2.779 | 3.423 | 3.584 | 4.243 | 4.337 | 2.2% |
| SG&A | | 3.712 | 3.592 | 3.797 | 4.246 | 11.8% |
| EBITDA | -0.703 | 0.033 | 0.315 | 0.759 | 0.407 | -46.4% |
| Net Income | -1.522 | -1.088 | -0.546 | 0.062 | 1.602 | 2,495.9% |
Balance Sheet
|
|---|
| Cash | 0.029 | 0.029 | 0.213 | 0.662 | 0.428 | -35.3% |
| Short Term Debt | 0.327 | 0.925 | 1.035 | 0.350 | 0.688 | 96.4% |
| Long Term Debt | 1.663 | 0.330 | 0.137 | 0.592 | 0.018 | -96.9% |
Cash flow
|
|---|
| Capex | 0.038 | 0.036 | 0.030 | 0.116 | 0.258 | 122.1% |
Ratios
|
|---|
| Revenue growth | -5.4% | 10.3% | 3.9% | 12.1% | 5.2% | |
| EBITDA growth | -5.7% | -104.7% | 854.3% | 141.2% | -46.4% | |
| Gross Margin | 47.3% | 52.8% | 53.2% | 56.2% | 54.6% | -1.6% |
| EBITDA Margin | -12.0% | 0.5% | 4.7% | 10.1% | 5.1% | -4.9% |
| Net Income Margin | -25.9% | -16.8% | -8.1% | 0.8% | 20.2% | 19.4% |
| SG&A, % of revenue | | 57.3% | 53.4% | 50.3% | 53.5% | 3.2% |
| CAPEX, % of revenue | 0.7% | 0.6% | 0.4% | 1.5% | 3.2% | 1.7% |
| ROIC | -20.9% | -8.7% | -2.5% | 6.2% | 0.3% | -5.9% |
| ROE | -49.8% | -44.0% | -18.7% | 1.5% | 30.3% | 28.7% |
| Net Debt/EBITDA | | 37.2x | 3.0x | 0.4x | 0.7x | 0.3x |
Revenue and profitability
The company's Revenue increased on 5.2% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 22.2 pp from 34.1% to 12.0% in 2015.
Gross Margin decreased slightly on 1.6 pp from 56.2% to 54.6% in FY2015. SG&A as a % of Revenue increased on 3.2 pp from 50.3% to 53.5% in FY2015.
Net Income marign surged on 19.4 pp from 0.82% to 20.2% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Russell Breweries Inc's CAPEX/Revenue was 3.2% in FY2015. The company's CAPEX/Revenue increased on 2.7 pp from 0.56% in FY2012 to 3.2% in FY2015. Average CAPEX/Revenue for the last three years was 1.7%.The company maintained rich investment policy and has spent a big chunk of EBITDA (63.4%) to CAPEX.
Return on investment
The company operates at good ROE (30.27%) while ROIC is low (0.31%). ROIC decreased on 5.9 pp from 6.2% to 0.31% in FY2015. ROE surged on 28.7 pp from 1.5% to 30.3% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.7x and Debt / EBITDA is 1.7x. Net Debt / EBITDA surged on 0.3x from 0.4x to 0.7x in FY2015. Debt dropped on 25.0% in FY2015 while cash dropped on 35.3% in FY2015.
Appendix 1: Peers in Consumer, Non-cyclical
Below we provide Russell Breweries Inc 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 |
|---|
| GDI Integrated Facility Services Inc ($GDI) | 43.8% | -38.8% | -72.9% | 218,969.1% | |
| Cardiome Pharma Corp ($COM) | -97.7% | -47.6% | 471.7% | 566.0% | |
| Family Memorials Inc ($FAM) | -13.6% | 54.7% | 22.9% | 245.3% | |
| Nobilis Health Corp ($NHC) | 16.6% | 45.3% | 49.0% | 169.9% | |
| Concordia Healthcare Corp ($CXR) | | | | 159.5% | |
| |
|---|
| Median (85 companies) | 12.0% | 7.7% | 6.9% | 13.2% | 6.3% |
|---|
| Russell Breweries Inc ($RB) | | 10.3% | 3.9% | 12.1% | 5.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nobilis Health Corp ($NHC) | | | | 99.8% | |
| Cipher Pharmaceuticals Inc ($CPH) | | | 99.5% | 98.3% | |
| Heritage Global Inc ($HGP) | 99.5% | | | 95.7% | |
| Ritchie Bros Auctioneers Inc ($RBA) | 87.9% | 88.7% | 88.4% | 88.0% | |
| Concordia Healthcare Corp ($CXR) | | | 79.4% | 86.0% | |
| |
|---|
| Median (73 companies) | 33.7% | 35.8% | 35.5% | 34.6% | 28.1% |
|---|
| Russell Breweries Inc ($RB) | 47.3% | 52.8% | 53.2% | 56.2% | 54.6% |
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% | |
| Information Services Corp ($ISV) | 34.1% | 39.6% | 39.6% | 37.6% | |
| |
|---|
| Median (84 companies) | 8.2% | 8.5% | 9.0% | 10.8% | 10.9% |
|---|
| Russell Breweries Inc ($RB) | -12.0% | 0.5% | 4.7% | 10.1% | 5.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Neptune Technologies & Bioressources Inc ($NTB) | 6.0% | 4.7% | 73.6% | 84.6% | 119.0% |
| CanaDream Corp ($CDN) | 68.6% | 43.3% | 38.1% | 70.4% | 63.4% |
| Ceapro Inc ($CZO) | 2.2% | 3.9% | 35.3% | 52.0% | |
| Feronia Inc/Canada ($FRN) | 129.0% | 191.4% | 117.4% | 42.4% | |
| Microbix Biosystems Inc ($MBX) | 1.0% | 1.2% | 3.0% | 40.3% | |
| |
|---|
| Median (85 companies) | 2.4% | 2.6% | 2.5% | 2.6% | 5.8% |
|---|
| Russell Breweries Inc ($RB) | 0.7% | 0.6% | 0.4% | 1.5% | 3.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Biosyent Inc ($RX) | 45.5% | 71.7% | 62.4% | 62.9% | |
| Information Services Corp ($ISV) | 56.0% | 71.8% | 72.8% | 58.9% | |
| Covalon Technologies Ltd ($COV) | -49.6% | -75.8% | -30.1% | 50.6% | |
| Cipher Pharmaceuticals Inc ($CPH) | -22.9% | 21.8% | 81.4% | 44.6% | |
| Ceapro Inc ($CZO) | 69.9% | -33.5% | 15.5% | 43.5% | |
| |
|---|
| Median (85 companies) | 8.0% | 7.2% | 6.7% | 7.8% | 7.2% |
|---|
| Russell Breweries Inc ($RB) | -20.9% | -8.7% | -2.5% | 6.2% | 0.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Noble Iron Inc ($NIR) | | 25.5x | 12.9x | 227.3x | |
| Family Memorials Inc ($FAM) | | | | 15.2x | |
| Amica Mature Lifestyles Inc ($ACC) | 11.7x | 9.4x | 14.7x | 13.8x | 12.3x |
| Cott Corp ($BCB) | 2.6x | 2.0x | 2.2x | 13.4x | |
| CRH Medical Corp ($CRH) | -2.3x | -3.1x | -3.5x | 12.0x | |
| |
|---|
| Median (69 companies) | 1.8x | 2.5x | 2.1x | 2.7x | 1.6x |
|---|
| Russell Breweries Inc ($RB) | | 37.2x | 3.0x | 0.4x | 0.7x |
