Toromont Industries Ltd reports 6.9% Net Income growth and 3.6% Revenue growth
06.02.2017 • About Toromont Industries Ltd (
$TIH) • By InTwits
Toromont Industries Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 15.7% in FY2016 vs. 15.5% in FY2015 vs. 14.7% in FY2012
- Toromont Industries Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.8%. At the same time it's in pair with industry average of 7.1%.
- CAPEX is quite volatile: 24.8 in FY2016, 150 in FY2015, 108 in FY2014, 94.8 in FY2013, 101 in FY2012
- The company has highly profitable business model: ROIC is at 21.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Toromont Industries Ltd ($TIH) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,507 | 1,593 | 1,660 | 1,802 | 1,867 | 3.6% |
| Gross Profit | 384 | 392 | 412 | 446 | 468 | 4.9% |
| SG&A | 216 | 218 | 228 | 241 | 256 | 6.2% |
| EBITDA | 222 | 233 | 250 | 279 | 293 | 5.3% |
| Net Income | 119 | 123 | 133 | 146 | 156 | 6.9% |
Balance Sheet
|
|---|
| Cash | 2 | 71 | 86 | 67 | 189 | 183.0% |
| Short Term Debt | 1 | 1 | 127 | 2 | 2 | 7.2% |
| Long Term Debt | 158 | 131 | 5 | 152 | 151 | -0.9% |
Cash flow
|
|---|
| Capex | 101 | 95 | 108 | 150 | 25 | -83.5% |
Ratios
|
|---|
| Revenue growth | 9.1% | 5.7% | 4.2% | 8.5% | 3.6% | |
| EBITDA growth | 14.2% | 5.2% | 7.3% | 11.3% | 5.3% | |
| Gross Margin | 25.5% | 24.6% | 24.8% | 24.7% | 25.0% | 0.3% |
| EBITDA Margin | 14.7% | 14.6% | 15.1% | 15.5% | 15.7% | 0.3% |
| Net Income Margin | 7.9% | 7.7% | 8.0% | 8.1% | 8.3% | 0.3% |
| SG&A, % of revenue | 14.3% | 13.7% | 13.7% | 13.4% | 13.7% | 0.3% |
| CAPEX, % of revenue | 6.7% | 5.9% | 6.5% | 8.3% | 1.3% | -7.0% |
| ROIC | 28.8% | 25.8% | 24.3% | 23.5% | 21.7% | -1.8% |
| ROE | 27.1% | 23.4% | 21.4% | 20.2% | 18.8% | -1.4% |
| Net Debt/EBITDA | 0.7x | 0.3x | 0.2x | 0.3x | -0.1x | -0.4x |
Toromont Industries Ltd ($TIH) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 378 | 511 | 498 | 481 | 11.0% | 5.4% | -1.4% | 1.8% |
| EBITDA | 52 | 73 | 86 | 82 | 14.3% | 5.1% | 4.5% | 1.3% |
| Net Income | 24 | 38 | 48 | 46 | 20.0% | 5.5% | 6.5% | 2.5% |
Balance Sheet
|
|---|
| Cash | 60 | 29 | 110 | 189 | 42.8% | -13.0% | 13.4% | 183.0% |
| Short Term Debt | 2 | 2 | 2 | 2 | -98.6% | -98.6% | -98.6% | 7.2% |
| Long Term Debt | 151 | 151 | 151 | 151 | 3,455.9% | 178.3% | -14.9% | -0.9% |
Ratios
|
|---|
| Gross Margin | 24.3% | 23.6% | 25.4% | 26.9% | -1.0% | 0.1% | 0.8% | 1.1% |
| EBITDA Margin | 13.7% | 14.3% | 17.2% | 17.1% | 0.4% | -0.0% | 1.0% | -0.1% |
| Net Income Margin | 6.4% | 7.5% | 9.6% | 9.5% | 0.5% | 0.0% | 0.7% | 0.1% |
Revenue and profitability
Toromont Industries Ltd's Revenue increased on 3.6%. Revenue growth showed slow down in FY16Q4 - it was 1.8% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 19.8 pp from 12.2% to -7.6% in 2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign showed almost no change in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Toromont Industries Ltd had CAPEX/Revenue of 1.3%. Toromont Industries Ltd showed decline in CAPEX/Revenue of 4.6 pp from 5.9% in FY2013 to 1.3% in FY2016. For the last three years the average CAPEX/Revenue was 5.4%.
Return on investment
The company operates at high and attractive ROIC (21.74%) while ROE is a bit lower (18.76%). ROIC decreased slightly on 1.8 pp from 23.5% to 21.7% in FY2016. ROE decreased slightly on 1.4 pp from 20.2% to 18.8% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.1x and Debt / EBITDA is 0.5x. Net Debt / EBITDA dropped on 0.4x from 0.3x to -0.1x in FY2016. Debt decreased slightly on 0.81% while cash jumped on 183%.
Management team
Toromont Industries Ltd's CEO is Scott J Medhurst. Scott J Medhurst is a founder and has 6 years tenure at the company.
Appendix 1: Peers in Industrial
Below you can find Toromont Industries Ltd benchmarking vs. other companies in Industrial 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 |
|---|
| 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% | 10.4% | 7.7% | 2.6% |
|---|
| Toromont Industries Ltd ($TIH) | | 5.7% | 4.2% | 8.5% | 3.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pure Technologies Ltd ($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 ($STN) | 55.0% | 54.7% | 54.9% | 54.5% | 54.1% |
| IWG Technologies Inc ($IWG) | 53.3% | 54.0% | 49.0% | 47.8% | 54.9% |
| |
|---|
| Median (49 companies) | 23.4% | 23.4% | 20.9% | 21.5% | 22.1% |
|---|
| Toromont Industries Ltd ($TIH) | 25.5% | 24.6% | 24.8% | 24.7% | 25.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canadian National Railway Co ($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% |
| IWG Technologies Inc ($IWG) | 12.7% | 25.5% | 20.0% | 24.0% | 26.9% |
| Winpak Ltd ($WPK) | 19.5% | 18.6% | 18.7% | 22.7% | 23.5% |
| |
|---|
| Median (53 companies) | 10.2% | 8.3% | 8.0% | 7.8% | 11.0% |
|---|
| Toromont Industries Ltd ($TIH) | 14.7% | 14.6% | 15.1% | 15.5% | 15.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newalta Corp ($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% | 3.6% | 4.3% | 3.7% | 4.8% |
|---|
| Toromont Industries Ltd ($TIH) | 6.7% | 5.9% | 6.5% | 8.3% | 1.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| IBI Group Inc ($IBG) | 4.8% | -9.0% | 11.6% | 21.9% | 26.2% |
| IWG Technologies Inc ($IWG) | 17.0% | 36.3% | 23.4% | 27.2% | 25.7% |
| Winpak Ltd ($WPK) | 20.4% | 18.0% | 18.3% | 22.6% | 21.8% |
| 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% |
|---|
| Toromont Industries Ltd ($TIH) | 28.8% | 25.8% | 24.3% | 23.5% | 21.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Conifex Timber Inc ($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 |
|---|
| Toromont Industries Ltd ($TIH) | 0.7x | 0.3x | 0.2x | 0.3x | -0.1x |
