IGM Financial Inc reports 2.4% EBITDA decline and 1.4 pp EBITDA Margin decline from 42.6% to 41.3%
10.02.2017 • About IGM Financial Inc (
$IGM) • By InTwits
IGM Financial Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 41.3% in 2016 vs. 42.6% in 2015 vs. 51.0% in 2012
- IGM Financial Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 42.3 in 2016, 36.8 in 2015, 18.0 in 2014, 14.3 in 2013, 30.8 in 2012
- The company has highly profitable business model: ROIC is at 13.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
IGM Financial Inc ($IGM) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,505 | 2,596 | 2,831 | 2,917 | 2,941 | 0.8% |
| EBITDA | 1,278 | 1,257 | 1,228 | 1,244 | 1,214 | -2.4% |
| Net Income | 768 | 771 | 762 | 781 | 779 | -0.2% |
Balance Sheet
|
|---|
| Cash | 1,059 | 1,082 | 1,216 | 983 | 611 | -37.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 1,325 | 1,325 | 1,325 | 1,325 | 1,325 | 0.0% |
Cash flow
|
|---|
| Capex | 31 | 14 | 18 | 37 | 42 | 14.9% |
Ratios
|
|---|
| Revenue growth | -5.6% | 3.6% | 9.0% | 3.0% | 0.8% | |
| EBITDA growth | -11.0% | -1.6% | -2.3% | 1.3% | -2.4% | |
| EBITDA Margin | 51.0% | 48.4% | 43.4% | 42.6% | 41.3% | -1.4% |
| Net Income Margin | 30.6% | 29.7% | 26.9% | 26.8% | 26.5% | -0.3% |
| CAPEX, % of revenue | 1.2% | 0.6% | 0.6% | 1.3% | 1.4% | 0.2% |
| ROIC | 14.2% | 14.2% | 13.7% | 13.7% | 13.1% | -0.6% |
| ROE | 17.6% | 17.2% | 16.3% | 16.7% | 16.8% | 0.1% |
| Net Debt/EBITDA | 0.2x | 0.2x | 0.1x | 0.3x | 0.6x | 0.3x |
IGM Financial Inc ($IGM) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 695 | 720 | 750 | 775 | -5.4% | -1.8% | 3.5% | 7.2% |
| EBITDA | 276 | 291 | 322 | 324 | -14.5% | -8.3% | 0.2% | 14.9% |
| Net Income | 169 | 175 | 200 | 235 | -16.5% | -12.7% | -0.7% | 33.6% |
Balance Sheet
|
|---|
| Cash | 607 | 658 | 657 | 611 | -45.9% | -27.2% | -29.6% | -37.8% |
| Long Term Debt | 1,325 | 1,325 | 1,325 | 1,325 | 0.0% | 0.0% | 0.0% | 0.0% |
Ratios
|
|---|
| EBITDA Margin | 39.7% | 40.4% | 42.9% | 41.9% | -4.2% | -2.9% | -1.4% | 2.8% |
| Net Income Margin | 24.3% | 24.3% | 26.6% | 30.4% | -3.2% | -3.0% | -1.1% | 6.0% |
Revenue and profitability
IGM Financial Inc's Revenue increased slightly on 0.81%. Revenue growth showed acceleration in 16Q4 - it increased 7.2% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.6 pp from -1.6% to 6.0% in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.4% in 2016. CAPEX/Revenue increased slightly on 0.89 pp from 0.55% in 2013 to 1.4% in 2016. It's average level of CAPEX/Revenue for the last three years was 1.1%.
Return on investment
The company operates at good ROIC (13.10%) and ROE (16.80%). ROIC decreased slightly on 0.62 pp from 13.7% to 13.1% in 2016. ROE showed almost no change in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.6x and Debt / EBITDA is 1.1x. Net Debt / EBITDA jumped on 0.3x from 0.3x to 0.6x in 2016. Debt didn't change in 2016 while cash dropped on 37.8%.
Management team
The company's CEO Jeffrey R Carney "Jeff" is a founder and has spent 5 years at the company.
