Russel Metals Inc EBITDA dropped on 120% in 2015 and EBITDA Margin decreased on 8.1 pp from 6.5% to -1.6%
16.02.2016 • About Russel Metals Inc (
$RUS) • By InTwits
Russel Metals Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Russel Metals Inc doesn't have a profitable business model yet: 2015 ROIC is -6.3%
- EBITDA Margin is quite volatile: -1.6% in 2015, 6.5% in 2014, 5.6% in 2013, 6.7% in 2012, 8.2% in 2011
- Russel Metals Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%. At the same time it's a lot of higher than industry average of 46.9%.
- CAPEX is quite volatile: 38.3 in 2015, 48.2 in 2014, 27.2 in 2013, 33.7 in 2012, 18.1 in 2011
- The company has unprofitable business model: ROIC is at -6.3%
- It operates with high leverage: Net Debt/EBITDA is 5.0x while industry average is 3.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Russel Metals Inc ($RUS) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,693 | 3,000 | 3,188 | 3,869 | 3,112 | -19.6% |
| Gross Profit | 525 | 523 | 563 | 703 | 487 | -30.8% |
| EBITDA | 221 | 201 | 180 | 252 | -51 | -120.3% |
| Net Income | 118 | 98 | 83 | 124 | -88 | -170.9% |
Balance Sheet
|
|---|
| Cash | 271 | 115 | 116 | 53 | 143 | 168.5% |
| Short Term Debt | 1 | 17 | 1 | 25 | 95 | 283.4% |
| Long Term Debt | 297 | 454 | 457 | 461 | 295 | -35.9% |
Cash flow
|
|---|
| Capex | 18 | 34 | 27 | 48 | 38 | -20.5% |
Ratios
|
|---|
| Revenue growth | 23.7% | 11.4% | 6.3% | 21.4% | -19.6% | |
| EBITDA growth | 51.7% | -9.3% | -10.4% | 40.2% | -120.3% | |
| Gross Margin | 19.5% | 17.4% | 17.7% | 18.2% | 15.7% | -2.5% |
| EBITDA Margin | 8.2% | 6.7% | 5.6% | 6.5% | -1.6% | -8.1% |
| Net Income Margin | 4.4% | 3.3% | 2.6% | 3.2% | -2.8% | -6.0% |
| CAPEX, % of revenue | 0.7% | 1.1% | 0.9% | 1.2% | 1.2% | -0.0% |
| ROIC | 17.6% | 14.3% | 10.9% | 15.3% | -6.3% | -21.5% |
| ROE | 14.9% | 11.9% | 9.7% | 13.4% | -9.6% | -22.9% |
| Net Debt/EBITDA | 0.1x | 1.8x | 1.9x | 1.7x | | -1.7x |
Revenue and profitability
Russel Metals Inc's Revenue dropped on 19.6% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 94.6 pp from -86.5% to 8.1% in FY2015.
Gross Margin decreased on 2.5 pp from 18.2% to 15.7% in 2015.
Net Income marign decreased on 6.0 pp from 3.2% to -2.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 1.2%. CAPEX/Revenue showed almost no change from 2012 to 2015. It's average CAPEX/Revenue for the last three years was 1.1%.
Return on investment
The company operates at negative ROIC (-6.28%) and ROE (-9.55%). ROIC dropped on 21.5 pp from 15.3% to -6.3% in 2015. ROE dropped on 22.9 pp from 13.4% to -9.6% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.0x and Debt / EBITDA is . Net Debt / EBITDA dropped on 1.7x from 1.7x to in 2015. Debt dropped on 19.6% in 2015 while cash surged on 169% in 2015.
Management team
The company's CEO Brian R Hedges is a founder and has spent 9 years at the company.
Appendix 1: Peers in Basic Materials
Below we provide Russel Metals 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 29.4% | 8.0% | -5.1% | -1.1% | 0.6% |
|---|
| Russel Metals Inc ($RUS) | | 11.4% | 6.3% | 21.4% | -19.6% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 31.2% | 32.0% | 21.8% | 16.8% | 16.0% |
|---|
| Russel Metals Inc ($RUS) | 19.5% | 17.4% | 17.7% | 18.2% | 15.7% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (137 companies) | 23.3% | 18.6% | 11.7% | 9.9% | 6.8% |
|---|
| Russel Metals Inc ($RUS) | 8.2% | 6.7% | 5.6% | 6.5% | -1.6% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 24.1% | 26.3% | 25.5% | 16.3% | 10.2% |
|---|
| Russel Metals Inc ($RUS) | 0.7% | 1.1% | 0.9% | 1.2% | 1.2% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (143 companies) | 5.4% | 4.9% | -0.1% | -0.1% | -3.6% |
|---|
| Russel Metals Inc ($RUS) | 17.6% | 14.3% | 10.9% | 15.3% | -6.3% |
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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (94 companies) | -0.1x | 0.3x | 0.7x | 0.9x | 1.8x |
|---|
| Russel Metals Inc ($RUS) | 0.1x | 1.8x | 1.9x | 1.7x | |
