RONA Inc Debt jumped on 124% in 2015 and Revenue increased on 3.3%
16.02.2016 • About RONA Inc (
$RON) • By InTwits
RONA Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 4.9% in FY2015, 5.2% in FY2014, 1.9% in FY2013, 3.4% in FY2012, 2.5% in FY2011
- RONA Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's a lot of higher than industry average of 26.4%.
- CAPEX is quite volatile: 49.1 in FY2015, 43.5 in FY2014, 38.3 in FY2013, 33.0 in FY2012, 76.2 in FY2011
- The company has potentially unprofitable business model: ROIC is at 6.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
RONA Inc ($RON) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 4,805 | 4,444 | 4,192 | 4,096 | 4,233 | 3.3% |
| Gross Profit | 1,368 | 1,199 | 1,097 | 1,067 | 1,144 | 7.2% |
| SG&A | 1,233 | 1,011 | 935 | 831 | 882 | 6.1% |
| EBITDA | 118 | 151 | 79 | 212 | 207 | -2.0% |
| Net Income | -78 | 16 | -154 | 76 | 68 | -10.4% |
Balance Sheet
|
|---|
| Cash | 17 | 21 | 8 | 17 | 0 | -100.0% |
| Short Term Debt | 25 | 21 | 11 | 3 | 191 | 5,974.6% |
| Long Term Debt | 232 | 299 | 164 | 184 | 227 | 23.6% |
Cash flow
|
|---|
| Capex | 76 | 33 | 38 | 44 | 49 | 12.8% |
Ratios
|
|---|
| Revenue growth | -0.3% | -7.5% | -5.7% | -2.3% | 3.3% | |
| EBITDA growth | -64.4% | 28.0% | -47.7% | 167.2% | -2.0% | |
| Gross Margin | 28.5% | 27.0% | 26.2% | 26.0% | 27.0% | 1.0% |
| EBITDA Margin | 2.5% | 3.4% | 1.9% | 5.2% | 4.9% | -0.3% |
| Net Income Margin | -1.6% | 0.4% | -3.7% | 1.9% | 1.6% | -0.2% |
| SG&A, % of revenue | 25.7% | 22.7% | 22.3% | 20.3% | 20.8% | 0.5% |
| CAPEX, % of revenue | 1.6% | 0.7% | 0.9% | 1.1% | 1.2% | 0.1% |
| ROIC | -1.4% | 2.0% | -1.8% | 6.9% | 6.0% | -0.9% |
| ROE | -4.8% | 0.4% | -9.3% | 4.3% | 4.1% | -0.2% |
| Net Debt/EBITDA | 2.0x | 2.0x | 2.1x | 0.8x | 2.0x | 1.2x |
Revenue and profitability
RONA Inc's Revenue increased on 3.3% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 159 pp from 50.8% to -109% in 2015.
Gross Margin increased slightly on 0.98 pp from 26.0% to 27.0% in FY2015. SG&A as a % of Revenue increased slightly on 0.54 pp from 20.3% to 20.8% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.2% in FY2015. RONA Inc showed almost no change in CAPEX/Revenue from FY2012 to FY2015. For the last three years the average CAPEX/Revenue was 1.0%.
Return on investment
The company operates at low ROIC (6.02%) and ROE (4.14%). ROIC decreased slightly on 0.87 pp from 6.9% to 6.0% in FY2015. ROE showed almost no change in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.0x and Debt / EBITDA is 2.0x. Net Debt / EBITDA surged on 1.2x from 0.8x to 2.0x in FY2015. Debt surged on 124% in FY2015 while cash dropped on 100% in FY2015.
