Russell Breweries Inc reports 129% CAPEX growth and 2.1% Revenue growth
21.10.2016 • About Russell Breweries Inc (
$RB) • By InTwits
Russell Breweries Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Russell Breweries Inc doesn't have a profitable business model yet: FY2016 ROIC is 0.1%
- EBITDA Margin is quite volatile: 5.0% in FY2016, 5.1% in FY2015, 10.1% in FY2014, 4.7% in FY2013, 0.5% in FY2012
- Russell Breweries Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 0.59 in FY2016, 0.26 in FY2015, 0.12 in FY2014, 0.030 in FY2013, 0.036 in FY2012
- The company has potentially unprofitable business model: ROIC is at 0.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Russell Breweries Inc ($RB) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 6.478 | 6.732 | 7.545 | 7.938 | 8.102 | 2.1% |
| Gross Profit | 3.423 | 3.584 | 4.243 | 4.337 | 4.255 | -1.9% |
| SG&A | 3.712 | 3.592 | 3.797 | 4.246 | 4.189 | -1.4% |
| EBITDA | 0.033 | 0.315 | 0.759 | 0.407 | 0.403 | -1.0% |
| Net Income | -1.088 | -0.546 | 0.062 | 1.602 | -0.320 | -120.0% |
Balance Sheet
|
|---|
| Cash | 0.029 | 0.213 | 0.662 | 0.428 | 0.350 | -18.4% |
| Short Term Debt | 0.925 | 1.035 | 0.350 | 0.688 | 0.136 | -80.2% |
| Long Term Debt | 0.330 | 0.137 | 0.592 | 0.018 | 0.818 | 4,367.2% |
Cash flow
|
|---|
| Capex | 0.036 | 0.030 | 0.116 | 0.258 | 0.590 | 128.6% |
Ratios
|
|---|
| Revenue growth | 10.3% | 3.9% | 12.1% | 5.2% | 2.1% | |
| EBITDA growth | -104.7% | 854.3% | 141.2% | -46.4% | -1.0% | |
| Gross Margin | 52.8% | 53.2% | 56.2% | 54.6% | 52.5% | -2.1% |
| EBITDA Margin | 0.5% | 4.7% | 10.1% | 5.1% | 5.0% | -0.2% |
| Net Income Margin | -16.8% | -8.1% | 0.8% | 20.2% | -3.9% | -24.1% |
| SG&A, % of revenue | 57.3% | 53.4% | 50.3% | 53.5% | 51.7% | -1.8% |
| CAPEX, % of revenue | 0.6% | 0.4% | 1.5% | 3.2% | 7.3% | 4.0% |
| ROIC | -8.7% | -2.5% | 6.2% | 0.3% | 0.1% | -0.2% |
| ROE | -44.0% | -18.7% | 1.5% | 30.3% | -5.3% | -35.5% |
| Net Debt/EBITDA | 37.2x | 3.0x | 0.4x | 0.7x | 1.5x | 0.8x |
Russell Breweries Inc ($RB) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 2 | 2 | 2 | 2 | 3.4% | 8.3% | -9.1% | 5.8% |
| EBITDA | 0 | 0 | 0 | -0 | 242.6% | -38.2% | -53.0% | |
| Net Income | -0 | 0 | 0 | -0 | | -78.5% | -72.1% | -131.3% |
Balance Sheet
|
|---|
| Cash | 1 | 0 | 0 | 0 | 164.1% | -41.5% | -44.9% | -18.4% |
| Short Term Debt | 1 | 0 | 0 | 0 | 144.8% | -59.2% | -44.7% | -80.2% |
| Long Term Debt | 0 | 1 | 1 | 1 | -100.0% | 41.4% | 98.2% | 4,367.2% |
Ratios
|
|---|
| Gross Margin | 56.4% | 55.6% | 55.8% | 42.6% | 7.5% | -0.5% | -1.7% | -13.5% |
| EBITDA Margin | 4.3% | 8.7% | 10.6% | -3.1% | 3.0% | -6.5% | -9.9% | 13.8% |
| Net Income Margin | -2.4% | 1.8% | 4.6% | -19.0% | 4.1% | -7.2% | -10.4% | -83.3% |
Revenue and profitability
Russell Breweries Inc's Revenue increased on 2.1%. Revenue growth showed acceleration in FY16Q4 - it increased 5.8% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 24.6 pp from 11.5% to -13.1% in FY2016.
Gross Margin decreased on 2.1 pp from 54.6% to 52.5% in FY2016. SG&A as a % of Revenue decreased slightly on 1.8 pp from 53.5% to 51.7% in FY2016.
Net Income marign dropped on 24.1 pp from 20.2% to -3.9% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 7.3% in FY2016. The company's CAPEX/Revenue increased on 6.8 pp from 0.45% in FY2013 to 7.3% in FY2016. Average CAPEX/Revenue for the last three years was 4.0%.Russell Breweries Inc maintained rich investment policy and has spent a lot to CAPEX (146% of EBITDA).
Return on investment
The company operates at low but positive ROIC (0.10%) and negative ROE (-5.26%). ROIC showed almost no change in FY2016. ROE dropped on 35.5 pp from 30.3% to -5.3% in FY2016.
Leverage (Debt)
Debt level is 1.5x Net Debt / EBITDA and 2.4x Debt / EBITDA. Net Debt / EBITDA surged on 0.8x from 0.7x to 1.5x in FY2016. Debt surged on 35.0% while cash dropped on 18.4%.
Appendix 1: Peers in Consumer, Non-cyclical
Below you can find Russell Breweries Inc 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 |
|---|
