ADF Group Inc EBITDA surged on 354% in 2016 and Revenue jumped on 29.0%
14.04.2016 • About ADF Group Inc (
$DRX) • By InTwits
ADF Group Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 7.4% in FY2016, 2.1% in FY2015, 15.3% in FY2014, 2.9% in FY2013, 12.5% in FY2012
- ADF Group Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.2%. At the same time it's in pair with industry average of 7.8%.
- CAPEX is quite volatile: 8.6 in FY2016, 13.9 in FY2015, 22.7 in FY2014, 5.0 in FY2013, 1.2 in FY2012
- The company has potentially unprofitable business model: ROIC is at 2.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
ADF Group Inc ($DRX) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 48.431 | 41.412 | 92.997 | 76.058 | 98.089 | 29.0% |
| Gross Profit | 9.303 | 4.706 | 20.219 | 7.267 | 14.020 | 92.9% |
| SG&A | | | 9.431 | 9.854 | 11.391 | 15.6% |
| EBITDA | 6.032 | 1.221 | 14.234 | 1.594 | 7.244 | 354.5% |
| Net Income | 1.812 | -1.554 | 7.682 | -1.570 | 1.699 | |
Balance Sheet
|
|---|
| Cash | 18.976 | 23.914 | 18.675 | 7.946 | 2.377 | -70.1% |
| Short Term Debt | 2.526 | 2.505 | 1.706 | 0.763 | 0.868 | 13.8% |
| Long Term Debt | 3.676 | 1.157 | 4.315 | 9.374 | 14.351 | 53.1% |
Cash flow
|
|---|
| Capex | 1.230 | 5.004 | 22.683 | 13.860 | 8.591 | -38.0% |
Ratios
|
|---|
| Revenue growth | -12.4% | -14.5% | 124.6% | -18.2% | 29.0% | |
| EBITDA growth | -44.8% | -79.8% | 1,065.8% | -88.8% | 354.5% | |
| Gross Margin | 19.2% | 11.4% | 21.7% | 9.6% | 14.3% | 4.7% |
| EBITDA Margin | 12.5% | 2.9% | 15.3% | 2.1% | 7.4% | 5.3% |
| Net Income Margin | 3.7% | -3.8% | 8.3% | -2.1% | 1.7% | 3.8% |
| SG&A, % of revenue | | | 10.1% | 13.0% | 11.6% | -1.3% |
| CAPEX, % of revenue | 2.5% | 12.1% | 24.4% | 18.2% | 8.8% | -9.5% |
| ROIC | 2.7% | -2.3% | 10.7% | -2.4% | 2.3% | 4.7% |
| ROE | 1.9% | -1.7% | 7.9% | -1.5% | 1.6% | 3.1% |
| Net Debt/EBITDA | -2.1x | -16.6x | -0.9x | 1.4x | 1.8x | 0.4x |
ADF Group Inc ($DRX) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 29 | 19 | 21 | 29 | 17.5% | -6.7% | 70.5% | 55.1% |
| EBITDA | 2 | 0 | 3 | 2 | 30.7% | -4.2% | | 926.1% |
| Net Income | 0 | -1 | 1 | 1 | -87.9% | | | |
Balance Sheet
|
|---|
| Cash | 4 | 1 | 5 | 2 | -80.1% | -86.0% | 6.5% | -70.1% |
| Short Term Debt | 1 | 1 | 1 | 1 | -41.0% | 28.1% | 23.7% | 13.8% |
| Long Term Debt | 9 | 9 | 14 | 14 | 2.1% | 10.9% | 65.0% | 53.1% |
Ratios
|
|---|
| Gross Margin | 12.4% | 9.9% | 21.2% | 14.0% | 0.8% | -0.9% | 14.9% | 6.2% |
| EBITDA Margin | 6.4% | 2.5% | 13.4% | 7.2% | 0.6% | 0.1% | 17.5% | 6.1% |
| Net Income Margin | 0.2% | -2.8% | 4.9% | 3.9% | -1.7% | -1.1% | 14.0% | 6.9% |
Revenue and profitability
The company's Revenue jumped on 29.0%. Revenue growth showed acceleration in FY16Q4 - it increased 55.1% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.3 pp from 2.1% to 7.4% in FY2016.
Gross Margin increased on 4.7 pp from 9.6% to 14.3% in FY2016. SG&A as a % of Revenue decreased slightly on 1.3 pp from 13.0% to 11.6% in FY2016.
