Linamar Corp reports 36.2% Net Income growth and almost no change in EBITDA Margin of 16.9%
09.03.2016 • About Linamar Corp (
$LNR) • By InTwits
Linamar Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Linamar Corp is a fast growth stock: 2015 revenue growth was 23.8%, 5 year revenue CAGR was 18.3% at 2015 ROIC 23.7%
- Linamar Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.7%. At the same time it's a lot of higher than industry average of 5.1%.
- CAPEX is quite volatile: 319 in 2015, 355 in 2014, 227 in 2013, 169 in 2012, 135 in 2011
- The company has highly profitable business model: ROIC is at 23.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Linamar Corp ($LNR) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,861 | 3,222 | 3,595 | 4,172 | 5,162 | 23.8% |
| Gross Profit | 292 | 386 | 506 | 664 | 853 | 28.3% |
| SG&A | 143 | 166 | 183 | 218 | 266 | 21.7% |
| EBITDA | 335 | 409 | 539 | 690 | 871 | 26.2% |
| Net Income | 101 | 146 | 230 | 321 | 437 | 36.2% |
Balance Sheet
|
|---|
| Cash | 99 | 82 | 130 | 194 | 339 | 74.7% |
| Short Term Debt | 1 | 1 | 56 | 3 | 11 | 313.7% |
| Long Term Debt | 655 | 718 | 487 | 434 | 537 | 23.7% |
Cash flow
|
|---|
| Capex | 349 | 367 | 245 | 264 | 342 | 29.6% |
Ratios
|
|---|
| Revenue growth | 28.4% | 12.6% | 11.6% | 16.0% | 23.8% | |
| EBITDA growth | 19.2% | 22.3% | 31.5% | 28.1% | 26.2% | |
| Gross Margin | 10.2% | 12.0% | 14.1% | 15.9% | 16.5% | 0.6% |
| EBITDA Margin | 11.7% | 12.7% | 15.0% | 16.5% | 16.9% | 0.3% |
| Net Income Margin | 3.5% | 4.5% | 6.4% | 7.7% | 8.5% | 0.8% |
| SG&A, % of revenue | 5.0% | 5.1% | 5.1% | 5.2% | 5.2% | -0.1% |
| CAPEX, % of revenue | 12.2% | 11.4% | 6.8% | 6.3% | 6.6% | 0.3% |
| ROIC | 10.9% | 12.9% | 17.0% | 21.7% | 23.7% | 1.9% |
| ROE | 11.5% | 14.9% | 19.1% | 21.2% | 22.2% | 1.0% |
| Net Debt/EBITDA | 1.7x | 1.6x | 0.8x | 0.4x | 0.2x | -0.1x |
Revenue and profitability
Linamar Corp's Revenue surged on 23.8% in 2015. EBITDA Margin showed almost no change in 2015.
Gross Margin increased slightly on 0.59 pp from 15.9% to 16.5% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign increased slightly on 0.77 pp from 7.7% to 8.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 6.6% in 2015. Linamar Corp's CAPEX/Revenue decreased on 4.8 pp from 11.4% in 2012 to 6.6% in 2015. It's average level of CAPEX/Revenue for the last three years was 6.6%.
Return on investment
The company operates at high and attractive ROIC (23.67%) and ROE (22.23%). ROIC increased slightly on 1.9 pp from 21.7% to 23.7% in 2015. ROE increased slightly on 1.0 pp from 21.2% to 22.2% in 2015.
Leverage (Debt)
Debt level is 0.2x Net Debt / EBITDA and 0.6x Debt / EBITDA. Net Debt / EBITDA dropped on 0.1x from 0.4x to 0.2x in 2015. Debt jumped on 25.4% in 2015 while cash surged on 74.7% in 2015.
Management team
Linda S Hasenfratz is a Linamar Corp's CEO. Linda S Hasenfratz is a founder and has spent 16 years at the company. Dale Schneider is a Linamar Corp's CFO. Dale Schneider has spent 7 years at the company.
