Transat AT Inc EBITDA dropped on 80.4% in 2016 and EBITDA Margin decreased on 2.8 pp from 3.5% to 0.68%
14.12.2016 • About Transat AT Inc (
$TRZ.A) • By InTwits
Transat AT Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Transat AT Inc doesn't have a profitable business model yet: FY2016 ROIC is -6.2%
- EBITDA Margin is quite volatile: 0.7% in FY2016, 3.5% in FY2015, 2.3% in FY2014, 3.0% in FY2013, 0.6% in FY2012
- Transat AT Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 63.7 in 2016, 74.6 in 2015, 23.4 in 2014, 67.1 in 2013, 16.1 in 2012
- The company has unprofitable business model: ROIC is at -6.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Transat AT Inc ($TRZ.A) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,714 | 3,648 | 3,752 | 2,898 | 2,890 | -0.3% |
| Gross Profit | 1,738 | 1,697 | 1,752 | 1,638 | 1,580 | -3.5% |
| EBITDA | 23 | 111 | 85 | 101 | 20 | -80.4% |
| Net Income | -17 | 58 | 23 | 43 | -42 | -198.1% |
Balance Sheet
|
|---|
| Cash | 171 | 266 | 309 | 336 | 364 | 8.1% |
| Short Term Debt | 20 | 11 | 11 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 65 | 55 | 65 | 55 | 71 | 28.3% |
Ratios
|
|---|
| Revenue growth | 1.6% | -1.8% | 2.9% | -22.8% | -0.3% | |
| EBITDA growth | -14.7% | 390.5% | -23.0% | 17.7% | -80.4% | |
| Gross Margin | 46.8% | 46.5% | 46.7% | 56.5% | 54.7% | -1.8% |
| EBITDA Margin | 0.6% | 3.0% | 2.3% | 3.5% | 0.7% | -2.8% |
| Net Income Margin | -0.4% | 1.6% | 0.6% | 1.5% | -1.4% | -2.9% |
| CAPEX, % of revenue | 1.7% | 1.5% | 1.7% | 1.9% | 2.4% | 0.5% |
| ROIC | -4.7% | 17.2% | 8.3% | 11.0% | -6.2% | -17.3% |
| ROE | -4.4% | 14.4% | 4.9% | 8.3% | -8.3% | -16.7% |
| Net Debt/EBITDA | -6.7x | -2.3x | -3.5x | -3.3x | -18.5x | -15.1x |
Transat AT Inc ($TRZ.A) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 726 | 888 | 664 | 491 | -8.0% | 1.5% | -5.9% | -7.3% |
| EBITDA | -29 | -2 | 9 | 50 | | -125.6% | -79.6% | -39.8% |
| Net Income | -61 | -25 | 9 | 35 | | -201.0% | -27.8% | -49.5% |
Balance Sheet
|
|---|
| Cash | 431 | 441 | 470 | 364 | 9.6% | -0.2% | -8.8% | 8.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 43.6% | 44.5% | 63.9% | 86.1% | 1.7% | -2.0% | -0.0% | 1.3% |
| EBITDA Margin | -4.0% | -0.2% | 1.4% | 10.3% | 0.5% | -1.1% | -5.0% | -5.6% |
| Net Income Margin | -8.4% | -2.8% | 1.4% | 7.1% | -0.3% | -5.6% | -0.4% | -5.9% |
Revenue and profitability
Transat AT Inc's Revenue showed almost no change in FY2016. Revenue decline showed acceleration in FY16Q4 - it was 7.3% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.8 pp from 3.5% to 0.68% in FY2016.
Gross Margin decreased slightly on 1.8 pp from 56.5% to 54.7% in FY2016.
Net Income marign decreased on 2.9 pp from 1.5% to -1.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.4% in FY2016. CAPEX/Revenue increased slightly on 0.93 pp from 1.5% in FY2013 to 2.4% in FY2016. Average CAPEX/Revenue for the last three years was 2.0%.Transat AT Inc has spent a lot to CAPEX (359% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-6.24%) and ROE (-8.34%). ROIC dropped on 17.3 pp from 11.0% to -6.2% in FY2016. ROE dropped on 16.7 pp from 8.3% to -8.3% in FY2016.
Leverage (Debt)
The company has no debt. Cash increased on 8.1%.
Management team
The company's CEO is Jean-Marc Eustache. Jean-Marc Eustache is a founder and has 31 years tenure at the company. Denis Petrin is a The company's CFO. Denis Petrin has spent 9 years at the company.
