Dollarama Inc reports 30.4% Net Income growth and 13.7% Revenue growth
30.03.2016 • About Dollarama Inc (
$DOL) • By InTwits
Dollarama Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Dollarama Inc is a growth stock: FY2016 revenue growth was 13.7%, 5 year revenue CAGR was 13.3% at FY2016 ROIC 36.4%
- EBITDA Margin is expanding: 22.5% in FY2016 vs. 19.8% in FY2015 vs. 18.5% in FY2012
- Dollarama Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.6%. At the same time it's in pair with industry average of 4.9%.
- CAPEX is quite volatile: 567 in 2016, 706 in 2015, 787 in 2014, 340 in 2013, 166 in 2012
- The company has highly profitable business model: ROIC is at 36.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dollarama Inc ($DOL) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,603 | 1,859 | 2,065 | 2,331 | 2,650 | 13.7% |
| Gross Profit | 600 | 695 | 766 | 860 | 1,033 | 20.2% |
| SG&A | 305 | 340 | 363 | 399 | 436 | 9.3% |
| EBITDA | 296 | 355 | 402 | 461 | 597 | 29.6% |
| Net Income | 173 | 221 | 250 | 295 | 385 | 30.4% |
Balance Sheet
|
|---|
| Cash | 70 | 53 | 71 | 40 | 59 | 47.2% |
| Short Term Debt | 14 | 1 | 3 | 4 | 4 | 7.4% |
| Long Term Debt | 258 | 262 | 398 | 562 | 921 | 63.8% |
Cash flow
|
|---|
| Capex | 53 | 70 | 96 | 74 | 83 | 12.3% |
Ratios
|
|---|
| Revenue growth | 12.9% | 16.0% | 11.1% | 12.9% | 13.7% | |
| EBITDA growth | 25.7% | 19.8% | 13.3% | 14.5% | 29.6% | |
| Gross Margin | 37.5% | 37.4% | 37.1% | 36.9% | 39.0% | 2.1% |
| EBITDA Margin | 18.5% | 19.1% | 19.5% | 19.8% | 22.5% | 2.8% |
| Net Income Margin | 10.8% | 11.9% | 12.1% | 12.7% | 14.5% | 1.9% |
| SG&A, % of revenue | 19.0% | 18.3% | 17.6% | 17.1% | 16.4% | -0.7% |
| CAPEX, % of revenue | 3.3% | 3.7% | 4.7% | 3.2% | 3.1% | -0.0% |
| ROIC | 21.6% | 24.7% | 26.5% | 29.9% | 36.4% | 6.5% |
| ROE | 21.3% | 24.2% | 27.9% | 36.8% | 63.8% | 27.0% |
| Net Debt/EBITDA | 0.7x | 0.6x | 0.8x | 1.1x | 1.4x | 0.3x |
Dollarama Inc ($DOL) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 566 | 653 | 664 | 766 | 13.0% | 14.1% | 13.0% | 14.6% |
| EBITDA | 106 | 147 | 155 | 190 | 22.9% | 35.3% | 34.8% | 25.5% |
| Net Income | 65 | 95 | 100 | 125 | 21.7% | 38.6% | 37.1% | 24.5% |
Balance Sheet
|
|---|
| Cash | 64 | 54 | 75 | 59 | 71.2% | 93.4% | 221.9% | 47.2% |
| Short Term Debt | 7 | 4 | 7 | 4 | 2.7% | -23.4% | -15.9% | 7.4% |
| Long Term Debt | 677 | 687 | 792 | 921 | 26.0% | 18.2% | 31.6% | 63.8% |
Ratios
|
|---|
| Gross Margin | 36.0% | 38.4% | 40.0% | 40.8% | 0.6% | 2.3% | 3.3% | 2.1% |
| EBITDA Margin | 18.7% | 22.5% | 23.3% | 24.8% | 1.5% | 3.5% | 3.8% | 2.2% |
| Net Income Margin | 11.4% | 14.6% | 15.1% | 16.3% | 0.8% | 2.6% | 2.6% | 1.3% |
Revenue and profitability
The company's Revenue jumped on 13.7%. Revenue growth showed acceleration in FY16Q4 - it increased 14.6% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.8 pp from 19.8% to 22.5% in FY2016.
Gross Margin increased on 2.1 pp from 36.9% to 39.0% in FY2016. SG&A as a % of Revenue decreased slightly on 0.66 pp from 17.1% to 16.4% in FY2016.
