Hydrogenics Corp reports 133% CAPEX growth while 21.3% Revenue decline
09.03.2016 • About Hydrogenics Corp (
$HYG) • By InTwits
Hydrogenics Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hydrogenics Corp doesn't have a profitable business model yet: 2015 ROIC is -44.9%
- The company operates at negative EBITDA Margin: -21.4%
- Hydrogenics Corp motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -20.4% for the sames years0
- Hydrogenics Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.0%. At the same time it's in pair with industry average of 7.6%.
- CAPEX is quite volatile: 2.0 in 2015, 0.87 in 2014, 0.94 in 2013, 0.42 in 2012, 0.90 in 2011
- The company has unprofitable business model: ROIC is at -44.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hydrogenics Corp ($HYG) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 23.832 | 31.697 | 42.413 | 45.548 | 35.864 | -21.3% |
| Gross Profit | 5.488 | 5.249 | 12.061 | 11.214 | 5.971 | -46.8% |
| SG&A | | 13.027 | 16.275 | 11.756 | 10.215 | -13.1% |
| EBITDA | -8.328 | -11.355 | -6.071 | -3.165 | -7.684 | 142.8% |
| Net Income | -9.788 | -12.797 | -8.908 | -4.523 | -11.442 | 153.0% |
Balance Sheet
|
|---|
| Cash | 7.785 | 13.020 | 11.823 | 6.572 | 23.398 | 256.0% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 1.086 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.897 | 0.424 | 0.939 | 0.871 | 2.028 | 132.8% |
Ratios
|
|---|
| Revenue growth | 13.9% | 33.0% | 33.8% | 7.4% | -21.3% | |
| EBITDA growth | -0.3% | 36.3% | -46.5% | -47.9% | 142.8% | |
| Gross Margin | 23.0% | 16.6% | 28.4% | 24.6% | 16.6% | -8.0% |
| EBITDA Margin | -34.9% | -35.8% | -14.3% | -6.9% | -21.4% | -14.5% |
| Net Income Margin | -41.1% | -40.4% | -21.0% | -9.9% | -31.9% | -22.0% |
| SG&A, % of revenue | | 41.1% | 38.4% | 25.8% | 28.5% | 2.7% |
| CAPEX, % of revenue | 3.8% | 1.3% | 2.2% | 1.9% | 5.7% | 3.7% |
| ROIC | -70.3% | -158.7% | -126.4% | -34.9% | -44.9% | -9.9% |
| ROE | -74.7% | -169.7% | -170.2% | -41.8% | -64.1% | -22.2% |
Revenue and profitability
Hydrogenics Corp's Revenue dropped on 21.3% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 14.5 pp from -6.9% to -21.4% in 2015.
Gross Margin decreased on 8.0 pp from 24.6% to 16.6% in 2015. SG&A as a % of Revenue increased on 2.7 pp from 25.8% to 28.5% in 2015.
Net Income marign dropped on 22.0 pp from -9.9% to -31.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 5.7%. CAPEX/Revenue increased on 4.3 pp from 1.3% in 2012 to 5.7% in 2015. It's average level of CAPEX/Revenue for the last three years was 3.3%.
Return on investment
The company operates at negative ROIC (-44.86%) and ROE (-64.06%). ROIC decreased on 9.9 pp from -34.9% to -44.9% in 2015. ROE dropped on 22.2 pp from -41.8% to -64.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.8x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2015. Debt jumped while cash surged on 256% in 2015.
Management team
The company's CEO is Daryl C F Wilson. Daryl C F Wilson is a founder and has 11 years tenure at the company. The company's CFO Robert Martin Motz "Bob" has spent 6 years at the company.
Appendix 1: Peers in Energy
Below we provide Hydrogenics Corp benchmarking against other companies in Energy 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 |
|---|
| Petro Rio SA ($PRJ) | -36.3% | -32.1% | -34.9% | 10,977.1% | |
| ONEnergy Inc ($OEG) | | | | 6,002.6% | |
| Sterling Resources Ltd ($SLG) | | -94.8% | 4,514.9% | 2,244.4% | |
| Ikkuma Resources Corp ($IKM) | 22.5% | 17.0% | -4.5% | 1,231.1% | |
| Spartan Energy Corp ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 43.4% | 9.5% | 16.2% | 18.5% | -27.7% |
|---|
| Hydrogenics Corp ($HYG) | | 33.0% | 33.8% | 7.4% | -21.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TransAlta Renewables Inc ($RNW) | | | 94.4% | 94.5% | 94.5% |
| Advantage Oil & Gas Ltd ($AAV) | 70.5% | 62.0% | 84.5% | 92.5% | 88.5% |
| Freehold Royalties Ltd ($FRU) | 91.7% | 90.4% | 89.0% | 90.2% | 86.3% |
| MEG Energy Corp ($MEG) | 85.5% | 86.8% | 87.4% | 87.6% | 84.1% |
| NXT Energy Solutions Inc ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 34.2% | 29.3% | 31.6% | 30.3% | 32.2% |
|---|
| Hydrogenics Corp ($HYG) | 23.0% | 16.6% | 28.4% | 24.6% | 16.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Seven Generations Energy Ltd ($VII) | | 56.9% | 54.0% | 106.0% | 70.0% |
| Tourmaline Oil Corp ($TOU) | 67.4% | 67.9% | 80.0% | 97.6% | 70.1% |
| Bonavista Energy Corp ($BNP) | 63.8% | 64.6% | 62.6% | 91.6% | 54.5% |
| Bellatrix Exploration Ltd ($BXE) | 42.7% | 58.6% | 83.6% | 89.6% | |
| Advantage Oil & Gas Ltd ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (159 companies) | 25.5% | 25.7% | 31.1% | 29.6% | 12.6% |
|---|
| Hydrogenics Corp ($HYG) | -34.9% | -35.8% | -14.3% | -6.9% | -21.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oryx Petroleum Corp Ltd ($OXC) | | | | 1,997.8% | |
| Petroshale Inc ($PSH) | 30.6% | | 346.6% | 865.9% | |
| Toro Oil & Gas Ltd ($TOO) | 192.4% | 139.0% | 39.2% | 808.7% | |
| Athabasca Oil Corp ($ATH) | 176.2% | 2,426.4% | 596.6% | 504.7% | |
| BNK Petroleum Inc ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 43.3% | 50.0% | 39.2% | 48.8% | 29.1% |
|---|
| Hydrogenics Corp ($HYG) | 3.8% | 1.3% | 2.2% | 1.9% | 5.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pason Systems Inc ($PSI) | 33.5% | 30.0% | 29.7% | 41.0% | 6.0% |
| Sea Dragon Energy Inc ($SDX) | -10.1% | 8.1% | 21.8% | 32.9% | |
| Raging River Exploration Inc ($RRX) | | | | 29.1% | 6.2% |
| High Arctic Energy Services Inc ($HWO) | 27.0% | 31.4% | 26.3% | 24.9% | |
| Rooster Energy Ltd ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.5% | 3.5% | 4.6% | 5.1% | -6.7% |
|---|
| Hydrogenics Corp ($HYG) | -70.3% | -158.7% | -126.4% | -34.9% | -44.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Veresen Inc ($VSN) | 22.3x | 16.2x | 14.7x | 30.3x | 7.4x |
| Lightstream Resources Ltd ($LTS) | | 2.0x | | 27.8x | |
| Petroshale Inc ($PSH) | 0.1x | | | 21.7x | |
| Connacher Oil and Gas Ltd ($CLC) | 9.7x | 16.7x | 8.8x | 17.1x | |
| Pengrowth Energy Corp ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (137 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 2.7x |
|---|
