Rogers Communications Inc Debt jumped on 13.1% in 2015 and Net Debt / EBITDA jumped on 0.4x from 3.2x to 3.6x
27.01.2016 • About Rogers Communications Inc (
$RCI.A) • By InTwits
Rogers Communications Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 36.9% in 2015 vs. 37.9% in 2014 vs. 38.0% in 2011
- Rogers Communications Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.7%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 1,815 in 2015, 1,501 in 2014, 962 in 2013, 444 in 2012, 220 in 2011
- The company has business model with average profitability: ROIC is at 10.7%
- It operates with high leverage: Net Debt/EBITDA is 3.6x while industry average is -0.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Rogers Communications Inc ($RCI.A) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 12,346 | 12,486 | 12,706 | 12,850 | 13,414 | 4.4% |
| Gross Profit | 4,664 | 4,757 | 4,909 | 4,982 | 4,977 | -0.1% |
| EBITDA | 4,691 | 4,658 | 4,876 | 4,875 | 4,953 | 1.6% |
| Net Income | 1,563 | 1,693 | 1,669 | 1,341 | 1,342 | 0.1% |
Balance Sheet
|
|---|
| Cash | 0 | 213 | 2,301 | 176 | 11 | -93.8% |
| Short Term Debt | 92 | 348 | 1,827 | 1,812 | 1,810 | -0.1% |
| Long Term Debt | 10,034 | 10,441 | 12,173 | 13,824 | 15,870 | 14.8% |
Cash flow
|
|---|
| Capex | 2,127 | 2,142 | 2,240 | 2,366 | 2,440 | 3.1% |
Ratios
|
|---|
| Revenue growth | 1.7% | 1.1% | 1.8% | 1.1% | 4.4% | |
| EBITDA growth | 0.9% | -0.7% | 4.7% | -0.0% | 1.6% | |
| Gross Margin | 37.8% | 38.1% | 38.6% | 38.8% | 37.1% | -1.7% |
| EBITDA Margin | 38.0% | 37.3% | 38.4% | 37.9% | 36.9% | -1.0% |
| Net Income Margin | 12.7% | 13.6% | 13.1% | 10.4% | 10.0% | -0.4% |
| CAPEX, % of revenue | 17.2% | 17.2% | 17.6% | 18.4% | 18.2% | -0.2% |
| ROIC | 20.2% | 17.8% | 16.1% | 12.3% | 10.7% | -1.6% |
| ROE | 42.6% | 46.1% | 39.6% | 26.4% | 24.1% | -2.3% |
| Net Debt/EBITDA | 2.2x | 2.3x | 2.4x | 3.2x | 3.6x | 0.4x |
Revenue and profitability
Rogers Communications Inc's Revenue increased on 4.4% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.0 pp from 37.9% to 36.9% in 2015.
Gross Margin decreased slightly on 1.7 pp from 38.8% to 37.1% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Rogers Communications Inc had CAPEX/Revenue of 18.2%. The company showed small growth in CAPEX/Revenue of 1.0 pp from 17.2% in 2012 to 18.2% in 2015. It's average CAPEX/Revenue for the last three years was 18.1%.
Return on investment
The company operates at good ROE (24.14%) while ROIC is low (10.68%). ROIC decreased slightly on 1.6 pp from 12.3% to 10.7% in 2015. ROE decreased on 2.3 pp from 26.4% to 24.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.6x and Debt / EBITDA is 3.6x. Net Debt / EBITDA surged on 0.4x from 3.2x to 3.6x in 2015. Debt jumped on 13.1% in 2015 while cash dropped on 93.8% in 2015.
Management team
Rogers Communications Inc's CEO Alan Douglas Horn is a founder and has spent 10 years at the company. Anthony Staffieri is a Rogers Communications Inc's CFO. Anthony Staffieri has spent 6 years at the company.
