Empire Co Ltd EBITDA dropped on 259% in 2016 and EBITDA Margin dropped on 13.0 pp from 5.1% to -7.9%
28.06.2016 • About Empire Co Ltd (
$EMP.A) • By InTwits
Empire Co Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Empire Co Ltd doesn't have a profitable business model yet: FY2016 ROIC is -34.9%
- EBITDA Margin is quite volatile: -7.9% in FY2016, 5.1% in FY2015, 3.6% in FY2014, 5.4% in FY2013, 5.4% in FY2012
- Empire Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.8%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 1,073 in 2016, 2,994 in 2015, 5,290 in 2014, 6,297 in 2013, 5,478 in 2012
- The company has unprofitable business model: ROIC is at -34.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Empire Co Ltd ($EMP.A) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 16,249 | 17,401 | 20,958 | 23,929 | 24,619 | 2.9% |
| Gross Profit | 4,029 | 4,075 | 5,016 | 5,962 | 5,958 | -0.1% |
| SG&A | 3,577 | 3,600 | 4,787 | 5,404 | 5,424 | 0.4% |
| EBITDA | 877 | 933 | 759 | 1,225 | -1,945 | -258.8% |
| Net Income | 339 | 380 | 235 | 419 | -2,131 | -608.6% |
Balance Sheet
|
|---|
| Cash | 510 | 455 | 429 | 296 | 265 | -10.5% |
| Short Term Debt | 242 | 54 | 218 | 54 | 341 | 533.4% |
| Long Term Debt | 889 | 916 | 3,282 | 2,230 | 2,012 | -9.8% |
Cash flow
|
|---|
| Capex | 603 | 532 | 563 | 497 | 617 | 24.0% |
Ratios
|
|---|
| Revenue growth | 1.8% | 7.1% | 20.4% | 14.2% | 2.9% | |
| EBITDA growth | 1.6% | 6.4% | -18.6% | 61.4% | -258.8% | |
| Gross Margin | 24.8% | 23.4% | 23.9% | 24.9% | 24.2% | -0.7% |
| EBITDA Margin | 5.4% | 5.4% | 3.6% | 5.1% | -7.9% | -13.0% |
| Net Income Margin | 2.1% | 2.2% | 1.1% | 1.8% | -8.7% | -10.4% |
| SG&A, % of revenue | 22.0% | 20.7% | 22.8% | 22.6% | 22.0% | -0.6% |
| CAPEX, % of revenue | 3.7% | 3.1% | 2.7% | 2.1% | 2.5% | 0.4% |
| ROIC | 11.6% | 11.9% | 4.6% | 8.4% | -34.9% | -43.3% |
| ROE | 10.3% | 10.7% | 5.0% | 7.2% | -44.4% | -51.5% |
| Net Debt/EBITDA | 0.7x | 0.6x | 4.0x | 1.6x | | -1.6x |
Empire Co Ltd ($EMP.A) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 6,249 | 6,059 | 6,027 | 6,283 | 0.4% | 1.1% | 1.5% | 8.9% |
| EBITDA | 314 | 256 | -1,468 | -1,047 | -8.3% | -20.8% | -555.2% | -543.9% |
| Net Income | 109 | 69 | -1,366 | -943 | -11.6% | -41.4% | -1,204.9% | -1,801.4% |
Balance Sheet
|
|---|
| Cash | 384 | 304 | 294 | 265 | -1.6% | -19.3% | -8.9% | -10.5% |
| Short Term Debt | 333 | 346 | 347 | 341 | 333.9% | 1,648.5% | 1,133.8% | 533.4% |
| Long Term Debt | 1,939 | 2,117 | 2,041 | 2,012 | -37.4% | -31.7% | -26.3% | -9.8% |
Ratios
|
|---|
| Gross Margin | 24.3% | 24.3% | 23.6% | 24.6% | -0.6% | -0.4% | -1.3% | -0.6% |
| EBITDA Margin | 5.0% | 4.2% | -24.4% | -16.7% | -0.5% | -1.2% | -29.8% | -20.8% |
| Net Income Margin | 1.7% | 1.1% | -22.7% | -15.0% | -0.2% | -0.8% | -24.7% | -16.0% |
Revenue and profitability
Empire Co Ltd's Revenue increased on 2.9%. Revenue growth showed acceleration in FY16Q4 - it increased 8.9% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.2 pp from 13.0% to 7.8% in 2016.
Gross Margin decreased slightly on 0.72 pp from 24.9% to 24.2% in FY2016. SG&A as a % of Revenue decreased slightly on 0.55 pp from 22.6% to 22.0% in FY2016.
Net Income marign dropped on 10.4 pp from 1.8% to -8.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Empire Co Ltd's CAPEX/Revenue was 2.5% in FY2016. The company's CAPEX/Revenue decreased slightly on 0.55 pp from 3.1% in FY2013 to 2.5% in FY2016. For the last three years the average CAPEX/Revenue was 2.4%.
