Yellow Pages Ltd/Canada Net Income dropped on 761% in 2016 and Revenue decreased slightly on 1.4%
14.02.2017 • About Yellow Pages Ltd/Canada (
$Y) • By InTwits
Yellow Pages Ltd/Canada reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Yellow Pages Ltd/Canada doesn't have a profitable business model yet: 2016 ROIC is -47.7%
- EBITDA Margin is declining: -47.4% in 2016 vs. 27.7% in 2015 vs. 51.4% in 2012
- EBITDA Margin is quite volatile: -47.4% in 2016, 27.7% in 2015, 36.0% in 2014, 42.8% in 2013, 51.4% in 2012
- Yellow Pages Ltd/Canada has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 12.7 in 2016, 6.2 in 2015, 14.8 in 2014, 11.7 in 2013, 5.1 in 2012
- The company has unprofitable business model: ROIC is at -47.7%
- It operates with high leverage: Net Debt/EBITDA is 9.7x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Yellow Pages Ltd/Canada ($Y) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,108 | 972 | 878 | 830 | 818 | -1.4% |
| Gross Profit | 569 | 416 | 316 | 261 | 235 | -9.8% |
| EBITDA | 569 | 416 | 316 | 230 | -388 | -268.7% |
| Net Income | -1,962 | 176 | 189 | 61 | -404 | -761.2% |
Balance Sheet
|
|---|
| Cash | 107 | 202 | 103 | 67 | 17 | -74.3% |
| Short Term Debt | 101 | 89 | 103 | 99 | 75 | -23.7% |
| Long Term Debt | 788 | 646 | 494 | 399 | 327 | -18.1% |
Cash flow
|
|---|
| Capex | 5 | 12 | 15 | 6 | 13 | 104.1% |
Ratios
|
|---|
| Revenue growth | -16.6% | -12.3% | -9.7% | -5.4% | -1.4% | |
| EBITDA growth | -16.2% | -26.9% | -24.1% | -27.3% | -268.7% | |
| Gross Margin | 51.4% | 42.8% | 36.0% | 31.4% | 28.8% | -2.7% |
| EBITDA Margin | 51.4% | 42.8% | 36.0% | 27.7% | -47.4% | -75.1% |
| Net Income Margin | -177.1% | 18.1% | 21.5% | 7.4% | -49.4% | -56.7% |
| CAPEX, % of revenue | 0.5% | 1.2% | 1.7% | 0.8% | 1.6% | 0.8% |
| ROIC | 18.0% | 28.4% | 17.9% | 11.1% | -47.7% | -58.9% |
| ROE | -167.4% | 42.5% | 30.7% | 8.5% | -71.6% | -80.0% |
| Net Debt/EBITDA | 1.4x | 1.3x | 1.6x | 1.9x | | -1.9x |
Yellow Pages Ltd/Canada ($Y) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 204 | 210 | 201 | 203 | -1.1% | 2.8% | -4.5% | -2.8% |
| EBITDA | 58 | 57 | 47 | -550 | -16.2% | -2.8% | -13.6% | -1,262.2% |
| Net Income | 13 | 11 | 4 | -432 | -48.5% | -33.7% | -71.3% | -7,457.4% |
Balance Sheet
|
|---|
| Cash | 35 | 14 | 72 | 17 | -75.3% | -81.2% | -33.0% | -74.3% |
| Short Term Debt | 99 | 97 | 91 | 75 | -5.0% | -8.3% | -13.8% | -23.7% |
| Long Term Debt | 399 | 365 | 371 | 327 | -19.0% | -20.1% | -18.8% | -18.1% |
Ratios
|
|---|
| Gross Margin | 30.4% | 28.0% | 28.3% | 28.3% | -4.0% | -2.1% | -2.0% | -2.6% |
| EBITDA Margin | 28.3% | 27.3% | 23.5% | -271.3% | -5.1% | -1.6% | -2.5% | -294.0% |
| Net Income Margin | 6.5% | 5.2% | 1.9% | -212.9% | -5.9% | -2.9% | -4.4% | -215.7% |
Revenue and profitability
The company's Revenue decreased slightly on 1.4%. Revenue decline showed acceleration in 16Q4 - it was 2.8% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 31.1 pp from 24.1% to 55.1% in 2016.
Gross Margin decreased on 2.7 pp from 31.4% to 28.8% in 2016.
Net Income marign dropped on 56.7 pp from 7.4% to -49.4% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.6% in 2016. Yellow Pages Ltd/Canada showed almost no change in CAPEX/Revenue from 2013 to 2016. It's average level of CAPEX/Revenue for the last three years was 1.3%.
Return on investment
The company operates at negative ROIC (-47.75%) and ROE (-71.55%). ROIC dropped on 58.9 pp from 11.1% to -47.7% in 2016. ROE dropped on 80.0 pp from 8.5% to -71.6% in 2016.
Leverage (Debt)
Debt level is 9.7x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 1.9x from 1.9x to in 2016. Debt dropped on 19.2% while cash dropped on 74.3%.
Appendix 1: Peers in Communications
Below we provide Yellow Pages Ltd/Canada 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 (25 companies) | 13.1% | 4.4% | 3.1% | 4.3% | 2.4% |
|---|
| Yellow Pages Ltd/Canada ($Y) | | -12.3% | -9.7% | -5.4% | -1.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wanted Technologies Corp ($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 (22 companies) | 43.5% | 41.7% | 49.1% | 48.2% | 44.6% |
|---|
| Yellow Pages Ltd/Canada ($Y) | 51.4% | 42.8% | 36.0% | 31.4% | 28.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BCE Inc ($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 (29 companies) | 14.4% | 7.7% | 8.8% | 9.4% | 8.2% |
|---|
| Yellow Pages Ltd/Canada ($Y) | 51.4% | 42.8% | 36.0% | 27.7% | -47.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| TELUS Corp ($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 (28 companies) | 2.8% | 3.2% | 2.4% | 3.1% | 3.6% |
|---|
| Yellow Pages Ltd/Canada ($Y) | 0.5% | 1.2% | 1.7% | 0.8% | 1.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tucows Inc ($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 (28 companies) | 8.0% | 7.7% | 7.1% | 2.0% | 2.2% |
|---|
| Yellow Pages Ltd/Canada ($Y) | 18.0% | 28.4% | 17.9% | 11.1% | -47.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Intertain Group Ltd/The ($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 (20 companies) | 1.4x | 1.2x | 1.5x | 1.5x | 1.7x |
|---|
| Yellow Pages Ltd/Canada ($Y) | 1.4x | 1.3x | 1.6x | 1.9x | |