Appendix 1: Peers in Communications
Below you can find Rogers Communications Inc benchmarking vs. other companies in Communications industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Telehop Communications Inc ($HOP) | -11.7% | -13.1% | -7.8% | 105.7% | |
| Wi2Wi Corp ($YTY) | | | 11.5% | 100.3% | |
| BSM Technologies Inc ($GPS) | | | 39.1% | 55.5% | 2.7% |
| Plaintree Systems Inc ($NPT) | | 14.5% | 9.1% | 50.8% | -7.1% |
| Aimia Inc ($AIM) | 2.9% | 6.3% | -25.6% | 47.5% | |
| |
|---|
| Median (49 companies) | 7.8% | 5.0% | 2.1% | 3.1% | 1.5% |
|---|
| Rogers Communications Inc ($RCI.A) | | 1.1% | 1.8% | 1.1% | 4.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanted Technologies Corp ($WAN) | 86.6% | 90.5% | 93.2% | 94.3% | 95.6% |
| CounterPath Corp ($CCV) | 74.1% | 80.0% | 85.1% | 80.9% | 81.5% |
| Mediagrif Interactive Technologies Inc ($MDF) | 78.2% | 79.8% | 79.8% | 78.8% | 80.1% |
| NeuLion Inc ($NLN) | 45.2% | 53.6% | 63.8% | 70.2% | |
| Sangoma Technologies Corp ($STC) | 74.5% | 68.8% | | 66.9% | 67.2% |
| |
|---|
| Median (40 companies) | 43.3% | 43.3% | 42.7% | 42.5% | 60.5% |
|---|
| Rogers Communications Inc ($RCI.A) | 37.8% | 38.1% | 38.6% | 38.8% | 37.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Manitoba Telecom Services Inc ($MBT) | 33.7% | 34.3% | 33.7% | 47.4% | |
| Cogeco Cable Inc ($CCA) | 45.8% | 46.0% | 44.9% | 43.8% | 46.2% |
| Cogeco Inc ($CGO) | 28.1% | 43.2% | 43.5% | 43.3% | 44.3% |
| Shaw Communications Inc ($SJR.B) | 43.3% | 42.7% | 43.3% | 42.1% | 44.6% |
| BCE Inc ($BCE) | 37.0% | 38.8% | 37.7% | 38.4% | |
| |
|---|
| Median (49 companies) | 14.1% | 13.5% | 14.1% | 11.7% | 17.7% |
|---|
| Rogers Communications Inc ($RCI.A) | 38.0% | 37.3% | 38.4% | 37.9% | 36.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newfoundland Capital Corp Ltd ($NCC.B) | | 8.7% | 5.5% | 76.8% | |
| Axia NetMedia Corp ($AXX) | 10.7% | 30.8% | 27.2% | 27.0% | |
| UrtheCast Corp ($UR) | | | | 26.5% | |
| TeraGo Inc ($TGO) | 21.6% | 20.9% | 21.5% | 23.1% | |
| Manitoba Telecom Services Inc ($MBT) | 16.3% | 19.8% | 18.1% | 22.4% | |
| |
|---|
| Median (52 companies) | 4.3% | 2.2% | 3.0% | 2.1% | 2.2% |
|---|
| Rogers Communications Inc ($RCI.A) | 17.2% | 17.2% | 17.6% | 18.4% | 18.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi2Wi Corp ($YTY) | -28.5% | -166.9% | | 136.7% | |
| Tucows Inc ($TC) | 12.8% | 17.7% | 22.5% | 35.4% | |
| Asian Television Network International Ltd ($SAT) | 102.7% | 34.6% | 23.6% | 23.4% | |
| Points International Ltd ($PTS) | 20.7% | 14.9% | 15.0% | 21.2% | |
| NeuLion Inc ($NLN) | -62.1% | -55.8% | -10.3% | 18.5% | |
| |
|---|
| Median (53 companies) | 6.3% | 8.0% | 8.2% | 8.0% | 1.6% |
|---|
| Rogers Communications Inc ($RCI.A) | 20.2% | 17.8% | 16.1% | 12.3% | 10.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Plaintree Systems Inc ($NPT) | 0.7x | | | 124.2x | 3.9x |
| Advantex Marketing International Inc ($ADX) | | 4.8x | 2.2x | 5.0x | |
| MDC Partners Inc ($MDZ.A) | 7.3x | 12.4x | 112.6x | 4.6x | |
| Quebecor Inc ($QBR.B) | 2.0x | 3.7x | 3.9x | 4.2x | |
| Postmedia Network Canada Corp ($PNC.B) | 2.9x | 3.3x | 3.4x | 4.2x | |
| |
|---|
| Median (41 companies) | 0.9x | 1.4x | 1.3x | 1.4x | 1.4x |
|---|
| Rogers Communications Inc ($RCI.A) | 2.2x | 2.3x | 2.4x | 3.2x | 3.6x |
