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Bombardier Inc revenue decreased on 9.6% in 2015 and EBITDA Margin dropped on 23.5 pp from -0.74% to -24.2%

17.02.2016 • About Bombardier Inc ($BBD.B) • By InTwits

Bombardier Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Bombardier Inc doesn't have a profitable business model yet: 2015 ROIC is -87.2%
  • The company operates at negative EBITDA Margin: -24.2%
  • Bombardier Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -0.7% for the sames years0
  • Bombardier Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.9%. At the same time it's a lot of higher than industry average of 6.9%.
  • CAPEX is quite volatile: 1,114 in 2015, 1,098 in 2014, 1,374 in 2013, 3,565 in 2012, 2,047 in 2011
  • The company has unprofitable business model: ROIC is at -87.2%
  • It operates with high leverage: Net Debt/EBITDA is 8.8x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Bombardier Inc ($BBD.B) key annual financial indicators

mln. $201120122013201420152015/2014
P&L
Revenue18,34716,41418,15120,11118,172-9.6%
Gross Profit2,9032,3612,4932,5771,973-23.4%
SG&A1,4391,4421,4171,3581,213-10.7%
EBITDA1,5351,0301,314-149-4,4002,853.0%
Net Income837460564-1,260-5,347324.4%
Balance Sheet
Cash3,3722,5573,3972,4892,7209.3%
Short Term Debt000567126.8%
Long Term Debt4,7485,3606,9887,6278,90816.8%
Cash flow
Capex1,5002,1252,3571,9821,879-5.2%
Ratios
Revenue growth-5.3%-10.5%10.6%10.8%-9.6%
EBITDA growth-3.8%-32.9%27.6%-111.3%2,853.0%
Gross Margin15.8%14.4%13.7%12.8%10.9%-2.0%
EBITDA Margin8.4%6.3%7.2%-0.7%-24.2%-23.5%
Net Income Margin4.6%2.8%3.1%-6.3%-29.4%-23.2%
SG&A, % of revenue7.8%8.8%7.8%6.8%6.7%-0.1%
CAPEX, % of revenue8.2%12.9%13.0%9.9%10.3%0.5%
ROIC22.2%14.5%13.7%-7.5%-87.2%-79.7%
ROE44.5%74.6%36.2%0.0%
Net Debt/EBITDA0.9x2.7x2.7x0.0x

Revenue and profitability


Bombardier Inc's Revenue decreased on 9.6% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 23.5 pp from -0.74% to -24.2% in 2015.

Gross Margin decreased slightly on 2.0 pp from 12.8% to 10.9% in 2015. SG&A as a % of Revenue showed almost no change in 2015.

Net Income marign dropped on 23.2 pp from -6.3% to -29.4% in 2015.

Capital expenditures (CAPEX) and working capital investments


The company's CAPEX/Revenue was 10.3% in 2015. Bombardier Inc's CAPEX/Revenue decreased on 2.6 pp from 12.9% in 2012 to 10.3% in 2015. For the last three years the average CAPEX/Revenue was 11.1%.

Leverage (Debt)


Debt level is 8.8x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2015. Debt jumped on 16.9% in 2015 while cash increased on 9.3% in 2015.

Management team


Alain M Bellemare is a the company's CEO. Alain M Bellemare is a founder and has spent 3 years at the company. Bombardier Inc's CFO John Di Bert has spent 3 years at the company.

Appendix 1: Peers in Industrial


Below we provide Bombardier Inc benchmarking against other companies in Industrial 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
Electrovaya Inc ($EFL)-4.0%-71.2%160.5%123.8%
Enterprise Group Inc ($E)14.5%3.5%88.3%128.5%
Carmanah Technologies Corp ($CMH)5.8%-26.4%-2.0%68.8%
Exco Technologies Ltd ($XTC)19.7%0.9%50.5%35.3%
Lumenpulse Inc ($LMP)56.7%33.9%47.0%61.8%
 
Median (92 companies)13.5%11.5%4.9%9.1%12.5%
Bombardier Inc ($BBD.B)-10.5%10.6%10.8%-9.6%


Top companies by Gross margin, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
WSP Global Inc ($WSP)81.1%81.1%83.2%81.0%
Pure Technologies Ltd ($PUR)75.7%77.9%78.0%77.5%
Alarmforce Industries Inc ($AF)76.4%75.0%76.5%72.2%69.2%
Epicore BioNetworks Inc ($EBN)59.0%60.8%63.2%64.1%58.1%
FLYHT Aerospace Solutions Ltd ($FLY)54.0%57.2%59.2%62.9%
 
Median (88 companies)23.4%23.4%23.4%23.1%25.5%
Bombardier Inc ($BBD.B)15.8%14.4%13.7%12.8%10.9%


Top companies by EBITDA margin, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Canadian National Railway Co ($CNR)46.3%46.5%45.9%46.8%50.9%
Canadian Pacific Railway Ltd ($CP)28.1%26.1%32.4%43.7%48.9%
Vitreous Glass Inc ($VCI)29.0%31.4%32.2%37.8%39.0%
Questor Technology Inc ($QST)25.1%25.7%34.9%34.1%
Progressive Waste Solutions Ltd ($BIN)32.2%30.7%33.1%34.0%9.8%
 
Median (85 companies)8.1%9.4%8.3%7.7%10.0%
Bombardier Inc ($BBD.B)8.4%6.3%7.2%-0.7%-24.2%


Top companies by CAPEX/Revenue, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Cargojet Inc ($CJT.A)6.8%7.0%6.3%54.1%
Newalta Corp ($NAL)17.2%21.7%34.5%35.1%
Enterprise Group Inc ($E)3.6%17.4%27.2%32.7%
ENTREC Corp ($ENT)35.0%26.7%29.5%
Horizon North Logistics Inc ($HNL)25.1%26.5%16.3%24.1%
 
Median (92 companies)2.4%3.0%3.5%3.1%3.3%
Bombardier Inc ($BBD.B)8.2%12.9%13.0%9.9%10.3%


Top companies by ROIC, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Vitreous Glass Inc ($VCI)26.1%30.5%32.3%48.3%51.0%
Photon Control Inc ($PHO)10.1%21.0%44.4%38.0%
SNC-Lavalin Group Inc ($SNC)14.6%10.7%4.0%35.2%
Alarmforce Industries Inc ($AF)18.3%5.3%24.0%33.9%19.0%
Epicore BioNetworks Inc ($EBN)24.8%28.1%16.1%32.5%26.3%
 
Median (93 companies)8.9%9.3%8.5%9.1%10.3%
Bombardier Inc ($BBD.B)22.2%14.5%13.7%-7.5%-87.2%


Top companies by Net Debt / EBITDA

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Sigma Industries Inc ($SSG)4.4x11.3x225.9x2.9x
H2O Innovation Inc ($HEO)4.2x73.2x1.6x
Grand Power Logistics Group Inc ($GPW)47.8x53.1x
Cargojet Inc ($CJT.A)1.8x1.5x1.5x31.5x
IBI Group Inc ($IBG)4.2x6.5x8.3x
 
Median (73 companies)1.1x1.5x1.4x1.3x1.6x