Transat AT Inc reports 22.8% revenue decline in FY2015 and 1.2 pp EBITDA Margin growth from 2.3% to 3.5%
09.12.2015 • About Transat AT Inc (
$TRZ.A) • By InTwits
Transat AT Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Transat AT Inc is a company in decline: FY2015 revenue growth was -22.8%, 5 years revenue CAGR was -3.7%
- EBITDA Margin is quite volatile: 3.5% in FY2015, 2.3% in FY2014, 3.0% in FY2013, 0.6% in FY2012, 0.7% in FY2011
- Transat AT Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's in pair with industry average of 88.7%.
- CAPEX is quite volatile: 74.6 in 2015, 23.4 in 2014, 67.1 in 2013, 16.1 in 2012, 3.0 in 2011
- The company has business model with average profitability: ROIC is at 11.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Transat AT Inc ($TRZ.A) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,654 | 3,714 | 3,648 | 3,752 | 2,898 | -22.8% |
| Gross Profit | 1,654 | 1,738 | 1,697 | 1,752 | 1,638 | -6.5% |
| EBITDA | 27 | 23 | 111 | 85 | 101 | 17.7% |
| Net Income | -15 | -17 | 58 | 23 | 43 | 86.1% |
Balance Sheet
|
|---|
| Cash | 182 | 171 | 266 | 309 | 336 | 8.9% |
| Short Term Debt | 19 | 20 | 11 | 11 | 0 | -100.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 54 | 65 | 55 | 65 | 55 | -15.1% |
Ratios
|
|---|
| Revenue growth | 4.4% | 1.6% | -1.8% | 2.9% | -22.8% | |
| EBITDA growth | -79.2% | -14.7% | 390.5% | -23.0% | 17.7% | |
| Gross Margin | 45.3% | 46.8% | 46.5% | 46.7% | 56.5% | 9.8% |
| EBITDA Margin | 0.7% | 0.6% | 3.0% | 2.3% | 3.5% | 1.2% |
| Net Income Margin | -0.4% | -0.4% | 1.6% | 0.6% | 1.5% | 0.9% |
| CAPEX, % of revenue | 1.5% | 1.7% | 1.5% | 1.7% | 1.9% | 0.2% |
| ROIC | -3.9% | -4.7% | 17.2% | 8.3% | 11.0% | 2.8% |
| ROE | -3.6% | -4.4% | 14.4% | 4.9% | 8.3% | 3.4% |
| Net Debt/EBITDA | -6.1x | -6.7x | -2.3x | -3.5x | -3.3x | 0.1x |
Revenue and profitability
The company's Revenue dropped on 22.8% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.2 pp from 2.3% to 3.5% in FY2015.
Gross Margin increased on 9.8 pp from 46.7% to 56.5% in FY2015.
Net Income marign increased slightly on 0.86 pp from 0.61% to 1.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 1.9%. Transat AT Inc showed almost no change in CAPEX/Revenue from FY2012 to FY2015. It's average CAPEX/Revenue for the last three years was 1.7%.Transat AT Inc invested a big chunk of EBITDA (54.8%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (11.01%) and ROE (8.34%). ROIC increased on 2.8 pp from 8.3% to 11.0% in FY2015. ROE increased on 3.4 pp from 4.9% to 8.3% in FY2015.
Leverage (Debt)
The company paid down all the debt in FY2015. Cash increased on 8.9% in FY2015.
Management team
The company's CEO is Jean-Marc Eustache. Jean-Marc Eustache is a founder and has 31 years tenure at the company. Transat AT Inc's CFO is Denis Petrin. Denis Petrin has 9 years tenure at the company.
