EXFO Inc reports 90.5% EBITDA growth and 4.7% Revenue growth
12.10.2016 • About EXFO Inc (
$EXF) • By InTwits
EXFO Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EXFO Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's in pair with industry average of 1.7%.
- CAPEX is quite volatile: 4.4 in FY2016, 5.9 in FY2015, 7.9 in FY2014, 8.0 in FY2013, 23.8 in FY2012
- The company has business model with low profitability: ROIC is at 9.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
EXFO Inc ($EXF) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 250.0 | 242.2 | 230.8 | 222.1 | 232.6 | 4.7% |
| Gross Profit | 152.0 | 143.7 | 139.0 | 137.0 | 145.5 | 6.2% |
| SG&A | | 88.8 | 86.4 | 82.2 | 82.2 | -0.0% |
| EBITDA | 14.5 | 15.5 | 12.7 | 10.8 | 20.7 | 90.5% |
| Net Income | -3.6 | 1.3 | 0.8 | 5.3 | 8.9 | 68.0% |
Balance Sheet
|
|---|
| Cash | 58.9 | 45.4 | 54.1 | 25.9 | 43.2 | 67.1% |
| Short Term Debt | 0.6 | 0.3 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.3 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 23.8 | 8.0 | 7.9 | 5.9 | 4.4 | -26.6% |
Ratios
|
|---|
| Revenue growth | -7.3% | -3.1% | -4.7% | -3.8% | 4.7% | |
| EBITDA growth | -61.0% | 6.8% | -18.0% | -14.6% | 90.5% | |
| Gross Margin | 60.8% | 59.3% | 60.2% | 61.7% | 62.6% | 0.9% |
| EBITDA Margin | 5.8% | 6.4% | 5.5% | 4.9% | 8.9% | 4.0% |
| Net Income Margin | -1.4% | 0.6% | 0.3% | 2.4% | 3.8% | 1.4% |
| SG&A, % of revenue | | 36.7% | 37.4% | 37.0% | 35.3% | -1.7% |
| CAPEX, % of revenue | 9.5% | 3.3% | 3.4% | 2.7% | 1.9% | -0.8% |
| ROIC | 0.2% | 1.2% | 1.5% | 1.6% | 9.1% | 7.5% |
| ROE | -1.4% | 0.5% | 0.3% | 2.6% | 5.0% | 2.4% |
| Net Debt/EBITDA | -4.0x | -2.9x | -4.3x | -2.4x | -2.1x | 0.3x |
EXFO Inc ($EXF) key quoterly financial indicators
| mln. $ | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 55 | 54 | 61 | 63 | -2.6% | 5.1% | 5.4% | 11.1% |
| EBITDA | 5 | 5 | 5 | 6 | 75.5% | 544.9% | 20.2% | 83.9% |
| Net Income | 2 | 4 | 1 | 2 | 19.2% | 325.7% | 63.2% | -3.1% |
Balance Sheet
|
|---|
| Cash | 28 | 43 | 42 | 43 | -46.6% | 43.0% | 46.3% | 67.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 63.5% | 64.7% | 60.8% | 61.6% | 1.0% | 3.1% | -0.7% | 0.4% |
| EBITDA Margin | 8.9% | 9.3% | 8.1% | 9.3% | 4.0% | 7.8% | 1.0% | 3.7% |
| Net Income Margin | 3.2% | 7.4% | 1.5% | 3.6% | 0.6% | 5.6% | 0.5% | -0.5% |
Revenue and profitability
The company's Revenue increased on 4.7%. Revenue growth showed acceleration in FY16Q4 - it increased 11.1% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 33.9 pp from -36.7% to -2.8% in 2016.
Gross Margin increased slightly on 0.86 pp from 61.7% to 62.6% in FY2016. SG&A as a % of Revenue decreased slightly on 1.7 pp from 37.0% to 35.3% in FY2016.
Net Income marign increased slightly on 1.4 pp from 2.4% to 3.8% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 1.9%. CAPEX/Revenue decreased slightly on 1.4 pp from 3.3% in FY2013 to 1.9% in FY2016. Average CAPEX/Revenue for the last three years was 2.7%.
Return on investment
The company operates at low ROIC (9.13%) and ROE (5.03%). ROIC increased on 7.5 pp from 1.6% to 9.1% in FY2016. ROE increased on 2.4 pp from 2.6% to 5.0% in FY2016.
