Agrium Inc reports 41.2% CAPEX decline and 7.8% Revenue decline
09.02.2016 • About Agrium Inc (
$AGU) • By InTwits
Agrium Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Agrium Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.7%. At the same time it's a lot of higher than industry average of 6.9%.
- CAPEX is quite volatile: 1,188 in 2015, 2,021 in 2014, 1,755 in 2013, 1,225 in 2012, 663 in 2011
- The company has highly profitable business model: ROIC is at 13.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Agrium Inc ($AGU) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 15,470 | 16,024 | 15,727 | 16,042 | 14,795 | -7.8% |
| Gross Profit | 4,333 | 4,308 | 3,773 | 3,552 | 3,888 | 9.5% |
| SG&A | 2,008 | 2,125 | 2,205 | 2,397 | 2,189 | -8.7% |
| EBITDA | 2,706 | 2,596 | 2,040 | 1,705 | 2,128 | 24.8% |
| Net Income | 1,371 | 1,494 | 1,062 | 714 | 988 | 38.4% |
Balance Sheet
|
|---|
| Cash | 1,346 | 658 | 801 | 848 | 515 | -39.3% |
| Short Term Debt | 265 | 1,832 | 822 | 1,538 | 843 | -45.2% |
| Long Term Debt | 2,098 | 2,069 | 3,066 | 3,559 | 4,513 | 26.8% |
Cash flow
|
|---|
| Capex | 663 | 1,225 | 1,755 | 2,021 | 1,188 | -41.2% |
Ratios
|
|---|
| Revenue growth | 44.0% | 3.6% | -1.9% | 2.0% | -7.8% | |
| EBITDA growth | 84.1% | -4.1% | -21.4% | -16.4% | 24.8% | |
| Gross Margin | 28.0% | 26.9% | 24.0% | 22.1% | 26.3% | 4.1% |
| EBITDA Margin | 17.5% | 16.2% | 13.0% | 10.6% | 14.4% | 3.8% |
| Net Income Margin | 8.9% | 9.3% | 6.8% | 4.5% | 6.7% | 2.2% |
| SG&A, % of revenue | 13.0% | 13.3% | 14.0% | 14.9% | 14.8% | -0.1% |
| CAPEX, % of revenue | 4.3% | 7.6% | 11.2% | 12.6% | 8.0% | -4.6% |
| ROIC | 25.8% | 20.7% | 13.8% | 9.9% | 13.7% | 3.8% |
| ROE | 23.6% | 22.4% | 15.5% | 10.6% | 15.6% | 5.0% |
| Net Debt/EBITDA | 0.4x | 1.2x | 1.5x | 2.5x | 2.3x | -0.2x |
Revenue and profitability
The company's Revenue decreased on 7.8% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.8 pp from 10.6% to 14.4% in 2015.
Gross Margin increased on 4.1 pp from 22.1% to 26.3% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign increased on 2.2 pp from 4.5% to 6.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 8.0%. Agrium Inc showed almost no change in CAPEX/Revenue from 2012 to 2015. Average CAPEX/Revenue for the last three years was 10.6%.Agrium Inc invested a big chunk of EBITDA (55.8%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at good ROIC (13.69%) and ROE (15.58%). ROIC increased on 3.8 pp from 9.9% to 13.7% in 2015. ROE increased on 5.0 pp from 10.6% to 15.6% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.3x and Debt / EBITDA is 2.5x. Net Debt / EBITDA dropped on 0.2x from 2.5x to 2.3x in 2015. Debt increased on 5.1% in 2015 while cash dropped on 39.3% in 2015.
Management team
The company's CEO Charles V Magro "Chuck" is a founder and has spent 4 years at the company. Steven James Douglas "Steve" is a The company's CFO. Steven James Douglas "Steve" has spent 4 years at the company.
