WesternOne Inc Debt dropped on 45.5% in 2015 and EBITDA dropped on 38.4%
09.03.2016 • About WesternOne Inc (
$WEQ) • By InTwits
WesternOne Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- WesternOne Inc doesn't have a profitable business model yet: 2015 ROIC is 1.3%
- WesternOne Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.9%. At the same time it's a lot of higher than industry average of 8.4%.
- CAPEX is quite volatile: 10.2 in 2015, 38.8 in 2014, 31.5 in 2013, 35.7 in 2012, 19.0 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
WesternOne Inc ($WEQ) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 109.4 | 217.8 | 292.4 | 373.9 | 233.0 | -37.7% |
| Gross Profit | 42.4 | 63.7 | 74.6 | 78.2 | 54.2 | -30.7% |
| SG&A | | | | | 54.5 | |
| EBITDA | 21.7 | 42.6 | 49.6 | 43.9 | 27.0 | -38.4% |
| Net Income | -19.6 | -10.2 | -14.0 | -10.9 | -19.5 | 80.0% |
Balance Sheet
|
|---|
| Cash | 13.0 | 5.7 | 23.0 | 5.9 | 15.6 | 164.8% |
| Short Term Debt | 62.6 | 81.2 | 99.3 | 92.4 | 8.2 | -91.1% |
| Long Term Debt | 112.9 | 87.6 | 116.7 | 94.3 | 93.5 | -0.8% |
Cash flow
|
|---|
| Capex | 19.0 | 35.7 | 31.5 | 38.8 | 10.2 | -73.7% |
Ratios
|
|---|
| Revenue growth | 127.2% | 99.0% | 34.3% | 27.9% | -37.7% | |
| EBITDA growth | 64.1% | 96.3% | 16.5% | -11.5% | -38.4% | |
| Gross Margin | 38.7% | 29.2% | 25.5% | 20.9% | 23.3% | 2.3% |
| EBITDA Margin | 19.8% | 19.5% | 17.0% | 11.7% | 11.6% | -0.1% |
| Net Income Margin | -17.9% | -4.7% | -4.8% | -2.9% | -8.4% | -5.5% |
| SG&A, % of revenue | | | | | 23.4% | 23.4% |
| CAPEX, % of revenue | 17.4% | 16.4% | 10.8% | 10.4% | 4.4% | -6.0% |
| ROIC | 5.7% | 12.1% | 12.1% | 7.8% | 1.3% | -6.5% |
| ROE | | -38.4% | -25.0% | -12.5% | -21.6% | -9.1% |
| Net Debt/EBITDA | 7.5x | 3.8x | 3.9x | 4.1x | 3.2x | -0.9x |
Revenue and profitability
WesternOne Inc's Revenue dropped on 37.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 62.5 pp from 28.2% to 90.7% in 2015.
Gross Margin increased on 2.3 pp from 20.9% to 23.3% in 2015.
Net Income marign decreased on 5.5 pp from -2.9% to -8.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 WesternOne Inc had CAPEX/Revenue of 4.4%. WesternOne Inc's CAPEX/Revenue dropped on 12.0 pp from 16.4% in 2012 to 4.4% in 2015. Average CAPEX/Revenue for the last three years was 8.5%.
Return on investment
The company operates at low but positive ROIC (1.33%) and negative ROE (-21.56%). ROIC decreased on 6.5 pp from 7.8% to 1.3% in 2015. ROE decreased on 9.1 pp from -12.5% to -21.6% in 2015.
Leverage (Debt)
Debt level is 3.2x Net Debt / EBITDA and 3.8x Debt / EBITDA. Net Debt / EBITDA dropped on 0.9x from 4.1x to 3.2x in 2015. Debt dropped on 45.5% in 2015 while cash jumped on 165% in 2015.
Appendix 1: Peers in Diversified
Below you can find WesternOne Inc benchmarking vs. other companies in Diversified 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, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tellza Communications Inc ($TEL) | -15.5% | -14.8% | 51.1% | 56.1% | |
| Sherritt International Corp ($S) | | -76.0% | -5.6% | 1.6% | -26.3% |
| TWC Enterprises Ltd ($TWC) | | -0.5% | -0.7% | -0.3% | 6.7% |
| |
|---|
| Median (3 companies) | -15.5% | -14.8% | -0.7% | 1.6% | -9.8% |
|---|
| WesternOne Inc ($WEQ) | | 99.0% | 34.3% | 27.9% | -37.7% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TWC Enterprises Ltd ($TWC) | 79.0% | 79.5% | 79.3% | 78.0% | 89.2% |
| Sherritt International Corp ($S) | 25.1% | 45.3% | 30.5% | 30.2% | 5.3% |
| Tellza Communications Inc ($TEL) | 6.8% | | 5.5% | 3.8% | |
| |
|---|
| Median (3 companies) | 25.1% | 62.4% | 30.5% | 30.2% | 47.2% |
|---|
| WesternOne Inc ($WEQ) | 38.7% | 29.2% | 25.5% | 20.9% | 23.3% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sherritt International Corp ($S) | 32.3% | 50.7% | 33.0% | 36.9% | 27.0% |
| TWC Enterprises Ltd ($TWC) | 27.8% | 29.6% | 29.3% | 26.5% | 27.9% |
| Tellza Communications Inc ($TEL) | 2.0% | | 2.5% | 1.2% | |
| |
|---|
| Median (3 companies) | 27.8% | 40.1% | 29.3% | 26.5% | 27.4% |
|---|
| WesternOne Inc ($WEQ) | 19.8% | 19.5% | 17.0% | 11.7% | 11.6% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sherritt International Corp ($S) | 6.4% | 12.3% | 15.1% | 17.7% | 23.5% |
| TWC Enterprises Ltd ($TWC) | 7.0% | 11.0% | 7.3% | 5.6% | 5.3% |
| Tellza Communications Inc ($TEL) | 0.1% | | 0.6% | 0.3% | |
| |
|---|
| Median (3 companies) | 6.4% | 11.7% | 7.3% | 5.6% | 14.4% |
|---|
| WesternOne Inc ($WEQ) | 17.4% | 16.4% | 10.8% | 10.4% | 4.4% |
Top companies by ROIC, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tellza Communications Inc ($TEL) | 7.3% | | | 7.6% | |
| TWC Enterprises Ltd ($TWC) | 6.4% | 7.0% | 6.7% | 5.2% | 5.9% |
| Sherritt International Corp ($S) | 7.5% | 2.6% | 1.0% | 1.2% | -0.6% |
| |
|---|
| Median (3 companies) | 7.3% | 4.8% | 3.8% | 5.2% | 2.6% |
|---|
| WesternOne Inc ($WEQ) | 5.7% | 12.1% | 12.1% | 7.8% | 1.3% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sherritt International Corp ($S) | 2.5x | 7.9x | 14.7x | 10.1x | 22.4x |
| TWC Enterprises Ltd ($TWC) | 5.7x | 5.5x | 5.5x | 6.3x | 5.5x |
| Tellza Communications Inc ($TEL) | 0.4x | | -0.8x | -2.2x | |
| |
|---|
| Median (3 companies) | 2.5x | 6.7x | 5.5x | 6.3x | 14.0x |
|---|
| WesternOne Inc ($WEQ) | 7.5x | 3.8x | 3.9x | 4.1x | 3.2x |