Net Income marign increased slightly on 1.9 pp from 12.7% to 14.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Dollarama Inc's CAPEX/Revenue was 3.1% in FY2016. CAPEX/Revenue decreased slightly on 0.60 pp from 3.7% in FY2013 to 3.1% in FY2016. Average CAPEX/Revenue for the last three years was 3.7%.
Return on investment
The company operates at high and attractive ROIC (36.39%) and ROE (63.80%). ROIC increased on 6.5 pp from 29.9% to 36.4% in FY2016. ROE surged on 27.0 pp from 36.8% to 63.8% in FY2016.
Leverage (Debt)
Debt level is 1.4x Net Debt / EBITDA and 1.5x Debt / EBITDA. Net Debt / EBITDA jumped on 0.3x from 1.1x to 1.4x in FY2016. Debt surged on 63.4% while cash jumped on 47.2%.
Appendix 1: Peers in Consumer, Cyclical
Below we provide Dollarama Inc 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 539.9% | |
| Restaurant Brands International Inc ($QSR) | | | 4.6% | 238.0% | |
| Amaya Inc ($AYA) | 311.5% | 85.2% | 254.0% | 113.8% | |
| NYX Gaming Group Ltd ($NYX) | 65.2% | 52.8% | 45.8% | 91.8% | |
| Rainmaker Entertainment Inc ($RNK) | -24.6% | -45.0% | 30.1% | 56.4% | |
| |
|---|
| Median (49 companies) | 5.3% | 4.9% | 7.8% | 8.6% | |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NYX Gaming Group Ltd ($NYX) | 91.3% | 86.7% | 88.3% | 85.6% | |
| DEQ Systems Corp ($DEQ) | 77.5% | 78.4% | 84.7% | 82.7% | |
| Second Cup Ltd/The ($SCU) | 86.6% | 85.1% | 72.7% | 81.1% | |
| New Look Vision Group Inc ($BCI) | 71.8% | 72.6% | 72.6% | 78.7% | |
| Cara Operations Ltd ($CAO) | | 79.2% | 78.9% | 78.4% | |
| |
|---|
| Median (42 companies) | 34.1% | 31.8% | 31.9% | 30.6% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Westshore Terminals Investment Corp ($WTE) | 49.7% | 65.9% | 60.9% | 59.6% | |
| Gamehost Inc ($GH) | 46.1% | 45.7% | 45.9% | 42.8% | |
| Great Canadian Gaming Corp ($GC) | 16.8% | 41.1% | 40.1% | 36.6% | |
| Restaurant Brands International Inc ($QSR) | | 51.1% | 20.8% | 33.9% | |
| Cara Operations Ltd ($CAO) | | 9.6% | 22.6% | 32.6% | |
| |
|---|
| Median (46 companies) | 7.5% | 9.7% | 10.2% | 9.0% | |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($HLC) | 8.2% | 6.7% | 14.8% | 26.7% | |
| WestJet Airlines Ltd ($WJA) | 7.9% | 19.5% | 18.6% | 22.5% | |
| Westshore Terminals Investment Corp ($WTE) | 25.7% | 11.5% | 6.2% | 21.2% | |
| Exchange Income Corp ($EIF) | 7.9% | 15.8% | 15.5% | 15.4% | |
| Chorus Aviation Inc ($CHR.A) | 9.9% | 9.6% | 3.9% | 15.0% | |
| |
|---|
| Median (49 companies) | 2.7% | 3.1% | 3.4% | 2.8% | |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Partner Jet Corp ($PJT) | -51.6% | -50.8% | 85.1% | 51.1% | |
| Westshore Terminals Investment Corp ($WTE) | 24.0% | 37.8% | 35.0% | 38.3% | |
| Cara Operations Ltd ($CAO) | | | 24.7% | 35.1% | |
| Air Canada ($AC) | | 37.0% | 23.2% | 28.4% | |
| BMTC Group Inc ($GBT) | 33.0% | 32.5% | 25.2% | 25.2% | |
| |
|---|
| Median (49 companies) | 9.2% | 9.7% | 9.9% | 7.7% | |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 39.7x | |
| Mountain China Resorts Holding Ltd ($MCG) | | | 317.1x | 29.0x | |
| Rainmaker Entertainment Inc ($RNK) | | | | 18.6x | |
| Holloway Lodging Corp ($HLC) | | 5.8x | 8.4x | 17.1x | |
| AutoCanada Inc ($ACQ) | 4.2x | 4.7x | 6.4x | 8.0x | |
| |
|---|
| Median (38 companies) | 1.6x | 2.0x | 2.4x | 2.7x | |
|---|
