Advantex Marketing International Inc reports 18.5 pp EBITDA Margin growth from -6.0% to 12.5% in 2016 while 15.2% Revenue decline
27.10.2016 • About Advantex Marketing International Inc (
$ADX) • By InTwits
Advantex Marketing International Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Advantex Marketing International Inc is a company in decline: FY2016 revenue growth was -15.2%, 5 years revenue CAGR was -3.6%
- EBITDA Margin is quite volatile: 12.5% in FY2016, -6.0% in FY2015, 11.2% in FY2014, 19.7% in FY2013, 20.2% in FY2012
- Advantex Marketing International Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 0.056 in FY2016, 0.32 in FY2015, 0.40 in FY2014, 0.83 in FY2013, 0.23 in FY2012
- The company has highly profitable business model: ROIC is at 30.2%
- It operates with high leverage: Net Debt/EBITDA is 3.5x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Advantex Marketing International Inc ($ADX) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 15.895 | 16.910 | 16.535 | 13.298 | 11.274 | -15.2% |
| Gross Profit | 11.033 | 11.360 | 10.210 | 8.132 | 7.580 | -6.8% |
| SG&A | | 8.037 | 8.359 | 7.923 | 6.170 | -22.1% |
| EBITDA | 3.214 | 3.323 | 1.851 | -0.793 | 1.410 | |
| Net Income | 0.227 | 0.036 | -0.715 | -3.071 | -0.907 | |
Balance Sheet
|
|---|
| Cash | 1.085 | 1.774 | 1.816 | 1.163 | 0.659 | -43.3% |
| Short Term Debt | 6.716 | 7.099 | 6.454 | 5.712 | 5.533 | -3.1% |
| Long Term Debt | 9.665 | 2.114 | 4.662 | 4.865 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 0.226 | 0.828 | 0.402 | 0.321 | 0.056 | -82.7% |
Ratios
|
|---|
| Revenue growth | 17.5% | 6.4% | -2.2% | -19.6% | -15.2% | |
| EBITDA growth | | 3.4% | -44.3% | -142.8% | -277.9% | |
| Gross Margin | 69.4% | 67.2% | 61.7% | 61.1% | 67.2% | 6.1% |
| EBITDA Margin | 20.2% | 19.7% | 11.2% | -6.0% | 12.5% | 18.5% |
| Net Income Margin | 1.4% | 0.2% | -4.3% | -23.1% | -8.0% | 15.0% |
| SG&A, % of revenue | | 47.5% | 50.6% | 59.6% | 54.7% | -4.9% |
| CAPEX, % of revenue | 1.4% | 4.9% | 2.4% | 2.4% | 0.5% | -1.9% |
| ROIC | | 28.9% | 17.5% | -15.6% | 30.2% | 45.8% |
| Net Debt/EBITDA | 4.8x | 2.2x | 5.0x | | 3.5x | 3.5x |
Advantex Marketing International Inc ($ADX) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 3 | 3 | 2 | 3 | -15.1% | -18.5% | -10.4% | -15.5% |
| EBITDA | 0 | 1 | 0 | 0 | -34.5% | -0.3% | | |
| Net Income | -0 | -0 | -1 | -0 | -643.6% | | | |
Balance Sheet
|
|---|
| Cash | 1 | 1 | 1 | 1 | -56.1% | -52.0% | -42.4% | -43.3% |
| Short Term Debt | 6 | 7 | 6 | 6 | 14.4% | 19.3% | 4.0% | -3.1% |
| Long Term Debt | 0 | 0 | 0 | 0 | -100.0% | -100.0% | -100.0% | -100.0% |
Ratios
|
|---|
| Gross Margin | 70.5% | 66.8% | 69.1% | 62.5% | -2.6% | -1.3% | 41.2% | -5.5% |
| EBITDA Margin | 15.5% | 17.1% | 6.0% | 9.9% | -4.6% | 3.1% | 80.6% | 13.9% |
| Net Income Margin | -3.6% | -1.0% | -21.0% | -9.4% | -4.2% | 2.8% | 74.0% | 1.8% |
Revenue and profitability
Advantex Marketing International Inc's Revenue dropped on 15.2%. Revenue decline showed acceleration in FY16Q4 - it was 15.5% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 18.5 pp from -6.0% to 12.5% in FY2016.
Gross Margin increased on 6.1 pp from 61.1% to 67.2% in FY2016. SG&A as a % of Revenue decreased on 4.9 pp from 59.6% to 54.7% in FY2016.
Net Income marign surged on 15.0 pp from -23.1% to -8.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Advantex Marketing International Inc's CAPEX/Revenue was 0.49% in FY2016. The company's CAPEX/Revenue decreased on 4.4 pp from 4.9% in FY2013 to 0.49% in FY2016. It's average CAPEX/Revenue for the last three years was 1.8%.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.5x and Debt / EBITDA is 3.9x. Net Debt / EBITDA jumped3.5x from to 3.5x in FY2016. Debt dropped on 47.7% while cash dropped on 43.3%.
Appendix 1: Peers in Communications
Below we provide Advantex Marketing International 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 |
|---|