Return on investment
The company operates at negative ROIC (-34.85%) and ROE (-44.37%). ROIC dropped on 43.3 pp from 8.4% to -34.9% in FY2016. ROE dropped on 51.5 pp from 7.2% to -44.4% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is . Net Debt / EBITDA dropped on 1.6x from 1.6x to in FY2016. Debt increased on 3.0% while cash dropped on 10.5%.
Appendix 1: Peers in Consumer, Non-cyclical
Below you can find Empire Co Ltd benchmarking vs. other companies in Consumer, Non-cyclical 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Concordia Healthcare Corp ($CXR) | | | 159.5% | 275.7% | 107.0% |
| Heritage Global Inc ($HGP) | | -37.0% | 76.2% | 11.2% | 80.8% |
| EnerCare Inc ($ECI) | | 8.6% | 21.1% | 55.7% | 76.6% |
| CRH Medical Corp ($CRH) | | 12.5% | 56.0% | 284.2% | 70.2% |
| Nuvo Research Inc ($NRI) | | -25.3% | -29.1% | 57.0% | 31.9% |
| |
|---|
| Median (41 companies) | | 8.6% | 13.8% | 15.2% | 12.8% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cipher Pharmaceuticals Inc ($CPH) | | 99.5% | 98.3% | 92.7% | |
| Ritchie Bros Auctioneers Inc ($RBA) | 88.7% | 88.4% | 88.0% | 89.1% | 88.3% |
| Information Services Corp ($ISV) | 77.5% | 80.4% | 80.9% | 87.6% | 85.1% |
| Biosyent Inc ($RX) | 79.3% | 79.2% | 78.1% | 78.7% | |
| Concordia Healthcare Corp ($CXR) | | 79.4% | 86.0% | 76.1% | 72.9% |
| |
|---|
| Median (35 companies) | 32.5% | 37.1% | 35.7% | 35.7% | 31.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CRH Medical Corp ($CRH) | 21.0% | 24.5% | 29.1% | 44.1% | |
| Valeant Pharmaceuticals International Inc ($VRX) | 30.6% | 27.8% | 45.6% | 39.8% | 23.8% |
| Concordia Healthcare Corp ($CXR) | | 43.7% | 37.0% | 39.8% | -92.8% |
| Ritchie Bros Auctioneers Inc ($RBA) | 36.8% | 36.3% | 36.4% | 39.7% | 31.4% |
| EnerCare Inc ($ECI) | 52.8% | 51.0% | 45.5% | 39.3% | 26.6% |
| |
|---|
| Median (44 companies) | 9.2% | 12.4% | 13.4% | 11.8% | 10.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| ProMetic Life Sciences Inc ($PLI) | 2.1% | 33.6% | 34.6% | 23.3% | |
| EnerCare Inc ($ECI) | 25.7% | 26.5% | 23.6% | 20.7% | 15.5% |
| Black Diamond Group Ltd ($BDI) | 61.9% | 27.5% | 31.0% | 17.6% | |
| easyhome Ltd ($EH) | 32.2% | 25.6% | 21.6% | 16.9% | 12.7% |
| K-Bro Linen Inc ($KBL) | 10.0% | 19.0% | 11.4% | 16.6% | |
| |
|---|
| Median (43 companies) | 3.1% | 2.7% | 2.3% | 2.4% | 2.1% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Information Services Corp ($ISV) | 71.8% | 72.8% | 58.9% | 38.1% | 27.6% |
| Colliers International Group Inc ($CIG) | 10.5% | 11.2% | 15.2% | 10.9% | 26.1% |
| Nuvo Research Inc ($NRI) | -11.6% | -17.4% | -37.9% | 12.9% | 20.8% |
| International Road Dynamics Inc ($IRD) | 0.9% | 6.7% | 4.4% | 10.6% | 16.5% |
| Premium Brands Holdings Corp ($PBH) | 10.3% | 9.9% | 6.9% | 12.6% | 15.3% |
| |
|---|
| Median (44 companies) | 8.8% | 8.4% | 8.4% | 6.9% | 8.0% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Concordia Healthcare Corp ($CXR) | | -1.3x | 5.6x | 20.2x | |
| SunOpta Inc ($SOY) | 2.9x | 3.5x | 1.3x | 16.9x | 140.8x |
| Centric Health Corp ($CHH) | 5.6x | 10.2x | 11.2x | 15.6x | |
| Sienna Senior Living Inc ($SIA) | 9.5x | 11.8x | 9.2x | 9.1x | 9.1x |
| Valeant Pharmaceuticals International Inc ($VRX) | 9.5x | 10.4x | 4.0x | 7.3x | 12.7x |
| |
|---|
| Median (38 companies) | 2.8x | 2.3x | 3.4x | 2.5x | 2.8x |
|---|