Appendix 1: Peers in Consumer, Cyclical
Below we provide Transat AT Inc benchmarking against other companies in Consumer, Cyclical 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 |
|---|
| New Flyer Industries Inc ($NFI) | | 38.6% | 21.0% | 6.1% | 47.8% |
| Hardwoods Distribution Inc ($HWD) | | 21.3% | 22.8% | 25.4% | 38.1% |
| Spin Master Corp ($TOY) | | 21.5% | 41.0% | 22.9% | 31.3% |
| Great Canadian Gaming Corp ($GC) | | -0.3% | 9.6% | 3.7% | 22.4% |
| CanWel Building Materials Group Ltd ($CWX) | | 2.1% | 4.6% | 8.6% | 18.6% |
| |
|---|
| Median (36 companies) | | 4.9% | 6.9% | 6.8% | 5.0% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Innova Gaming Group Inc ($IGG) | 89.3% | 82.4% | 85.3% | 92.9% | 88.1% |
| Second Cup Ltd/The ($SCU) | 86.6% | 85.1% | 72.7% | 81.1% | |
| New Look Vision Group Inc ($BCI) | 71.8% | 72.6% | 72.6% | 78.7% | |
| Cara Operations Ltd ($CAO) | | 79.2% | 78.9% | 78.4% | |
| Canlan Ice Sports Corp ($ICE) | 71.6% | 69.7% | 70.7% | 78.2% | |
| |
|---|
| Median (37 companies) | 36.1% | 31.6% | 32.5% | 31.5% | 34.6% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Westshore Terminals Investment Corp ($WTE) | 49.7% | 65.9% | 60.9% | 59.6% | |
| Gamehost Inc ($GH) | 46.1% | 45.7% | 45.9% | 42.8% | 42.6% |
| Great Canadian Gaming Corp ($GC) | 16.8% | 41.1% | 40.1% | 36.6% | 34.4% |
| Restaurant Brands International Inc ($QSR) | | 51.1% | 20.8% | 33.9% | 44.4% |
| Cara Operations Ltd ($CAO) | | 9.6% | 22.6% | 32.6% | |
| |
|---|
| Median (39 companies) | 8.1% | 9.8% | 12.3% | 10.1% | 15.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($HLC) | 8.2% | 6.7% | 14.8% | 26.7% | 9.3% |
| WestJet Airlines Ltd ($WJA) | 7.9% | 19.5% | 18.6% | 22.5% | 22.4% |
| Westshore Terminals Investment Corp ($WTE) | 25.7% | 11.5% | 6.2% | 21.2% | |
| Innova Gaming Group Inc ($IGG) | 20.6% | 26.7% | 15.9% | 15.6% | 15.1% |
| Exchange Income Corp ($EIF) | 7.9% | 15.8% | 15.5% | 15.4% | 29.7% |
| |
|---|
| Median (42 companies) | 2.7% | 3.1% | 3.4% | 3.4% | 4.9% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Spin Master Corp ($TOY) | | 19.2% | 56.9% | 48.2% | 44.5% |
| Magna International Inc ($MG) | 16.3% | 18.6% | 25.2% | 21.9% | 21.2% |
| Linamar Corp ($LNR) | 12.9% | 17.0% | 21.7% | 23.7% | 19.8% |
| Sleep Country Canada Holdings Inc ($ZZZ) | | | 9.7% | 12.7% | 19.0% |
| Air Canada ($AC) | | 37.0% | 23.2% | 28.4% | 18.8% |
| |
|---|
| Median (42 companies) | 10.5% | 12.5% | 10.8% | 10.6% | 11.2% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($HLC) | | 5.8x | 8.4x | 17.1x | 8.6x |
| AutoCanada Inc ($ACQ) | 4.2x | 4.7x | 6.4x | 8.0x | 13.7x |
| Second Cup Ltd/The ($SCU) | 1.0x | 0.6x | 0.0x | 7.5x | 0.0x |
| Amaya Inc ($AYA) | 17.9x | 1.8x | 13.5x | 6.6x | 5.0x |
| Performance Sports Group Ltd ($PSG) | 2.6x | 3.5x | 12.2x | 6.5x | |
| |
|---|
| Median (35 companies) | 1.9x | 2.8x | 2.4x | 2.5x | 2.1x |
|---|
