IWG Technologies Inc reports 17.9% Net Income growth and 2.8 pp EBITDA Margin growth from 24.0% to 26.9%
02.12.2016 • About IWG Technologies Inc (
$IWG) • By InTwits
IWG Technologies Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- IWG Technologies Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's a lot of higher than industry average of 7.1%.
- CAPEX is quite volatile: 0.10 in FY2016, 0.22 in FY2015, 0.16 in FY2014, 0.038 in FY2013, 0.023 in FY2012
- The company has highly profitable business model: ROIC is at 25.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
IWG Technologies Inc ($IWG) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 6.014 | 6.606 | 7.397 | 9.514 | 9.732 | 2.3% |
| Gross Profit | 3.205 | 3.566 | 3.621 | 4.543 | 5.346 | 17.7% |
| SG&A | 0.400 | 0.439 | 0.486 | 2.082 | 2.636 | 26.6% |
| EBITDA | 0.765 | 1.683 | 1.480 | 2.286 | 2.615 | 14.4% |
| Net Income | 0.526 | 0.970 | 0.751 | 1.282 | 1.512 | 17.9% |
Balance Sheet
|
|---|
| Cash | 0.924 | 1.363 | 1.451 | 3.350 | 3.874 | 15.6% |
| Short Term Debt | 0.228 | 0.253 | 0.111 | 0.013 | 0.012 | -8.6% |
| Long Term Debt | 0.313 | 0.107 | 0.026 | 0.281 | 0.001 | -99.7% |
Cash flow
|
|---|
| Capex | 0.023 | 0.038 | 0.163 | 0.218 | 0.103 | -52.8% |
Ratios
|
|---|
| Revenue growth | 35.7% | 9.9% | 12.0% | 28.6% | 2.3% | |
| EBITDA growth | 60.0% | 120.0% | -12.0% | 54.4% | 14.4% | |
| Gross Margin | 53.3% | 54.0% | 49.0% | 47.8% | 54.9% | 7.2% |
| EBITDA Margin | 12.7% | 25.5% | 20.0% | 24.0% | 26.9% | 2.8% |
| Net Income Margin | 8.8% | 14.7% | 10.2% | 13.5% | 15.5% | 2.1% |
| SG&A, % of revenue | 6.7% | 6.6% | 6.6% | 21.9% | 27.1% | 5.2% |
| CAPEX, % of revenue | 0.4% | 0.6% | 2.2% | 2.3% | 1.1% | -1.2% |
| ROIC | 17.0% | 36.3% | 23.4% | 27.2% | 25.7% | -1.6% |
| ROE | 16.5% | 25.4% | 15.8% | 21.9% | 20.5% | -1.3% |
| Net Debt/EBITDA | -0.5x | -0.6x | -0.9x | -1.3x | -1.5x | -0.1x |
IWG Technologies Inc ($IWG) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 2 | 3 | 2 | 3 | 6.4% | 8.7% | -4.5% | -0.1% |
| Net Income | 0 | 0 | 0 | 1 | 6.6% | 16.8% | -13.4% | 51.7% |
Balance Sheet
|
|---|
| Cash | 4 | 4 | 4 | 4 | 155.4% | 125.4% | 46.5% | 15.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | -88.1% | -87.2% | -85.5% | -8.6% |
| Long Term Debt | 0 | 0 | 0 | 0 | 1,137.4% | 1,342.4% | -1.3% | -99.7% |
Ratios
|
|---|
| Gross Margin | 52.7% | 55.2% | 53.9% | 57.3% | 3.6% | 7.6% | 8.5% | 8.2% |
| Net Income Margin | 12.9% | 13.7% | 12.1% | 22.3% | 0.0% | 1.0% | -1.3% | 7.6% |
Revenue and profitability
IWG Technologies Inc's Revenue increased on 2.3%. Revenue growth showed slow down in FY16Q4 - it was -0.1% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.8 pp from 24.0% to 26.9% in FY2016.
Gross Margin increased on 7.2 pp from 47.8% to 54.9% in FY2016. SG&A as a % of Revenue increased on 5.2 pp from 21.9% to 27.1% in FY2016.
Net Income marign increased on 2.1 pp from 13.5% to 15.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 IWG Technologies Inc had CAPEX/Revenue of 1.1%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 1.9%.
Return on investment
The company operates at high and attractive ROIC (25.67%) and ROE (20.54%). ROIC decreased slightly on 1.6 pp from 27.2% to 25.7% in FY2016. ROE decreased slightly on 1.3 pp from 21.9% to 20.5% in FY2016.
Leverage (Debt)
Debt level is -1.5x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.1x from -1.3x to -1.5x in FY2016. Debt dropped on 95.6% while cash jumped on 15.6%.
