Silver Wheaton Corp CAPEX surged on 1,198% in 2015 and Revenue increased on 4.6%
16.03.2016 • About Silver Wheaton Corp (
$SLW) • By InTwits
Silver Wheaton Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 65.8% in 2015 vs. 69.6% in 2014 vs. 84.8% in 2011
- Silver Wheaton Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 136.7%. At the same time it's a lot of higher than industry average of 29.0%.
- CAPEX is quite volatile: 1,811 in 2015, 140 in 2014, 2,026 in 2013, 641 in 2012, 141 in 2011
- The company has potentially unprofitable business model: ROIC is at 4.4%
- It operates with high leverage: Net Debt/EBITDA is 3.2x while industry average is 2.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Silver Wheaton Corp ($SLW) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 730.0 | 849.6 | 706.5 | 620.2 | 648.7 | 4.6% |
| Gross Profit | 643.7 | 732.1 | 567.1 | 308.9 | 259.9 | -15.9% |
| SG&A | 18.9 | 24.4 | 26.9 | 29.7 | 26.1 | -12.1% |
| EBITDA | 618.8 | 701.5 | 532.1 | 431.5 | 426.9 | -1.1% |
| Net Income | 550.0 | 586.0 | 375.5 | 199.8 | -162.0 | -181.1% |
Balance Sheet
|
|---|
| Cash | 840.2 | 778.2 | 95.8 | 308.1 | 103.3 | -66.5% |
| Short Term Debt | 28.6 | 28.6 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 50.1 | 21.5 | 998.1 | 998.5 | 1,466.0 | 46.8% |
Cash flow
|
|---|
| Capex | 141.3 | 641.4 | 2,026.0 | 139.5 | 1,811.5 | 1,198.2% |
Ratios
|
|---|
| Revenue growth | 72.4% | 16.4% | -16.8% | -12.2% | 4.6% | |
| EBITDA growth | 95.7% | 13.4% | -24.2% | -18.9% | -1.1% | |
| Gross Margin | 88.2% | 86.2% | 80.3% | 49.8% | 40.1% | -9.7% |
| EBITDA Margin | 84.8% | 82.6% | 75.3% | 69.6% | 65.8% | -3.8% |
| Net Income Margin | 75.3% | 69.0% | 53.2% | 32.2% | -25.0% | -57.2% |
| SG&A, % of revenue | 2.6% | 2.9% | 3.8% | 4.8% | 4.0% | -0.8% |
| CAPEX, % of revenue | 19.4% | 75.5% | 286.8% | 22.5% | 279.2% | 256.8% |
| ROIC | 22.0% | 20.4% | 10.3% | 6.0% | 4.4% | -1.6% |
| ROE | 22.4% | 20.3% | 11.6% | 5.7% | -4.2% | -9.9% |
| Net Debt/EBITDA | -1.2x | -1.0x | 1.7x | 1.6x | 3.2x | 1.6x |
Revenue and profitability
Silver Wheaton Corp's Revenue increased on 4.6% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 7.7 pp from 10.3% to 2.6% in 2015.
Gross Margin decreased on 9.7 pp from 49.8% to 40.1% in 2015. SG&A as a % of Revenue decreased slightly on 0.76 pp from 4.8% to 4.0% in 2015.
Net Income marign dropped on 57.2 pp from 32.2% to -25.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 279%. Silver Wheaton Corp's CAPEX/Revenue surged on 204 pp from 75.5% in 2012 to 279% in 2015. It's average CAPEX/Revenue for the last three years was 196%.The company investments to CAPEX were large: 424% of EBITDA.
Return on investment
The company operates at low but positive ROIC (4.44%) and negative ROE (-4.17%). ROIC decreased slightly on 1.6 pp from 6.0% to 4.4% in 2015. ROE decreased on 9.9 pp from 5.7% to -4.2% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.2x and Debt / EBITDA is 3.4x. Net Debt / EBITDA surged on 1.6x from 1.6x to 3.2x in 2015. Debt surged on 46.8% in 2015 while cash dropped on 66.5% in 2015.