Appendix 1: Peers in Consumer, Cyclical
Below you can find RONA Inc benchmarking vs. other companies in Consumer, Cyclical 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 |
|---|
| Amaya Inc ($AYA) | 216.4% | 311.5% | 85.2% | 254.0% | |
| Partner Jet Corp ($PJT) | -19.9% | -15.2% | 1.2% | 119.7% | |
| Kelso Technologies Inc ($KLS) | 80.5% | 577.5% | 487.8% | 81.4% | |
| XPEL Technologies Corp ($DAP.U) | 46.3% | 76.6% | 67.7% | 65.5% | |
| Holloway Lodging Corp ($HLC) | 5.4% | -24.6% | 2.7% | 62.7% | |
| |
|---|
| Median (67 companies) | 11.5% | 5.3% | 5.3% | 7.7% | 3.7% |
|---|
| RONA Inc ($RON) | | -7.5% | -5.7% | -2.3% | 3.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Restaurant Brands International Inc ($QSR) | | | 69.7% | 87.0% | 42.9% |
| Imvescor Restaurant Group Inc ($IRG) | 96.2% | 94.2% | 89.7% | 84.9% | 84.3% |
| DEQ Systems Corp ($DEQ) | 74.3% | 77.5% | 78.4% | 84.7% | |
| Second Cup Ltd/The ($SCU) | 91.1% | 86.6% | 85.1% | 72.7% | |
| New Look Vision Group Inc ($BCI) | 72.3% | 71.8% | 72.6% | 72.6% | |
| |
|---|
| Median (59 companies) | 37.9% | 36.5% | 32.1% | 34.6% | 36.9% |
|---|
| RONA Inc ($RON) | 28.5% | 27.0% | 26.2% | 26.0% | 27.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Westshore Terminals Investment Corp ($WTE) | | 49.7% | 65.9% | 60.9% | 59.6% |
| Gamehost Inc ($GH) | 44.2% | 46.1% | 45.7% | 45.9% | |
| Great Canadian Gaming Corp ($GC) | 34.1% | 16.8% | 41.1% | 40.1% | |
| Amaya Inc ($AYA) | -5.7% | 7.2% | 38.2% | 39.3% | |
| MTY Food Group Inc ($MTY) | 32.2% | 36.3% | 38.7% | 37.0% | 34.9% |
| |
|---|
| Median (65 companies) | 8.7% | 8.1% | 9.8% | 10.0% | 10.0% |
|---|
| RONA Inc ($RON) | 2.5% | 3.4% | 1.9% | 5.2% | 4.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 32.5% | |
| WestJet Airlines Ltd ($WJA) | 3.9% | 7.9% | 19.5% | 18.6% | 22.5% |
| Exchange Income Corp ($EIF) | 8.2% | 7.9% | 15.8% | 15.5% | |
| Holloway Lodging Corp ($HLC) | 3.4% | 8.2% | 6.7% | 14.8% | |
| Kelso Technologies Inc ($KLS) | 79.2% | 0.4% | 0.7% | 13.5% | |
| |
|---|
| Median (68 companies) | 2.9% | 2.7% | 2.9% | 2.4% | 2.7% |
|---|
| RONA Inc ($RON) | 1.6% | 0.7% | 0.9% | 1.1% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Partner Jet Corp ($PJT) | -30.7% | -51.6% | -50.8% | 85.1% | |
| Kelso Technologies Inc ($KLS) | -121.3% | | | 48.8% | |
| XPEL Technologies Corp ($DAP.U) | 52.9% | 54.7% | 57.5% | 43.2% | |
| Westshore Terminals Investment Corp ($WTE) | | 24.0% | 37.8% | 35.0% | 38.3% |
| Iplayco Corp Ltd ($IPC) | -35.4% | 23.0% | 58.5% | 33.6% | 10.9% |
| |
|---|
| Median (68 companies) | 10.7% | 9.8% | 10.8% | 9.8% | 9.4% |
|---|
| RONA Inc ($RON) | -1.4% | 2.0% | -1.8% | 6.9% | 6.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mountain China Resorts Holding Ltd ($MCG) | | | | 317.1x | |
| Restaurant Brands International Inc ($QSR) | | | 3.8x | 33.6x | 5.8x |
| Allied Hotel Properties Inc ($AHP) | | | | 21.3x | |
| Hudson's Bay Co ($HBC) | 8.7x | 3.8x | 3.6x | 19.1x | 3.6x |
| Amaya Inc ($AYA) | | 17.9x | 1.8x | 13.5x | |
| |
|---|
| Median (57 companies) | 1.3x | 1.2x | 1.6x | 2.0x | 1.1x |
|---|
| RONA Inc ($RON) | 2.0x | 2.0x | 2.1x | 0.8x | 2.0x |
