Canadian National Railway Co CAPEX surged on 17.8% in 2015 and Revenue increased on 3.9%
26.01.2016 • About Canadian National Railway Co (
$CNR) • By InTwits
Canadian National Railway Co reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Canadian National Railway Co has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.9%. At the same time it's a lot of higher than industry average of 6.9%.
- CAPEX is quite volatile: 4,468 in 2015, 11,398 in 2014, 7,211 in 2013, 6,104 in 2012, 6,201 in 2011
- The company has highly profitable business model: ROIC is at 16.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.6x while industry average is 1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Canadian National Railway Co ($CNR) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 9,028 | 9,920 | 10,575 | 12,134 | 12,611 | 3.9% |
| EBITDA | 4,180 | 4,609 | 4,853 | 5,674 | 6,424 | 13.2% |
| Net Income | 2,457 | 2,680 | 2,612 | 3,167 | 3,538 | 11.7% |
Balance Sheet
|
|---|
| Cash | 101 | 155 | 214 | 52 | 153 | 194.2% |
| Short Term Debt | 135 | 577 | 1,021 | 544 | 1,442 | 165.1% |
| Long Term Debt | 6,441 | 6,323 | 6,819 | 7,828 | 8,985 | 14.8% |
Cash flow
|
|---|
| Capex | 1,625 | 1,731 | 1,973 | 2,297 | 2,706 | 17.8% |
Ratios
|
|---|
| Revenue growth | 8.8% | 9.9% | 6.6% | 14.7% | 3.9% | |
| EBITDA growth | 8.3% | 10.3% | 5.3% | 16.9% | 13.2% | |
| EBITDA Margin | 46.3% | 46.5% | 45.9% | 46.8% | 50.9% | 4.2% |
| Net Income Margin | 27.2% | 27.0% | 24.7% | 26.1% | 28.1% | 2.0% |
| CAPEX, % of revenue | 18.0% | 17.4% | 18.7% | 18.9% | 21.5% | 2.5% |
| ROIC | 14.6% | 16.0% | 15.2% | 16.4% | 16.8% | 0.4% |
| ROE | 22.4% | 24.7% | 21.8% | 24.0% | 24.9% | 0.9% |
| Net Debt/EBITDA | 1.5x | 1.5x | 1.6x | 1.5x | 1.6x | 0.1x |
Revenue and profitability
Canadian National Railway Co's Revenue increased on 3.9% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 4.2 pp from 46.8% to 50.9% in 2015.
Net Income marign increased slightly on 2.0 pp from 26.1% to 28.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 21.5% in 2015. The company's CAPEX/Revenue increased on 4.0 pp from 17.4% in 2012 to 21.5% in 2015. It's average level of CAPEX/Revenue for the last three years was 19.7%.
Return on investment
The company operates at high and attractive ROE (24.90%) while ROIC is a bit lower (16.81%). ROIC showed almost no change in 2015. ROE increased slightly on 0.93 pp from 24.0% to 24.9% in 2015.
Leverage (Debt)
Debt level is 1.6x Net Debt / EBITDA and 1.6x Debt / EBITDA. Net Debt / EBITDA jumped on 0.1x from 1.5x to 1.6x in 2015. Debt surged on 24.5% in 2015 while cash jumped on 194% in 2015.
Appendix 1: Peers in Industrial
Below we provide Canadian National Railway Co 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 ($EFL) | | -4.0% | -71.2% | 160.5% | 123.8% |
| Enterprise Group Inc ($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) | | 19.7% | 0.9% | 50.5% | 35.3% |
| Lumenpulse Inc ($LMP) | | 56.7% | 33.9% | 47.0% | 61.8% |
| |
|---|
| Median (92 companies) | 12.5% | 11.5% | 4.9% | 9.1% | 19.0% |
|---|
| Canadian National Railway Co ($CNR) | | 9.9% | 6.6% | 14.7% | 3.9% |
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 ($AF) | 76.4% | 75.0% | 76.5% | 72.2% | 69.2% |
| Epicore BioNetworks Inc ($EBN) | 59.0% | 60.8% | 63.2% | 64.1% | 58.1% |
| FLYHT Aerospace Solutions Ltd ($FLY) | 54.0% | 57.2% | 59.2% | 62.9% | |
| |
|---|
| Median (89 companies) | 23.3% | 23.2% | 23.4% | 22.9% | 26.5% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Canadian Pacific Railway Ltd ($CP) | 28.1% | 26.1% | 32.4% | 43.7% | 48.9% |
| Vitreous Glass Inc ($VCI) | 29.0% | 31.4% | 32.2% | 37.8% | 39.0% |
| Questor Technology Inc ($QST) | 25.1% | 25.7% | 34.9% | 34.1% | |
| Progressive Waste Solutions Ltd ($BIN) | 32.2% | 30.7% | 33.1% | 34.0% | |
| Photon Control Inc ($PHO) | 8.1% | 17.6% | 24.8% | 29.3% | |
| |
|---|
| Median (85 companies) | 8.1% | 9.2% | 8.3% | 7.2% | 11.9% |
|---|
| Canadian National Railway Co ($CNR) | 46.3% | 46.5% | 45.9% | 46.8% | 50.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cargojet Inc ($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 (92 companies) | 2.4% | 3.0% | 3.5% | 3.1% | 3.1% |
|---|
| Canadian National Railway Co ($CNR) | 18.0% | 17.4% | 18.7% | 18.9% | 21.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vitreous Glass Inc ($VCI) | 26.1% | 30.5% | 32.3% | 48.3% | 51.0% |
| 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 ($AF) | 18.3% | 5.3% | 24.0% | 33.9% | 19.0% |
| Epicore BioNetworks Inc ($EBN) | 24.8% | 28.1% | 16.1% | 32.5% | 26.3% |
| |
|---|
| Median (93 companies) | 8.9% | 9.3% | 8.5% | 8.5% | 11.2% |
|---|
| Canadian National Railway Co ($CNR) | 14.6% | 16.0% | 15.2% | 16.4% | 16.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sigma Industries Inc ($SSG) | | 4.4x | 11.3x | 225.9x | 2.9x |
| H2O Innovation Inc ($HEO) | | | 4.2x | 73.2x | 1.6x |
| Grand Power Logistics Group Inc ($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 | |
| |
|---|
| Median (72 companies) | 1.1x | 1.5x | 1.4x | 1.2x | -0.2x |
|---|
| Canadian National Railway Co ($CNR) | 1.5x | 1.5x | 1.6x | 1.5x | 1.6x |