Appendix 1: Peers in Financial
Below you can find IGM Financial Inc benchmarking vs. other companies in Financial 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 |
|---|
| Grenville Strategic Royalty Corp ($GRC) | | | | 317.2% | |
| StorageVault Canada Inc ($SVI) | | 22.2% | 7.5% | 111.8% | |
| Slate Retail REIT ($SRT.UN) | | 316.8% | 229.7% | 92.5% | 21.6% |
| Mogo Finance Technology Inc ($GO) | | 13.7% | 34.6% | 86.0% | 14.6% |
| Morguard Corp ($MRC) | | 27.2% | 9.2% | 58.8% | 4.6% |
| |
|---|
| Median (53 companies) | | 7.5% | 9.0% | 3.6% | 5.8% |
|---|
| IGM Financial Inc ($IGM) | | 3.6% | 9.0% | 3.0% | 0.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Olympia Financial Group Inc ($OLY) | 80.9% | 82.6% | 83.2% | 84.5% | 83.5% |
| Morguard Corp ($MRC) | 74.0% | 69.9% | 68.6% | 76.5% | 75.5% |
| Mogo Finance Technology Inc ($GO) | 70.4% | 64.5% | 63.4% | 62.3% | |
| StorageVault Canada Inc ($SVI) | 18.2% | 22.6% | 18.3% | 52.4% | |
| Clarke Inc ($CKI) | 28.1% | 20.0% | 18.9% | 43.4% | 41.6% |
| |
|---|
| Median (9 companies) | 28.1% | 30.7% | 28.3% | 43.4% | 30.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Firm Capital Mortgage Investment Corp ($FC) | 87.6% | 87.9% | 88.8% | 86.6% | |
| Equitable Group Inc ($EQB) | 88.1% | 87.4% | 86.0% | 84.7% | 83.0% |
| Atrium Mortgage Investment Corp ($AI) | 79.8% | | | 81.9% | 83.2% |
| Trez Capital Mortgage Investment Corp ($TZZ) | | | | 76.2% | |
| First National Financial Corp ($FN) | 67.8% | 76.5% | 77.1% | 74.6% | |
| |
|---|
| Median (36 companies) | 39.5% | 32.1% | 38.2% | 30.0% | 45.4% |
|---|
| IGM Financial Inc ($IGM) | 51.0% | 48.4% | 43.4% | 42.6% | 41.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dundee Corp ($DC.A) | 10.3% | 14.1% | 88.8% | 123.6% | |
| Gazit-Globe Ltd ($GZT) | 80.2% | 43.3% | 52.1% | 69.3% | 95.5% |
| First Capital Realty Inc ($FCR) | 127.9% | 76.1% | 73.8% | 56.7% | 79.7% |
| Killam Properties Inc ($KMP) | 80.7% | 114.1% | 143.5% | 46.7% | 59.9% |
| StorageVault Canada Inc ($SVI) | 150.5% | 73.3% | 79.1% | 21.4% | |
| |
|---|
| Median (55 companies) | 0.5% | 0.5% | 0.7% | 0.7% | 0.6% |
|---|
| IGM Financial Inc ($IGM) | 1.2% | 0.6% | 0.6% | 1.3% | 1.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CI Financial Corp ($CIX) | | | | | 24.1% |
| FirstService Corp ($FSV) | | | | | 17.4% |
| Alaris Royalty Corp ($AD) | 9.5% | 10.1% | 10.7% | 7.3% | 12.3% |
| Genworth MI Canada Inc ($MIC) | 11.9% | 9.6% | 9.7% | 9.5% | 9.4% |
| Slate Retail REIT ($SRT.UN) | | 6.0% | 9.8% | 8.4% | 9.4% |
| |
|---|
| Median (55 companies) | 4.4% | 3.3% | 3.9% | 2.8% | 3.0% |
|---|
| IGM Financial Inc ($IGM) | 14.2% | 14.2% | 13.7% | 13.7% | 13.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Element Financial Corp ($EFN) | 140.2x | 31.9x | 37.6x | 79.9x | 22.6x |
| First National Financial Corp ($FN) | 34.3x | 33.7x | 40.9x | 37.4x | |
| StorageVault Canada Inc ($SVI) | 11.2x | 9.7x | 13.6x | 35.7x | |
| Gazit-Globe Ltd ($GZT) | 12.8x | 12.7x | 15.3x | 22.1x | 15.2x |
| Equitable Group Inc ($EQB) | 11.8x | 10.2x | 9.8x | 12.3x | 13.7x |
| |
|---|
| Median (27 companies) | 5.5x | 4.8x | 4.7x | 6.5x | 9.7x |
|---|
| IGM Financial Inc ($IGM) | 0.2x | 0.2x | 0.1x | 0.3x | 0.6x |