Appendix 1: Peers in Consumer, Cyclical
Below we provide Transat AT Inc benchmarking against other companies in Consumer, 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 |
|---|
| Amaya Inc ($AYA) | 216.4% | 311.5% | 85.2% | 254.0% | |
| Partner Jet Corp ($PJT) | -19.9% | -15.2% | 1.2% | 119.7% | |
| Kelso Technologies Inc ($KLS) | 80.5% | 577.5% | 487.8% | 81.4% | |
| XPEL Technologies Corp ($DAP.U) | 46.3% | 76.6% | 67.7% | 65.5% | |
| Holloway Lodging Corp ($HLC) | 5.4% | -24.6% | 2.7% | 62.7% | |
| |
|---|
| Median (67 companies) | 11.5% | 5.3% | 5.3% | 7.7% | 4.0% |
|---|
| Transat AT Inc ($TRZ.A) | | 1.6% | -1.8% | 2.9% | -22.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Restaurant Brands International Inc ($QSR) | | | 69.7% | 87.0% | |
| Imvescor Restaurant Group Inc ($IRG) | 96.2% | 94.2% | 89.7% | 84.9% | |
| DEQ Systems Corp ($DEQ) | 74.3% | 77.5% | 78.4% | 84.7% | |
| Second Cup Ltd/The ($SCU) | 91.1% | 86.6% | 85.1% | 72.7% | |
| New Look Vision Group Inc ($BCI) | 72.3% | 71.8% | 72.6% | 72.6% | |
| |
|---|
| Median (59 companies) | 36.1% | 34.1% | 31.6% | 32.5% | 36.8% |
|---|
| Transat AT Inc ($TRZ.A) | 45.3% | 46.8% | 46.5% | 46.7% | 56.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Westshore Terminals Investment Corp ($WTE) | | 49.7% | 65.9% | 60.9% | 59.6% |
| Gamehost Inc ($GH) | 44.2% | 46.1% | 45.7% | 45.9% | |
| Great Canadian Gaming Corp ($GC) | 34.1% | 16.8% | 41.1% | 40.1% | |
| Amaya Inc ($AYA) | -5.7% | 7.2% | 38.2% | 39.3% | |
| MTY Food Group Inc ($MTY) | 32.2% | 36.3% | 38.7% | 37.0% | |
| |
|---|
| Median (65 companies) | 8.7% | 8.1% | 9.8% | 10.0% | 8.7% |
|---|
| Transat AT Inc ($TRZ.A) | 0.7% | 0.6% | 3.0% | 2.3% | 3.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 32.5% | |
| WestJet Airlines Ltd ($WJA) | 3.9% | 7.9% | 19.5% | 18.6% | |
| Exchange Income Corp ($EIF) | 8.2% | 7.9% | 15.8% | 15.5% | |
| Holloway Lodging Corp ($HLC) | 3.4% | 8.2% | 6.7% | 14.8% | |
| Kelso Technologies Inc ($KLS) | 79.2% | 0.4% | 0.7% | 13.5% | |
| |
|---|
| Median (68 companies) | 2.9% | 2.7% | 2.9% | 2.4% | 2.7% |
|---|
| Transat AT Inc ($TRZ.A) | 1.5% | 1.7% | 1.5% | 1.7% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Partner Jet Corp ($PJT) | -30.7% | -51.6% | -50.8% | 85.1% | |
| Kelso Technologies Inc ($KLS) | -121.3% | | | 48.8% | |
| XPEL Technologies Corp ($DAP.U) | 52.9% | 54.7% | 57.5% | 43.2% | |
| Westshore Terminals Investment Corp ($WTE) | | 24.0% | 37.8% | 35.0% | 38.3% |
| Iplayco Corp Ltd ($IPC) | -35.4% | 23.0% | 58.5% | 33.6% | 10.9% |
| |
|---|
| Median (68 companies) | 10.7% | 9.8% | 10.1% | 9.8% | 5.6% |
|---|
| Transat AT Inc ($TRZ.A) | -3.9% | -4.7% | 17.2% | 8.3% | 11.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mountain China Resorts Holding Ltd ($MCG) | | | | 317.1x | |
| Restaurant Brands International Inc ($QSR) | | | 3.8x | 33.6x | |
| Allied Hotel Properties Inc ($AHP) | | | | 21.3x | |
| Hudson's Bay Co ($HBC) | 8.7x | 3.8x | 3.6x | 19.1x | 3.6x |
| Amaya Inc ($AYA) | | 17.9x | 1.8x | 13.5x | |
| |
|---|
| Median (57 companies) | 1.3x | 1.4x | 1.8x | 2.0x | 1.4x |
|---|
| Transat AT Inc ($TRZ.A) | -6.1x | -6.7x | -2.3x | -3.5x | -3.3x |
