Agnico Eagle Mines Ltd reports 9.8% EBITDA growth and 1.8 pp EBITDA Margin growth from 37.0% to 38.8%
10.02.2016 • About Agnico Eagle Mines Ltd (
$AEM) • By InTwits
Agnico Eagle Mines Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 38.8% in 2015, 37.0% in 2014, 35.5% in 2013, 41.1% in 2012, -25.1% in 2011
- Agnico Eagle Mines Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 27.1%. At the same time it's in pair with industry average of 28.1%.
- CAPEX is quite volatile: 31.7 in 2015, 58.0 in 2014, 41.5 in 2013, 13.2 in 2012, 26.6 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Agnico Eagle Mines Ltd ($AEM) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,822 | 1,918 | 1,638 | 1,897 | 1,985 | 4.7% |
| Gross Profit | 946 | 1,020 | 772 | 892 | 990 | 11.0% |
| SG&A | 108 | 119 | 114 | 119 | 97 | -18.4% |
| EBITDA | -458 | 787 | 582 | 702 | 771 | 9.8% |
| Net Income | -569 | 311 | -687 | 83 | 25 | -70.4% |
Balance Sheet
|
|---|
| Cash | 179 | 298 | 139 | 178 | 124 | -30.1% |
| Short Term Debt | 11 | 13 | 12 | 74 | 24 | -67.7% |
| Long Term Debt | 920 | 830 | 987 | 1,322 | 1,118 | -15.4% |
Cash flow
|
|---|
| Capex | 483 | 446 | 621 | 475 | 450 | -5.4% |
Ratios
|
|---|
| Revenue growth | 28.1% | 5.3% | -14.6% | 15.8% | 4.7% | |
| EBITDA growth | -169.4% | -272.0% | -26.1% | 20.6% | 9.8% | |
| Gross Margin | 51.9% | 53.2% | 47.1% | 47.0% | 49.9% | 2.8% |
| EBITDA Margin | -25.1% | 41.1% | 35.5% | 37.0% | 38.8% | 1.8% |
| Net Income Margin | -31.2% | 16.2% | -41.9% | 4.4% | 1.2% | -3.1% |
| SG&A, % of revenue | 5.9% | 6.2% | 6.9% | 6.3% | 4.9% | -1.4% |
| CAPEX, % of revenue | 26.5% | 23.2% | 37.9% | 25.1% | 22.7% | -2.4% |
| ROIC | -14.8% | 10.8% | 5.9% | 5.1% | 2.6% | -2.5% |
| ROE | -16.6% | 9.4% | -22.4% | 2.4% | 0.6% | -1.8% |
| Net Debt/EBITDA | | 0.7x | 1.5x | 1.7x | 1.3x | -0.4x |
Revenue and profitability
The company's Revenue increased on 4.7% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 8.6 pp from 15.8% to 24.3% in 2015.
Gross Margin increased on 2.8 pp from 47.0% to 49.9% in 2015. SG&A as a % of Revenue decreased slightly on 1.4 pp from 6.3% to 4.9% in 2015.
Net Income marign decreased on 3.1 pp from 4.4% to 1.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Agnico Eagle Mines Ltd had CAPEX/Revenue of 22.7%. Agnico Eagle Mines Ltd's CAPEX/Revenue decreased slightly on 0.58 pp from 23.2% in 2012 to 22.7% in 2015. It's average level of CAPEX/Revenue for the last three years was 28.5%.Agnico Eagle Mines Ltd invested a large share of EBITDA (58.4%) to CAPEX.
Return on investment
The company operates at low ROIC (2.62%) and ROE (0.60%). ROIC decreased on 2.5 pp from 5.1% to 2.6% in 2015. ROE decreased slightly on 1.8 pp from 2.4% to 0.60% in 2015.
Leverage (Debt)
Debt level is 1.3x Net Debt / EBITDA and 1.5x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from 1.7x to 1.3x in 2015. Debt dropped on 18.2% in 2015 while cash dropped on 30.1% in 2015.
Management team
The company's CEO is Sean Boyd. Sean Boyd is a founder and has 20 years tenure at the company. David Smith is a Agnico Eagle Mines Ltd's CFO. David Smith has spent 6 years at the company.
Appendix 1: Peers in Basic Materials
Below we provide Agnico Eagle Mines Ltd 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 26.3% | 8.5% | -5.0% | -1.1% | 2.5% |
|---|
| Agnico Eagle Mines Ltd ($AEM) | | 5.3% | -14.6% | 15.8% | 4.7% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 30.1% | 31.5% | 20.7% | 16.8% | 18.9% |
|---|
| Agnico Eagle Mines Ltd ($AEM) | 51.9% | 53.2% | 47.1% | 47.0% | 49.9% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (137 companies) | 23.3% | 18.4% | 11.3% | 9.7% | 6.8% |
|---|
| Agnico Eagle Mines Ltd ($AEM) | -25.1% | 41.1% | 35.5% | 37.0% | 38.8% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 23.9% | 26.3% | 25.2% | 16.0% | 10.2% |
|---|
| Agnico Eagle Mines Ltd ($AEM) | 26.5% | 23.2% | 37.9% | 25.1% | 22.7% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (143 companies) | 7.0% | 4.9% | -0.1% | -0.1% | -5.7% |
|---|
| Agnico Eagle Mines Ltd ($AEM) | -14.8% | 10.8% | 5.9% | 5.1% | 2.6% |
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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (94 companies) | -0.1x | 0.3x | 0.7x | 0.9x | 1.8x |
|---|
| Agnico Eagle Mines Ltd ($AEM) | | 0.7x | 1.5x | 1.7x | 1.3x |
