BCE Inc reports 7.1% Net Income growth and 2.2% Revenue growth
04.02.2016 • About BCE Inc (
$BCE) • By InTwits
BCE Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 37.7% in 2015 vs. 38.4% in 2014 vs. 37.0% in 2011
- BCE Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.3%. At the same time it's a lot of higher than industry average of 8.0%.
- CAPEX is quite volatile: 7,273 in 2015, 10,524 in 2014, 8,235 in 2013, 5,194 in 2012, 3,508 in 2011
- The company has highly profitable business model: ROIC is at 12.3%
- It operates with high leverage: Net Debt/EBITDA is 2.4x while industry average is -0.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
BCE Inc ($BCE) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 19,497 | 19,978 | 20,400 | 21,042 | 21,514 | 2.2% |
| Gross Profit | 7,629 | 7,888 | 8,089 | 8,303 | 8,685 | 4.6% |
| EBITDA | 7,220 | 7,755 | 7,683 | 8,087 | 8,105 | 0.2% |
| Net Income | 2,340 | 2,595 | 2,106 | 2,500 | 2,678 | 7.1% |
Balance Sheet
|
|---|
| Cash | 175 | 129 | 335 | 566 | 613 | 8.3% |
| Short Term Debt | 2,106 | 2,136 | 2,571 | 3,743 | 4,895 | 30.8% |
| Long Term Debt | 12,721 | 13,886 | 16,341 | 16,355 | 15,390 | -5.9% |
Cash flow
|
|---|
| Capex | 3,256 | 3,515 | 3,571 | 3,717 | 3,626 | -2.4% |
Ratios
|
|---|
| Revenue growth | 7.9% | 2.5% | 2.1% | 3.1% | 2.2% | |
| EBITDA growth | 4.3% | 7.4% | -0.9% | 5.3% | 0.2% | |
| Gross Margin | 39.1% | 39.5% | 39.7% | 39.5% | 40.4% | 0.9% |
| EBITDA Margin | 37.0% | 38.8% | 37.7% | 38.4% | 37.7% | -0.8% |
| Net Income Margin | 12.0% | 13.0% | 10.3% | 11.9% | 12.4% | 0.6% |
| CAPEX, % of revenue | 16.7% | 17.6% | 17.5% | 17.7% | 16.9% | -0.8% |
| ROIC | 14.7% | 14.1% | 12.6% | 12.6% | 12.3% | -0.3% |
| ROE | 24.6% | 23.2% | 17.9% | 21.0% | 21.1% | 0.1% |
| Net Debt/EBITDA | 2.0x | 2.0x | 2.4x | 2.4x | 2.4x | 0.0x |
Revenue and profitability
The company's Revenue increased on 2.2% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.96 pp from 4.2% to 5.1% in FY2015.
Gross Margin increased slightly on 0.91 pp from 39.5% to 40.4% in 2015.
Net Income marign increased slightly on 0.57 pp from 11.9% to 12.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 16.9%. The company showed small CAPEX/Revenue decline of 0.74 pp from 17.6% in 2012 to 16.9% in 2015. It's average level of CAPEX/Revenue for the last three years was 17.3%.
Return on investment
The company operates at high and attractive ROE (21.08%) while ROIC is a bit lower (12.26%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is 2.4x Net Debt / EBITDA and 2.5x Debt / EBITDA. Net Debt / EBITDA increased slightly on 0.012x from 2.4x to 2.4x in 2015. Debt increased slightly on 0.93% in 2015 while cash increased on 8.3% in 2015.
Management team
BCE Inc's CEO is George A Cope. George A Cope has 10 years tenure at the company. The company's CFO is Glen Leblanc. Glen Leblanc has 3 years tenure at the company.
Appendix 1: Peers in Communications
Below you can find BCE 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 ($AIM) | 2.9% | 6.3% | -25.6% | 47.5% | |
| |
|---|
| Median (49 companies) | 10.2% | 5.0% | 1.8% | 1.9% | 2.7% |
|---|
| BCE Inc ($BCE) | | 2.5% | 2.1% | 3.1% | 2.2% |
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 ($STC) | 74.5% | 68.8% | | 66.9% | 67.2% |
| |
|---|
| Median (40 companies) | 43.3% | 43.3% | 42.7% | 42.5% | 52.3% |
|---|
| BCE Inc ($BCE) | 39.1% | 39.5% | 39.7% | 39.5% | 40.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Manitoba Telecom Services Inc ($MBT) | 33.7% | 34.3% | 33.7% | 47.4% | 42.3% |
| Cogeco Cable Inc ($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% |
| Rogers Communications Inc ($RCI.A) | 38.0% | 37.3% | 38.4% | 37.9% | 36.9% |
| |
|---|
| Median (49 companies) | 14.1% | 13.5% | 14.1% | 11.7% | 17.7% |
|---|
| BCE Inc ($BCE) | 37.0% | 38.8% | 37.7% | 38.4% | 37.7% |
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 ($MBT) | 16.3% | 19.8% | 18.1% | 22.4% | 22.9% |
| |
|---|
| Median (52 companies) | 4.3% | 2.2% | 3.0% | 2.1% | 2.3% |
|---|
| BCE Inc ($BCE) | 16.7% | 17.6% | 17.5% | 17.7% | 16.9% |
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 ($NLN) | -62.1% | -55.8% | -10.3% | 18.5% | |
| |
|---|
| Median (53 companies) | 6.3% | 8.0% | 8.2% | 8.0% | 2.6% |
|---|
| BCE Inc ($BCE) | 14.7% | 14.1% | 12.6% | 12.6% | 12.3% |
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 ($PNC.B) | 2.9x | 3.3x | 3.4x | 4.2x | |
| |
|---|
| Median (41 companies) | 0.9x | 1.4x | 1.3x | 1.4x | 1.5x |
|---|
| BCE Inc ($BCE) | 2.0x | 2.0x | 2.4x | 2.4x | 2.4x |