Appendix 1: Peers in Consumer, Cyclical
Below we provide Linamar Corp benchmarking against other companies in Consumer, Cyclical 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 |
|---|
| Amaya Inc ($AYA) | 216.4% | 311.5% | 85.2% | 254.0% | |
| Partner Jet Corp ($PJT) | -19.9% | -15.2% | 1.2% | 119.7% | |
| Kelso Technologies Inc ($KLS) | 80.5% | 577.5% | 487.8% | 81.4% | |
| XPEL Technologies Corp ($DAP.U) | 46.3% | 76.6% | 67.7% | 65.5% | |
| Holloway Lodging Corp ($HLC) | | -24.6% | 2.7% | 62.7% | 13.5% |
| |
|---|
| Median (68 companies) | 16.1% | 5.3% | 4.9% | 7.0% | 4.0% |
|---|
| Linamar Corp ($LNR) | | 12.6% | 11.6% | 16.0% | 23.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Restaurant Brands International Inc ($QSR) | | | 69.7% | 87.0% | 42.9% |
| Imvescor Restaurant Group Inc ($IRG) | 96.2% | 94.2% | 89.7% | 84.9% | 84.3% |
| DEQ Systems Corp ($DEQ) | 74.3% | 77.5% | 78.4% | 84.7% | |
| Cara Operations Ltd ($CAO) | | | 79.2% | 78.9% | 78.4% |
| Second Cup Ltd/The ($SCU) | 91.1% | 86.6% | 85.1% | 72.7% | 81.1% |
| |
|---|
| Median (60 companies) | 37.9% | 36.5% | 34.1% | 35.4% | 36.8% |
|---|
| Linamar Corp ($LNR) | 10.2% | 12.0% | 14.1% | 15.9% | 16.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Westshore Terminals Investment Corp ($WTE) | | 49.7% | 65.9% | 60.9% | 59.6% |
| Gamehost Inc ($GH) | 44.2% | 46.1% | 45.7% | 45.9% | 42.8% |
| Great Canadian Gaming Corp ($GC) | 34.1% | 16.8% | 41.1% | 40.1% | 36.6% |
| Amaya Inc ($AYA) | -5.7% | 7.2% | 38.2% | 39.3% | |
| MTY Food Group Inc ($MTY) | 32.2% | 36.3% | 38.7% | 37.0% | 34.9% |
| |
|---|
| Median (66 companies) | 8.4% | 7.9% | 9.6% | 9.8% | 10.1% |
|---|
| Linamar Corp ($LNR) | 11.7% | 12.7% | 15.0% | 16.5% | 16.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 32.5% | |
| WestJet Airlines Ltd ($WJA) | 3.9% | 7.9% | 19.5% | 18.6% | 22.5% |
| Exchange Income Corp ($EIF) | 8.2% | 7.9% | 15.8% | 15.5% | 15.4% |
| Holloway Lodging Corp ($HLC) | 3.4% | 8.2% | 6.7% | 14.8% | 26.7% |
| Kelso Technologies Inc ($KLS) | 79.2% | 0.4% | 0.7% | 13.5% | |
| |
|---|
| Median (69 companies) | 2.6% | 2.7% | 2.8% | 2.3% | 3.1% |
|---|
| Linamar Corp ($LNR) | 12.2% | 11.4% | 6.8% | 6.3% | 6.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Partner Jet Corp ($PJT) | -30.7% | -51.6% | -50.8% | 85.1% | |
| Kelso Technologies Inc ($KLS) | -121.3% | | | 48.8% | |
| XPEL Technologies Corp ($DAP.U) | 52.9% | 54.7% | 57.5% | 43.2% | |
| Westshore Terminals Investment Corp ($WTE) | | 24.0% | 37.8% | 35.0% | 38.3% |
| Iplayco Corp Ltd ($IPC) | -35.4% | 23.0% | 58.5% | 33.6% | 10.9% |
| |
|---|
| Median (69 companies) | 10.4% | 9.7% | 10.1% | 9.7% | 11.0% |
|---|
| Linamar Corp ($LNR) | 10.9% | 12.9% | 17.0% | 21.7% | 23.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mountain China Resorts Holding Ltd ($MCG) | | | | 317.1x | |
| Restaurant Brands International Inc ($QSR) | | | 3.8x | 33.6x | 5.8x |
| Allied Hotel Properties Inc ($AHP) | | | | 21.3x | |
| Hudson's Bay Co ($HBC) | 8.7x | 3.8x | 3.6x | 19.1x | 3.6x |
| Amaya Inc ($AYA) | | 17.9x | 1.8x | 13.5x | |
| |
|---|
| Median (58 companies) | 1.3x | 1.2x | 1.8x | 2.1x | 1.4x |
|---|
| Linamar Corp ($LNR) | 1.7x | 1.6x | 0.8x | 0.4x | 0.2x |
