Canfor Pulp Products Inc's growth is outstanding: revenue grew 13.2% and EBITDA 30.2% annually over the last three years
24.02.2016 • About Canfor Pulp Products Inc (
$CFX) • By InTwits
Pay attention to Canfor Pulp Products Inc as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Canfor Pulp Products Inc showed fast growth in the last financial year. The company's revenue surged on 19.8% in FY2015. The growth also happened in EBITDA of 10.8% for the same period.
If we look for the longer period the company showed fast revenue growth of 13.2% from 2012 to 2015 annually. EBITDA surged on 30.2% from 2012 to 2015 annually.
Canfor Pulp Products Inc ($CFX) financials for the last 5 years
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 941 | 810 | 887 | 981 | 1,175 |
|---|
| Revenue growth, % | | -13.9% | 9.4% | 10.6% | 19.8% |
|---|
| Gross margin, % | 19.0% | 6.40% | 11.1% | 15.6% | 20.1% |
|---|
| SG&A, % | 2.69% | 3.04% | 2.71% | 2.84% | 2.38% |
|---|
| EBITDA | 220 | 94 | 144 | 188 | 208 |
|---|
| EBITDA growth, % | | -57.1% | 53.0% | 30.3% | 10.8% |
|---|
| EBITDA margin, % | 23.4% | 11.6% | 16.3% | 19.2% | 17.7% |
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| Net Income | 70 | 9 | 42 | 90 | 107 |
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| Net Income margin, % | 7.41% | 1.12% | 4.71% | 9.13% | 9.07% |
|---|
| |
| CAPEX | 156 | 89 | 61 | 58 | 68 |
|---|
| CAPEX/Revenue, % | 16.6% | 10.9% | 6.90% | 5.88% | 5.81% |
|---|
| Debt | 112 | 109 | 61 | 50 | 50 |
|---|
| Cash | 0 | 0 | 14 | 77 | 18 |
|---|
| Net Debt/EBITDA | 0.5x | 1.2x | 0.3x | -0.1x | 0.2x |
|---|
| |
| ROIC, % | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
|---|
| ROE, % | | 3.0% | 10.1% | 19.3% | 22.0% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. In the longer period the company showed fast EBITDA margin growth of 6.10 pp from 11.6% in 2012 to 17.7% in 2015.
Canfor Pulp Products Inc shows attractive ROIC at 24.1% for the last 12 months which assumes stable development model. During the last three years it surged - it was 4.87% in FY2012. It's average level of ROIC for the last three years was 19.5%.
Canfor Pulp Products Inc showed no change in Net Income margin of 0 pp from 9.10% to 9.10% in 2015. In the last 3 years Canfor Pulp Products Inc's Net Income margin surged on 8 pp from 1.10% in 2012 to 9.10% in 2015.
Canfor Pulp Products Inc operates at ROE of 22.0%. It's average level of ROE for the last three years was 17.1%.
Capital expenditures (CAPEX)
To this fast growth Canfor Pulp Products Inc had to invest in CAPEX.In FY2015 the company had CAPEX/Revenue of 5.81%. Canfor Pulp Products Inc showed big decline in CAPEX/Revenue of 5.13 pp from 10.9% in 2012 to 5.81% in 2015. It's average CAPEX/Revenue for the last three years was 6.20%.
Leverage (Debt)
Having such a fast growth profile Canfor Pulp Products Inc keeps low debt level at 0.2x Net Debt/EBITDA. In the longer period the company's leverage dropped on 1.00x from 1.16x in 2012 to 0.16x in 2015.
Valuation vs. comparable companies
At the end of trading day today Canfor Pulp Products Inc traded at 3.8x EV/EBITDA which is 86.2% lower than 27.7x Basic Materials peer group avearge calculated on the basis of 1498 companies. The company trades at 7.2x P/E which is 80.8% lower than 37.5x Basic Materials industry avearge calculated based on 16 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. At the end of trading day today Canfor Pulp Products Inc traded at 5.7x EV/(EBITDA-CAPEX) which is 3.11% higher than 5.5x Basic Materials peer group avearge calculated on the basis of 21 companies.
Peers in Basic Materials
Below you can find Canfor Pulp Products Inc benchmarking vs. other companies in Basic Materials 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 30.1% | 8.5% | -5.1% | -1.1% | -1.8% |
|---|
| Canfor Pulp Products Inc ($CFX) | | -13.9% | 9.4% | 10.6% | 19.8% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 31.2% | 32.0% | 21.8% | 17.6% | 15.5% |
|---|
| Canfor Pulp Products Inc ($CFX) | 19.0% | 6.4% | 11.1% | 15.6% | 20.1% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (137 companies) | 22.0% | 18.6% | 11.3% | 9.7% | 6.8% |
|---|
| Canfor Pulp Products Inc ($CFX) | 23.4% | 11.6% | 16.3% | 19.2% | 17.7% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 24.1% | 26.3% | 25.5% | 16.3% | 10.2% |
|---|
| Canfor Pulp Products Inc ($CFX) | 16.6% | 10.9% | 6.9% | 5.9% | 5.8% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% | |
| Almonty Industries Inc ($AII) | | 22.1% | 1.6% | 20.1% | -22.0% |
| |
|---|
| Median (143 companies) | 5.4% | 4.9% | -0.1% | -0.1% | -3.6% |
|---|
| Canfor Pulp Products Inc ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (94 companies) | -0.1x | 0.3x | 0.9x | 0.9x | 1.7x |
|---|
| Canfor Pulp Products Inc ($CFX) | 0.5x | 1.2x | 0.3x | -0.1x | 0.2x |