Management team
Randy V J Smallwood is a Silver Wheaton Corp's CEO. Randy V J Smallwood is a founder and has spent 7 years at the company. Gary D Brown is a The company's CFO. Gary D Brown has spent 10 years at the company.
Appendix 1: Peers in Basic Materials
Below you can find Silver Wheaton Corp 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Barkerville Gold Mines Ltd ($BGM) | | 97.4% | -90.6% | -97.6% | 84,715.6% |
| Golden Minerals Co ($AUM) | | 1,320.8% | -59.1% | -97.8% | 3,334.5% |
| Jemi Fibre Corp ($JFI) | | | | -27.3% | 375.3% |
| Osisko Gold Royalties Ltd ($OR) | | | | | 164.4% |
| VMS Ventures Inc ($VMS) | | | | | 139.7% |
| |
|---|
| Median (107 companies) | 42.4% | 8.0% | -5.0% | -0.8% | -1.1% |
|---|
| Silver Wheaton Corp ($SLW) | | 16.4% | -16.8% | -12.2% | 4.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nevsun Resources Ltd ($NSU) | 90.3% | 89.9% | 94.8% | 95.5% | 82.3% |
| Franco-Nevada Corp ($FNV) | 84.6% | 86.1% | 85.0% | 83.5% | 30.3% |
| Labrador Iron Ore Royalty Corp ($LIF) | 80.2% | 80.2% | 80.2% | 80.2% | 80.3% |
| Lucara Diamond Corp ($LUC) | | 42.5% | 57.4% | 66.7% | 60.9% |
| Royal Gold Inc ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 30.1% | 31.5% | 20.7% | 16.8% | 15.5% |
|---|
| Silver Wheaton Corp ($SLW) | 88.2% | 86.2% | 80.3% | 49.8% | 40.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | 60.8% |
| Sandstorm Gold Ltd ($SSL) | 63.8% | 74.3% | 49.9% | 62.1% | |
| Nevsun Resources Ltd ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | 38.6% |
| Lucara Diamond Corp ($LUC) | | 7.6% | 57.3% | 57.5% | 60.0% |
| |
|---|
| Median (137 companies) | 22.0% | 18.4% | 11.3% | 9.7% | 6.6% |
|---|
| Silver Wheaton Corp ($SLW) | 84.8% | 82.6% | 75.3% | 69.6% | 65.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | 0.5% |
| Franco-Nevada Corp ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | 230.0% |
| |
|---|
| Median (139 companies) | 24.1% | 26.3% | 25.2% | 16.0% | 13.4% |
|---|
| Silver Wheaton Corp ($SLW) | 19.4% | 75.5% | 286.8% | 22.5% | 279.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lucara Diamond Corp ($LUC) | -7.1% | -2.9% | 41.3% | 54.7% | 39.6% |
| CanAf Group Inc ($CAF) | 74.9% | 37.0% | 65.2% | 37.6% | 13.8% |
| Nevsun Resources Ltd ($NSU) | 89.8% | 52.2% | 8.8% | 35.0% | 10.4% |
| Dynacor Gold Mines Inc ($DNG) | 45.6% | 62.8% | 50.9% | 31.3% | |
| Canfor Pulp Products Inc ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| |
|---|
| Median (143 companies) | 5.4% | 4.9% | -0.1% | -0.1% | -3.6% |
|---|
| Silver Wheaton Corp ($SLW) | 22.0% | 20.4% | 10.3% | 6.0% | 4.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| VMS Ventures Inc ($VMS) | | | | 86.7x | 4.7x |
| Ur-Energy Inc ($URE) | | | | 55.1x | 6.7x |
| 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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (94 companies) | -0.0x | 0.3x | 0.7x | 0.9x | 1.3x |
|---|
| Silver Wheaton Corp ($SLW) | -1.2x | -1.0x | 1.7x | 1.6x | 3.2x |