Appendix 1: Peers in Basic Materials
Below we provide Agrium Inc benchmarking against other companies in Basic Materials 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 |
|---|
| Northern Sun Mining Corp ($NSC) | -93.3% | 315.4% | -99.4% | 8,924.9% | |
| Turquoise Hill Resources Ltd ($TRQ) | | | -34.0% | 3,268.9% | -5.8% |
| Asian Mineral Resources Ltd ($ASN) | | | | 859.1% | |
| Ur-Energy Inc ($URE) | | | | 285.4% | |
| Nevsun Resources Ltd ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 27.7% | 8.5% | -5.1% | -1.1% | 4.3% |
|---|
| Agrium Inc ($AGU) | | 3.6% | -1.9% | 2.0% | -7.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nevsun Resources Ltd ($NSU) | 90.3% | 89.9% | 94.8% | 95.5% | |
| Franco-Nevada Corp ($FNV) | 84.6% | 86.1% | 85.0% | 83.5% | |
| Labrador Iron Ore Royalty Corp ($LIF) | 80.2% | 80.2% | 80.2% | 80.2% | |
| Lucara Diamond Corp ($LUC) | | 42.5% | 57.4% | 66.7% | |
| Royal Gold Inc ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 31.2% | 32.0% | 20.7% | 16.8% | 16.5% |
|---|
| Agrium Inc ($AGU) | 28.0% | 26.9% | 24.0% | 22.1% | 26.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Royal Gold Inc ($RGL) | 86.1% | 88.2% | 88.6% | 84.4% | 65.0% |
| Franco-Nevada Corp ($FNV) | 38.6% | 62.1% | 44.6% | 72.3% | |
| Silver Wheaton Corp ($SLW) | 84.8% | 82.6% | 75.3% | 69.6% | |
| Sandstorm Gold Ltd ($SSL) | 63.8% | 74.3% | 49.9% | 62.1% | |
| Nevsun Resources Ltd ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (137 companies) | 23.3% | 18.6% | 11.3% | 9.7% | 6.7% |
|---|
| Agrium Inc ($AGU) | 17.5% | 16.2% | 13.0% | 10.6% | 14.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Barkerville Gold Mines Ltd ($BGM) | 123.7% | 38.5% | 49.9% | 7,166.9% | 3.2% |
| Marlin Gold Mining Ltd ($MLN) | | | | 508.8% | |
| Imperial Metals Corp ($III) | 28.2% | 69.2% | 185.7% | 280.2% | |
| Golden Minerals Co ($AUM) | 462.4% | 36.9% | 16.8% | 212.8% | |
| Franco-Nevada Corp ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 24.1% | 26.3% | 25.5% | 16.3% | 11.6% |
|---|
| Agrium Inc ($AGU) | 4.3% | 7.6% | 11.2% | 12.6% | 8.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lucara Diamond Corp ($LUC) | -7.1% | -2.9% | 41.3% | 54.7% | |
| CanAf Group Inc ($CAF) | 74.9% | 37.0% | 65.2% | 37.6% | |
| Nevsun Resources Ltd ($NSU) | 89.8% | 52.2% | 8.8% | 35.0% | |
| Dynacor Gold Mines Inc ($DNG) | 45.6% | 62.8% | 50.9% | 31.3% | |
| Canfor Pulp Products Inc ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (143 companies) | 5.4% | 4.9% | -0.1% | -0.1% | -5.8% |
|---|
| Agrium Inc ($AGU) | 25.8% | 20.7% | 13.8% | 9.9% | 13.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| VMS Ventures Inc ($VMS) | | | | 86.7x | 4.7x |
| Ur-Energy Inc ($URE) | | | | 55.1x | |
| Katanga Mining Ltd ($KAT) | 0.4x | 19.4x | 3.3x | 18.8x | |
| HudBay Minerals Inc ($HBM) | -2.8x | -4.8x | 2.0x | 14.0x | |
| Imperial Metals Corp ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (94 companies) | -0.1x | 0.3x | 0.7x | 0.9x | 1.6x |
|---|
| Agrium Inc ($AGU) | 0.4x | 1.2x | 1.5x | 2.5x | 2.3x |