Appendix 1: Peers in Industrial
Below we provide IWG Technologies Inc benchmarking against other companies in Industrial 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 |
|---|
| Progressive Waste Solutions Ltd ($BIN) | | 16.1% | 7.8% | 1.8% | 59.4% |
| Baylin Technologies Inc ($BYL) | | 16.5% | -44.0% | -4.1% | 47.5% |
| CCL Industries Inc ($CCL.B) | | 44.4% | 36.8% | 17.5% | 30.8% |
| Stantec Inc ($STN) | | 17.9% | 13.3% | 14.4% | 30.5% |
| Avigilon Corp ($AVO) | | 72.6% | 41.9% | 17.7% | 22.2% |
| |
|---|
| Median (51 companies) | | 4.9% | 9.9% | 7.7% | 3.2% |
|---|
| IWG Technologies Inc ($IWG) | | 9.9% | 12.0% | 28.6% | 2.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pure Technologies Ltd ($PUR) | 77.9% | 78.0% | 77.5% | 75.6% | |
| WSP Global Inc ($WSP) | 81.1% | 83.2% | 81.0% | 74.0% | 76.7% |
| Avigilon Corp ($AVO) | 49.3% | 54.2% | 56.6% | 57.4% | 52.0% |
| Stantec Inc ($STN) | 55.0% | 54.7% | 54.9% | 54.5% | 54.1% |
| Progressive Waste Solutions Ltd ($BIN) | 42.4% | 44.8% | 45.2% | 44.4% | 42.0% |
| |
|---|
| Median (49 companies) | 23.4% | 23.4% | 20.9% | 21.5% | 22.1% |
|---|
| IWG Technologies Inc ($IWG) | 53.3% | 54.0% | 49.0% | 47.8% | 54.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canadian National Railway Co ($CNR) | 46.5% | 45.9% | 46.8% | 50.9% | 54.3% |
| Canadian Pacific Railway Ltd ($CP) | 26.1% | 32.4% | 43.7% | 48.9% | 51.6% |
| Badger Daylighting Ltd ($BAD) | 25.7% | 25.9% | 27.9% | 24.6% | 24.2% |
| Winpak Ltd ($WPK) | 19.5% | 18.6% | 18.7% | 22.7% | 23.5% |
| CCL Industries Inc ($CCL.B) | 19.6% | 15.6% | 18.4% | 19.9% | 18.3% |
| |
|---|
| Median (53 companies) | 10.2% | 8.3% | 8.0% | 7.8% | 11.0% |
|---|
| IWG Technologies Inc ($IWG) | 12.7% | 25.5% | 20.0% | 24.0% | 26.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newalta Corp ($NAL) | 21.7% | 34.5% | 35.1% | 42.0% | 9.6% |
| Cargojet Inc ($CJT.A) | 7.0% | 6.3% | 54.1% | 41.3% | |
| Algoma Central Corp ($ALC) | 15.9% | 7.3% | 5.0% | 27.4% | 58.2% |
| Canadian Pacific Railway Ltd ($CP) | 20.2% | 20.2% | 21.9% | 22.7% | 19.0% |
| Canadian National Railway Co ($CNR) | 17.4% | 18.7% | 18.9% | 21.5% | 22.4% |
| |
|---|
| Median (54 companies) | 3.2% | 3.7% | 4.4% | 3.9% | 4.8% |
|---|
| IWG Technologies Inc ($IWG) | 0.4% | 0.6% | 2.2% | 2.3% | 1.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| IBI Group Inc ($IBG) | 4.8% | -9.0% | 11.6% | 21.9% | 26.2% |
| Winpak Ltd ($WPK) | 20.4% | 18.0% | 18.3% | 22.6% | 21.8% |
| Toromont Industries Ltd ($TIH) | 28.8% | 25.8% | 24.3% | 23.5% | 21.7% |
| Intertape Polymer Group Inc ($ITP) | 12.3% | 13.7% | 22.5% | 23.0% | 21.0% |
| Norbord Inc ($NBD) | 15.2% | 24.0% | 2.4% | 2.2% | 19.5% |
| |
|---|
| Median (55 companies) | 12.2% | 9.6% | 11.0% | 8.3% | 8.5% |
|---|
| IWG Technologies Inc ($IWG) | 17.0% | 36.3% | 23.4% | 27.2% | 25.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Conifex Timber Inc ($CFF) | | 2.7x | 6.1x | 35.9x | 3.6x |
| Ag Growth International Inc ($AFN) | 2.9x | -0.1x | 2.1x | 14.1x | |
| Cargojet Inc ($CJT.A) | 1.5x | 1.5x | 31.5x | 12.9x | |
| Progressive Waste Solutions Ltd ($BIN) | 4.5x | 3.3x | 2.9x | 10.6x | 3.8x |
| Finning International Inc ($FTT) | 2.3x | 1.8x | 1.4x | 9.4x | 2.5x |
| |
|---|
| Median (49 companies) | 1.5x | 1.6x | 1.3x | 1.0x | 2.1x |
|---|
| IWG Technologies Inc ($IWG) | -0.5x | -0.6x | -0.9x | -1.3x | -1.5x |