Leverage (Debt)
The company has no debt. Cash surged on 67.1%.
Appendix 1: Peers in Communications
Below we provide EXFO Inc benchmarking against other companies in Communications 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 |
|---|
| AcuityAds Holding Inc ($AT) | | | | 51.6% | 91.4% |
| Shopify Inc ($SH) | | 111.9% | 109.0% | 95.4% | 89.7% |
| Gaming Nation Inc ($FAN) | | | | | 46.6% |
| Tucows Inc ($TC) | | 13.3% | 13.6% | 17.1% | 9.8% |
| Points International Ltd ($PTS) | | 45.1% | 26.0% | 16.2% | 8.6% |
| |
|---|
| Median (26 companies) | 13.1% | 3.5% | 2.1% | 4.2% | 2.3% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wanted Technologies Corp ($WAN) | 90.5% | 93.2% | 94.3% | 95.6% | |
| NeuLion Inc ($NLN) | 53.6% | 63.8% | 70.2% | 81.1% | 81.6% |
| TeraGo Inc ($TGO) | 62.9% | 61.8% | 59.8% | 77.2% | 77.2% |
| ICTV Brands Inc ($ITV) | 67.4% | 71.9% | 69.6% | 68.1% | |
| Platinum Communications Corp ($PCS) | 67.4% | 67.1% | 60.2% | 60.5% | |
| |
|---|
| Median (23 companies) | 44.2% | 42.8% | 45.3% | 46.4% | 41.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BCE Inc ($BCE) | 38.8% | 37.7% | 38.4% | 37.7% | 39.8% |
| Rogers Communications Inc ($RCI.A) | 37.3% | 38.4% | 37.9% | 36.9% | 32.5% |
| Quebecor Inc ($QBR.B) | 27.5% | 36.3% | 35.5% | 34.2% | 35.5% |
| TELUS Corp ($T) | 35.3% | 35.2% | 35.1% | 34.1% | 33.0% |
| ZoomerMedia Ltd ($ZUM) | 32.6% | 33.8% | 29.3% | 29.1% | 27.1% |
| |
|---|
| Median (30 companies) | 17.0% | 10.7% | 9.9% | 9.9% | 7.7% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| TELUS Corp ($T) | 17.9% | 17.8% | 19.8% | 20.2% | 21.5% |
| Rogers Communications Inc ($RCI.A) | 17.2% | 17.6% | 18.4% | 18.2% | 17.2% |
| Quebecor Inc ($QBR.B) | 16.7% | 15.4% | 17.9% | 17.5% | 17.6% |
| BCE Inc ($BCE) | 17.6% | 17.5% | 17.7% | 16.9% | 17.4% |
| TeraGo Inc ($TGO) | 20.9% | 21.5% | 23.1% | 14.8% | 13.0% |
| |
|---|
| Median (29 companies) | 2.7% | 3.0% | 2.3% | 2.3% | 3.0% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tucows Inc ($TC) | 17.7% | 22.5% | 35.4% | 51.4% | 58.4% |
| BCE Inc ($BCE) | 14.1% | 12.6% | 12.6% | 12.3% | 12.6% |
| Quebecor Inc ($QBR.B) | 7.9% | 9.6% | 8.4% | 8.4% | 10.1% |
| MDC Partners Inc ($MDZ.A) | -3.1% | -6.3% | 14.2% | 13.7% | 10.1% |
| TELUS Corp ($T) | 12.4% | 13.0% | 13.0% | 11.5% | 9.6% |
| |
|---|
| Median (29 companies) | 8.9% | 7.9% | 7.3% | 2.6% | 0.1% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Intertain Group Ltd/The ($IT) | | | | 9.4x | |
| MDC Partners Inc ($MDZ.A) | 12.4x | 112.6x | 4.6x | 5.5x | 9.6x |
| Quebecor Inc ($QBR.B) | 3.7x | 3.9x | 4.2x | 4.8x | 4.3x |
| Rogers Communications Inc ($RCI.A) | 2.3x | 2.4x | 3.2x | 3.6x | 3.8x |
| Newfoundland Capital Corp Ltd ($NCC.B) | 1.4x | 1.3x | 3.3x | 3.2x | |
| |
|---|
| Median (21 companies) | 1.4x | 1.3x | 1.5x | 1.6x | 1.7x |
|---|