Net Income marign increased on 3.8 pp from -2.1% to 1.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 ADF Group Inc had CAPEX/Revenue of 8.8%. The company's CAPEX/Revenue decreased on 3.3 pp from 12.1% in FY2013 to 8.8% in FY2016. It's average level of CAPEX/Revenue for the last three years was 17.1%.To fuel this fast growth the company made large investments to CAPEX (119% of EBITDA).
Return on investment
The company operates at low ROIC (2.29%) and ROE (1.61%). ROIC increased on 4.7 pp from -2.4% to 2.3% in FY2016. ROE increased on 3.1 pp from -1.5% to 1.6% in FY2016.
Leverage (Debt)
Debt level is 1.8x Net Debt / EBITDA and 2.1x Debt / EBITDA. Net Debt / EBITDA jumped on 0.4x from 1.4x to 1.8x in FY2016. Debt surged on 50.1% while cash dropped on 70.1%.
Appendix 1: Peers in Basic Materials
Below we provide ADF Group Inc benchmarking against other companies in Basic Materials 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 |
|---|
| Golden Minerals Co ($AUM) | 1,320.8% | -59.1% | -97.8% | 3,334.5% | |
| Marlin Gold Mining Ltd ($MLN) | | | | 835.4% | |
| Mangazeya Mining Ltd ($MGZ.H) | | -22.8% | -36.5% | 230.1% | |
| Osisko Gold Royalties Ltd ($OR) | | | | 164.4% | |
| HudBay Minerals Inc ($HBM) | -22.0% | -28.6% | -8.4% | 92.8% | |
| |
|---|
| Median (117 companies) | 5.5% | -3.5% | 1.8% | -4.6% | -16.5% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($NSU) | 89.9% | 94.8% | 95.5% | 82.3% | |
| Labrador Iron Ore Royalty Corp ($LIF) | 80.2% | 80.2% | 80.2% | 80.3% | |
| Lucara Diamond Corp ($LUC) | 42.5% | 57.4% | 66.7% | 60.9% | |
| Trevali Mining Corp ($TV) | | | 49.0% | 59.3% | |
| Mangazeya Mining Ltd ($MGZ.H) | 55.4% | 28.0% | 32.6% | 55.1% | |
| |
|---|
| Median (112 companies) | 32.1% | 21.8% | 18.0% | 15.8% | 16.4% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($LIF) | | | | 72.8% | |
| Silver Wheaton Corp ($SLW) | 82.6% | 75.3% | 69.6% | 65.8% | |
| Franco-Nevada Corp ($FNV) | 62.1% | 44.6% | 72.3% | 60.8% | |
| Lucara Diamond Corp ($LUC) | 7.6% | 57.3% | 57.5% | 60.0% | |
| Sandstorm Gold Ltd ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | |
| |
|---|
| Median (118 companies) | 18.6% | 10.8% | 10.6% | 5.3% | -29.8% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($LGO) | | | | 567.6% | |
| Sandstorm Gold Ltd ($SSL) | 152.1% | 118.8% | 49.4% | 412.7% | |
| Silver Wheaton Corp ($SLW) | 75.5% | 286.8% | 22.5% | 279.2% | |
| Franco-Nevada Corp ($FNV) | 3.7% | 35.5% | 201.6% | 230.0% | |
| Avino Silver & Gold Mines Ltd ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (118 companies) | 28.3% | 27.4% | 17.4% | 17.2% | 27.0% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($LUC) | -2.9% | 41.3% | 54.7% | 39.6% | |
| Canfor Pulp Products Inc ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | |
| Supremex Inc ($SXP) | 14.1% | 18.5% | 16.5% | 23.4% | |
| Mangazeya Mining Ltd ($MGZ.H) | | -3.0% | -5.0% | 23.0% | |
| Claude Resources Inc ($CRJ) | 4.5% | -5.6% | 3.6% | 19.3% | |
| |
|---|
| Median (120 companies) | 4.7% | -0.2% | 0.8% | -4.9% | -6.7% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Imperial Metals Corp ($III) | 1.5x | 4.9x | 12.9x | 67.5x | |
| Copper Mountain Mining Corp ($CUM) | 3.9x | 5.0x | 5.4x | 30.6x | |
| Resolute Forest Products Inc ($RFP) | 1.3x | 1.1x | 3.8x | 29.6x | |
| Mangazeya Mining Ltd ($MGZ.H) | 11.4x | | | 19.7x | |
| Fortress Paper Ltd ($FTP) | | | | 18.8x | |
| |
|---|
| Median (69 companies) | 0.3x | 0.9x | 1.0x | 1.6x | |
|---|
