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CCL Industries Inc demonstrated fast growth over the last few years. Will the growth continue?

03.03.2016 • About CCL Industries Inc ($CCL.B) • By InTwits

CCL Industries Inc is a fast-growing stock in Industrial industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story


CCL Industries Inc showed fast growth in the last financial year. CCL Industries Inc's revenue surged on 17.5% in FY2015. In addition to revenue CCL Industries Inc also keeps delivering EBITDA growth. It was 27.2% in FY2015

In the longer period CCL Industries Inc showed fast revenue growth of 32.4% from 2012 to 2015 annually. EBITDA surged on 33.1% from 2012 to 2015 annually.

CCL Industries Inc ($CCL.B) financials for the last 5 years

mln. CAD 2011 2012 2013 2014 2015
Revenue1,2681,3091,8892,5863,039
Revenue growth, %3.2%44.4%36.8%17.5%
Gross margin, %23.1%23.9%25.2%26.8%28.3%
SG&A, %12.2%12.3%13.6%13.9%13.7%
EBITDA240257295476606
EBITDA growth, %7.2%15.1%61.2%27.2%
EBITDA margin, %18.9%19.6%15.6%18.4%19.9%
Net Income8497104217295
Net Income margin, % 6.63%7.45%5.48%8.38%9.71%
 
CAPEX8194116154172
CAPEX/Revenue, %6.42%7.15%6.14%5.94%5.67%
Debt3543297126591,006
Cash141189209222406
Net Debt/EBITDA0.9x0.5x1.7x0.9x1.0x
 
ROIC, %11.2%12.2%11.4%17.7%19.0%
ROE, %10.6%11.4%10.9%19.4%20.8%

Profitability and return on investment


Margin expansion supported EBITDA growth. CCL Industries Inc showed EBITDA margin growth of 1.50 pp from 18.4% to 19.9% in 2015. In the last 3 years the company showed small growth in EBITDA margin of 0.300 pp from 19.6% in 2012 to 19.9% in 2015.

We call CCL Industries Inc an attractive growth stock as together with the growth it delivers high ROIC at 19.0%. During the last three years it surged - it was 12.2% in FY2012. It's average level of ROIC for the last three years was 16.0%.

Net Income margin surged on 1.30 pp from 8.40% to 9.70% in 2015. If we look for the longer period Net Income margin surged on 2.20 pp from 7.50% in 2012 to 9.70% in 2015.

CCL Industries Inc operates at ROE of 20.8%. Average ROE for the last three years was 17.0%.

Capital expenditures (CAPEX)


To fuel this fast growth CCL Industries Inc had to invest in CAPEX.CCL Industries Inc's CAPEX/Revenue was 5.67% in FY2015. CCL Industries Inc's CAPEX/Revenue dropped on 1.48 pp from 7.15% in 2012 to 5.67% in 2015. For the last three years the average CAPEX/Revenue was 5.92%.

Leverage (Debt)


Having such a fast growth profile the company keeps low debt level at 1.0x Net Debt/EBITDA. In the last 3 years leverage surged on 0.44x from 0.55x in 2012 to 0.99x in 2015.

Peers in Industrial


Below we provide CCL Industries 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, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
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)13.0%11.5%4.9%9.1%8.3%
CCL Industries Inc ($CCL.B)3.2%44.4%36.8%17.5%


Top companies by Gross margin, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
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%23.0%23.3%22.6%25.0%
CCL Industries Inc ($CCL.B)23.1%23.9%25.2%26.8%28.3%


Top companies by EBITDA margin, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
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%9.2%8.3%7.2%10.0%
CCL Industries Inc ($CCL.B)18.9%19.6%15.6%18.4%19.9%


Top companies by CAPEX/Revenue, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
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%14.7%
 
Median (92 companies)2.4%3.0%3.5%3.1%3.7%
CCL Industries Inc ($CCL.B)6.4%7.1%6.1%5.9%5.7%


Top companies by ROIC, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
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%8.5%9.4%
CCL Industries Inc ($CCL.B)11.2%12.2%11.4%17.7%19.0%


Top companies by Net Debt / EBITDA

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
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 (72 companies)1.1x1.5x1.4x1.3x1.3x
CCL Industries Inc ($CCL.B)0.9x0.5x1.7x0.9x1.0x


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